AIG, Axa, Allianz, Generali and Zurich amongst companies with diminshing brand value.
One of the more impalpable effects of the economic slowdown is the impact it has on the brand value of companies. A recent report by consultancy Brand Finance reveals that the total value of the top 100 global brands has decreased by $67bn since the beginning of 2008. Leading insurers are among the companies that have suffered a devaluation of their brand, with five of them – AIG, Axa, Allianz, Generali and Zurich – figuring in the Brand Finance top 100.
What is the significance of brand value? A company’s brand is classed as one of its “intangible assets”, which need to be valued for a number of reasons including for financial reporting purposes. So, in effect, a decline in a company’s brand value means a decline in the organisation’s value.
In general, companies in the financial sector, including insurers, have seen their brand value decrease due to the worsening economic climate. “With the current economic conditions, it is not surprising that the financial services sector has decreased in brand value across the board”, the Brand Finance report says. How should financial sector organisations combat diminishing brand values? According to Brand Finance, the solution is to “refocus on the key value drivers of their brands and develop longer term strategies”.
The decline in the brand value of the leading insurers has not been insignificant. Axa is one of the biggest fallers in the Brand Finance Top 100 rankings, dropping from 36th to 48th in the table – its brand value has decreased by 15 per cent in the last year and now stands at $12.9bn. Meanwhile, AIG – which last week had to be saved from extinction by the US government – fell from 37th to 44th in the rankings. The Brand Finance report rates AIG’s brand value at $13.5bn – though whether that is still the case following the bail-out of the company is open to question. Other fallers in the Brand Finance Top 100 – which, incidentally, ranks Wal-Mart as the leading brand – were: Allianz (which dropped from 42nd to 50th), Generali, (which fell from 53rd to 56th) and Zurich (which dropped from 96th to 98th).
