Thursday April 16, 07:59 PM
AIG sells US auto insurance unit for $1.9 bln
NEW YORK (AFP) - American International Group, the insurance giant surviving on US government aid, said Thursday it had sold its US auto insurance business to Zurich Financial Services for 1.9 billion dollars.
AIG said in a statement that Swiss-based Zurich had agreed to buy 21st Century Insurance Group, the units comprising AIG's US personal auto insurance business.
ZFS unit Farmers Group will acquire 21st Century by paying AIG 1.5 billion dollars in cash and 400 million dollars in euro-denominated capital notes backed by ZFS's main operating unit, Zurich Insurance Company.
Farmers Group also will assume 21st Century's outstanding debt of 100 million dollars, AIG said.
The Wilmington, Delaware-based 21st Century includes the former AIG Direct business and Agency Auto business. The company operates in 49 states and the capital city of Washington.
In 2008, 21st Century reported total premiums of 3.6 billion dollars, including 2.7 billion dollars in direct sales and 900 million dollars through independent agents.
The transaction excludes AIG's Private Client Group, which provides property and casualty insurance to wealthy clients, AIG said.
The deal is "subject to satisfaction of certain conditions, including approvals by appropriate regulatory authorities," the bailed-out US insurer said.
The government has pumped 180 billion dollars into AIG to keep it afloat, the largest single recipient of federal bailout money, giving the US Treasury effective control of what had been the world's largest insurer.
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