Birmingham-based insurance company Protective Life (PL) is in advanced talks to be bought by Japan’s second-largest life insurer Dai-Ichi, according to reports published Monday by Reuters and the Financial Times.

The FT said Dai-Ichi would pay “around $5 billion”, while Reuters put the valuation above that. Dai-Ichi’s shares fell 5% in Tokyo Monday in response to suggestions that it would finance at least part of the deal by issuing new stock. A valuation of $5 billion would be a premium of nearly 20% over Protective’s current market value. Its shares have already risen nearly 40% in the last year.

Dai-Ichi confirmed in a statement in response to the reports that it was “considering the acquisition of a US life insurance company”, but didn’t name its target. Reuters quoted a Dai-Ichi spokesman as saying that “nothing has been decided.”

The deal would be the latest and one of the largest foreign acquisitions by Japanese insurers, who are looking abroad to secure their future as their home country’s ageing population starts to decline.

Since 2010, Dai-Ichi has bought Tower Australia Group for $1.2 billion, as well as a 40% stake in Indonesia’s Panin Life for $337 million.  But a $5 billion bid for Protective would dwarf both of those deals, and become the largest Japanese acquisition in the US insurance sector, beating the $4.7 deal for Philadelphia Consolidated Holding Corp. by Tokio Marine Holdings in 2008.

Reuters said Goldman Sachs was advising Dai-Ichi on the deal.  A spokeswoman for Protective declined to comment.