L&G bids for Co-op's household business

Legal & General has tabled a bid for the Co-operative Group’s household insurance book, according to reports. Sky News reports that L&G is not interested in the mutual’s motor insurance book, an approach which is forcing the Co-op to consider dividing up the business.

Catalina Holdings and Anacap are also reported to be amongst the bidders for the Co-op’s general insurance operation. And former RSA chief Andy Haste is rumoured to be working on a separate bid with private equity firm Advent International. A Co-op spokesman said: “We do not comment on speculation. We will issue an update on the sales process as and when appropriate.”

L&G declined to comment. Household accounts about 28% of the Co-op’s book and is highly profitable. For the full year of 2012, the household business reported a combined operating ratio of 78.9% compared to a GI total COR of 110.9% after the group strengthened its motor reserves. In the first half of 2013 its group COR improved to 96.2%. The Co-op is trying to raise £500m from selling off its GI and life insurance businesses to plug a £1.5bn black hole in the balance sheet of its bank.

It sold its life insurance arm to Royal London for £219m.