The world's once-largest insurer expects $60 billion fourth-quarter loss.

NEW YORK (Reuters) -- American International Group Inc. is in talks with the U.S. government for further help, as the troubled insurer expects to post a $60 billion fourth-quarter loss, a source familiar with the matter said Monday.

The talks with the government include the possibility of additional funds for the insurer and trading debt for equity, another source said.

AIG in talks with U.S. for more funds: