Highlights of Swiss Re's Sustainability approach - How we accelerate sustainable progress
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Highlights of Swiss Re’s Sustainability approach How we accelerate sustainable progress May 2020
Table of contents
Swiss Re Group – who Reducing our
we are and what we do footprint
Slide 3 Slide 51
Approach to Engaging
sustainability our people
Slide 13 Slide 56
Creating solutions Corporate
for sustainability Governance
Slide 26 Slide 62
Being a Compensation
responsible investor framework
Slide 44 Slide 79
Highlights of Swiss Re’s Sustainability approach| May 2020 2
Who we are and what we do? We make the world more resilient
Swiss Re’s success is built on three key differentiation drivers
Reinsurance Corporate Solutions Life Capital
Foundation of our strength with Returning to profitability and Transitioning to a digital
increasing earnings power focused on competitive advantages B2B2C player
Client Risk Capital
Access Knowledge Strength
Highlights of Swiss Re’s Sustainability approach| May 2020 4
Client
Access
Swiss Re operates a truly global and diversified Group
Premiums Americas EMEA Asia «We make the
EVM1 USD 22bn USD 21bn USD 14bn world more
US GAAP2 USD 18bn USD 12bn USD 8bn resilient»
>150
countries
>100 000
P&C clients supported
>175 million
Premiums per country1
family members supported
USD >3bn USD 0
through L&H Re
Swiss Re’s global access to risks and diversified earnings generation is exceptional in the insurance industry
1 EVM premiums and fees, FY 2019
2 US GAAP net premiums earned (including fee income from policyholders), FY 2019
Highlights of Swiss Re’s Sustainability approach| May 2020 5
Risk
Knowledge
R&D cements Swiss Re as the pre-eminent knowledge company
R&D value driver framework Strategic focus areas Program examples
Business steering Market intelligence Insurance markets and cycle analysis
Macroeconomic R&D
Insurance beta Advance Nat Cat risk view
Chinese cancer research
Capital
Efficiency allocation Insurance alpha Nat Cat pricing tools
Risk engineering services
Data, solutions, publications Magnum
Commer- Risk selection Life Guide
cialisation and pricing
Process re-engineering Analytics for contract wording
Group data integration
500 13 80
R&D FTEs R&D teams R&D programmes
Highlights of Swiss Re’s Sustainability approach| May 2020 6
Capital
Strength
Group capital position remains industry-leading, also on a Solvency II
equivalent basis
Comparison of Group SST / Solvency II ratio1
• SST and Solvency II are both comprehensive economic
>260%
and risk-based solvency regimes
238%
232% • Due to important differences, Solvency II equivalent
ratio is higher for the Swiss Re Group
210%
• The Group benefits from peer-leading diversification
resulting in superior capital efficiency and attractive
capital management actions
Group SST ratio Group Average of Average of • Swiss Re has strong financial flexibility and is well
Solvency II reinsurance insurance peers positioned to respond to market shocks and growth
equivalent peers Solvency Solvency II
ratio II ratio 2
ratio 3
opportunities
1/2020 Year-end 2019
1 Comparison was produced on a best effort basis, with Solvency II ratio estimate for Swiss Re not allowing for any long-term guarantee adjustments
2 Average of Hannover Re, Munich Re, SCOR
3 Average of Allianz, Aviva, AXA, Generali
Highlights of Swiss Re’s Sustainability approach| May 2020 7
Reinsurance Corporate Solutions Life Capital
Reinsurance has built up industry-leading competitive advantages
Global scale 15% 11%
market share1 for L&H Re market share1 for P&C Re
L&H Re with P&C Re with
Direct client access >90% >50% 11%
premiums from non-intermediated business
avg.
Reinsurance
>40% ROE in the last
High diversification risk diversification 5 years4
within Reinsurance2
~50%
Superior risk knowledge of profit from
differentiated business3
We leverage our competitive advantages and maintain our edge through Core, Transactions and Solutions
1 Source: Swiss Re Institute
2 Diversification between P&C, L&H, Financial Market and Credit risks based on shortfall calculation
3 EVM profit – new business, differentiated business: i) preferential terms & conditions, ii) higher share of wallet, and/or iii) private deals (100% share) Highlights of Swiss Re’s Sustainability approach| May 2020 8
4 Average 2015-2019
Reinsurance Corporate Solutions Life Capital
Corporate Solutions has taken actions to restore stability and underwriting
profitability
Good progress in implementing
management actions Strategic priorities
• Significant portfolio pruning
While implementing management actions, Corporate Solutions will grow
• 12% price increases achieved in 2019 selectively in line with its strategic priorities
and 14% further increases in January
2020
• Estimated 2020 combined ratio of
105% supported by pruning actions
and rates
Combined ratio target De-commoditise our Grow with Expand through tech-
98% in 2021 core business differentiating assets driven solutions
Access to commercial lines risk pool and to corporate clients remains strategic to Swiss Re Group
Highlights of Swiss Re’s Sustainability approach| May 2020 9
Reinsurance Corporate Solutions Life Capital
Life Capital further accelerated its transition to a dynamically growing, digital
B2B2C business
2019 was a pivotal year for Life Capital
Agreement to sell ReAssure with expected positive impact on economic value creation
Transition to a dynamically growing, digital B2B2C business
Consistently strong growth in the open book business:
• Launching new partnerships
• Geographical expansion
• #29 distribution partners (#19 in YE18) and providing • >5% market share1
protection to more than 377 000 costumers globally • 17% increase in core business gross written premiums
• Partnership with IKEA signed in early 2020 • Expansion into US market
• Launch of iptiQ P&C business and inclusion of iptiQ
L&H ANZ
1 Across Swiss and Dutch markets, determined using GPW compared to available total GPW in the respective Group protection insurance market in
201
Highlights of Swiss Re’s Sustainability approach| May 2020 10Swiss Re continues to focus on our over-the-cycle Group financial targets
Group targets over-the-cycle
Group return on equity Group ENW per share growth2
20
14 13.7% 13.7%
17.0%
12 11.0% 10.8%
10.5% 10.6%
10 10
8.2%
8 Rf + 7.2%
9.4% 9.6% 9.2% 9.4% 9.4% 9.6% 9.3% 10% 10% 10% 10% 10% 10% 10% 10%
700
6 5.4%
bps1
5 4.4%
4
2.5%
2 1.4%
1.0%
0 0
2013 2014 2015 2016 2017 2018 2019 Over- 2013 2014 2015 2016 2017 2018 2019 Over-
the-cycle the-cycle
target target
