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A new focus: many insurers are changing their company names to reflect their core business purpose.


What's in a name? A lot, say branding experts. That's why companies like Zurich Financial Services Group have opted to change that part of their brand to better reflect their positioning and offerings to consumers.

On March 29 the global insurance provider's board of directors approved a name change--to Zurich Insurance Group Ltd.-at its annual general meeting of shareholders.

Over the past several years, Zurich has streamlined its business portfolio to concentrate on insurance. In recognition of this strategic focus, the board proposed to replace the reference to financial services in the company name to "reflect the fact that our product portfolio focuses on insurance, providing a clear brand message to our customers, shareholders and other stakeholders," said company spokesman Lukas Meermann.

That's a good move, said Nick Nichols, founder of online branding and reputation management firm Dalfort Media. "If Zurich wants to narrow the focus of its business to increase clarity in the minds of consumers and to move from the broad, ambiguous financial services to insurance group because they're narrowing their focus to insurance products, then it's a great step."

While some companies added "Financial Services" to their name on the heels of Gramm-Leach-Bliley, several now are scrapping that reference to return to their insurance roots and incorporate that focus back into their name.

"Part of that is because the idea of tying together insurers and financial services didn't resonate well with consumers, even back in the 1990s when Gramm-Leach-Bliley became law," said Robert Hartwig, president of the Insurance Information Institute. "In fact, it didn't even resonate well with banks and insurers at that time."

He said the 2010 Dodd-Frank Act, which implements changes that, among other things, affect the oversight and supervision of financial institutions, has caused some carriers to shed their banking operations.

"However, many banks will continue to have what some consumers think of as insurance operations," he said. "But in reality, banks have bought out some other distribution channels; there is very little insurance risk on the balance sheets of banks today."

While hundreds of banks failed as a result of the recent financial crisis, no property/casualty insurer failed as a result, he said.

"While a small number of insurers continue to operate successful banking operations, nobody today is banging on the doors of insurance companies saying that in order to survive in the 21st century you need to have a bank," Hartwig noted.


Ansi Vallens, owner of media relations and strategic communications planning firm Signals & Strategies, calls Zurich's name change pre-emptive.

"Financial products and insurance products are antithetical," he said. "Financial products are inherently risky and insurance products are designed to protect against risk. That's confusing to customers."

Vallens added, "The reputation of the financial industry keeps eroding. Bank bailouts and banks' opposition to regulation still outrage people, and the upcoming retirement crisis, the effects of the European crisis and inflation will continue to anger boomers. The insurance industry's reputation, on the other hand, is improving because it's regulated by states and carriers are delivering on their promises, especially during recent catastrophic events like floods, tornadoes and hurricanes."

Branding and marketing expert Liz Goodgold, author of Red Fire Branding, said one of the main reasons why companies want to rename is to avoid consumer confusion. "When consumers aren't clear about what you do, you have a branding problem. The Holy Grail of branding is that people must remember you in order to do business with you. 'Financial' is a broad word that consumers don't understand; it goes tight into genetic titles like 'wealth adviser,' 'estate planning' or 'financial management."

"When it comes to naming, specifics are terrific," she added. "When you give a consumer the specificity of what you do, you create understanding. So rather than trying to figure out what financial services entails, insurance is something consumers understand; they know when to a call a company when they need that coverage."

Goodgold lauds the company's decision to keep "Zurich" in its new moniker. "We call that an evolutionary approach to a name change. It retains a component of the old name into the new name so consumers can still relate."

Following Zurich's name-change approval, Meermann said an established team at its corporate center will direct and supervise the necessary steps to be taken globally. The name was changed immediately "in the most relevant contexts, while we expect a gradual phase-out of the old name's usage in other regards."

More Changes

Zurich certainly isn't the first carrier to venture down this path. In 1997, ITT Hartford Insurance Group changed its brand name to Hartford Financial Services Group Inc. to better reflect its businesses and the variety of Financial service products it offers to consumers.

In July 2010, XL Capital officially became XL Group plc, following the redomestication of its holding company's place of incorporation to Ireland from the Cayman Islands. The change from "Capital" to "Group" reflects its focus on providing property, casualty and specialty insurance and reinsurance products for complex risks, said company spokesperson Christine Weirsky.

