Travel insurer Cover-More is considering an initial public offering (IPO) that could take place before the new year.

UBS and Macquarie have been appointed to explore the possibility, a spokesman told insuranceNEWS.com.au.

Timing is among the issues they are considering, with a chance the offering could be held this year or early next.

Cover-More – owned by Crescent Capital Partners – would be the third insurance-related listing since midyear.

Comparator iSelect debuted on the Australian Securities Exchange in late June, followed by broker group Steadfast in August.

The insurer would join a busy IPO pipeline, with recent equity market strength encouraging groups to consider listing.

“This environment is an ideal time to float a business, particularly for private equity owners looking to realise gains and recycle capital,” Morningstar analyst Ravi Reddy told insuranceNEWS.com.au.

However, a flood of IPOs could reduce competitive tension, leaving investors spoilt for choice, he says.

Some analysts say the previous insurance-related IPOs are unlikely to dampen interest in Cover-More, and new listings could present opportunities to find value in the market.

“If it is priced attractively, fund managers will always have an appetite for it,” one analyst said.

In 2009 Cover-More entered a long-term underwriting arrangement with Munich Re subsidiary Great Lakes for the Australian, New Zealand and UK operations. The tie-up was extended in August for a further five years.

The two companies have a 45.7% share of all travel insurance written in Australia, according to researcher Ibisworld.