The bidders for its successful life and funds management businesses are forming a line at the gate as Royal & SunAlliance in Australia moves into a new era as a general insurance-only operation.

While MD Mike Wilkins has been circumspect in his public comments, it’s understood the decision to quit the life insurance and funds management operations in Australia reflected the UK parent’s attempts to do the same. It’s a move that Mr Wilkins indicated was part of a global strategy to focus on general insurance.

R&SA manages more than $7 billion in funds in Australia and New Zealand and the businesses are expected to fetch about $600 million. “Our strategy is a return of capital of the business,” he said. “We have opportunities in Australia that remain core to the overall group vision.”

The Australian Financial Review said Royal & Sun’s future in Australia has been the subject of speculation for several weeks and confirmed that its corporate adviser, Deutsche Bank, has released this information in a memorandum to potential buyers.

The move follows a number of consolidations in the financial services sector over the past few weeks. ANZ Banking Group and ING have secured a funds management joint venture worth $38.4 billion, and Rothschild Asset Management is in the final stages of completing a $350 million exit from Australia.

R&SA’s London-based parent lost $826 million in the December quarter, blaming September 11 and rising asbestos claims. So who will acquire their local funds management operations? The current favourite is Axa, although AMP, CBA, Westpac and Tower are also believed to be interested.