actual 700 bps above 10y US Govt. bonds actual target
1 700 bps above 10y US Govt. bonds. Management to monitor a basket of rates reflecting Swiss Re’s business mix
2 The 10% ENW per share growth target is calculated as: (current-year closing ENW per share + current-year dividends per share) / (prior-year closing
ENW per share + current-year opening balance sheet adjustments per share) Highlights of Swiss Re’s Sustainability approach| May 2020 11Our capital management priorities remain unchanged
Priority I Priority II
Ensure superior capitalisation Grow the regular dividend
at all times and maximise with long-term earnings, and
financial flexibility at a minimum maintain it
Capital
management
priorities
Deploy capital for
Repatriate further
business growth where
excess capital to
it meets our strategy and
shareholders
profitability targets
Priority IV Priority III
Highlights of Swiss Re’s Sustainability approach| May 2020 12What is Swiss Re’s approach to sustainability? Through our Group Sustainability Strategy, we aim to reinforce our efforts to make the world more resilient and sustainable, thus helping to maintain our competitiveness, today and in future
Swiss Re has a long tradition of sustainability and reinforces this with further
ambitious steps towards net-zero emissions
Signing of More details on slide 19
Adopted FSB TCFD
recommendations
Net-zero
Signing of Reduced investing
Obtain 100% GHG
Reduced providing of power
in thermal re/insurance from renewable
emissions
First sustainability-
related publication
coal companies to thermal coal sources in operations
2003 2009 2015 2017 2019 2023 2050
1979 2007/08 2012 2016 2018 2020 2030
100% GHG Formal Commitment to Shift of Commitments Stop providing Net-zero
neutral Sustainable Business investment portfolio to UN re/insurance
Risk Framework developed to follow ESG Climate Action to most carbon-intensive
GHG
investment benchmarks Summit oil & gas production emissions
across entire
business
More details on slide 19
More details on next slides Highlights of Swiss Re’s Sustainability approach| May 2020 14Sustainable Business Risk Framework (SBR Framework):
managing sustainability risks in underwriting and asset management
• Ensures responsible and sustainable business practices by identifying, mitigating and eliminating
SBR potential ESG risks inherent to our business transactions and investments
Framework • Applies to all lines of business of the insurance portfolio as well as investments and is fully embedded
in our standard operating procedures
Sustainability umbrella guidelines Sector specific guidelines
Human rights Animal testing Mining
We do not want to do business with countries and
companies that are complicit in severe human rights Dams Nuclear weapons
violations proliferation
Environmental protection Defence industry Oil and gas
(revised in 2019)
We do not want to involve ourselves with companies
that cause irreversible damage to the environment
Forestry and logging Thermal coal
and in particular ecologically sensitive areas
(introduced in 2018)
Company and country exclusions Sustainable Business Risk (SBR) process More details
on next slide
Read more online and find the SBR Framework here
Highlights of Swiss Re’s Sustainability approach| May 2020 15Sustainable Business Risk (SBR) referral process: our approach to managing
sustainability risks
SBR Assessment Tool is
continuously improved to address
new developments in each
industry
SBR Framework training raises
awareness of sustainability issues
among our underwriters and
client managers
We are developing risk assessment
tools designed to help the industry
better understand and manage
sustainability risks, in partnership
with other re/insurers Read more online
Highlights of Swiss Re’s Sustainability approach| May 2020 16Swiss Re’s Sustainable Business Risk Framework applies to all of our business
transactions in re/insurance as well as investments
238
Sustainable business risks referred to our Number of sustainable business risk
expert team in 2019, by sector/issue referrals and decisions taken
250
SBR transactions
referred to our team 200
of sustainability
experts (down from
150
247 in 2018)
100
50
0
25.2% Oil and gas 4.6% Defence 2016 2017 2018 2019
21.0% Mining (excl. thermal coal) 2.9% Other: environmental issues
21.0% Thermal coal 1.7% Forestry, pulp and paper, and oil palm Proceed Proceed with conditions Abstain
14.7% Dams 1.3% Animal testing
Read more online 7.6% Other: human rights
Highlights of Swiss Re’s Sustainability approach| May 2020 17Phasing out the most severe climate-related transition risks
Most recent policies and guidelines
Thermal coal Oil and gas Carbon steering
policy policy
• Swiss Re does not provide re/insurance • In 2019, Swiss Re developed a policy to • Swiss Re is working on a comprehensive
to businesses with more than 30% shift away from the most carbon- carbon risk steering mechanism to
thermal coal exposure since 2018 intensive oil and gas production measure our carbon intensity and
associated risks embedded in our
• For transactions in low- and middle- • Swiss Re will no longer provide re/insurance business
income countries, that derive more than individual/insurance covers for those oil
70% of electricity from coal, existing and gas companies which produce the • In 2019, Swiss Re co-launched a project
power plants can be covered until 2025 world’s: via the CRO Forum to develop a robust
if there is evidence that the insured is carbon footprinting methodology to
implementing an effective emission − 5% most carbon intense oil & gas quantify these exposures
reduction strategy from July 2021
• It will support Swiss Re’s carbon steering
• Swiss Re is fully committed to a total − 10% most carbon intense oil & gas towards reaching net-zero emissions on
phase-out of thermal coal from our from July 2023 the liability side of our business by 2050
business in the long term
Read more online
Highlights of Swiss Re’s Sustainability approach| May 2020 18In 2019, Swiss Re made a public commitment to reach net-zero emissions by
2050 across our whole business
Present focus on reduction Future: saying yes toBuilding on our successful track record, we decided to further strengthen our
efforts and developed an enhanced Group Sustainability Strategy
More details on next slide
Through our
enhanced Group
Sustainability
Strategy, we aim
to reinforce our
efforts to make
the world more
resilient and
sustainable
Read more online
Highlights of Swiss Re’s Sustainability approach| May 2020 20Our sustainability ambitions cover areas where we have significant positive
