Royal Bank of Scotland (RBS) is tipped to sell its insurance business through a trade sale rather than going for a public listing.

The division has reported a £253 million ($428 million) loss for the first half of this year compared to a £217 million ($367 million) operating profit in the same period last year.

Despite the poor results, it is understood a number of potential buyers are in the wings, including Warren Buffett’s Berkshire Hathaway.

RBS has to dispose of the unit by December 2013 as part of the European Union’s rescue package for the troubled bank.

Previously a public listing for the business by 2012 was favoured by RBS management, but it is understood the bank has appointed advisers to look at options for the division, suggesting a trade sale is under way.

RBS Insurance is the largest home insurance provider in the UK and its Direct Line business has been rated most trusted insurance brand by Consumer Intelligence.

Last month the bank cut about 400 jobs at its Direct Line business in Glasgow and a further 3500 back-office jobs at the bank were cut late last week with some, possibly up to 1500 coming from the insurance business.

The insurance division has been badly hit during the past six months with second-quarter income down 2% to £1.03 billion ($1.74 billion) while claims were up 16% to £1.13 billion ($1.91 billion).