Lessons in Globalizing an Insurance Brand

Chubb Insurance, founded in 1882 in New York, today sells in 28 countries and has about 120 offices throughout North America, Europe, South America and the Pacific Rim, serving its property and casualty customers.

While Chubb is today a worldwide brand, its efforts to achieve global recognition began in earnest only about 20 years ago. It has been two decades of learning by listening to foreign governments, people and businesses.

The focus on global growth got serious in the 1980s when Dean O’Hare, the former chairman, was in Rochester, N.Y., where a manufacturer said to him, “I’ve got manufacturing plants in Germany and I have manufacturing plants in Asia. Why can’t you insure them? I want to be insured by Chubb.”

So, O’Hare listened to the customer and started looking at what Chubb needed to do. That’s when Chubb started taking global expansion seriously, according to Jan Tomlinson, who as Chubb executive vice president and international field operations manager since 2003 has been a key player in taking the Chubb brand around the world.

In the past 20 years of expansion, Tomlinson and Chubb have learned some valuable lessons about the cultural differences that can affect business, the patience needed to work with foreign governments and how to work with foreign businesses — even one with the same name.

Chubb’s roots are in the marine insurance business. It was 1882 when founder Thomas Caldecot Chubb and his son, Percy, opened their marine underwriting business in the seaport district of New York City.

In 1928, well before O’Hare’s tenure, the insurer had actually opened an office in Montreal to accommodate its marine customers.

“Our marine customers were interested in having operations in Quebec, specifically Montreal, where we could continue to underwrite their cargo insurance. So that’s how we started,” Tomlinson says.

But real global expansion came later.

Chubb was one of the first to enter Korea when it did so in 1992 and it was there that Tomlinson says Chubb learned one of the first lessons of global branding: understand the local culture. The lesson involved Chubb’s signature Masterpiece suite of personal lines policies — home, auto, possessions, watercraft and umbrella — for the affluent market. This suite includes a personalized appraisal of a home and the insured’s possessions. The insurer recommends loss control and risk management strategies based on the results of the appraisal. The customer gets a high-gloss book with the policy and the plan.

The Masterpiece approach has been a big seller for Chubb elsewhere but affluent Koreans weren’t comfortable with it.

“As we looked at Korea, what we found out was that because of the nature of the country where people tried to hide their wealth, and also because there had been a very close alignment between the government and insurers, that individuals who had wealth were very reluctant for us to do this,” recalls Tomlinson.

“They didn’t want anybody to see what they owned because they thought that insurer was then going to tell the government and they would be taxed on it. As a result, we did not introduce Masterpiece in Korea.”

Brazil taught Chubb a lesson about aligning itself with other businesses, which for Chubb has turned out to be a smart strategy. Chubb began in Brazil in 1973 in a partnership with Citibank. But in 1977, Chubb bought out Citibank’s participation and renamed the insurer, Chubb de Brasil Cia de Seguros.

Citibank was not the only affiliation Chubb employed in Brazil.

“One of the things that we realized is that we could align ourselves with other global brands that had great reputations and were well-recognized in the Brazilian market, specifically a very large agricultural equipment manufacturer and a very large truck manufacturer. In both instances, we were able to tag on to those companies and actually write insurance programs that enabled us to be able to get the Chubb brand out in front of large numbers of customers and also still allow us to do what we do, which is to be specialty underwriters,” Tomlinson says.

Aligning with others worked out in Brazil but Tomlinson advises caution when using this strategy.

“You have to worry about the halo effect. If you have a manufacturer or you have a partner who doesn’t continue to have the kind of brand recognition and the kind of reputation that you want to have, it can be very, very dangerous. So, it’s very important to pick your partners well, to underwrite them ahead of time, and make certain that their interests are aligned with yours,” Tomlinson says.

Chubb used to think it had a lock on the Chubb name, even its recognizable blue logo, but global expansion has taught it otherwise.

In the United Kingdom, there is another company named Chubb. It is a well-recognized global brand in its own right that happens to be in the safe and security systems business.

“[I]t’s interesting because their logo is blue, very similar to ours. Their ‘C’ is somewhat similar to ours,” according to Tomlinson. “We’re a very well recognized global brand and we coexist very nicely with them in the countries where they operate.”

Tomlinson tells the story of a personal lines insured in the U.K. telling her one day, “I’m so proud of the fact that I have your Masterpiece policy and I have your security system.”

She told him, “It’s not our security system.”

“Oh, no,” he said. “I can’t have a Masterpiece policy without a Chubb security system.”

Tomlinson said it took her “a little while to dissuade him” and she thought she had finally convinced him, only to have him call her again a day later asking, “Are you sure I don’t have to have a Chubb security system if I have a Chubb policy?”

So Chubb has learned how to help another business while perpetuating its own.

Chubb has also learned how best to staff a foreign office. Twenty years ago it would start with an expatriate with Chubb experience. But that only helped to open the door; finding local help to replace this person and deal with local issues and people was not easy.

Today Chubb relies on local people to staff its foreign offices.

“[O]ver time, we started with the expatriate and then we have built our own local staff. As you go around our offices internationally, where we have about 2,500 employees, we have very few expatriates.”

Not every foreign insurance market is structured like the system in the U.S., where Chubb is a leading company for independent agents and brokers.

“The vast majority of markets that we do business in actually do [have an independent brokerage system.] So probably 75 to 80 percent of the business that we do in our international operations is in markets where there are independent brokerages. They don’t operate as agencies, they operate as brokers.

“We very much adhere to our philosophy that this is how Chubb does business. That having been said, there are some markets where there is not an established brokerage system and in those markets we’ve had to develop strategic alliances with other insurance companies, particularly in some of the Asian markets.”

On the Web

Tomlinson shared Chubb’s foreign experiences in a recent video interview with Insurance Journal‘s Andrew Simpson:

Global Branding, Chubb Take 1: Lessons Lived and Learned

Global Branding, Chubb Take 2: The Insurance Promise of China