Insuring the ‘culture wars’

Even after State Farm was forced to cut ties with the project in May, criticism continued.

The end of the agreement was welcomed by the Governor of Florida Ron de Santiis and Senator Tom Cotton of Arkansas – according to Cotton “most of the workers of State Farm – like the majority of Americans – “do not want schools to teach five-year-olds. and gender stereotypes”, said Bloomberg.

This drew anger, however, from the LGBTQ Caucus of the Illinois General Assembly, which in a statement called State Farm’s actions “directly against [the insurer’s] which is said to be important.

It was also not well received by the group of LGBTQ + insurance workers, Link USA, whose chairman criticized the carrier for “putting profit on people and leaning on baseless fear”.

Read more: Insurance companies are at risk of putting “social value” on LGBTQ+ issues

And the move was not enough to end the campaign against the virus. Consumers’ Research, whose other targets include Blackrock and American Express, will continue to promote the “dangerous neighbours” campaign.

State Farm isn’t the only one struggling on both sides. US businesses are struggling to keep consumers and other business partners comfortable and secure.

Corporate stakeholders do not only focus on the organization, investors, employees, and customers. They may also include non-governmental organizations and activists, prosecutors, vendors, creditors, and regulators. Everyone can have a very different opinion.

Controversy may always exist, but businesses have had a harder time keeping negative publicity out of the spotlight since the advent of social media, which has also fueled campaigning and social media sharing. Meanwhile, in recent years the US has faced an epidemic, the acceleration of Black Lives Matter, the MeToo movement, LGBTQI + development – from the most visible to Florida’s ‘Don’t Say Gay’ Bill, and the decision of Roe v Wade.

“I think this is the biggest challenge in three years,” said Nir Kossovsky, CEO of Steel City Re, an ESG philanthropy and a well-known Pittsburgh-based insurer.

From the conflicts between owners and insurance leaders – Progressive’s Tricia Griffith gave a slow response to the “wake up” of hiring, while in the UK Aviva CEO Amanda Blanc answered who should wear the “pants” – to a media storm which Allstate saw. with Progressives cutting ties with an insurance association over a sign that mocked Juneteenth, the insurance industry has found itself fighting transparency and progress with the ever-present threat of social and political divisiveness.

Read more: The CEO comes in as Progressive criticized for hiring

Another debate that has plagued the business community is the ‘E’ in ESG, and the growing concern over climate. Opponents of fossil fuel bans have been popular at insurance HQs and annual conferences around the world, while activist investors – such as Green Century Capital Management and As You Sow – have also pushed for more environmentally friendly reforms.

Read more: Lloyd is urging members to attend the AGM online at the risk of protests

Big businesses across the country need to follow through on DE&I and ESG commitments and be seen to live up to their commitments, keeping many stakeholders happy and – most importantly – saving money.

“Increasingly, corporations are finding themselves called – willingly or unwillingly – to participate in many social and political debates,” according to a 2018 report published in the Harvard Law School Forum on Corporate Governance.

And while they may be “accustomed” to consumer-led actions, institutional investors and others are “asking companies to take a public stand on many topics, some of which may be inconsistent with the company’s interests,” the report said.

Attempts to remain “neutral” are also ineffective, it found.

Delta Airlines lost $38 million in taxes amid a “dangerous political push” from the State of Georgia after canceling discounts for members of the National Rifle Association who attended the pro-gun group’s annual conference, in one example.

So how can insurance companies – and big businesses in general – navigate this popular minefield? There is no easy answer, according to Kossovsky. The effects cannot be measured in profit and loss, and any financial problems may take time to manifest. However, the most important thing is planning and preparation.

Read more: Why are reputational issues on the rise?

Kossovsky said: “The real question is, how do we know what our stakeholders are waiting for, and how can we minimize leaving them angry or disappointed by our decision so that the financial consequences of our decisions and actions will not seriously damage the company. , and therefore will not cause a re-invention of our investors?”

Steel City Re refers to controversial cases such as Roe v Wade as “jack in the box issues”. This, according to Kossovsky, is because “they surprise you and almost everyone jumps when something bad happens.”

After the Supreme Court overturned Roe v Wade in June, which sparked fears of abortion bans in some states, some carriers and small businesses assured workers they would expand benefits to pay for travel expenses to access medical care. Others were silent.

It remains to be seen how Roe v Wade will affect the insurance industry, but one business that proved to change, DICK’S Sporting Goods, is now facing a legal challenge in its unique journey. The seller is no stranger to participation; Its 2018 decision to divest from the firearms business and the negative publicity cost it “almost a quarter of a billion dollars”, said CEO Ed Stack. Business Insider.

Read more: Roe v. Wade raises concerns about profitability

The risk profile on ESG topics requires “coordinating and looking at companies,” according to Kossovsky.

“What companies need to do is to establish a representative system, a board of directors, which feeds and informs the organization, so that the company is always aware of the expectations of stakeholders,” said Kossovsky.

Having this information serves as a “defense tool” for both potential litigants and a “public court,” Kossovsky said.

“A company that can point to a reliable, repeatable process can defend its decisions because it can’t be called sloppy and careless,” Kossovsky said.

This, Mr. Kossovsky said, is important under Delaware Law because “decisions made through a formal process are protected under the Delaware Business Decision Act.”

As recently as “a few years ago”, Steel City Re recommends that organizations should not take part in binary options – but when the political and social conflicts have increased, the business has been suspicious of this “half glass” approach. blank or half-filled questions”.

“We [used to say]there are ways to make the question that the glass is twice as big as it should be, and by taking the same place, both sides can find their answer, “he said. “But it has been difficult to say that the glass is twice as big as it is when the stakeholders are waiting for what is happening.”

The only way to deal with the pressure, according to Kossovsky, “is to go through it wisely and wisely” – according to Kossovsky, “guaranteed by insurance.”