UK - Life insurance groups Royal London and Royal Liver Assurance have today announced they are in early talks about a possible merger.

Royal London says it has approached fellow mutual life insurer Royal Liver Assurance about "a possible combination of [their] businesses" but a spokesman for the company said discussions are at an early stage and no further information is available at this time.

Both firms operate predominately in the UK life and pensions financial services arena, but Royal London also manages around £1bn (€1.4bn) in final salary pension fund money through its Scottish Life arm.

Its asset management arm Royal London Asset Management also manages pension fund assets as well as being responsible for the management of the £1.8bn Royal London Group which closed to new members in August 2005.

RLAM was earlier this month awarded a corporate bond mandate by the £2.1bn Avon Pension Fund to actively manage £100m.

Royal Liver Assurance operates only in the retail financial services market but has several life insurance and financial advice brands in the UK and Ireland, including Caledonian Life.

It also has a defined benefit scheme, now managed by Sally Wright since she took over as superannuation scheme manager earlier this year, and which was last recorded in 2006 as having assets under management of around £200m.