Insurance giant offers customers chance at impact investing
Insuring your social enterprise? Now you can turn your premiums into impact investments.
One of the world's top 20 insurance companies is offering customers the opportunity for their money to do some good.
QBE's Premiums4Good allows any customer taking out any type of policy to opt to have 25% of their premiums be invested in social infrastructure, environmental initiatives and social impact bonds, globally.
The company offers a wide spectrum of insurance for all kinds of businesses from small firms to multinationals.
After 18 months of operation, QBE have published two impact investment reports relating to the offering. They show the money has gone to initiatives such as helping families struggling with substance abuse in the US and supporting families at risk of having their children taken into care in Australia. It has also been invested in renewable energy and schemes to combat homelessness.
Such a bold move has been taken at a challenging time for the company. In August 2016 half year company profits halved*, with falling bond yields associated with Brexit being blamed.
Why get into impact investing?
The reasons for taking the leap into impact investing are many according to Grant Clemence, director of underwriting at QBE, “It was not a case of can we afford to do this? It was: can we afford not to do it because this is exactly where business as a whole is going and we want to be a part of it.”
Clemence says part of the reason for such an offering is to ensure new impact investment opportunities come to them: “We want to be at the front of the pack doing that, frankly, getting the best choice of social investments.
“Then if someone is thinking of launching some new social investment scheme they will know that QBE has a desire to get into that space. We’re not getting dragged to it late on, we want to lead the way in investing in this way”
It’s certainly true to say that we want customers and others to form a view about us
So it’s not just a marketing initiative then? “It’s certainly true to say that we want customers and others to form a view about us and what sort of company we are by introducing something like this,” says Roger Lowry, head of communication and marketing.
Lowry says that other benefits include promoting good feelings about the company: “We know that employees want to work for a ‘caring’ company, intelligent, thinking about what they do and their place in society and it absolutely plays really strongly into that.”
Building on his earlier comment regarding where the market is going, Clemence also says: “We would anticipate, in time, customers starting to take a great interest in where that money is invested and we want to be proactive in how we do that.”
QBE have seen £70m go into Premiums4Good in the UK to date. The company has around £20bn under investment and Clemence says that a lot of it needs to be in quite safe and secure assets, “But there is an opportunity… to make a significant difference by customers electing to put their money into Premiums4Good type investments.”
Working out a percentage for good
Whilst admitting that there is work to do in terms of Premiums4Good accounting for more of their total investment, Clemence is encouraged by the support from marquee clients.
Phil Clark, director of insurance at Vodafone has commented: “Premiums4Good is a clever and very worthwhile initiative. Why wouldn’t we want to support it? We’d be happy for 50%… 100% of our premiums to be invested this way”
Settling on 25% was partly out of concern for over demand and with one eye on the amount of investible propositions available.
“If it was at 100% we would have struggled to find the investments to match that,” says Clemence. “25% is intended to be something that is meaningful to clients and equally something sustainable in the long term for us, and deliverable.”
Lowry says he had broached this subject with former minister of civil society Rob Wilson and, given the opportunity, will do so with his successor Tracey Crouch.
The greatest impact of social enterprise may yet prove to be not just the benefits it brings stakeholders, but the influence that it is increasingly having on mainstream business. Business that does good? QBE is nailing its flag to the mast.
*QBE's half year results for 2017 were published on 17th August, after publication of this article. The company recorded a 30% increase in profits on the same period last year.
Photo credit: Llywelyn Nys/Unsplash