WPP is teaming up with Aon, one of the world’s biggest insurance brokers, and Zurich Financial Services to offer insurance policies worth up to $100m for companies seeking to restore damaged reputations.
The policies will have an annual premium of about $5m and WPP’s contribution will be up to $25m of advertising, lobbying and public relations. The company will have a dual role advising on strategy and then supervising spending which means that it will act as both loss adjuster and agency.
With many of the world’s biggest corporations including BP, with its Deepwater Horizon disaster, Toyota with its spate of recalls, Sony with its gaming hacking problem and Rolls-Royce with faulty aircraft engines running into problems and huge costs in recent times the attractions of the policy are easy to see although the collateral damage in some of these instances is well over $100m.
None of the above are major WPP Group clients and it’s unclear what will happen with the new policies when it comes to appointing spin doctors and the like. Would the companies in question be required to use WPP agencies even if they had their own in place?
Either way there will be a substantial fee for for WPP.
Leading independent British PR firm Brunswick headed by Alan Parker is believed to have earned £10m for advising BP in the weeks following the Deepwater Horizon spill. If the same thing happened again and BP held one of the new policies, would that mean WPP’s Hill & Knowlton would get the business?
Sir Martin is well known for upsetting his rivals with his machinations. But I bet they never expected him to become an insurance salesman.