Farmers Insurance Group Will Acquire 21st Century, Other AIG Personal Auto Carriers

The Farmer's Insurance Group (Los Angeles; a subsidiary of Zurich Financial Services Group) has acquired AIG's Personal Auto Group, which includes 21st Century Insurance Co., at a price of $1.9 billion, subject to post-closing adjustments, according to a Farmer's Group press release.

Under the terms of the deal, 21st Century Insurance Group, the wholly owned subsidiaries comprising AIG's U.S. personal auto insurance business, will be sold to Farmers Group, Inc. Farmers Group, Inc. will sell the underlying insurance entities to the Farmers Exchanges, which Farmers Group, Inc. manages, but does not own. The acquisition is expected to close by the third quarter of 2009 pending regulatory approval.

The acquisition by the Farmers Exchanges will make Farmers the third-largest American personal lines insurer, according to the Farmers Group source. It will also position the Farmers Exchanges as the largest auto insurer in several states, including California.

21st Century, which includes the former AIG Direct business and Agency Auto business, operates in 49 states and Washington, D.C. 21st Century has more than 2.4 million customers and insures more than 4 million vehicles across the country; the carrier is the third-largest largest traditional direct writer of insurance in the United States, according to Farmers Group

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