Resolution joins insurance giants and private equity firms to compete for £6bn insurance outfit

European insurers, private equity firms and investment acquisition vehicle Resolution emerged as front runners to pick up RBS Insurance this week, although the bank itself indicated it would prefer a flotation.

RBS has been forced to sell its lucrative insurance business on receiving a further £25.5bn of state aid, but has up to four years to do so.

RBSI attracted several high-profile bidders when its brands, including Direct Line, Churchill, Privilege and Green Flag, were put up for sale by former RBS chief executive Fred Goodwin last year.

European insurance giants Allianz, Zurich and Generali are expected to return to the bidding, while private equity firms, including CVC Partners and BC Partners, and Apollo Management – which failed with a joint bid before the bank pulled the plug in February – has been tipped for the lead.

Resolution, the firm set up by Clive Cowdery, has also thrown its hat into the ring. A Resolution spokesman said: “Unless [it is sold] in the next 18 months, it’s certainly something that Resolution will have a look at,” he said.

Trade buyers, including Aviva, RSA and LV= could be tempted to buy parts of the business, including broker insurer NIG, if RBS decides to break up the business.

But the bank has also refused to rule out an IPO, hinting it could be an option in the coming years.