LV=, the mutually-owned life insurer, said talks are ongoing over a possible transaction after weekend reports that a tie-up with fellow mutual Royal London is imminent.
Management of LV= met last week to discuss progress with a strategic review of the business that started in June, according to Sky News.
Sources were quoted as saying the value of a deal would be more than £500mln, but substantially less than £1bn.
Royal London is the UK’s largest mutual life and pensions group and considerably bigger than LV, which sold its general insurance arm last year to German group Allianz.
LV’s 1.1m members would be asked to be to vote on any recommendation made by the board on a deal, said the report, which would likely see the LV= brand disappear from the life and pensions market.
Bain Capital, which is behind motor insurer esure, is also said to be looking at LV.
In a statement this morning, LV said: "Discussions are on-going and there can be no certainty that the discussions will result in any transaction being agreed or with whom.
“LV= continues to trade well having adapted effectively to the impact of COVID-19 with a strong capital coverage ratio in excess of 200%.”