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Corporate social reporting and human

resource disclosures: experiences from

insurance companies in India
Sudhir C. Das

Sudhir C. Das is Associate Abstract

Professor at the Faculty of Purpose – The purpose of this study is to examine the extent to which Indian insurance companies have
Commerce, Banaras Hindu adapted socially responsible reporting practices, HR disclosures and also to identify areas of corporate
University, Varanasi, India. social reporting and HR disclosures.
Design/methodology/approach – The study adopts longitudinal design and has analyzed qualitative
data by using content analysis in 26 insurance companies in India disclosed in annual reports. The
paper focuses on annual reports of Indian insurance companies starting from the financial year
2002-2003 to 2009-2010, which are analyzed with regard to the nature of their human resource
disclosures and social reporting. Finally, a test of legitimacy theory is then conducted.
Findings – The study found that the non-life insurance companies disclosed significantly less social
information than life insurance companies. The study also reveals that public life insurers disclosed
significantly more social information than the other life insurance companies. On the other hand, a paired
difference t-test shows private general insurance companies disclose more social information as the
difference significant.
Research limitations/implications – The study has ignored longitudinal variations and the sample
organizations comprised 26 government and private insurance organizations, restricting
generalizations to the companies examined in the study.
Practical implications – The study recommends that a checklist of disclosures should be developed
jointly by the Insurance Regulatory and Development Authority (IRDA), the Institute of Chartered
Accountants of India (ICAI), and the Securities and Exchange Board of India (SEBI).
Originality/value – The study, while providing valuable insights, highlights the dearth of research of
corporate social reporting in emerging economies and opens up many avenues for further research.
Keywords Corporate social reporting, HR disclosures, IRDA, Human resource development,
Insurance companies, Insurers, Human resource management, India
Paper type Research paper

1. Introduction
Now days, the community development, environmental and social management is an
integral part of business management for the corporate world. Creation of wealth through
business and sustaining the success depends not only how effectively organisations
manage the environmental and social issues, but how stakeholders, the people who are
interested in an organisation perceive their role as a responsible business organisation.
Apart from environmental and social reporting, in the recent years, all over the world, there
has been increasing demand for transparency of operations with respect to HR reporting
i.e. training and development, pay and benefits, participation and staff development,
security in employment, equal opportunities and work life balance, etc. large or small, in
addition to its financial performance. Thus, social reporting and HR disclosures are a tool for
extending a broad dialogue with stakeholders, those who are interested in the organisations.
Received 30 June 2011
Revised 12 October 2011
It can be designed to suit organisational needs and it can be made to focus on what
Accepted 28 October 2011 shareholders are looking for. Further, pressure from public interest groups, mandatory social

DOI 10.1108/17471111311307796 VOL. 9 NO. 1 2013, pp. 19-32, Q Emerald Group Publishing Limited, ISSN 1747-1117 j SOCIAL RESPONSIBILITY JOURNAL j PAGE 19
disclosure requirements and management’s motivation to improve the firm’s image more and
more corporations of developed countries are disclosing social information in some form or
another. The trend has also started in developing countries like India. Will all firms disclose
social information regularly? An answer to this question will either depend on the mandatory
requirements or on the demand for social information by investors and other financial
statement users. Until disclosure of social information becomes mandatory, firms would be
encouraged to disclose this information only if the users of annual statements demand this
information and management is convinced that such a disclosure would be in their best
interest. The objectives for corporate social reporting can be derived from the rationale for
corporate social responsibility, which is supported by the following two arguments: social
contact argument and quality of life argument.

1.1 Objective of the study

Although CSR has been the subject of substantial academic research for more than three
decade, the CSR literature is dominated by empirical studies in the industrialized countries
of Western Europe, the USA, and Australia. International comparative studies of CSR have
focused on analysis of the differences and similarities of CSR practices in these countries
only (e.g. Ernst and Ernst, 1978; Guthrie and Parker, 1990). It is dangerous to generalise the
results of these studies to developing countries as the stage of economic development is
likely to be an important factor affecting CSR practices. Moreover, cultural and national
differences are likely to affect CSR practices in particular (Mathews, 1993). The main
shortcoming of existing studies is that most of the studies are cross-sectional in nature.
Although some improvements have been made, but still there is a relative paucity of
empirical studies on CSR practices in developing countries and India in particular. Thus it is
not possible to trace the development of CSR practices in India by reviewing the literature
over time. Keeping in view the previous imbalances, the study has been conducted for the
following purposes:
1. To explore the extent to which the Indian insurance companies have adapted socially
responsible reporting practices.
2. To examine areas of corporate social reporting and HR disclosures.

