The disposal of Generali Leben, which stopped accepting new business in 2015, would mark the largest closed book sale ever.
Citing a source close to the matter, the news agency said the insurer has hired Morgan Stanley to conduct the sale, with hopes of receiving a bid of €900m for the book.
Reuters added that any deal would be subject to approval from Germany’s financial watchdog Bafin and is likely to take time.
In a statement to International Adviser, Generali said "a sale of certain portfolios within the German perimeter could be just one of several strategic options we said we would evaluate".
Like many insurers, Generali is struggling to pay guaranteed returns to clients due to rock-bottom interest rates, combined with increasingly burdensome EU capital adequacy requirements that have lead a number of other life insurers to offload their life units.
Dutch insurer Aegon sold its £9bn closed book of UK annuities in two separate deals with Rothesay Life and Legal and General and Standard Life has signalled it is open to selling its £16bn closed portfolio of UK life policies.
Earlier this year, Generali fended off a takeover bid by Italian bank Intesa Sanpaolo, which would’ve seen the insurer split up. At the time, Axa’s Thomas Buberl dismissed speculation that the French insurer was looking to buy Generali’s German life unit as part of a break-up process.
The sale is part of Generali’s plans to withdraw from less profitable markets and focus on more core countries, a similar strategy currently being pursued by insurers such as Axa.
In December 2015, Generali International merged with Generali Worldwide, to focus on its operations in the Bahamas, the British Virgin Islands, the Cayman Islands, Guernsey, Jersey, Hong Kong, Singapore and the UAE.
The merger saw the insurer stop selling its products in 14 jurisdictions; including China, Brazil, and Switzerland. Last year, the Italian also pulled out of Liechtenstein and Guatemala.
In May, Generali unveiled a fresh push into asset management and said it will bolster its fee-based business.