Insurer American International Group has agreed to sell its nearly 98 per cent stake in Taiwan unit Nan Shan to an investor group led by Hong Kong's Primus Financial for about $2.15 billion.

Nan Shan, which serves more than 4 million life insurance policy holders in Taiwan, is the third-largest life insurer in the country by total premiums. Established in 1963, it operates a network of 24 branches and 450 agency offices.

The Primus consortium, which also includes investment firm China Strategic Holdings, will maintain the Nan Shan brand. It also has agreed to retain existing compensation and benefits packages for Nan Shan's 4,000 employees and the agency's organizational and commission structure for at least two years after the deal closes. The current Nan Shan management team will remain in place.