UK based Prudential is gearing up to bid for the insurance business of Thailand's Thanachart Bank for nearly $500m, with an aim to successfully compete with its competitor AIA in the Southeast Asian nation.

The Thanachart Bank unit to be auctioned may include life and non-life assets as well as a bank assurance arrangement, according to Reuters.

The auction has seen interest from some Japanese and European insurers who are also believed to participate in the bidding process.

Last year, Thai insurance sector sustained huge losses of approximately $15bn due to claims settlements, caused by destructive floods.

Currently, the UK insurance player has a 2% market share in Thailand and is planning to broaden its business base in the Southeast Asia’s second-largest economy, which is expected to grow at the rate of 5.7% in current fiscal.

Within the next two weeks, Thanachart’s adviser Citigroup (CN) is believed to issue sale documents to potential bidders.

Thanachart Bank, which is a JV of Thanachart Capital and Scotia Netherlands, owned total assets of THB34.9bn ($1.1bn) and the non-life insurance business had total assets of THB8.7bn ($281.56m) as of 31 December 2011.