Page last updated at 20:03 GMT, Thursday, 16 April 2009 21:03 UK

AIG sells car insurance business

AIG sign
AIG has been bailed out by the US government to the tune of $170bn

Troubled US insurer AIG has announced the sale of its car insurance unit to Zurich Financial Services (ZFS).

Under the terms of the deal, which still needs regulatory approval, ZFS' Farmers Group will pay $1.9bn (£1.27bn) for 21st Century Insurance.

AIG boss Ed Liddy said that the insurer is "moving forward with discussions for several other transactions".

The company needs to raise cash during the financial crisis and has already taken $170bn in state aid.

It has been heavily criticised for paying $165m in bonuses after taking the government money, although many top executives have agreed to return the payments.

Farmers Group will also assume 21st Century's outstanding debt of $100m.

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