British life insurer Phoenix in talks to buy Admin Re unit from Swiss Re

British life insurer Phoenix Group is in preliminary talks to buy the Admin Re unit of Swiss Re, in a deal that may be worth around £3 billion ($4.5 billion).

Both companies said that they were in talks, but Phoenix said a potential deal would see Swiss Re take a minority stake in Phoenix, indicating that the deal could probably be a stock transaction.

But both insurers declined to indicate the value of the transaction, but Sky News reported that the deal could be worth £3 billion.

"There is no certainty that these discussions will lead to any transaction. Further statements will be made if and when appropriate," Phoenix today said in a statement.

Phoenix, one of the largest providers of insurance services in the UK, was founded by British entrepreneur Hugh Osmond, and was formerly known as Pearl Group.

The company, which has a market value of about £1.5 billion, has £68.6 billion in assets under management serving over 6 million policyholders.

Zurich-based Swiss Re Group is the world's second-largest reinsurer with total assets worth $215 billion, and 2012 revenues of $33.6 billion.

Admin Re provides risk and capital management solutions that enable Swiss Re to assumes closed books of in-force life and health insurance business, entire lines of business, or the entire capital stock of life insurance companies.

Admin Re solutions help clients to divest non-core blocks of business, thus reducing administrative costs and freeing up capital.

According to Sky News, the merger would create a business with over £100 billion under management and close to 10 million policy holders.

Last year, Swiss Re sold its US Admin Re to Jackson National Life Insurance for $600 million.