April 29, 2013 by Stefan Dubowski
What’s in a name? If the name happens to be “AIG,” it may well bring to mind the financial crisis. It might evoke subprime mortgages. It could conjure up debates concerning inadequate financial sector regulation and corporate mismanagement.
These are not positive impressions. Yet Chartis Insurance Company of Canada—the company formerly known as AIG Commercial Insurance Company of Canada—is going back to the AIG brand. In doing so, the company’s executive team believes it can turn negative perceptions of AIG around completely. They aim to accentuate the positive facts about parent company American International Group Inc.: that the bailout money the firm received from the US government has been returned; that the company has, in fact, injected an additional US$15 billion into the government’s coffers; that it is stable and profitable. Those facts underpin the AIG brand revival, led here by Lynn Oldfield, president and CEO of Chartis Canada.
AIG solidified its association with the financial crisis when the US government bailed the company out of its pecuniary pickle with $182 billion in 2008. The company had sold billions of dollars worth of guarantees on subprime mortgages, and when mortgage defaults skyrocketed AIG was left with a heavier financial weight than it could shoulder.
In Canada—where Oldfield was AIG Commercial Insurance Company of Canada’s regional VP at the time—crisis management became top priority. The firm’s communications strategy was to assure the Canadian market that all was well, particularly with AIG’s Canadian insurance operations, despite the parent company’s challenges.
Oldfield met with numerous brokers and clients during this time. “The goal was to provide them with the information they needed to continue to support us,” she says. “We had a message. The company is highly profitable. It’s a stable property-casual writer in the Canadian market. And importantly, our statutory capital remains in Canada to pay for the claims of our clients.”
While Oldfield and her team assuaged the concerns of brokers and policyholders in this country, AIG devised a new entity for its insurance business. In July 2009, Chartis Insurance was born. It comprised AIG’s North American and international P&C insurance operations. Executives presented Chartis as an efficient, globally-minded organization. Insurance industry observers pointed out that the new name and structure effectively insulated the insurance business from the parent company’s troubles.
Now, just three years later, Chartis is returning to the AIG name. Why so soon? Oldfield says AIG has a better story to tell these days and it’s time to capitalize on the company’s achievements.
Notably, the bailout money has been returned, plus an extra $15.9 billion. The company is now financially stable. (AIG report $2 billion profit for Q3.)
An undercurrent of nostalgia also informs the return to the previous brand. For some, the Chartis name never really stuck. Even now, many brokers still refer to Chartis as AIG.
Does this fact suggest that the Chartis name change failed in some respects?
“I don’t think so at all,” Oldfield says. “Chartis was a change at a particular point in the history of this organization—a change for a compelling reason, to bring together the international and North American operations as one global company for the first time. AIG has exceeded anyone’s expectations in a mere four short years, in not only returning the money to the US government but also adding a positive return of $15 billion. That is the reason to move back to AIG.”
Brokers can expect Chartis to roll out the new brand in phases. The company is sending letters to brokers detailing the reasons for the name change. The letters point out that the company has a new “brand promise”: “Bring on tomorrow.” That message will be featured in AIG’s new marketing material. The letters also indicate that a new website is in the works.
Embracing the “New”
Oldfield says the firm is employing the same three key tactics used during the Chartis branding to support the AIG brand launch. First, the firm will embrace the new brand. “The senior leadership team has to be in synch and on board,” Oldfield says. “Our employees throughout the organization are excited to be AIG.”
Second, AIG plans to “talk it up,” she says. “The brand is reinforced by consistent communications.” This includes developing the new website, producing webcasts, sending letters to brokers and engaging in media outreach.
Third, Oldfield says, the company will “live the brand. Our corporate culture reinforces the essence of the promise, ‘Bring on tomorrow,’” she says.
“We are a customer-centric organization. ‘Bring on tomorrow’ means reaching out to clients. What risks are they concerned about around the corner? We have invested significantly in a science office to capture our data, and our brokers’ and clients’ data to be more efficient and effective.”
While AIG’s leaders clearly are confident that the company’s financial stability and conscientious debt repayment pave the way for a return to the old name, a question remains: is the market ready for this rebranding? When consumers see the AIG name, will they consider the good news about the firm, or will they recall the subprime mortgage debacle and the worldwide “Occupy” protests?
Oldfield insists that the market is ready for AIG’s renaissance. “I spent this spring speaking with our Canadian brokers and clients across the country and asked, ‘What do you think about us going back to AIG?’ They were unanimous. Our clients and brokers recognize us as AIG, as a global powerhouse in the property-casualty insurance space. They are embracing the change.”
Chartis/AIG is the 12th largest insurer in Canada overall as measured by direct written premiums, but is among the top five liability writers in the country
|Liability Insurance written in 2011|
|Rank||Company/Group||Direct Premiums Written$,000||Earned Claims Ratio%|
|2||Aviva Ins Co of Canada||343,392||68.39|
|3||Chartis Ins Co of Canada||330,960||52.94|
|4||Zurich Ins Co of Canada||279,967||40.49|
|5||Chubb Ins Co of Canada||232,459||56.26|
|Source: Canadian Insurance Top Broker 2012 Annual Statistical Issue.|
Copyright 2012 Rogers Publishing Ltd. This article first appeared in the December 2012 edition of Canadian Insurance Top Broker magazine.
This story was originally published by Canadian Insurance Top Broker.