Our people Drawing on the know-how and experience of a diverse, multigenerational group of people, we want to ensure our employees can contribute to an organisation that is constantly looking for new ways to improve the wellbeing of society – where how we achieve results is as important as what we achieve.
Active in society Playing an active role in society beyond our core business is important to us. Globally, we empower vulnerable communities to become more resilient to risk and, where we have offices, we encourage volunteering activities and support local institutions.
Within these core chapters, the content primarily reflects our three 2030 Sustainability Ambitions and other Sustainability Topics, as displayed and described on pages 16–19. Our activities as an active citizen in society are described in detail in the separate Activity Report published by the Swiss Re Foundation.
All the main chapters of the report have received independent assurance from PricewaterhouseCoopers. Their assurance report is included on pages 82–83.
Our Sustainability Report incorporates our 2019 Communication on Progress (CoP) for the UN Global Compact (www.unglobalcompact.org). You can view the full list of references to the Compact’s ten principles in the online version of the report.
More detailed information on reporting scope, reporting period and publishing rhythm is available in the online version of the report: reports.swissre.com/ sustainability-report/2019/ introduction/our-approach-tosustainability /report-profile-andreporting -frameworks.html
Our CoP for the UN Global Compact and our PSI Public Disclosure of Progress are available at: reports.swissre.com/ sustainability-report/2019/ introduction/our-approach-tosustainability /report-profile-andreporting -frameworks.html
We develop our solutions as part of our established risk modelling and underwriting activities or by creating innovative new products in close cooperation with our clients and partners.
Across our efforts, we seek to develop solutions that improve access to insurance protection, especially in emerging markets. If governments and communities are financially protected against such risks as windstorms, earthquakes, drought and flooding, they can better cope with the immediate consequences of a disaster.
Natural catastrophes are a key risk in our property and casualty (P&C) business. The damage caused by storms, floods, droughts, earthquakes and other natural catastrophes can affect millions of lives and the economies of entire countries. In 2019, large natural catastrophe losses were mainly driven by typhoons Hagibis and Faxai in Japan, Hurricane Dorian in the Atlantic, and wildfires, floods and hailstorms in Australia.
Providing effective re/insurance protection against such large natural catastrophes creates significant benefits for our clients and for society at large. In 2019, our clients in P&C Reinsurance paid us USD 2.94 billion of natural catastrophe premiums (for losses larger than USD 20 million), equivalent to approximately 15% of total premiums in this business segment.
On pages 25–29 you can read about some of the innovative solutions we have developed to offer our clients protection against natural catastrophe and other risks.
Worldwide economic as well as insured losses from natural catastrophes were high in each of the past three years, but have steadily increased on average for more than
Section_Level 1 Section_Level 2 20 years. The main reasons for this are economic development, population growth, urbanisation and a higher concentration of assets in exposed areas.
This general trend will continue. But, crucially, economic 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 Fifth Assessment Report (AR5, 2014) and the Special Report on Global Warming of 1.5°C (SR15, 2018), published by the Intergovernmental Panel on Climate Change (IPCC, www.ipcc.ch), a changing climate gradually leads to shifts in the frequency, intensity, spatial extent, duration and timing of extreme weather events.
While the impact of climate change will increase gradually over the coming decades, most of our business is renewed and re-priced annually, and our risk models are refined regularily. Risks are normally covered for 12 months (up to five years for catastrophe bonds). Thus, re/insurance premiums do not reflect expected loss trends over the coming decades. Rather, for underwriting and risk management purposes, our models provide an estimate of the current risk. But as natural catastrophe losses continue to rise as a result of the different factors listed above, our models will gradually factor in this trend.
Creating solutions for sustainabilityCreating solutions for sustainability 1 sigma 2/2019, Natural catastrophes and man-made disasters in 2018: “secondary” perils on the frontline
As neither the investors in the SREC securitisation nor the Green Bank own the rooftop solar panels, traditional insurance was not available for this risk. Through our know-how, we were able to develop an alternative parametric solution that satisfied the needs of both investors and the bank, and allowed the SREC securitisation to be brought to the investment market as planned.
In this section, we describe a selection of the innovative transactions and initiatives we were involved in during 2019 to help strengthen risk resilience. These transactions help meet the three 2030 Sustainability Ambitions defined in our Group Sustainability Strategy (for details, see pages 9–14), often more than one at the same time: • Mitigating climate risk and advancing the energy transition • Building societal resilience • Driving affordable insurance with digital solutions
The transactions help our clients and their communities become more resilient to the risks they face, by ensuring that adequate funding is in place when it is needed.
expanded flood coverage and new policy options. Benefiting from partnering with Swiss Re, a growing number of private insurers are now bringing new flood protection offerings to their customers.
Improving the resilience of small and medium-sized businesses in California, US Earthquakes pose a significant risk in California, and at present most of the losses faced by small and medium-sized businesses would be uninsured. Even if these businesses escape property damage, they risk having to shut down due to power outages, supplier issues or employees not being able to commute to work. Additionally, obligations to continue paying employee wages or lease payments can cause financial difficulties.
In response, Swiss Re and our insurance partners Falls Lake (www.fallslakeins.com) and Arrowhead General Insurance Agency (www.arrowheadgrp.com) have launched an innovative parametric insurance solution for commercial clients called Quake Assist. The product offers coverage for earthquakerelated business interruptions, with fast, simplified claims payments based on the earthquake’s magnitude and the distance of the insured’s location from its epicentre.
Since claims are paid quickly once the parametric trigger conditions are met, business owners face less financial uncertainty and can manage their budgets more effectively. The solution thus enables California’s small and medium-sized businesses, which provide the economic backbone of most communities, to become more resilient, ultimately helping to protect people’s livelihoods and financial security in this earthquake-prone region.
Providing crop insurance to smallholder farmers in Mexico As a growing global population fuels demand for higher crop output, offering protection against loss of, or damage to, crops and livestock is becoming increasingly important. Agricultural insurance thus provides significant benefits to communities, particularly by protecting smallholder farmers’ incomes against such risks.