impact to support sustainability and strengthen resilience
Ambition
Mitigating climate risk Building societal Driving affordable
and advancing the resilience insurance with digital
energy transition solutions
Key 2019 • Weather-related nat cat protection • 219 000 beneficiaries of L&H • Continued engagement with key
achievements insurance through partnership with stakeholders on embracing
• 120 (sub-)sovereigns advised on Women's World Banking opportunities offered by
climate risk resilience and USD 10 digitalisation in a responsible and
billion in protection offered • Insurance protection to smallholder ethical way
farmers against various natural perils
• Further involvement in offshore wind
farm projects in France and Asia
• Revised oil and gas policy
Links to
UN SDGs
Read more online More details on next slide
Highlights of Swiss Re’s Sustainability approach| May 2020 21Climate change continues to be an essential element in our enhanced Group
Sustainability Strategy and thus we developed a Climate Action Plan
3 key objectives Examples Key 2019 achievements
Leading risk transfer products on
• Insurance for peak perils (eg tropical
cyclones) USD 10 bn
• Insurance coverage for secondary Total amount of climate
physical climate risk perils (eg extreme precipitation, heat protection offered to
waves, droughts) (sub-)sovereigns
Leading provider of re/insurance • Sustainable energy and infrastructure
solutions (eg renewables such as wind >4 000
solutions for low-carbon transition and solar power) Wind and solar farms insured
opportunities
• Partnering with cedents/insurers,
Partnering to develop scalable corporate clients and public sector >300
solutions to mitigate and adapt to clients
Dialogue engagements with
• Solutions supporting the transition to a
climate change low-carbon energy systems
clients on thermal coal
Read more online
Highlights of Swiss Re’s Sustainability approach| May 2020 22Climate-related Financial Disclosures (TCFD) provide a foundation for investors
to assess and price climate-related risk and opportunities
Offer consistent and effective financial disclosures allowing investors and other stakeholders to appropriately assess
climate risks faced by companies and to take appropriate action
Four pillars of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD)
Governance Strategy Risk Management Metrics and targets
Swiss Re’s Board and Group Executive
Swiss Re regularly assesses the actual Sound risk management, underwriting
teams are fully engaged on climate We use a number of metrics and
and potential impacts of climate-related and asset management lie at the core
risks and opportunities. The Board targets to assess and manage relevant
risks and opportunities on our of the re/insurance business; we use
oversees the implementation and climate-related risks and opportunities
business, strategy and financial our existing processes and instruments
execution of Swiss Re’s Climate Action
planning to address climate-related risks
Plan
Swiss Re is an active member of the TCFD, helped develop voluntary recommendations on climate-risk reporting,
Active member is involved in shaping future guidance and disclosure requirements
Full reporting Swiss Re voluntarily reports across all TCFD recommendations, early adopter, initiating reporting already in 2016
Read more online
Highlights of Swiss Re’s Sustainability approach| May 2020 23Selection of Swiss Re’s most important sustainability-related memberships and
commitments
Read more online
Highlights of Swiss Re’s Sustainability approach| May 2020 24Selection of sustainability-related index listings and ratings
MSCI AAA rating Dow Jones Sustainability Bloomberg Gender-Equality
(July 2019) Indices, Bronze Class Index
Ethibel Sustainability Index Euronext Vigeo Index: FTSE4Good Global Index
(ESI), Excellence Global Europe 120
ISS QualityScore, Environmental, Social & Governance ISS ESG Prime
Highlights of Swiss Re’s Sustainability approach| May 2020 25What sustainable solutions does Swiss Re offer?
We focus on mitigating
climate risk and advancing
the energy transition,
building societal resilience,
and driving affordable
insurance with digital
solutions to advance
access to insuranceBuilding on recent efforts, we focus on three overarching 2030 sustainability
ambitions defined in our Group Sustainability Strategy
Mitigating climate risk Building societal Driving affordable
and advancing the resilience insurance with digital
energy transition solutions
Solution type
Climate risk • Selected examples of climate risk resilience solutions, addressing both physical
resilience and transition risks
More details on • Includes nat cat solutions supported by proprietary modeling, climate mitigation
slides 28-32
and adaptation and energy solutions
Public sector • Selected examples of public sector solutions, supporting resilient economies
More details on and mitigating current and emerging risks
slides 33-36
• Includes supportive partnerships, nat cat and other peril solutions
Digital
• Selected examples of digital solutions advancing insurance access, reducing
More details on
slides 37-43 costs and increasing efficiency for customers
• Includes digital platforms, smart analytics, parametric and cyber solutions
Highlights of Swiss Re’s Sustainability approach| May 2020 27Swiss Re has a unique approach to nat cat underwriting; utilising proprietary
modelling with rapid feedback loops
In-house models Experts Integrated and transparent
risk management
• State-of-the-art 190+ perils models, • 40+ scientists and experts in natural • Seamless integration of risk
unparalleled worldwide coverage sciences and statistics quantification and portfolio steering
• Rapid feedback loops post event, • Boutique sized R&D: holistic model • Portfolio steering based on integrated
incorporating learnings and latest experts, close to Underwriting risk view across entire value chain
scientific information in risk views and
• Track record of solid costing
UW decision-making
accuracy: robust alignment of
• Main risk trends (urban development, expected claims vs loss experience
socio-economic impact and climate across various time periods
change acceleration) factored in
modelling
Highlights of Swiss Re’s Sustainability approach| May 2020 28Our proprietary probabilistic natural catastrophe model allows us to adapt to an
ever-evolving nat cat risk landscape
Import any Encode Hazard Insurance What is the
portfolio geography & loss hurricane
vulnerability simulation activity in the
next 5-10
years?
Severity, Loss
How to model
rainfall/flooding
(Harvey)?
