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Don’t Duck Reputational Risk in ERM

How Aflac diffused a potential fiasco can teach us a lot about managing reputational risk.

By Denise Tessier | Updated on March 01, 2012

On March 14, 2011, Aflac severed ties with comedian Gilbert Gottfried; the only quacking voice that its popular television mascot, the Aflac Duck had ever had. The dismissal occurred within hours after Gottfried tweeted a chain of tasteless jokes about a devastating earthquake and tsunami in Japan, the same day the disaster occurred. In the aftermath, more than 20,000 people were lost making the potential harm to Aflac’s reputation from the tweets particularly severe at the time, as more than 70 percent of its income emanated from Japan.

How Aflac quickly and creatively responded to this massive reputational risk was an incredible achievement. Not only did Aflac avoid potentially disastrous financial losses, they turned the incident completely around into an incredible marketing opportunity. A year later, the response to this crisis is worthy of study by other insurers working to identify, monitor, and control reputational risk within their enterprise risk management (ERM) programs.

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