The group's announcement to the London Stock Exchange comes in response reports that it is in talks with several rivals about a takeover which could be worth more than £3bn.

Shareholders in GRE should benefit from the takeover move.

GRE shares are expected to leap upwards when the London market opens on Monday. The stock closed at 308p on Friday, valuing the group at £2.7bn.

However it is unclear whether policy holders will benefit significantly from the deal.

Intense competition in the industry has pushed insurance premiums down to low levels. However premiums may begin to rise again if competitors join forces.

Possible suitors include Axa, France's largest insurance group, which is seeking to expand its presence in the UK presence having already brought a controlling stake in life assurance group Sun Life & Provincial.

Germany's Allianz and US company AIG are other potential suitors.

GRE is believed to have put itself up for sale as a result of pressure from institutional shareholders and worsening conditions in the global insurance market.

The group said it was seeking alternatives against a background of ongoing consolidation in the financial services sector, both in the UK and overseas, adding "the company continuously monitors events".

The insurance market has undergone tumultuous change over the past few years, with larger groups snapping up smaller rivals.

GRE recently bought private health insurance group PPP. But it is still a relatively small player in the insurance market and has struggled to cope with its larger rivals.

The insurance industry has been hit by bad weather across the globe, including recent hurricane damage in America and the Caribbean. That is likely to hit GRE's profits and may have hastened its decision to review the future of the group.