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The challenge presented by these vacancies is clear to any business looking to attract new talent but there’s strength too in entering a recessionary period armed with a low unemployment rate. For insurance businesses, in particular, the talent crunch facing firms of every size does not have to ring too many alarm bells if they are proactive in addressing the concern and flexible about the approach required to bridge this gap.

In a recent interview with Insurance Business, Freedom Services group’s Chantel Emilius shared some of the secrets behind the group’s impressive talent attraction and retention figures. At the core of its recent success is taking a human approach to developing your culture and engagement, she said, and having faith in your people. Having trust in its people is what has allowed the insurance business to roll out advanced sick leave policies, a completely flexible remote working initiative and, most recently, a four-day working week.

Of course, what works for one business may not necessarily be right for another but the underlying principle behind the work Emilius and her team rolled out is a valuable lesson to business leaders – well-placed empowerment will pay back dividends.

Fail fast, learn faster has long been an underlying tenet of innovation and it’s time that companies embraced a change management approach to the question of talent. All across the insurance chain, firms are implementing new digital-first practices and incorporating data-driven modelling to leverage new opportunities. Post-COVID, in particular, increased innovation has become a must-have even among businesses traditionally resistant to change.

Yet, for many, there’s still a certain reticence about evolving the way people work alongside the changes happening around the work they actually do. Change is happening certainly, the move to hybrid working models by so many insurance companies is alone proof of that. But the time is right for insurance businesses to move faster and take every action necessary to future-proof their talent pipelines.

Forward-thinking policies, structures and programmes will go a long way to retaining talent and, as seen from Freedom Services’ experience, have a significant part to play in talent attraction as well. But they’re only one part of the solution and the other major element is rejuvenating the overall external perspective of what a career in insurance entails.

Even from my own conversations, I know that there remains formidably little understanding of what insurance is, does and can do. And until insurance businesses do everything in their power to change that perspective, I can’t see that changing. The work of associations like Airmic and the CII has been integral in moving the dial to where it is today, but they need the support of the broader sector if they’re to continue that evolution.

Airmic’s ERM forum saw speakers from the railway, nuclear and construction sectors all coming together to discuss the critical role that insurance and risk management play in the operational success of their respective industries. The message is clear – insurance touches everything. And if insurance was to truly adopt that messaging as standard, you’d soon see it among the industries least likely to have trouble attracting great talent.

The chance to change how insurance is seen is in the hands of everyone who works in the sector. So, have genuine pride in what you do and take every opportunity presented to talk about it. By doing so, the insurance profession has the chance to lead discussions around talent retention and attraction rather than finding itself listening in to these conversations, hoping to pick up hints and tips.

There’s no time like the present to get started. Because, with over one million vacancies and with the UK employment rate standing at 75.5%, insurance firms are no longer competing with just their own market peers or the financial services sector more widely – the playing field has been blown wide open.

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Chipman was chief executive of Grant Thornton US and Radius, while Hunt’s credentials span time spent at the likes of Aviva, Hibernian Group, PwC, RSA, Standard Life, Prudential Plc, and Allianz. Tomczyk previously served as vice chair of corporate operations at Toronto-Dominion Bank and as president and CEO of TD Ameritrade.

Meanwhile current directors Brendan O’Neill and Linda Rabbitt have given notice that they will not be standing for re-election at the 2023 annual general meeting due to other commitments and in furtherance of the succession plan.

“On behalf of the board, I would like to welcome our three new directors and to thank Brendan and Linda, our two outgoing directors, for the many years of dedicated service that they have given WTW,” said board chair Paul Thomas.

“We are delighted to have identified such strong incoming candidates in Stephen, Jackie, and Fred, each of whom has significant experience leading dynamic professional and financial service firms as well as broad financial and operational expertise.”

WTW board directors include former Lloyd’s chief Dame Inga Beale, who joined in January 2022.

