Marsh is understood to have rebuffed an audacious takeover proposal from smaller rival Willis.
Insurance industry insiders said that an informal approach was made by Willis two months ago. However, the discussions were terminated after Marsh rejected the proposals and there are currently no talks taking place.
Willis - valued at around $6bn - is understood to have proposed a cash and share bid for Marsh, worth around $15.5bn. The company is believed to have received pledges of funding from secretive US private equity firm KKR.
This would have given KKR a substantial stake in the combined business whose shares would have been listed on the New York Stock Exchange.
KKR and Willis have close links because the operation took the then London-listed Willis private in a £951m deal in 1998. KKR then brought Willis back to the market in 2001 for $1.9bn. Insurance brokers have tended to enjoy better valuations in the US than in the UK.
One industry source said: "I think Marsh would probably prefer to sort its own problems out rather than joining forces with Willis. There have been lots of rumours about a possible sale of the UK arm, but that wouldn't make a lot of sense, given the importance of the network to its business."
Willis has around 9% of the global broking market compared to nearly a third for Marsh. Its approach was sparked by a sharp fall in Marsh's share price, which tumbled by a third between January and August.
Marsh and Willis both declined to comment.