1.2 Research methodology

The following steps were carried out to accomplish the aforesaid objectives. First, the
frequency of disclosure of corporate social reporting practices were examined by means of
Content Analysis in 26 insurance companies in India disclosed in annual reports. Secondly,
the interface between HR and Corporate Social Disclosures were discussed on the basis of
Chairman’s statement description of operations of each annual report. The paper focuses on
annual reports of Indian insurance companies starting from the financial year 2002-2003 to
2009-2010, which are analysed with regard to the nature of their human resource
disclosures, environmental, product/services and community development. Finally, the
intended outcomes were analysed using Legitimation theory.
At end-August 2010, there were 47 insurance companies operating in India; of which 23 were
in the life insurance business and the remaining 24 were in the general insurance business.
In addition GIC is the national insurer. Of the 48 companies presently in operations, eight are
in the public sector: two specialized insurers, namely Export Credit Guarantee Corporation
Ltd., (ECGC) and Agriculture Insurance Company of India (AIC), one in life insurance, four in
general insurance and one reinsurance. The remaining 40 companies are in the private
sector (Insurance Regulatory and Development Authority, 2010). The sample annual reports
have been selected randomly according to the growth in the number of insurance players
(see Table I) and those who have started their operation till the financial year 2004-2005. Out
of 48 insurance companies operating in India, the scholar have examined 26 annual reports
of which 14 are life and 12 are non-life insurance companies (see Table II). A total of
129 annual reports were examined. It was found that 07 of the 26 companies did not have
any social responsibility reporting throughout the whole period. Only the 19 companies were
included for further analysis (see Table II).

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Table I Growth in the number of insurance players
Insurers 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Life_Public 1 1 1 1 1 1 1 1 1 1 1
Life_Private 3 10 12 12 13 13 15 15 21 21 22
A. Total Life 4 11 13 13 14 14 16 16 22 22 23
Non-Life Public 4 4 5 6 6 6 6 6 6 6 6
Non-Life_Private 3 6 8 8 8 8 9 10 15 15 17
Reinsurer 1 1 1 1 1 1 1 1 1 1 1
B. Total Non_Life 8 11 14 15 15 15 16 17 22 22 24
Total (A þ B) 12 22 27 28 29 29 32 33 44 44 47

Sources: Compiled from IRDA annual reports

Table II Number of companies disclosing social responsibility information

Life Non-life
Sample companies State owned Private State Private owned Total

Total number of companies 01 13 04 08 26

Number of companies with disclosure 01 08 04 06 19

1.2 (A) Content analysis: It is a method of codifying the text or content of a piece of writing
into various groups or categories depending on selected criteria (Weber, 1988). The
technique has been widely used in determining the extent and nature of corporate social
reporting (Gray et al., 1995). Various approaches can be taken to analyse annual reports in
order to reveal the presence and extent of CSR orientation (Wolfe, 1991). The literature
generally follows one of two paths; the number of disclosures or amount of disclosures.
Several authors have focused on determining the volume of disclosure with regard to
determined categories, using words, sentences or proportion of pages as a unit of analysis
(Adams et al., 1995). The aim of this research is to use the simplest form and perhaps as
such the most reliable form of content analysis. Although the study measures the extent of
the disclosures, it aims at establishing the presence or absence of certain themes and
indicators in each selected units.
Content analysis was conducted on the chairman’s statement and the description of
operations of each annual report; that is, the whole report, except the financial statements,
graphs, diagrams and photographs, was a subject to coding. The unit of analysis was a
sentence, which ended in a period or a question mark. One advantage of this method is that
is that the number of sentences can be counted very preciously. The sentences were
classified according to their manifest meaning (Janis, 1965).
1.2 (B) Legitimacy theory: Legitimacy theory postulates that corporate disclosure reacts to
environmental factors and that disclosures legitimize actions (Preston and Post, 1975;
Hogner, 1982; Lehman, 1983; Lindblom, 1983). Legitimacy Theory based on the notion that
business operates in society via a social contact where it agrees to perform various socially
desired actions in return for approval of its objectives, other rewards and its ultimate survival.
It therefore needs to disclose enough social information for society to assess whether it is a
good corporate citizen. In legitimating its action via disclosure, the corporation hopes
ultimately to justify its continued existence (Lehman, 1983). This theory is largely reactive in
that it suggests that organisations aim to produce congruence between the social values
inherent in their activities and social norms (Lindblom, 1983).
Legitimacy theory emphasis that corporate management will react to community
expectations (Deegan et al., 2002; Patten, 1992) and human resource management
(Campbell, 2000; Deegan et al., 2002). The insurance companies do not produce harmful
products nor do they use processes that are harmful to the society. The insurance industry in
India handles social responsibilities through means a wider spread of insurance cover,