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“I learnt a lot from her as to culture and how we behave with each other, and how she wants a business to run,” she said. “And she wants that human approach, she doesn’t want it to be transactional. I saw first-hand for 14 years how culture influences your organisation so I’m always banging the drum of it being at the foundation of any organisation. How we treat our employees comes back to us – if we treat our people well they’ll in turn treat our customers well and provide a good service.”

Rolling out a four-day working week policy

When she was appointed to her current role in January, one of Emilius’s first areas of focus was on raising the idea of the four-day working work – which she had seen getting a lot of attention in the news. Knowing that it was something that insurance didn’t seem to be doing, she said, she realised that the opportunity was there to really do something different, particularly in light of how Freedom had already capitalised on COVID’s lesson in the need for flexibility to roll out remote working to all its people.

“People have the option to work from wherever they want, as long as they’re doing the job and hitting their KPIs,” she said. “So, off the back of that approach, the four-day working week was discussed with the exec team. It took us about five-to-six months to pull it all together because we needed to make sure we had the right foundations in place in terms of KPIs and the structure to ensure a successful launch.

“We launched our six-month pilot scheme on July 1. Of course, some people were sceptical and said they couldn’t see it working in the insurance space. But I’m pleased to say it has been more of a success than any of us could have imagined.”

The key results of the four-day working week trial

Outlining some of the key outcomes of the trial, Emilius revealed that Freedom has seen:

• Staff turnover drop from 31% to 6% since the trial was implemented
• Productivity increase 12.4% in ops areas – including increased performance in customer service areas
• An uptake of 80% of the four-day working week option by the Freedom workforce – up 5% since its inception
• 51 new starters in the last quarter – with feedback indicating that the four-day working week and other flexible work arrangements were key factors behind their choice of Freedom over other insurance businesses.

Emilius noted that hearing the feedback from new starters has been fantastic but it has also been great to hear the responses from the current team – and to hear how their work-life balance has changed since the trial was implemented. People have more time to be creative now, she said, and it’s encouraging them to spend more time doing the things they love with the people they love. Freedom’s culture is very much human-led and at the core of this initiative has been a simple question – “how do we make our employees’ lives better?”

“Obviously, this kind of push has got to be a two-way street because it has to work for the organisation as well,” she said. “But it’s something we were really passionate about making work and it has [paid dividends]. Our customer service has seen an uptick of 12.4%, and all the back-office staff and support staff have [renewed] strategic focus because they’ve still got the same amount of work to do, just in a shorter period of time.

“They know they’ve still got to hit the KPIs and still get the work done. But this is just giving them better focus on that work while offering them a work-life balance – and everybody who has taken this up has said they would never want to go back now to a five-day working week.”

Moving to a four-day working week, permanently

With the blueprint for success so clearly laid out during the trial, it is with confidence that the business is moving to enact a four-day working week permanently. Freedom is currently creating the correct policy to go around that, she said, and it will of course be monitored on an ongoing basis but, from January, it will be a permanent fixture. Looking back on the trial, Emilius highlighted what made it really work is the buy-in from Freedom’s team.

“I think the culture as a whole in Freedom is fabulous,” she said. “And people have really bought into this and made it something special. I can’t see the four-day working week ever not working for us because people have really bought into this journey, everybody’s been with us on it and it’s very collaborative. It’s not a one-way street where all our employees love working with us, we love them working with us too.”

Recommendations for firms considering a four-day working week

In terms of recommendations, Emilius emphasised the importance of a flexible approach when rolling out such an initiative. The majority of Freedom’s sales team, for instance, didn’t take up this opportunity because they didn’t want to miss out on a day when they could be contacting prospects but they still have the option to opt-in if they want to at any point.

In addition, she recommended getting the right structures in place as early on as possible to make sure that somebody from the right team is always available if required. In accordance with this, she said, when Freedom moves the four-day working week to a permanent basis in January, its schedule will run on a rotational basis. This will ensure somebody from each department is available when necessary – because the insurance sector doesn’t shut down on a Thursday evening.

