Two major banks are tipped to be the major suitors for the mooted sale of life insurer Aviva’s Australian business.

Ibisworld analyst Richard Jeremiah says the National Australia Bank and Westpac are the major candidates to take over the giant UK company’s local operations but with a significant rise in bad debt provisions expected in the next nine months and the drain on capital this could represent, an Aviva purchase is “somewhat ambitious”.

“Having said that, all the banks are in the process of realigning their operations around wealth management and recognising the huge potential for this outside of just superannuation,” he told insuranceNEWS.com.au.

Mr Jeremiah says AMP cannot be excluded from the list of suitors, and this could also be a golden opportunity for smaller player Axa to bolster its market position.

“There has been a lot of speculation about Aviva for months,” he said. “Its capital position is looking pretty sick and sorry after all the financial turmoil, so a sale would seem to be assured.”

The speculated price tag ranges from $800 million to $1 billion.