Joint insurers LV= and Royal London have walked away from talks over a possible merger.
LV=, formerly known as Liverpool Victoria, said a marriage would not be in the best interests of its members.
Royal London hinted that it had been misled into thinking that LV= did not have a viable future on its own.
It is the latest in a tumultuous few months for LV=, after its 1.2 million members rejected a takeover by US private equity firm, Bain Capital.
Mutuals are owned by, and for, their members. There was considerable public and political debate when the leadership at LV= favoured the Bain Capital takeover - a move that would have led to it losing its mutual status 178 years after it was founded.
In December, it was announced that after a vote, the sale did not get enough support from members.
LV= members reject sale to US private equity firm
Discussions about a merger with another mutual insurer - Royal London - began shortly afterwards, but on Wednesday both sides said these had come to an end.
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 added it was in a healthy financial position, having previously stated that without a deal with Bain Capital it would struggle to survive.
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