Getting the right plan in place is critical, she said, but her other key recommendation is to “just go for it.” If implemented on a trial basis, if it doesn’t work out for a company, they can always reverse it but, from her experience, if the right plans and structures are in place and you have the right culture of self-empowerment within your organisation, then you’re on a good footing for success.

“I don’t see any downside,” she said. “And the news in the press [recently] about the success of four-day working week trials and how a lot of firms have looked to permanently adapt to this lets me know that we’re very aligned. Everybody that has done this seems to have had massive benefits. And bringing new talent to your door is massive, particularly for us as we’re on a growth trajectory over the next three-to-five years.

“So, it has been really important for us to find that offering that sets us apart and gives us that competitive edge. And I think we’ve found it and I think it’s a real gem.”

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“This is what gives the property insurance market the mechanism required to bifurcate between the types of events they can cover as standard, and those that they need to treat a bit differently,” he said. “We think we need an equivalent professional for the digital world. We need to be able to agree on exactly what a ‘cyber hurricane’ looks like.”

Laying the foundations for a cyber cat market

“In recent months, CFC have advanced plans to support the creation of such a solution. We started out some months ago by commissioning a legal feasibility study into the establishment in the UK to have an independent body which would exist to identify, define and categorise cyber events. The findings of that study stated that this was doable, it found no legal or regulatory reason as to why a body couldn’t be set up.”

With that confirmation in place, CFC has started work on determining what this body would need to look like. Recommendations posit a CLG structure, he said, which is typically used by charities and non-profits wherein members can fund the establishment and operating costs of the body but the body is a legal identity distinct from those members. As it stands, CFC is acting as the initial sole sponsor and is keen to encourage broader stakeholder support from both within and outside the insurance industry.

“Once established,” Burns said, “the board of the body will oversee the setting up of the technical committee drawn from non-insurance backgrounds in IT security, research, academia and law and whose job will be to identify, define and categorise cyber events. To do this, they will need to assess inputs from a range of data feeds and analyse them within the framework of an objective methodology.”

The four tasks of the proposed technical committee

The construction of that methodology is where the bulk of the work going into this new initiative is currently focused. So, CFC is engaging with a broad range of experts to create a methodology that is rigorous and robust while also being practical and workable. The team will shortly be able to provide a high-level overview of the first iteration of this initiative with wider stakeholders, he said, and as it stands, conceptually the technical committee will have three primary tasks.

Their first job is to identify potential cyber events as they start to develop. To support identification, he said, it’s likely that an event alerting system will need to be established and given its role as a frontline responder, the cyber insurance industry is well-placed to be the primary supplier of data feeds into any such event alerting system.

Burns highlighted that the second job of the technical committee would be to identify the specific nature of the events by a thorough analysis of technical indicators of compromise and the tactics, techniques and procedures deployed in order to accurately define the events. Systemic scenarios might range from malware outbreaks to mass extortion events, major data breaches to cloud failures.

“The technical committee’s experience and expertise will be required to make an assessment of what’s happening quickly and accurately,” he said. “For this second phase, third-party contributors to the event alerting system will also provide additional data to support the definition of the event… Importantly, we propose that once defined at this stage, the body should also assign an official name to the event. Creation of a commonly agreed naming convention feels like an important step forward in the space to make sure that everyone’s on the same page as these events arise.”

The third and final task of the technical committee should be to categorise the severity of the events according to two factors – how widespread it is and how significant its overall financial impact is. By assigning a rating based on the size of the affected population and combining that with an economic impact rating, he said, the event can be ascribed a catastrophe rating – with one being the lowest and the five the highest.

Once complete, Burns said, CFC believes that the entire process of identifying, defining and categorising cyber events could be completed within a 30-day window.

“We know that this initiative is ambitious,” he said. “It’s a model that is simple in concept but complex in execution. But that simplicity of concept is what we think makes this avenue worth pursuing.”

