Co-op Group looks to sell off insurance division for £300m | City A.M.

The Co-op Group is looking into selling off its general insurance operations for a sum of around £300m.

Investment bankers from Fenchurch Advisory Partners have been brought in to advise the company on potential options for its insurance business.

The Co-op division, which made £11m in underlying profit last year, has started to approach potential buyers – though a decision to sell is not yet set in stone.

Read more: Co-op Group increases membership but profits dip in first half

​Sky News reported a sale of the business could result in significant job losses – although a deal would not lead to Co-op completely exiting the insurance market.

Any buyer would be made to sign a long-term deal to continue selling products under the Co-op’s brand as it tries to expand the number of its members who buy at least one policy.

Co-op currently underwrites home and motor insurance policies itself – travel insurance is underwritten by Mapfre.

Five years ago, Co-op’s board hired Rothschild to handle an auction of its insurance division as it tried to address its £1.5bn funding black hole on its balance sheet.

Its life insurance arm was sold to Royal London, although the sale was halted after Co-op’s board decided it didn’t need the extra cash from the auction.

Read more: Co-op Group could reduce stake in Co-op Bank to less than five per cent

Co-op has conducted an impressive u-turn since nearly collapsing in 2013 after it overhauled its board following a scandal with its former chair Paul Flowers.

The company has also gone through a significant makeover as it sold its farming operations as well as its remaining stake in the Co-op bank, which still uses its branding.

Co-op declined to comment.

Read more: Co-op Group grows legal services offering