So it’s goodbye Norwich Union after 200 years. The UK’s biggest insurance brand and a major pensions provider is being phased out in favour of a name with no values, zero appeal and limited awareness.
And hello Aviva, its vague-sounding replacement. Isn’t this just another wasteful and pointless rebranding exercise of the sort we thought we had waved goodbye to years ago? Remember how Royal Mail rebranded as Consignia, then changed back again after the name was derided as meaningless? Then there was the equally ham-fisted attempt to re-brand BA with ethnic tailfins.
These rebranding operations were botched because the companies failed to adequately explain the reasons behind the changes, leaving staff and consumers nonplussed. So Aviva has a lot of explaining to do. It may struggle to show customers they will benefit.
Financial services brands are under scrutiny as never before. The collapse of Northern Rock has educated people not to trust bank brands. The crises at Royal Bank of Scotland and HBOS, along with a string of pension scandals, have further undermined consumer trust in the financial world.
In this environment, the switch from the long-established and trusted Norwich Union name to the newcomer Aviva will have to be carefully handled. The company argues the rebrand gives it an opportunity to put clear blue water between itself and other financial institutions. Aviva will be seen as a thrusting, expanding brand with an eye on the future while others are mired in the credit crunch and pay the price for poor management.
Aviva was formed in 2002 to brand the group formed from the merger of Norwich Union and CGU. The name is used in over 20 markets around the world, and economies of scale apparently dictate that the brand must be used in the UK. Think of all those savings on stationery costs and global sponsorships.
Norwich Union is already branded as “an Aviva company”, so existing customers are familiar with it. But those with NU pensions may worry that their savings are about to be swept up into some gigantic global bureaucracy. The unspecific origins of the name could scare those concerned about where responsibility for their investments lies. They may wonder whether it will be better, worse or exactly the same as NU.
For prospective customers, the new name will come as something of a shock. What does it mean? Why does it sound like Arriva and Aveda? Is it an overseas entity?
According to the company, the name change will enable it to launch successful products from other markets in the UK. We will have to wait and see if it really delivers customer benefits or is simply driven by cost cutting.
The switch also raises the question of whether brands matter at all, especially in financial services. If you can drop a brand that has been built up over centuries and has lavished tens of millions of pounds on promotion, surely it is of little value anyway. HSBC acquired Midland Bank and brought it under the HSBC umbrella with barely a murmur of discontent. The only brand which has survived the HSBC steamroller is First Direct, which still exists independently of its parent.
In the great game of global consolidation, other financial service brands are also likely to be axed. Abbey, one of the UK’s largest high street banks, will probably be rebranded in the name of its owner Santander. It looks likely that Axa will axe Sun Life and Cornhill Insurance will be absorbed into Allianz. RBS may sell off Direct Line, Churchill and Privilege, among the most recognisable insurance brands in the UK. Their new owners may well scrap those brands.
Aviva runs the risk of presiding over another re-branding disaster. To avoid this, it must persuade existing and prospective customers and staff that there is something in the name change for them.