^aPolicy Development and Research, Property Casualty Insurers Association of America (PCI), 2600 S. River Road, Des Plaines, IL 60018, U.S.A. E-mail: gregory.heidrich@pciaa.net

¹The authors are, respectively, President/CEO and Senior Vice President – Policy Development and Research, for the Property Casualty Insurers Association of America (PCIAA).

Abstract

This paper explores the question of reputational risk from an insurance industry perspective. The paper discusses the sources of reputational risk in the insurance context and points to reputational concerns that arise at both the individual firm and industry level. The paper suggests that many reputational risks arise from economic and social factors outside the industry but still carry significant implications for the industry and for insurers operating within it. The paper finally discusses some of the implications of reputational risk for public policy issues facing the insurance industry today and offers thoughts on how those risks must be addressed. The paper concludes that reputational risk is a particularly important issue for the insurance industry, given the nature of the underlying transactions themselves and the public policy challenges the industry faces. The paper concludes that the industry must continue to build its capabilities for addressing this risk.