Editor's comment: Battle of the brands

On Monday, French insurer Covéa announced its intention to bring together the insurance businesses of Provident and MMA into a single company for the UK market – citing the creation of an “optimal platform for growth”.

Nothing unexpected there, with a full merger widely predicted since Covéa bought Provident in April 2011. Nor is there anything unusual in multi-brand insurers currently undergoing Part VII transfers to simplify their FSA-regulated entities.

After all, this week saw confirmation that RBSI had completed the transfer of its own trio of underwriting functions – encompassing the consumer brand giants of Direct Line and Churchill alongside broker brand NIG – into a simplified structure, bringing them into UK Insurance.

But while RBSI’s move was clearly positioned as a ‘merger of means’, driven by preparations for Solvency II — with no suggestion of brand loss — Covéa seems fuelled by a desire for rebirth, with the single company also set for a new single brand: Covéa Insurance.

It’s slightly curious the parent company felt the need to ditch its two long-standing UK brands in favour of pushing its own name here, when history shows such a switch can come at a cost.

Only last August, for example, David McMillan, Aviva CEO for UK GI, inadvertently admitted it can take years to re-establish recognition. While declaring spontaneous customer awareness levels of the Aviva brand had reached those of Direct Line – hitting 58% — he contrasted this against a rather lowly 4% to 5% awareness rate that Aviva ‘enjoyed’ when it infamously dropped the Norwich Union name.

You can’t help wondering whether this is a victory for brand consultants and marketeers over common sense. What next — Swinton to disappear from UK high streets? Think of the alliterative loss if nothing else — what would replace the January ‘Swinton Sizzler’ sales, currently advertising ‘1000s of rock bottom prices from the UK’s top insurers’?

Mind you, after Covéa’s shock action last month in suddenly sacking Swinton’s entire executive board, you can’t help feeling it wise to expect the unexpected.

Lynn Rouse,
Editor