The sale of American International Group's auto unit to Zurich's Farmers Group subsidiary will not alter the personal auto landscape, but will allow Farmers to develop an East Coast presence and become a competitor in the direct writer market, experts and analysts said.
In exchange for the Wilmington, Del.-based 21st Century auto unit, which includes the former AIG Direct and Agency Auto business, AIG said Farmers Group will pay $1.9 billion, consisting of $1.5 billion in cash and $400 million in face amount of subordinated, euro-denominated capital notes backed by Zurich Insurance Company, Zurich's principal operating unit.
The transaction did not include the AIG Private Client Group, which provides property-casualty insurance to high-net-worth individuals, the company said.
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