American International Group, the US insurer, is seeking to raise $10bn-$20bn (£5.6bn-£11.1bn) in equity from buy-out investors that could include Kohlberg Kravis Roberts, Texas Pacific Group and JC Flowers, as part of an emergency plan to shore up its balance sheet.

AIG has also petitioned to be allowed to borrow from the Federal Reserve’s discount window, which it argues will help stabilise its business and the fragile financial markets, sources close to the company said. Such access would be unprecedented for an insurer.