MAPFRE
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Madrid 2,148 EUR -0,02 (-0,83 %)

INSURANCE | 06.17.2024

Insurance: a shield for protecting a company’s intangible assets

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They can't be seen or touched, but intangible assets such as branding and intellectual property are essential components of today's businesses. In a globalized and highly competitive world, managing these resources effectively is crucial for any company, as their development depends on it. The insurance industry has risen to the challenge of serving as a protective shield for these assets, offering a value proposition that goes beyond simple compensation in the event of a threat. This includes taking a more proactive role in preventing or managing difficulties.

Can you imagine one of your top talents leaving the company with key design information, a hacker breaking into the system and stealing sensitive customer data, or a problem with one of your products that threatens your company's image?

Knowledge, information, and corporate reputation are three increasingly important intangible assets in organizations. Traditionally, a company's value was measured by its buildings, machinery, and equipment. Today, it's more closely tied to the resources that have become essential to standing out in an ever-changing business world, especially with the advancement of new technologies and digital transformation.

Intangible assets include software, databases, R&D, intellectual property, branding, design, and training, and investment in these assets varies widely around the world. In advanced countries like the Nordic nations, the US, and the UK, investment in intangibles surpassed tangible assets years ago. Meanwhile, Southern European countries like Spain and Italy are still catching up, and regions such as Latin America have even further to go. Despite these differences, there's a clear trend of intangibles becoming increasingly important in the global economy.

"Improving productivity is a major challenge for many economies today, and the transition to an economy more reliant on these assets is crucial. If we want to be more productive, we need to invest more in intangible assets,” explains Gonzalo de Cadenas-Santiago, Director of Macroeconomics and Financial Analysis at MAPFRE Economics.

Managing intangibles: the role of insurance

Given these developments, companies are facing a significant challenge: managing their intangible assets, which also includes effectively controlling threats and potential impacts on these resources.  

The insurance industry has risen to the challenge of acting as a shield and providing customers with protection to safeguard these assets. Throughout history, this industry has helped businesses enter new markets and launch new products and services, and its commitment to helping companies expand continues today.

Insurance companies are working to find solutions that meet their customers’ need to protect the value of their brands, reputation, intellectual property, and more. And there's huge potential here: surveys show that less than 20% of these types of assets are currently insured.

The lack of data and loss experience, as well as the difficulty of quantifying risk – essential elements in the insurance industry – make the path difficult. But it's evident that insuring this type of asset has become an opportunity for the insurance industry that will help its customers. So how has the industry responded?

A value proposition

Helping customers recover from damage to insured property has always been the primary aim of insurance companies. Now they are catching up to solutions that protect intangible assets and provide companies with the means to manage incidents quickly and effectively. Cyber insurance, intellectual property protection, and insurance for directors and managers to cover their decisions are some of the modalities that are beginning to gain traction.

Insurance companies are looking beyond mere compensation for losses and are working with customers to prevent risks from materializing through prevention, or to address these challenges through the provision of services.

In fact, in response to the proliferation of intangible risks, insurers are reinventing the scope of insurability to meet the changing needs of customers. This is a clear opportunity for the insurance industry to strengthen its position as a trusted partner to businesses.

In summary, the insurance community is playing an increasingly active role in helping organizations manage the risks associated with their increasingly valuable intangible assets. This is a trend that MAPFRE is following. Get to know the company's commitment through its value proposition.

 

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