The news that American International Group (AIG) is to re-attach its brand name to its global non-life insurance business brings to a close a dramatic chapter of the financial crisis in which a major leader in our universe took an important role.
The rehabilitation of the AIG brand is to be welcomed. We are conservative folk in the insurance sector and brands and traditional nomenclature tend to endure even when they have been long since retired and replaced. It is an endearing feature of our industry that even more than three years into the brave new world of Chartis, the new brand name had gained little or no traction.
Everybody remembers where they were that fateful weekend in September 2008 after the collapse of Lehman Brothers when the future of AIG hung in the balance. Indeed, this publication took global centre stage for a time as the world watched to see whether one of the biggest insurance groups would be allowed to go the same way as its hapless investment banking peer.
Today, AIG is a fundamentally changed institution from the one that necessitated a $182.5bn US government rescue.
The firm is leaner and has a far greater handle on its risks than it did before its near-death experience. The group's internal controls, risk appetites and relationship with its customers and reinsurers have been fundamentally reassessed.
In the short term, the near failure at AIG also unleashed a savage land-grab for US market share right at the bottom of the soft pricing cycle, the consequences of which may only be revealed in coming quarters as the market climbs back towards pricing adequacy.
However the longer-term effects on clients and buying patterns are only just beginning to be felt. The crisis forced customers and brokers to reassess their use of major insurers, leading to a fundamental shift in buying behaviour. Clients are far more wary of placing business 100 percent with a single carrier and the relative strength and virtue of the subscription market has been rediscovered, to the long-term benefit of intermediaries and global hub markets across the world. This is a long-term trend that has traction and is unlikely to reverse with any speed.
Lloyd's and the London subscription market in particular have benefited from the shift, as illustrated by the re-emergence of Lloyd's as the top excess and surplus lines writer in the US. Like AIG, Lloyd's own recovery from severe periodic crises in the past shows the Teflon quality of long-term brands. For while it may have had periods of highly adverse publicity in the tumultuous period that began in the early 1970s, ran through the reforms of the 1980s, the 1990s reconstruction and renewal and ended with 9/11, its subsequent performance shows that 300-plus years' of relationships and the Lloyd's of London brand still carry enormous power.
Of course, almost five years after the first sub-prime problems began to emerge, the global financial crisis is still far from over and continues to claim the scalps of governments and affect the brand strength of whole nations. In this context the AIG bailout does seem something of a hors d'ouevre to today's main course of near Eurozone meltdown and developed world economic stagnation.
So welcome back AIG, if you can learn from the group risk management lessons of the past and build on the palpable brand strengths that you still possess, you will be well on the road to regaining a place at the top table...