Life insurer Aviva Australia has refused to comment on speculation that it may withdraw from the local market.

Business newspaper The Australian Financial Review last week suggested advisers are in the early stages of courting buyers in a deal that could fetch $1 billion.

But Aviva spokesman Tim Cobb told insuranceNEWS.com.au he “couldn’t comment either way” on the report.

Aviva has strong historical links to the Australian market, in both the life and general insurance sectors. Predecessor company Commercial Union established its first Australian agency in 1877. Aviva sold CGU Australia and NZI to IAG for $1.86 billion in 2002.

The UK parent company has endured tough times of late, reporting a £915 million ($1.87 billion) loss last year, compared with a £1.3 billion ($2.7 billion) profit in 2007.

Earlier this month another Aviva subsidiary in the UK, Norwich Union, announced plans to axe 1100 jobs.

The local life insurance division has enjoyed strong growth lately, but the UK parent company is reportedly seeking to shore up its capital position.