AIG has sold almost 600 million AIA shares for $US2.02 billion ($1.94 billion).

The move reduces its stake in the Hong Kong-based life insurer to 13.69%, worth about $US6 billion ($5.7 billion).

AIG will put the money towards buying up to $US5 billion ($4.8 billion) of its stock back from the US Treasury.

Demand for AIA stock was strong, with AIG achieving $HK26.50 ($3.29) a share, a 0.8% premium to last Thursday’s closing price.

The buyers were institutional investors; AIA has become a favourite among fund mangers amid demand for financial services products in Asia.

AIG cannot dispose of any more AIA shares until December 10, when the sales restriction on this parcel is lifted.