Three years ago, AIG decided to spin off its property and casualty business and rename it Chartis. At the time, a company exec said the change would help the operation “distinguish who we are, what we can do for brokers and clients, and how stable and financially strong we continue to be.” That’s corporate-speak for what observers call the P&C operation’s desire to distance itself from the AIG name, which was associated with a $180 million-plus bailout following “wrong-way bets on the housing market.”
The 2009 move followed by a few of months comments made by then CEO, Edward Liddy: “I think the AIG name is so thoroughly wounded and disgraced that we’re probably going to have to change it.”
This week, the company said it was ditching the Chartis name and re-rebranding—this time under the AIG moniker. My first thought upon reading this was “New Coke.”
Wikipedia reminds us of the cola maker’s move like this:
New Coke was the reformulation of Coca-Cola introduced in 1985 by The Coca-Cola Company to replace the original formula of its flagship soft drink, Coca-Cola (also called Coke). New Coke originally had no separate name of its own, but was simply known as “the new taste of Coca-Cola” until 1992 when it was renamed Coca-Cola II.
The American public’s reaction to the change was negative and the new cola was a major marketing failure. The subsequent reintroduction of Coke’s original formula, re-branded as “Coca-Cola Classic”, resulted in a significant gain in sales, leading to speculation that the introduction of the New Coke formula was just a marketing ploy.
AIG’s 2009 branding move was not a simple product unveiling or brand shift. It was response to what was, at the time, at least, a potential brand crisis. Company officials said the switch came after 7,000 brokers, clients and employees were surveyed about whether the unit needed a brand more distinct from its parent.
The company did not know what the reputational fallout would. If it relied on clues from politicians, the downside risk was great. My own one-term U.S. Congressman from New Hampshire, Paul Hodes, put it this way at a 2009 House hearing: “AIG stands for ‘arrogance, incompetence and greed.’” The company had to do something.
I can actually feel their pain. While I was handling media relations for CIGNA, the company made a financial decision that was largely unprecedented at the time. We took a $1.2 billion charge against earnings to bolster claims reserves. We expected for a dramatic drop in share price—and were prepared to handle the fallout. We did see a sharp drop—but that was short lived. Investors recognized that the company had done the right thing. So did competitors, as evidenced by a number of other P&C firms following suit and strengthening their own reserves.
In the past three years, AIG (did any of us really stop calling it that?) has performed well. It repaid government loans. Last year, it started using the AIG Direct platform to sell life insurance in the U.S., marking the first time since the bailout that the company used the name while advertising.
A couple of weeks ago, the company announced it would revert to the AIG brand for its domestic and international P&C operations. In May of this year, John Doyle, CEO of global-commercial business at Chartis, reportedly said there were no lingering reputation issues for the P&C business and that Chartis’ international operations, in particular, were ‘begging us to rebrand as AIG.”
So they did—or will.
This all leads me to ask a few questions: Did AIG overreact in 2009? Did they do the right thing in 2012? Perhaps most important, do you think there’s a pack-rat or hoarder somewhere that kept all of the old signs and stationery so they don’t need to create them all over again? Oh, never mind on that last question.