Should we mourn the passing of JLT?
Calling all of you over 30, can you remember the Benfield brand? Probably for those below that age, reinsurance broking’s defining innovator is just an old brand name which you may have some vague recognition of, that is now being owned by Aon. Or what about asking older relatives about Commercial Union which famously didn’t ‘make a drama out of a crisis’ but as part of Aviva has never quite achieved the same advertising excellence.
Should we feel sad about the loss of venerable insurance brands? Or simply see their demise as the march of progress and the natural evolution of the market? Undoubtedly, last week’s announcement of the takeover of JLT by MMC makes this question pertinent, as we are probably about to witness the disappearance of the JLT name, with JLT Re likely to become part of Guy Carpenter and the overall brand being subsumed into Marsh.
The loss of the brand does have a value and although we don’t know what cash figure the bankers have placed on the JLT name – the size of the transaction suggests that it must have been of significant size.
And there is no doubt that the merged businesses will be a bigger. Re-insurance magazine has reported that as a result of the merger the combined entities of Guy Carpenter and JLT Re will leapfrog over Aon to become the world’s biggest reinsurance broker by revenues. Surely a winning argument for any merger and a handy metric to convince investors – if not the competition authorities.
However, there is the potential for losses if the strengths, particularly of the smaller partner are not respected and celebrated. Created in 1997, through the merger of Jardine’s and Lloyd’s Thompson insurance brokers. JLT has a strong standing in Asia through its association with the Jardine name and its 200+ year history in the region. As yet it’s unknown what its Asia customers will think of the brand now that it is part of the MMC behemoth.
People and culture are the central essence of any brand, the question for the soon to be defunct JLT is how the people will feel and the culture will evolve once it is part of MMC and one of its group brands Guy Carpenter, Marsh or Mercer. And in turn can existing JLT clients be reassured that their relationships and service levels will be maintained and where possible improved by the new ownership?
As the management team go about finalising the transaction and undertaking the logistical challenge of integration and achieving the cost efficiencies and growth opportunities that it presents, they should try not to forget that maintaining the best of the individual and combined brand value will be vital if they are to reap the benefits of the merger.