Prudential and Aviva are among a handful of European insurers expected to be front-runners in a multibillion-dollar auction of AIG’s prime assets.

Axa, of France, Allianz, the German insurance group, and Aegon, the Dutch insurer, were all tipped by analysts as being likely to run the slide rule over large swaths of AIG, particulary the booming Asian unit.

AIG, which was among the first foreign companies to set up in South-East Asia, runs head-to-head with the Pru in Asia. Barry Stowe, a former AIG executive, runs the Pru’s Asian business and has rapidly expanded it in the region.

AIG, once the world’s biggest insurer, secured a desperately needed financial lifeline late on Tuesday night after the US Federal Reserve agreed to lend it up to $85 billion (£47 billion). The loan will help it to meet increased margin calls of up to $25 billion after its debt was downgraded by Standard & Poor’s, the ratings agency.

AIG, a big insurer in the American mortgage market, has also struggled under a huge exposure to structured derivatives, including insurance against company debt defaults.

AIG will repay the loan, secured after days of tense negotiations, by selling assets, the company and the Fed said.

AIG said in a statement: “We believe the loan, which is backed by profitable, well-capitalised operating subsidiaries with substantial value, will protect all AIG policyholders, address rating agency concerns and give AIG the time necessary to conduct asset sales on an orderly basis.”

Eamonn Flanagan, of Shore Capital, said: “I think they could easily raise $90 billion from asset sales. US taxpayers are getting a very good deal. The Asia savings business would be fantastically interesting.”

Prudential, which owns Jackson National Life in the United States, has signalled that it is keen to make bolt-on acquisitions in America. Clark Manning, Jackson’s chief executive, has set aside a war chest of up to $2 billion to fund takeover deals. The Pru is unlikely to show interest in any of AIG’s general insurance businesses.

Mr Flanagan said that he believed Prudential shareholders would support a capital-raising to help to pay for the “once in a lifetime opportunity” to acquire parts of AIG.

Before the loan was secured, AIG had been in talks to sell assets worth up to $20 billion, including its reinsurance, financial products and consumer loans divisions. Speculation had also mounted that it would sell its aircraft leasing unit, the world’s second-largest.

However, the size of the loan makes it likely that AIG will have to sell off considerably more of the business or break itself up entirely, analysts said. The loan lasts for two years and charges an interest rate of 8.5 per cent more than Libor, or the rate that banks charge to lend to each other.

Zurich Financial Services, based in Switzerland, and Generali, the Italian insurance group, are expected to be in the running if any of AIG’s UK assets are put up for sale. AIG sells life and general insurance policies in the UK. The vast majority of its 12 million general insurance policyholders are companies. It is a specialist in directors’ and officers’ liability cover and is a substantial player on the Lloyd’s of London market.

Warren Buffett, the billionaire who runs Berkshire Hathaway, is expected to be interested in parts of AIG’s general insurance business.

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