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devising and implementing special schemes for the weaker sections, and titling its
investments in favour of social development. Both life and general insurance companies
implement specially designed schemes in this behalf. The management of the insurance
firms may legitimize their existence by reporting on the positive actions taken by them.

1.3 Literature review

Corporate social reporting (CSR) is ‘‘the process of communicating the social and
environmental effects of organisations’ economic actions to particular interest groups within
society and to society at large’’ (Gray et al., 1987). Similarly, Perks (1983) defined corporate
social reporting as the disclosure of those cost and benefits that may or may not be quantifiable
in money terms arising from economic activities and substantially borne by the community at
large or other stakeholders. Low et al. (1985) analysed the 1983 annual reports of 80 publicly
listed companies in Singapore. The author has tried to propose such a framework, which
consists of a two part disclosure-a descriptive statement and a quantitative report. The authors
concluded that social accounting in Singapore was in its infancy. Foo and Tan’s (1988) study
covered 299 of the 305 Malaysian and Singapore companies listed on the Stock Exchange of
Singapore as at the end of 1985. The incidence of CSR in Singapore companies was higher
than in Malaysian companies, Andrew et al. (1989) studied 119 annual reports of publicly listed
companies in Malaysia and Singapore for the year ending December 1983. It was found that a
higher proportion of large and medium sized companies disclosed social information
compared with the small companies. Tortman (1979) found an increased incident of disclosure,
from 28 companies in 1976, to 48 in 1972 and 69 in 1977 in the USA. Kelly (1979) examined
selected social responsibility disclosures from the annual reports of 50 selected Australian
companies over the period 1969-1978. These results also confirm Tortman’s findings of
increased disclosure over the time period. Robertson (1977) in New Zealand found that of the
largest 100 companies (based on paid up capital), 54 made some sort of social disclosure
(ranging from major to very Minor).
Roberts (1991) conducted a survey of a sample of 110 companies from five of the largest
mainland European countries and found that 68 per cent of them provided at least one item
of environmental information in their reports. Chiong et al. (1993) examined the 1990 annual
reports of a sample of 51 Singapore incorporated companies listed on the Singapore Stock
Exchange as at 31 December 1990. They found that 48 per cent of the companies disclosed
social information in 1990. Tsang (1998), comprehensively studies the banking, food and
beverages, and hotel industries of Singapore and Presented trends in social disclosures by
17 companies of these industries from 1986 to 1995. The study was concluded with remarks
that in Singapore where there is a huge number of multinationals, proper guidelines should
be formulated within the accounting profession or by relevant public bodies.
Two empirical studies were made – one by the American Accounting Association (AAA)
Committee on Accounting for Social Performance in 1975 and the other by the National
Association of Accountants (NAA) Committee on Accounting for Corporate Social Performance
in 1977 in the areas of social measurement and reporting. The NAA (Association for accountants
in industrial sectors) defined the Corporate Social Performance as follows:
The term corporate social performance reflects the impact of a corporation’s activities on society.
This embodies the performance of its economic functions and other actions taken to contribute to
the quality of life. This activity may extend beyond meeting the letter of the law, the measure of
completion or the requirement of contracts (Porwal, 1993).

