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JLT & Allianz partner on corporate reputation cover for SMEs

28th February 2019 - Author: Matt Sheehan

JLT Specialty and Allianz Global Corporate & Specialty (AGCS) have partnered on the launch of a new corporate reputation insurance product targeted at small and medium-sized enterprises (SMEs) in the UK.

reputational-riskReputation Protect Plus provides coverage against the loss of net operating profit from a reputational crisis combined with a crisis response service.

As the first UK broker to offer the product, JLT is focusing on UK SMEs and midcorps within the entertainment, hospitality, food, beverage, travel, communication & technology, education and healthcare sector

Companies in these sectors tend to rely heavily on consumer trust, which can be undermined quickly and become vulnerable to reputational damage, particularly if they haven’t budgeted for crisis communication and reputational risk solutions.

The coverage will also offer clients comprehensive reputation analysis to identify potential risks to their business and help to develop response and prevention strategies.

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This will be overseen by media analysis institution MediaTenor International AG, and clients will be able to choose from several communication agencies to support them during an incident, including Brunswick, Kekst CNC and Hill+Knowlton.

JLT and AGCS explained that Reputation Protect Plus will provide protection for up to 180 days of falling net operating profits from when the reputational harm is first discovered, including the cost of an external expert required to prepare and present the quantity of the financial loss.

“Reputation is a matter of trust – and if that trust is undermined, then customers will vote with their feet, tweets and wallets very quickly,” said Edel Ryan, Partner for JLT Specialty. “While the best-known scandals inevitably involve high-street brands, all businesses are equally at risk.”

“While the financial loss cover under the JLT exclusive policy wording with Allianz is a game changer, we also set out to deliver a proactive risk management strategy for the board to deal effectively with a reputational crisis,” she continued.

Susan Crabtree, Regional Head of Product Development Financial Lines at Allianz Global Corporate & Specialty, also commented: “In the era of social media and fake news, perception is reality and reputations can be shredded in hours with an immediate knock-on effect on a company’s bottom line.”

“A crisis can also lead to aggressive competitors seeking to capitalise on your troubles,” she added. “A dangerous mix that can erode short- and long-term income.”

AGCS noted that almost a quarter (24%) of a company’s value is estimated to lie in its brand, with studies suggesting that a company can lose close to 30% of its equity value following a reputational crisis.

“Nevertheless, many companies are still inadequately protected against the consequences of a reputational crisis,” remarked Stefania Davi-Greer, Regional Unit London Head of Financial Lines, AGCS. “This is all the more alarming because the triggers for reputation risks have multiplied in the social media age.”

“With the new Allianz Reputation Protect Plus product, AGCS offers a comprehensive insurance solution that combines the support of professional crisis communication consultants with the coverage of financial damage resulting from a reputation crisis,” she said.

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