Farmers Completes Acquisition of 21st Century Insurance

The Farmers Insurance Group of Companies (Los Angeles; a subsidiary of Zurich Financial Services) has completed the acquisition of 100 percent of AIG's (New York) Personal Auto Group, which includes 21st Century Insurance, the former AIG Direct, and AIG's Agency Auto business. Farmers will pay approximately $1.9 billion for the AIG assets, according to a Farmers Group source.

The agreement calls for AIG's U.S. personal auto insurance business to be sold to Farmers Group, Inc., which will sell the underlying insurance entities to the Farmers Exchanges, which Farmers Group, Inc. manages but does not own, for approximately $1.4 billion. The acquisition is the largest in the Farmers Exchanges 81-year history.

The addition of the AIG assets strengthens Farmer's rank as the third largest personal lines carrier in the U.S. and the largest auto insurer in several states, including California, according to the Farmers source. Farmers CEO F. Robert Woudstra characterizes the acquisition as beneficial to consumers and to Farmers' national network of agents. "This acquisition represents a perfect strategic business fit and will dramatically transform the insurance landscape by positioning Farmers as the leading multi-line, multi-channel insurer in the United States," Woudstra says. "Most importantly, this acquisition enables us to accommodate the shopping needs of all insurance consumers."

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio