NEW YORK (Bloomberg) ? Liberty Mutual Group and Safeco Corp. are bidding for the US insurance arm of Credit Suisse Group?s Winterthur, a unit that may fetch as much as $1.5 billion, said three people involved in the auction.

Boston-based Liberty Mutual, the sixth-largest US property and casualty insurer, and Safeco, a smaller Seattle-based competitor, would gain auto, home and commercial policies worth $1.43 billion in premiums last year.

As many as five bidders are in the running, said the people, who declined to be identified because details haven?t been disclosed publicly.

The auction follows Credit Suisse?s agreement in June to sell its Winterthur insurance operation to Axa SA, Europe?s second-largest insurer, for 7.9 billion euros ($9.9 billion).

Paris-based Axa doesn?t sell property and casualty coverage in the US, and for companies such as Safeco, acquisitions may help lower expenses as insurance prices drop.

?The whole product is becoming more of a commodity every year,? said Rob Haines, an analyst at CreditSights Inc. in New York. As competition increases, acquisitions may boost business with limited additional costs, he said.

Axa said the US arm of Winterthur was under strategic review in June, and last week the company?s 2,150 US employees were told Winterthur intends to seek a buyer for the unit, said Winterthur spokeswoman Anne Smith.

It was unclear whether an agreement could be completed before the end of the year, when Zurich-based Credit Suisse is expected to close the larger deal.

Final offers are due by mid-November, one of the people familiar with the auction said. Paul Hollie, a spokesman for Safeco, and Richard Angevine, a spokesman at Liberty Mutual, declined to comment, as did Axa?s Mary Taylor.

Victoria Harmon, a spokeswoman for Credit Suisse, referred questions to Winterthur. Smith declined to comment further.

Winterthur US Holdings Inc. operates under the General Casualty and Unigard brands, selling policies to small and mid- sized businesses, homeowners or drivers in 32 states, according to its Web site.

The company?s $1.43 billion in 2005 premium revenue compares with Safeco?s $5.8 billion and Liberty Mutual?s $17.6 billion.

Its net income rose ten percent to $114 million last year, compared with Safeco?s 23 percent increase to $691.1 million, and Liberty Mutual?s 18 percent decline to $1.03 billion.

Liberty Mutual was the fourth-biggest US insurer of businesses and the eighth-largest home and auto insurer in 2004, according to a ranking of premiums by credit rating company A.M. Best Co.

The company, owned by its policyholders, bought Winterthur?s Portuguese unit in 2003.

Terms weren?t disclosed.

For Safeco, a deal would be the company?s biggest since the $2.8 billion acquisition of American States Financial Corp. in 1997.

Two thirds of its premium revenue comes from home and auto policies, while most of the rest comes from commercial insurance. As of 2004, Safeco was 13th in home and auto and 20th in commercial, A.M. Best data show.

Credit Suisse, Switzerland?s second-biggest bank, is following New York-based Citigroup Inc., the world?s largest financial services company, in abandoning an effort to marry banking and insurance.

Buying Winterthur will give Axa, Europe?s second-largest insurer, a leading position in the Swiss market and 13 million more clients in 17 countries from Spain to China.