Several bidders are looking to join forces with Catalina Holdings

Proposed buyers could be looking to join forces in the sale of the Co-op Group’s insurance arm.

Several bidders are understood to be in talks about joining forces with Catalina Holdings or another specialist consolidator to split the business between its back book and ongoing policies, according to Sky News.

The group needs to sell its insurance business to plug a £1.5bn black hole in the balance sheet of its bank.

Last month it was reported that LV= had entered the battle to buy the Co-operative Group’s general insurance business, while Legal & General is reportedly interested in the Co-op’s profitable household insurance book.

Advent and AnaCap have also been previously linked with the sale.