AI powers reputational damage insurance policy

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Insurance broker Willis Towers Watson has partnered with Liberty Specialty Markets to introduce artificial intelligence (AI) -based reputation crisis insurance.

The product uses customer-controlled, live reputation data and intelligence analytics provided by Polecat Intelligence.

Reputations can be strengthened or decimated via an inappropriate Tweet, and sometimes the company is only notified of reputation damage when the comment is posted by an influencer or celebrity on social media.

A study by AMO Strategic Advisors, conducted in 2019, found that 21% of over 1,000 of the world’s largest companies saw their market capitalization shrink by a total of $ 436 billion due to the impact of negative reputations.

Overall, AMO reported that corporate reputation accounts for 35.3% of the market capitalization of the top 15 global stock indexes, which equates to $ 16.77 billion in shareholder value.

The challenge for the insurance industry is that it is easy to place a value on a physical asset, but much more difficult to assess something like a company’s reputation, which is intangible and heavily impacted by the digital domain.

According to Polecat, 80% of the total value of an average business is made up of intangibles, such as intellectual property, brands and reputation, but 90% of businesses have inadequate data to manage reputation.

David Bennett, head of sales, global markets, P&C at Willis Towers Watson, said previous attempts by the insurance industry to compensate reputational risk have failed. Despite the risks to the business, “people think the insurance industry is not meeting the reputation needs of businesses,” he said.

“Most of the risky products come in after the event, which in most cases is too late,” he added. “The way ours works is we look at the horizon, monitor the event as it unfolds, and after three months provide an interim payment of up to 40% of the coverage. complete. “

The new product, Reputational Crisis Insurance, took four years to develop and uses AI-powered analytics to monitor events on news and social media sites that may impact the business or harm the business. sector in which it operates.

From a technology perspective, James Lawn, CEO and co-founder of Polecat, described the challenges of analyzing vast amounts of social media data and determining sentiment. “We are now talking about external stakeholders, external domain data, how to collect this information in all the languages ​​of the world and draw the context,” he said.

Reputation Crisis Insurance was developed through an exclusive partnership between Willis Towers Watson and Liberty Specialty Markets. It is available worldwide and is initially available to customers in the leisure and hospitality, manufacturing, retail and transportation industries.

Lewis Edwards, Underwriting Manager, Specialty Binders at Liberty Specialty Markets, said: “The increasing exposure of clients to traditional media and social media has resulted in increased reputation losses globally. Most of the reputation products on the market currently only respond to the Crisis Communication costs incurred as a result of a Reputation Crisis event.

“This new product is one of the few that covers an organization’s loss of gross profit as a result of such an event, providing financial protection and also giving clients the tools they need to protect their reputation. The ability to act quickly and transparently can have an extremely positive impact on the outcome of a crisis. ”


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