London, Apr 28:
Even as world’s top insurance brands have lost nearly $30 billion in brand value,since the onslaught of Covid-19 Pandemic in 2020, India’s state owned life insurance behemoth Life Insurance Corporation(LIC), for the first time, has emerged as the third strongest insurance brand as well as the 10th most valuable insurance brand globally, according to the Brand Finance Insurance 100 2021 ranking, prepared by London based Brand Finance, that tracks brand value of multinational companies across the geographies and sectors.
LIC’s brand value at $ 8.6 billion, as 10th most valuable insurance brand, has gone up by 6.8 per cent helping the insurer to improve its ranking from 13th to 10th in this segment, which is topped by Chinese Ping An, with a brand value of $44,8 billion.
“We have taken LIC’s performance upto Dec 31,2020 for our global ranking exercise,” said a spokesperson of Brand Finance.
According to the latest report released by Brand Finance, on Wednesday, the total value of the world’s top 100 most valuable insurance brands has declined by 6 per cent, falling from $462.4 billion in 2020 to $433.0 billion in 2021.
Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors, explains Brand Finance.
The company further defines brand value as the present value of earnings specifically related to brand reputation. Organisations own and control these earnings by owning trademark rights..
Brand Finance always incorporates a review of what users of brands actually pay for the use of brands in the form of brand royalty agreements, which are found in more or less every sector in the world.This is known as the “Royalty Relief” methodology and is by far the most widely used approach for brand valuations since it is grounded in reality, said the company.
“It is the basis for our public rankings but we always augment it with a real understanding of people’s perceptions and their effects on demand – from our database of market research on over 3000 brands in over 30 markets.,” said Brand Finance.
In 10 most valuable insurance brands,five are Chinese insurers( China Life with a $ 22 billion valuation at 2nd, CPIC with a $ 51 billion at 5th, AIA with a $14billion valuation at 6th, PICC with a valuation of $8 billion at 9th), two are Europeans(French re/insurer AXA with a $51 billion valuation at 4th, Germany’s Allianz with a $ 20 billion valuation at 3rd, two are from US( Warren Buffet’s GEICO with a $11 billion valuation at 7th and Progressive with a $ 8 billion valuation at 8th) and one from India.
12 Chinese brands in ranking account for 30 per cent of total brand value as brands leverage significant volume premium of Chinese market
US brands have bucked negative sector trends as 26 brands featured record 14 per cent cumulative brand value growth year-on-year.
Among “top 10 strongest insurance brands”, there are only two European companies Italy’s Poste Italiane and Spanish MAPRE, which are abpove LIC.Piang An and South Korea’s Samsumg are athe 4th and 5th in their rankings in this segment.
Declan Ahern, director, Brand Finance, commented:“As predicted, insurance brands have taken a hit this year as they negotiate the fallout from the pandemic – from the near standstill of the global economy and prolonged low interest rates to slowing development across the sector in general. They have, however, fared better than our initial predictions at the outbreak of last year, demonstrating the resilience of the world’s top insurance brands.”
Ping An continues to lead field
Ping An is still by far the world’s most valuable insurance brand, despite recording a 26 per cent drop in brand value to $44.8 billion. The decline in brand value is largely attributable to the temporary drop in future earnings and revenue outlook, compared to the previous year. The brand has, however, already begun to show signs of a strong recovery as parts of the world begin to remerge from the pandemic, and therefore, if this trend continues, Ping An should see a solid increase in brand value in the coming year.
Ping An has continued to reap the benefits of its Good Doctor app – the world’s leading online healthcare platform – which posted growth in both revenue and user traffic over the last year. The app has proved central to helping combat the repercussions of the pandemic through increasing the speed of diagnoses as well as through providing faster treatment services.
China Life overtakes Allianz
China Life has overtaken Allianz (down 19% to US$20.2 billion) to claim second spot in the Brand Finance Insurance 100 2021 ranking, after recoding a slight 4% decrease in brand value to US$22.6 billion.
Three further Chinese brands feature in the top 10: CPIC (up 10 per cent to $15.4 billion) in 5th; AIA (down 22 pe cent to $14.1 billion) in 6th; and PICC (down 20 per cent to $8.8 billion) in 9th.
Overall, there are 12 Chinese brands featured in the ranking, with their cumulative brand value accounting for 30 per cent of the total brand value. With access to a market as immense as China, this offers these brands huge potential to leverage a significant volume premium over many other markets.
CPIC is once again the fastest growing brand in the top 10, following a 10% brand value increase to US$15.3 billion. The brand has continued to focus on expansion into new markets and has been implementing its plans to onboard high-quality investors globally by making its debut on the London Stock Exchange as part of the London-Shanghai Stock connect scheme.
US brands buck trend
On the whole, US insurance brands have fared well compared to their international counterparts, with the 26 brands hailing from the nation recording a cumulative brand value growth of 14% year-on-year.
Brand Finance’s research from the Global Brand Equity Monitor study shows that the majority of US insurers performed well throughout the pandemic, with consumers exhibiting high levels of brand equity. The pandemic forced many Americans to think about insurance – perhaps for the first time – and interact with health insurers, thus increasing overall demand and awareness. The two US insurance brands in the top 10 – GEICO and Progressive – have both recorded a 7 per cent uplift in brand value.
The US is also home to the fastest growing brand in the ranking – Jackson National Life Insurance Company – which has seen an impressive 43% brand value increase to US$3.6 billion. Jackson celebrated solid financial results last year and strives towards developing its suite of products, as well as expanding its footprint. With the recent announcement that its parent company, Prudential (down 26% to US$5.0 billion), plans to separate Jackson, through demerger distribution, the impact on it brand value in the coming year will depend on how well the brand establishes its position in the market and how it implements its strategy as a single entity.
Poste Italiane is sector’s strongest
In addition to measuring overall brand value, Brand Finance also determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity, and business performance. According to these criteria, Poste Italiane (down 7% to US$6.2 billion) is once again the world’s strongest insurance brand, with a Brand Strength Index (BSI) score of 86.2 out of 100 and a corresponding AAA brand strength rating.
The ability of the brand to succeed and thrive in areas that are unrelated to its core business model showcases just how strong the Poste Italiane brand is. In addition to insurance services, Poste has three other business units: mail; payments and financial services; and over 12,000 post offices located across the country, which act as bank and insurance branches. Poste is also active in mobile and fixed line internet services, and last year announced its entry into the fibre space thanks to its partnership with TIM and OpenFiber.
The crucial role that Poste has played in the digital landscape across the nation has been even more vital throughout the turbulence of the previous year. The main Italian regions have been using the Poste portal to manage Covid vaccinations reservations after the services of local administrations proved inefficient – showcasing the brand’s ability to leverage its strength and demonstrate that they can deliver value to the community in a moment of great need.