American International Group Inc. (AIG) is actively engaged in talks to sell its U.S. auto insurance unit to Swiss insurer Zurich Financial Services, CNBC reports on its Web site. A source familiar with the matter said the auto insurance business is expected to fetch around $2 billion.
Part of AIG's U.S. personal lines unit, the auto insurance business includes selling products to high net-worth individuals through its AIG Private Client division. AIG CEO Edward Liddy previously said the private client division is not being sold.
The auto unit includes the 21st Century Insurance Group business, which AIG took over in 2007 when it bought out the minority stakeholders for $811 million, the report says. Zurich said it was looking for deals to bolster its North American personal lines and global life insurance businesses.
On Oct. 3, 2008, INN reported the insurer would sell its life insurance operations in the United States, Europe, Latin America, South Asia and Japan, as well as some of its personal lines property/casualty businesses.
At the time, Liddy said he preferred to sell "large slices" of AIG to "brand-name" companies because that strategy will hasten divestitures and benefit customers and employees.
Since then, AIG has sold HSB Group to German reinsurer Munich Re for $742 million, and its Canadian life insurance unit to Bank of Montreal for about C$375 million.
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