The nation’s economy, or more specifically, its uncertainty, is not only affecting the insurance industry in terms of what it takes in, but also what it gives out.

In the mid-Atlantic, both insurers and brokerages are cutting back on community sponsorship, honoring long-term commitments while also wary about adding new ones.

Francis X. Kelly Jr.

Francis X. Kelly Jr., founder and chairman of Kelly & Associates Insurance Group, a brokerage with offices in Delaware, Maryland and Virginia, said his firm is “being cautious like everyone else” when it comes to sponsorship.

“We are taking it as it goes, month to month,” Kelly, a former Maryland State senator, said. “We are fulfilling our commitments, where we give them and careful about adding new ones. We are trying to curb things while we see where the economy is going.”

Debby Labant, director of operations at Philadelphia-based Kistler Tiffany Benefits,  said her firm is also cutting back, “and at the same time, requests are down.”

“I do believe the economy has a lot to do with it as well as nobody to do the work [to organize community events],” she said.

At Kistler Tiffany Benefits, community giving comes through the brokerage itself as well as through the Kistler-Tiffany Foundation, which offers grants to various nonprofit organizations. Last year, Labant said, the brokerage made $30,000 in community donations, while the foundation gave $125,000. Both support community events, ranging from local banks and insurance agent associations to local causes, including a variety of children’s health care and wellness initiatives.

This year, however, the foundation’s board decided to cut back its giving by $65,000 to $60,000, citing the economy and its effect on the foundations endowment.

Fewer requests

“This year has been slow,” Labant said. “We try to spread things out as we can’t give to everybody. We don’t have a lot of excess money to give, so we try, as best we can, to spread things out to more organizations.”

KTB has also seen its own fundraising efforts hurt, Labant said. The foundation’s annual golf tournament, which brings in the majority of funds distributed to the community, showed signs of the economic climate, she said.

“This year, our 21st year, we are finding our waiting list is not as long as in past years as carriers, for example, are also cutting back on the number of sponsorship themselves,” she said.

‘Can’t say yes to everyone’

Kelly admits that his brokerage is cutting back this year, but would not elaborate on how much it will donate to charities.

“Anything that helps people, we like to support,” Kelly said. “We do get a lot of requests each year and you don’t like saying ‘no,’ but some have to be left out because you can’t do everything. You can’t say yes to everyone, but it is part of our mission to give back as much as we can.”

Kelly said the brokerage is “a little over” its earnings last year and both the business and his family feel giving back is an important aspect of being a member of the community. In addition to its support to the R. Adams Cowley Shock Trauma Center in Baltimore, Md., and the Cal Ripken Sr. Foundation, Kelly also urges employee giving through the World Vision program, where workers can sponsor a child in need with a match by their employer.

The brokerage also supports agent-based associations like the local chapters of the National Association of Health Underwriters, which Kelly hopes continues.

“In these times, if there was no profession to help, that would be a loss, given the threat of national insurance,” he said. “We strongly support our industry.”

Redistributing support

While regional brokerages are cutting back on their support, regional insurer CareFirst is actually increasing it.

Michael Sullivan, spokesperson for the Blues-affiliated insurer, which covers Maryland, Washington, D.C., and Northern Virginia, said the company is increasing its community support from $40 million in 2008 to $46 million this year.

As part of its nonprofit status, Sullivan said, the company “makes community giving part of our mission.”

“We went into this year with a plan for 2009 and obviously took into account the economy’s affect on us as it would be for any organization,” Sullivan said. “Our total [giving] number is up in 2009, which reflects our level of commitment.”

The CareFirst Commitment program, created in 2005, covers five areas of community support, including community sponsorship, targeted health giving and the insurer’s biggest commitment, subsidies and enhanced access.

Sullivan said that sponsorship are down “slightly” in 2009 as the company shifts its focus to other areas of the program.

“It is really more of a considered decision versus the economy or business environment,” he said.

This story originally appeared in the September 2009 print edition of Insurance & Financial Advisor.