Forging
Reputation
Resilience
Steel City Re is an insurance intermediary and risk advisor for reputation and ESG-linked reputation risk…
…forging for our clients reputation resilience through a strategy comprising a 4-element process, insurance, and strategic disclosure.
We are the world’s only source of parametric ESG and reputation insurances. Our lead risk-bearer is Lloyd’s of London’s Tokio Marine Kiln. Our captive insurance solutions are explicitly welcomed in a number of domestic and international jurisdictions.
Our reputation risk management advisory services integrate principles of quality management and behavioral economics, substantiated by a proprietary quantitative methodology. Our authority as thought leaders is recognized in the legal, risk, finance, and governance literature.
“Lose money for the firm, and I will be understanding. Lose a shred of reputation for the firm, and I will be ruthless.” (Watch video)
Warren Buffett, American Business Magnate
Reputation Value and Risk Principles
Reputation is a value driven by expectations, and threats to that value—reputation risks—arise when expectations are not met or are no longer expected to be met. That shift in expectations is the proximate cause of behaviors, often associated with strong emotions, that precipitously erode enterprise value. Examples include a run on a bank[i] and equity share dumping in a public company.
[i] The Diamond–Dybvig model is a model of how bank runs and related financial crises may give rise to self-fulfilling panics among stakeholders when expectations shift. Diamond and Dybvig were recipients of the 2022 Nobel Prize in Economics for their work.
Reputation Strategy and Governance Services
Steel City Re’s full solution has three parts: an intelligence-based risk management and oversight process, insurance that authenticates process quality[ii], and a communications strategy to create upside value. Included, and also available individually, are quantitative benchmarking reputation risk reports, oversight reports, captive-based risk financing, and reinsurance.
[ii] The signaling power of insurance—the ability to tell a story about quality in markets with asymmetric information–was first outlined by Michael Spence in 1973 and deemed worthy of the Nobel Price in Economics in 2001, shared with George Akerlof and Joseph Stiglitz.
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