Suitors request more time to evaluate bids.

RBS has extended the deadline for the auction of its insurance arm after a number of key bidders aborted their interest in the £7bn GWP business.

The Daily Mail reported that the first-round bids for Britain's largest motor insurer, originally due to conclude on Wednesday, are expected to arrive within days.

Reuters said that the extension was the result of several potential buyers asking for more time to consider their bids.

The move has also prompted speculation that the bank has not received sufficiently high value offers for the division, which includes brands Churchill and Direct Line, and is estimated to be worth between £5bn and £7bn.

IItalian insurer Generali, previously considered a leading candidate after revealing a £4bn war chest to grow its business overseas, announced yesterday it would not be pursuing a bid due to the price tag.

In a research note Investment bank Landsbanki Kepler suggested that a multiple of between eight and 10 times earnings for a direct UK motor business was questionable, given the high volatility of the sector and sluggish improvement in ratings.

RBSI's UK business made £683m last year.

It is also understood that RBS' desire to sell the business as a whole has impacted on potential bidders, including private equity suitors, who were rebuffed by the bank two weeks ago. Sources have suggested, however, that the bank might reconsider its position and accept private equity investment as part of a joint bid with a trade buyer.

Meanwhile AIG, which has been repeatedly linked with RBSI's commercial arm NIG, has also upped its capital raising estimate stemming from the credit crunch by 60 per cent to $20bn.

Berkshire Hathaway ruled itself out of the RBSI bidding two weeks ago, despite its interest in acquiring business that have entrenched positions in their core markets.

Zurich, Allianz, American giants Allstate and Travelers, and Ping An remain in the frame.