Thursday, 9 February 2012
The crown jewels
Sophie Maguer, Risk Manager at Euro Disney, will host a session on brand management during this week’s AMRAE conference. She discussed this vital risk management topic with Rodrigo Amaral before the event.
A company takes years, sometimes decades to build a valuable brand. But it can see this same brand suffer severe damages in a matter of days, thanks to the multiplying effect of new communication technologies.
Dealing with the threats against one of the most important assets of any company, its public image, is a subject that has been climbing up the agenda of risk managers in France and elsewhere in recent times.
And it won’t be missing among the worshops that take place at Les Rencontres 2012, in Deauville this week.
To host the discussions, AMRAE has invited a risk professional who works on a daily basis with a brand that ranks among the most recognisable in the world and is valued in tens of billions of dollars.
That person is Sophie Maguer, the risk manager at Euro Disney, the company that operates Disneyland Paris, France’s most popular tourist attraction.
The importance of taking care of the brand in the case of Euro Disney is not difficult to gauge.
The company needs to keep its risk management practices sharp, as it relies on attracting millions of visitors every year, especially children, who have to be confident that they will be safe while they have fun in a large entertainment complex full of complex machines. And the ‘Disney’ part of the name is nothing to be sniffed at.
According to Interbrand, a specilaist brand consultancy, it is the 9th most valuable brand in the world, valued at U$29bn last yaer.
But a company does not really need to have a brand worth billions of dollars to be worried about damage done to its reputation and the perception of the wider market about its image.
“Brand and image risks are very important for us,” Ms Maguer told Commercial Risk Europe in an interview before the AMARE conference.
“But episodes that we have seen worldwide in past years have shown that this is a very relevant subject for any company today, no matter its size. All of us are worried,” she added.
High levels of concern are explained by the ability of social networks, blogs and other real time communication tools available to people who can easily make damaging remarks about a company.
Rumours and false news spread like wildfire in the Australian summer, and even innocent mishaps by a company become widely known before it is able to rectract them.
“When you speak to people about brand image risks, everybody is concerned,” Ms Maguer said. “There is much information on the web, on blogs, even in the media. Anybody can take a picture and post it to a website, and in five minutes it is available worldwide, even if people don’t know whether information that can cause damage to a brand name is accurate or not,” she added.
The best solution is possibly to focus on the adoption of prevention measures and be prepared to react immediately when a threat is identified.
This is, of course, likely to be as difficult as it sounds.
These issues and more will be discussed in Deauville. “The workshop will give us an opportunity to listen to the experts and we will try and find information that will help risk managers to protect the brand name and reputation of their companies,” Ms Maguer explained.
The debate will gather risk managers, a consultant and an insurance broker, who will present some market-based perspectives that should catch the attention of the audience.
“It is a very difficult task to find adequate solutions to tackle this risk,” Ms Maguer said. “Today it is very hard to transfer image risks to the insurance market because it is a general risk. It is hard to define the potential consequences and the damage to the brand. It can vary quite a lot according to the kind of activity and the size of the company. It needs to be evaluated on a case by case basis,” she added.
There are a few options available in the market to transfer brand image risks, but their workings are not fully clear to everybody.
Risk managers need to be aware of how they really work and especially when they can be activated.
“Very often there will be a double trigger in this kind of policy,” Ms Maguer remarked. “One of them will activate the coverage in the case that there is a problem with media coverage, the spreading of rumours or the like. The second trigger will depend on a certain amount of financial loss, which is the most complicated aspect to calculate. To determine the value of a brand is not a simple task,” she added.
During Ms Mauger’s session there will be discussions about the experience of German companies including Alexander Mahnke, Chief Risk Officer at Siemens. German companies are generally thought to be a step ahead when it comes to calculating the value of their brands.
Regardless of the current state of readiness of any company, participants will be urged to be always ready to deploy mitigating measures to avoid brand damage, rather than simply leave it up to the insurance market to compensate for losses.
“Risk managers need to act very efficiently during a crisis, because information spreads so fast these days,” said Ms Maguer.
Managing reputational risks is one among several responsabilities that Ms Maguer has as the risk manager at Euro Disney. She has been at the company for almost five years, always working as a risk manager, a job she took to take advantage of previous experience in the insurance market.
An engineer by training, Ms Maguer started her career as a loss prevention specialist, carrying out inspections, analysing risks, checking fire prevention measures and making recommendations for clients on how to better mitigate risks.
After a few years she moved to the risk transfer side of the business and worked as an underwriter for property damage at an insurance company.
“When I had the opportunity to become a risk manager, it was a very interesting perspective for me,” she said. “My background and my knowledge about risk management and risk analysis have been very helpful in the new job.”
The years as a prevention engineer, for instance, helped her to be always conscious of the value of, first of all, of working to ensure that losses do not occur in the first place and to become familiar with a wide range of potential threats, especially in the field of property damage.
“As a prevention engineer, I was able to deal with lots of different industries, and to learn about many different risks,” she told CRE. “I worked with people on site as we tried to find the best solutions to prevent or to transfer their risks, to make sure that their assets were properly protected. It was a very interesting job, and my engineering background has been very helpful for me in my work as a risk manager,” continued Ms Maguer.
The ability to deal with the intricacies of risk transfer were later sharpened during her stint as an insurance underwriter. “I’ve become used to doing technical analysis and I’ve learned insurance techniques. It all helps me to better understand everything related to property damage. And as I know how insurers and brokers work, it is easier for me to understand what I need, to find the most adequate coverage and to provide the information that brokers and insurers need.”
The risk manager added: “When you work in the insurance market, be it as an underwriter, an engineer or a broker, you are aware of the difficulties and the problems you can meet. When I came to the other side, I already knew something about the job, as I had dealt with many risk managers before.”
Four people work at the risk management department at Euro Disney.
Ms Maguer’s team is responsible for all insurance buying, but she also works closely with the heads of other departments to coordinate risk management policies and to supervise their implementation.
The other participants taking part in Ms Maguer’s discussion along with Mr Mahnke of Siemens at AMRAE are Thomas Aragneti, Associate at Deloitte Conseil, France Hanniet, Group Risk and Compliance Manager at Hanniet, Organgina Schweppes Group, Luc de Laender, Gras Savoye.