The solution will look to create a simple delineation in cyber policies between attrition losses and true catastrophic events, which should facilitate the development of a thriving event-based cyber reinsurance market. In all CFC’s ongoing conversations with insurers, reinsurance and third-party data providers, he said, there does not seem to be a real lack of appetite for cyber cat risk. Rather there is a real frustration at the lack of agreement around precisely what cyber cat risk actually entails.

“This solution will solve that problem and provide the mechanism by which a cyber cat market can fully develop so that customers will buy back cover for extreme scenarios should they wish to,” he said.

The next steps in the development of this cyber cat market

In terms of the next steps, CFC is close to having the CMG set up with articles of association drawn up, he said, and a proposed detailed methodology ready to circulate by the end of this calendar year. While this will take time, the group is keen to see something operational towards the end of the next calendar year, even if it’s not useable for insurance purposes right away, and to hopefully create a model that can be replicated in other territories and jurisdictions.

“The initial feedback from everyone – from insurers, reinsurers, brokers and government – has been overwhelmingly positive,” he said. “And seeing so many different stakeholders all so excited about the same thing is incredibly motivating. We’re using that motivation to act as a catalyst to get something going here.

“Even if this body ends up as an inspiration for something else, or as a precursor to a different, similar end solution, that’s OK. By definition, this cannot be a CFC or even an insurance market-owned initiative. It has to be independent in nature to work, but we can push it forward to get to something that might benefit not only the insurance market but hopefully wider society as well.”

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Aon plc (Aon), a leading global professional services firm, has appointed Marshall Bailey OBE, CFA, as its non-executive chair of the Aon UK Limited Board, effective January 31, 2023.

Bailey has several non-executive roles, including the chair of the Financial Services Compensation Scheme, MUFG Securities EMEA, and MUS (Asia) Hong Kong. He is also a member of the Board of Governors of the CFA Institute. He has also held other non-executive positions in financial services and insurance, including at the London Stock Exchange Group, Chubb, and CIBC World Markets plc.

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A vast majority, or 96%, of the claims managers surveyed reported an increase in the number of properties that are underinsured in the past 12 months, with rapid inflation in the cost of building materials often mentioned as the cause of the rise.

To back the research findings, Gallagher cited an October 2022 official government data showing a 16.7% increase for ‘all work’ year-on year. More specifically, the cost of cement had an increase of 18% between September 2021 and September 2022, the price of steel went up by 13%, and the cost of timber rose by 35% year-on-year. 

Gallagher’s research also found that more properties are also underinsured in part due to rising labour costs, according to 61% of claims management experts. When it comes to what’s causing construction labour cost rises, 85% cited inflation, and just over three-quarters, 77%, said that Brexit was a major factor due to the decreased availability of labour.

Unfortunately, the majority (65%) of business leaders who own their premises have not reviewed their commercial property insurance during the past year, indicating that many could now be at risk. Some have gone even longer without looking at their policy, with one in six (16%) not having reviewed their insurance at any point in the last five years.

The most common reasons among business owners for not reviewing their property valuation was thinking that nothing had changed since last time they checked (29%), trying to keep insurance costs down while inflation is causing budget constraints elsewhere (23%), and simply being too busy with other priorities (20%).

 Despite this, many who own their premises said that one or more of their properties has needed major repairs (18%) in the past 12 months.  

Claims managers also noted that it is taking longer for commercial property repairs to complete – taking an average of an additional 33% compared to this time 12 months ago due to supply chain delays and the lack of available construction workers.

As a result, eight in 10 (805) claims managers said many businesses may have too short a term specified on their business interruption cover – the insurance that pays for loss of earnings while a property is unusable.

“Property underinsurance is at a record high currently because of issues, such as inflation and the rising cost of materials,” Gary Fletcher, Gallagher’s managing director for the South in the UK, said. “However, business owners also often make the mistake that the valuation of the property is based on what it would sell for – and as property prices haven’t changed a great deal over the last year – that the valuation is the same.

