Distinction must be maintained between an insurer’s corporate social responsbility and its fiduciary responsibility

Advances in corporate social responsibility are blurring the lines between the objectives of risk management and the economic role of insurance, according to an article written for The Geneva Association.
One of risk management’s responsibilities is to assess any and all hazards that might jeopardize human life or property, Walter Stahel writes in ‘Risk Management, Insurance and Climate Change,’ published in the November 2009 edition of Risk Management, a Geneva Association Information Newsletter.
Natural hazards are only a challenge for insurance, however, if they threaten insured values such as human life, health or property.
“A major flood in Bangladesh is certainly a natural disaster and a tragedy for the people hit that may have lost all of their belongings, but it is a humanitarian relief problem more than a matter of concern for insurance if no insured values are hit,” Stahel says.
But as insurance companies participate more often in humanitarian relief efforts — which they do as part of their evolving corporate social responsibilities — a moral responsibility should not be confused with a fiduciary responsibility to help.
“Insurance companies will continue to act as concerned corporate citizens in support of relief efforts and providing risk management knowledge and risk engineering services on loss prevention, developing strategies to avoid disasters of the same kind from happening again, and by designing new insurance products…” Stahel writes.
“But this role of insurance as concerned corporate citizen should not be interpreted as an insurer’s duty to help for solidarity reasons, or to pay for natural disasters even if not covered by insurance policies in the strict sense.”