Most ERM frameworks don't factor in reputation…
- Published: Tuesday, 13 August 2019 08:19
In an article on the Airmic website, Kasper Nielsen, chief strategy officer at the Reputation Institute, says that most organizations still don't understand how to manage their reputation.
"The problem with some ERM frameworks," says Kasper Nielsen, "is that they are two dimensional, focusing only on cost and likelihood. As a result, they don't take into account the reputational risk multiplier."
In the article Mr. Nielsen says that alongside managing reputation, creating a reputation insurance product has become somewhat of a holy grail for the risk and insurance professions. There is appetite for such a product, but the complexities of this risk, combined with a lack of data and an incomplete understanding at a corporate level has so far precluded this market from taking off. Insurers are particularly cautious given the potential magnitude of a reputation insurance claim.
Mr Nielsen believes that the challenges are surmountable but having reliable and consistent reputation data with clearly defined triggers will be vital for insurance to take off.