Due to the size and complexity of the project, a panel of insurers and reinsurers, including Swiss Re, were consulted and invited to participate in the insurance programme design discussions to ensure an optimal insurance solution could be provided. Based on our large infrastructure project engineering and risk knowledge, we gained the leading reinsurer position on the construction and post-construction insurance covers. In this role, we have been able to support the larger ambitions of the project that include creating better access to suburban areas, stimulating economic development and growth, as well as providing important quality-of-life improvements to all Parisians.
In particular, this unparalleled project will bring significant improvements to the city’s environment by drastically reducing vehicle congestion, noise and air pollution, as well as material increases in efficiency by reducing travel times between key locations. In the end, the Grand Paris Express will be more than just a new transport network, it intends to revitalise Paris as a leading global city.
Building on these experiences, we made a significant commitment to the United Nations at its Climate Summit in September 2014. Personally addressing the government leaders present at the summit, our then 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 have offered them USD 10 billion against this risk”.
We have agreed with the United Nations to report publicly on the progress we make on this commitment. By the end of 2019, we had advised 120 sovereigns and sub-sovereigns on climate risk resilience and offered a total of USD 10.0 billion in re/insurance protection, thus reaching our target one year ahead of schedule.
Lack of health insurance is a major protection gap in many parts of the world. In particular, it affects low-income women who work in the informal sector, by running a market stall with fruits or vegetables, offering laundry services or undertaking similar activities. To date, these microentrepreneurs usually lack any sort of insurance protection against loss of income due to illness.
Our partnership will aim for replicating insurance schemes, similar to that in Egypt, in further countries. In 2019, the focus was on building the necessary foundation to scale and replicate this insurance solution in the future.
Number of (sub-)sovereigns advised 66 96 120 Amount of climate protection offered (in USD) 5.3 billion 8.2 billion 10.0 billion
Total amount of climate protection offered to sovereigns and sub-sovereigns since 2014 (USD 8.2 billion by 2018)
219 000 Customers benefiting from insurance cover by the end of 2019
Creating solutions for sustainability the longest underground railway connection in the world, linking Austria and Italy. When completed in 2026, this pioneering work of engineering will not only greatly improve passenger travel through the heart of Europe but, more importantly, help shift the European freight sector from road to rail, thus allowing a material reduction in heavy road vehicle traffic.
Swiss Re Corporate Solutions’ long-standing expertise in the field of infrastructure and tunnel construction, coupled with its capacity to underwrite large risks and a strong understanding of local insurance regulations, allowed us to be appointed insurance leader and co-leader for the Austrian and Italian sides of the project. With both parts of the tunnel being worked on simultaneously, the project’s technical complexity has required a rigorous underwriting process, including the examination of the physical aspects of the work, as well as meeting the clients’ local regulation and risk management requirements.
As a key element of the wider TransEuropean Transport Network, the Brenner Base Tunnel is central for the European economy. Given that about 40% of all trans-alpine transport currently goes over the Brenner Pass, the tunnel will remove a significant infrastructure bottleneck and make a major contribution to improving the sustainable transport of goods. Ultimately, it will promote faster and more environmentally friendly high-capacity transport for freight and passengers, and help reduce CO2 emissions.
Making Shaanxi Province in China more resilient through natural catastrophe cover With more than 300 million farmers, China is one of the world’s largest food producers. It is also one of the most exposed to extreme weather events due to its vast size, complex geographical environment and varied climate. Insurance is widely recognised in China’s disaster relief approach as a key factor in enhancing resilience. To this end, provincial governments are increasingly using insurance instruments to support relief programmes and facilitate recovery and rebuilding efforts.
Asia is expecting a significant increase in its ageing population over the next 15 years. It is estimated that, by 2035, 450 million people will be 75–84 years old. For traditional three-generation households, this means that the current “sandwich” generation of working adults is experiencing an increasing financial burden since they are taking care of their children’s needs (eg tuition fees and childcare), as well as their ageing parents who are living longer in retirement due to medical advances. This comes in addition to juggling housing loan costs, saving for their own retirement and building a financial safety cushion to protect against unexpected events.
Insurance plays an important role in ensuring the financial security of farmers, particularly in countries with a large agricultural sector. In Cambodia, for example, about three million people, or almost 20% of the country’s population, are engaged in rice farming. The crop thus plays a major role in securing livelihoods, but production is highly dependent on the right weather conditions. As it is particularly sensitive to excessive or insufficient soil moisture, flood and drought conditions can have a catastrophic impact on rice crop yields.
Crop insurance not only helps farmers reduce the risk of losing their production inputs for current crops, but also means they can avoid having to take out additional and/or larger loans to finance future crops. Ultimately, getting access to adequate financial protection means farmers can overcome the risks caused by uncertain weather and stabilise their livelihoods.
Mitigating climate risk and advancing the energy transition Building societal resilience Driving affordable insurance with digital solutions
In 2019, we were involved in a number of new offshore wind farm projects, which included the following highlights: First offshore wind farm in France Europe continues to be the region with the largest number of offshore wind projects. Within Europe, the leading markets to date have been the UK, Germany and Denmark. Recently, the first large commercial projects have been launched in France. In 2019, we agreed to provide insurance to the first of these projects to be constructed, the St-Nazaire Offshore Wind Farm (Parc éolien en mer de St-Nazaire, www.parc-eolien-enmer -de-saint-nazaire.fr).
This wind farm is being developed by Eolien Maritime France, a joint venture co-owned by EDF Renewables (www.edf-renouvelables.com). Situated between 12 and 20 kilometres off the coast of the Loire-Atlantique department, it will comprise 80 turbines with a total capacity of 480 megawatts. When fully operational, the wind farm is expected to cover 20% of the department’s power consumption.
iptiQ reflects Swiss Re’s commitment to introduce more people in society to the benefits of financial protection against life’s uncertainties – in particular to closing the gap between the amount of savings or insurance that someone has, and the amount needed in the event of misfortune. iptiQ works in partnership with established and trusted brands, combining Swiss Re’s vast experience and expertise in designing protection products with the partner companies’ own know-how.
In 2019, we placed special emphasis on taking measures that have the long-term goal of decarbonising our business model and addressing the carbon risks embedded in it.
Our efforts to fulfil the Paris Pledge for Action include the development of suitable re/insurance solutions for our clients, our Responsible Investing strategy and reducing the footprint of our own operations. In our risk management, we focus on the carbon intensity and the associated risks embedded on the liability side of our balance sheet.
