Show Hide image Business 20 January 2014 Five questions answered on the Co-operative Group's decision not to sell its insurance business How much is it said to be worth? Print HTML The Co-operative Group has announced that it will not to sell the general insurance arm of the business. We answer five questions on the group's decision. Why has the Co-operative decided to pull out of selling the general insurance part of its business? The group has reportedly decided it no longer needs the money the sale would have generated. It was originally initiating the sale to fill the bank's £1.6bn financial black hole. The Co-op management is said to have thought the bids they were offered undervalued the business, in light of its potential for growth. How much is this side of the Co-op business said to be worth? According to the Telegraph, analysts have valued its worth between £250m and £600m. Legal & General and private equity house AnaCap are believed to have made second-round bids. What has the Co-operative said about its decision to halt the sale? Co-operative’s chief executive Euan Sutherland, in a statement, said: Having considered the sale process, and in light of the changed requirements on us under the Bank recapitalisation process, we believe it is in the best interests of our members, customers and colleagues, that we retain this strong business and develop it further. What were the Co-operative's original plans before it decided to cancel the sale? Originally, the group had planned to part with the business in March 2013, in a bid to boost the Co-op Bank’s capital position. The life insurance arm of the group, which was sold to Royal London for £219 million, and the general insurance arm, were intended to be used to safeguard the future of the bank. The discovery of a £1.5bn capital shortfall at the bank last summer intensified the need for capital. Under the original recapitalisation plans, the bank was due to find part of £1bn with £500m from bondholders. However, the groups funding needs reduced from £1bn to £462m after a redrafting of those plans in November resulted in distressed debt funds opted to inject a greater amount of funding. What other changes is the group making in a bid to get its finances in order? Over the weekend, the Telegraph reported that the Co-op Group will cut its £850 annual donations to the Labour Party. Lord Myners, who is carrying out a review of the group's corporate governance and relationship with third parties, told the newspaper: "The scale of giving to others cannot go unaffected by the change in the Co-op’s economics.” “It’s got less money to spend on everything,” he added. › The Lib Dems suspend Rennard from the party Heidi Vella is a features writer for Nridigital.com From only £1 a week Subscribe More Related articles Autumn Statement 2015: a test of competence as well as compassion Autumn Statement 2015: whatever you hear, don't forget - there is an alternative Autumn Statement 2015: How should Labour respond?