Corporate Responsibility Leading the re/insurance sector in leveraging our business to enhance sustainability.
Above: The Kenyan capital Nairobi, location of a knowledge-sharing event with our clients in 2014.
A challenging test The Miami-Dade public school system (MDPCS) educates more than 300 000 children every year, operating out of over 400 buildings and schools. Taken as a whole, it is also very exposed to risk of hurricane and flood. Over the years the county has paid a substantial amount in insurance premiums for comparatively little in claims. They questioned the efficiency of their risk protection — and we delivered an answer.
Providing a safe pair of hands is central to being entrusted with new acquisitions. Business integration is a key competence underpinning Admin Re®’s acquisition strategy.
Our people client discussions on capital management and regulatory developments. After completing the programme in February 2014, Benedikt was promoted and transferred to Mexico City, where he works as a Client Manager.
̤ continue to grow new life business and further develop health opportunities.
Changes in 2014 George Quinn stepped down as Group CFO and member of the Group EC and left the Group as of 30 April 2014.
Forward-looking statements typically are identified by words or phrases such as “anticipate”, “assume”, “believe”, “continue”, “estimate”, “expect”, “foresee”, “intend”, “may increase” and “may fluctuate” and similar expressions or by future or conditional verbs such as “will”, “should”, “would” and “could”. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause Swiss Re’s actual results of operations, financial condition, solvency ratios, liquidity position or prospects to be materially different from any future results of operations, financial condition, solvency ratios, liquidity position or prospects expressed or implied by such statements or cause Swiss Re to not achieve its published targets. Such factors include, among others: ̤ instability affecting the global financial system and developments related thereto; ̤ deterioration in global economic conditions; ̤ Swiss Re’s ability to maintain sufficient liquidity and access to capital markets, including sufficient liquidity to cover potential recapture of reinsurance agreements, early calls of debt or debt-like arrangements and collateral calls due to actual or perceived deterioration of Swiss Re’s financial strength or otherwise; ̤ the effect of market conditions, including the global equity and credit markets, and the level and volatility of equity prices, interest rates, credit spreads, currency values and other market indices, on Swiss Re’s investment assets; ̤ changes in Swiss Re’s investment result as a result of changes in its investment policy or the changed composition of its investment assets, and the impact of the timing of any such changes relative to changes in market conditions; ̤ uncertainties in valuing credit default swaps and other credit-related instruments; ̤ possible inability to realise amounts on sales of securities on Swiss Re’s balance sheet equivalent to their mark-to-market values recorded for accounting purposes; ̤ the outcome of tax audits, the ability to realise tax loss carryforwards and the ability to realise deferred tax assets (including by reason of the mix of earnings in a jurisdiction or deemed change of control), which could negatively impact future earnings; ̤ the possibility that Swiss Re’s hedging arrangements may not be effective; ̤ the lowering or loss of one of the financial strength or other ratings of one or more Swiss Re companies, and developments adversely affecting Swiss Re’s ability to achieve improved ratings; ̤ the cyclicality of the reinsurance industry; ̤ uncertainties in estimating reserves; Cautionary note on forward-looking statements
The 2014 Annual Report is also available in German. The web version of the 2014 Annual Report is available at: reports.swissre.com
Return on equity1 in % 13.7 10.5 Return on investments in % 3.6 3.7
Corporate governance Overview 74 Group structure and shareholders 76 Capital structure 79 Board of Directors 82 Executive management 96 Shareholders’ participation rights 102 Changes of control and defence measures 103 Auditors 104 Information policy 106
In this report We provide a detailed record of our financial and operational performance over 2014.
Where is the growth? Several years ago we pointed out to you that the company will experience a shift of business gravity towards emerging markets, in particular Asia. This process is well underway and those in charge of all segments are continuously refocusing their efforts. By the end of this year, we expect 25% of our premiums to be generated in High Growth Markets but only less than 20% of our present resources are deployed there. This will require ongoing attention by both Reinsurance and Corporate Solutions — less so for Admin Re® which is focused now on Europe — and will help to further diversify our sources of revenue. This is good for Swiss Re as we have built relationships in the new markets for many years.
