Tag Archives: Charitable Giving

Insurance Industry Charitable Giving Nears $600 Million Annually, IICF/McKinsey Study Finds

By Loretta Worters, Vice President, Media Relations, Insurance Information Institute

Millennials – the generation born between 1980 and 2000 – have begun to influence charitable giving.  They prefer to work for companies that are involved in charitable causes, seeking a greater desire to make a social impact through their work, compared with previous generations.  In addition, they tend to share these values on social media.  These are some philanthropic trends in insurance industry Corporate Social Responsibility (CSR), identified in “Charitable Giving in the Insurance Industry,” a report by the Insurance Industry Charitable Foundation (IICF), released in partnership with McKinsey & Company. The report, along with IICF’s 2019 Philanthropic Showcase, highlight each of its Key Partner Company’s charitable endeavors in 2019.

The McKinsey report found that 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.

In addition to the influence of millennials on the types of charitable engagements companies pursue within their communities, the report offers a glimpse of the industry’s philanthropic commitment and highlights opportunities to expand programs and fuel community engagement. Charitable giving in the insurance industry continues to be an important focus. 

Some of the report’s key findings, based upon responses from property and casualty companies and for the first time since 2011 life insurance and wealth management segments of the industry, include:

• The industry’s desire to work toward a single cause has increased to 33 percent in 2019 from 17 percent in 2015.

• The importance of giving within their own communities was evident as about 30 percent of respondents in 2019 prioritize contributions where employees live and work and where significant business is already done.

• Insurers have shifted their charitable focus toward increased volunteering opportunities, recognizing millennials prefer to work with companies directly involved in charitable efforts and activities, rather than those making only monetary donations.

• Measurement of charitable giving has increased, to 41 percent in 2019 from 26 percent in 2015, as more companies use key performance indicators to evaluate the impact of their philanthropy.

For organizations looking to amplify either the impact of their philanthropic efforts or the range of causes, the findings point to a few key opportunities including planning for greater employee engagement, with a special focus on millennials to further employee-focused giving strategies;  to measure the impact of philanthropy to identify and build on charitable successes and refine metrics and giving standards; to rethink roles across the giving organization as CSR leadership and employee-driven engagement become increasingly common and CEOs continue to set broad direction; and finally to consider the value and benefits of a united, collaborative industry approach to CSR.

P/C Insurers and Charitable Giving: A Recap

While many parents are putting the final wrappings on gifts from Santa, we thought we’d take a moment to acknowledge the charitable giving of insurers.

As Insurance Journal reminds us here, 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.

According to a 2015 McKinsey report, an increasing number of insurers are aligning their programs with their business strategy.

While the P/C 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 an earlier study in 2011.

Education funding declined by about half while contributions to health and social services increased by half and contributions to community needs rose by about 70 percent.

The survey also found that while insurers ranked the same three factors for determining the focus of charitable giving at the top of their list in 2014 as in 2011– serving local communities, aligning with business needs and meeting the interests of stakeholders such as employees and customers, the emphasis has shifted.

Some 28 percent of carriers now put local community needs at the top, up from 22 percent in 2011.

And increasing alignment with business needs has seen the biggest shift, with 22 percent now considering this factor most important, up from 14 percent in 2011.

The survey revealed that firms that look for such synergies are more likely to select charitable causes that could lead to opportunities for innovation or building new market knowledge.

The Insurance Journal article cites Bill Ross, CEO of the Insurance Industry Charitable Foundation (IICF):

The more closely you can align charitable giving to your business the greater value generation you will see. That alignment means a lot of things to P/C carriers.

The obvious one is disaster relief but if you look at insurance, the industry is involved with every aspect of life.”

We couldn’t have said it any better.

For information on the insurance industry’s contribution to community development see Impact, the Insurance Information Institute’s online resource.