LV= has reportedly held talks to secure a merger with another provider amid a backdrop of tougher capital requirements.
Sky News reports LV= has held talks in recent months with Royal London about a potential deal, though merger talks are said to have broken down following a disagreement over the structure of a deal.
LV= has also been approached by other insurers about the acquisition of its general insurance arm.
The provider is contending with Solvency II, and is subject to tougher requirements than some other firms. As a mutual, it is unable to issue new shares to raise capital.
In its half-year results in September, LV= chief executive Richard Rowney said: “Our capital position is satisfactory…although we continue to explore options to increase our Solvency II ratio.”
“We are operating in a prolonged low interest rate environment with significant volatility and this has created challenging market conditions.
“We will remain disciplined in the management of the business, exercising strict controls over the allocation of capital to the right product areas.”
The provider will announce its full-year results next month.
LV= and Royal London declined to comment.