What the AIG name change means to your clients

Decision shows how much value there is in a strong brand

The news that, come this fall, AIG will use the AIG name in marketing all its operations came as a surprise to many. The surprise was not so much that the company would resume using the AIG name, but that:

  • It is doing so a little over 3 years after adopting the Chartis name
  • It is reverting to its old name while it is still majority-owned by U.S. taxpayers
  • It is extending the brand to other member companies that never traded under the AIG name.

Read: Chartis to return to AIG name

When I started discussions about this on LinkedIn insurance groups, the prevailing sentiment was “So what?” It seemed most people in the industry had continued to use the AIG name or referred to Chartis as “the new name for AIG.” This made sense to me. From my experience with brands and branding, I would be shocked if the Chartis name was adopted that quickly, especially with AIG’s long history and the constant press reports referring to the company as AIG. So the AIG name went away officially, but the AIG brand remained.

Some LinkedIn group members pointed out that it was a non-insurance division of AIG that caused the financial problems and that the insurance operations continued to be well-run, profitable entities. Others felt that the reputation of the entire financial services industry has been so damaged that as long as AIG’s prices are competitive, the name does not matter much.

Read: Why Branding Still Matters

Many commercial lines buyers are well informed of the company’s issues and the causes of the financial problems. In fact, a cynic might say: “Why wouldn’t you buy from AIG/Charits? It’s backed by the biggest reinsurer in the world: the US government!”

But the general public is not that well informed and there is still hostility towards companies involved in the financial meltdown and government bailouts. These negative emotions go a long way in influencing perceptions of the AIG brand and make me wonder if AIG is jumping the gun in rebranding many of its personal lines companies that had always traded under non-AIG names.

Read: Your Brand, Your Promise

For some of your clients, there may be an emotional response when you recommend an AIG product. If you feel AIG is the best alternative for your client, here are some points you can make to offset negative emotions about the company:

Financial Security – There may be worry about the financial security of the company given all the negative press about the company’s finances. I would stress AIG’s strong financial ratings, especially its A.M. Best’s ratings, which are “A” for most of AIG’s companies. Also, as noted earlier, the US government cannot afford to let AIG fail.

History – The company has a long history as a well-managed, profitable insurance company, known for its innovative products.  Its recent problems were caused by a financial products division that supported other companies’ risky financial products. When these products were downgraded, the US government stepped in to avoid a major bankruptcy that would have thrown an already-weak financial system into a full panic in the fall of 2008. The problems were not caused by the traditional insurance operations.

Read: Lessons for brokers from the world’s most successful brands

Making Amends – The current leaders of the company were not at the helm of AIG when the financial products division made bad bets or when the company stumbled in 2008 and 2009. They are making a concerted effort to repay the government loans by selling operations and making payments from its profits. By most press accounts, the company would like nothing better than to be finished with its ownership by the US government.

A brand is a person’s perceptions of a company. In the end, it is your client’s perceptions that will dictate his/her comfort level in doing business with AIG. Some will reject the company outright on emotional grounds, while others will be willing to consider reasons not to exclude the company. You can act as a counselor to help change your client’s perceptions of the AIG brand only if your client is willing to be counseled.

Bill Fellows is the president of Top-of-Mind Branding, a marketing and branding consulting firm in Yardley, Pennsylvania, USA. He has held marketing positions with AIG and Munich Reinsurance America, and has worked as a consultant with other property/casualty companies. He has also worked for a number of business services companies. You can read his blog at www.whatisabrandhq.com.

 

Copyright © 2017 Transcontinental Media G.P.
Transcontinental Media G.P.