Like any change, referring to a new name takes time to become a habit, she said. "And some time had to be spent making corrections, whether in the media or even employee references. However, despite the legal entity name change, we were more commonly known as 'XL' and that did not change:' She said changing the parent name to reflect "Group" was one of the first steps in the company's rebranding efforts, unveiled in October 2011.

"We are a group of businesses focused on delivering insurance and reinsurance. And the word 'Group' better reflects the cohesive, collaborative approach each of those businesses take to manage our clients' complex risks."

Recently, Unitrin Inc. renamed to Kemper Corp. to reflect what its Chairman, President and CEO Don Southwell said is "a very well-known, well-respected name in the insurance industry." In 2011, the company also began rebranding its business units by renaming its largest property/casualty business unit as Kemper Preferred and its largest life/health insurance business unit as Kemper Home Service Cos.

The renaming strategy was more than a name change, noted Southwell. Rather, it was "a brand launch for us, because we've done a lot of research and a lot of planning about what we want our brand to stand for." In researching the cachet of the Kemper brand, the company and its brand-consultancy firm Lippincott polled existing and potential customers, agents and investors. The result: the Kemper brand had about 30% greater awareness than the Unitrin name, especially among younger customers.


So what motivates a company to change its moniker?

Along with mergers and acquisitions, companies that want to change their perceived image, have a bad reputation or wish to change or narrow their core business purpose often rename themselves, Nichols said.

"I suspect the latter is the case for Zurich," he added. "However, that's a challenging task to undergo. The main factor in changing a name should be customer focused. Put yourself in the customers' shoes and imagine how they would be affected by a name change for a brand they trust."

A corporate renaming involves much more than just changing a logo or tagline or overhauling a company's culture and message, noted Goodgold. "The decision to rename is difficult and companies need to weigh the positives against the negatives of losing any derived brand equity. Naming requires a tremendous amount of both due diligence and 'duh' diligence; companies have to combine the qualitative and quantitative along with the creative and strategic."

She suggests companies craft a plan that includes competitive analysis, perceptual mapping, trademark screening, domain acquisition, foreign language review, name change tactics and customer communication. "That helps create consistency with the overall brand positioning.

"Naming is to marketing as location is to real estate, so a naming decision cannot be taken lightly," Goodgold added. "It's the sizzle that rings up the sale."

Among some of the "branding blunders" companies should avoid when renaming or rebranding themselves include "abandoning a well-established name that has specific meaning to everyone and forgetting to put their egos and trendiness aside," said Nichols. "If a company is truly changing or narrowing its focus, the right kind of name change will be very beneficial.

"What is financial services anyway?" he asked. "Many companies now say they're a financial services company but that could be anything from a mortgage company to insurer to stock brokerage. The more you can narrow the focus of your corporate purpose without limiting your target market, the better. People tend to believe they're buying a product that is made specifically for the problem they have at hand. And they believe the company is an expert in insurance, rather than a financial services company where everyone claims to be an expert in many different things."

In 2008, the company developed a new global brand position, Zurich HelpPoint, which focuses on how Zurich delivers what matters.

Brand is a strategic asset, "and it's not what you say it is but rather what your customers say it is," Vallens noted. "Sometimes companies have to rebrand. Chartis is a good example of that because people just couldn't get past the AIG name."

Key Points

* The Background: Some insurance companies have added "Financial Services" to their names on the heels of the passage of Gramm-Leach-Bliley.

* What Happened: Other insurers are scrapping the reference to financial services to return to their insurance roots and incorporate that focus back into their names.

* The Payoff: A brand change can better reflect an insurer's positioning and offerings to consumers.

A History of Zurich's Name

Zurich is no stranger to corporate name changes.

* The company was founded in 1872 as Versicherungs-Verein.

* Over the years, it became Zurich Marine and Accident Insurance Co. Ltd., Zurich General Accident and Liability Insurance Co. Ltd., Zurich Insurance Co., Zurich Financial Services Ltd. in 1998 and most recently Zurich Insurance Group Ltd.

Source: Zurich Insurance Group Ltd.

Learn More

Zurich insurance Group Ltd.

A.M. Best Company # 86976

Distribution: Multichannel

XL. Group plc

A.M.Best Company #: 52919

Distribution: Brokers

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Title Annotation:Property/Casualty
Author:Chordas, Lori
Publication:Best's Review
Date:Jun 1, 2012
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