British bank Lloyds TSB Group is to auction off its Abbey Life insurance unit, a source said today.
The value of Abbey Life's existing policies is about €1 billion, and businesses are typically sold for 85 per cent to 90 per cent of that embedded value.
The first round of bids were made last week, the source said. Interested bidders are expected to include Swiss Re and Britain's Resolution Plc and Pearl Group, which specialise in administering such portfolios.
Talk that Lloyds could sell the business has resurfaced in recent months. Finance chief Helen Weir declined to comment on a possible sale last week but said Lloyds would consider all ways of unlocking more capital from its insurance units.
Earlier Lloyds shares were up 0.9 per cent at 580 pence, outperforming a slightly higher British share market.
Several insurers have sold their so-called closed life insurance books in recent years, and Swiss Re, Resolution and Pearl have picked up many of the books and consolidated them to gain efficiencies of scale.