Learn more about how we address political risks at: www.swissre.com/sustainability/ risk-intelligence/political-risks.html
Thermal coal policy Through our Sustainable Business Risk Framework (see pages 35–37), we continued with the implementation of our thermal coal policy in our underwriting, including direct, facultative and treaty business. We first introduced this policy in mid-2018, pledging not to provide re/insurance to businesses with more than 30% exposure to thermal coal utilities or mining.
Phasing out the most severe climaterelated transition risks In 2019, we took another important step in our carbon steering mechanism and developed a policy to shift away from the most carbon-intensive oil and gas production.
From July 2023, we will no longer provide individual insurance covers for those oil and gas companies that are responsible for the world’s 10% most carbon-intensive oil and gas production.
Our Sustainable Business Risk Framework is an advanced risk management instrument designed to identify and address the potentially negative effects of our transactions on local communities, workforces and the environment. This framework applies to all of our business transactions in re/insurance as well as investments, to the extent that we can influence their various aspects.
The Sustainable Business Risk process Each of the two umbrella policies and eight sector guidelines of our Sustainable Business Risk Framework contains criteria and qualitative standards which define precisely when a transaction may present a sustainability risk. We assess such transactions through our Sustainable Business Risk (SBR) process with its two due-diligence mechanisms.
You can download a summary of our main human rights and environmental protection concerns at: www.swissre.com/sustainability/ risk-intelligence/sustainable-businessrisk -framework/policies.html
Company exclusions The policies of our Sustainable Business Risk Framework specify certain criteria that may lead us to exclude a company from both our re/insurance transactions and our investments, to the extent that such an exclusion is permissible (eg by virtue of mandatory law or internal policies) and possible (eg if existing documentation relating to such re/insurance transactions and investments provide for it). These criteria include: involvement in prohibited war material; verifiable complicity in systemic, repeated and severe human rights violations; causing repeated, severe and unmitigated damage to the environment; unregulated proliferation of nuclear weapons; and unethical/cruel animal testing practices.
Country exclusions Swiss Re also excludes certain countries from its business that have particularly poor human rights records. This step goes further than compliance with ITCs. Our goal is to refrain from directly underwriting risks or making investments in entities that are based in these countries. We review the list of
excluded countries annually based on independent human rights assessments and update it if warranted.
Training Ever since we introduced our comprehensive Sustainable Business Risk Framework eleven years ago, we have made considerable efforts to raise awareness of sustainability issues among our underwriters and client managers. Through training, we ensure that they know how to properly apply the framework with its underlying principles of respecting human rights and protecting the environment. In recent years, we have focused on high growth markets where we want to expand our business.
A couple of years ago, we developed a new eLearning course for our in-house training. While this continues to be compulsory for all our employees who work in underwriting and with our clients, it is now mandatory for all our new entrants, as well. In 2019, a total of 3 000 employees completed the mandatory training course.
Client and industry interaction Over the year, we had a number of important external engagements on sustainability risks with clients, brokers, investors, industry peers and civil society groups such as environmental and humanitarian NGOs. We held in-person meetings with clients operating in sensitive sectors such as mining, forestry, and oil and gas, discussing potential measures they could take to address their sustainability risks.
As part of our ongoing efforts to implement our thermal coal policy (see page 34), we had over 300 engagements with clients across the globe in 2019. Many of them introduced a thermal coal policy themselves and in turn are helping us reduce our carbon exposure in our treaty business.
A cyber risk assessment is conducted at least annually to inform senior management of the design and status of Swiss Re’s Cybersecurity Programme. The assessment allows for the revision of controls to respond to technological developments, evolving threats and changed cyber risk exposures. Areas identified that require improvements are addressed to enhance Swiss Re’s cyber security resilience.
Detecting and investigating such risks early on forms an important part of our comprehensive approach to risk management. In analysing how risks are evolving and related to each other, we seek to assess their potential impact on Swiss Re. This is vital to reduce uncertainty and prevent unforeseen losses, raising awareness within the Group and across our industry.
Effective governance of the programme is seen as crucial, which is why it is overseen by both the Group Chief Risk Officer and Group Chief Operating Officer, and is robustly implemented through a three-linesof -defence model. Additionally, Swiss Re has a committee in place that provides Groupwide management oversight and direction in information security, cyber defence and data protection risks, with the Group Chief Information Security Officer ensuring that the Board of Directors is regularly informed on relevant matters.
Learn more about how we address emerging risks at: www.swissre.com/sustainability/ risk-intelligence/emerging-risks.html
Swiss Re has highlighted risks from climate change since the 1980s and has achieved a reputation as a pioneer and thought leader on this topic in the re/insurance industry. Some climate change impacts, eg sea-level rise, are relatively easy to model accurately, and risk transfer offerings can be adjusted on a yearly basis. Other effects are more complex, however, because they involve knock-on and cascading effects. Such emerging risks may build up over a long period without any visible impacts, but when loss events are finally triggered, they can be severe.
For a pioneering research collaboration, see Climate Change Futures. Health, Ecological and Economic Dimensions. A Project of The Center of Health and the Global Environment, Harvard Medical School. Sponsored by: Swiss Re and the United Nations Development Programme, 2005.
Swiss Re’s SONAR Report features emerging risk themes that have the potential to impact the re/insurance industry. These topics derive from our SONAR process and have been assessed by our emerging risk management experts in recent years. www.swissre.com/institute/ research/sonar/sonar2019. html
Our emerging risk specialists periodically cluster and further assess these risk notions for their potential impact on our business. Further “early signals” are harvested from external research institutions and experts, and digitally enabled horizon scanning tools are also deployed. Finally, our specialists carry out in-depth investigations and internal reviews on selected topics.
Strategic foresight Identifying and addressing emerging risks can be challenging. Their novelty and interconnectedness make it difficult to determine when a particular risk notion must be considered an emerging risk. Timing is of crucial importance. If measures to price and, eventually, exclude a particular risk are taken too early, we may not be able to offer our clients adequate re/insurance protection; if measures are taken too late, we may end up with increased loss potential. Given these challenges, we believe it is essential to foster risk dialogue with various partners. By sharing perceptions and assessments, all parties can gain a better understanding of potential emerging risks.
