Bank moves to appoint corporate advisers to manage process through a sale or flotation

Arista and LV= could bid for NIG should the broker-only insurer be sold separately from the rest of the Royal Bank of Scotland Insurance [RBSI] group.

The admissions come one month after NIG put its personal lines book of business into run-off and follows speculation this week surrounding the future of the wider RBS Insurance business.

Commercial underwriting agency Arista’s chief executive and former NIG managing director Charles Earle confirmed that he could be a bidder. “It would depend on what is for sale and on what basis,” he said.

A source close to LV= confirmed that the motor insurer would also be interested in acquiring the business, but would have to “look at what condition the business is in and how strong the underwriting is”. Other bidders could include Fortis, Allianz and AXA.

However, NIG managing director Jon Greenwood said there were no plans to sell the business as a standalone entity. Last week, RBS started the process of appointing corporate advisers to arrange a sale or flotation. RBS is understood to have been keen to float RBSI since the European Commission gave it a 2013 deadline to dispose of the business. But, following deteriorating conditions in motor insurance and a £253m H1 2010 loss, a trade sale is believed to be the most likely option.

RBS has said no decision has been made and it is not in talks with any potential buyers. Overseas bidders are thought to have the best chance of landing the business. Warren Buffett’s Berkshire Hathaway has again been linked with a play in the UK motor market, as has rival US personal lines insurer Allstate. A group of major investment banks were lined up last week to study options for the business.

RBSI is closing offices in Glasgow, Birmingham, Croydon, Bristol, Farnham, Cardiff, Ipswich, Manchester, Peterborough and Romford. RBS said it is too early to say how many jobs will be lost.

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