2 September 2014 Insurance

Airmic partners with Reputation Institute

Airmic, the UK association for risk managers and insurance buyers, is set to work with the Reputation Institute on how to tackle the complex subject of reputational risk.

The two organisations will explore ways in which risk managers and the insurance industry can improve their handling of reputation.

The aim is to develop a framework that sets out an agreed definition of reputational risk and an understanding of its drivers and what can be done to mitigate and insure against it.

Surveys of Airmic members have repeatedly shown reputation to be at or near the top of the concerns of risk managers.

John Hurrell, Airmic chief executive, said: “Reputation can be a company’s most important asset. Yet it is an extremely complex subject and very difficult to underwrite. Whilst recognising its importance, risk managers and underwriters struggle to get to grips with it. We want to build a greater understanding of all aspects of reputational risk and to explore the possible solutions both from an insurance and wider risk management perspective.

“I am delighted to announce that we will be working with the Reputation Institute and benefiting from their extensive experience.”

Spencer Fox, the Reputation Institute’s managing director UK, said: “Reputation is the defining area of risk management. Risk managers and underwriters are experts at quantifying financial, operational and regulatory risk, but reputation risk management requires a different set of tools and techniques. Companies with the strongest reputations will not only recover faster from these adverse developments, but also often outperform their rivals.

“We are therefore very encouraged that Airmic will be making reputational risk a priority and we look forward to working with them.”

In July, Airmic hosted a roundtable on reputation, with a panel representing risk managers, insurers and reputation experts. The debate ranged from how to define and measure the risk, to whether and how insurers can offer greater cover in an area where there are currently very few underwriters.

The panel agreed that the risk management community and the firms that employ them have a lot to learn. There was also consensus on the need for the different parties – especially clients, brokers, underwriters and experts in the field of reputation – to work together.

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