The committee has identified four major areas of Corporate Social Performance:
1. Community development: this includes socially oriented activities that are primarily of
benefit to the general public, e.g. general corporate philanthropy, financing of health
services, community planning and improvement.
2. Human resource: this area includes social performance directed towards the well being
of employees, e.g. improvement of employment practices, training and development
programmes, working conditions, promotion policies and provision for job enrichment
schemes and employee benefits.

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3. Product or service contribution: this includes consumerism, product quality, warranty
provision and product safety.
4. Physical resources and environmental contribution: activities directed towards alleviating
or preventing environmental deterioration, e.g. air, water, noise pollution, conservation of
scarce resource and the disposal of solid waste are under this area.
The American Accounting Association (1975), in the report of the Committee on Social
Costs, suggested that three levels of measurement may be involved in the development of
social accounting (Mathews, 1994). These are:
B Level I where the activity is identified and described;
B Level II where the activity is measured using non-monetary units; and
B Level III where attempts are made to value the effects of discharges.
Very few studies were conducted in India with regard to corporate social reporting. Singh
and Ahuja (1983) conducted the first study in India on CSR of 40 Indian public sector
companies for the years 1975/1976 and found that 40 percent of the companies disclosed
more than 30 percent of total disclosure items included in their survey. Hedge et al. (1997)
conducted a case study of the Steel Authority of India Ltd (SAIL), a public sector company.
They found that SAIL published a Social Income Statement and a Social Balance Sheet to
measure the social benefits to employees, public and the community and the cost involved.
Raman (2006) conducted a study using content analysis technique to examine the
Chairman’s message section in the annual reports of the top 50 companies in India to identify
the extent and nature of social reporting. This study concluded that the Indian companies
placed emphasis on product improvements and development of human resources.
Community development issues were given relatively less space in the chairman’s
messages. The latest study of CSR practices in India was conducted by Murphy (2008). The
study examines the corporate social reporting practices and the motivations behind such
practices of the top 16 software firms in India. When findings were analyzed using
legitimation strategies, the results indicate that firms use dual strategies in reporting their
human resource and social relations to legitimize their activities to stakeholders.
Apart from the previous studies, there are several other studies has been conducted in various
countries such as Portugal, the UK, Malaysia, Cyprus and Canada (Abreu et al., 2005; Jones
et al., 2005; Vallee, 2005) and different industry sectors such as finance industry, banking
sector, hospitality industry and petroleum industry (Goldreyer and Diltz, 1999; Longo et al.,
2005). Four major areas of CSR identified by the NAA committee are human resources,
community development, product or services contribution and environmental activities. All four
major areas of corporate social performance are important, in analysizing corporate social
activities. Since the insurance industry in India handles social responsibilities through means a
wider spread of insurance cover, devising and implementing special schemes for the weaker
sections, and titling its investments in favour of social development, hence this study has
focused on community development, product or services (social investment), environmental
activities and human resources areas only.

2. Indian insurance industry: key issues and outlook

Insurance is one major sector which has been on ascent since the revival of Indian economy.
Taking into account the huge population and growing per capita income besides several other
driving factors, a huge opportunity is in store for the insurance companies in India. Nearly
80 per cent of Indian population is without life insurance covering while health insurance and
non-life insurance continues to be below international standards (India Law Offices, 2008). And
this part of the population is also subjected to weak social security and pension systems with
hardly any old age income security. Insurance in India is primarily used as a means to improve
personal finances and for income tax planning. There is a tendency to invest in properties and
gold followed by bank deposits with a slight investment in Stocks and shares. This in itself is an
indicator that growth potential for the insurance sector is immense. It’s a business growing at

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the rate of 15-20 per cent per annum and presently is of the order of $68 billion (Insurance
Regulatory and Development Authority, 2010).

