XL Catlin; the measures that will matter

May 06, 2015

A business that makes nothing but money is a poor business.

Henry Ford

 

So there we have it. The XL Catlin merger has happened. Deal signed; tick. New logo designed; tick. Strap line delivered; tick. Global ad campaign; tick.

The XL Catlin leadership has a good track record of delivering on mergers; but this is the big one and success will be important for the insurance industry as a whole.

So what should they be focusing on?

In the early stage, say the first three months, the market will be highly sensitive to everything about the newly merged business; hopes and fears will morph quickly into lasting perceptions. In this phase it is vital that the business is sure-footed and confident, internally and externally. Communications is key. Any doubts raised in the market early on will be difficult to dispel later.

Initially all eyes will be on the leadership; a window of opportunity to set the tone and feel of the business internally - rallying the troops is everything. The staff need to feel this is all going to be worth it. If they do, it will be like an electrical charge into the business because the market will pick it up very quickly.

Finally the market will want to know that you can still deliver. Are key decision-makers available? Is your claims service still as good? Stumbling on the brilliant basics early isn't fatal but might lose you the benefit of the doubt for delivering on the bigger stuff.

What success indicators should XL Catlin be using to check its reputation health?

Detailed feedback is obviously valuable but there are essentially three key research questions that will help them to understand how the new brand is performing:

  1. Top of mind awareness; Awareness correlates with positive views of the brand. Strong brands achieve market awareness that outstrips actual usage or size. As a result they achieve greater consideration from the wider market as opposed to those they already know. So, if awareness is dropping below the aggregate sum of the two merged entities it’s time to start finding out why.
  2. Three word description; how your brand is described tells a great deal about the health of the brand; for example great brands tend to be described in with future-based language such as dynamic, progressive, innovative, ambitious...lacklustre brands neutrally; professional, financially strong, large.
  3. Reputation association; Strong brands are famous for something, (not everything) and have a clear raison d’etre. Association with key attributes that you seek to stand out for should be measured against the competition and aligned with your own brand values. So, if you aim to be seen as innovative your customers should, unprompted, associate you with this attribute. If they don't, then I'm afraid you aren't.

The overriding message here is that successful mergers are about delivery not clever communications campaigns and that perceptions of new brands are formed very early on in the process, so you only have a short time to get it right.