Zurich Financial to buy AIG US unit
Zurich Financial Services says it will buy American International Group's car insurance unit, US Personal Auto Group, for $1.9 billion (SFr2.18 billion).
Switzerland’s largest insurer said on Thursday its subsidiary Farmers Group would acquire 100 per cent of the unit, positioning the Farmers Exchanges as the third-largest traditional direct writer of insurance in the United States.
The company said that as part of the deal, Farmers Group would immediately sell the regulated insurance businesses of the acquisition to the Farmers Exchanges, which Zurich manages but does not own.
It added that the closing of the transaction was subject to applicable antitrust and insurance regulatory approvals.
In February Zurich Financial announced that business operating profit had dropped by 23 per cent to $5.2 billion and resulted in a net income after tax of $3 billion in its full year results.
It followed an 87 per cent fall in fourth-quarter net profits, which the group blamed on losses and writedowns on investments amid the global financial turmoil.
The group had $1.1 billion in writedowns in the fourth quarter. It cut its dividend to SFr11 for 2008 per share from SFr15 in 2007 and announced an additional $200 million in cost cuts.
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