Zurich may divest its Australian general insurance division, excluding the travel business, according to a media report, with any move to sell the business expected to attract widespread interest.

The insurer is preparing to launch a sale process, involving Goldman Sachs and PwC, The Australian Dataroom column reports today. The business on offer could be worth around $500 million, it says.

A Zurich Australia spokeswoman told insuranceNEWS.com.au the company does not comment on rumours and speculation.

Zurich provides life and general insurance and is one of the major commercial underwriters in the Australian market.

The general insurance business, Zurich Australian Insurance Ltd, reported an after-tax loss for the past calendar year of $47.3 million, compared to a profit of $61 million in 2019.

Direct premium revenue totalled $1.24 billion, down from $1.49 billion previously, while the claims expense, before reinsurance and other recoveries, increased to $1.43 billion from $906 million.

Travel premium revenue was $146 million last year, amid the pandemic, compared with $452.9 million the year before.

Analysts say that a business the size of Zurich’s would attract significant interest at the “tyre-kicking” stage, including from IAG, Suncorp and QBE, even if it doesn’t fit with current priorities for the locally-listed insurers.

“You have nothing to lose and everything to gain by having a look and at least understanding the assets,” one analyst told insuranceNEWS.com.au.

Allianz last year acquired Westpac’s insurance business and is making other changes, while Hollard is bedding down its Commonwealth Bank insurance acquisition, highlighting that both are pursuing expansion but raising doubts over whether they would be ready to acquire Zurich assets.

Other companies that could take a look include Chubb, Liberty, Berkley and AIG, as well as insurers from a tier down in size that may be looking for a transformative acquisition.

Macquarie Insurance Analyst Andrew Buncombe says IAG and QBE may face Australian Competition and Consumer Commission (ACCC) issues, Suncorp may not be interested and IAG has also been focused on improving its own commercial business.

“I don’t think investors would welcome IAG buying another book at this point, before it has fixed its own,” he said.

The Australian report follows an article published by Bloomberg last month that said Zurich Australia was considering selling “non-core” general insurance assets as it looked to streamline its portfolio.

Morningstar analyst Nathan Zaia says interest in the Zurich business would depend on the composition of the book by line and channel, while the ACCC might not be an obstacle.

“There are already a large tail of insurers competing, not to mention Lloyds,” he said. “In many insurance lines, the three large players have even been losing market share for a number of years.”