A tougher regulatory stance from the Financial Services Authority, the UK regulator, could force Standard Life, Europe's largest mutually-owned life assurer, into the arms of a trade buyer, according to independent analyst Ned Cazalet.

Standard Life recently started discussions with the FSA to determine how it needs to comply with the new solvency regime, due to be introduced in March. It is understood that the talks were initiated by Standard Life and rival life assurers are likely to be holding similar discussions in the months ahead.