The CII Insurance Broking Faculty New Generation group is calling for industry wide action to address the gap in reputational risk protection for small and medium-sized enterprises. In a new report, the industry group details the growing threat of reputational risks associated with recent advancements in social media and attendant global connectivity. The report goes on to address the lack of response from the insurance sector to mitigate this developing risk; and analyses the difficulties in offering reputation damage cover and puts forward practical solutions it feels the sector can and should adopt.

Following 18 months of research, the group recommends that data capture and collection be developed to enable quantification. It says insurers and brokers must co-ordinate a shared approach to recording loss data. It also suggests that brokers become far more proactive; and that as part of their role as risk advisor, brokers should discuss brand and reputation risk with their clients as a matter of course.

Furthermore, the group has recommended that the market develop a comprehensive brand and reputation solution which should offer four distinct areas of protection including prevention risk management, crisis cost and containment, indemnity protection for loss of revenue and post loss consultancy.

Nick Kincaid, project manager at Wills Towers Watson, and a member of the group, said the use of social media is exacerbating the extent to which reputation damaging events affect a business, particularly SMEs. "Insurance brokers must be prepared to readily discuss this exposure with their clients, and the industry as a whole must devise a concise and cost effective solution to help SME’s protect their brand,” he explained. “We hope our report’s recommendations can form the basis of a marketable product, or at the very least, help elevate the profile of brand and reputation risk within the insurance industry.”

Ant Gould, CII director of faculties, said the fact that this group of insurance professionals – the likely future leaders of the insurance broking profession – have identified this issue demonstrates that it is one that should not be ignored. “It is only by tackling the real risks that customers face that the insurance profession can ensure it remains relevant and continues to do what it has done for centuries, which is support and facilitate the development of individuals and businesses by taking imaginative approaches to covering risk," he added. "The group has analysed this ever prevalent issue of ensuring the security of SME's reputation and I urge the profession to act on the group’s work."

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