ONEBEACON Insurance Group Ltd, the 177-year-old insurer that paid claims on the Titanic sinking, is seeking a buyer for its auto and home division in a sale that may raise about US$500 million, according to three insiders.

OneBeacon hired Lehman Brothers Holdings Inc to help sell the business amid a record pace of United States insurance acquisitions, the trio told Bloomberg News. Potential buyers may include European carriers seeking a foothold in the US Northeast.

T. Michael Miller, 49, chief executive officer of Canton, Massachusetts-based OneBeacon, is aiming to shed the unit to focus on selling coverage to commercial clients.

He's looking to sell as larger property and casualty companies are on the prowl for acquisition targets amid US$13.2 billion worth of US deals since January 1, headed for the busiest year in at least a decade.

"There are more opportunities for growth in their other businesses," said Dean Evans, an analyst at KBW Inc in New York who rates the shares "market perform." Bigger rivals were looking for deals to deploy cash reserves and boost revenue as insurance rates declined, he said.

Carmen Duarte, a spokeswoman for OneBeacon, declined to comment, as did Catherine Jones of New York-based Lehman.

OneBeacon sells insurance to firms, covering property and providing specialized liability protection for professionals such as medical workers and lawyers. Those divisions have boosted revenue while premiums from drivers and home owners declined.

Net premiums from personal insurance declined 14 percent to US$690 million last year. The commercial-insurance business rose 1.4 percent to US$728 million, and its specialty insurance unit rose 2 percent to US$446 million.