Boston, MA – October 24, 2024 – Partnership for Financial Equity unveils its latest report, It Wasn’t So Scary, on the twenty-five year life of the Massachusetts Insurance Company Community Investment Initiative. These two initiatives, one involving life insurance companies and the other property insurers, represent a transformative effort to leverage financial capital for community development and economic empowerment in Massachusetts.

“This initiative is a beacon of change, addressing historical injustices and fostering equity and inclusion through $1.24 billion in strategic investments in lower-income communities across the state in the past twenty-five years”, said report author Candace Sledge, research fellow for the Partnership for Financial Equity.

In 1998, the Massachusetts legislature passed “An Act Insuring Community Investment and the Equitable Taxation of Insurance Companies in Massachusetts”. Life and property & casualty insurance companies could reduce their tax rates by investing in the newly formed The Life Initiative or Property and Casualty Initiative. These organizations, managing $100 million funds each in initial investments, focus on projects benefiting low- and moderate-income communities. Over two plus decades, The Life Initiative has committed approximately $707 million, creating or preserving over 21,134 affordable housing units and generating thousands of jobs. The Property and Casualty Initiative has invested $544 million, impacting affordable housing, healthcare, and community facilities with a minimal loan loss rate of 0.47%.

The Massachusetts Insurance Company Community Investment Initiative represents a groundbreaking approach to utilizing financial resources for the betterment of low and moderate-income communities and one that could be replicated around the nation. These initiatives contrast the dark history of insurance in America, where enslaved Africans were commodified and insured as property with a progressive approach to addressing the needs of neighborhoods that remain economically disenfranchised.

“As a company, we look at the return, but it is not the main factor,” said Dwayne Parmley, Investment Committee Chair for the Property and Casualty Initiative and a Senior Portfolio Manager with Arbella Insurance Group. “Arbella also considers the overall mission of the work that can take place and its impact on communities where Arbella does business.”

What once seemed risky to insurers became less intimidating as it generated financial returns and positively impacted the communities that needed it most. Insurers agreed to extend the life of the initiatives, through at least 2033, a few years ago.

“I believe the companies voluntarily reinvested, even if they no longer utilize the tax credit because both the financial results and the impact of the fund have exceeded their expectations,” expressed Kristen Harol, President of The Life Initiative.