Company directors have always been concerned about the reputation of their companies and products. But now, with the growth of social media and 24-hour news, they have much less time to respond to events.
One mistake can overshadow a lifetime of good service. Construction companies know that upholding a good reputation and maintaining trusted relationships with clients is paramount for future success. However, reputational risks can occur at any stage of your day to day operations and indeed may not always relate to the direct actions of your business, for example the cyber attack on TalkTalk in 2015 did not just have implications on customer data but the fallout of the attack itself damaged TalkTalk's reputation which therefore hindered its ability to retain existing customers and acquire new ones.
We have launched a new solution for reputational risks. In the time it takes you to read this sentence 50,000 tweets have been sent, and innovations in how we communicate will see this number continue to rise, which makes the risk to corporate reputation one of the highest priorities for every boardroom.
This solution is an annual policy that acts as protection against loss of profits resulting from damage to a client’s reputation. It’s very much tailored to the specific needs of each client, as each client may have a very unique concern regarding what could damage them, with the insurer indemnifying for loss of profit based on a pre-agreed profit margin. The resulting pay-out is based on the difference between actual revenue versus forecast revenue multiplied by the pre-agreed profit margin.
As this new offering is bespoke to each client, we expect to spend significant time with the C-Suite (company’s senior executives) of each prospect in order to successfully identify the risks they face. We then use that to model their reputational risk portfolio.
The reputation policy is triggered when news of an event that could adversely affect the client’s reputation appears in the public domain. This could either be a recent event or an historical event that has been uncovered. Examples of negative publicity include employee misconduct, cyber-attacks, a perceived failure to manage negative incidents properly and improper use of confidential information.
Our role is to engage with those responsible for protecting the brand and to learn first-hand the risks they consider to posea threat. The exercise may or may not result in a risk transfer but will help clients address reputational exposures, which continues to be our goal.
As reputational damage is an increasingly prevalent issue, this solution for reputational risks could enhance our client offering across all our specialties.
For further information, please contact Edel Ryan, Senior Partner, Financial Lines Group on +44 20 7528 4745 or email firstname.lastname@example.org