French insurance group MMA has confirmed that a new partnership with CGU France will not affect its UK operations.
There has been speculation that the move could involve CGNU taking over all of MMA's insurance operations, although the two companies are refusing to confirm or deny this.
CGU France currently co-operates with another French mutual, MAAF, providing insurance for small to medium commercial risks. There are now discussions in place to include MMA in this partnership and to boost its commercial income in France.
A statement from CGNU said: "The partnership would reinforce the position of the MMA group in the area of general insurance and the position of CGU France in life insurance and asset management."
An MMA spokesman said the discussions were still "preliminary". He added: "None of these discussions, of course, have any bearing on our own activities in the UK."
There has been concern among brokers in the UK that the French insurer may sell up to CGNU.
MMA has recently bought broker-only insurer Swinton from Royal & Sunalliance (R&SA) for £54m and CGNU owns high street broker Hill House Hammond.
Broker Richard Mikula of Topaz Insurance Services said: "If the two are combined, they will have a branch on every high street and could soon be competing head on with brokers."
MMA was known as Norman Insurance before undergoing a major rebranding excercise last year. In 1999, its group premium income was £2.35bn and it has gross worldwide assets of £13.4bn. Its key accounts are household and liability.
CGNU has recently been pruning back its business and has dropped out of the bus, travel and pet insurance markets as part of a strategic review.