It has appeared that in order to get rid of a non-core division and invest nearly $500 million, Singapore's United Overseas Bank Ltd is selling its life insurance unit.

The move is a clear indication of increased optimism among executives, who are looking at terminating the business. The deal also emphasizes on the ongoing interest of Western firms, which are seeking to tap Asia's growing personal wealth.

The sources that are close to the matter specified that Southeast Asia's second-biggest lender, Prudential Plc, which is among the global insurers bidding for the company, is being advised by HSBC on the sale of the business dubbed UOB Life Assurance.

Apart from Prudential Plc, even Manulife Financial Corp, Canada's largest insurer, has displayed interest in UOB Life.

It was back in 1990 when UOB Life, a wholly owned subsidiary, was integrated in Singapore. Going by November 2008 figures, it held over S$2 billion ($1.4 billion) in assets.

"The life insurance business was never really a core strategy for them. In addition, UOB Life has always struggled to compete with some of the larger life insurers in the region, such as Great Eastern, majority-owned by rival Oversea-Chinese Banking Corp Ltd," said a source.

He added, "Great Eastern is the largest insurance group in Singapore and Malaysia, dwarfing UOB Life with S$45 billion in assets and 3.8 million policyholders in both countries."

The timing of the auction is dramatic, as global insurance companies are mulling to widen their networks in rapidly growing regions like Asia.