The group’s new report details the growing threat of reputational damaging events due to unprecedented advancements in social media and global connectivity. The report addresses the lack of response from the insurance sector to mitigate developing risk; analyses the difficulties in offering reputation damage cover and puts forward practical solutions the sector can and should adopt.
The group's recommendations, following 18 months of research are:
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Data capture and collection must be developed to allow quantification. Insurers and brokers must co-ordinate a shared approach to recording loss data.
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Brokers must become far more proactive. In their role as risk-advisor they should discuss brand and reputation risk with their clients as a matter of course.
Furthermore, the group have recommended the market should develop a comprehensive ‘Brand & Reputation’ solution which should offer four distinct areas of protection:
- prevention risk management,
- crisis cost & containment,
- indemnity protection for Loss of revenue and:
- post loss consultancy
Nick Kincaid, project manager at Wills Towers Watson, member of the group, said: “The use of social media is exacerbating the extent to which reputation damaging events affect a business. From our research it is clear that this is especially true of SME–sized companies, who at present, are left unprotected.
"Insurance brokers must be prepared to readily discuss this exposure with their clients, and the industry as a whole must devise a concise and cost effective solution to help SME’s protect their brand. We hope our report’s recommendations can form the basis of a marketable product, or at the very least, help elevate the profile of brand and reputation risk within the insurance industry.”
Ant Gould, CII director of faculties, said: "The fact that this group of insurance professionals – the likely future leaders of the insurance broking profession – have identified this issue demonstrates that it is one that should not be ignored.
"It is only by tackling the real risks that customers face that the insurance profession can ensure it remains relevant and continues to do what it has done for centuries – which is support and facilitate the development of individuals and businesses by taking imaginative approaches to covering risk.
"The group has analysed this ever prevalent issue of ensuring the security of SME's reputation and I urge the profession to act on the groups work."
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