The board of Liverpool Victoria Friendly Society Limited has now confirmed it is in advanced discussions with the German insurer.
In a statement to the London stock exchange this morning (3 August), the company added it is not able to comment on any terms which may be reached or timescales.
It stated that further information would be released in due course.
A potential tie-up with Allianz was mooted back in April, after the friendly society revealed a £139m fall in its operating profit, to £20m.
The introduction of the new reduced insurance discount rate of 0.75 per cent on personal injury claims was seen a key reason for the downturn in profits.
It has been widely reported that LV has general insurance operations worth around £1bn.