January 21, 2019

Criticism of Davos Risk Survey: This is the wisdom of the crowd, without the crowds. Or the wisdom…If you want to make sure your respondents interpret your words in the same way, it’s a good idea to select a group of people who, well … see things in pretty much the same way. What could be the risk of that?”

January 21, 2019
Financial Times

“The thing about risk is, it depends on what you value in the first place.”

Reputation risk: peril of stakeholders’ disappointment and anger.

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?