Royal London confirmed on Monday it has had “initial, exploratory discussions” with mutual life insurer LV= — formerly known as Liverpool Victoria — about a potential merger.

Royal London is the UK’s largest mutual life, pensions and investment company. It employs more than 1,000 in Scotland and includes the former Scottish Life and Scottish Provident businesses.

LV= said on Monday its chairman Alan Cook would step down after members of the mutual life insurer failed to support a £530 million takeover approach by private equity giant Bain Capital in sufficient numbers.

Cook will be replaced in April by Seamus Creedon as part of a wider board reshuffle.

LV= said: ““We share a common interest with Royal London in a healthy and vibrant mutual sector so that we can both compete fairly with shareholder-owned firms. 

“We have had, and continue to have, discussions with Royal London about if and how we can co-operate to the benefit of both sets of members and the mutual sector.  

“In the meantime, we will continue to strengthen our independent business for the benefit of our existing and future policyholders.“

Royal London said: “In light of the outcome of LV=’s Special General Meeting, Royal London issued a statement on 10 December 2021 outlining our belief that we could offer an attractive future for the members of LV= as part of a growing and well-capitalised mutual.

“We note LV=’s announcement and we can confirm we have had initial, exploratory discussions with them.

“There is no certainty that these discussions will result in a transaction and a further announcement will be made as and when appropriate.”