* Insurer AIA submits first round bid for CBA's insurance unit
* CBA's insurance units valued at about $4 billion
* Zurich Insurance eyeing ANZ's insurance unit valued at $3 bln (Adds details on insurance business, market context)
By Sumeet Chatterjee
HONG KONG, Sept 15 (Reuters) - Hong Kong-based insurance giant AIA Group Ltd 1299.HK has shown interest in buying Commonwealth Bank of Australia's CBA.AX insurance business, which is likely to be valued at about $4 billion, people with knowledge of the matter said.
Separately, Zurich Insurance Group AG ZURN.S has emerged as the final bidder for Australia and New Zealand Banking Group's ANZ.AX life insurance and wealth business, valued at about $3 billion, the people said.
While the official final deadline for offers for fourth-largest Australian lender ANZ's insurance and wealth business was Friday, there was still a possibility of a few more bids coming in soon, one of the people told Reuters.
Australia is an attractive market for foreign insurers such as Zurich and MetLife Inc (NYSE:MET) MET.N because the population and economy are growing faster than in most other developed markets and the regulatory regime is stable, analysts have said.
Local banks' insurance units have also struggled amid growing competition from the pure-play and large foreign insurance companies and due to new regulations demanding increased capital buffers for their main banking operations.
National Australia Bank NAB.AX , the country's No.3 lender by assets, sold its 80 percent stake in its life insurance arm to Japan's Nippon Life NPNLI.UL for A$2.4 billion ($1.9 billion) in a deal that closed late last year.
ANZ's insurance and wealth management unit sale outcome is expected to be announced within a month and CBA's is expected to take longer as more bidders are expected to join, the people with knowledge of the matter said.
But there is no certainty that both transactions will proceed and be completed soon, one of the people said.
Representatives at ANZ and CBA, as well as AIA and Zurich, all declined to comment. The people who have knowledge of the two divestment deals declined to be named as they were not allowed to discuss them in public.
ANZ's Australian insurance and wealth business reported a full-year cash profit of A$327 million for the year ended Sept. 30, 2016, down 24 percent from a year earlier, after significant restructuring and software charges.
CBA said last month it was in talks to sell its life insurance business, although it did not name any potential buyer and added that the outcome of the negotiations was uncertain. is being sued by Australia's financial intelligence body over alleged widespread breaches of money laundering and counter terrorism financing laws. It is also facing a separate investigation by two regulatory bodies and a potential class action. = 1.2475 Australian dollars)