Europe

The companies have held on-and-off discussions in recent months about a potential tie-up, said the people, who asked not to be identified because the information is private.

The primary objective of Solvency II was to create a risk-based regulatory framework.

Starting Jan. 1, every company in Italy must buy insurance to protect its assets from floods, landslides and other natural hazards.

More than 200 people have died and thousands of homes were destroyed in Spain's worst natural disaster since 1962.

Central Europe's insured flood losses will likely be €2 billion ($2.2 billion) to €3 billion, Global reinsurance broker Gallagher Re estimates.

Thunderstorm alerts are in place for a swath of Europe from Poland and Hungary to Italy and Greece.

As climate change worsens, insurance coverage is expected to shrink further as rising premiums choke demand and insurers withdraw from particularly exposed areas, according to statements from the European Central Bank.

Liberty Mutual sells everything from property and casualty to life insurance in Spain and Portugal through agents, banks and affiliates, according to its website.

The US insurer is working with Bank of America Corp. on the possible divestments, which could fetch more than 1 billion euros ($1 billion), according to the people, who asked not to be identified because the discussions are private.

Axa is considering a deal once BPM has taken full ownership of several insurance businesses where it has partners, people said.