Senior execs lack confidence in ability to financially model reputational risks: Willis

By Navneeta Nandan

May 27 - (The Insurer) - Although firms are making investments in crisis response teams to address issues around the tangibility and quantification of reputational risks, just over one in 10 are confident in modelling the financial impact of an event in advance, a new survey by Willis has found.

Willis' reputation risk readiness survey, published on Tuesday, indicated that 64% of the 500 global senior executives surveyed agree that their organization has a “moderate” ability to anticipate the financial impact of an event in advance, down from 74% in 2023 and 87% in 2022.

Just 11% said that they were able to assess the financial implications with a “great deal” of capability to understand the severity and frequency of their reputational exposures.

87% of respondents said they have a formal crisis response team in place, with 91% also carrying out annual exercises to test their crisis communication plan.

The vast majority (94%) of organizations said they have reserved some budget to help deal with a damaging reputational event.

Willis found that organizations are increasingly considering cyber risk as the main threat to their reputation, having increased to 65% in 2025 from 52% in 2023. The report noted that geopolitical instability can also increase the frequency and sophistication of cyberattacks, including hacked technology used as weapons and the rise of disinformation.

Cyber risk was followed by environmental concerns, governance and social impacts as other reputational risks of most concern.

The report noted that culture wars are increasingly difficult for firms to navigate; as businesses face ESG-related responsibilities across environmental risks, diversity and labour standards, they are also concerned with the reputational and financial fallout from "getting it wrong" in an increasingly polarised world.

However, Willis found that appetite is high for the "right" risks, with more than half (57%) of respondents stating that they would be willing to take more risks if the activity or the association in question was the "right fit" for their business, while 69% said they assess reputational risks on a case-by-case basis.

“In today’s unpredictable environment, the ability to anticipate and assess costs and liabilities is becoming increasingly critical,” said David Bennett, head of reputational risk management, direct and facultative, at Willis.

“Reputation has long been viewed as intangible and difficult to quantify. However, embracing advances such as AI-powered platforms, enables organisations to monitor real-time sentiment and model the frequency, severity, and potential sources of reputational threats with greater precision than ever before.”