Insurance giant AIG, which has been suffering devastating losses in the recent economic downturn, has received two bids for its life insurance arm from MetLife and AXA.

The subsidiary, known as American Life Insurance Co. has been up for sale for the last couple of weeks and recent bids by AXA and MetLife are much lower than could be expected in good economic conditions. MetLife has made an initial offer of $11.2 billion dollars for the multinational operation but the price could yet drop again to around $8 billion according to experts.

AIG is currently selling off a number of its formerly prized assets in a bid to pay back a $150 billion loan from the US government.

“All the life insurers are pretty much suffering right now. Before this whole financial crisis happened, that unit of AIG was considered one of their best ones. Under normal circumstances there would probably be a lot more interest than just two companies,” said Alan Rambaldini from analysts Morningstar Inc.