People talk: Insurers not doing enough to cover reputation damage, says Willis
International broker Willis has called for the insurance industry to do more to cover reputational risk for its clients.
This message comes after research found that while 95 percent of corporations had suffered from reputational damage over the last 20 years, only 10 percent of those events were insurable.
Phil Ellis, chief executive officer of Willis Global Solutions Consulting Group, has called for the insurance industry to innovate rapidly to address, what he sees as, a gap that exists for reputational risk cover.
“Our industry deals with protection against named perils – a storm, a fire, an explosion, piracy, a war, etc – some of these or a combination may damage a company’s reputation, but usually they do not,” he says.
“In fact, based on our own research, less than 10 percent of major reputation-damaging events are due to an insurable, peril-related event. As a result, our standard insurance products aren’t designed to help out when reputation is damaged, except when a policy against a peril, like product recall, coincides with a fall in reputation. But even then the sums paid are not enough to turn the heads of any reputation stakeholder.”