Lloyd’s of London has partnered with KPMG on a report examining the ways in which reputational risk landscape has changed over the last decade.
The report says risk profiles of businesses continue to evolve faster than ever and that corporate brand and reputation accounts for 25.3% of the market capitalisation of the world’s leading equity market indices.
Businesses have been urged to stay resilient and ensure that safeguarding reputation is a critical part of any risk management strategy.
The report also notes the role insurers have in providing reputational risk transfer solutions and products able to support multiple losses from legal costs to the loss of market value.
Of course the COVID-19 pandemic has caused widespread disruption and impacted organisations’ financial, commercial and operational resilience, increasing the likelihood of adverse reputational events.
The report explains how organisations can proactively take steps to protect their reputation by enhancing their brand, preventing adverse events, as well as limiting damage and rebuilding reputation after an incident.
Dr. Trevor Maynard, Head of Innovation at Lloyd’s, explained, “The Lloyd’s market already provides cover for reputational risks and is developing new products to help mitigate these risks and organisations’ exposure to them.
“Insurers have an opportunity to become true end-to-end reputational risk management partners, moving well beyond traditional risk indemnity and the usual crisis management support. There are huge growth opportunities for insurers and brokers to help organisations transform their reputation management.”
Paul Merrey, Head of Commercial & Specialty Insurance at KPMG UK, added, “The reputational risks facing organisations are becoming increasingly complex, and a ‘one size fits all’ approach to protection simply won’t work.
“Insurers can play a key role in supporting businesses, though to be truly effective we expect new products will measure more nuanced triggers and be tailored to specific industries and companies’ needs.
“Just as cyber insurance has become a core offering to reflect a changed risk landscape, we anticipate that reputation products will become a staple within the insurance industry in the next five years.”