Talks between mutual insurers Royal London and LV= over a potential merger have ended with both sides walking away.

The mutuals started discussions shortly after an attempted takeover of LV= by private equity giant Bain Capital in December failed to win enough support from its 1.2 million members.

But on Wednesday, Royal London appeared to suggest it had been misled by LV= over the company’s need to merge or risk going bust, whilst LV= said the different business models made a merger impossible.

Royal London’s chief executive Barry O’Dwyer said: “Mutuals are owned by their customers and are run for their benefit.

“Our offer to preserve LV=’s mutuality through a merger with Royal London was based on an understanding that LV= did not have a viable future as an independent company.”

LV= said a deal would not be possible because “our different mutual models mean such a merger would not be in the best interests of LV= members.”

The company went on to say that it was in a healthy financial position, having previously stated without a deal with Bain it would struggle to survive.

Seamus Creedon, LV= interim chair, said: “We thank Royal London for its engagement and we look forward to operating alongside it as part of a vibrant mutual sector.

“The strength of LV=’s business performance over the past 18 months combined with its operational progress has strengthened the board’s belief in, and commitment to, the continuation of our status as an independent mutual.

“We have heard what our members have said about the importance of mutuality and the continuation of the LV= brand.

“We continue to maintain our strong capital position, are trading well and building a successful future for LV=, its members, employees and wider communities.”