AIG Closes Sale of 21st Century Insurance to Farmers Group

American International Group, or AIG, has closed the sale of 21st Century Insurance Group, the wholly owned subsidiaries of AIG's US personal auto insurance business, to Farmers Group, a subsidiary of Zurich Financial Services, for $1.9 billion.

AIG said that the consideration consists 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. Farmers Group 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.

Edward Liddy, AIG's chairman and CEO, 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's quality of capital by monetizing its interest in 21st Century Insurance Group."