Hanover supersedes Allmerica under rebrand effort
On December 1st, Allmerica Financial officially became The Hanover Insurance Group, what had been the parent company shedding its brand and taking on instead the name of its eldest and most venerable child.
President and CEO Fred Eppinger, who took the reins of the company in the summer of 2003, characterizes the change as the culmination of a two-year reorientation from "primarily a life company brand with separate regional property and casualty brands" to a "super regional property casualty company.""We believe the time is right to re-introduce ourselves to the market," Eppinger says of the name change.
The company has been reconfiguring for several years now and there have been jolts along the way. The bumpiest part of the ride has been the three-year process through which Hanover has shed its life insurance and annuity lines. This summer’s sale of the variable life insurance and variable annuity side of the business to Goldman Sachs was the last piece, some two and a half years after the sale of the fixed life insurance units to John Hancock Financial Services.
That latter transaction was initiated toward the end of 2002, a year that saw Allmerica’s stock decline in value some 80 percent.
The re-branding seeks to accomplish a number of things. At the top of the list, as Eppinger’s language suggests, it provides an opportunity, in the company’s "reintroduction," for Hanover to make an extensive and extended publicity push in both paid and free media.
In the month between the announcement and the official change, the company has rolled out an advertising campaign and Eppinger has toured the regional offices, culminating in his ringing the opening bell on the floor of the New York Stock Exchange in celebration of the company’s 10th anniversary on the exchange.
Time will tell whether or not the re-branding will be successful.
According to Reshma H. Shah, an assistant professor in the practice of marketing at Emory University’s Goizueta Business School in Atlanta, whether a rebranding effort succeeds or fails largely depends on the degree to which customers perceive the change to be genuine and deep, rather than simply "a changing of the facade." She points to the example of AirTran, formerly ValuJet.
In May of 1996, a ValuJet DC-9 crashed in the Florida Everglades, killing all 110 people on board. This was widely perceived to be a harbinger of the company’s demise. Rebranded as AirTran, the company has instead soared to new heights.
Why? Shah says the changes were comprehensive and genuine, rather than skin deep: in addition to the name change, there was a wholesale revamping of the leadership of the company; there was an infusion of capital and new equipment; and with the latter, a dramatically improved safety record. The flying public accepted the name change as part of a larger package.
It makes sense to "re-introduce" a company when it has undergone significant change; there is always the downside risk, however, of alienating any number of constituencies on which the company relies, customers front and center. In a nod toward this reality, one unit, Michigan-based Citizens Insurance Company of America, will keep its name, though it will be identified as a company of The Hanover Insurance Group.
In another sign that the company is seeking balance between change and continuity, the name on the facade of the Lincoln Street headquarters has been changed, while the logo, an eagle in a triangle which pierces a circle, remains essentially the same.
The re-branding campaign has been managed by Hanover’s media relations staff, including Michael Buckley and Arny Spielberg in Worcester, with the assistance of an outside consultant who has since been hired to work for Hanover directly.
"It is a challenging and complex undertaking," says Spielberg, "which impacts all of our key constituents and draws on the resources and teamwork of every area of our organization."
With the latest change, the Allmerica Era comes to a close. And the company reaches back for a name with deep roots, as it looks to the future.
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