We have been advocating one specific change that could mitigate some of the negative impacts while enhancing growth. Infrastructure investment should become a viable asset class for institutional investors like Swiss Re. This would give long-term investors some relief from the low yield environment and at the same time give a boost to the real economy.
Regardless of whether the goal with infrastructure investment can be achieved, ultra-low interest rates can’t go on indefinitely. Sooner or later policymakers will have to let go of the support and address the hard business of structural reforms.
ouR aPPRoaCh and Why A knowledge company We’re taking the lead in developing techniques to estimate losses in changing or even unknown areas of practice, and sharing the benefits of that knowledge with our clients.
The first is to deliver a return on equity of 700 basis points above risk-free (as measured by 10-year US Treasury bonds) over the cycle. Management will continue to monitor a basket of interest rates reflecting our business mix.
We seek to grow earnings per share by an average of 10% per year over the target period. For our baseline reference we use 2010 earnings, excluding all impacts related to a convertible perpetual capital instrument which was repaid in 2011. We have also factored in special dividends, for example adjusting the 2014 growth rate to account for the special dividend of cHF 4.15 per share paid in april 2014. Taking the latest earnings per share of USD 10.23 in 2014 and using 2010 adjusted earnings per share of USD 6.62 as our baseline, the compound annual growth rate for earnings per share over the target period comes to 11.6%.
This target measures our performance using economic net worth, a figure generated by applying our own Economic Value Management framework (see page 55 for details). We aim to increase economic net worth per share by an average of 10% per year over the target period. The growth rate counts regular and special dividends paid over the period. The average compound annual growth rate of economic net worth per share plus dividends is now 10.9% over the period 2011–2014.
Premium growth in the emerging markets also slowed significantly compared to 2013. Premiums were up 5% in 2014, down from a 9% gain in 2012 and 2013. The deceleration is partially due to the economic slowdown in many exportdependent countries in Southeast Asia and Central and Eastern Europe (CEE). That said, in China non-life premiums rose by about 15% based on new car sales and infrastructure investments. In keeping with the other emerging regions, premiums in Latin America, Africa and the Middle East are also estimated to have been weaker in 2014 than in 2013.
The investment environment remains challenging: after a short-lived recovery in 2013, government bond yields began to slip again this year. This has dashed hopes of an improvement in investment returns, which instead are expected to remain subdued for a while, thus limiting non-life insurers’ operating profitability. Overall industry profitability declined in 2014, with return on equity (ROE) estimated to be about 7%, down from
Market overview The size of the global life & health reinsurance business was around USD 70 billion in 2014, of which about 80% come from the US, Canada and the UK. Ceding companies from emerging markets accounted for 6% of global demand. Life reinsurers are increasingly diversifying away from traditional mortality business.
̤ Deploy capital at return that meets our strategic and financial targets.
Admin Re® reported net income of USD 34 million for 2014, compared to USD 423 million for 2013. The 2014 result includes a loss of USD 203 million on the sale of Aurora National Life Assurance Company (Aurora). The 2013 result was supported by higher realised gains following the re-balancing of the investment portfolio and favourable investment market movements in the UK.
Property & Casualty We believe that maintaining a diversified portfolio of growth opportunities and differentiating our services and knowledge are key to success for Property & Casualty Reinsurance (P&C) in the current market environment. We aim to maintain earnings quality through disciplined underwriting and superior service. Our product offerings go beyond pure capacity, with customised solutions that complement traditional reinsurance.
The balance between proportional and non-proportional reinsurance business moved towards proportional business in 2014. Based on gross premiums written before intra-Group retrocession, the share of proportional business was 64% in 2014, compared to 61% in 2013.
