The transaction is worth $1.9 billion
American International Group (AIG) has sold 21st Century Insurance Group, the subsidiary of its US personal auto insurance business, to Farmers Group, a subsidiary of Zurich.
The transaction of $1.9 billion consists of $1.7 billion in cash and $200 million in face amount backed by Zurich Insurance, Zurich’s principal operating unit. Farmers also assumed 21st Century’s outstanding debt of $100 million.
Edward Liddy, Chairman and CEO of AIG, said: “Closing the sale of 21st Century Insurance Group denotes further progress in AIG’s restructuring efforts. In addition, the transaction further improves AIU Holdings’ quality of capital by monetizing its interest in 21st Century Insurance Group.”
The transaction excludes AIG’s Private Client Group. AIG’s US personal auto insurance business includes 21st Century Insurance, in addition to AIG’s Agency Auto.