American International Group's brand has weathered the financial crisis, and is making a comeback, experts said.
"Looking back on it, it was a surprise to see how many experts were willing to leave [the AIG] brand for dead," said Scott Piergrossi, vice president of creative development for Brand Institute, a branding consultant. AIG has "a story in history. Ultimately, the storm has passed. A brand is never dead; it may be down, but it's not out."
On Jan. 24, AIG announced plans to merge the group benefit operations of two units into a new organization to be called AIG Benefit Solutions. Also, a pilot program, which had been slated to expire next month, has been so successful in marketing term life insurance under the AIG brand that the company is planning to expand it.
Both examples reflect a return to the AIG brand, a name the company had once attempted to distance itself from after the company's federal bailout in 2008 (Best's News Service, Jan. 24, 2012).
Marketing experts say AIG's brand has rebounded as the specific details from the financial crisis have faded from most Americans' memories.
"I don't think it's enough time to say people have forgotten, but they've probably forgotten the specifics," Piergrossi said. "The public issue dissipates over time."
More consumers may know the AIG name today even if they don't remember why, he said.
"People were more exposed to AIG [during the financial crisis], they forget why there was an issue, and it's just the positive left," Piergrossi said.
Liz Goodgold, branding and marketing expert with Redfire Branding said, "The AIG story is so complicated that most consumers only remember something about a bailout, not the specifics. It's better to have some brand recall than no brand recall. And with new marketing and advertising messages, AIG can shape the brand in the right direction."
At the suggestion of AIG Chief Executive Officer Robert Benmosche last fall, Matrix Direct, the direct-to-consumer marketing arm of AIG's American General Life Insurance, began marketing the products under the brand "AIG Direct" (Best's News Service, Sept. 19, 2011).
"We didn't know if we'd get a whole bunch of calls after everything that happened during the economic meltdown. Was there a black cloud over the AIG brand?" said Ron Harris, president of Matrix Direct.
It turns out, there was not.
So far, 140 million people have seen the AIG cable television advertisements, and the company has received one lone negative call in response. Beyond the single negative response, the company was surprised to find the AIG ads were more successful than the Matrix Direct ads in drumming up new business.
"The results have been quite honestly nothing short of miraculous," Harris said.
The AIG name generated a 23% lift in the response rate; a 20% increase in people opening emails; and a 44% increase in leads compared to the Matrix Direct brand, Harris said.
"It's a significant chapter in a telling story," Mark Clowes, director of global branding for AIG said. "The AIG brand is on a comeback."
AIG's brand had once graced BusinessWeek's annual ranking of the top 100 global brands. In 2007, AIG ranked 47th overall, and the highest of any insurance company, with an estimated brand value of $7.5 billion.
All that changed during the fall of 2008. AIG was on the brink of failing when the federal government rushed to its rescue with a bailout package valued at up to $182 billion. The company retrenched, selling some units to pay back to federal government, and taking steps away from the iconic AIG name.
In 2009, AIG created AIU Holdings to hold the commercial insurance and private client groups. That business was later renamed Chartis. Around that time, AIG also launched SunAmerica Financial Group, a financial services enterprise that combined its domestic life and retirement services companies, including American General Life; American General Life & Accident Insurance Co.; Variable Annuity Life Insurance Co.; Western National Life Insurance Co. — formerly known as AIG Annuity.
Matrix Direct, which AIG bought in February of 2007, had just started to use the AIG name when the financial crisis hit, but went back to Matrix Direct because of the fallout, Harris said.
About 99% of Matrix Direct's business is term life, with an average face value of $500,000 and an annual premium of $1,000. The customers drawn in through the AIG ads tend to buy more coverage, and spend maybe 15% more in premiums, Harris said.
"We've actually found the AIG Direct customers to be a little higher on the social-economic scale than Matrix Direct," Harris said.
The pilot AIG marketing plan was scheduled to sunset on Feb. 12, but the company is already planning to expand it, Clowes said. Research showed that 98% of people recognized the AIG name and 70% were familiar with it.
On Jan. 24, AIG announced plans to merge the group benefit operations of American General Life Cos. and Chartis U.S. Accident and Health, into a new organization to be called AIG Benefit Solutions.
AIG's subsidiaries currently have a Best's Financial Strength Rating of A (Excellent).
(By Meg Green, senior associate editor, BestWeek: Meg.Green@ambest.com)