Return period
We employ We develop the
Business knows We employ
natural software in-
best (client engineers &
scientists & house -
know-how) follow science
collaborate actuaries
Highlights of Swiss Re’s Sustainability approach| May 2020 29Selected solutions designed to advance the climate transition and adapt to
physical risks
Supporting sustainable Tackling the US flood
energy solutions More details on next slide
insurance protection gap
• As sustainable energy projects increase in scale and complexity, so • Across the globe, the risk of flooding is increasing; on average it
do the risks associated with them. Innovative risk transfer solutions affects more people worldwide than any other type of natural
help reduce these risks and drive investment in the sector catastrophe because flooding can occur practically anywhere.
• Solution example: cover provided to wind farm in the North Sea, to • Solution example: flood insurance model allows for policy pricing
provide compensation for material damage and loss of profit, both according to individual risk exposure (building location, construction
during the construction phase and first three years of the farm's type and insured value), enabling our clients – insurers in the US – to
operational phase (producing 309 megawatts at peak for approx. provide a more affordable product to homeowners
285 000 households)
Innovative solutions for renewable energy
Protection against natural catastrophes and
projects help drive the transition to a
extreme weather events (climate adaptation)
low-carbon energy system (climate mitigation)
Read more online Read more online
Highlights of Swiss Re’s Sustainability approach| May 2020 30Energy and weather solutions: insuring offshore wind farms
>4 000
Swiss Re offers re/insurance protection against extreme weather events and
weather volatility to help communities adapt to climate change and make them
more resilient
Number of wind and
solar farms to which • Offshore wind is considered one of the most promising renewable energy sources
Swiss Re were providing • As sustainable energy projects increase in scale and complexity, so do the risks associated with them
risk cover, as at the end • Innovative risk transfer solutions help reduce these risks and drive investment in the sector
of 2019
• As an initiator and cofounder of the European Wind Turbine Committee established in 2009, Swiss Re was
instrumental in launching the Offshore Code of Practice (OCoP), a best-practice guide for risk management in
the sector
• In recent years, Swiss Re Corporate Solutions has participated in numerous offshore wind projects, including
wind farms, stand-alone offshore sub-stations and stand-alone export cables
Read more online
Swiss Re is considered a “lead market” for offshore wind risks
Highlights of Swiss Re’s Sustainability approach| May 2020 31Climate change impacts extend to L&H
Swiss Re analyses the impacts
of climate change on L&H
We expect the impacts to be
relevant for the industry
The most pronounced
risks from climate change
affecting human health
stem from heatwaves and
vector-borne diseases
Read more online in our
SONAR report, identifying
new, changing and not-yet
envisioned risks that the
re/insurance industry needs to
have on its radar
Property Supply-chain interruption Marine Agriculture Fishery Casualty Workplace accidents Life Health Insurance market growth
Highlights of Swiss Re’s Sustainability approach| May 2020 32In the context of disasters and shocks to a country, insurance can help to save
lives, speed up recovery and reduce long-term impact on the economy
ECONOMIC SOCIETAL GEOPOLITICAL TECHNOLOGICAL ENVIRONMENTAL
Governments • Fiscal crises
• Financial mechanism
• Water crises
• Infectious disease
• Interstate conflict
• Regional/global
• Cyber attacks
• Critical information
• Extreme weather
events
are exposed failure spread governance failure infrastructure • Mitigation/adaptation
• Asset bubbles in major • Large-scale involuntary • Terrorist attacks breakdown failure
to manifold economies migration • National governance • Data fraud/theft • Natural disasters
risks… • Un/der-employment • Food crises failure • Adverse consequences • Biodiversity loss &
• Critical infrastructure • Profound social • State collapse/crisis of advances ecosystems collapse
failure instability • Man-made
• Energy price shock • Urban planning failure environmental
disasters
Flood, Thailand (2011)
70%
Drought, Kenya (2017)
… and only a Total loss
33% loss insured
Total lossSwiss Re Public Sector Solutions is dedicated to helping governments at all
levels to strengthen their resilience strategies
Florida United Turkey Egypt Bangladesh
United States Hurricane risk Kingdom Earthquake Hospital cash Flood insurance
• 1st team in the Flood risk Flood risk pool
reinsurance industry Caribbean
Hurricane, earthquake Heilongjiang
to be fully dedicated and excess rainfall risk Multiperil disaster risk
to the public sector Louisiana Beijing
Hurricane risk Agricultural risk
• +570 bound
California/Utah Vietnam
transactions since Earthquake risk Agriculture yield cover
2011 demonstrate Guangdong
the need for the Typhoon/rainfall
covers we offer Philippines
Mesoamerican Coral Reef Earthquake and
• Global footprint Protection of reef damage tropical cyclone risk
following a storm
providing tailored Pacific Islands
support to the Mexico Earthquake and
Earthquake/hurricane tropical cyclone risk
specific needs of our and livestock risk
public sector clients Guatemala
Nat cat business
• Always at the interruption risk
forefront, we are a Pacific Alliance
Agriculture
(CHL, COL, MEX, PER)
pioneer in emerging Earthquake risk
Drought
and industrialized Uruguay African Risk Kenya India Thailand
Hurricane
Flood
markets Energy production shortfalls Capacity Livestock Weather Crop
Government drought insurance insurance insurance Earthquake
due to drought
insurance pool for farmers Health
Highlights of Swiss Re’s Sustainability approach| May 2020 34Selected case studies
Pacific Alliance Kenya Livestock Health microinsurance
Insurance Program Egypt
• Chile, Colombia, Peru and • Droughts are responsible for • Micro-entrepreneurs, such as
Insurance concept
Mexico are highly exposed to ~75% of livestock deaths in the low-income women working in
earthquake risk. They suffered Greater Horn of Africa region, the informal sector, often lack
devastating losses to lives and leaving herders destitute insurance protection against loss
property in recent past • Through satellite imagery, we of income due to illness
• The World Bank has issued the can assesses the state of • In 2018, we started to help
largest-ever sovereign grazing conditions. Should expand a pioneering health
sponsored catastrophe bond. conditions deteriorate beyond a microinsurance program that
