Its £150m takeover of Highway Insurance, the owner of broker Hero, has also pushed it into the UK’s top-five biggest car insurers by 2012.

The group has meanwhile benefited from tie-ups with building society Nationwide on travel and car insurance.

Steve Burnett left Royal Liver in August after spending seven years modernising the business.

Speaking to the Daily Post’s LDP Business magazine last year, Mr Burnett said Royal Liver’s board did not feel that a merger with Royal London was the right thing for the company.

He said: “The board had been through five years of hard work and was seeing the results starting to come through.

“To hand the baton on to another company just didn’t feel like the right thing to do at that point.”

Royal Liver has also announced a full strategic review of its businesses.

The company out-sourced its IT functions, with 73 staff transferring to ATOS and just 10 staying within Royal Liver. Chairman and acting chief executive David Woods said the move could save £20m over 10 years.

The company also axed 29 jobs at Dublin-based financial advice arm Citadel and is restructuring its Park Row financial advisory arm.

Any merger deal would have to be approved by Royal Liver’s 200 delegates, the group’s own “members of Parliament” who are elected by policyholders to scrutinise the company’s performance.