2.1 Growth dynamics

In 1999, various reforms were suggested in the insurance industry in India. This has
changed a lot of things for the insurance companies in India. In 2000, Indian
insurance market size was $21.71 billion. Between 2000 and 2010, it had an increase of
199.26 per cent and reached $64.97 billion. Between 2000 and 2010, total premiums
maintained CAGR of 24.6 per cent. It was one of the most consistent growth patterns have
noticed in any other emerging economies in Asian as well as Global markets. The life
insurance sector grew at an impressive CAGR of 25.8 per cent between FY02 and FY10.The
number of policies issued increased at a CAGR of 12.3 per cent during this period. This
growth is mainly attributed to the improving standard of living, rising disposable income and
literacy in addition to insurance awareness among the people. The non-life insurance sector
grew at a CAGR of 17.6 per cent between FY02 and FY10. The intense competition following
de-tariffication and pricing deregulation (initiated in FY07) resulted in the growth momentum
slowing down in the sector (Ernest and Young, 2010). The general insurance (non-life)
segment, on the other hand, witnessed growth due to increase in automobile sales, which, in
turn, fuelled motor insurances, and the awareness regarding non-life insurance plans, like
health insurance (Research and Markets, 2010). A growing middle class segment, rising
incomes, increasing awareness of insurance, as well as investments and infrastructure
spending, has laid a strong foundation for insurance services in India. The impressive
growth in life insurance, the dominating segment, led to an overall growth of the Indian
insurance industry.

2.2 Major growth drivers

B growing economy and purchasing power;
B favorable government and regulatory initiatives;
B de-tariffication in the non-life segment;
B reduction the number of years after which companies can raise capital via initial
public offering from ten years to five years;
B increasing the upper limit in FDI from 26 per cent at present to 49 per cent;
B detailed guidelines are being formulated on IPO and M&A;
B a data warehouse is being set up to monitor settlement of insurance claims;
B launching innovative and customized products;
B rising demand for auto insurance with increasing passenger car loans; and
B emergence of new distribution channels such as banc assurance, brokers, and
e-channels with enhanced reach.
The potential and performance of the insurance sector is universally assessed with
reference to two parameters, viz. Insurance Penetration and Insurance Density. Insurance
penetration is defined as the ratio of premium underwritten in a given year to the gross
domestic product (GDP). Insurance density is defined as the ratio of premium underwritten
in a given year to the total population (measured in USD for convenience of comparison).
The insurance penetration was 2.32 per cent (Life 1.77 per cent and Non life 0.55 per cent)
in the year 2000 when the sector was opened up for private sector. It had increased to
5.20 per cent in 2009 (Life: 4.60 per cent and Non life: 0.6 per cent). The insurance density
stood at USD 54.3 in 2009 (Life USD 47.7 and Non-life USD 6.7) from USD 9.9 in 2000 (Life
USD 7.6 and Non-life USD 2.3) (see Tables III and IV). Despite of that, the country still
remains scarcely penetrated and low density as compared to other developed and
developing economies.

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Table III Non life insurance growth matrix
Insurers 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

Non-Life_ Public (INR) 11,917.59 13,520.44 14,284.65 14,948.82 15,976.44 17,283.45 17,813.71 19,107.31 20,643.45
Growth_ Matrix (in per cent) (13.59) (13.45) (5.65) (4.65) (6.87) (8.18) (3.07) (7.26) (8.03)
Market_ Share (in per cent) 96 91 86 81 75 67 62 61 60
Non-Life_ Private (INR) 467.65 1,349.80 2,257.83 3,507.62 5,362.66 8,646.57 10,991.89 12,321.09 13,977.00
Growth_ Matrix (in per cent) (6,453.98) (188.64) (67.27) (55.35) (52.89) (61.24) (27.12) (12.090 (13.43)
Total_Non Life (INR) 12,385.24 14,870.25 16,542.49 18,456.45 21,339.10 25,930.02 28,805.60 31,428.40 34,620.45
Combined _Growth (in per cent) (17.97) (20.06) (11.25) (11.57) (15.62) (15.62) (11.09) (9.11) (10.16)
Non-Life _Density (USD) 3 3.5 4 4.4 5.2 6.2 6.2 6.7 NA
Non-Life_Penetration (in per cent) 0.67 0.62 0.64 0.61 0.6 0.6 0.6 0.6 NA

Table IV Life insurance growth matrix
Insurers 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

