By Erik Holm
AIG's name is no longer mud.
Under a pilot project launched last year, the life-insurance unit at American International Group Inc. (AIG) found it got better results selling coverage under the AIG brand than it did using a name that didn't indicate an affiliation with the bailed-out company, a senior executive said.
AIG is now expanding the effort to sell life insurance directly to consumers by directing them to a website called AIG Direct, said Jay Wintrob, the head of AIG's life-insurance unit, SunAmerica Financial Group.
"We had higher response and sell-through rates using the AIG name," he said at a conference in New York on Wednesday. "So we've expanded our AIG Direct lead-generation efforts."
The results of the pilot project show the AIG brand has greatly improved since the depths of the financial crisis, when its $130 billion bailout prompted criticism far and wide, from the halls of Congress to the faux newscast on "Saturday Night Live," prompting AIG's then-chief executive, Edward Liddy, to declare the AIG name "so thoroughly wounded and disgraced" that it would probably need to be changed.
Amid the furor, the company retooled marketing efforts, removed the AIG logo from identity badges and even renamed entire units of the company in an attempt to limit the damage from its massive government rescue. AIG has now repaid the bulk of the bailout, but remains majority-owned by the U.S. government for now.
The pilot program involved advertisements for AIG Direct, which currently tells potential customers they can get "the protection your family needs from AIG, a world leader in insurance." AIG Direct is a marketing division of a unit called Matrix Direct, which sells term life insurance directly over the Internet from carriers including AIG's American General Life Cos. and ING Groep NV's (ING) ReliaStar Life Insurance Co.
The improved sales using the AIG Direct brand were in contrast to results when the coverage was sold through Matrix Direct, Wintrob said.
Wintrob also said AIG's SunAmerica is poised to expand sales of variable annuities through a variety of channels. Rivals including MetLife Inc. (MET) have retooled their variable annuity offerings in recent months to make them less generous, while Hartford Financial Services Group Inc. (HIG) exited the business altogether.
"We have the capacity, distribution capability, risk controls and financial discipline to capitalize on the growing demand in this market as some of our competitors pull back," Wintrob said.
Write to Erik Holm at [email protected]