Global law firm Kennedys is leading a consortium that will be undertaking a £1.2 million project aimed at developing technology with the capability of identifying and assessing reputational risk.
Part-funding the project is Innovate UK’s Smart Grants scheme, which is contributing £783,000. Kennedys and consortium members University of Manchester, University College London, Cicero/amo, and RiskCovered Limited will be shouldering the remainder.
The project will see Kennedys’ Reputation Advisor develop domain-specific technology that can accurately measure, quantify, and track the ESG-specific (environmental, social, and governance) reputational index of companies in real time.
Complex interrelationships between organisations and markets will also be modelled in order to measure any reputational risk from third parties. For its analysis, the software will be using corporate reports and contracts, as well as other information in the public domain.
“The ongoing ESG momentum is likely to lead to a new chapter of reputational risk insurance,” asserted Kennedys corporate affairs director Deborah Newberry (pictured centre). “I expect to see a market shift in optimising existing products that add on reputational risk, such as D&O (directors and officers) and cyber security; or towards initiatives that offer standalone coverage of reputation as a discreet hazard.
“However, insurance alone cannot be the solution. Firms must be able to accurately monitor and measure the impact of ESG-related events as part of an effective risk-management strategy. Current systems for building in reputational resilience are limited – largely because the data relied on is unstructured, uncertain, and incomplete.
Newberry said Reputation Advisor – the fifth Kennedys initiative to be awarded funding by Innovate UK – will be designed to solve the abovementioned problem.
Meanwhile project director Karim Derrick (pictured left) added: “In a world where companies are often accused of greenwashing, Reputation Advisor will also provide robust and transparent evidence of a firm’s genuine green credentials. From an insurance perspective, the product will help insurers in their conversations with their own clients to quantify ESG-related risk.
“Our technology work builds on that of our academic partners, combined with legal expertise, scaffolding human judgment for improved consistency. The benefits and opportunities are huge.”
Derrick, who is product and innovation director of Kennedys’ tech arm Kennedys IQ, will oversee the project over the next 18 months. When completed, Reputation Advisor will become part of the Kennedys IQ tools suite called Toolkit.
“Reputation Advisor is testament to just how far Kennedys has come in developing technology-based solutions for our clients based on emerging real-world problems,” commented Kennedys client innovation head Richard West (pictured right). “It also demonstrates that we listen to our clients and their customers in order to evolve.
“While the origins of the hugely successful Kennedys IQ Toolkit were in the claims space, Reputation Advisor will provide a solution for both corporate clients and underwriters. This has become possible because of our established approaches to Open Innovation and the proven partnerships we have built across the commercial and academic world.”