The programme is called SEARCH: Systematic Explanatory Analyses of Risk factors affecting Cardiovascular Health. It focuses on four countries — Brazil, China, India and Mexico — that account for nearly three billion people.
“Our goal is to grow the business in a profitable and sustainable way. In 2014 we also laid the foundation for future growth by extending our footprint in key High Growth Markets.”
The credit combined ratio improved to 72.3% in 2014 compared to 74.5% in 2013. The result was driven by a significant expansion of the book and continued strong business performance across all regions, especially in Europe and Latin America.
Credit & Surety is part of Corporate Solutions specialty business, contributing approximately 10% to annual gross premium earned. The focus is on two distinct offerings.
Admin Re® generated gross cash of USD 945 million in 2014 compared to USD 521 million generated in 2013. The 2014 amount included USD 217 million relating to the sale of Aurora. The strong performance in 2014 was also driven by the release of USD 225 million in surplus reserves held against the risk of credit default. Another USD 234 million was recognised following the finalisation of the 2013 year-end and 2014 half-year UK statutory valuation, owing to favourable mortality and longevity experience.
Outlook Admin Re® aims to pursue selective growth opportunities in the UK. All transactions must meet Group investment criteria and hurdle rates. Admin Re® has benefited from greater financial flexibility and a lower weighted average cost of capital following the establishment of a credit facility of GBP 550 million in April 2014. Overall Admin Re® aims to improve efficiency, to achieve capital and tax synergies, and to actively manage its asset portfolios and blocks of business. Through these actions Admin Re® aims to generate approximately USD 500 million in cash from 2015 through 2016 and approximately USD 600 million of dividends to be paid to Group in the corresponding period.
SST risk-bearing capital SST target capital SST ratio 1 SST is a legally binding solvency measure. SST risk-bearing capital is based on the preceding year-end (mid-year for SST 2/2014) capital position (minus projected dividends). SST target capital reflects a 12-month forward-looking view; SST 2/2014 as filed with FINMA at the end of October 2014, consolidated Group view. The impact of the October 2013 CHF 175 m subordinated write-off securities and September 2014 USD 500 m subordinated loan notes are not reflected in SST 2/2014.
Swiss Re’s capital management aims to ensure our ability to continue operations following an extremely adverse year of losses from insurance and/or financial market events.
Swiss Re’s risk culture provides a key foundation for the efficient and effective application of our risk management framework by delivering: ̤ Confidence, both within the organisation and among stakeholders, regarding risk exposure and the way it is handled to deliver sustainable, profitable business. An effective and strong risk culture facilitates intelligent risk taking that optimises return and avoids exposure to excessive loss.
The table on page 67 shows Swiss Re’s sensitivity to various market scenarios. The potential loss from credit spread widening increased in 2014, reflecting additional investments in corporate bonds as well as the impact of market movements in 2014. Our lower exposure to equity market moves is driven by a reduction in our listed equity and hedge fund investments. The equity scenario includes listed and private equities, hedge funds, equity derivatives, equity exposure embedded in insurance liabilities (eg, variable annuities), fee income related to equities in unit-linked business, and funding obligations from equity holdings in Swiss Re pension funds. The lower loss from a fall in real estate markets is driven by a decline in the value of real estate holdings due to the weakening of major currencies against the US dollar. The decrease in the interest rate scenario resulted from the reduction of Swiss Re’s net short duration position.
In November, the FSB confirmed the list of companies designated as G-SIIs and at the same time announced a further revision of its methodology. G-SIIs will be subject to enhanced group supervision, recovery and resolution planning, as well as higher capital requirements; for this purpose, the FSB and IAIS have introduced a basic capital requirement applicable to G-SIIs effective from 2015. The designation of reinsurers as G-SIIs has been delayed until 2015 or beyond.
̤ The Board of Directors nominated Trevor Manuel and Philip K. Ryan to be proposed to the Annual General Meeting 2015 for election as new members to the Board of Directors, whereas Raymund Breu will not stand for re-election.
