American International Group, Inc. (AIG) announced that it has closed the sale of 21st Century Insurance Group, the wholly owned subsidiaries of AIG’s U.S. personal auto insurance business, to Farmers Group, Inc. (FGI). a subsidiary of Zurich, for $1.9 billion, consisting of $1.7 billion in cash and $200 million in face amount of subordinated, Euro-denominated capital notes backed by Zurich Insurance Company, Zurich’s principal operating unit. FGI also assumed 21st Century’s outstanding debt of $100 million.
The transaction excludes AIG’s Private Client Group, which provides property and casualty insurance to high-net-worth individuals.
“Closing the sale of 21st Century Insurance Group denotes further progress in AIG’s restructuring efforts,” said Edward Liddy, AIG’s Chairman and Chief Executive Officer. “In addition, the transaction further improves AIU Holdings’ quality of capital by monetizing its interest in 21st Century Insurance Group.”
AIG’s U.S. personal auto insurance business includes 21st Century Insurance (comprising the former AIG Direct and 21st Century Insurance), as well as AIG’s Agency Auto.