U.S. property/casualty insurers have increased their charitable giving by an average of 15 percent since 2011, to an industry total of $575 million, outpacing inflation and moving closer to what many industry leaders believe the public expects, according to the updated “Charitable Giving in the Property/Casualty Industry” published by McKinsey & Co. in collaboration with the Insurance Industry Charitable Foundation (IICF).
“The rise in charitable giving is very exciting,” said Bill Ross, CEO of IICF. “It’s really positive for our industry.”
While the industry continues to direct almost two-thirds of its giving to three areas — education, health and social services, and community needs — the emphasis has shifted since McKinsey’s 2011 Charitable Giving report.
Education funding has declined by about half, while contributions to health and social services increased by half and contributions to community needs rose by about 70 percent.
“An increasing number of carriers are aligning their programs with their business strategy,” Ross said.
The top three program areas for giving have remained consistent, but the order has shuffled: direct giving to education has fallen by almost 50 percent, while health and social services and community needs are receiving much more attention. And as McKinsey found in its 2011 study, fewer than half of the carriers surveyed measure either the social or business impact of their charitable giving.
“The more closely you can align charitable giving to your business the greater value generation you will see,” Ross said. That alignment means a lot of things to P/C carriers, Ross said. “The obvious one is disaster relief but if you look at insurance, the industry is involved with every aspect of life.”
Most of the companies surveyed prefer to make contributions in communities where their employees live and work, especially near corporate headquarters. Only 16 percent say they do not consider geography when making contribution decisions.
Top executives are also becoming more active in charitable activities, according to McKinsey.
Nearly two in three respondents noted that CEOs are acting as charitable role models, for example, up from only 16 percent in the 2011 study. Well over half of CEOs make specific funding decisions themselves, the report said.
About 90 percent of carrier respondents said that partnering with other stakeholders can help increase the value of contributions, but not many are willing to join forces with their competitors. Fewer than one in seven are inclined to partner with other property/casualty carriers or participate in joint industry efforts, the McKinsey report found.
“Besides doing the right thing and a good thing for the community, can you find a strategy for what you want to accomplish?” Ross asked. He and others seem to think so.
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