Why purpose matters to the insurance industry

The B2B insurance industry wrote more than a quarter of a trillion dollars in net premiums in the US in 2019. In 2020, COVID-19 induced health and economic challenges, while the racial justice movement created a unique and unprecedented time for insurers. They have important decisions to make about what is covered and how to support clients--choices that will either reinforce their innate value to society in terms of recovery and future resilience, or call into question their social license to operate. There are few circumstances in which a clear understanding of purpose – a company’s reason for being that guides business growth and impact on society – could be more important.


According to research from the ANA, Carol Cone ON PURPOSE, and Harris Poll, B2B insurance companies recognize the value of embracing purpose. However, “The B2B Purpose Paradox Report,” also uncovered something surprising: While 9 out of 10 of respondents from the B2B insurance industry said that purpose is important to their business, only 4 out of 10 said purpose is embedded in their business to the point of influencing culture, innovation, operations and their engagement with society. This gap is the purpose paradox.


How are insurance companies responding? Those with purpose have acted with an understanding of the primacy of people amidst this health crisis.


Travelers, the largest US commercial insurer, with a purpose to “help provide peace of mind,” took measures to support its customers, employees, and communities. This includes billing relief, a 15% reduction of premiums, and more than $100 million in accelerated commission payments to agents and brokers. The company also pledged $1 million to support racial justice efforts across the US.


Liberty Mutual, the third largest company in the category, announced a 15% rebate as well as stakeholder supporting initiatives including $15 million to current nonprofit partners to support immediate remote learning, health and training priorities. To address the racial injustice, the insurer donated $1 million to the Equal Justice Initiative (EJI) to fund a fellowship to advance its work and to help change the national dialogue about race.


UnitedHealth Group, which provides healthcare options to employers and individuals, frames its purpose as “creating a more sustainable health care system: one that works better for everyone.” The company focused its $60 million initial commitment on healthcare workers, seniors and vulnerable populations experiencing hunger or homelessness in hard-hit states. In addition to funds for PPE for frontline workers and immediate support, including $5 million for organizations like the National Health Care for the Homeless Council, Feeding America and Meals on Wheels America, The United Health Foundation also provided $1 million the American Nurses Foundation Coronavirus Response Fund to build a virtual support system to advance the resilience of nurses working the front lines going forward.


New York Life, a 175-year old company that helps people “act on their love,” activated its purpose to support the needs of those who will be left behind from victims of COVID-19. New York Life committed $50 million through their foundation to launch the Brave of Heart Fund, which provides for the families, and especially the children, of healthcare workers who lost their lives fighting COVID-19. In addition to dedicating $1 million to NAACP Legal Defense and Educational Fund, Inc. and matching employee donations, CEO Ted Mathas published a letter in which he stated “George Floyd’s senseless death is a societal tragedy—one that could not be more human. And it is one that requires all of us, in our professional and personal lives, to define who we are through words and deeds that reject racism and bias and repel discrimination and hatred.”


State Farm is returning $2 billion to its auto-insurance customers. In less than 10 days, State Farm also transitioned more than 100,000 employees, agents, and agent team members to work from home, procuring 30,000 new telephone headsets to support the effort. The company also made paid administrative leave available to employees who are caring for themselves or household members who tested positive for COVID-19.


These insurers are using purpose as their “north star” to guide their responses. How can your organization do the same? Whether just identifying your purpose or working to more deeply embed it in your business, the following insights can help your organization lead with purpose.

  • Take an all-stakeholder approach: Develop a vision for what is to come and communicate it to all of your stakeholders (employees, suppliers, customers, investors, etc.). Let them know how your purpose is guiding your recovery. Ensure you are providing support for their needs as well as helping them to help others. Be hopeful and humble.

  • Prioritize the welfare of employees: Employees are your most powerful stakeholder and vital to continuity in tumultuous times. Ensure you are providing them with the flexibility, resources and information they need to take care of themselves and their families. Listen carefully, communicate honestly and lead with empathy and compassion.

  • Practice ‘smart generosity’: Be innovative in the application of your company’s resources (cash, personnel, operations, reinvented products/services). Whether it is an immediate urgent issue like hunger or a longer-term recovery and resilience issue such as financing for small business, understand how you can deploy your unique assets to leverage impact. Most importantly ensure you are putting the needs of stakeholders before short-term profits.

The insurance sector sells a safety net for individuals and businesses to enable them to recover from catastrophes if they should unfortunately occur. The systemic shock we are experiencing is testing their promises. By putting people first and using purpose as their guide, leading insurers are demonstrating the sincerity of their promises. Those that do will thrive.