New York Times
October 23, 2018
Reputation insurance: indemnification affirming trust and reducing economic losses.
“Grappling with what to say and do about the disasters they themselves create is only the beginning. ”
“As one ethical quandary after another has hit its profoundly ill-prepared executives, their once-pristine reputations have fallen like palm trees in a hurricane.”
Reputation crisis: disappointment, diminished trust, and economic losses.
Reputations are valuable strategic intangible assets. Threats to these assets⏤ enterprise reputation risks, often mislabeled “brand risks” ⏤ need to be managed, and management needs to be overseen through reputation risk governance lest reputational damage or reputational harm result in long-tailed go-forward losses in economic value and/or political power. Because these intangible risks arise from the interplay of stakeholder expectation, experiences, and media amplification, parametric insurances for intangible asset risks, for reputational value, for reputational harm, and for reputation assurance help mitigate risk by telling a simple, convincing and completely credible story of quality reputation governance to stakeholders. This story telling effect is the expressive power of insurance complementing insurance’s better known instrumental power of indemnification.
Risk management, risk financing in insurance captives, and risk transfer through reputation insurances comprise the constituent elements of a comprehensive solution. What’s your strategy?