In “AIG Learns It’s All in the Name” from FinancialPlanning.com, we learn that taxpayers’ bailout dollars have helped AIG bounce back faster than many expected. American International Group is one of the few insurance companies that has successfully come back from the financial mess it was in through creative branding. It’s subsidiary was previously named AIG Annuity Insurance Co. but was switched this year to Western National Life Insurance Co. That distancing from the tarnished brand name of AIG helped lead Western National to be the third quarter’s number one seller of fixed annuities through banks. New York Life Insurance Co. does still hold the number one spot for the year, but believes it lost it’s third quarter spot due to low interest rates in the market.
Western National has been able to attract more annuity clients because they are offering higher interest rates than competitors. They do this by making agreements with banks to lower the commissions they pay to the banks. In turn, the banks receive more annuity clients after a couple years of clients shying away from the products. Banks believe that the volume of fixed annuity customers they receive will make up for the lower commissions they are being paid by Western National. While some other insurance companies may not think it is fair that AIG’s Western National is using government bailout money to cushion it’s higher interest rate offerings, that was part of the purpose for the bailout. Companies should use that money in a way that they will become successful again and repay the bailout money to taxpayers.