Plans of vending US auto unit by AIG to Zurich!

Based on few sources there is hottest news that AIG (American International Group Inc) is planning to vend its US auto insurance business to Swiss insurer Zurich Financial Services for about USD 1.5 billion. This deal will be announced soon but it’s not yet finalized and moreover if this deal is finalized then it’s a great benefit to the insurer.

The unit which is been vended comprises the 21st century insurance business which was acquired by AIG in 2007. This take over happened when it purchased minority stakeholders.

In AIG’s US personal line unit, auto insurance business is one of the part and the AIG’ US personal line unit comprises selling products to high net-worth souls via its AIG Private Client division. AIG Chief Executive Edward Liddy has already stated that the private client division is not vended.

The taxpayers in US have roughly taken 80% stake in AIG. The concern is endeavoring to vend off assets in a bid to reimburse the government but too much difficulty has been faced by them in determining the buyers for big ticket items.

Liddy stated that keeping in mind the challenging market environment, AIG agreed to vend off 10 businesses. These comprise the sale of HSB Group to Germen reinsurer Munich Re for USD 742 million and its Canadian life insurance unit to Bank of Montreal for USD 375 million approximately.