You can read about our most important strategic initiatives concerning emerging risks at: www.swissre.com/sustainability/ risk-intelligence/emerging-risks/ strategic-initiatives.html
Including ESG criteria along the investment process makes economic sense, especially for long-term investors, as it improves risk-adjusted return profiles and reduces downside risks. Our Responsible Investing strategy relies on the three cornerstones Enhancement, Inclusion and Exclusion, of which Enhancement is the most meaningful for Swiss Re.
1 Asset classes considered are government bonds, credit bonds, and mortgages and other loans.
Overall investment portfolio USD 134.5 bn, as of 31 December 2019 4% Short-term investments 42% Government bonds 34% Credit bonds 5% Equities* 3% Mortgages and other loans 6% Other investments (incl. policy loans)
Enhancement Enhancement refers to the systematic integration of ESG criteria along the entire investment process, from the Strategic Asset Allocation (SAA) to monitoring and reporting. Today, close to 100% of our SAA considers ESG aspects.
At the end of 2019, approximately 45% of our investment portfolio was managed externally, and more than 98% of those assets were managed by signatories to the Principles for Responsible Investment (PRI,
ESG rating distribution across our corporate credit and listed equities portfolio in %
Focus on themes and create related mandates, such as green bonds, renewable or social infrastructure
Exclusions based on internal sustainability risk assessments, such as thermal coal www.unpri.org/). We work closely with our external managers to ensure they consider ESG and climate-related aspects in their investment processes. Before external managers are appointed, we perform thorough due diligence on them to confirm their compliance with our responsible investing principles. This includes a review of the managers’ ESG considerations in their investment decisions and monitoring, as well as of their commitment to responsible investing. After they have been mandated, the managers’ individual performances are monitored in line with the Swiss Re Responsible Investing Policy and measured against ESG-related benchmarks. The managers are required to report regularly on their responsible investment activities.
For our real estate portfolio, we focus on certified buildings, such as the MINERGIE® standard (www.minergie.ch/ ) in Switzerland, or the world-wide known Leadership in Energy and Environmental Design certification (LEED, www.usgbc.org/ leed). By the end of 2019, the value of our MINERGIE®-certified buildings reached USD 0.4 billion or 23% of our Swiss portfolio.
Systematic integration of ESG considerations along investment process and into portfolio
in the Australian, UK and US real estate markets, reaching a total size of USD 2.1 billion by the end of 2019.
Infrastructure is an attractive asset class for our investment portfolio given its credit quality and inherent liquidity premium. Our infrastructure investments are assessed against a catalogue of ESG parameters to evaluate the underlying sustainability risk.
• 21% of our infrastructure investments are allocated to social infrastructure such as hospitals, student dorms or affordable housing projects.
Exclusion Swiss Re’s approach to Exclusion is based on our Group-wide Sustainable Business Risk Framework. This advanced risk management tool sets company-wide criteria for what we consider as acceptable business and which may thus lead to the exclusion of a company or a country from our investment scope. Swiss Re’s Sustainability Risk Management team is responsible for reviewing and updating the framework on a regular basis. Further information is available in this report on pages 35–37. Additionally, we consider the way companies conduct their business by screening their alignment with the ten principles of the UN Global Compact (www.unglobalcompact.org/).
To mitigate the risk of stranded assets in the light of the accelerating transition to a net-zero GHG economy, we avoid investments in companies that generate 30% or more of their revenues from thermal coal mining or that use at least 30% thermal coal for power generation. We have also divested from companies with more than 20% revenues from oil sands operations. Further strengthening our efforts, we introduced an absolute coal threshold in 2019: We are committed to not investing in mining companies that produce at least 20 million tonnes of coal per year and in power utility generators with more than 10 gigawatts of installed coal fire capacity.
For further information on how we manage climate risk in our investment portfolio, please read our Climate-related financial disclosures published in the 2019 Financial Report (pages 151–167).
T h e m a ti c In ve st m e n ts
• Active mandates benchmarked against MSCI ESG Leaders indices restricted to BB and better
• New investments are only made into Private Equity funds that adhere to ESG guidelines
• Benchmarked against different sustainability standards depending on the location of the property (Minergie standard, LEED certification, GRESB scoring, NABERS rating, BREEAM certification)
The number of points reflects the level of ESG integration for the respective asset class.
The SAA & Markets Committee reviews and discusses operational decisions related to Swiss Re’s Responsible Investing strategy and advises the co-heads SAA & Markets on related decisions and improvements. The Asset Management Investment Committee reviews and discusses strategic decisions and improvements related to Swiss Re’s Responsible Investing strategy and advises the Group Chief Investment Officer (Group CIO) on them.
In the case of internally managed equities, we make use of our influence as a responsible shareholder by directly exercising our voting rights and engaging with companies in which we are invested. For externally managed portfolios, we work with the relevant portfolio managers to execute our proxy votes and related engagement activities.
We review the voting policies of external managers during the due diligence process to confirm compliance with our policy. In addition, external managers are required to report on voting and engagement activities conducted on Swiss Re’s behalf.
Promoting responsible investing Shifting the large institutional asset base towards sustainable investments would mark a big step forward in making the world more resilient. Swiss Re’s brand promise “We’re smarter together” is also applicable to responsible investing.
Knowledge sharing is another key aspect of promoting responsible investing. We offer all Asset Management employees various internal ESG training opportunities to ensure consistent know-how across the Group. Furthermore, we are in an ongoing dialogue
We joined the global Science Based Targets initiative and will develop science-based emission reduction targets (sciencebasedtargets.org). Our commitment also includes advocating for and engaging on corporate and industry action as well as public policies for a low-carbon transition of economic sectors.
In this context, we hosted the “Sustainability Leadership Series– Responsible investing in practice” conference in September 2019. The event featured expert speakers as well as panel sessions and served as a platform to share first-hand insights on the implementation of responsible investing strategies, discuss policy developments and look at the latest trends in stewardship across a fast-evolving market. You can find more information about the event on page 54.
In 2019, we also launched the brochure Responsible Investing – Our approach, which provides an update on the implementation of our Responsible Investing strategy and outlines our most recent commitments: www.swissre.com/ri-our-approach.