The acquisition of registered shares through the exercise of conversion or option rights and any further transfers of registered shares shall be subject to the restrictions specified in the Articles of Association.
of Geneva Cantonal Bank ̤ Board member of Nestlé S.A., Swatch
̤ Assesses the capital adequacy, funding structure and liquidity management of the Group
Convocation of the General Meeting of shareholders In accordance with Swiss Re Ltd’s Articles of Association, the Board of Directors convenes the General Meeting of shareholders through a notice published in the Swiss Official Gazette of Commerce at least 20 days before the date of the meeting. The notice must state the day, time and place of the General Meeting of shareholders, along with the agenda and proposals, which will be submitted by the Board of Directors.
The SESTA allows companies to include an “opting up” provision in their articles of association, which raises the mandatory takeover offer threshold up to 49%, or an “opting out” provision, which waives the mandatory offer. Swiss Re’s Articles of Association contain neither of these provisions.
News release, media call 6 August Swiss Re posts another strong quarterly profit of USD 802 million, contributing to a half-year net income of USD 2.0 billion
This general trend will continue in the future. But, crucially, losses will be further aggravated by climate change. The scientific consensus is that a continued rise in average global temperatures will have a significant effect on weather-related natural catastrophes. According to the Special Report on Extremes (SREX) published by the Intergovernmental Panel on Climate Change (IPCC) in 2012, a changing climate gradually leads to shifts in the frequency, intensity, spatial extent, duration and timing of extreme weather events.
In the long run, if climate change remains unchecked, the relative importance of the key drivers will gradually shift, with climate change accounting for an increasingly large share of natural catastrophe losses.
Several performance highlights were seen across all businesses last year. At a Group level, US GAAP, return on equity and economic net worth targets were all either exceeded or achieved, but target EVM results were underachieved. Consequently the Compensation Committee approved aggregate compensation levels for 2014 which were lower than those for 2013.
In addition Swiss Re aims to ensure that total compensation is well-balanced in terms of fixed versus variable compensation and in terms of short-term versus long-term incentives. This is to encourage sustainable performance and appropriate risk-taking.
Measurement of the economic impact of profit/ loss from previous years’ business
LPP grant The amounts disclosed under LPP in the section Compensation decisions in 2014 reflect the grants made in April 2014. This LPP award will be measured over the period 2014 to 2016 and will vest in 2017.
̤ Review and update of the VAI plan September and December
Aggregate variable compensation expense The Compensation Committee takes its decisions to award variable compensation on an economic value basis at the time of grant. In the financial statements the recognition of deferred compensation follows the accrual principles as defined under US GAAP. The financial statements reflect the aggregate value of variable compensation for the year under review as follows: Status of Value Alignment Incentive awards
Aggregate compensation for Key Risk Takers The aggregate compensation of the individuals that held a key risk-taking position during the performance years 2013 and 2014 was: Performance Year 2013 Performance Year 2014
company contributions to social security systems paid by Swiss Re in line with applicable laws which amounted to CHF 491 381 in 2013 and CHF 359 721 in 2014.
Shadow adjustments Shadow adjustments are recognized in other comprehensive income reflecting the offset of adjustments to deferred acquisition costs and PVFP, typically related to universal life-type contracts, and policyholder liabilities. The purpose is to reflect the fact that certain amounts recorded as unrealised investment gains and losses within shareholders’ equity will ultimately accrue to policyholders and not shareholders.
