There is something very positive about the name Chartis. For a start, it’s not anything like American Insurance Group.

Last week’s brand change for the global general insurance operations of the bailed-out insurance giant provides the necessary psychological distance from the tarnished AIG tag.

The parent company remains an insurance monolith – albeit one that is for now propped up by American taxpayers, with its many limbs being reorganised for sale as separate operations.

The political reality is that the Obama administration won’t stay in the insurance business for any longer than it has to – and there is a large investment to recover.

AIG is still too big to fail. The consequences of failure remain systemic and go far beyond the scope of one company, regardless of its size.

No one is pretending the big American’s role in the global financial crisis has been good for its Australian general insurance business. But, as we are often reminded, it wasn’t AIG’s general insurance operations that went astray and helped plunge the world into economic turmoil.

However, a reputationally shot brand isn’t helpful when trying to retain clients – a fact that must frustrate local managers who continue to exceed Australia’s stringent capital requirements.
 
Brokers are reluctant to talk in any detail about the attitude of their clients – or their own thoughts – on AIG and its place in the market. From what we do know, the company will have lost some business on June 30 and is also bruised by clients’ increased distrust of putting all their insurance eggs in one basket.

Marsh’s MD Placement Services Scott Leney had some noteworthy things to say at the recent Australian Insurance Summit in Sydney.

Describing the past 12 months as “destructive” for insurance, he said the industry runs the risk of buyers viewing it as “one more area of volatility”.

“The bailout of AIG, more importantly the need to bail them out, is proof positive of the systemic risks in the insurance industry and its link to the financial world,” Mr Leney said. “Buyers are concerned that no insurer is safe, even now.

“As a consequence we have seen a dramatic shift from the larger corporate buyers who previously wanted fewer and deeper relationships with insurers to actively looking to introduce additional insurance companies onto their panel to spread the risk of insurer default.”

So what’s in a name?

RMIT University Professor of Marketing Michael Beverland says the brand change to Chartis (derived from the Greek word for map) and the associated marketing emphasis on global reach are both positives.

The American reference had to go, considering how closely that country is associated with the economic downturn.

“Playing to your strengths, which is ‘globally we’re quite sound, globally we’re very credible’ is probably a really important strategy to move away from a base where the country of origin effect is relatively negative,” Professor Beverland told insuranceNEWS.com.au.

“It’s making the very best of a bad situation. It could really work for them.”

He describes Chartis as a “typical name for insurance” – something conservative and assured. Using a Greek word suggests “pillars and all the types of bedrock things we want to be assured of when we’re dealing with banks”.

But will what amounts to little more than a change of name be enough to quell the uncertainty? The statements last week announcing the rebrand did little to dispel the notion that Chartis will be very much the same creature it was when it was AIG – and that the company thinks it was always pretty nifty and doesn’t need to change.

Or has Chartis just wasted a huge opportunity to grab not just a new name but to embrace new attitudes, new approaches to the way they play their role in the market?

Chartis is a very safe name and its managers are taking the safe and steady course by emphasising it’s the change that isn’t really much of a change at all. Will “safe and steady” be enough for Chartis to climb once again to the pinnacle it occupied at the start of last year? Time will tell.