NEW YORK (Reuters) – Struggling insurance conglomerate American International Group Inc (AIG.N) is expected to reach deals to sell its U.S. personal lines unit and an equipment insurer by the year end, a source familiar with the situation said on Thursday.
New York-based giant AIG is expected to clinch a deal soon to sell its U.S. personal lines business, which one analyst has valued at between $5 billion to $7 billion.
It is also close to selling a smaller business, Hartford Steam Boiler Inspection and Insurance Co, the source said.
The sales are the first sign that AIG Chief Executive Edward Liddy is progressing with his plans to sell off a large part of its business to repay a massive government loan.
AIG is not expected to announce any deals when it reports its third-quarter results on Monday. The insurer is widely expected to post its fourth consecutive quarterly loss, hurt once more by write-downs on credit derivatives linked to subprime mortgages.
On October 3, the insurer said it planned to keep its U.S. property-casualty, foreign general insurance businesses and an ownership interest in its foreign life operations but sell the remainder. So far, no deals have been announced.
AIG is selling off the business as part of an ambitious restructuring it has had to undertake to pay off an $85 billion government loan.
Chief Executive Edward Liddy told Reuters in early October it was in talks with potential buyers for the personal lines business and Hartford Steam Boiler.
Liddy said at the time that AIG was in advanced talks with one potential buyer for part of the U.S. personal lines business and that he expected some of AIG’s smaller businesses, such as Hartford Steam and AIG’s 60 percent stake in reinsurer Transatlantic Holdings Inc, to sell quickly.
AIG’s U.S. personal lines business sells auto insurance, and products to high net-worth individuals through its AIG Private Client division. The division has annual policy sales of about $5 billion, with auto policies accounting for 80 percent of premiums written.
Hartford Steam Boiler provides insurance for a range of risks, including insurance to cover the cost of lost business and repairs when equipment breaks down.
Joshua Shanker, an analyst at Citigroup Global Markets, calculated in a report in September that AIG could get $5 billion to $7 billion for its personal lines business.
AIG spokesman Joe Norton said the company would not comment on asset sales.
(Reporting by Megan Davies and Lilla Zuill; Editing by Gary Hill)