Reputation risk insurance and crisis management

What is reputation risk?

Reputation is a broad subject that has a different meaning to different people. As a major intangible asset, reputation has grown to comprise a significant proportion of many companies’ entire value.

The forces that affect reputation have multiplied over the past decade with the pace of change seemingly increasing by the minute.

Changing demographics, falling public trust, rising state and non-state manipulation of public opinion and the exponential rise in both the quality and quantity of data are all factors driving a new reputation risk landscape for companies to navigate.

From cyber-attacks and customer abuse to terrorist incidents, the risk factors affecting reputation and brand resilience are constantly changing. Company risk and executive functions are under pressure from stakeholders to protect their business from adverse reputational events and to be able to properly articulate the strategy in this area.

How reputational crisis insurance works

Our reputational crisis insurance product is specifically designed to help companies understand and manage the risk of reputational damage.

The key areas which may result in reputational damage can be summarised as:

How reputational crisis insurance can help you

Reputation risk is one of the most dynamic and systemic risks facing modern companies.

Greater public and shareholder scrutiny with regards to a board’s fulfilment of fiduciary and regulatory duties on the subject has resulted in greater pressure on companies to prepare for and mitigate against reputational crises.

In response to this growing problem and in response to the fact that intangible assets comprise an ever-higher proportion of total enterprise value, Willis Towers Watson is developing a truly value-driven suite of new products and solutions led by the reputational crisis insurance solution.

The solution is an innovative reputational risk management tool, incorporating cutting-edge technology to drive proactive risk management and responsive crisis management insurance covering critical costs like business interruption.

Alongside Liberty Specialty Markets, a leading global insurance company with an exceptional financial rating, we are helping our clients to comprehensively mitigate and transfer this balance sheet threat.

Reputation risk management

As the shadow of reputation risk looms larger, many companies are looking for reputational risk management and transfer solutions.

Company Executives frequently articulate how hard it can be to identify and manage reputation-harming events, with many saying that they are taking positive action to invest in products and services that can help them to understand the situation and scan the horizon for threats.

Willis Towers Watson have partnered with Polecat, a technology leader in reputation intelligence, to deliver the critical actionable insights that corporate reputation professionals need to make key decisions.

Polecat solutions support many of the world’s largest and most high-profile global businesses across multiple sectors. It’s products and services allow you to:

• Put corporation reputation at the heart of strategic decision-making processes
• Reduce over-reliance on budget heavy, expensive consulting services
• Monitor reputation campaigns that directly impact the corporate brand
• Gain foresight around issues happening on the horizon, so you can plan your response now
• Improve the speed and efficiency on delivery of insight around changing trends
• Gain perceptions of the corporate brand across key stakeholder groups: NGOs, politicians, activist investors etc.

Frequently asked questions

How can social media damage my company’s reputation?

The exponential growth in mobile devices has driven unforeseen levels of viral immediacy in the sharing of stories. Negative public commentary about products and services can spread anytime and can be very difficult for companies to control.

Rogue states have also been seen to use social media for disreputable objectives, for example in the context of electoral manipulation. Such activities have the propensity to be targeted at specific companies, especially those that are important constituents of national economies.

Can media democracy escalate reputational damage?

Amid an atmosphere of wider public mistrust of corporations, greater media democracy has the effect of escalating reputational damage. Consumers now have a more accessible route to voice opinions and are more likely to post damaging content online than ever before.

The public is grappling with a shifting trust dynamic; in today’s world, many consumers struggle to identify products, services and companies in which they have a high level of trust.

How are demographic changes influencing reputation risk?

Younger generations, an increasingly important consumer segment, are increasingly look to social media to consume news and opinion rather than traditional sources of media like established newspapers.

Whilst traditional news sources remain influential, they are losing ground to platforms that are not subject to the same stringent ethics and reporting quality. Negative stories on social media can be highly influential, viral and difficult to target via traditional public relations methods.

Does reputational crisis insurance provide cover for any reputational crisis event?

The reputational crisis insurance product offers financial indemnity for certain costs and expenses that arise as a result of the occurrence of a ‘named peril’, which are illustrated in the policy as ‘insured events’.

Named perils policies operate in a different manner to ‘all-risks’ policies. Under a named perils policy, the facts and circumstances of a given event should match one of the ‘insured events’ in the wording that has been taken up by the policyholder, as illustrated in the policy document, in order for coverage to apply under the policy.

A major part of the reputational crisis insurance product is that the solution provides access to real-time data analysis via the Polecat Intelligence portal. Regardless of whether an ‘insured event’ has been purchased by a policyholder, access to the Polecat platform is available. In fact, the Polecat portal tracks over 8000 different data aspects relating to reputation – both positive and negative.

How is reputational crisis insurance different to other reputational damage insurance policies?

There are several similarities between reputational crisis insurance and other reputational damage insurance policies.

In all cases, we encourage comparison and wording review to ensure that you understand the terms and conditions that have been offered. On a high-level basis, the main benefits of the reputational crisis insurance offering are:

1. Meaningful policy limits of liability – up to $50 million aggregate limit of liability available for business interruption, crisis consultancy and brand rehabilitation.
2. Clear terms and conditions – the policy wording is under 15 pages and uses clear language.
3. Crisis consultancy support – available on both a pre and post crisis basis from a leading global consultancy.
4. Brand rehabilitation – the policy pays for promotional and advertising costs, designed to help a policyholder recover market share and sales.
5. Artificial-Intelligence powered data analysis – helping the business executives, and other functions, understand what open-source data says about their brand in real-time.

Does Willis Towers Watson only offer reputational crisis insurance?

Willis Towers Watson, as an insurance intermediary that advises companies on their risk transfer and management strategies, always encourages comparison of insurance products as part of pursuing ‘fair market appraisal’.

While the reputational crisis insurance product is a Willis Towers Watson exclusive offering, it does not preclude or prevent the company from fulfilling its duty to consider alternative insurers and offerings.

The most important thing to Willis Towers Watson is that the right solution for the client is taken up, whether that is reputational crisis insurance or another offering that the company can access.

As part of the placement process, we will appraise our clients of the alternatives and provide an assessment of the options.

Case studies

All names, characters, and incidents portrayed in the case studies are fictitious. No identification with actual persons (living or deceased), places, buildings, companies, entities or products is intended or should be inferred.