AVIVA is reported to be considering a £650m bid for The Co-operative’s general insurance business as the mutual society rushes to sell the division to fund its purchase of 632 Lloyds bank branches.
Other interested parties are believed to include rival insurer Ageas UK and private equity expert Edmund Truell.
The Co-op is desperate to improve its capital position as it attempts to complete the Lloyds deal – initially agreed in December 2011 – which would transform its banking division into a major player.
But serious questions remain about the Co-op’s capital strength and only last month the Co-op offloaded its life insurance and asset management division to Royal London for £219m.
The acquisition would be an unusual move for Aviva, which has spent the last year offloading non-core units. On Friday new chief executive Mark Wilson announced a further 2,000 job losses as part of a radical turnaround plan.
Aviva declined to comment on the bid, which was first reported in The Sunday Times.