Lloyd’s of London has published a joint report with KPMG examining the evolution of business assets towards those that are less tangible, and therefore harder to spot, assess and manage. COVID-19, it says, has brought intangible assets into the spotlight.

The report, Protecting intangible assets: Preparing for a new reality looks at the increasing value of intangible assets, and the role of risk managers and the insurance industry in protecting them. It looks at how COVID-19 has increased companies’ exposure to new risks, many of which implicate the intangible assets held by businesses. These include reputational issues, managing intellectual property and conduct risk amid a displaced workforce.

Dr. Trevor Maynard, head of Innovation at Lloyd’s said: “As an industry we need to recognise that the world has changed and adapt to how it looks now. COVID-19 has changed the risk landscape, exposing companies to new risks and encouraging companies to think about how they now operate. Whilst a range of insurance products already exist to help organisations manage their risks related to reputation, human capital, and intellectual property, it is important that at Lloyd’s we work together with the market to innovate and create new products to help customers mitigate risks and protect themselves from future threats.”

Paul Merrey, partner, KPMG added: “As we move swiftly into the new reality, it’s apparent that many businesses aren’t adequately prepared for it. The key drivers of corporate value are completely different now to in the past, and this shift has only been amplified by COVID-19. Whilst physical assets are still a focus, recognition of what intangible assets are and how much they represent a firm’s value may come as a hard awakening for some organisations. In order to remain resilient and competitive, organisations across all industries must be proactive in finding new ways to enhance their business practices to protect these assets, and this will require a new way of thinking and acting.”

Intangible assets have long been a growing proportion of companies’ balance sheets. Nonetheless, with COVID-related pressures mounting, any call to look more closely at them it is a good call.

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