Second tranche of non-core business to be offloaded

AA Insurance is offloading more non-core business by putting its commercial vehicle book out to tender.

Up to nine companies are believed to have put bids in for the business, which has 22,000 policies, estimated to be worth just over £2m.

The sale is the second time in a month the AA has sold non-core parts of its business. Carole Nash picked up its 17,000-policy motorbike book in February.

Though both Swinton and Folgate are tipped to be part of the tender process, neither would confirm they had entered an offer.

Swinton managing director Patrick Smith said: "We are acquisitive and would look at any opportunities on the market."

A spokesman for Folgate said it was not company policy to speculate on acquisitions.

The sale of the commercial book

follows a disappointing set of annual figures for 2003, which showed the AA's motor book to be in decline.

At the time, AA head of insurance Neale Phillips said the company was putting measures in place such as cross selling between products and increased advertising to "turn the corner".

A spokesman for the AA declined to comment on the sale except to say the company was looking at a number of its products at the moment.