In today’s world, reputation is more than an intangible – it’s a real business asset. If it’s damaged, the financial impact can be deep, affecting sales, stock prices and company valuations.
Reputation risk is now among the top 10 in most risk registers. [1] But many businesses find it hard to quantify and therefore, difficult to protect against.
This can leave you exposed not just to losses, but also fiduciary risk, as investors and regulators increasingly expect directors to anticipate and prevent foreseeable events.
Innovative reputation risk model with granular insights
Our Reputation Risk Quantification Model marks a step change in this process. It allows you to model the frequency and severity of likely sources of reputational threats through ground up, granular modeling.
Drawing on rich datasets from our risk intelligence partner Polecat, the model uses detailed risk analytics to calculate the impact on sales and profits across a range of negative event scenarios.
This can put real numbers behind reputation risk and enable more informed decisions and proactive risk management, grounded in data.
Quantifying the risk of celebrity endorsement
The initial release of the model quantifies potential losses from the disgrace of a celebrity endorser. Relationships with celebrities and influencers are increasingly central to marketing strategies, from retail to manufacturing.
The right association with a recognized figure in sports or entertainment can boost your sales and profile.
Research has shown that endorsements can increase revenue by an average 4% [2]. But these gains can be thrown into reverse if the celebrity’s conduct reflects badly on the brand.
Being able to accurately assess the risks involved can help you:
- Get a clearer picture of the nature and size of the risks
- Make better decisions about agreements with celebrities and influencers
- Fulfil your fiduciary duties to investors and stakeholders
- Mitigate and manage the impact of misconduct on your reputation and finances
- Understand how best to protect your business
As the model and data develops, we will evolve it to include other reputational perils.
Get in touch
Take the first step towards protecting your business from the financial impact of reputation damage. Get in touch to find out how our innovative Reputation Risk Quantification Model can help you get ahead of potential risks and make data-driven decisions to safeguard your brand’s value.
Footnotes
- Willis Reputation Risk Readiness Survey 2024/25 Return to article
- Celebrity Endorsement in Beauty & Cosmetic Industry: Strategy, Stats & Trends Return to article
Disclaimer
WTW hopes you found the general information provided here informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).
