(Adds Fiat hiring banker on possible Toro sale; adds background)
PARIS, Feb 19 (Reuters) - French mutual insurer Groupama, which aims to expand in Italy, said on Wednesday it would look at Toro, the insurance operation of Fiat , if the troubled Italian car maker put the business up for sale.
Fiat said on Wednesday it has hired an investment bank to advise it on the sale of the unit which is Italy's sixth-largest insurance group and carries a reported price tag of 2.0 billion euros to 2.5 billion euros ($2.15 billion).
Groupama is the largest property and casualty insurer in France but wants to widen its international scope to offset domestic market pressures.
Reuters reported on Monday that Groupama was among European insurers studying Fiat's insurance arm.
Italy's insurance market is seen as having great potential but it is difficult for foreign insurers to gain a foothold there because local agents, who only sell products offered by a single insurer, dominate the business.
"In the context of our strategy, we hope to develop in the Italian market," a Groupama spokeswoman told Reuters. "If a sale of Toro is confirmed, we would look at the dossier."
Groupama already offers life and nonlife insurance products in Italy through its GAN Italy unit. It has looked to southern Europe for growth because its core French market is highly developed and saturated, rating agencies have said.
Other European insurers also might be interested in Toro, including RAS , the Italian arm of German insurer Allianz . RAS has said it would consider buying Toro though a spokeman added he was not aware the unit was for sale.
At the same time, many major European insurers are strapped for cash because after slumping stock markets ate into their once-enviable financial reserves. But efforts to restructure its portfolios and exit ancillary businesses have bolstered Groupama's profits in recent years.
Fiat meanwhile said on Wednesday it hired MCC, the merchant banking arm of Capitalia to advise it on a Toro sale. Capitalia is a Fiat creditor.