Arthur J Gallagher says it has launched a unique reputation risk practice to help Asia-Pacific corporate clients deal with growing threats to their brands.

The operation will be led by Sydney-based National Practice Leader for Professional and Financial Risks Stuart Davies and Singapore-based Asia CEO Dick Heath.

Reputation risk is increasingly important for businesses, as transparency in organisational behaviour combines with high-impact social media.

The broker believes it has developed an innovative solution to tackle what has been, until now, a largely uninsurable risk.

“It’s certainly the first dedicated practice of its kind in Australia and the Asia-Pacific region,” Mr Davies told insuranceNEWS.com.au.

“There have been some attempts to address reputation risk but the main blocker has been the difficulty in measuring and quantifying the risk from a financial perspective and, as a result, finding the capacity to provide broad coverage.”

Mr Davies says when an event damages a brand – such as a product recall, a data security breach, inappropriate labour use or fraud – the digital age allows instant communication.

“Social media has had a massive impact and is increasingly the place where brands can rise and fall. In our view, one of the key strategies for companies to employ is crisis management and communications. Being prepared for risk events is half the challenge.”

Mr Davies says Gallagher has a unique approach to reputation risk assessment modelling, which he cannot reveal publicly.

He also declined to name insurers working on the project.

“We work with a number of insurers in this space,” he told insuranceNEWS.com.au.

“Their appetites differ, as do the capacities they offer. For that reason there may be a combination of insurers on a specific risk.”