Amortisation of deferred expense on retroactive reinsurance and impact of commutations 151 17
Estimating ultimate asbestos and environmental liabilities is particularly complex for a number of reasons relating in part to the long period between exposure and manifestation of claims, and in part to other factors, which include risks and lack of predictability inherent in complex litigation, changes in projected costs to resolve, and in the projected number of, asbestos and environmental claims, the effect of bankruptcy protection, insolvencies, and changes in the legal, legislative and regulatory environment. As a result, the Group believes that projection of exposures for asbestos and environmental claims is subject to far less predictability relative to non-environmental and non-asbestos exposures. Management believes that its reserves for asbestos and environmental claims are appropriately established based upon known facts and the current state of the law. However, reserves are subject to revision as new information becomes available and as claims develop. Additional liabilities may arise for amounts in excess of reserves, and the Groupʼs estimate of claims and claim adjustment expenses may change. Any such additional liabilities or increases in estimates cannot be reasonably estimated in advance but could result in charges that could be material to operating results.
Financial statements I Notes to the Group financial statements 8 Investments
Assets and liabilities measured at fair value on a recurring basis As of 31 December, the fair values of assets and liabilities measured on a recurring basis by level of input were as follows: 2013 USD millions
Liabilities for life and health policy benefits –145 –145 Accrued expenses and other liabilities –1 634 –1 271 –2 905 Total liabilities at fair value –1 648 –4 368 –1 138 2 656 –4 498 1 The netting of derivative receivables and derivative payables is permitted when a legally enforceable master netting agreement exists between two counterparties. A master netting agreement provides for the net settlement of all contracts, as well as cash collateral, through a single payment, in a single currency, in the event of default or on the termination of any one contract.
Fixed income securities backing unit-linked and with-profit business 3 680 3 680
Total assets at fair value 43 968 89 541 2 773 –3 530 132 752
Private placement corporate debt 383 317 Corporate Spread Matrix Illiquidity premium 15 bps–186 bps (65 bps)
The redemption frequency of hedge funds varies depending on the manager as well as the nature of the underlying product. Additionally, certain funds may impose lock-up periods and redemption gates as defined in the terms of the individual investment agreement.
The Group elected the fair value option for positions in the following line items in the balance sheet: Equity securities trading The Group elected the fair value option for an investment previously classified as available-for-sale within other invested assets in the balance sheet. The Group economically hedges the investment with derivative instruments that offset this exposure. The changes in fair value of the derivatives are recorded in earnings. Electing the fair value option eliminates the mismatch previously caused by the economic hedging of the investment and reduces the volatility in the income statement. Over the first six months of 2014, these equity securities were redeemed.
Diluted earnings per share Net income assuming debt conversion and exercise of options 4 513 3 569 Weighted average common shares outstanding 379 604 516 380 157 594 Net income per share in USD 11.89 9.39 Net income per share in CHF2 11.04 8.56 1 Please refer to Note 11 “Debt and contingent capital instruments“. 2 The translation from USD to CHF is shown for informational purposes only and has been calculated using the Group’s average exchange rates.
The accumulated benefit obligation (the current value of accrued benefits excluding future salary increases) for pension benefits was USD 5 735 million and USD 5 980 million as of 31 December 2013 and 2014, respectively.
Certain items reported as pension plan assets at fair value in the table below are not within the scope of Note 9, namely two positions: real estate and an insurance contract.
Grant date fair value in CHF 42.00 35.60 61.19 52.59 60.85 60.21
As of 31 December 2013 and 2014, the Group’s investment in mortgages and other loans included USD 304 million and USD 285 million, respectively, of loans due from employees, and USD 233 million and USD 210 million, respectively, due from officers. These loans generally consist of mortgages offered at variable and fixed interest rates.
United Kingdom Admin Re UK Limited, Shropshire GBP 73 100 f Admin Re UK Finance Limited, Shropshire GBP 0 100 f Reassure Limited, Shropshire GBP 289 100 f Swiss Re Capital Markets Limited, London USD 60 100 f Swiss Re Services Limited, London GBP 2 100 f Swiss Re Specialised Investments Holdings (UK) Limited, London GBP 1 100 f
Bermuda Ark Insurance Holdings Limited, Hamilton USD 6 14 fv CORE Reinsurance Company Limited, Hamilton USD 0 100 f Swiss Re Global Markets Limited, Hamilton USD 0 100 f
The Group did not provide financial or other support to any VIEs during 2014 that it was not previously contractually required to provide.