Swiss Re Institute Swiss Re has long been recognised as a knowledge leader within the re/insurance industry. We believe that a superior understanding of the risks we all face supports the Group’s vision of making the world more resilient.
Swiss Re Institute plays an essential role in achieving this objective. It conducts and publishes superior risk research to drive better decisions and innovation in the re/insurance industry. It curates risk and market data to enable solutions that create value for clients and to guide the Group’s strategic direction. It acts as a coordination point bundling all research activities across Swiss Re and works with selected partners to explore the future of risk coverage, assess changes in the risk landscape and act as a catalyst for industry change.
Based on its mandate and key activities, Swiss Re Institute supports the Group’s commitment to sustainability. It helps identify emerging risk trends and fosters dialogue with our clients and other stakeholders to advance sustainable risk solutions.
In 2019, our stakeholder dialogue on this 2030 Sustainability Ambition included the following highlights: • We attended the UN Climate Action
Summit in New York and signed two important commitments: the UN Global Compact Business Ambition for 1.5°C (see page 33) and the UN-convened Net-Zero Asset Owner Alliance (see page 47). In addition, the Insurance Development Forum (IDF) announced a series of coordinated commitments with the UN Development Programme, Germany and the UK to increase insurance protection in climate-exposed countries. Swiss Re has endorsed this commitment together with a number of peer companies.*
• We contributed our know-how to the development of the 2019 Task Force on Climate-related Financial Disclosures (TCFD) Status Report, as well as hosted the Industry Stakeholder Workshop convened by the International Association of Insurance Supervisors (IAIS) and the Sustainable Insurance Forum (SIF) on the “Implementation of the Recommendations and Guidance of the Task Force on Climate-related Financial Disclosures and Supervision of Climate Change Risks” event.
• We produced the sigma issue 2/2019: “Secondary natural catastrophe risks”, which took a look at global insured losses from natural catastrophe events, as well as provided a detailed analysis of the “secondary” effects of primary perils. While underwriting catastrophe risks means looking at peak risks, increasingly it also requires taking into consideration forward-looking trends on secondary perils.
• Swiss Re’s Chairman Swiss Re Institute and Group Chief Underwriting Officer, Edi Schmid, published a blog titled: “Averting a collision course with climate change”. This article emphasised how climate change and urban growth are impacting weather-related disasters and underinsurance, as well as how efforts must converge with broader actions on climate change and support more sustainable business models.
• We contributed to the Chief Risk Officer (CRO) Forum Emerging Risk Initiative position paper titled: “The heat is on – Insurability and Resilience in a Changing Climate”. The aim of the paper was to provide the insurance sector, risk professionals and other stakeholders with a clear understanding of climate change implications for the re/insurance industry, and to help equip them to challenge their businesses and clients in their responses to climate change.
• We held a number of Engineering & Construction events in locations that included Sao Paolo and Kuala Lampur, as well as the Engineering Underwriting Forum in Zurich. These events brought together stakeholders to discuss infrastructure development, investment and insurance, as well as focused on the advancement of holistic and sustainable infrastructure development. Further on the topic, Marcela Bortolamedi Cochrane, Property & Specialty Underwriting Operations Officer, published a blog article titled: “Helping the world rebuild and renew”, outlining Swiss Re’s role in supporting a holistic approach to sustainable infrastructure development and our involvement in the Madaster Project, which is focused on finding ways to reduce infrastructure’s carbon footprint by re-using building materials.
Technological and economic development, population growth, ageing populations and other societal trends are increasingly putting people and assets at risk. Swiss Re’s Responsible Investing strategy, as well as its work in the areas of health and longevity, agriculture and infrastructure represent some of the ways we help build societal resilience and reduce related vulnerabilities.
• With a broad panel of experts from politics, science, business and risk engineering, Swiss Re Corporate Solutions held a webinar on “The European food industry: Increasing resilience and strengthening food security”. Topics addressed included biodiversity, digitisation and competition – all key factors to resilience in the European food industry. Further on this topic, Jeffrey Khoo, Head Food & Agriculture Sales Asia, published a blog article titled: “Let’s protect those who secure our food”, outlining thoughts on food security considering the ever-growing world population, as well as how to better protect smallholder rice farmers, who remain largely uninsured, but who generate 90% of the rice crops in the Asia-Pacific Region.
• As part of our Digital Ecosystems Series (January 2019), we published the research report titled “Extending the boundaries of value creation in insurance”. The study took a look at how different digital ecosystems are creating new markets by combining a variety of services and vendors on one platform to offer consumers a holistic and “power of choice” user experience. Further, by leveraging digital ecosystems, it is expected that reinsurers and insurers will be better able to customise their products to customers’ needs.
• We co-organised “The Power of Predictions” conference together with the Gottlieb Duttweiler Institute and IBM. Swiss Re Institute positioned the effects of better predictions in the insurance industry, and how financial markets and risk allocation will evolve. In addition, we presented emerging trends and risks that are key for the insurance industry and future of societies.
Our three 2030 Sustainability Ambitions provide a key focus for our stakeholder dialogue. At the same time, we regularly engage in the wider sustainability discussion and contribute to other topics we consider relevant.
Underwriting Reinsurance, Mike Mitchell, published a blog titled: “Now, more than ever insurance is vital to the sustainability of the world’s economies”. This article emphasised the importance of improving and other topics. Discussions cover Swiss Re’s approach to managing risks and seizing opportunities on ESG topics, including advances to our leading Sustainable Business Risk Framework, and how we integrate ESG criteria across our investment portfolio.
• Swiss Re’s Group Chief Executive Officer, Christian Mumenthaler, was part of the Climate Leaders panel session at the 2019 World Economic Forum, as well as quoted in an article for Reactions magazine. He continues to be outspoken and action-oriented on mitigating climate change, having indicated that speed, industry-wide collaboration and taking a long-term view are key in enabling the critically important transition to a low-carbon economy.
• Swiss Re’s Chairman Swiss Re Institute and Group Chief Underwriting Officer, Edi Schmid, published a blog titled: “Risk, resilience and the road to a sustainable future”. This article emphasises the importance of both resilience and sustainability, as well as thinking about them in the context of the Resilience Index for countries that was developed jointly by Swiss Re Institute and the London School of Economics. Closing the protection gap makes economic common sense and the new Resilience Index is a good example of how risk knowledge can help guide decision-making and strengthen societal resilience.
