The Royal Bank of Scotland (RBS) has reignited the sale of its insurance assets with a multi-billion pound restructuring designed to make them more attractive to potential suitors.

The £5 billion ($8.8 billion) sale of RBS Insurance is expected to take place next year once the company pools its diverse liabilities into a single vehicle using a court-appointed mechanism known as a Part VII restructure.

Once complete, the restructure will reduce the amount of capital a potential buyer would need – an important advantage amid new European Union solvency requirements forcing insurers to hold larger reserves.

RBS Insurance is the largest home and motor insurer in the UK, owning the Churchill, Direct Line and Privilege brands and administering more than 17 million policies.

The bank shelved its original plan to sell its insurance assets in February last year, when group CEO Stephen Hester said a sale on the terms available at that time “would destroy value for RBS shareholders”.