Markerstudy is reportedly nearing an agreement to takeover Co-op's insurance business, according to Sky News.

On 6 November, the news outlet reported that the Qatar Re-owned motor insurer is in “detail talks” with Co-op about a potential £300mn sale of its general insurance arm.

Sky News said that discussions between the parties are at an advanced stage, although a definitive decision to proceed with a transaction has yet to be reached by either of the two boards.

Whilst Markerstudy has emerged as the frontrunner for the takeover, Sky News noted that AA, Aviva, RSA Insurance and Saga are among those who are understood to have expressed an interest in a deal with the Co-op.

The mutual, which has recovered strongly from its near-collapse in 2013, has been exploring a sale of its insurance operations since the summer, Sky News said.

The Co-op’s underwrites its own home and motor insurance policies, while travel insurance policies are underwritten by Mapfre. It also sells pet insurance with Allianz.

Sky News noted that the disposal of the insurance arm, generated £11mn in underlying profit in 2017 on £331mn revenue, is being viewed sensitively within the Co-op Group because of its prospective impact on the insurance division's c.1,000 headcount.

Citing sources, the news outlet further added that any buyer would have to agree to sell Co-op branded insurance products.

The Co-op attempted to sell its general insurance business in 2013 – the same year in which sold its life insurance business to Royal London – but the process was abandoned in early 2014.

Markerstudy, which underwrites more than five percent of the UK motor insurance market, operates through brands such as Zenith and works with more than 1,000 brokers and intermediaries.