The Royal Bank of Scotland (RBS) will sell its insurance business in the second half of next year.

Speaking at the company’s AGM in Edinburgh, RBS Chairman Phillip Hampton confirmed the timetable for the sale of the business.

The bank has been forced to sell off its insurance business as part of a financial rescue package struck with the European Union.

In the 2010 financial year the insurance business recorded a £300 million ($458 million) loss, mainly due to bad weather experienced in the UK just before Christmas.

“Management actions are beginning to turn the business around and underlying profitability is coming back toward more acceptable levels,” Mr Hampton said.

The brands for sale will include Churchill Insurance, Direct Line and car insurer Privilege.