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The red umbrella is back in the Dow.

In an ironic twist, Citigroup Inc. (C) will soon lose its place in the Dow Jones Industrial Average to Travelers Companies Inc. (TRV), a property-and-casualty insurance company Citi sold only seven years ago.

In the corporate world, the two companies are something like estranged divorcees. Travelers merged its operations - and its celebrated red umbrella logo - with Citicorp in 1998 in one of the largest corporate mergers ever. Sandy Weill, head of Travelers, became Citigroup's sole chief executive and chairman after pushing out Citicorp chief John Reed.

The two companies began disentangling themselves even before Weill left Citi in 2006. In fact, it was only two years ago that Citigroup sold the red umbrella logo, long praised by brand consultants, back to Travelers.

The news is the latest embarrassment for Citi, which on June 8 will lose its place in the Dow after it gorged on boom-time mortgages and other real estate debt, accepted billions in rescue funds from the U.S. government, and watched its stock fall as low as 97 cents.

"This has no impact on the company's strategy or our efforts to return Citi to sustained profitability," the New York bank said Monday. "Citi has strong businesses and good growth prospects."

Travelers, meanwhile, has fared much better than most of its insurer counterparts over the course of the ongoing global financial crisis. Its shares are down 25% over the last two years - a relatively palatable decline compared to Citi's 93% tumble. The Dow Jones Industrial Average is down 38% over the same period.

A spokeswoman for Travelers was not able to comment immediately.

Shares in Citi were recently down 0.5% to $3.70 in composite trading, while stock in Travelers was recently up 3.8% to $42.21.

Travelers is also benefiting from the fall of another titan of American finance - American International Group Inc. (AIG) - which has accepted more than $100 billion in public support after betting the farm on its once-obscure credit-default swaps business.

Dow Jones, which publishes this and other newswires, removed AIG from its industrial average in last September after the government took a nearly 80% stake in the company. Instead of replacing AIG with another insurer, Dow Jones instead selected Kraft Foods Inc. (KFT).

Like AIG and Citigroup, Travelers itself has a rich history that reaches back into modern America history. Founded in 1864 by a stonecutter, the company sold automotive insurance as early as 1901 and became the first firm to offer aviation insurance in 1919.

Travelers also underwrote the U.S. government's Manhattan Project, under which the U.S. military built the world's first atomic bomb.

The firm introduced its red umbrella logo in 1960.

News Corp. owns Dow Jones, publisher of this newswire.

-By Marshall Eckblad, Dow Jones Newswires; 201-938-4306; marshall.eckblad@dowjones.com