The impact of the level of corporate social responsibility on financial performance: Evidence from insurance firms in the Czech Republic

Abstract

The topic of Corporate Social Responsibility (CSR) has gained considerable popularity among researchers in recent decades in the Czech Republic. However, given this, no detailed study has been demonstrated on whether Czech insurance firms benefit from this. The paper uses an extensive content analysis method to investigate the impact of CSR on financial performance in 23 Czech insurance companies. These companies are included in the Czech Association of Insurance Companies, over the past years 2019 and 2020. Further, the GRI CSR Disclosure Index and correlation analysis are used. The results indicate a significant relationship between CSR disclosure and financial results. There is a linear positive relationship between CSR and ROE, and between CSR and ROA, even a significant one between CSR and ROE. The study suggests that insurance companies in the Czech Republic ought to make continuous efforts so that their CSR activities have a positive effect on their future development.