The reputation of a company is its most valuable asset. In an age when a crisis can spread globally within minutes thanks to social media and interconnected supply chains, the risk of reputational damage from a multitude of sources has increased exponentially. Allianz Global Corporate & Specialty (AGCS) today launched Reputation Protect Plus in the UK to help companies protect their reputations in times of crisis. Reputation Protect Plus provides flexible, comprehensive crisis management services to ensure that an organisation’s response to a crisis is professional and timely. In addition, it offers compensation for the loss of profit if revenues are affected by the crisis.
Almost a quarter of a company’s value (24%) is estimated to lie in its brand1. Studies also suggest that a company can lose close to 30% of its equity value in the year following a reputational crisis2. No business is too small to be unaffected. Reputation can often be under-protected but insurance can provide tangible assistance to an intangible risk, such as funding for, and access to, crisis management experts. A professional response can make a difference. Research shows the value of a company that effectively manages a reputational crisis can rise by 6% the following year. These trends are exaggerated further if the crisis is caused by a cyber-attack.
According to the Allianz Risk Barometer 2019, reputational crises are among the ten largest corporate risks. More than any other threat, reputation risk is interconnected with other business risks. A negative compliance event, for example, can turn into a reputation risk. The same goes for other risks, such as cyber-attacks, financial issues and risks around company culture and behaviour. Given all the potential causes for a reputation-impacting event, an organisation’s reputation is constantly vulnerable: "Nevertheless, many companies are still inadequately protected against the consequences of a reputational crisis. This is all the more alarming because the triggers for reputation risks have multiplied in the social media age," explains Stefania Davi-Greer, Regional Unit London Head of Financial Lines, AGCS. “With the new Allianz Reputation Protect Plus product, AGCS offers a comprehensive insurance solution that combines the support of professional crisis communication consultants with the coverage of financial damage resulting from a reputation crisis.”
“In the era of social media and fake news, perception is reality and reputations can be destroyed in hours with an immediate knock-on effect on a company’s bottom line. A crisis can also lead to aggressive competitors seeking to capitalise on your troubles," said Susan Crabtree, Regional Head of Product Development Financial Lines at AGCS. "Our customers can take reassurance from the fact that for the first time, monetary losses are also included in a reputation product at AGCS.”
“As the first broker to offer the Reputation Protect Plus product, we worked closely with the Allianz team developing exclusive wording to ensure our clients are sufficiently protected in the event of a reputational crisis” explains Edel Ryan, Partner and Head of Media & Entertainment at JLT Specialty. “Our bespoke wording will help to mitigate risks companies face in an environment where reputational issues have a habit of escalating rapidly, fueled by social media and 24-hour news.”
Allianz Reputation Protect Plus provides support and protection in all phases of a reputation risk crisis. Initially the customer receives an in-depth analysis of its specific reputation risk from MediaTenor International AG, a global leader in strategic media analysis. Companies can also select a crisis communications consultant in order to react quickly and professionally in the event of a crisis. Clients can choose from international communication agencies in the AGCS partner network including Brunswick, Kekst CNC and Hill+Knowlton who will be available in the event of a reputational crisis.
In the event of a crisis, AGCS will cover the costs of communication consulting by the selected agency, for the reputation monitoring service by MediaTenor International and for the implementation of the crisis response measures recommended by the communications agency commissioned. This can be the establishment and operation of call centres, a cross-border advertising campaign or the commissioning of market research institutions. Finally, after the crisis, important results of the specific case are analysed together with the communications consultants and made available in the form of a final report. "This is important in order to learn lessons from the incident and from the mistakes made" explains Matthias Vollbracht of Media Tenor International.