* Planning for spin-off from UK parent Aviva
* Aviva would list minority stake in Amsterdam
* Company says it foresees consolidation in Benelux
* Sources put value of IPO at 1 bln euros
(Adds IPO size and timeframe)
By Ben Berkowitz
AMSTERDAM, Aug 6 (Reuters) - Dutch insurer Delta Lloyd said on Thursday it was making preparations for a spinoff from parent Aviva and an initial public offering, and had a close eye on acquisitions in the crisis-hit Benelux insurance market.
Delta Lloyd, which has fared better than many of its competitors over the last year, is already a major investor in the Dutch market and could accelerate consolidation in a sector hit hard by the credit crisis.
The news comes as several of Europe's top insurers, such as Axa, Standard Life PLC and Old Mutual, have warned of difficult times ahead, though Zurich Financial beat expectations with its second-quarter profits on Thursday and sounded a more optimistic note.
Aviva Chief Executive Andrew Moss said the newly public Delta Lloyd would be on the hunt for deals.
"We do believe there are opportunities, as does the Delta Lloyd board, for consolidation in the Benelux market, and we want to make sure Aviva shareholders benefit from value-creation that would come from that," Moss said on a conference call.
Sources familiar with Aviva's IPO plans told Reuters the flotation was likely to come in October and November. Aviva, the sources said, is expecting to raise about 1 billion euros for a roughly 25 percent stake in the business, suggesting a total valuation for Delta Lloyd of around 4 billion euros.
STATE OF FLUX
The insurance market in the Benelux region has been in a heavy state of flux since the credit crisis began, in large part because of the substantial writedowns insurers have taken and the subsequent government bailouts they required.
Four of the largest insurers in the region -- Fortis, ING Groep, Aegon and SNS Reaal -- were either broken up or rescued with huge state investments late in 2008.
And while insurers across Europe are seeing glimmers of improvement in their underlying businesses, uncertainty about writedowns and future market trends have weighed on them throughout the year.
Against that backdrop, all of the big Benelux insurers are making changes to consolidate their businesses.
ING is planning to combine all of its Benelux insurance operations under the Nationale-Nederlanden banner, with 165 million euros of extra spending over four years to build a tighter organisation.
Aegon has been closing some smaller businesses while consolidating others and working on brand-boosting strategies to increase market share. And SNS Reaal is shifting its focus away from acquisitions and toward strategies to better sell its products, such as dedicated cashless bank branches.
After its breakup along national lines, Fortis is concentrating on restructuring and making a viable insurance business from the remaining parts of the company that were not nationalised or bought out by others.
Were Aviva to look at selling Delta Lloyd, other than by IPO, it is not clear that any of the otherwise logical Benelux buyers would be able to buy because of their repayment obligations to the state.
"Delta Lloyd is the only major Dutch insurance company that hasn't been forced to raise equity either from private capital markets or the government in the last 18 months. The corollary of that is there aren't a lot of people there in the Dutch market who've got a cheque book to wave at us," Moss said. (Additional reporting by Myles Neligan and Daisy Ku in London, editing by Will Waterman)