Reputational risk is the most challenging category of risk to manage, according to a new study from ACE Group conducted across 15 countries within its Europe, Middle East and Africa (EMEA) region.
The report, Reputation at Risk, finds that 92 percent of companies have found reputational risk the trickiest to maintain.
The research shows that while 81 percent of companies in the survey see reputation as their most significant asset, many firms admit that they struggle to protect it—highlighting a number of reasons why find the risk so challenging to manage.
Over half (56 percent) of companies said that social media has greatly exacerbated the potential for reputational risk to affect their business. Sixty-six percent of companies also felt inadequately covered for reputational risk from an insurance perspective.
Many companies also believed that information and advice about how to manage reputational risk was hard to find. Compounding the sense of uncertainty and confusion about how best to manage it.
The report highlighted a number of solutions that companies could adopt including the adoption of a clear framework to manage reputational risk; sharpening up crisis management plans; and working harder to measure how their reputation is perceived.
Andrew Kendrick, president of ACE European Group, said: “Insurance is not a panacea for the fast evolving world of reputational risk. Nevertheless, I believe there is much that insurers and brokers can do collectively to help their clients.”
“This includes the evolution of new more holistic insurance solutions that involve the input of crisis and PR specialists. More generally, professional risk engineering can help to manage the more ‘traditional risks’ better and reducing the likelihood of a reputational event in the first place.”
