AIG Private Client Unit Not For Sale - Report

Tom Burroughes

11 February 2009

American International Group, the US insurer which has been saved from collapse by a government bailout, is in advanced talks to sell its US auto insurance unit to Swiss insurer Zurich Financial Services, Reuters said, quoting a source familiar with the matter. But AIG Chief Executive Edward Liddy has said that the private client division is not being sold.

The auto insurance business is expected to fetch around $2 billion, the source said.

The auto insurance business is part of AIG's US personal lines unit, which includes selling products to high net-worth individuals through its AIG Private Client division.

The unit being sold includes the 21st Century Insurance Group business, which AIG took over in 2007 when it bought out the minority stakeholders for $811 million.

AIG and Zurich both declined to comment.

AIG, once the world's biggest insurer by market value, averted bankruptcy in September with an $85 billion federal bailout. The rescue later swelled to about $150 billion.

The US firm has also sold off its Swiss-based private banking arm to Aabar Investments, based in Abu Dhabi.