Auditor’s responsibility Our responsibility is to express an opinion on the consolidated financial statements based on our audit. We conducted our audit in accordance with Swiss law, Swiss Auditing Standards and auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
Swiss Re Ltd (the Company), domiciled in Zurich, Switzerland, is the ultimate holding company of the Swiss Re Group. Its principal activity is the holding of investments in Swiss Re Group companies.
Non-current assets Investments in subsidiaries and affiliated companies 5 17 117 17 340
Shareholders Number of shares % of voting rights and share capital1 Creation of the obligation to notify
Opening balance of legal reserves from capital contributions 7 994 5 423 Reclassification to other reserves for dividend payments –2 571 –2 741 Legal reserves from capital contributions as of 31 December 5 423 2 682 thereof confirmed by the Swiss Federal Tax Administration1 5 231 2 490 1 Under current Swiss tax legislation, the amount of legal reserves from capital contributions, which has been confirmed by the Swiss Federal Tax Administration, can be paid out as dividends exempt from Swiss withholding tax, and for Swiss resident individual shareholders holding shares in private wealth also exempt from Swiss income taxes.
John R. Coomber, former Member1 130 000 n/a 1 Term of office expired as of 11 April 2014 and did not stand for re-election.
Opinion In our opinion, the financial statements for the year ended 31 December 2014 comply with Swiss law and the Company’s articles of incorporation.
Countries in emerging market regions in Asia and Latin America recently have experienced deceleration in GDP growth. Policy uncertainty and volatile, negative or uncertain economic conditions in developed markets could also adversely impact economies in Asia and Latin America, undermining business confidence. Periods of economic upheaval could also result in sudden government actions such as imposition of capital, price or currency controls, or changes in legal and regulatory requirements.
GRI Content Index, with UN Global Compact Communication on Progress (COP) references 75
Our approach to corporate responsibility 2014 Financial Report This includes a “corporate responsibility” section focusing on the link to financial performance (on pages 108–119).
Since detecting the long-term threat posed by climate change more than 20 years ago, we have been an acknowledged thought leader on the topic. To tackle the issue, we pursue a comprehensive strategy with four pillars. This is described in the box on the right, together with the strongest business impacts of climate change.
A time-lapse view of Hurricane Andrew travelling towards the Gulf of Mexico. Natural catastrophes and the impact of climate change remain key topics for us and our partners.
USD 2.9 bn Natural catastrophe premiums in our P&C Reinsurance business (USD 2.75 billion in 2013)
Payout to Tonga after Tropical Cyclone Ian Like its neighbours in the Pacific Islands, Tonga is highly exposed to natural disasters: in fact, the whole region is one of the most vulnerable in the world. These recurring disasters not only cause widespread destruction, they also put a huge financial strain on the islands’ governments and hamper economic development.
Building on the experience we have gained with these solutions, we made a significant commitment at the UN Climate Summit held in September 2014 in New York City. Personally addressing the government leaders present at the summit, our Group CEO Michel M. Liès made the following pledge: “By the year 2020, Swiss Re commits to having advised 50 sovereigns and sub-sovereigns on climate risk resilience and to having offered them USD 10 billion against this risk.”
This web of ethical principles helps us to make decisions that are aligned with universal fundamental rights. However, for decisions in a business context this is not sufficient. Further aspects that need to be considered are the social and economic implications of our decisions in their respective cultural contexts. Last but not least, we need to take into account the implications for our business. Balancing these different aspects requires the careful and consistent assessment of transactions and their local effects, often in collaboration and dialogue with external experts and local stakeholders.
