ISTANBUL/LONDON Sompo Japan Insurance, Dai-ichi Life Insurance (8750.T), Zurich Insurance ZURN.VX and Allianz SE (ALVG.DE) are among the potential buyers for Turkish bank Yapi Kredi's insurance arm Yapi Kredi Sigorta YKSGR.IS, sources close to the matter said on Friday.
Turkey, Europe's fastest growing economy in 2011, has potential attractions for foreign insurers looking to diversify away from competitive and mature home markets where there is less chance for growth.
"The auction moved to the second round about two weeks ago," one banker close to the process said.
However, another source said three of the companies were not interested in the pensions part of the business and there would probably need to be a third round, adding that Japanese bidders were "very aggressive" on the price.
"Yapi Kredi is in talks to sell the whole of the insurance unit and a majority stake in the pension unit," a third source said.
Dai-ichi, Sompo Japan, Zurich and Allianz all declined to comment.
Shares in Yapi Kredi Sigorta YKSGR.IS jumped as much as 8 percent.
Yapi Kredi bank, a joint venture between UniCredit SpA (CRDI.MI) of Italy and Turkey's Koc Holding (KCHOL.IS), said on Thursday that the sale process was continuing.
One source said Munich Re (MUVGn.DE) was also involved, though Munich declined to comment.
Dai-ichi, one of Japan's top four life insurance companies, has been actively looking for overseas acquisition opportunities, while Sompo Japan, a unit of NKSJ Holdings (8630.T), one of Japan's top three non-life insurers, bought Turkey's Fiba Sigorta in 2010.
Allianz, Europe's biggest insurer, and Zurich also already have Turkish units.
Corporate Japan spent a record amount in 2012 acquiring assets abroad, up 24 percent from the previous year as a strong yen added to the attractions of buying foreign companies with strong growth potential.
($1=1.7753 Turkish liras)
(Additional reporting by Seda Sezer, Asli Kandemir, Taiga Uranaka, Myles Neligan, Jonathan Gould and Dinesh Nair; Editing by Greg Mahlich)