* First round bids already in for life insurance unit
* Prudential Plc said to be among bidders
* Auction started last year, but pulled when markets fell
* UOB Life seen as non-core business (Adds details of auction, deal, company information)
By Michael Flaherty
SINGAPORE, Sept 11 (Reuters) - Singapore's United Overseas Bank Ltd is selling its life insurance unit, according to sources involved in the auction, in an effort to shed a non-core division and raise up to $500 million in the process.
The move shows a pick-up in confidence among executives seeking to divest businesses, and highlights the continued interest of Western firms looking to tap Asia's growing personal wealth.
Sources say HSBC is advising Southeast Asia's second-biggest lender on the sale of the business, known as UOB Life Assurance.
Prudential Plc is among the global insurers bidding for the company, sources say, with first round bids arriving a few weeks ago.
Manulife Financial Corp, Canada's largest insurer, has also shown interest in UOB Life, according to one source involved in the deal.
UOB Life, a wholly owned subsidiary, was incorporated in Singapore in 1990, and had more than S$2 billion ($1.4 billion) in assets as of November 2008.
"The life insurance business was never really a core strategy for them," said one of the sources. 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.
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 auction comes at a time when global insurance companies are seeking to expand their networks in fast growing regions such as Asia. The sale of American International Group Inc's various insurance units in the region this year has attracted bidders from both Asia and abroad.
Sources say UOB started the sale of its life insurance business late last year, and pulled the auction when the global economy was in freefall.
UOB Group has a global network of over 500 offices in 18 countries and territories in Asia-Pacific, Western Europe and North America, according to its website. The company offers financial services, including life assurance and investment-related products and services.
A UOB spokesman said the company does not respond to rumours. HSBC declined to comment.
A Prudential spokesman in London said the company would not comment on speculation about specific companies. But he added Prudential would evaluate any opportunity against strict financial criteria with a view to delivering value for its shareholders.
Manulife declined to comment.
The sources did not want to be identified because they were not authorised to speak publicly about the matter.
UOB shares closed down 1.6 percent on Friday, underperforming the broader index, which was flat. (Editing by Ian Geoghegan)