The AIG Brand Resurrection

This week, in a move I thought impossible two or three years ago, AIG announced that it would resume using the AIG name and brand subsidiaries that never used the AIG name under the corporate umbrella.

After the company was bailed out by the government in the 2008 financial meltdown, it stopped using the AIG name and branded most of its insurance operations under the Chartis name.  Some member companies, such as SunAmerica, continued to use their subsidiary name without reference to AIG.  Even AIG employees did not have the company name on their employee badges for safety reasons.

According to the press reports about resuming use of the AIG name, the company had very favorable results from recent advertising tests.  The tests showed higher response rates and lower customer acquisition-costs for AIG-branded products.  “The increasingly positive sentiment toward AIG is a powerful asset,” Bob Benmosche, AIG’s Chief Executive Officer said in a memo to staff, a copy of which was reported by Reuters.

To some extent, I applaud the company’s move because it followed the results of its research and determined the time was right to move forward with the AIG brand, especially as an insurance brand.  I have had a fondness for the AIG brand since I was Advertising Services Manager at the company earlier in my career and contributed to the success of the AIG brand for many years.  As most people familiar with the AIG story know, it was a small financial trading group, not the insurance operations, that caused the company’s financial issues.

At the same time, AIG’s executives should not assume clear sailing on the name change.  As the New Coke experience makes clear, customers can tell you one thing in research and act totally different in the real world.  Coke drinkers preferred the taste of New Coke over Old Coke and Pepsi in taste tests.  About 10% of Coke drinkers in focus groups expressed anger at the thought of changing the formula, but the company downplayed these emotions as part of focus group bias (a vocal participant swaying other group members).  When the Coca-Cola Company introduced New Coke a revolt and boycott ensued.

So while AIG may have research on its side, the reality may prove entirely different.  Emotions are still raw for many people over the financial meltdown.  The government bailouts without suitable compensation for the risk taken, limited regulatory change and many of the culprits receiving hefty compensation packages are still galling to some.  Whether this plays out in people actually avoiding the AIG brand is yet to be seen.

Assuming the AIG research that people are willing to do business with the AIG branded entities holds true, the move to an umbrella brand makes a great deal of sense.  When I worked at the company, we branded just about everything under the AIG name.  Since then it allowed strong brands it acquired (SunAmerica, Hartford Steam Boiler, etc.) to trade under their established brand names and retain their brand equity.  Moving back to a true umbrella approach allows each subsidiary to leverage the AIG name.  In short, the whole can be greater than the sum of the parts.

Even if I am a little hesitant about the timing, I hope this gutsy call for AIG works out because I think it is the right move in the long run.

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