Swiss Re is proud to have pre-defined level, a lump sum targets this protection gap in
assisted in the structuring and payment allows herders to Egypt
placement provide feed and water to their
livestock
• The bond helps Pacific Alliance • In 2017, six counties suffered • By the end of 2019, the program
Benefits
members to recover faster from drought triggering the program. covered ~219’000 customers
major earthquakes and protect The government paid out USD and during the year the cover
their economic development. It ~5.3m to 14’000 pastoral was expanded to additional
reduces the pressure on public households. It is estimated that family members
budgets and taxpayers’ pockets the funds helped save 70’000
livestock, which sustain
~100’000 people
Read more online Read more online Read more online
Highlights of Swiss Re’s Sustainability approach| May 2020 35Swiss Re’s partnership commitments…
… to the United Nations … with Women’s World Banking
USD 10bn
Efforts to expand insurance covers for
2 million
• • In 2018, Swiss Re helped expand a
natural catastrophes and weather pioneering health microinsurance
volatility (e.g. drought or excessive programme to address protection gap in
Total amount of climate rainfall) Customers globally to Egypt
protection offered to • Partnering with public-sector clients benefit from partnership • Our partnership will aim to replicate
sovereigns and sub- (especially national and regional by the end of 2020 insurance schemes, similar to that in
sovereigns governments) increases effectiveness to Egypt, in additional countries. In 2019,
since 2014 develop solutions the focus was on building the necessary
• 2020 target achieved already in 2019 foundation to scale and replicate this
insurance solution in the future
Read more online Read more online
Highlights of Swiss Re’s Sustainability approach| May 2020 36Swiss Re is at the forefront of digital
2/3
people
innovation, leveraging new worldwide have
technology to extend its insurance ~1 100 mobile device
access
offering digital
innovation use
cases across
Key objectives of providing digital solutions: insurance value
chain
• Provide accessible and affordable cover for more
risk types, across all income levels and with efficient
claims handling, and thus contribute to closing
the protection gap
• Smart analytics and devices enhance risk
knowledge and advise on risk prevention, 26
improvement, mitigation and crisis management countries
where Swiss
• Integrate ethical aspects into digital business and Re’s Magnum
solutions to manage risks of digital societies platform is
available
Read more online
Highlights of Swiss
Highlights Re’sRe’s
of Swiss Sustainability approach
Sustainability | May
approach| 2020
May 2020 37We strengthen our connection to clients by commercialising our digital
platforms
Digital platforms have become a significant business facilitator for Swiss Re
USD bn
> USD 2.7bn > 800
3.0
2.5 attributable EVM premiums1 clients onboarded
iptiQ
2.0
Corporate Solutions
1.5 P&C Re Solutions
1.0
L&H Re Solutions
(Magnum)
0.5
0.0
2014 2015 2016 2017 2018 2019
Swift Magnum Magnum iptiQ iptiQ Cat Stork Telematics IPA Magnum iptiQ
Re® mobile Pure L&H EMEA L&H US Server (parametric) Platform platform Go P&C
1 EVM premiums and fees, FY 2019 Highlights of Swiss Re’s Sustainability approach| May 2020 38iptiQ narrows the protection gap by offering simple, streamlined digital solutions
at an affordable price
• iptiQ’s overriding goal is to offer simple, streamlined, 377 000
digital solutions that remove traditional hurdles to inforce policies
purchasing protection and thereby protecting a larger in 2019 29
amount of people (up from 175
Distribution
000 in 2018)
partners in
• iptiQ works in partnership with trusted brands and offers 2019
numerous easy-to-understand protection products (up from 19 in
with clear and transparent pricing 2018)
Read more online / online
Solution example: HEMSÄKER home insurance offering, launched by iptiQ and IKEA
• Easily accessable online via the IKEA website in a matter of minutes at an affordable price
• Created to extend home insurance to more people and in turn increase their financial resilience
Read more online
Highlights of Swiss Re’s Sustainability approach| May 2020 39Selected examples of innovative platform solutions utilising digital technology
Magnum Go SwiftRe PULSE Client Portal
• Online, user-friendly, automated life • Online tool providing facultative • Online platform for clients and
insurance underwriting solution reinsurance in real-time to clients brokers of Corporate Solutions
• Ensures data security, reduces • Quick and automated access to • Monitor and manage insurance
operating costs, increases medium-sized single risks or facilities programmes in real-time
accessibility • One-stop-shop for clients to handle • One-stop-shop to review policy, track
• Delivers instant underwriting premiums, claims, financial accounting premium payments, submit loss
decisions to customers • Transparency over entire own portfolio notifications, risk improvements, etc.
Read more online Read more online Read more online
Highlights of Swiss Re’s Sustainability approach| May 2020 40Swiss Re combines smart analytics and devices to enhance data-driven risk
knowledge
Advanced risk knowledge through Advise on risk prevention, mitigation
Goals
internal and external data sources and crisis management based on
data insights
Solution example:
Creation of Digital Market Center using Microsoft’s Powered by Microsoft’s automative data
Microsoft
data analytics and Artificial Intelligence (AI) capabilities, Swiss Re will be able to develop a
capabilities will help to develop next-generation, deeper analysis of risks. For example, better
large-scale tools to transform the way the insurance understanding automative risks enables insurers to
industry predicts and manages risks design new motor insurance products, such as pay-
as-you-drive covers
Read more online
Highlights of Swiss Re’s Sustainability approach| May 2020 41Selected examples of parametric solutions, supporting fast and simplified claims
payments
Windstorm insurance Nat cat and agricultural cover Business insurance
• Innovative windstorm insurance for • Increasing resilience of farmers in • “Quake Assist” improves resilience
14 000 solar panels in Connecticut, Shaanxi province, China of small and medium-sized
US, using a parametric trigger • Solution covers drought, excessive businesses in California, US
• Client-tailored solution rain and heavy rainfall in areas, • Offers coverage for earthquake-
• Supports mitigation of hurricane where poverty remains a particular related business interruptions
risk causing damage to rooftop solar concern • Fast, simplified claims payments
panels • Quick payouts to the Agriculture based on parametric triggers (incl.