Life_ Public (INR) 49,821.91 54,628.49 63,533.43 75,127.29 90,792.22 127,822.8 149,790 157,288 186,077.3
Growth_ Matrix (%) 42.79 9.65 16.3 18.25 20.85 40.79 17.19 5.01 18.3
Market_ Share 99 98 95 91 86 82 74 71 70
Life_ Private (INR) 272.55 1,119.06 3,120.33 7,727.51 15,083.54 28,253 51,561.42 64,497.44 79,373.06
Growth_ Matrix 4,124.31 310.59 178.83 147.65 95.19 87.08 82.5 25.09 23.06
Total_ Life (INR) 50,094.46 55,747.55 66,653.75 82,854.8 105,875.8 156,075.8 201,351.4 221,785.5 265,450.4
Combined_Growth (%) 43.54 11.28 19.56 24.31 27.78 47.38 29.01 10.15 19.69
Life_Density (USD) 11.7 12.9 15.7 18.3 33.2 40.4 41.2 47.7 N/A
Life_Penetration (%) 2.59 2.26 2.53 2.53 4.1 4 4 4.6 N/A
3. Corporate social performance
Business responsibility and sustainability are all embracing concepts which are not just
about managing risks, but also about identifying and taking advantage of opportunity. The
investment community is no exception when it comes to the increasing shift of business
towards ethical and environmentally friendly operations, and even more so they are starting
to identify those businesses for investment. The other significance of CSR for the insurance
industry, which is perhaps far more visible, is the increasing uncertainty around the
environmental impacts of climate change. Managing the risk associated with unpredictable
climate conditions will pose dangerous problems if not identified and responded to. Those
insurers who are ahead of the game and have understood the significance of climate change
have the chance to use climate change mitigation as opportunity, as much as a risk
management exercises (Cumming and Bettridge, 2009). There are basically two categories
wherein insurer’s responsibilities could broadly be divided. These are: business areas and
non-business areas. The business areas would cover various social security schemes and
investment to be managed and monitored. In this, the insurer is expected to respond by
offering its products and services to the selected segments of the population and investment
of funds in social sector. Whereas non-business areas of social responsibility for a insurer
shall cover his contribution to the development in the fields of education, health care,
environment, employment, infrastructure, poverty alleviation, development of employees
and thus national economy may increase in new shape. Insurance is directly related to the
status of an individual in society. Improving the standard of living would affect the values of
the society, which in turn would affect the insurance industry in quantitative terms (Pal et al.,
Meeting CSR by means of group schemes, social security and investment in social sector
are the common practices in Indian insurance companies. Life Insurance Corporation of
India (LICI’s) group insurance schemes provide security to weaker section of the society.
LIC’s crusade received due recognition when on 15 August 1987, the world largest group
insurance scheme covering about 1.20 crore families of landless agricultural laborers
throughout the country was announced. The different schemes under social security are
Janashree Bima Yojana, Swarna Jayanti Gram Swarojgar Yojana, Social Security Group
Insurance Schemes, Krishi Shramik Samajik Suraksha Yozana, Critical Illness Rider, and
Aam Admi Bima Yojana, etc. are the few examples of PSU life insurer’s CSR practices. As on
2010 total 2.40 crore of lives were given insurance cover under various social security
schemes (LICI, 2010). It has been the constant Endeavour of the Corporation to provide
security to as many people as possible and to channelise the savings mobilized for the
welfare of the people at large. To meet this end, the Corporation has been promoting social
welfare through investments in infrastructure and social sector which includes:
B projects/schemes for generation and transmission of power;
B housing sector;
B water supply and sewerage projects/schemes; and
B development of roads, bridges and road transport.
The total investment in these sectors during 2009-2010 was 20,808.74 crores The
investments by way of central, state and other government guaranteed marketable
securities, loans, debentures and equity investments in infrastructure and social sector
amounts to 6,49,808 crore (LICI, 2010).
Aviva Life Insurance has own the ‘‘CSR Award’’ at the prestigious Asia Insurance Industry
Awards 2010 for its CSR programme- ‘‘Street to School’’ for demonstrating how CSR can be
closely and successfully tied with business strategy (Aviva Life Insurance, 2010). CSR in
general insurance is a conscious approach adopted to increase the social, ethical and
environmental concern of the society and participate actively to encourage the community
development and growth. Besides HR development, innovative products and services
ICICI-Lombard have taken the initiative of providing nutritional support and education to
underprivileged children namely (ICICI Lombard, 2010):

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B Healthy Lokshakti: Healthcare system to reduce newborn and infant death;
B Muktaangan: Quality education to the underprivileged children; and
B Doorstep School: Programme for out of school, etc.
In spite of the previous examples, the fact of the matter is that, the concept of CSR has not
penetrated into deeply in to the insurance sector. Apart from big companies, most of the
smaller companies are still at a very nascent stage as far as their CSR is concerned.

