Phoenix Group Holdings, Britain's largest owner of life insurance funds, said it was in advanced discussions with Deutsche Bank to acquire the German lender's UK insurance business, Abbey Life Assurance.
Deutsche Bank was nearing a deal to sell the business to Phoenix, a person close to the matter told Reuters.
Phoenix is planning to raise £800m to fund the purchase, which will be finalised in a couple of weeks, the person added.
Abbey Life, which was bought by Deutsche Bank for £977m in 2007, is valued at about £1 billion, sources told Reuters in June.
Deutsche Bank began weighing the sale of Abbey Life in October last year, attracting interest from Swiss Re's unit Admin Re, Phoenix and Legal & General Group among others, sources familiar with the matter said.
In March, the UK's Financial Conduct Authority launched an investigation into Abbey Life's treatment of long-time life insurance customers, which could result in compensation payments to policy holders or fines for the British insurer.
Regulatory changes and rock bottom interest rates had ramped up pressure on industry players to deal with their legacy books, leading many to consider putting them up for sale.
The interest rate cut that followed Britain's vote to leave the European Union has also squeezed returns on investments for companies that manage closed life insurers.
Phoenix said today that it continued to explore further acquisition opportunities in the UK-closed life insurance sector.
Phoenix CEO Clive Bannister told Reuters in August that the company was scouting for acquisitions to help gain scale in a challenging, low-interest-rate environment after Brexit.
The company bought French insurer AXA's UK investment and pensions business in May for £375m.
