Allstate makes second round bid for RBS insurance business

by Gill Montia

Story link: Allstate makes second round bid for RBS insurance business

Allstate, the US insurance group, is reported to have submitted a bid for Royal Bank of Scotland’s (RBS) insurance business, which includes the Direct Line, Churchill, Privilege, UKI and NIG brands.

The deadline for second-round offers was Friday of last week and according to the Financial Times, Allstate will be offering less than the £7 billion RBS said it wanted for the business when it was put up for sale, last April.

Other interested parties including Allianz, Travelers and Zurich, are either known or believed to have withdrawn, leaving Allstate as the only serious contender in the second round.

RBS will be reluctant to let the business go for less than its original price tag and may withdraw from a sale.

However, the group needs to raise £4 billion from disposals by the end of the year, to levitate its Tier one capital ratio to 6%.

In addition, analysts are predicting that RBS will write down £5.9 billion in risky investments in the six months to the end of June and could post a loss of up to £1.7 billion in the first-half.

The group will report its results later this week.