By Lori Chordas | September 2008
Experts agree something needs to be done with the American International Group Inc. brand.
Some believe the insurer, bailed out last year by the U.S. government with a multibillion dollar rescue package, can rebrand itself over time under its current name. Others view the once highly regarded brand as "dead."
That's a far cry from once gracing BusinessWeek's annual list of the top 100 global brands. In 2007, AIG ranked 47th overall and first among insurance companies, with an estimated $7.5 billion brand value.
Branding expert Nick Nichols, of Las Vegas public relations firm and Internet branding agency LVPR, said the brand is beyond saving. Until it's officially comatose, however, they should reinvent themselves and first think if they need to have a new name and point-of-view or tagline that talks about the positives of what the company will do versus what's happened in the past.
Other branding and marketing experts, like speaker and author Liz Goodgold, believe AIG has no choice but to regroup under a new name.
"AIG has become the Enron of brand names," she said. "The brand name is what people remember and that name is forever tainted."
Several major AIG subsidiaries have been moving in that direction in the past year. This includes the formation of Chartis, which holds AIG's commercial units, in 2009. AIG Direct automobile insurance business was renamed 21st Century Insurance -- the name the automobile insurance company used until AIG acquired 100% of the company in 2007. The Farmers Insurance Group of Cos. acquired 21st Century in July.
AIG's long-standing Asia-Pacific life insurance subsidiary, American International Assurance Co. Ltd., reinforced its independent identity with an aggressive branding effort launched in May.
In June, AIG Annuity rebranded as Western National Life Insurance Co., which had previously been the unit's name for 50 years. Judith Alexander, director of sales and marketing for Beacon Research, said the firm's sources consider that a wise move. "Banks are extremely risk averse. We have heard that banks increasingly did not want to be associated with Western National, then AIG Annuity, as concerns mounted about its corporate parent."
In one of its largest moves, in July, AIG unveiled a new brand for its property/casualty business under the name Chartis -- previously known as AIU Holdings, which was a transitional name. The name Chartis is derived from the Greek word for map.
John Doyle, executive vice president of Chartis and president and chief executive officer of Chartis U.S., said AIU was "never intended to be our long-term brand. After consulting with thousands of our brokers, our customers and our employees, we made the decision to reintroduce ourselves as Chartis." He said that announcement was well-received, adding "it has united our business under one global brand."
But are these rebranding efforts enough to help detoxify the AIG brand?
In order for AIG to rebrand what was once the moniker of the largest global insurer, Goodgold said "they'll have to weigh the brand equity and negative image versus the unknown. Companies want a new name when they have two things against them -- insurmountable negative publicity and negative connotation. AIG hit both of those key criteria."
Goodgold noted low-cost carrier ValuJet Airlines went through a major rebranding effort in 1996 after one of its planes crashed into the Florida Everglades, killing all 110 on board. Today, the company is going strong after rebranding itself as AirTran Airways.
"All the changes AIG is making with a new CEO, Board and regulations will start the building blocks of a new brand," Goodgold said. "Now is the time to make that change."
But Scott Piergrossi, vice president of creative development for the Brand Institute, a health care, consumer and business-to-business brand identity consultancy, lauds AIG for not rushing into a new brand name. "Over the short-term, there's little AIG can do from a branding perspective to alleviate the current public outrage. It makes greater sense to continue daily business, focus on delivering all elements of its mission and wait to make any macrobranding decisions until the future direction of the organization becomes clearer."
To create positive rebranding steps, Goodgold said AIG must be both "genuine and authentic." Otherwise, she said, "a new brand is just whitewashing. They need to attack their rebranding from every element -- promotions, PR, a new logo. They can't just come out and say they're 'the new and improved AIG.' Consumers won't buy that."
Kelly O'Keefe, director of executive education at Virginia Commonwealth University Brandcenter, believes it's possible for AIG to restore itself under its current name.
"It first has to fix its troubles. Then AIG has to show consumers it's a solid and secure company they can feel confident about.
"My message to AIG is to forget about the name and instead change the way it does business," said O'Keefe. "A name change isn't enough to fool consumers. The challenge with a tarnished brand is that we stop believing what they say." AIG should be actively communicating to the public what actions it's taking to eliminate or reduce exposures to risk, he added.
O'Keefe is skeptical about what he calls "baby steps" of rebranding individual subsidiaries. "[AIG] is a B2B brand with well-informed consumers, so they aren't fooled by a quick name change. AIG could end up with a bigger problem then it started with by having many different names that have to be reconciled back."
But Piergrossi thinks it's a step in the right direction. "You need to have a clearer picture of what the company is going to be, how it will be structured and the overall approach to branding operating units and how they relate to the parent company. Like renaming 21st Century, there will likely be some fears of guilt-by-association over the next few years for AIG's operating units. That was likely one reason for the name change."
He said the AIG brand is "one of the most dynamic branding situations in history with regard to what are appropriate steps forward and how to accurately gauge perception of the AIG brand name and understand how it might be different in the future.
"Whenever a company goes through things such as AIG has gone through, the immediacy is always a bit cloudy. It's important to consider the long term and that the company will take the appropriate steps to ensure things of the past won't happen again to re-establish their mission and regain client trust." Piergrossi said.
"It's easy to say AIG should quickly come up with a new name -- something that can help redefine the company and lay to rest some mistakes of the past," he added. "But it needs to consider that buried deep within the company, past all the public outrage and Congressional scrutiny over toxic financial products and derivatives, is the equity of a 90-year-old global insurance giant that once was known for its credibility and integrity."