Minnesota-based insurance company St Paul Travelers could be in merger talks to acquire Zurich Financial Services, the Wall Street Journal reports.
Zurich Financial could follow consolidation in the industry
If the deal is confirmed, it could be one of the biggest acquisitions of a European firm by a US company.
The two firms had a combined revenue of more than $90bn (£51bn) last year and employed about 85,000 workers.
The merger could help the two companies to "spread their risk", according to the newspaper.
In addition, having a presence on both sides of the Atlantic could help counter the cycle of boom and bust common within the industry.
Zurich is present in 50 countries, while St Paul Travelers is largely US-based.
Creating a rival
If the two firms merged, the resulting insurer could become a rival to American International Group (AIG), which has offices worldwide.
St Paul Travelers, which offers individual as well as personal insurance, is the result of a merger between St Paul and Travelers, which was formerly part of Citigroup.
The rumoured merger follows recent consolidation in the insurance industry.
Reinsurer Swiss Re paid $6.8bn for the insurance unit of industrial giant General Electric in late 2005.
And earlier this year, South African insurance firm Old Mutual closed its $6.5bn deal for Swedish rival Skandia.
Last year was the most expensive year to date for insurers because of a series of natural disasters. Insured losses totalled about $80bn, Swiss Re said.