Exploration of Reputational Risk from the Perspective of a Variety of Stakeholders

This report describes and demonstrates a method to understand reputational risk that you can apply to the unique circumstances of your insurance firm. This method applies a policy-capturing survey with scenario analysis to generate insight into reputational risk from the perspective of a variety of stakeholders. The activity we report here designed and analyzed six survey instruments which were distributed online to the members of the Risk Management Sectiona and to the individuals listed in the contact database of the Enterprise Risk Management Initiative (ERMI) of North Carolina State University. In all, 519 people each responded to 30 scenarios to make 15,570 purchase decisions informed by 12 cues about an insurance companys reputation. The analysis of survey responses provides probabilistic information about three different purchase decisions (New Policy, Renewal, and Investment) prompted by reputational cues suggested by insurance industry literature and experts. Using multinomial logistic regression analysis on decisions submitted by survey respondents, we report results for all reputational cues informing the purchase decisions. We then convert these results to predicted probabilities for each decision outcome.