“In fact, the valuation is based on rebuild costs which have unfortunately risen dramatically over the last year. As a broker we advise our clients on their insurance, and the need to review their cover when issues like this arise, but some businesses won’t necessarily realise the extent of the issue.”  

Fletcher added that business leaders have a range of increasing costs to cope with, as inflation remains stubbornly high.

“The knock-on effect of inflation on commercial property and business interruption insurance shouldn’t be ignored,” he stressed. “Your insurance broker can advise how to go about a valuation to ensure that cover is valid.

“With construction and labour costs as they are – and supply chain issues meaning businesses who need to repair or rebuild might be closed for longer than expected – it is currently very important to make sure you take time to check your cover.”

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Geopolitical uncertainty, energy issues, and other challenges have caused rough sailing in the marine insurance industry. However, Insurance Business UK’s (IBUK) 5-star marine insurers for 2022 have remained resilient in the past 12 months, helping brokers either increase their premium volume or maintain it at the same level.

IBUK selected the best marine insurance providers in the UK for 2022 by sourcing feedback from insurance brokers. The research team conducted a survey with a wide range of brokerages to determine what brokers value in a marine insurer and asked 100s of brokers across the country to rate the marine insurers they had worked with over the past 12 months.

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1. Where do you think UK PI market is heading in 2023?

An interesting question. After the hard market years of 2019 and 2020 (made worse by the pandemic) and 2021 the UK PI market has seen signs of significant softening in the last two Quarters of 2022. This has mainly been within the SME sectors albeit there has been more competition in the larger mid-size sectors especially Excess of Loss/Cat markets where softening usually first starts when a cycle changes. Softening usually then starts with broadening of coverage followed by premium pricing reductions.

This year we have seen inflationary pressures affect the cost defence litigation especially within the construction sectors where the cost of raw materials and labour costs have risen dramatically, this has made insurers review upwards their initial claims reserving.

Global interest rates have shot up since the summer, few would have foreseen base rates move north at the pace they have, with more rate rises forecast in 2023 to try to dampen inflation. Interest rate rises will have an adverse effect on employment. Commercial insurance policyholders will see their margins pinched and will expect their PI broker to search the market to provide fair value at renewal in 2023.   It is interesting that the equity markets have stayed pretty much flat over the past few years and have bounced back after the initial drop in equity prices in the spring of 2020.

2. How are these market conditions likely to impact new entrants to the market?

Some new entrants to the market in 2023 will not have the legacy tail that current insurers live with, so there is a significant chance that there might be a “dash for cash” where new entrants will undercut existing market pricing with the logic that they can sit on cash for some years as their liability tails lengthens. Negligence claims can take up to five years to settle/close. Complex claims can take even longer with the costs of mediation and eventually litigation in the Courts. Investment income will become an important tool in return on capital.

Lloyd’s of London has posted some attractive numbers recently so the worst underwriting years of 2016, 2017 and 2018 are clearly behind the market now.

3. What would the impact of a prolonged economic recession be on the development of this market?

Should the UK suffer from a prolonged recession, history tells us that negligent litigation follows but there is usually a time lag before the tail catches up with the dog. At MGB we monitor claims triangulations closely. So as far as MGB is concerned, we see nothing unusual now.

4. Where does trading in the PI market stand going into 2023?

The Lloyd’s & London marketplace is back to pre-pandemic normal trading (face-to-face) and the market’s 334-year-old history is getting back to some form of normality. The frozen marketplace of 2020 and 2021 is over as we see people coming together again to discuss risk transfer.

5. What changes can policyholders coming to the market expect to see?

Policyholders who come to the market and purchase Cat towers of £100 million to £200 million protection are unlikely to see much price change in the market but there will be competition at SME firms where there is Primary capacity competition and abundance of Excess of Loss capacity.