4. Discussion on pattern of disclosure

Mainly four issues have been identified to analyse annual reports namely environment,
community development, product or services and HR disclosures. The theme covered
under environment are awareness programme, activities towards preventing environment
deterioration, promoting road safety and advertising for socially important causes.
Community improvement, corporate philanthropy, quality education, investment in social
sector, health care system are the few theme covered under community development.
Socially oriented products namely rural insurance, social insurance, innovative products,
micro insurance, consumer issues and social security covered under products/services
whereas HR disclosures covers HRD, welfare of SC/ST/OBC/PWD/Ex-serviceman,
employees strength, pay and incentives, participation, values and principles, etc.
The trend of disclosing social responsibility information in annual reports by the 19 companies,
each of which had disclosures in at least one of the eight years is shown in the Table V. In the
second column of the table shows, the number of companies which reported social
responsibility information remains at least ten since 2003. The figures shown in the third to
seventh columns are in percentage terms, and represent the mean disclosures of the 19
companies. For each of the eight years, annual reports of the 19 companies were coded and
the percentage of statements disclosing each of the four categories of social responsibility was
calculated. The mean percentage was then calculated for each category. CSR is not
mandatory under the law in India, any social information is disclosed on a voluntary basis.
However the proposed Companies Bill 2010 will mandate every company has a CSR policy
that targets a spend of 2 per cent of the profits for such activities. Such spending will not be
mandatory but companies will have to compulsorily provide details in their annual reports and
at some stage the government could incentivise such spending. The 19 companies mainly
disclosed in formation on human resources and products/services, and the amounts of
information disclosed under the two categories did not differ much. In Table V also cleared that
human resource information got the widest coverage, and was followed by product/services,
community development and the environment.
Although quantification of a disclosure improves its quality by specifying the amount of effort
a company expends in a particular area of social responsibility, but the disclosures in this
study were mostly qualitative. Table V indicates that starting from a low level, there was a
steady increase in the total amount of disclosures during the late 2000. Since the mid-2000,
the industry has been putting more emphasis on training the workforce in order to cope with
talent crunch. Table VI represents the disclosure of social information by life and non-life

Table V Type of social responsibility information disclosed (per cent of sentences)

Year No. of companies Environment Community development Product/services Human resources Total disclosure

2002-2003 13 0.06 0.23 2.45 2.36 5.10

2003-2004 12 0.02 0.12 3.26 3.45 6.85
2004-2005 10 0.00 0.23 2.56 4.23 6.99
2005-2006 10 0.05 0.25 3.56 4.23 8.09
2006-2007 12 0.16 0.23 6.23 5.65 12.27
2007-2008 12 0.12 0.26 5.23 3.45 9.06
2008-2009 10 0.24 0.26 3.45 4.23 8.18
2009-2010 10 0.33 0.56 4.26 4.25 9.40

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Table VI Disclosure of social responsibility information by sector (per cent of sentences)
Life Non-life
(n ¼ 09) (n ¼ 10)
State owned Private State owned Private
Year (n ¼ 01) Disclosure (n ¼ 08) Disclosure (n ¼ 04) Disclosure (n ¼ 06) Disclosure

2002-2003 01 2.25 07 2.23 04 3.23 06 2.56

2003-2004 01 3.12 06 1.45 04 3.45 05 3.45
2004-2005 01 2.56 08 2.23 04 4.21 06 3.89
2005-2006 01 2.35 07 2.48 04 4.56 04 2.56
2006-2007 01 3.36 07 3.16 04 5.23 06 3.23
2007-2008 01 4.23 08 4.12 04 4.23 05 4.89
2008-2009 01 3.26 08 3.25 04 4.56 05 2.45
2009-2010 01 4.56 08 2.47 04 3.26 06 3.78

