Managing risk to reputation a model to monitor the key drivers. A key to long term solvency for insurance and reinsurance companies

Jean-Paul Louisot and Christophe Girardet

International Journal of Banking, Accounting and Finance, 2012, vol. 4, issue 1, 4-47

Abstract: Reputation is an intangible asset that directly affects the market value of the firm. Reputation is built on the trust established with all stakeholders through past behaviour. Reputation may prove resilient, yet even minor misconducts, if repeated, can lead to downfall. We propose an operational model to define, measure and monitor the nine key drivers of authenticity, classified in three categories: 1) intentions: vision/promises to partners, CSR profile and human capital; 2) actions: leadership/governance, outreach and operations; 3)results: sector profile, regulatory profile, finance and value. The model proposes metrics for each driver by aggregating data gathered by different methods. The different driver values are combined through multi criteria analysis based on fuzzy measure. This generic model can apply to all industries, but it is most immediately relevant for industries based on future promises like insurance and reinsurance. Carriers domiciled in the European Union will have soon to comply with Solvency 2 that mandate managing risks to reputation.

Keywords: cindynics; expectations; opportunity; perception; reputation risks; risk management; stakeholders; threat; trust; MACBETH method; multicriteria decision analysis; MCDA; interacting criteria; fuzzy logic; Choquet integral; authenticity; insurance industry; reinsurance; CSR; corporate social responsibility; human capital; leadership; governance, outreach; operations; regulation; finance; value; solvency. (search for similar items in EconPapers)
Date: 2012
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