Newly Merged Employee Benefits Entity Reclaims AIG Brand Name

Two American International Group Inc. units, American General Life Cos. and Chartis U.S. Accident and Health, will merge their group benefits operations into a new organization to be called AIG Benefit Solutions.

The name reflects 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.

Three and a half years after the bailout, "the AIG name has been moving steadily back out there," said Mark Herr, vice president of media relations for AIG.

Last fall, AIG returned to its brand in a trial program. The company began advertising term life insurance using the AIG name, marking the first time in the United States since the financial crisis of 2008 that it's marketing insurance directly to consumers under the AIG brand. Matrix Direct, the direct-to-consumer marketing arm of American General Life Insurance, a unit of AIG, began marketing the products under the brand "AIG Direct" (Best's News Service, Sept. 19, 2011).

The pilot program has proven to be successful, Herr said.

"There's been a significant lift on the brand," Herr told Best's News Service. "We found it raised sales and leads significantly for Matrix Direct. So when it came time to pick a name for this new unit, where we are marrying units from two major subsidiaries, it made sense for it to be 'AIG'."

Research showed that 98% of people recognized the AIG name and 70% were familiar with it, he said.

"But the real convincing piece of information is that when employee benefit managers were quizzed about the name and their willingness to do business, they were twice as receptive to the AIG brand name than for American General, and even a little better than Chartis," Herr said. "Clearly this is a brand that resonates strongly in the insurance community."

AIG (NYSE: AIG) was in danger of failing in September 2008 when the U.S. government first stepped in to provide the insurer with an emergency loan. The available bailout grew as high as $182 billion, but AIG said it never borrowed the full amount it was offered. Since then, it's been selling noncore assets to pay back what it owes to the federal government (Best's News Service, Aug. 19. 2011).

In 2009, AIG initially created AIU Holdings to hold the commercial insurance and private client groups, but later renamed the business 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.

AIG Benefit Solutions will offer products and services through two segments: U.S. employee benefits, which will offer group and individual employee benefits, including many voluntary/worksite products; and U.S. affinity benefits, which will offer products and services to affinity groups.

Curtis W. Olson, who joined American General Benefit Solutions in June 2011 as president and chief executive officer, has been tapped to lead the new organization, which will be based in Neptune, N.J. Before joining American General, Olson had previously been president and CEO of ING Life Insurance, Korea, and had also served for several years as president of ING Employee Benefits U.S.

Business will continue as usual for the producers and customers of Chartis Corporate Benefits and American General Benefit Solutions, but both sets of customers will have immediate access to the combined portfolio of products and services through one sales representative.

Benefit Solutions' portfolio includes plans and programs for life (term and universal), accidental death and dismemberment, accident, hospital indemnity, dental, vision, limited health care, group and personal disability (including Family Medical Leave Act administration), critical illness and cancer insurance, as well as an employee assistance program.

Chartis Corporate Benefits' portfolio includes AD&D, business travel accident, critical illness, accident, limited health care, expatriate medical, stop loss, organ transplant, vision and travel insurance.

AIG's subsidiaries currently have a Best's Financial Strength Rating of A (Excellent).

On the afternoon of Jan. 24, shares of AIG were trading at $25.32, down 0.47% from the previous close.

(By Meg Green, senior associate editor, BestWeek: Meg.Green@ambest.com)