Ranked by consumers as 'the most ethical brand' in the UK, Co-operative Insurance is a worthy winner of the Corporate Social Responsibility award. Ant Gould takes a look at a number of the company's initiatives.
The winner of this year's British Insurance Awards Corporate Social Responsibility award was described by one judge as being the most socially conscious insurer in the country, with another adding that its whole business strategy and philosophy are centred on its CSR objectives.
Co-operative Insurance has made a number of major strides in the past 18 months, building on the strong ethical stance of its parent Co-operative Financial Services. For example, it remains 'beyond carbon neutral'; offsetting 110% of its remaining carbon dioxide emissions as a way of beginning to address its carbon legacy.
Along this theme the insurer introduced carbon offset as a standard feature of its new car insurance policies in 2008 and sponsored the 'Sexy Green Car Show' at The Eden Project in Cornwall.
Throughout 2008, Co-operative Insurance also operated to a set of sound sourcing practices. It demonstrated its activism as an institutional investor; voting on 8834 UK resolutions in 2007, of which 1053 were votes in opposition to management.
Last year, it developed a customer-led definition of a fair pricing strategy. Price optimisation is a common tool in general insurance but Co-operative Insurance's policy sacrifices profit maximisation in favour of balance. Under this approach it says it: will not seek to make excessive profits from any group of customers; will not write business at prices that destroy value for existing customers; and targets a lower return than its competitors.
The insurer also created a panel of 3500 customers who deliver weekly feedback on the business. Views were sought on subjects as diverse as membership, fairness and its customer promise. In 2008, it also appointed a customer to its Retail Executive Committee, who has access to every executive paper giving a customer perspective on all matters.
The core of Co-operative Insurance's CSR strategy is to make a small impact on the environment and a big contribution to society. It is, therefore, no surprise that it is the leader in the Business in the Community Corporate Responsibility Index and was recognised as its 'Company of the Year' in 2008, with a top three ranking in the presswatch scores within the sector.
Co-operative Insurance is guided to a great extent by the views of its customers through its ethical policy consultations. It has a programme of community investment that embraces everything from the financial education of prisoners to the provision of kits to grassroots football.
It also actively campaigns for change and encourages customers to do the same through its Customers Who Care programme. An independent study on business ethics conducted last year found that consumers ranked the Co-operative as 'the most ethical brand' in the UK.
The final measure of whether a CSR policy is really in line with a business strategy is the bottom line and Co-operative Insurance reported a solid financial result. It achieved its target return on capital, witnessed the first growth of its motor insurance customer base in five years along with improved retention, halted a 15 year decline in its home insurance book and overall saw new business sales up by a third on 2007.
However, a sound CSR policy is not just about customers, suppliers and profits" it is also about internal staff and the company saw a significant increase in internal engagement compared to 2007.
Through a complete re-engineering of its business model and operations over the last three years the company has succeeded in marrying a competitive proposition and a strong heritage, which together create a business which has increased profit and customer satisfaction at a time when the consumer is struggling to trust most financial institutions.
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