QBE's Grant Clemence on moving CSR forward

In today’s society, every industry, including insurance, needs to think about how it contributes to the bigger picture. Acting responsibly and addressing social and environmental issues, and helping our clients to do the same, is a must.

It’s also something that customers are increasingly demanding. As an example, a 2015 study by US public relations agency Cone Communications and marketing analytics specialists Ebiquity found that 91% of global consumers expect companies to do more than make a profit, with 84% saying they seek out responsible products whenever possible. 

But, while there are plenty of examples of charitable work across the insurance sector, we need to think more ambitiously. By making corporate social responsibility part of our day-to-day activities, we can meet our customers’ expectations and make a meaningful difference to society.

One area where there is an opportunity to do this is the claims fund investment strategy. In order to cover future claims, insurers set aside huge reserves of funds, investing this money to generate a return. To ensure future commitments can be met, insurers adopt a fairly conservative investment strategy, using low-risk assets such as government bonds and blue chip companies.

Possibly because most insurers take a similar investment approach, or it’s just something they don’t talk about, clients pay very little attention to where this money goes. But this is at odds with many businesses’ procurement strategies, where seeking out the greenest or most ethical option is a key criteria for the selection of everything from energy to photocopier paper.

Meeting this customer demand is the thinking behind our Premiums 4 Good initiative. With this, we offer our clients the opportunity to have 25% of their premium invested in projects that help the environment or deliver direct, sustainable benefits to communities.

Rather than simply offer an ethical or environmental fund, our investment committee selects projects that make a difference. Examples include green energy schemes such as solar panels and wind turbines, key worker housing in the UK and a project in Sheffield that helps unemployed teenagers into working and training.

Importantly, these investments must also fit our risk criteria to ensure the funds are available to meet future claims. Our experience shows that it is possible to balance meaningful investments with material returns.

As well as meeting customer demand, at no additional cost or risk to them, it also enables our policyholders to demonstrate their commitment to CSR. We provide them with details of where their Premiums 4 Good money is invested and this information can then be used in their own annual reports and CSR reporting.

This approach is proving popular. In Europe in 2016, around $11.5m (£8.9m) of premiums were allocated to Premiums 4 Good, while globally, in the two years since we launched this initiative, QBE has invested nearly $400m in 18 different projects.

We expect demand to grow in this area and, with the CSR agenda so prominent, it won’t be long before clients, and the government, start asking insurers more about where their reserves are invested.

Rather than waiting to be asked, it’s time for the insurance industry to move the CSR conversation on from philanthropy and make it very much part of business as usual.