• Fast payment process Bureau, who uses the funds to initiate earthquake magnitude and distance
recovery efforts from epicenter)
Read more online Read more online Read more online
Highlights of Swiss Re’s Sustainability approach| May 2020 42Cyber reinsurance solutions support
state-of-the-art cyber risk
management
Improvements in technology and connectivity
have caused the risk landscape to rapidly evolve,
giving rise to exposures not traditionally
considered by the insurance industry. Swiss Re
supports insurers on the path to improved cyber 67%
risk management growth in cyber
security breaches
in past 5 years1
Solution example: “Decrypt”, a holistic cyber
solution
• Helps insurers to identify, quantify and
manage their cyber risk exposure, including
embedded, silent, and affirmative cyber risks USD 25bn
estimated cyber
• Single, flexible, end-to-end solution offering insurance market
protection against the aggregation of cyber in 20232
losses across different lines of business
Read more online
1 Source: Accenture
2 Source: Swiss Re Institute Highlights of Swiss
Highlights Re’sRe’s
of Swiss Sustainability approach
Sustainability | May
approach| 2020
May 2020 43How does Swiss Re invest responsibly in practice? We integrate ESG criteria across our investment portfolio. Our approach is based on three strategic cornerstones: Enhancement, Inclusion and Exclusion
Swiss Re’s responsible investing strategy is built on
three cornerstones
We integrate Environmental, Enhancement Inclusion Exclusion
Social, and Governance (ESG)
criteria along our investment
process aiming to generate
higher risk-adjusted returns
over the long term ESG benchmarks Thematic investments Sustainability risk
and criteria gfsadfdffg assessments
ESG integration focused on Positive and direct real-world Risk avoidance based on
ESG risks and opportunities impact supporting a internal Sustainable Business
USD 134.5bn specific purpose Risk Framework
investment portfolio
Monitoring/ Manager Stewardship
~100%
Mandate Benchmark
reporting selection
assets considering
ESG criteria
Read more online
Highlights of Swiss Re’s Sustainability approach| May 2020 45In 2019 we further strengthened our responsible
investing strategy, contributing to our Group vision Co-founder of
Net-Zero Asset
Owner Alliance1
Enhancement Inclusion Exclusion
Thought
Leadership
ESG benchmarks
adopted in 2017
Further improvement Green, social & Introduction of new
of portfolio’s ESG sustainability bonds of absolute threshold for
profile throughout the USD 1.9bn coal mining
year companies and power
New target of
utility generators Part of
Committed to net-zero USD 4bn to be
achieved by end of
PRI 2019
GHG emissions by
2050 2024 Leaders’ Group
1 UN-convened Net-Zero Asset Owner Alliance
Highlights of Swiss Re’s Sustainability approach| May 2020 46Swiss Re integrates ESG across all asset classes
Enhancement Inclusion Exclusion ESG makes economic sense:
improved risk-adjusted return
ESG benchmarks Thematic Sustainability risk
and criteria investments assessments Information ratio (risk-adjusted return)
May 2014 – December 2019
Govt
bonds
Credit
0.81
Listed
equities
0.88
Private
equity 0.5 0.6 0.7 0.8 0.9
Real US Corp Int. Sustainability US Corp Int.
estate (Traditional) (ESG BB+)
Legend: Level of ESG integration per asset class Source: Barclays, Swiss Re
Highlights of Swiss Re’s Sustainability approach| May 2020 47Our thematic investments support the SDGs1
Inclusion focuses on
investment opportunities,
stemming from
transitioning to a more
sustainable world
Thematic investments
should therefore serve a
specific purpose, while
targeting to achieve
market returns
1 Sustainable Development Goals Highlights of Swiss Re’s Sustainability approach| May 2020 48Our responsible investing approach supports the
transition towards a low-carbon economy
Swiss Re’s Carbon Footprint Green investments1
Weighted average carbon intensity
CO2 tn / USD m revenue
Infrastructure
loan book
369 34%
285 Sustainable
252 242
198 share
168 161
91 82
51 Real estate
2015 2016 2017 2018 2019
28%
Green share
Corporate Credit Portfolio Equity Portfolio
• Portfolio optimisation drives the continued reduction of carbon intensity of our corporate
Green bonds
credit and listed equities portfolio
USD 1.8bn
• In our 2019 Financial Report (TCFD2 disclosure), we provide further information on our Green share
climate change-related investment risk exposure.
1 As of 31December 2019 Highlights of Swiss Re’s Sustainability approach| May 2020 49
2 Task-force on Climate-related Financial DisclosuresSwiss Re encourages close collaboration among industry participants to enable
broad-based ESG adoption
Engage with regulators and Thought leader in industry Promote dialogue on
policy makers associations and alliances Swiss Re’s ESG approach
Member of the
technical expert group
on sustainable finance
Highlights of Swiss Re’s Sustainability approach| May 2020 50What does Swiss Re do about our own footprint? We want to lead by example and work to minimise the environmental impact of our operations. Bringing our CO2 emissions to net-zero and reducing energy consumption are key targets across the Group
Bringing our CO2 emissions to net-zero and reducing energy consumption are key
targets across the Group
Credibly green:
>50%
14001:2015
Environmental • Corporate Real Estate and Services (CRES) has an Environmental
Swiss Re employees are Management Management System in place, certified acc. to ISO14001 since 2015
working in green offices System and • 60% energy efficiency increase since 2003
green labels
100 Tackling
emissions:
• More than 50% emission reductions per employee were achieved since 2003
through Swiss Re’s GHG Neutral Programme (2003-2020)
Net-zero pioneer:
Tonnes of negative CO2
Greenhouse • In 2019, Swiss Re committed to net-zero emissions in our operations by Do our best,
emissions secured in the
world’s first carbon Neutral and 2030. We will further curb emissions and compensate any remaining Remove the rest
removal marketplace CO2NetZero emissions through carbon removal under the new CO2NetZero Programme
3 436 Engaging our
employees:
• Swiss Re’s pioneering COyou2 programme supports our employees in
tackling their own carbon emissions
COyou2 subsidies were COyou2
granted to our staff in • The programme provides our employees access to subsidies for a range of
2019
Programme emission-cutting investments in their private lives
Highlights of Swiss Re’s Sustainability approach| May 2020 52We want to lead by example and work to minimise the environmental impact of
our operations
92% Founding
member of the
• Swiss Re and IKEA co-founded the Climate Group’s RE100 Initiative in 2014 94%
Renewable power used • To date, 235 companies have committed to going “100% renewable”,
in 2019
RE100 including numerous Fortune Global 500 companies