With two or three profitable underwriting years behind us, it is hard to see why the UK PI market would not turn a softer in 2023 but one thing we can be certain of is the economic uncertainty we all face.

At MGB, we do everything we can to keep our customers informed on all market developments and MGB remains a leading PI market maker.

You can find out more about MGB and how it continues to build enduring relationships with clients, broker partners and insurers here

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However, armed with knowledge gleaned from a ten-minute segment on NBC, I had other ideas. The programme had highlighted how modern sustainable development techniques hugely reduced the risk of hurricane damage. If we are to gather a pool of federal money, why use it to maintain an artificial insurance market? Surely better to use the funds to incentivise building back better. Because the main impediment to people doing that is the cost, but if they did build more resilient homes the private insurance market would return as the risk would be so much better mitigated.

And then, back on home turf and in conversation with my former chair-turned-climate-guru, Richard Dudley, I was provided with the evidence that really makes my case: Babcock Ranch. Babcock Ranch, America’s first solar-powered town, is 12 miles northeast of Fort Myers – and so took the full brunt of Ian. But it is a purpose-built sustainable community. It has a 700-pane solar array just outside the 2,000-person community which provides more electricity than its residents use. The streets are designed to flood so houses won’t. Builders have used native landscaping techniques that both look nice but also control storm waters. And they have buried all the cables. The net result of this inbuilt climate resilience was that the town had not one second of outage during the hurricane – despite 2.6 million people losing power all around it. The only damage was a couple of uprooted trees. The town stood in the way of a category 5 hurricane and barely chipped a toenail. It is living proof that sustainable development could be the future for Florida and for the insurance sector.

The one thing Press reports on Babcock Ranch are pretty coy about is how much it all cost. But I feel confident in asserting that the answer to that question is “quite a lot” and probably out of the reach of a section of civilians. So, I return to my earlier point. Given what it has proven to be possible, surely public money would be best spent subsidising the creation of many more Babcock Ranches than propping up the insurance of legacy properties. It is a classic prevention-not-cure investment decision. And this is not just about public money. How can we as an industry incentivise this sort of sustainable development? Because it is in our interests, too, that these sorts of communities proliferate.

To give some context to this conundrum, take a look at the report the McKell Institute produced for Insurance Commission of Australia. This shows that during 2005–2022, the Australian government spent AU$24 billion on disaster relief but only AU$0.51 billion on building disaster resilience. Which seems sort of, to use the technical term, nuts. Surely, redressing the balance between these two figures could deliver a lower overall total?

So, I returned from Colorado a resilience disciple. It is further proof that our business is risk management consultancy and only, in part, the insurance of risks that can’t be mitigated in better ways. To paraphrase Che Guevara, what we need to build is two, three, a million Babcock Ranches. The future of our industry and the future of society demand it.

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How can reputational risk impact organisations?

“There are lots of different ways that reputational impact can affect an organisation, particularly as we see more and more companies are being valued by their brands,” he said. “And that can be very interpretational and can swing to huge degrees of volatility, far greater than that experienced in the past.”

In terms of market value, if you think about the top 10 companies of 20 or even just 10 years ago, they were heavily in the manufacturing/physical product space, he said, whereas now the top 10 are dominated by firms with heavily intangible assets. And while the risk of reputational harm is sitting high on the risk register of lots of C-suite leaders, many of them don’t yet understand how to combat or reduce their exposure – or how mechanisms such as insurance can help remove some of their risk exposure.

While brand reputation has always been a central factor in a business’s success, its value as an intangible asset – particularly in the context of a world that disseminates good and bad news alike so rapidly via social media – has come into its own. And so, the role of insurance in creating the right products and services to go alongside that evolving significance is more critical than ever.

The changing nature of reputational risk insurance

Edwards highlighted that, traditionally, reputational risk (or brand rehabilitation or crisis management) insurance was not bought in isolation.

