(Bloomberg) — Shares of health insurers from Cigna to Aetna surged on speculation that the industry is heading for a round of mergers to boost profits.

Cigna rose as much as 19% after the Wall Street Journal reported Anthem Inc. has made two takeover bids for its smaller rival within the past 10 days. Aetna climbed as much as 7.2% after the newspaper reported that UnitedHealthGroup may be interested in a deal for the company or for Cigna.

Also see: UHC acquisition of Catamaran may lead to lower PBM costs

The reports add to the drumbeat for consolidation in the health-insurance industry. Already, Humana Inc. is exploring a sale after being approached by Cigna about a potential deal, Bloomberg News reported last month, citing a person with knowledge of the matter. Humana offers Cigna a way to gain the lead in the market for Medicare Advantage policies, the health insurer-run version of the U.S.’s program to cover the elderly and disabled.

Jon Sandberg, a spokesman for Cigna, and Kristin Binns, a spokeswoman for Anthem, declined to comment to Bloomberg News. Tyler Mason at UnitedHealth and Cynthia Michener at Aetna also declined to comment.

Health insurers in the U.S. have been trading near all-time highs after enjoying an influx of new business from the Patient Protection and Affordable Care Act, which brought previously uninsured people into the market for the first time. At the same time, the law put pressure on profit margins by imposing new fees on the companies and mandating that they spend at least 80% to 85% of premiums on medical claims.

Also see: What would an Aetna acquisition mean for brokers?

With the initial surge of Obamacare enrollment now leveling off, the companies are looking at mergers to cut costs and keep profits expanding.

‘Crazy Times’

Cigna rebuffed the latest offer from Anthem for about $175 a share, the newspaper said, citing people familiar with the discussions.

Buying Cigna would help Anthem expand in employer-provided health insurance and in overseas markets. Cigna provides insurance to employees of U.S. companies working internationally and also sells products in countries such as South Korea. Anthem sells coverage under the BlueCross BlueShield brand in states including California, Georgia, New York and Connecticut.

“Strategically the transaction would improve the competitive position of both concerns,” Chris Rigg, an analyst at Susquehanna Financial Group, said in a research note.

Also see: 6 characteristics to look for in a sale or merger partner

Amid speculation of consolidation in the industry, analysts have been working to figure out how the deal frenzy will shake out. If Anthem targets Cigna, Aetna is likely to pursue Humana, Rigg said.

“Alternatively, if Cigna really doesn’t want to sell, then the obvious defense is to buy Humana at any cost,” he said. “Crazy times.”

With reporting assistance from Michelle Fay Cortez in Minneapolis. 

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