October 11, 2022

Insurance Captive and Risk Strategy Transparency

Insurance Captive and Risk Strategy Transparency. Rewards for risk strategies that prevent adverse events are much harder to find because the value of non-events is harder to measure. That’s where our industry has something to offer. My company helps clients manage, mitigate, insure and reinsure reputation risk, and a key risk strategy we support is enabling our clients to insure themselves through a financial vehicle called an insurance captive. The insurance captive is the key to making the value of a risk strategy transparently measurable to all stakeholders.

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Steel City Re is an insurance intermediary and risk advisor for reputation and ESG-linked reputation risk. Auditors’ reports on controls are how boards can signal to regulators that their management processes are effective. Reputation and ESG insurances are how boards can signal to investors and the courts (and regulators) that their governance processes are effective.

Reputation is Mission-Critical

Insurance Captive and Risk Strategy Transparency. A management program for ethics and compliance can forestall prosecution and mitigate fines. Similarly, oversight of “mission- critical” issues can forestall securities litigation. A program for reputation resilience, comprising both risk management and authenticated oversight for all that is mission-critical, can create value in many ways.. To this end, Steel City Re offers a Reputation Resilience Program.

Having a robust Reputation Resilience Program in place offers, amongst other benefits:

• Protection for the company, its staff, executives, and board from litigation and regulatory challenges
• Improved governance processes and better enterprise risk management protocols
• Establishment of an agile operating, communications, and decision-making team, with clear roles and responsibilities, trained and ready to handle all reputational threats
• Proactive management of risks that could give rise to delays or derailing concerns around new product and strategic partnership launches
• Captured behavioral economic value from stakeholders
• Reduced costs of debt and risk transfer while boosting equity value

A hazard of reputation risk is a lurking gap between stakeholder expectations and reality. Another hazard is the emotional intensity associated with expectations. The peril is anger from disappointed stakeholders. This video and this written summary explain the behavioral economic features of the many perils of reputation risk.Insurance Captive and Risk Strategy Transparency.

Insurance Captive and Risk Strategy Transparency. Mitigating risk strategically through expectation management and operational adjustments evinces thoughtful management and dutiful governance. Financing such risks evinces prudence, and doing so publicly enables stakeholders to appreciate and value the effort. These comprise the core of Steel City Re’s professional services.

One Question

ESG-linked reputation risks are prevalent and material. Are insurances for ESG-linked reputation risk part of your strategy?