“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.”
The velocity of reputational risk is approaching the speed of a nuclear assault on a nation, said Nir Kossovsky, Steel City Re CEO. A “Military grade” response to sped up reputational crises requires cold war game theory strategy and preemption.
ESG-related false advertising litigation. Since the onset of 2021, there have been multiple class actions filed in federal courts over greenwashing claims targeting companies from the retail industry, such as H&M and Allbirds, and food manufacturers, like Vital Farms. The statements attacked by consumers in these lawsuits varied due to the wide-ranging nature of the marketing techniques used by the companies, including the use of internal sustainability metrics as well as the reliance on benchmarks created by third parties.
SteelCity Re’s reputation premium-seeking RepuSPX equity portfolio is out-performing the S&P500 Index by 421.16%
Captives for ESG Goals. Nir Kossovsky, CEO, Steel City Re, said organizations that form captives can use them to cover risks in an ESG-friendly manner, which will help them reduce reputation risks.
Parametric ESG-linked Reputation Insurance. Stakeholders and regulators scrutinising companies making ESG-related policy commitments are leading to more interest in insurance designed to cover such risks: Steel City Re.
Captives for a Challenging Market. Mitigating risk strategically through expectation management and operational adjustments evinces thoughtful management and dutiful governance. Financing such risks evinces prudence, and doing so publicly with insurance captives and reinsurance enables stakeholders to appreciate and value the effort. These comprise the core of Steel City Re’s professional services
”The reputation premium-seeking RepuSPX is out-performing the S&P500 Index by 393.55%.”
Steel City Re’s reputation metrics help demonstrate effective risk management and dutiful governance over mission-critical ESG.
Is insurance-authentication in your risk strategy?
Reputation Arbitrage October 2022. The reputation premium-seeking RepuSPX is out-performing the S&P500 Index by 384.39%. The trailing twelve month spreads over the S&P500 of the three reputation-linked indices comprising RepuStars Variety Corporate Reputation Composite Equity Index family range from 1.09% to 3.19%. The trailing twelve month return spread between the two reputation-based price-only indices, REPUVAR and REPUSPX, is at a low of 2.1%. All three indices are outperforming the S&P500 this calendar year.