Rothesay had approached Swiss Re some weeks back to buy ReAssure, Swiss Re's British closed books division, and would make a formal offer in the coming months, Sky News reported https://news.sky.com/story/rothesay-gatecrashes-swiss-re-ipo-with-35bn-bid-11598646, citing sources.

Both Rothesay and Swiss Re declined to comment.

The news comes less than a month after Swiss Re, the world's second-largest reinsurer, named a chief executive officer for its ReAssure amid plans for an initial public offering of the British unit.

Swiss Re announced the IPO plans in August last year, saying it was important for the unit to have access to new capital to buy more closed books.

Rothesay, which has been actively bulking up its portfolio, last year bought a 12-billion-pound UK annuities book from insurance giant Prudential and an 860 million pounds portfolio of equity release loans from UK Asset Resolution.

Such deals are attractive as ever with insurers struggling to pay guaranteed returns for life insurance policies due to record-low interest rates and more stringent European capital rules.

Analysts have pegged that ReAssure could achieve a market capitalisation of about $3 billion (£2.3 billion), or roughly half its book value.

The IPO market has been affected due to uncertainties stemming from UK's plans to leave the European Union. Mobile operator O2 had put its 10 billion pound IPO plans on hold citing Brexit uncertainties last year.

(Reporting by Muvija M in Bengaluru and Michael Shields in Zurich; Editing by Saumyadeb Chakrabarty)