Hartford Financial Services Group Inc is trying to sell its property and casualty business, sources familiar with the matter said on Thursday, as the U.S. insurer reels from massive losses.

Hartford has retained Goldman Sachs, which has been calling potential bidders for the property and casualty business, the sources said.

Possible contenders for the business could include German insurer Allianz , which is already an investor; MetLife Inc , Munich Re and Travelers Companies Inc , one of the sources said. It was not clear whether any of these companies had been approached, however.

Hartford's property-casualty business is worth about $8 billion on paper, based on the company's financial statements filed with regulators, according to a February note issued by Citigroup analyst Joshua Shanker.

But getting that price could be difficult, because capital and loan markets have been difficult to tap, reducing the capacity of bidders to pay. An insurer such as Travelers, with a market capitalization of about $23 billion, could have trouble raising enough debt and equity to pay for a deal, a source said.

Allianz made a $2.5 billion investment in Hartford last October, giving it a stake, and the ability to raise its ownership in future. And Allianz could also be better situated to pay for the business, a source said.

The investment in the Hartford is purely financial, not strategic, Sabia Schwarzer, a spokeswoman for Allianz of America, said on Thursday.

She declined to comment further.

Goldman spokeswoman Andrea Rachman declined to comment, as did Travelers and MetLife. Hartford could not immediately be reached and Munich Re spokeswoman Johanna Weber also declined to comment.

The development comes amid large losses for the 199-year-old company. Hartford, a large writer of a popular retirement product called variable annuities, has been badly battered by investment losses and higher costs from guarantees on these annuities, which are linked to stock market performance.

It had a net loss of $2.75 billion in 2008, reversing a net profit of $2.95 billion the previous year.

Earlier this month, media reports said Hartford was trying to sell parts of its life insurance unit to Canada's Sun Life Financial Inc , but Bloomberg reported those talks ended without a deal.

Hartford's shares are down some 40 percent so far this year. On Thursday, Hartford shares rose in early trading, but were down 1 cent at $9.67 by early afternoon. The stock traded as high as $76.39 last May, according to Reuters data.

(Additional reporting by Lilla Zuill and Paritosh Bansal in New York; Editing by Andre Grenon)