On April 18, 1906, a rupture of the San Andreas Fault was feltfrom southern Oregon to south of Los Angeles. Measuring 8.25 on theRichter scale, the tremor killed an estimated 3,000 people andcaused $500 million in damages (about $10 billion in today'sdollars).

This still ranks as one of the worst natural disasters in UnitedStates history, and was a watershed event for the insuranceindustry. It also served as an early lesson in the area of industryreputation.

Similar to the wind-versus-water controversy that followedHurricane Katrina, the earthquake-versus-fire question ragedfollowing the catastrophe.

Burst water pipes throughout San Francisco immediately after thequake were blamed for the widespread fire that eventually engulfedthe city. Insurance claims were disputed around the subject ofcause, and those insurers that held back in paying claims becamesubject to public scrutiny and bad press.

In more recent times, a number of issues crossing the insurancespectrum have placed carriers under Congress' microscope, causedthem to be batted about by the press, and resulted in criticism byconsumer advocates and state lawmakers.

Add to that new realities such as the challenging economicenvironment and the question of federal insurance regulation, andit is easy to see why the industry feels more pressure than ever toprotect its reputation and brand identity.

The good news is that there are a number of actions companiescan take in building relationships with stakeholders,including:

o Focusing on strategic communications.

o Creating a risk management approach to reputational risk.

o Creating communication frameworks that encourage all membersof the team to speak the same language with consistent andcomprehensive messaging.

The financial services industry, and large insurers inparticular, are grappling with swiftly unfolding market realities.No one needs a reminder of the performance of the markets in recentmonths, or of jobless rates and government bailouts.

But the truth is these conditions have either sparked new trendsor served to exacerbate existing ones–with consolidation andrestructuring, regulatory reforms and sustainable cost managementplaying high on the list.

With these challenges in mind, insurers must work harder thanever to protect their reputations and to correct misconceptionsarising with disturbing frequency.

Strong external and internal messaging serves to both highlightstrengths and dispel myths. By leveraging such communications,industry leaders can build message frameworks that take a proactivestance in supporting strategic and comprehensive communications toboth internal and external stakeholders.

The building blocks of such a framework might include four keyareas, beginning with brand reputation:

o Reputation: To combat loss of trust and theconsumer's sense of uncertainty about the future.

o Risk: To focus on the importance ofimplementing an integrated risk management approach that addressesrisk across all business decisions and activities.

o Reform: To be prepared and proactive aboutcoming regulatory changes.

o Realignment: To return to the basics of thebusiness by refocusing on key areas such as growth and operationaleffectiveness.

Now more than ever, a solid reputational risk communicationsplan must be imbedded in your organization's DNA. Carriers can nolonger just be defensive against bad publicity or be forced toreact in an uncoordinated fashion that serves to cause furtherharm.

By rethinking communications strategies and taking a newrisk-focused approach to reputational risk, savvy insurers arepositioning themselves to be proactive, rather than reactive, whenit comes to battling misconceptions and safeguarding brand andreputation.

Communicating progress toward implementing and buildingenterprise risk management systems is also one path to reassuringinvestors and other stakeholders.

One major element of an enterprisewide view of reputational riskis a business strategy that includes integrated core messagescustomized to all stakeholders, both within and outside thefirm.

Part of this might include winning over the media. According tothe Harvard Business Review, winning a “share of voice” inthe media is an effective hedge against reputational damage whenthe news turns problematic. By boosting the number of media storiesthat quote somebody from the firm, or citing data provided by theorganization, a company establishes a foothold that serves wellwhen crisis hits.

“Strong relationships and credibility with the press are crucialto attaining a large share of voice and are especially importantduring a crisis, when a company generally needs to communicate itspoint of view,” the Harvard report stated.

Lastly, by having a proactive communications framework in place,companies foster an environment that encourages all members of theteam to become involved.

Beginning with a business strategy and core messages, theframework includes a communication strategy that integratesmessaging to all stakeholders, including those internal andexternal to the company.

This successful communications approach prioritizes minimalbusiness disruption, promotes leadership visibility and alignment,and presents one face to the market. With it, messaging is alignedwith strategy and ensures that good business is at the center ofthe communications effort.

Here's an example of an integrated communications strategy thatencompasses both external and internal messaging, in the case of acompany that seeks to create a new image, or re-brand itself:

o At the employee level, staff will be remindedthat ours is a great industry, critical to society–and that theircompany is one for which they should be proud to work.

o At the board level, the message might conveythat senior leaders are stewards and protectors of theorganization's image.

Likewise, senior leaders and management should foster themessage to staff that they have a key role in shaping the brandthrough the experience they give the customer.

At its root, messaging to a company's external stakeholdersshould be very similar in nature to what's being saidinternally.

o Prospective employees will know that theinsurance industry is an attractive place to work for all and ispositioned to meet the modern expectations of futuregenerations.

o Customers are assured that the quality ofproduct and value of services remain constant in good times and inbad.

o Regulators, meanwhile, are getting themessage that a company is communicating and maintaining a highlevel of compliance and transparency, no matter the climate.

Reputational risk has the power to impair a firm's ability tooperate successfully in the long run. Companies that work to adoptfirmwide views on strategic communications prepare themselves tosucceed in today's world of 24-hour news cycles, increasingregulatory scrutiny and rising consumer expectations.

Organizations that pre-identify items that could lead toreputational risk are proactive in keeping the focus on strategiccommunications, creating a risk management approach tocommunications and building communication frameworks that encourageall members of the team to speak the same language with consistentand comprehensive messaging.

By putting a premium on reputational risk today, insurancecompanies can position themselves to succeed in the marketplace oftomorrow.

Rebecca Amoroso is U.S. head, andHoward Mills, the former New York insurancesuperintendent, is chief advisor at Deloitte's insurance practicein New York City.