initiative • Swiss Re committed to sourcing 100% renewable power by 2020
4.5MW Buying impactful
• Swiss Re’s sources renewable energy from additional plants where possible
Wind power secured for green power: − E.g. our own power plant at Swiss Re Americas' headquarters in Armonk
AMERICAS offices own PV plants, completed in 2017, generating 60% of the buildings' power needs
through our first virtual
PPA virtual PPA − E.g. our first virtual power purchase agreement (vPPA) with a wind farm in
the US, partnering with Apple, Akamai and Etsy, operational since Nov 2019
35% Driving
sustainability in • The platform allows us to monitor and support our vendors’ sustainability
Swiss Re’s key vendors
are included in EcoVadis our supply chain: performance
platform in 2019 EcoVadis • Goal: Swiss Re’s major vendors (Tier 1 and Tier 2) are in EcoVadis by 2020
platform
Highlights of Swiss Re’s Sustainability approach| May 2020 53Swiss Re commits to net-zero emissions in our operations by 2030
• Net-zero emissions means that for
every tonne of CO2 that cannot be
reduced yet, another tonne needs to
be removed from the atmosphere
and stored permanently through so-
called carbon removal technologies
• To reach net-zero emissions by
2030, Swiss Re will “do our best”
to reduce emissions: group-wide
travel reduction target of at least
15% in 2020
• Any emissions that we cannot
reduce yet, we will compensate
through carbon removal: “Remove
the rest”
Source: IPCC SR15 P4, 2018 Highlights of Swiss Re’s Sustainability approach| May 2020 54Swiss Re moves away from conventional carbon offsetting and starts supporting
carbon removal projects in line with our net-zero ambition
• Prior to 2003: it was not possible • 2003-2020: Swiss Re pioneered the • 2021-2030: Swiss Re will pioneer
to compensate emissions concept of emissions compensation at a emissions compensation through carbon
time carbon markets did not even exist removal certificates
• Going forward, compensation through • Early 2019, we secured a batch of 100
emission avoidance certificates (‘carbon tonnes of negative CO2 emissions in the
offsetting’) is incompatible with a net-zero world’s first auction for carbon removal
emissions target certificates (www.puro.earth)
Source: IPCC SR15 P4, 2018 Highlights of Swiss Re’s Sustainability approach| May 2020 55How does Swiss Re engage our people? We are an organisation where diverse talents come together globally to apply fresh perspectives and knowledge to make the world more resilient
We offer our employees meaningful work with a clear purpose in an attractive,
flexible and inclusive work environment where everyone can contribute
Lead and develop Empower and Drive the business Build for the future
collaborate
• In our People Strategy, we put • We empower and enable our • Our employees work hard to • We embrace and build a
a strong focus on developing people to make decisions and fulfil our vision of making the diverse workforce that brings
our leaders, our leadership drive performance world more resilient, and we together the best of multiple
pipeline and our employees hold each other accountable generations, cultures, skill
at all levels • Our Own the Way You Work for performance in this sets and thinking
programme is an integral part context
• In addition, we offer various of the Swiss Re culture • Our aim is for our employees
programmes to young adults • The way we have evolved our to live a flexible, inclusive and
moving into the workforce, • Applying agile methods will approach to managing open culture where all
the most prominent being our further improve the way we performance and, perspectives are valued.
award-winning can empower our people and consequently, reward our
graduates@swissre enable them to collaborate people supports this
programme even more
• We ensure reward is fair and
competitive
Highlights of Swiss Re’s Sustainability approach| May 2020 57Selected external acknowledgements
TheJobCrowd Award NASSCOM award
Bloomberg Gender-Equality
The graduates@swissre Our Global Business Solution
Index 2020
programme has won for the Centre Bangalore was
fourth year in a row the award recognised for “Excellence in
–1st place in the category Learning & Skills
“Banking & Finance” Development” at the
Swiss Re included as an index NASSCOM Global Capability
member for the second year Centres Conclave
in a row, which underscores
our strong commitment to
demonstrated a commitment
to equality and advancing
women in the workplace.
Highlights of Swiss Re’s Sustainability approach| May 2020 58At Swiss Re, we embrace and build a diverse workforce that brings together the
best of multiple generations, cultures, skill sets and thinking
• Swiss Re’s People Strategy key aspiration is to attract and engage talented Workplace split by region
employees from different backgrounds by providing a flexible, inclusive and
open culture where dialogue and different perspectives are valued - our
inclusive culture enables Swiss Re to truly live its “smarter together” brand
promise
Americas EMEA APAC
• Since 2013, Own the Way You Work, programme gives managers and 22.2% 62.1% 15.7%
employees autonomy to decide how, when and where work is carried out
• We aim to prevent stereotyping of individuals based on any dimension of
diversity; training sessions that specifically address feedback discussions or
recruiting include content and nudges on how to ensure fair and unbiased
dialogue and decision-making.
Swiss Re employs people with diverse backgrounds
• Employee Engagement Survey 2019: 68% of our employees say that we have from 115 nations, in over 80 offices and
an environment that is open to and inclusive of individual differences. more than 30 countries1
A commitment to inclusiveness is therefore fundamental to our organisational performance and to reaching the goals set out in our People Strategy
1 53% of employees are represented by an independent trade union or covered by collective bargaining agreements Highlights of Swiss Re’s Sustainability approach| May 2020 59We believe that increasing gender balance in leadership is a strategic imperative
critical to our future business success
In 2019, we:
• Established and regularly measure gender diversity metrics
‐ Gender Promotion Ratio1 was established in 2017 as a goal for the Group Executive Committee (GEC) in order to hold senior leaders
accountable for making progress
‐ Female joiners rate has been introduced
• Successfully completed our global female sponsorship initiative designed to enable high-potential female talent to reach their career
aspirations. Over 60 women were paired up with an executive sponsor, including all GEC members.
‐ Results were very encouraging and we are now following up on the career steps of these women as part of our overall talent pipeline and will
integrate the concept of sponsorship into our talent development programmes.
