Page 49 - The Insurance Times May 2025

Negative customer reviews and social media sentiment 4. Ethical Business Practices
Regulatory attention from IRDAI Uphold the highest standards in policy design, under-
writing, and sales. Ensure agents and partners do not
Increased customer support costs to handle the back-
resort to mis-selling or misleading promotions.
lash

5. Stakeholder Engagement
This case underscores how a single service failure, if not
Maintain regular engagement with stakeholders includ-
handled promptly and transparently, can spiral into a
ing customers, regulators, investors, and media. This
reputational disaster.
builds goodwill and cushions the impact during crises.
Why Reputation Risk is Growing 6. Customer Grievance Redressal

Several factors have contributed to the rise of reputation Streamline grievance mechanisms to resolve complaints
risk in recent years: efficiently. Implement AI-driven ticketing and escalation
1. Digital Amplification: Social media can magnify minor systems to reduce turnaround times.
incidents into viral outrage.
2. Customer Empowerment: Online reviews and com- Turning Reputation Risk into a Competi-
plaint portals give customers a strong voice.
tive Advantage
3. Regulatory Vigilance: Regulators now impose stricter
Interestingly, how a company responds to a reputation cri-
disclosure norms and penalties.
sis can itself become a brand-strengthening moment. Timely
4. Media Sensationalism: Media outlets often prioritize apologies, swift resolution, and transparent explanations not
controversial narratives that attract viewership. only help in damage control but can also reinforce customer
5. Competitor Landscape: Emerging InsurTech firms loyalty.
quickly capitalize on legacy insurers' missteps to gain
market share. For instance, in the current case, had the company issued a
clear statement and expedited the claim from the outset,
Strategies for Mitigating Reputation Risk it could have turned a potential backlash into an opportu-
nity to showcase its customer-first approach.
To manage and mitigate reputation risk, insurance compa-
nies need to adopt a multi-layered strategy:
Moreover, insurers that are proactive in addressing emerg-
1. Proactive Communication
ing social concerns-such as climate change, gender-sensitive
Maintain transparency in customer dealings, especially
products, or financial inclusion-enhance their brand value
in policy terms and claim processing. If an incident oc-
and attract purpose-driven consumers.
curs, issue timely and fact-based updates to control the
narrative.
Conclusion
2. Crisis Management Plan In an age where reputation can be made or marred in
Develop and periodically test a comprehensive crisis moments, managing reputation risk has become a corner-
communication plan involving PR, legal, compliance, stone of strategic planning in the insurance sector. Compa-
and customer service teams. The plan should outline nies must realize that their brand is shaped not just by
procedures for rapid response to social media trends, marketing campaigns but by every customer interaction and
regulatory notices, or press coverage. public statement. With a structured approach to communi-
cation, ethical practices, and crisis management, insurers
3. Social Media Monitoring can not only safeguard their reputation but also turn po-
Invest in tools that provide real-time monitoring of so- tential risks into lasting opportunities. The key lies in being
cial sentiment. This allows companies to identify brew- prepared, being transparent, and above all, being account-
ing issues before they escalate. able.

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