In today’s increasingly integrated world we need to be aware of political developments, actions and decisions that can have an adverse impact on our business. Within the Group’s risk management organisation, we have a team of specialists who look at a wide range of both commerce- and securityrelated political risks at global, country and business transaction levels.
We also share concerns that the design and implementation of regulatory reforms may increase procyclicality, which could exacerbate the effects of short-term market volatility. In 2014, we participated in consultations with the Financial Stability Board (FSB), the International Association of Insurance Supervisors (IAIS), the Organisation for Economic Co-operation (OECD), the European Insurance and Occupational Pensions Authority (EIOPA) and the European Commission on the implications of regulatory reforms, in particular on long-term investments, for example in infrastructure.
While the e-cigarette business is growing rapidly, knowledge about the potential health effects is lagging behind. E-cigarettes and similar devices such as e-shishas or e-pipes are commonly marketed as healthier alternatives to conventional tobacco smoking. However, the long-term effects of inhaling e-cigarette vapour are not yet fully understood. Furthermore, it is not yet clear how e-cigarettes will affect the smoking behaviour of the public: Will the dominant trend be for conventional smokers to switch to e-cigarettes, thus generally improving public health? Or will non-smokers start using e-cigarettes, with potentially adverse effects on public health?
Swiss Re SONAR: New emerging risk insights The Swiss Re SONAR report features emerging risk themes that have the potential to impact the insurance industry in the future. These topics were mainly derived from our SONAR process and were assessed by our emerging risk management experts. media.swissre.com/documents/ SONAR_2014.pdf
The CRO Forum’s position paper on “Pushing the limits” deals with new dimensions in managing risks arising from large, complex and rapidly realised projects in construction, engineering, logistics, transportation and medicine. Risk management needs to keep pace with these developments to ensure that tomorrow’s world remains as safe as today’s. media.swissre.com/documents/ CRO_Forum_Pushing+the+limits. pdf
In line with our voting framework, we review the voting policies of external managers during due diligence processes to confirm compliance with our own policy. In addition, external managers are required to report on voting activities conducted on Swiss Re’s behalf, including providing an explanation of any votes against management.
To unlock the potential of infrastructure investment, the World Bank has launched its Global Infrastructure Facility (GIF), a partnership of public and private sector entities. We took part in the GIF’s launch event in 2014 to announce our collaboration as an advisor. Swiss Re and other re/insurers can play a crucial role in promoting infrastructure investment: not only is our industry one of the largest institutional and longterm investors, it also offers the risk transfer solutions needed to protect investments.
Europe in Brussels on the European Commission’s Green Paper on the Insurance of Natural and Man-Made Disasters: In addition to regular involvement in exchanges and feedback, one of our senior managers took part in discussions with the European Commission; ̤ In the US, we maintain regular dialogue with the National Association of Insurance Commissioners (NAIC), principally on climate change and natural catastrophes; ̤ In Switzerland, we provide a committee member of the OcCC (Organe consultatif sur les changements climatiques), an advisory body on climate change set up by the Swiss Federal Administration.
In 2014, our total CO2 emissions per employee increased by 1.2%, mainly driven by a rise in business travel. Although we managed to achieve a further reduction in internal energy consumption (power and heating), this was not enough to outweigh the additional emissions caused by business travel.
One of the principal CO2 offsetting projects we supported in 2014 is based in Kenya. Despite being East Africa’s biggest and most advanced economy, Kenya is still a poor country in wide areas: It is estimated that half the population lives in absolute poverty. Two of the biggest challenges involve the burning of wood and biomass, and the lack of access to clean drinking water. By funding improved cooking stoves and chlorine dispensers, the project addresses both these challenges.
low maintenance and running costs. Constructing or renovating an office building in line with such sustainability criteria is the most effective way to minimise its environmental footprint.
