Luxury brands risk management

Our luxury brand and high-end retail clients operate in a fast-moving, complex and competitive business environment.

We understand that your customers require speed and convenience. Likewise, they have discerning tastes with a keen eye for the origin or source of your luxury product. To meet customer demands and continue growing, luxury brands are investing in complex supply chains, bespoke delivery and payment solutions and new technologies.

Brands also use technology like social media to build and support emotional investment, which is reflected in the many and diverse partnerships with third parties that help to define, develop, promote and support the brand.

While the risk profile of luxury brands from fashion and accessories to hard luxury may share many common features, we understand that your brand’s risks are unique. Luxury is an important and growing sector in which your risk exposures are tied to your unique business model and culture.

That's why we are committed to understanding and supporting your luxury brand’s culture, business model and operational objectives with our vast network of risk and people solutions.

Luxury brands face an evolving risk landscape

Corporate risk priorities have shifted to include more than just physical assets. Risk management now includes people risks, such as talent retention, and intangible assets, including intellectual property.

The growth of digitalization has highlighted the need for strong data protection. Likewise, the prevalence of social media has underlined the importance of reputation management.

The risk map for luxury brands is evolving. Along with the more traditional physical loss and damage exposures, corporate risks may also include:

• Failure to achieve environmental or sustainability targets
• The ability to attract and retain key talent
• Heightened exposure to global terrorism, civil commotion and political risk due to increased geopolitical instability
• New and diverse partnerships, joint ventures, projects and product lines, which expand business opportunities but create new risk exposures
• Reputational risk, which is especially acute in an industry dependent on social media and partnerships
• Cyber risk, especially in terms of customer and other sensitive data
• Crime, including the rise in organized theft, digital theft and social engineering
• Supply chain transparency and end-to-end ethical integrity
• Natural catastrophe risk, resulting in loss of assets or contingent business interruption
• Supply chain vulnerabilities in an increasingly global ecosystem
• Vulnerability to counterfeiters and loss or breach of intellectual property

At WTW, we combine years of global luxury brand experience with wide ranging risk management expertise to address the distinct and specific needs of your luxury brand to help you navigate the changing risk landscape.

How we can help your luxury brand better manage risk

Our globally integrated luxury brands team provides you with expertise from all areas of client servicing, including

• Claims management
• Captive management
• Insurance program design and placement with markets worldwide
• Actuarial analysis
• Alternative risk transfer
• Mergers and acquisitions
• Employee benefits

We also provide day-to-day servicing by a team that understands the luxury sector. We can work with you to provide bespoke policy wording aligned to your unique luxury risk profile and a risk program that supports and responds to luxury business and operational needs.

Our clients are leaders in high jewelry and fashion, watches and leather goods, cosmetics and fragrance, luxury automotive, fine art and online luxury sale and distribution.

We can provide advice, consultancy and risk transfer options in the following key areas:

• Property damage and business interruption
• Marine cargo
• Jewelers block
• Fine art and specie
• Environmental, social and governance (ESG) commitments
• Climate and sustainability
• Geopolitical and supply chain risks
• Cyber risk
• Credit risk
• D&O and crime exposures
• Reputational risk
• Terrorism and political risk
• Mergers and acquisitions
• Compensation advisory
• Employee listening
• Job architecture
• People risks
• Employee benefits
• Product recall
• Emerging risks and trends relative to your business model

WTW stats as of August 2023

Why choose WTW?

We use an analytical approach

We can provide you with the data analytics behind the decisions you make on insurance program design and cover requirements. This supports good governance, giving you a clear audit trail of decisions and enables you to present recommendations to your board and internal stakeholders from an evidenced, informed and data-driven position.

At the most basic level, we can help you decide whether to transfer or retain risk. By integrating our analytical and broking functions, we take into account current market conditions to ensure we achieve a competitive deal for you, providing strong value for money and fit-for-purpose coverage.

A proven model for global program risk management

You will benefit from our tried-and-tested processes and structures that ensure our clients receive the same high-level of quality of service anywhere in the world. Our local offices are fully supported by our global infrastructure to meet all your needs and objectives.

Our connected team brings the best of WTW to serve you

We have an integrated team approach. We connect experts in your business, industry professionals and product specialists with key talent from across WTW in a flexible team approach. This enables your core team to work cohesively across boundaries and profit centers, to bring the best of our intellectual capital to you.

Our claims service proposition

At WTW, we pride ourselves on our ability to protect your interests in the management and handling of claims.

We recognize the importance of an efficient claims service in terms of brand protection and customer care. We aim to prevent claims before they happen. And if they do, draw lessons from them to better prepare for similar losses in the future.

Case studies

Optimizing risk retention and transfer for a multinational luxury group

Client need

Our longstanding client, a large multinational luxury group specializing in one product wanted a streamlined and simplified insurance placement that would allow it to substantially increase captive involvement.

What we delivered

We engineered a new program design and successfully retained a broad form of wording. We also worked closely with the insurer to dramatically reduce information requirements, facilitated by a very large deductible, and to ensure full compliance in all territories. Fees reflected the placing costs and anticipated ongoing servicing costs of the account.

The value to our client

The client appreciated that we fully understood their objectives and had the technical ability to deliver a simplified placement and cost savings while retaining security of cover. The client also relied on our global compliance knowledge and benefitted from specially protected password folders and encrypted emails to protect confidentiality.

Improving the insurance program scope, policy wording and protocols

Client need

A luxury goods retailer asked us to undertake a technical audit of a property damage business interruption (PDBI) and inventory program placed in Lloyd's market by another broker.

What we delivered

We conducted an in-depth assessment of the company, the business, the exposures and objectives. These were risk mapped against the coverage in place, identifying several gaps and omissions. A full remarketing enabled us to conduct a full cost benefit analysis for the company, resulting in a recommendation to retain the program structure in a much-improved format.

The value to our client

We helped the client by negotiating bespoke wording to reflect actual exposure, arrive at a simplified claims process and overhaul protocols to ensure that the client further benefitted from complete cost transparency.

The luxury goods retailer came to us mid-term due seeking our expertise and credibility in this area. We were able to significantly improve upon the client’s existing arrangements.

Please note these case studies are for illustrative purposes and the outcomes may vary from client to client, depending on their individual needs and exposures.