Various regulators around the world have started to evaluate the need for regulations on the topic of big data / digital ethics or have issued initial guidelines. Swiss Re actively engages in discussions with regulators by participating in regulatory expert groups, contributing to studies and reports, as well as giving feedback to consultations and responding to regulatory questionnaires.
The European Insurance and Occupational Pension Authority (EIOPA) has appointed a Swiss Re employee to its consultative expert group for digital ethics and to chair the workstream on Fairness and NonDiscrimination. The outcomes of this work are expected to be published in 2021.
The event served as a platform to share first-hand insights on the implementation of responsible investing strategies, discuss policy developments and look at the latest trends in stewardship across a fast-evolving market. During the event, four panels discussed ESG aspects from different perspectives. Participants took stock of lessons learned thus far by asset managers who have taken active steps to integrate ESG into their investment decisions, looking at this by asset class, discussing the view-point of policy makers and regulators, and finally considering the latest trends and outlook on investment stewardship and shareholder engagement.
Panel discussion during the event (left to right): Guido Fürer, Chief Investment Officer, Swiss Re; Lady Lynn Forester de Rothschild, Founder and CEO, Coalition for Inclusive Capitalism; Patrick Odier, Managing Partner, Lombard Odier; Philippe B. Brahin, Head Investor Relations, Swiss Re.
• In Japan we are a member of the TCFD (Task Force on Climate-related Financial Disclosures) Consortium, which was established in May 2019. The inaugural TCFD Summit took place in October 2019. In Singapore we were actively involved in the development of a set of environmental risk management guidelines by the Monetary Authority of Singapore (MAS) for the insurance sector. The guidelines are to be issued in 2020 after a public consultation exercise.
• We have regularly contributed to platforms such as the World Economic Forum, B20, G20 and G8 to share our insights on key risks, and have supported the United Nations Framework Convention on Climate Change (UNFCCC) process.
• With the Institute of Insurance Economics at the University of St. Gallen, HSG (www.ivw.unisg.ch/), we conduct industry-wide studies to better understand market dynamics.
• We collaborate with NNEdPro Global Centre for Nutrition and Health (www.nnedpro.org.uk) to develop knowledge application models which help promoting nutrition to achieve better public health.
• With UC Berkeley (www.berkeley.edu/), we explore how sustainability issues impact financial risk through maximum drawdown.
Reducing our 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.
You can find out more about our commitment to reach net-zero emissions in our operations at: www.swissre.com/sustainability/ footprint/co2netzero-programme.html
As a knowledge company in the financial services sector, we do not cause large environmental impacts through our own operations. Nonetheless, we firmly believe that as a company committed to sustainability we should minimise our environmental footprint, thus leading by example.
We operate an integrated global management system at our Corporate Real Estate & Services (CRES) division, which interlinks quality and environmental management, and ensures that similar processes are seamlessly managed. Through a systematic, Group-wide reporting process, we monitor our environmental performance and implement appropriate improvement measures.
Since 2015, our entire CRES division has been certified according to the ISO 14001 environmental management standard (www.iso.org), replacing the location-based approach previously used. This means that all our operations and employees are covered by an ISO 14001-certified environmental management system (EMS).
For our recently completed office buildings in New York, Zurich (Swiss Re Next) and Bangalore we have also received the Leadership in Energy and Environmental Design (LEED, usgbc.org/leed) certification, the most widely used green building rating system worldwide to evaluate the overall environmental performance of a building. In addition, we have received certification for our Campus Mythenquai in Zurich as a “2000-Watt site in transformation”.
The Greenhouse Neutral Programme has been the principal means to reduce the emissions from our own operations. It combines two commitments: firstly, to reduce our CO2 emissions per employee (full-time equivalent, FTE); secondly, to offset all the remaining emissions by purchasing high-quality emission reduction credits, thus making our company fully greenhouse neutral.
Goals and scope Seamlessly continuing from the programme’s first phase, we launched a second commitment cycle running from 2013 until 2020. However, after almost halving our CO2 emissions per employee in the previous ten years, the potential for further reductions has now been significantly smaller. Thus, our target until the end of 2020 is to keep our CO2 emissions per employee stable at the 2013 level. In view of our expansive business strategy, especially in high growth markets, we regard this as an ambitious goal.
In the current cycle, the programme covers the following emission sources: • Heating (Scope 1) • Power consumption (Scope 2) • Business travel, copy paper use, waste generation, water use, technical gases and employee commuting (Scope 3)
In 2019, our total CO2 emissions per employee (FTE) decreased by 2.7% and were thus 10.6% lower than in 2013. We achieved this overall reduction mainly by further cutting power consumption at our business locations and moving into more energy-efficient buildings, eg in New York and Zurich (Swiss Re Next).
We pursue the following impactful green power options, with decreasing preference: • Direct investments in our own solar plants
In 2016, we also signed up to the EP100 initiative, launched by the Climate Group (www.theclimategroup. org) and the EE Global Alliance (eeglobalalliance.org/). This is a shared commitment by leading global companies to double their energy productivity or, in other words, to get more economic output from each unit of energy. www.theclimategroup.org/project/ ep100/39.0
Goals of our Greenhouse Neutral Programme until 2020: • Maintain the emissions reductions we achieved between 2003 and 2013 regarding power consumption, heating and business travel
• Obtain 100% of power from renewable sources by the end of 2020
Swiss Re has decided to play a leading role again in this accelerated effort to mitigate climate risk. Thus, in 2019 we committed to reaching net-zero emissions in our operations by 2030. This underscores our pledge to reach net-zero emissions by 2050 both in our re/insurance business (see page 33) and in our investment portfolio (see page 47).
Secondly, we will start to buy impactful carbon removal certificates, which are significantly more expensive than conventional carbon offsets. The latter cannot be used to substantiate a net-zero emissions claim, though (see page 62). The new carbon steering levy will address both objectives at the same time – cutting emissions from flights that are not absolutely needed and raising funds to support carbon removal projects.
