LV has opened sale talks with German insurance behemoth Allianz as part of plans to bolster its capital reserves.
The British insurer is looking at selling a minority share of its general insurance business, Sky News reported.
A number of trade, pension and sovereign wealth funds have approached LV, with one analyst indicating its general insurance operations would be worth more than £1bn, reports added.
Read more: LV is next to quit the annuity market
LV's profits were almost wiped out by the government decision to adjust the discount rate earlier in the year. The firm revealed a £139m hit in April, meaning operating profit for the year slumped to £20m.
Eamonn Flanagan, an analyst at Shore Capital Markets, said Allianz was one of the few trade players that might be entertain a tie-up.
He said there had been a lot of consolidation in the UK insurance market, leaving a smaller number of larger players. This means bigger players would likely be put off by competition regulators wanting to investigate a potential tie-up with 6m strong insurer.
Two months ago LV aborted a tie-up with Royal London. Flanagan said a deal between the two firms' life insurance divisions "would be a very useful merger".
But City sources told City A.M. a partnership with Royal London was something of a "red herring".
Allianz's UK footprint was originally based around Cornhill insurance, which it bought in 1986, only dispensing with the brand in 2000.
Potential trade suitors may also be restricted by price. Panmure Gordon head of research Barrie Cornes said the valuation of motor insurance firms were at the top end of the market. More buyers may have been interested two years ago, he added.
But from the perspective of LV, Cornes said the sales timing made sense. He said: "If you are going to the sell the business, now is the time to sell it."
LV declined to comment on the reports. Allianz have yet to respond to requests to comment.