AIG is no longer offering motor retail insurance following its rebrand to become Chartis.
The company provided insurance to independent garages across the UK, but told AM it was only ever testing the waters.
A spokesman from AIG said: “The truth is we were never really majorly in the market for automotive business insurance.
We had a product for automotive retailers, but it was more to test the waters through a minimal amount of brokers.
“We found that the market was very crowded and we were only ever a small fish.”
In response to AIG’s withdrawal from the dealer market, the Retail Motor Industry Federation stepped in to offer its support to any dealer that has had to seek a new provider.
Rob Foulston, chief executive of the RMIF, said: “AIG’s withdrawal from the motor industry insurance market will affect a number of our members.
“AIG policy holders will have to find an alternative insurance provider at their next renewal and this can be a time intensive and disruptive process.
“We have established finance help lines at the RMIF for all of our members and we also have our own insurance products available through RMIF Insurance Services and our broker, Bluefin.
"Our in-house teams are available to provide advice and guidance to any affected members at any time.”