RACQ has reportedly appointed Bank of America to prepare for the possible sale of its insurance business.

An Australian Financial Review Street Talk column says Queensland’s second-largest insurer after Suncorp has “put itself on the block again”.

“On the table is the mooted divestment of its insurance arm that includes car, home, pet and caravan insurance products,” the column said. “BoA’s financial institutions team Mike Evans and Pete Nicholls are understood to be leading the effort and are updating diligence reports around the asset ahead of a typical two-tranche process.”

The AFR says RACQ CEO David Carter declined to comment on the matter, and in a statement to insuranceNEWS.com.au today the insurer says it “will not be commenting on market speculation”.

In late 2022, the Courier Mail said IAG was close to buying RACQ’s insurance operations in a $500 million deal, noting Victoria’s RACV Insurance is underwritten by a joint venture 70% owned by IAG.

The AFR says three options were investigated in 2022: selling the whole insurance book, finding a joint venture partner, or putting together a quota share deal with reinsurers to underwrite some offers.

“No doubt IAG chief executive Nick Hawkins will take another look at its rival, to see how things have improved since his last recce,” Street Talk said.

RACQ has been affected by above normal natural hazard claims, high compulsory third party and motor claims costs, and unfavourable investment markets. It reported an after-tax net profit of $31.9 million in 2023, after a $236 million loss the previous year, which included a $149 million provision.

Group executive for insurance Tracy Green left the business in 2022 as the insurer self-reported a regulatory breach over discounts. It has since paid $220 million in remediation.

Last year the insurer withdrew from Queensland’s CTP scheme, saying it was no longer viable to continue participating. IAG pulled out of that scheme in 2013.