Zurich May Buy 21st Century (formerly AIG Direct)

The rumor mill is stirred up again regarding AIG's restructuring, as Zurich is reportedly in talks to buy 21st Century Insurance, which was also known as AIG Direct. The value could be as high as $2 billion, which isn't exactly chump change, but will barely make a dent in AIG's $80 billion debt to the government. Every little bit helps, I guess.

If Zurich proceeds with the acquisition, it would become the largest auto insurer in California, because it already owns Los Angeles-based Farmers (the management company, not the actual insurance company), and 21st Century has a large presence in California. There would be little overlap as well, as Farmers sells insurance through captive agents, while 21st Century sells directly via phone or the internet.

I think that this move would be a positive for 21st Century policyholders and employees, as the acquisition would bring some needed stability to the company. Not only is Zurich an "A" rated company (the same as 21st Century), it would allow 21st Century's management to have a planning horizon greater than two weeks. I believe that customers will notice the change as well, as claims reps would be less distracted.