AIG in advanced talks for U.S. personal lines unit

By Lilla Zuill

NEW YORK (Reuters) - American International Group Inc is in advanced talks with one potential buyer for part of its U.S. personal lines business as the insurer looks to sell assets to pay off a massive government loan, Chief Executive Edward Liddy said in an interview on Friday.

AIG contemplated giving investors a laundry list of units to be sold but decided it was better to say what would be retained, Liddy told Reuters.

Earlier on Friday, the insurer, which has been crippled by losses on bad mortgage bets, announced details of a plan to pay off up to $85 billion of U.S. government loans.

It plans to retain its U.S. property and casualty, and foreign general insurance businesses, and keep an ownership interest in its foreign life insurance operations.

Liddy declined to say how quickly he expects any deals to be signed.

"I want to balance speed with value," he said. "We have a number of buyers interested."

Liddy said some of AIG's smaller businesses, such as Hartford Steam Boiler Inspection and Insurance Co and AIG's 60 percent stake in reinsurer Transatlantic Holdings Inc, were expected to sell quickly.

"People are already looking at those. We want to make sure the contracts are rock solid," he said. "Nothing has been signed, but we have started the process."