“It’s historically been an add-on to more traditional products,” he said. “Where you’d typically see a sub-limit or an additional bolt-on providing a company with limited indemnity or limited support around a breach at an intangible level.”

The shift in the value of intangible assets as a key measure of a business’s share price has focused minds on the risk of reputational damage – whether that’s hands-on harm caused by the business itself, or inadvertent damage through their industry or association with an impacted brand. This damage can now have a far greater impact on a firm’s share price and ultimately its business value, he said, and it’s an evolution that is leading businesses to ask more of their insurance providers.

For LSM the answer to this evolving need has been to go one step further than creating a solution that matches the most pressing needs of clients, to develop an offering that is always a step ahead of where the winds of reputational harm are blowing.

“For us, for example, we’re looking at broader impacts like how companies can be affected by association with celebrity endorsements,” he said. “It’s a real gap when you think about some recent high-profile examples and how their associated brands which they endorse have reacted one way or another, either ending the relationship or continuing to use the individual(s) for future campaigns.”

The changing spectre of celebrity endorsements

Adaptability is built into the very core of LSM’s reputational risk insurance offering, he said, because the insurer recognises that reputational risk is not a binary matter, but a complex and delicate consideration that can appear to belie prediction. The product can’t afford to be overly restrictive about the brands that clients endorse, because high-profile modern celebrities have proven that even quite shocking associations can help sell a brand.

“So, more and more companies do associate themselves with [brands or individuals] who historically, from an underwriting lens, you’d think would surely have the largest claims possible,” he said. “But in truth, actually, because it’s a known substance with regards to how they’ve risen to publicity and maintained themselves at such a high level, it takes quite a lot to shock an audience.

“So sometimes, those which have a very clean bill of health as a celebrity endorser can be the ones that create the greatest challenge when either historic events are discovered or profile raised, or alternatively when they are involved in something that is against people’s perception of them. The big balance that we have to find is between the known risk and the unknown risk.”

Liberty’s reputational risk insurance offering is highly in-tune with the tide of public opinion, Edwards said, because it works so actively with a range of partners to perform horizon scans for companies that measure their risk exposures. LSM’s reputational crisis product supports clients in both understanding and managing this risk through insurance risk transfer, real-time reputational data analysis and industry-specific crisis and brand rehabilitation consultancy services.

The role of data insights in mitigating reputational risk

In order to supply its clients with the reputation intelligence necessary to help mitigate their risk, LSM’s underwriting team has partnered with Polecat Intelligence – an insurtech which has built an algorithm offering significant horizon scanning across both traditional media and social media to generate advanced data insights. This multi-lingual tool can even dig into even bespoke industry publications, he said, as well as monitor social media content.

Built into the algorithm is the creation of a sentiment and taxometry scale, he said, where the LSM team can measure discourse around a certain topic – whether that’s by the volume of its audience or the frequency with which a certain company or specific keywords are being used. There are a number of different metrics which are used to create a ‘horizon score’ and a ‘sentiment score’ which is then sense-checked against the industry sector in which the client operates. This allows the score to be benchmarked against a client’s true peers in the market.

All the information utilised by LSM is publicly available, he said, but Polecat pulls it all together to form “one version of the truth“. This then allows clients to be deliberate in managing their reputational risk exposures rather than taking a scattergun approach to determining their next steps whether that’s to do with marketing campaigns, limiting the damage of a reputational crisis or looking to change the way they’re viewed in their marketplace.  

“While the LSM product solution is still in its infancy, we see the use of these tools becoming more critical,” he said. “This is a problem that is not new but it’s growing at its fastest pace in terms of becoming more critical to the valuation of a business. At the same time, a lot of companies have yet to get a handle on how they can de-risk themselves nor what tools are available to support such understanding.

“For companies which have started to try to address and understand their exposures, we have many now looking at these types of products as being critical. More and more [these businesses] are looking at their reputation exposure as a business-critical insurance risk transfer purchase, in the same vein as liability cover, or traditional tangible property coverage.”

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