Corporate social responsibility in the insurance industry is becoming more professionalized and responsive to employees’ interests.
The goal of this research was to identify trends in charitable giving and to highlight opportunities for the industry to achieve greater impact through giving. In 2019, the survey was expanded to include responses from life insurance and wealth-management companies for the first time.
In the survey of 22 companies, including insurers and brokers that represented over $200 billion in premiums, six results stood out:
- Industry support for collaborating to further a single cause has grown. Respondents’ support for industry collaboration on a single cause increased significantly (33 percent expressed support in 2019 compared to 17 percent in 2015). Those who didn’t explicitly support the industry working on a single cause expressed openness to collaboration for “causes that are business related.”
- The level of giving has remained consistent, with a focus on education, health and social services, and community. One key factor behind this finding is industry consolidation, which has lowered the number of companies engaged in corporate giving. Insurers are also orienting philanthropy more around volunteerism. As a result, industry-wide giving has held steady between $560 million and $600 million in cash, grants, and other donations since 2015.
- Companies more evenly value a balance of business needs, stakeholder interests, and community needs for their charitable programs. This year, 22 percent of respondents named each of these three factors as their top consideration. This alignment of business, stakeholder, and community needs facilitates a strategic approach to charitable giving. Specifically, insurers can merge their giving with their core business offerings, as when a P&C provider works on disaster relief. What’s more, respondents seem to plan their giving: 95 percent of respondents set their contribution budget periodically (often annually), and 87 percent give to preselected causes and charities.
- Measurement of the impact of charitable giving has increased. The share of respondents that use key performance indicators to evaluate the benefits of their philanthropic activities has increased from 26 percent in 2014 to 41 percent in 2019. More respondents are also interested in engaging third parties to measure the impact of their philanthropy.
- Millennials’ preferences have begun to influence charitable giving. Millennials prefer to work for companies that are involved in charitable causes, indicating a greater desire to make a social impact through their work compared with previous generations1. In addition, their tendency to share these values on social media, including by documenting volunteer work, may be factor in their preference for volunteering (over monetary giving).
- The CEO’s role in charitable giving is becoming less hands-on. Instead, the CEO is now focused on setting direction for giving programs and communicating efforts with internal stakeholders. Meanwhile, the leaders of charitable giving, such as chief giving officers and corporate foundation heads, are now the primary setters of strategy.
Although charitable giving within insurance has remained steady since 2015, a greater share of respondents says that the industry’s charitable giving now meets the public’s expectations. Cash donations or grants continue to make up a bulk of giving, representing 65 percent of total funding. Among respondents who participated in both 2015 and 2019 surveys, company-organized employee volunteering increased from 0 percent in 2015 to 17 percent in 2019.
Health and social services, community, and education have continued to be the top causes for giving. Within these top three areas, contribution to community causes has increased (from 11 percent to 22 percent), while contribution to education has decreased (from 34 percent to 22 percent), and health or social services contribution has remained consistent.
Geographically, about 30 percent of respondents prioritize giving to communities where employees live and work and where significant business is already done. While the top three factors in determining focus of corporate giving have not changed since 2011, respondents’ focus on alignment toward business needs is up from 14 percent to 22 percent.
Goals for giving have also shifted from improving customer relations to building employee and leadership capabilities and skills—likely a reflection of millennial employees’ values.
Following millennial employees’ lead
Insurers are responding to social trends that center on personal passion and volunteerism, ideas championed by many millennials. Indeed, respondents have noted millennial preferences, such as a desire to work for companies that are involved in charitable causes, to support for philanthropic causes that relate to personal interests, and to volunteer instead of making monetary contributions.
Another sign of millennials employees’ influence could be the shift from improving customer relations toward goals related to building employee and leadership capabilities. Aside from making a social impact, 41 percent of respondents cited enhancing their corporate reputation or brand as the most important outcome of philanthropy.
Decision making and measurement
The number of companies that measure the benefits of their philanthropic activities has steadily increased. In 2019, 41 percent of respondents stated that they use metrics or key performance indicators to assess the impact of charitable giving, compared with 26 percent of respondents who said so in the 2015 survey (exhibit).
A growing share of insurers also mentioned commissioning external assessments to track the outcome of their giving efforts (9 percent of respondents in 2019, compared with none in 2011). At the same time, the share of insurers that do not track or measure social impact decreased from 43 percent in 2015 to 16 percent in 2019. This increased monitoring is likely driven by a growing awareness of the importance of transparency over charitable outcomes—73 percent of respondents think it’s important to communicate charitable giving efforts to the public.
A notable trend is the decrease in CEO’s involvement in giving since 2011. Specifically, the CEO is no longer heavily involved in making specific funding decisions and instead focuses on setting the overall direction of charitable efforts.
In 2019, 68 percent of respondents said that CEOs set the overall direction and 18 percent said that they make specific funding decisions. These figures are a near-reversal from 2015, when 48 percent of respondents stated that their CEOs set the overall direction and 61 percent said the CEO made specific funding decisions. This shift in the CEO’s role away from direct involvement and toward one of overall guidance points to the evolving skills in insurers’ CSR leadership. Indeed, CSR and corporate foundation teams have assumed a more strategic orientation, with increasingly skilled staff and leaders at the helm.
Opportunities to achieve greater impact
For organizations looking to amplify either the impact of their philanthropic efforts or the range of causes, our findings point to a few key opportunities:
- Plan for greater employee engagement, with a special focus on millennials, to further employee-focused giving strategies.
- Measure the impact of philanthropy to identify and build on charitable successes and refine metrics and giving standards.
- Rethink roles across the giving organization as CSR leadership and employee-driven engagement become increasingly common and CEOs continue to set broad direction.
- Consider the value and benefits of a united, collaborative industry approach to CSR.
- Align CSR with business objectives to create greater value for all stakeholders to support common causes.
Although total industry charitable giving has been consistent, the care and consideration devoted to CSR—which insurers increasingly treat as an important function—has increased. Indeed, charitable-giving leaders seem to hold increasing decision-making power, which allows insurers to be more responsive to stakeholder needs such as volunteer opportunities for employees and industry collaboration on philanthropic initiatives. Expanding efforts to track and measure the effects of philanthropy will help CSR leaders more easily identify areas of focus and highlight successes. These successes—backed by data and institutional resources—could light the way for the next change-making initiative that benefits the industry, employees, and (most importantly) communities.