For a start, we have built up a dense network of video conferencing equipment across the Group. Recently, we replaced these facilities with state-of-the-art technology, which creates a real-time, life-size virtual meeting experience in specially designed rooms. By the end of 2019, we had a total of 155 video conference facilities worldwide. In total, we hosted 97 743 video calls in 2019, amounting to 71 884 hours.
Paper, water and waste We also calculate and compensate the CO2 emissions from further sources along our supply chain (Scope 3), ie copy paper, waste generation and water use. The overview of our emissions sources on page 58 shows, however, that these are less relevant in our business than other environmental impacts, which is why we have not set quantitative reduction goals for them.
Furthermore, it is difficult for us to influence water use and waste generation at locations where we rent office space. In the office buildings we own ourselves, however, we ensure that appliances meet high standards of water efficiency.
As paper use is more responsive to managerial action, we have taken a number of measures to reduce the average amount used by our employees in recent years. New IT solutions such as “pull printing” (which eliminates uncollected printouts), web-based collaboration and document management platforms have led to a significant decrease of paper use in all our locations. Average paper use per employee fell strongly again by 19.7% in 2019, resulting in a total reduction of 66.9% since 2013.
For some sourcing categories, we have also developed Minimum Standards that further specify our requirements. Besides power (see page 59) and paper (see page 61), they cover cleaning services and agents, refrigerant agents and building materials.
In 2016, we signed up for EcoVadis (www.ecovadis.com), a collaborative platform for sustainable supply chain management, which covers a wide range of screening criteria across the topics of environmental impacts, human rights, labour practices, ethics and sustainable procurement. This allows us to assess the sustainability performance of our suppliers
Moving from carbon offsets to carbon removal to compensate our unavoided emissions
Net-zero emissions is the thought-leading concept of today. Yet the carbon removal industry, let alone a fully fledged market for removal certificates, is still to emerge. Hence, we find ourselves in a similar situation as in 2003. Through our early engagement we will help develop the carbon removal market by creating demand and by motivating clients and peers to join our commitment.
Living up to this ambition, we seized the opportunity to participate in the very first marketplace for sellers and buyers of carbon removal certificates – the Finnish start-up Puro (puro.earth/). In their inaugural auction held in May 2019, Swiss Re secured a first batch of 100 carbon removal certificates generated by a biochar project in Tampere. Biochar locks away the CO2 that plants have removed from the air to grow their biomass. Mixed with soil, biochar endures for hundreds of years and improves soil quality by retaining moisture and nutrients.
more systematically with the help of key performance indicators and to engage them in improvements. It also helps us reduce and manage potential sustainability risks in our supply chain.
For our tier 1 and tier 2 vendors (who account for approximately 80% of our outsourced spending), we have set ourselves the goal of having all of them ESG-assessed by the end of 2020. At the end of 2019, the assessment had been completed for approximately 35% of these vendors. In addition, due to expired scorecards we had to re-assess approximately 50% of our assessed tier 1 and tier 2 vendors during 2019.
Reducing our own carbon footprint is an important part of our efforts to tackle climate change. In 2007, we launched the COyou2 Programme because we wanted to make our commitment more tangible for our employees and help them become more recent years. Many new employees there have made use of the opportunity to claim subsidies, eg for highly energy-efficient fridges and washing machines as well as bicycles for their daily commute to work. In Europe, in general, mobility remains a popular category, with bicycles the most common type of subsidy.
In our Asian locations, energy-efficient home appliances were particularly popular. In the Americas region, both home appliances and home infrastructure subsidies were soughtafter subsidy categories.
In 2019, we granted a total of 3 436 subsidies spread across three product categories: home appliances, home infrastructure and mobility. Over the past six years, electricity-powered mobility has become more prominent, with 1 000 subsidies for e-bikes, e-motorbikes, e-cars and plug-in hybrid electric cars.
Among the larger Swiss Re locations, uptakes per employee were highest in Slovakia and India. Our office in Slovakia has witnessed particularly strong growth in
You can learn more about working at Swiss Re at: www.swissre.com/about-us/diversityinclusion -in-Swiss-Re/our-people.html
• Drive the business: We want our employees to operate with a truly commercial mind-set and a clear sense of accountability. They should all take accountability proactively and hold each other responsible for performance in terms of both results and behaviour. We ensure reward is fair and competitive, although this should not be the main reason why people want to work for our company.
• Build for the future: At Swiss Re, we embrace and build a diverse workforce that brings together the best of multiple generations, cultures, skill sets and thinking. Our aim is for our employees to live a flexible, inclusive and open culture where all perspectives are valued. We create meaning for our employees by connecting our work to the core purpose of our company: to make the world more resilient.
Below we describe key actions we took in 2019 across these four core themes.
Investing in our leadership and a strong pipeline The Swiss Re employee experience is very much dependent on our leaders. They serve as role models and play an important role in the growth and development of our people whilst being focused on delivering results. We recognise that being a good leader is not easy. We therefore strengthen the leadership capabilities of our line managers and prepare them to meet the challenges of a rapidly changing work environment. We do this through targeted skills programmes that strengthen our leaders’ skills both in people and general management.
In addition, we regularly review and adapt our leadership development programmes. In 2019, we put a special focus on embracing agility. The goal is to equip our leaders at all levels to cope with challenges such as creating joint movement amongst employees, responding faster to business changes and empowering everybody to take a leadership role.
Developing our employees In a world where the ability to learn and adapt quickly is increasingly crucial, the effective development of our people is key for our enduring success.
In 2019, we introduced our new learning experience platform called LearningOne. It is a one-stop shop aimed at making the learning experience more effortless for all our employees, by enabling them to easily access all the learning offerings they require. It finds the required content wherever it is hosted – inside or outside the company – while artificial intelligence personalises the learning offering for every individual. This supports the democratisation of learning because experts working for our company can now share their learning quickly and widely and be credited for their contributions. All this is helping us in our journey to become more agile.
Learning hours per employee 15.0 11.0 10.8 Learning costs per employee (in USD) 785 513 434 * In 2018 we began changing Swiss Re’s learning landscape with LearningOne, adopting a new learning philosophy that gives our employees access to bite-sized learning nuggets at their personal convenience. We no longer track these learning hours, which explains the significant drop from 2017 to 2018.
