Los Angeles-based the Farmers Insurance Group of Companies has announced it will acquire American International Group’s (AIG’s) Personal Auto Group, which includes 21st Century Insurance Co.

            Under the agreement, 21st Century Insurance Group, the wholly owned subsidiaries comprising AIG’s U.S. personal auto insurance business, will be sold to Farmers Group Inc., a subsidiary of Zurich Financial Services Group. 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 no later than by the third quarter of 2009 pending customary regulatory approvals.

            This acquisition by the Farmers Exchanges will position Farmers as the third-largest overall, personal lines insurer in the United States, according to the company's most current insurance industry data. The acquisition also will position the Farmers Exchanges as the largest auto insurer in several states, including California.