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... It is essential that the chairperson of the Crisis Management Audit Committee report to someone other than the chairperson of the Crisis Management Committee, who is the director of the plan. In order to eliminate bias and to provide for total objectivity, the Audit Committee Chairperson should report to the Executive Committee of the Board of Directors. SECTION 14.0 MANAGING HIGHLY SENSITIVE CRISES 14.1 Confidential Crisis Exposures Highly sensitive crises are those loss potential exposures normally considered confidential and are explosive given general media exploitation. The majority of highly sensitive exposures all have in common the scarcity of time available to cope with the situation. For this reason, pre-loss planning becomes vitally important as associated with coping with many of the typical confidential crisis exposures. These exposures may include, but are not limited to the following: Confidential Crisis Exposures Kidnap Ransom Personal extortion Asset extortion Product extortion Product contamination Product alteration Product recall Economic sabotage Industrial espionage Political risk 14.2 Management of Highly Sensitive Crisis Exposures It must be assumed that the majority of highly sensitive crisis exposures are monumental in the effect upon the operating organization as well as highly sensitive to public exposure and must be treated confidentially. Frequently, major organizations have established an Executive Security Committee which reports to the Executive Committee. This strategy provides for quick action and direction for senior executives without the encumbrance of attempting to get Board of Directors response and input to a sensitive crisis situation when timing may be critical. The operation becomes more manageable when the anticipated scope of responsibilities is within a Board of Directors pre-approved security program with defined action objectives involving both on-going procedures and policies. The Executive Security Committee should be ...

...l Crisis Exposures Kidnap Ransom Personal extortion Asset exto...r reimbursement, not for the initial ransom demand payment. Exhibit 14.1, prov...

... tampering; extortion; kidnap and ransom; credit risk, claims and self-insuran...

...nsurance industry spends a king’s ransom every year in sales and marketing to ...

...uilt by association) Kidnap, ransom, extortion Hostile takeover atte...

... does not complain and simply leaves and never comes back will leave a mark. That mark is on your wallet. Can you afford to lose that client? Consider the following: He/she will tell an average of 11 people about the negative experience. This will make it more difficult for your agency to sell to the client's friends. It will cost your agency seven to nine times more to replace a client than it would to retain one. A new client, on average in the first year, will generate only 33% of the profit that you earned from the former client. A former client has only a 9% chance of returning to your agency. You will lose that client's lifetime revenue if he/she moves to a competitor. The insurance industry spends a king's ransom every year in sales and marketing to attract new clients – an important and crucial activity to produce future growth and profitability. On the other hand, what do you spend to solve clients' complaints in a manner that "Wows" them and causes them to become raving fans? If your agency is like most businesses, probably not much. To understand the impact of handling clients' complaints to "Wow!" them, let's look at word-of-mouth advertising. As the original advertising medium, it's free and comes in two forms, positive and negative. The "up side" to word-of-mouth advertising is that in addition to being free, it's credible and usually carries no hidden agendas. The "down side" is that if a client is unhappy with your agency, you ...