Royal Bank of Scotland’s (RBS) insurance business continues to struggle with falling income and static claim numbers in its third-quarter results.

The disappointing result comes as the bank moves closer to selling its insurance division. Last week it appointed investment banks Goldman Sachs and Morgan Stanley to handle any public or private sale.

According to the bank’s third-quarter results for the three months ending September 30, total net insurance claims were almost static at £1.142 billion ($1.82 billion) compared to £1.145 billion ($1.82 billion) in the corresponding period last year.

Total insurance net premium income for the quarter was £1.2 billion ($1.91 billion) compared to £1.3 billion ($2.07 billion) in the 2009 September quarter.

CEO Stephen Hester says the improved third quarter was due to lower additions to bodily injury reserves, though the business still recorded an operating loss of £33 million ($52.6 million).

“Tighter underwriting criteria are now in effect, but the motor segment remained in loss,” he said.

“The home insurance segment continues to deliver strong results with the division established as the largest home insurance provider within the UK.”

According to UK market sources, the bank will be likely to raise more than the insurance division’s net asset value of about £4 billion ($6.3 billion), as it has been paying out more in claims than premium income for a number of years.

The insurance business has to be sold before 2013 as part of the bank’s rescue package from the UK Government.