The property/casualty insurance sector that already does a lot of good work is interested in doing more and having even more of an impact, according to the lead author of a landmark report on the property/casualty industry’s charitable giving.
“If you look at how the industry is performing today, it’s doing a tremendous amount of giving. It’s doing a tremendous amount of good work,” Peter Hahn, a partner at McKinsey & Co. and author of the charitable giving report, told Insurance Journal. “And what we heard from the industry was that the industry would like to continue to increase the impact of giving and increase its recognition.”
This research arose out of discussions McKinsey had with industry representatives and with the Insurance Industry Charitable Foundation (IICF). “The genesis of this report came from discussions last year about the need within the industry to put some fact base around the state of charitable giving within the p/c industry,” Hahn said.
He said McKinsey felt this was an important topic where it wanted to invest resources to “create the fact base and to share our perspectives and find best practices and ideas on how the industry could increase the impact of its giving and increase its recognition to the fullest.”
How to Give Better
The McKinsey report stresses several themes including the need to combine social and business goals in the individual company’s charitable giving program and the benefits of utilizing skills and capabilities that are unique to the insurance industry.
According to the McKinsey report, more insurance companies could better utilize their unique insurance-specific knowledge and expertise to contribute to society in ways that others cannot. “If you look at the results of the research, 60 percent of the industry felt that disaster relief and preparedness was one of the top three causes for them as a company,” Hahn said.
But disaster relief and preparedness represent a fairly small portion of the industry’s current charitable giving. Hahn said this is one area where industry collaboration could potentially have greater impact and achieve greater recognition.
The report advises companies to manage charitable giving like they do other major business investments. “There are a number of aspects to that,” Hahn said. “They include deep senior management commitment, focusing on a defined number of topics, and committing for the long term.”
Treating charitable giving more like other business investments means applying an effective organizational model, particularly around how a company collaborates with nonprofit organizations, and enforcing rigorous performance management.
Communication, knowing how to communicate what the company is doing to others, is important. Communication plans should be crafted with the audience in mind, according to Hahn. Communicating with the general public should focus on meeting community needs. The beneficiary of a company’s giving is often the best party to lead communication, he said.
In addition to using conventional media, companies can develop strategies to harness the power of social and digital media. Chase, for example, has a Facebook page that allows “friends” to provide input into its corporate giving agenda.
The report also discusses industry collaboration, which can be a means for the industry to have an impact on a larger scale and gain greater recognition. One historical example is the Insurance Institute for Highway Safety, which arose out of three major insurance associations decades ago and has played a key role in promoting highway safety. There are also inspirational examples of insurance companies committing to important causes like education for the long term, sometimes for multiple decades, Hahn said.
While Hahn said industry collaboration is a way for the industry to improve chances for success and recognition on nationwide causes at scale, many companies surveyed said they aren’t interested in collaborating more closely as an industry.