CLOs

March 25, 2023

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Yes, reputation is insurable.

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.

February 28, 2023

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Companies need an authenticated forward-looking oversight process to manage risk strategically.

“For the first time since its landmark Caremark decision, the Delaware Chancery Court has allowed a breach of oversight claim to proceed against a corporate officer when it declined to dismiss claims brought by stockholders against David Fairhurst, McDonald’s former head of human resources…”.[kos] The bottom line is that law and society are expecting better management and oversight—a touch of common sense many would say—and that disappointment (read, shift in expectations leading to anger and disappointment, aka, reputation crisis) is playing out in the courts….Companies and boards need a solid, universally applicable management and oversight process that is forward-looking to manage risk strategically. The quality of that process needs to be proactively authenticated with insurance. Compliance-focused controls, which by design are backward looking—and the audits that authenticate them—are necessary but with the evolving expectations of society, apparently no longer sufficient.

February 21, 2023

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Thoughtful Risk Management and Dutiful Oversight Agenda

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.”

January 24, 2023

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Building resilience requires a demonstrably effective, insurance-authenticated system.

Risk Strategy Authentication and Communication.If you oversee an effective reputation risk strategy process, but no one knows it, is it actually effective? This is a vital question boards of directors, senior executives, and risk professionals need to ask themselves in this era of enhanced regulatory enforcement. Building resilience requires a demonstrably effective, insurance-authenticated system.

December 5, 2022

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ESG-related false advertising litigation. Consumers are increasingly questioning environmental claims, sometimes landing directors in court.

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.

November 14, 2022

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Parametric insurance ESG authentication. How can companies use parametric insurance to prove their ESG bona fides?

Parametric insurance ESG authentication. Parametric insurance, which has long been popular in disaster recovery, is gaining steam as a proxy for proving the effectiveness of ESG programs. Nir Kossovsky and Denise Williamee of insurer Steel City Re explore details of this novel ESG solution. Insurance-based authentication — a regulatory lynchpin — is a recent innovation made possible by parametric insurance solutions.

September 12, 2022

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Reputation and ESG insurances are how boards can signal to investors and the courts (and regulators) that their governance processes are effective.

Ethics Compliance Management Governance. An effective management process for [ethics, compliance, ESG risk, reputation risk…] creates value with regulators. An effective governance process creates value with investors and the courts. 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 …

September 12, 2022 Read More

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