In a week that saw the UK insurance industry on the wrong end of the Appeal court decision over their business interruption policies reputation has been high on the agenda.
It seems reputation is a growing concern for corporate risk managers, with broker Willis Towers Watson (WTW) working on a product that it said will insure the previously uninsurable.
WTW has polled 200 global firms finding that 86 percent of clients are concerned about loss of income and a reduced customer base due to reputational risk.
The biggest fear is the impact of social media and its ability to redefine a company’s reputation in a matter of minutes.
Risk Managers major fear is the potentially crippling business outcomes for their organisations such as loss of income and weakened human capital, because of their reduced ability to retain or attract talented employees.
Willis Towers Watson used the results of the survey to announce it will be launching a risk transfer solution for “this previously uninsurable risk”.
The details of how this will be structured, what will trigger the cover and how the value of the reputational damage will be calculated have not been revealed, but it will be accompanied with a technology platform that will allow risk managers to measure the impact on the reputation.
Timing is everything, and it is interesting that the new reputational product has been announced against a backdrop of the Supreme Court BI case ruling. It has seen many business organisations taking the opportunity to chastise the industry for its failed efforts to, as they see it, avoid their responsibilities to meet the valid claims of a large section of their business interruption clients.
Insurers know they have a reputation crisis in their hands. Many CEOs have warned that any efforts to grow their business will be predicated on rebuilding the trust of consumers that the promises they provide within their policies will be honoured in times of need.
With the ongoing pandemic, its economic impact and the looming threat from climate change the industry needs to look at how it can swiftly repair its reputation in order to play its full role in the delivery of a range of global solutions.
As corporate risk managers polled by WTW fear, the speed with which you can lose your reputation and the speed with which it can be rebuilt are very different beasts indeed.