Swiss Re Next is not a greenfield project: It is being constructed in the same place where the previous Neubau stood, on an urban site surrounded by roads as well as office and residential buildings. This is challenging at the best of times, but things are complicated further by the fact that the site is located on artificial land created in the 19th century when the quayside areas of lower Lake Zurich were developed. The bedrock only begins some 30 metres below the ground. Thus, when the original Neubau building was erected in the 1960s, the engineers had to construct a special excavation enclosure, consisting of a 60 cm thick trench wall made from reinforced concrete: It has the shape of a giant sump and extends 25 metres into the construction ground.
COyou2 subsidies granted to our employees in 2014 52 Swiss Re 2014 Corporate Responsibility Report
In the first seven years of its existence, the programme was a resounding success: In total, we granted more than 9 000 subsidies. In view of this, we decided to start a new seven-year cycle, running from 2014 until 2020, for which all our regular employees have a new subsidy allowance. In 2014, we granted a total of 2 268 subsidies.
Employees by region as of 31 December 2014 12% Asia-Pacific 27% Americas 61% Europe (including Middle East and Africa)
Through awareness events as well as face-to-face and web-based training, employees participate in dialogues that increase self-awareness of unconscious biases such as those related to generations, sexual orientation and gender. Training on inclusive leadership and overcoming these unconscious biases has also been embedded into our leadership development and manager training.
Our third pillar is Own the Way You WorkTM: Living Team Spirit. This is a cultural change initiative, which gives managers and employees more autonomy to decide how, when and where work is carried out, within applicable laws, rules and regulations. Our future success depends on our ability to create a flexible, global workforce that is responsive to the needs of our business. We have already made good progress in advancing our employment brand internally and externally in this area, thus meeting the needs of a multi-generational workforce.
As mentoring is by nature “selforganising ”, it is not possible to provide exact statistics on how many of our employees and managers are formally involved in a mentoring relationship, but an estimated 500 people are currently listed as interested in being mentored or offering to be a mentor.
Intensifying senior management development In today’s business environment, which is characterised by increased competition, volatility, uncertainty and complexity, strong leadership capabilities are vital for Swiss Re to be successful and to remain a global market leader. For the future, we have set ourselves the ambitious goal of strengthening the leadership capabilities of our senior leaders.
Employee groups We are a signatory to the UN Global Compact and support its ten principles in the areas of human rights, labour, the environment and anti-corruption. Many of our locations have active employee groups. These employee representatives play an important part in the company’s success by contributing valuable perspectives and by helping to identify employment-related challenges.
For most employees, total compensation comprises the base salary and the Annual Performance Incentive (API), which includes communication of the individual target incentive that influences the level of payout when business and individual performance objectives are achieved.
Developing innovative risk transfer instruments If we want to expand the reach of our re/ insurance covers, we must take into account special requirements. For example, effective protection against natural catastrophe risks means that funds for relief and emergency measures need to be available quickly, so financing arrangements must be in place before an event (“ex-ante financing”). Likewise, agricultural insurance schemes in emerging and developing markets need to add real value, yet be affordable.
Building a sustainable energy future: risks and opportunities With an expanding population and world economy powered by oil, coal and gas, fossil fuels have become a large part of our daily lives. But this has come at a price: greenhouse gas emissions, which adversely affect our climate. How much higher will this price rise before we achieve a more sustainable energy system?
In a first step, for a given location, economic sector and affected population, we identify the most relevant hazards and analyze historic events (e.g., from disaster data sets).
The hidden risks of climate change: An increase in property damage from soil subsidence in Europe
FR = 2014 Financial Report 76 Swiss Re 2014 Corporate Responsibility Report
Labour practices and decent work Disclosure on management approach: Our management approach to labour practices and decent work is disclosed in the chapter “Being an employer of choice”.
FS14 Access to financial services for disadvantaged people 14, 17–19, 66–67 SO3 Anti-corruption training 10 64 SO5 Public policy positions 35
Product responsibility We consider the definition of product responsibility in the GRI guidelines to be of little relevance for a company providing business-to-business services in the financial industry, and hence provide no information in this area.