Previously, the bank had held initial discussions with Max Life Insurance but the deal got stuck over valuation issues.
The report quoting sources aware of the development said that the bank has hired US-based investment bank to look for a suitable midsize insurance company that can be acquired.
It is also eyeing Tata AIA, another insurance company on the block.
The bank has a partnership with LIC and Max Life in the life insurance space. While in general insurance space it has an alliance with Tata AIA, it holds 4.99 percent stake in Max Life Insurance.
Axis Bank has recently raised Rs 11,625 crore from Bain Capital-led consortium in November last year by issuing preferential shares and warrants.
Previously, the bank had held initial discussions with Max Life Insurance but the deal got stuck over valuation issues.In a clarification to the exchanges, Axis Bank termed the reports "speculative and factually incorrect." The bank said, "We are cognizant of our disclosure requirements under the listing regulations and the bank shall keep your exchange duly informed as and when any decision is taken by it with respect to any strategic initiative."