• Ensured gender-equal nominations to our senior talent development program “Explorer”
• Addressed gender pay gap and created transparency on Equal Pay
‐ Statistical analysis conducted in 2018 and 2019 by a leading consultancy does not indicate a statistically significant risk of gender bias at
Swiss Re
2017 2018 2019
Total workforce 47.3 47.9 48.4
Executive/senior management positions2 23.3 24.5 26.7
All management positions3 33.3 34.2 35.4
We recognise that women continue to be underrepresented at executive/senior management levels; our Group Executive Committee members are
committed to driving this change, and closely monitor the talent flows in their respective units and locations to actively improve the situation
1 The goal measures whether the ratio of female promotions into middle management and above is equal to or higher than the ratio of females in the "donor pool" below
2 “Executive/senior management positions” comprises the management levels of Director/Senior Vice President upwards Highlights of Swiss Re’s Sustainability approach| May 2020 60
3 “All management positions” refers to Vice President and aboveWe can only unleash the motivation and creativity of our employees if they can
all be who they are and feel included
Tackling Inclusive Equal benefits Together with Understanding
discrimination environment Pride network and guidance
Aligned with the UN Celebrated reaching Equalised our leave Our growing Together Launched training
Standards of Conduct for ‘embassy’ level in creating a (parental & bereavement), with Pride global network journeys with content
Business against LGBTI safe and inclusive working gift and insured (medical, comprises over 1000 focusing on understanding
discrimination, that we environment for all our death & critical illness) LGBTI+ employees and LGBTI+ and guidance on
signed in 2018, we LGBTI+ employees benefits for our employees allies and has active allyship available for all our
continue to provide and their partners: all of chapters in Australia, employees on the D&I
support for our LGBTI+ these benefits now extend Brazil, Canada, Germany, channel in our
staff to LGBTI+ partners as well India, Mexico, Slovakia, LearningOne platform
as unmarried heterosexual Switzerland, the UK and
partners across our the US.
locations globally – for the
few locations where a
significant cultural or legal
barrier still exists, we
continue to work on
solutions
Highlights of Swiss Re’s Sustainability approach| May 2020 61How does Swiss Re ensures good corporate governance and compliance? “We are in a constant dialogue with our shareholders and incorporate their valuable feedback into our governance framework.” Walter B. Kielholz, Chairman of the Board of Directors
Swiss Re Governance Framework
AGM
Swiss Re Ltd
Board of Directors
Chairman
Chairman’s Nomination Audit
and Governance
Committee Committee Committee
Compensation Finance and Risk Investment
Committee Committee Committee
Group Executive Committee
Group CEO
Group level Group Functions & Legal BU CEOs Regional Presidents
BU level Swiss Reinsurance Company Ltd
BU Reinsurance
Swiss Re Corporate Solutions Ltd
BU Corporate Solutions
Swiss Re Life Capital Ltd
BU Life Capital
AGM AGM AGM
Board of Directors Board of Directors Board of Directors
Executive Committee Executive Committee Executive Committee
Highlights of Swiss Re’s Sustainability approach| May 2020 63Responsibilities of Board Committees
Chairman’s & Governance Committee (CGC, 5 members) Audit Committee (AC, 4 members)
• Advisor to the Chairman • Integrity of financial statements
• Corporate Governance • Compliance with legal and regulatory requirements
• Planning and coordination of Board work • External Auditor’s qualifications, independence and performance
• Succession planning • Performance of internal audit function
• Oversees annual performance assessment and self-assessment for Board and Group EC • Monitors financial reporting process and system of internal control
Nomination Committee (NC, 4 members) Finance & Risk Committee (FRC, 5 members)
• Assists the Board of Directors in its responsibility to select, nominate and appoint • Annual review of Group Risk Policy
Board members • Risk Reports and business risk reviews
• NC evaluates nomination proposals for the Board members, the Chairman and the • Regular review of Risk Control Framework and important risk exposures
members of the Compensation Committee AGM • Review of critical underwriting standards and principles used in internal risk
Swiss Re Ltd measurement
Compensation Committee (CC, 4 members) Investment Committee (IC, 6 members)
• Compensation strategy, principles and governance • Strategic asset allocation
• Establishment of compensation plans Board of Directors • Monthly investment performance
• Oversight on compensation at Board and Group EC level • Tactical asset allocation
• Risk analysis methodology and valuation
Chairman’s
and Governance Nomination Audit
Committee Committee Committee
Compensation Finance and Risk Investment
Committee Committee Committee
Read more online
Group Executive Committee
Highlights of Swiss Re’s Sustainability approach| May 2020 64Swiss Re’s governance documents
Harmonised
principles and
procedures
Ensure Foster
sustainability transparency
AoA and quality
assessment of
the Group’s
AGM
Bylaws organisation
and business
Key governance
SRL
Committee requirements
Group level Charters
Board of Directors throughout the
Articles of Association Group
BU level
(AoA)
Bylaws
Foster
transparency and Committee Charters
quality
assessment of
the Group’s Ensure efficient
organisation and and consistent
business governance
across the Group
Highlights of Swiss Re’s Sustainability approach| May 2020 65Swiss Re’s Code of Conduct
• We believe we can only accomplish sustainable success if our stakeholders recognise us as a trustworthy
partner that pursues legitimate goals using legitimate means
• Swiss Re’s Code of Conduct provides key principles that guide Swiss Re in making responsible decisions and
achieving results using the highest ethical standards
• Swiss Re’s Code of Conduct is built on the five Swiss Re Corporate Values:
− Integrity
− Team Spirit
− Passion to Perform
− Agility
− Client Centricity
• The Corporate Values are put in action by the Leadership and Personal Imperatives
Highlights of Swiss Re’s Sustainability approach| May 2020 66Subsidiary governance principles throughout the Group
The Corporate Governance Guidelines…
• implement a consistent Group-wide governance framework
• harmonise the governance principles and processes across the Group
• ensure an efficient and consistent approach to corporate governance
across the Group
• introduce a customised governance approach taking into account the size, the nature and the
complexity of the Group’s legal entities when applying governance standards and requirements
Highlights of Swiss Re’s Sustainability approach| May 2020 67You can also read