insurance industry. Paired difference t-test were conducted to see whether there was any
difference among the two industries. The non-life insurance companies disclosed
significantly (at 0.01 level) less social information than life insurance companies. The
relationship between nature of ownership and CSR has examined by paired difference t-test.
Table II indicate five public sector insurers out of 19 sample companies. This public status
may lead people to expect that the management of PSI (Public Sector Insurers) would tend
to disclose more social information than other insurance companies do. To test whether this
expectation is correct, percentages of the total disclosures were is used. The disclosures of
PSI were compared with the mean disclosures of the other private insurers by paired
difference t- test. The result was surprising, that the PSI in fact disclosed less social
information than its counterparts, although the differences were not statistically significant.
The probable reason may be the PSI did not have to manipulate its social disclosure for the
purpose of legitimation.
Enough information needs to be disclosed for society to assess how far a company is good
corporate citizen. Reacting to community, environmental issues, companies may actively
manage CSR in order to improve their corporate image and to justify their continued
existence. In order to proof the legitimacy, the study adopts longitudinal method of
examining annual reports. To proof the legitimacy, four different companies of life and
general insurance companies (one each from private and public sector) have been
identified. In fact, in the annual reports of New India Assurance Company Ltd., spells out its
commitment to the community:‘‘We will respond to all commercially viable general insurance
requirements of the citizens, including products for weaker sections of the society at
affordable price within three months from the date on which such a requirement is
received.ICICI Lombard General Insurance Company Ltd, even profoundly put such a

ICICI Lombard’s value system is the DNA which molds and determines the growth and success of
the company and its employees. Strongly embedded and staunchly followed, these values form
the very core of our company’s spirit.

The catchword of Life Insurance Corporation of India often uses this mission statement:

Explore and enhance the quality of life of people through financial security by providing products
and services of aspired attributes with competitive returns, and by rendering resources for
economic development.

The commitment to the society of Aviva Life Insurance Company India Ltd, following the

Corporate Responsibility is deeply embedded in the culture at Aviva and reflects our social
conscience and commitment to the society. At Aviva, we strongly believe in proactively promoting
public interest by behaving ethically and contributing to the economic growth and welfare of the
society we live in.

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The scholar expected that all of companies would have well above average amounts of
social disclosure. To test the previous hypothesis, the percentages of the total disclosure
were used. The disclosures of each of the two companies (public vrs. private life insurance)
with the mean disclosures of two groups of companies by paired difference t-test. The Life
insurance Corporation of India disclosed significantly (at 0.01 level) more social information
than the other seven life insurance companies. On the other hand paired t-test shows private
general insurance companies disclose more social information as the difference significant
(at 0.01 level).

5. Concluding remarks
In conclusion, the scholar observed that the sample companies tend to represent a relatively
minor quantity of disclosure when it compared with corporate financial disclosures. The
disclosures mostly comprise narrative qualitative information. The companies also place
greater emphasis on human resource disclosures and products and services and still
provide relatively low level disclosure in environmental issues and community development.
The CSR literature shows that maximum studies were cross sectional in nature but in
developed countries. Very few studies were conducted in disclosure issues on developing
countries. In fact very rare study on CSP disclosures in the insurance sector. The paper has
demonstrated longitudinal studies on CSR are fruitful and deserve more attention from
researchers. There are several limitations to this research. First of all, it focused only specific
area of CSR, and consequently there is a need for a more comprehensive research.
Furthermore, this research says nothing about volume of disclosures. Moreover, the paper
focused on annual reports, but there are still several other alternative reporting media such
as interim reports, corporate websites, newspaper advertisements and press releases.
Finally, research highlighted on reports for the year 2003-2004 onwards, when CSR as a term
still relatively new in India. Therefore, further research would help to indicate possible
improvements in the quality and quantity of disclosures. More such studies should be
conducted, especially on developing countries where CSR is at an infant stage of
development. On a macro level, in addition to tracing the trend of social disclosure, impacts
of social and economic development on CSR practices can also be examined. Another
interesting research direction would be to have international comparative studies of CSR on
a longitudinal basis. Major factors influencing CSR overtime can be compared and
contrasted will stimulate more studies in that direction.

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Further reading
Sanyal, S. and Sikarwar, D. (2011), Government Won’t Make CSR Spending Mandatory, The Economic
Times, New Delhi, p. 1.

Corresponding author
Sudhir C. Das can be contacted at:

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