Willis Group, the world’s third biggest insurance broker, is believed to have approached Marsh & McLennan about a possible takeover in a deal which could value the insurer at more than $15 billion (£7.6 billion).

Hopes of a possible deal boosted shares in Marsh, which jumped 4 per cent on Wall Street.

Marsh has been under pressure either to break itself up or to put itself up for sale by a number of angry shareholders, including Nelson Peltz, the billionaire activist investor.

The insurer has had a difficult few years. In 2004, the company was accused of bid-rigging by Eliot Spitzer, the former New York Attorney General. Mr Spitzer sued Marsh for taking “contingent commissions”, paid by insurers for steering business their way. As a result, the insurer agreed to pay $850 million in 2005 to settle the inquiry.

Last month, the board of Marsh ousted its chief executive, Michael Cherkasky, and promised to look at new ways of boosting shareholder value, a review that was expected to include the possible sale or break-up of the company.

In August, Marsh sold its Putnam asset management unit to Canada’s Great-West Lifeco for $3.9 billion, and a Toronto investment firm is trying to force Marsh to sell Kroll, the security consulting unit, and Mercer, the human resources business.

Nelson Peltz recently received approval from the Federal Trade Commission to take a stake in Marsh & McLennan.

In November, Marsh said third-quarter profits were boosted by an exceptional gain from the sale of Putnam, but operating profit fell 40 per cent.

The company said performance at Marsh over the period had been “unacceptable”. In comparison, quarterly profits rose 92 per cent at Aon Corp , Marsh’s main insurance broking rival.

Shareholders agree that Marsh needs to boost margins within its brokerage business, which contributes 40 per cent of group revenue. Lee Matheson, an analyst at Harrison, which owns 1.1 million Marsh & McLennan shares, said: “We see no reason why the insurance brokerage can’t earn close to what its competitors are earning.”

Insurers are expected to experience difficulty this year in increasing their premiums. Goldman Sachs, the investment bank, told clients this month that they should not buy shares in the sector, given that “the risk of fundamentals deteriorating increases as we approach 2009”.

It explained that premiums are likely to stagnate 2008.

There has been speculation for some time that Marsh would attract a takeover approach. In 1998, Kohlberg Kravis Roberts, the private equity firm, bought Willis Group and made a good return when it floated the company again three years later. KKR has since been rumoured as a potential buyer of Marsh.

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