US insurer makes offer as interest cools in auction

US insurer Allstate is believed to have submitted a bid for Royal Bank of Scotland's insurance arm.

According to the Financial Times, Allstate was expected to submit a bid by the end of the deadline for second-round offers, set at the end of the day last Friday, in the multi-billion pound auction of RBS Insurance.

The report said the insurer’s offer was likely to be pitched below the £7bn price-tag attached to the insurance businesses, which include Direct Line and Churchill.

Allsate may be the only serious bidder. Allianz and Travelers submitted first-round bids, but it is thought their interest has cooled. Zurich has also pulled out of bidding.

Questions have been raised about whether RBS will ultimately sell its insurance business given the lack of interest.

RBS has insisted the sale is still on track.