The list of potential suitors for Royal Bank of Scotland�s insurance division continues to dwindle, with German financial giant Allianz yesterday declaring that it had not made a bid for these operations.

The list of potential suitors for Royal Bank of Scotland's insurance division continues to dwindle, with German financial giant Allianz yesterday declaring that it had not made a bid for these operations.

Allianz chief executive Michael Diekmann said in Frankfurt that his company had looked at the books of RBS Insurance, which takes in Direct Line and Churchill, but had "for the time being, refrained from making an offer".

The German group is the latest in a long line of touted suitors for the RBS Insurance operations to declare that it is not pursuing such a deal.

Zurich, which had been viewed as the clear frontrunner, declared on July 10 that it was withdrawing from the auction.

Famous American billionaire Warren Buffett's Berkshire Hathaway investment vehicle, Generali of Italy, and Chinese insurer Ping An had all already departed the scene before Zurich's withdrawal.

US insurer Allstate is now being cited as the frontrunner to buy Direct Line, although there has been speculation that it may not pay the £7bn-plus which Royal is believed to have hoped to obtain for its insurance business.

The sale of RBS Insurance forms the centrepiece of Royal's plans to boost its capital by £4bn through asset disposals.

However, when Royal confirmed its plans to sell its insurance business, its chief executive Sir Fred Goodwin said: "It is not going to be sold unless we can attract a very high price for it. We might simply sell a stake in it if it is financially attractive to an investor."

Royal Bank is today expected to unveil a loss of more than £1bn for the first half of 2008.