As a largely uninsurable risk, risk professionals are seeking metrics to better measure, monitor and manage reputational risk
In its Reputational Risk Survey, published late last year, Willis Towers Watson revealed that 86 percent of clients are concerned about loss of income and a reduced customer base due to reputational risk.
In a world where social media allows views and opinions to be shared globally in a matter of seconds, an organisation’s reputation can change very quickly. With less stringent checks in place compared to traditional media outlets, it is easy to see why organisations are concerned about protecting their hard-won reputations.
Key findings from the survey include:
- Seven in ten (72%) report that risk management teams have at least some responsibility for the monitoring, measuring or management of reputational risk.
- Nearly the same proportion said that reputational risk is reported at the C-Suite (61%) or Board level (66%) within their organisation.
- Almost eight in ten (80%) believe that the focus on reputational risk in their business will only increase in the coming five years.
- The majority of respondents highlighted that reputational risks could result in potentially crippling business outcomes for their organisation such as loss of income (86%) and weakened human capital, because of their reduced ability to retain (62%) or attract (57%) talented employees.
- Framed against this increasing focus, most respondents pointed out that when it comes to measuring and monitoring reputational risk, they face real challenges in accessing reliable data (51%), with a large proportion (42%) indicating they have inadequate tools to do so.
Garret Gaughan, head of Global Markets P&C Hub, Willis Towers Watson, said “Reputational risk is increasingly of concern to our clients with most risk mangers now having some responsibility for risk mitigation in this area. As a previously difficult to insure risk it is unsurprising that all of the survey participants agreed it would be helpful to them to have access to a reputation platform.”
“WTW in partnership with Polecat… have designed a platform that will allow organisations to monitor reputational threats in real time and provide them with reputational impact scores against their peers for issues and risks.”
He added the broker would “soon be launching a risk transfer solution for this previously uninsurable risk. We believe that this combined approach will deliver reputational risk solutions to address our clients’ needs.”