Farmers Group Inc., the Los Angeles subsidiary of Swiss insurance conglomerate Zurich Financial Services Group, announced Thursday that it acquired auto insurer 21st Century Insurance.

Under the $1.9 billion deal, Farmers Group will buy AIG’s personal auto insurance group, which includes Woodland Hills-based 21st Century, from the struggling New York insurance giant.

The deal, expected to close in the third quarter, would make Farmers Group the nation’s third-largest personal lines insurer, which includes homeowners, auto and personal umbrella insurance.

“This will dramatically transform the insurance landscape by positioning Farmers as the leading multi-line, multi-channel insurer in the United States,” said Farmers Chief Executive Robert Woudstra in a statement.

The deal will help AIG repay part of the $100 billion in government aid it has received in recent months after suffering massive losses as the result of bad bets made on residential mortgage-backed securities. The company is currently attempting to sell other businesses, including Los Angeles aircraft leasing company International Lease Finance Corp.