Will AIG change its name to improve its image?
byDec 10th 2009 5:00AM
Branding counts. Apple (AAPL) could probably do well selling tea pots. Sharper Image is still around, but its brand is so tarnished that it could not give away many of the ultra-modern home utilities that it used to market at ridiculously high prices.
The New York Times reports that AIG (AIG) is back in the business of selling annuities to bank customers. The products used to be among AIG's most successful. The paper reports that, "People buying the annuities in bank branches may be surprised to know they are signing up with A.I.G. The contracts are being offered under the names of two subsidiaries, Western National Life and First SunAmerica."
Will the AIG parent company change its name? It probably should. It is a move that has a lot of precedent. Tobacco company Philip Morris changed its name toAltria ( MO), which masked its presence in the cigarette business after it was hit with lawsuits over smoker health issues. Nissan was once known as Datsun in the U.S. Datsun cars had a reputation for using cheap parts and poor quality workmanship.Bank of America ( BAC) has virtually eliminated the Countrywide name from its home mortgage operations.
AIG's brand is so badly damaged by the company's huge losses, the $180 billion taxpayer bailout, and constant fighting with its long-time CEO, that the use of its subsidiary's names to improve product sales may show the AIG board and management that the firm needs a new identity to improve its standing with consumers and the companies it does business with. SunAmerica would do nicely.
Douglas A. McIntyre is an editor at 24/7 Wall St.