FRANKFURT/LONDON (Reuters) - Italy's Generali GASI.MI has put its 44 billion euro ($50 billion) German life insurance portfolio up for sale as it restructures in Europe, sources close to the matter said.

A banner with a logo of Generali insurance is seen outside of one of its branch offices in Telfs, Austria, November 1, 2016. REUTERS/Leonhard Foeger

Morgan Stanley MS.N is evaluating options, including a sale, for Generali Leben which ceased underwriting new business in 2015 but still offers life insurance in Germany under different brands, the sources told Reuters.

“A sale of certain portfolios within the German perimeter could be just one of several strategic options we said we would evaluate,” a Generali spokesman said on Wednesday, while Morgan Stanley declined to comment.

Generali and fellow insurers are struggling to pay guaranteed returns to clients because of record-low interest rates. Combined with more stringent European capital rules, these have prompted some to offload life insurance operations.

The Generali Leben portfolio would mark the largest closed book sale ever. Dutch insurer Aegon sold a 9 billion pound book of closed UK life business last year and Britain’s Standard Life has said it is open to the sale of its 16 billion pound closed annuity portfolio.

Given the complexity of Generali Leben, and the necessary approval from financial watchdog Bafin for any transaction, no deal is expected to emerge quickly, the sources said.

Generali may also opt to keep it if its price expectations are not met, they added.

Ratings agency Fitch said on Wednesday that the outlook for German life insurance was negative, reflecting the pressures from low investment yields.

Financial services groups specializing in the run-off of life insurance by acquiring policies until their expiry and aim to turn a profit by measures such as cutting administrative costs, are vying for the Generali Leben portfolio.

“Among the three big life business units of the group (AachenMuenchner, Cosmosdirekt and Generali Leben) Generali Leben is more exposed to the low interest rates risk,” the Generali spokesman said.

One of the sources said that the insurer is hoping for a purchase price of 900 million euros for the portfolio, but that bidders value the business at closer to 400-600 million euros.

Only a handful of smaller portfolios of the roughly 90 German life insurers have changed hands, including those of Arag Leben, Delta Lloyd, Basler Leben, Heidelberger Leben and Skandia.

German firms such as Viridium - owned by Cinven and Hannover Re HNRGn.DE - and Fosun-backed Frankfurter Leben have shown interest in the Generali closed book, as has Bermuda-based Athene ATH.N, the sources said.

These companies declined to comment.

After fending off a possible takeover from Italy’s biggest retail bank Intesa Sanpaolo earlier this year, Generali announced plans to leave markets where it lacks scale.

The group aims to raise about 1 billion euros by selling businesses in 13 to 15 countries across the world, Chief Executive Philippe Donnet has said.

The insurer’s roadmap includes selling operations in a handful of European countries such as the Netherlands and Belgium, where it is working with BNP and Deutsche Bank, respectively, sources told Reuters.

Generali is also looking for new owners for subsidiaries in Portugal, Colombia, Ecuador and Panama, these sources said.