CSR reporting as a factor of insurance companies’ competitive advantage
Slawomir Bukowski and Marzanna Lament Introduction
Adequate Corporate Social Responsibility (CSR) information policies contribute to improved or enhanced image and may constitute a factor in competitive advantage, influencing the competitive position of an insurance company. This is an underexplored subject, though, analysed chiefly with reference to businesses other than insurance companies. This is corroborated by Ivanisevic and Stojanovic (2015) studying a group of banks in Croatia, Chomvilailuk and Butcher (2010) on the banking sector in Thailand, Douglas et al. (2004) on Irish financial institutions, and Korenik (2011) for banks in the Polish market, among other authors.
This study is designed to determine the impact of socially responsible actions and their presentation as CSR reports on competitive standing of an insurance company, expressed as a growing share in the insurance market.
The following research question is posed in connection with such an objective: does CSR reporting have statistically significant effects on competitive standing of insurance companies in the Polish market?
The following research hypothesis is formulated: socially responsible actions by insurance companies and their presentation as CSR reports affect competitive standing of an insurance company, expressed as a growing share in the insurance market.
In search of answers to the research question and in order to verify the research hypothesis, CSR reporting and shares of insurance companies in the Polish insurance market in 2004-2018 are analysed.
The following methods are employed: review of specialist literature, including critical analysis of empirical results reported by a range of Polish and international authors, and analysis based on econometric modelling. To this end, a balanced panel model is constiucted that addresses the influence of CSR reporting on the competitive position of an insurance company.
Insurance companies’ competitiveness is measured with their share in the insurance market. CSR reporting, efficiency of business measured with return on equity (ROE) and return on assets (ROA), cost levels as measured with the loss ratio, costs of acquisition, and the combined ratio, as well as levels of reinsurance measured with the retention ratio are assumed to influence competitiveness of insurance companies.
Annual data are used for insurance companies in the Polish market in 2004-2018, collected by the Polish Chamber of Insurance (PIU). Compulsory CSR reports are derived from the CSR reported database - Global Reporting Initiative (GRI).
The chapter consists of three principal sections. Literature on CSR reporting by insurance companies is reviewed in the first section. Data and methods are described in the second section. The third section presents results of econometric model estimations and the author’s research results are compared to those reported by other authors.
No results concerning impact of CSR repox-ting on competitive standing of insurance companies and studies on a similar sample have been found in the literature resources.
This study contributes to development of CSR theory and research into Corporate Social Responsibility in insurance companies and determinants of insurance companies’ development.
