Talks between Heath Lambert and Marsh over a possible merger have been terminated, according to reports.
Despite having agreed an exclusivity deal, reports suggest that a decision was taken this week not to proceed with further discussions.
Heath Lambert is believed to be looking at other options to move its business forward.
Having scrapped plans for an initial public offering (IPO) last year, Heath Lambert could view it as an option for the future.
Market appetite for IPOs has risen in recent weeks following Benfield Group's successful flotation and predictions that the hardening market will remain in place for the medium term.
Heath Lambert Financial group chief executive David Margrett told Insurance Times in June: "An IPO will remain an option for the future provided it is in the best interests of our business, our staff and our shareholders."
