Minnesota-based insurer St Paul Travelers may be in takeover talks with Switzerland's Zurich Financial Services according to a report in the Wall Street Journal, although St Paul Travelers denied the reports.

If the deal is confirmed, it could become one of the biggest acquisitions of a European company by a US group, creating a global business that would rival AIG. The two firms reported a combined revenue of more than $90 billion last year.

However, St Paul Travelers denied the rumors of a merger, despite its policy of avoiding comment on market speculation. The company said that the factual and definitive manner in which these reports were made, both nationally and internationally, has prompted the company to provide this clarification. Zurich has declined to comment.