Bermuda-based insurer XL Group Ltd. is attracting interest from rivals including Allianz SE of Germany, according to people with knowledge of the matter.

Interest from insurers in potentially acquiring XL, which has a market value of almost $10 billion, is preliminary and may not lead to a takeover, the people said, asking not to be identified as the talks are confidential. Allianz is looking at XL as a potential target to grow its casualty coverage business in the U.S., the people said.

XL shares closed up 12.5 percent at $42 in New York. The BI North America P&C Reinsurance index jumped as much as 1.7 percent, the biggest intraday move since Jan. 22.

Dealmaking in the insurance industry has been active since the start of the year, with $11.7 billion of acquisitions announced globally, according to data compiled by Bloomberg. Last month, American International Group Inc. agreed to acquire Bermuda reinsurer Validus Holdings Ltd. for $5.56 billion in cash, in its largest standalone purchase in 17 years.

Representatives for XL and Allianz declined to comment.

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XL Group has been hit in recent years by costs tied to disasters around the world. Chief Executive Officer Mike McGavick, who expanded the Bermuda-based insurer in 2015 with the $3.9 billion deal to buy Catlin Group Ltd., this month said he was optimistic about “where we are going” on the back of a solid capital position and growth in premiums.

“We are seeing early signs of a return to realistic and sustainable rate,” he said in a statement. “We feel well positioned for what comes next.”

Allianz Chief Executive Officer Oliver Baete last year said his priority in terms of dealmaking would be to buy a property and casualty business, particularly in the U.S., to address a weak spot for the Munich-based firm. In February 2017, in the face of opposition from some large shareholders, he opted to instead deploy a $3.2 billion war chest to buy back shares, while simultaneously pointing out that he could still finance a takeover if the opportunity arose.

“At the right price, this potential deal makes sense to me,” David Havens, an analyst at Imperial Capital, said in a note to clients. “XL is a mid-sized player in a rapidly consolidating industry. Allianz would bolster its global business platform, and could draw more business.”

Shares of Allianz have climbed almost 26 percent in the past year, taking its valuation to 86 billion euros ($105 billion).