The Travelers Group was established in 1995, and in 1996, it acquired Aetna's real estate and accident business. In April 1998, the Travelers Group merged with Citicorp to form Citigroup. This merger allowed Citigroup to serve more than 100 million customers in 100 countries, while also realizing cost savings from the merger and benefits of marketing the two companies' products. Citicorp is the owner of Citibank, the largest credit card issuer in the world, while Travelers is the owner of Salomon Smith Barney, Travelers life, property and accident insurers, and Primerica, a financial services firm.
The Depression-era laws that separated banks from brokerage firms are being relaxed, but they still prohibit most banks from entering the insurance business. President Sanford Weill decided to part with Travelers because the property and accident business has a lower growth rate than other Citigroup units, putting a strain on its stock price. As a result, Citigroup distributed more than 219 million shares of Travelers Class A common stock on Tuesday and more than 450 million shares of Travelers Class B common stock to Citigroup shareholders. The merger between Citicorp and Travelers Group was beneficial for both companies as it allowed them to expand their customer base and market their products more effectively.
However, current laws still prohibit bank holding companies from participating in insurance. This means that while Citibank is owned by Citicorp, it cannot directly own or operate Travelers Insurance.