Reputation insurer Steel City Re is offering boards of directors access to its proprietary reputation volatility metrics (RVM) reports as a standalone product in response to recent bank crises. Reputation value volatility case studies. “Volatility can indicate shifting stakeholder expectations preceding stock price collapses.”
Yes, reputation is insurable. That’s the opinion of several carriers and agencies interviewed by Law360. “The proportion of the asset base of larger companies, and for the majority of companies these days, has shifted from the tangible and physical to the intangible. Reputation and brand are a core part of that,” Neil Kempston, head of Beazley’s Incubation Underwriting team, told Law360. […] Steel City Re instead offers parametric coverage, in which after some reputational loss, the insurer automatically applies a preset coverage amount based on the level of reputation impairment once a policy is found to be triggered.
The settlement with Activision Blizzard could have widespread implications for how companies choose to manage risk, according to Nir Kossovsky, CEO of Steel City Re, which provides insurance for reputation and assists companies in establishing risk management functions. Kossovsky said that companies should create “reputation risk leadership committees” composed of representatives from “every silo” of the company that interacts with a critical stakeholder group…“No one can argue with thoughtful risk management and dutiful oversight, but you need a demonstrable, effective process to make that claim.”
Angry Reactions From Stakeholders. Southwest Airlines promoted five executives as the budget air carrier continues to reel from an operational meltdown that resulted in nearly 17,000 canceled flights over the chaotic holiday travel season. The company said … the moves would “strengthen our operational execution.” […] Nir Kossovsky, an expert on corporate risk and CEO of Steel City Re, told FOX Business that the angry reactions from apparent stakeholders is further evidence that Southwest is going through a “reputational crisis.”
Delayed maintenance creates reputation risk. In the aftermath of a meltdown that led to 16,700 flight cancellations and may cost the airline more than $800 million, blame has fallen on an outmoded crew scheduling system and an unusual point-to-point route network. […] Southwest has acknowledged putting updates to its crew scheduling system behind other improvements, despite long-standing complaints from pilots and flight attendants.
Culture limits risk strategy. Southwest was overwhelmed and unable to adapt as a severe storm swept the US. But behind those specific issues is an insular management team that critics say lacks the imagination and technology expertise to help avoid such crises. […] The carrier has a long-standing reputation of being slow to adopt new technology, and spent years implementing a new reservation system and updating its maintenance operations.
“There is a standard pattern after a major reputational event. It begins with the event that is usually emotionally charged and leaves a lot of people disappointed, and thereafter every different stakeholder group will have their say. Customers will obviously be disappointed, employees will be disappointed, and shareholders will be disappointed,” said Nir Kossovsky, a reputation risk expert. “
Southwest Airlines canceled between Dec. 22 and Jan. 1 around 37% of its schedule. […] The holiday flight disruption is likely to have lasting consequences for Southwest’s reputation, Nir Kossovsky, CEO of reputation risk insurer Steel City Re, said. “In addition to the large swath of customers who are angry and disappointed and likely to act on those feelings in the future, reputational damage of this magnitude often triggers a pile-on of regulators, litigators, and activists,” he said. “It’s no surprise Southwest’s shares are now underperforming the airline index.”
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