In the advent of social media, a person’s reputation is beginning to play a much more important role in the world of business. A new trend has been born in the insurance industry in the form of reputational risk. This risk is most apparent in companies that have had their reputations damaged by some sort of incident that caused consumer backlash. Companies with bad reputations tend to fare poorly in their given industry, as consumers often steer clear of such companies. In some cases, this avoidance can mean the end for some companies.
The Reputation Institute of London, a reputation management firm based in the UK, believes that reputation insurance policies will be a powerful asset to large companies that sometimes run afoul of consumer opinion. Corporations like Wal-Mart, for instance, can benefit from reputation insurance as the retailer is often the target of derision from shoppers. Such insurance policies could help a company recover from the impact of having a bad reputation and work toward obtaining a better rapport with consumers.
_________________________Random Success Quotes to Remember ~ “Successful people do what unsuccessful people are not willing to do. Don't wish it were easier; wish you were better..” - Jim Rohn
The American Insurance Group (AIG) launched new insurance policies that account for reputational risk earlier in the year. The company has experience with the negative effects of a bad reputation and designed the policies based upon past experience. Other companies are beginning to consider offering similar policies. The Reputation Institute expects to see more policies entering the market by the end of next year.