In a bid to tap into the best re/insurance talent in the country, Swiss Re Bangalore has signed Memorandums of Understanding with some of India’s leading academic institutions such as the National Insurance Academy (niapune.org.in/) in Pune and BIMTECH – Birla Institute of Management Technology (www.bimtech.ac.in/) in Noida. Through these partnerships, we also get an opportunity to shape and build the academic curricula, as well as raise awareness of the talent potential in re/insurance.
To determine the ranking, our graduates were asked to complete a survey about working for Swiss Re. The survey included questions such as: What are the best things about your company? What attracted you to the company? How do you rate the work/life balance, training and ethical/environmental balance? The results from our graduates were overwhelmingly positive.
Engaging the next generation: graduates@swissre Every year, our award-winning graduates@ swissre programme provides entry positions for university graduates and offers an excellent opportunity for young talents to discover the exciting world of a leading global re/insurer.
You can learn more about the graduates@swissre programme at: careers.swissre.com/go/ Careerstarters/2744101/
We empower and enable our people to make decisions and drive performance. In a global company such as Swiss Re, employees need to collaborate across the organisation and different geographies. In this context, our employees tell us that our Own the Way You Work programme makes a noticeable difference. We also have high hopes that applying agile methods will further improve the way we can empower our people and enable them to collaborate even more.
Experimenting with agile methods Swiss Re has been an early mover with regard to agile working methods and created cross-functional teams by market and for key clients many years ago, bringing together roles like client management, underwriting, claims handling and technical accounting to deliver value to our clients as one. Recently, further units have started to implement agile organisational structures, removing traditional hierarchies and experimenting with agile methods (eg Scrum). We expect these units to have a role model effect for others.
Our employees work hard to fulfil our vision of making the world more resilient, and we hold each other accountable for performance in this context. The way we have evolved our approach to managing performance and, consequently, reward our people supports this.
Managing performance Our performance management approach supports our aim for a high-performance culture in which our individual and team goals, as well as behaviours, are aligned to our firm’s purpose and business strategy. We want our employees to reach their potential and be fully supported in their work, which also links back to our approach to learning (see section “Lead and develop”).
Our Leadership Imperatives are fully embedded in our performance management approach, focusing both on what people achieve and how they achieve their goals. Including these behaviours in performance and feedback discussions allows for robust, forward-looking conversations, better performance differentiation and transparent pay-for-performance.
Together, we are moving Swiss Re towards a culture of continuous performance dialogue by placing more emphasis on frequent conversations between employees and their managers that provide forwardlooking, ongoing and timely feedback.
We also encourage our employees to own Swiss Re shares by providing opportunities to participate directly in the long-term success of the Group through the Global Share Participation Plan.
In addition, the COyou2 Programme has continued to offer our employees subsidies for a range of climate-friendly investments they want to make in their private lives (see page 63).
Further information on Swiss Re’s approach to compensation can be found in our 2019 Financial Report (pages 120–149).
Executive/senior management positions* 23.3 24.5 26.7 All management positions** 33.3 34.2 35.4 *”Executive/senior management positions“ comprises the management levels of Director/Senior Vice President upwards. **”All management positions“ refers to Vice President and above.
At Swiss Re, we embrace and build a diverse workforce that brings together the best of multiple generations, cultures, skill sets and thinking. We can only unleash the motivation and creativity of our employees if they can all be who they are and feel included. An inclusive culture is key to our business success: in today’s fast-changing world we can only thrive with a culture that celebrates diverse teams, encourages fresh perspectives and fosters innovative thinking to create smarter solutions for our clients. A commitment to inclusiveness is therefore fundamental to our organisational performance and to reaching the goals set out in our People Strategy. Throughout the year, we continued with several inclusion initiatives.
Achieving gender equality at Swiss Re At Swiss Re, we believe that increasing gender balance in leadership is a strategic imperative critical to our future business success. Swiss Re is a signatory to the UN Global Compact and deeply committed to the UN Sustainable Development Goal #5: “To achieve gender equality and empower all women and girls”. We are proud to have been included in the Bloomberg GenderEquality Index (GEI, www.bloomberg.com/ gei) for the second year in a row, an achievement which underscores our strong commitment to gender-related topics and an inclusive work environment.
We are also focused on increasing the number of women who join Swiss Re at all levels, ensuring diverse candidate slates as well as diverse selection panels. “Gender Promotion Ratio” is a key internal performance metric for each of our Group EC members: It compares the ratio of female promotions into middle management and above with the ratio of women in the “donor pool”. Whilst we are doing well here, we recognise the need to do more overall to address imbalances in the gender composition of our workforce.
Our global Female Sponsorship Initiative started in 2017 and came to a successful close in March 2019 with very encouraging results. In that, we identified a pool of sponsors and sponsorees and paired them for an engagement that lasted 18–24 months, with the aim of preparing the sponsorees for leadership positions and strengthening our female talent pipeline. We are committed to following up on the career steps of these women as part of our overall talent pipeline and on integrating the concept of sponsorship into our talent development programmes.
We foster a culture of open dialogue and frequent feedback at all levels, where employees and managers engage in regular, personal exchange. In particular, we want to assess our progress in fostering an engaging work environment and an agile, commercial culture, which are both key to our present and future success.
For the past five years, we sought feedback from all our employees in a more formal manner through an annual Employee Engagement Survey (EES), run by our external provider Aon, now known as Kincentric (www.kincentric.com/). Besides helping to foster an open culture, it has also enabled us to measure progress against the objectives of our People Strategy.
A key feedback received from our line managers, which is supported by external trends, is the need to become more flexible in our survey approach. Acting on this, we have shifted from an annual survey to a pulse check approach: shorter, more regular and lighter surveys on themes important to evolve our organisation. This also enables us to act more quickly on the results and take targeted actions.
The first of these pulses carried out early in 2019 focused on the topics of engagement and agility, while also measuring progress on specific priorities such as talent, pay and leaders creating excitement for the future.
Given our desire to build a more agile culture, we place special emphasis on measuring our progress in this respect. One of Swiss Re’s biggest strengths has been reconfirmed by our employees – that we have an environment that is open to and inclusive of individual differences (68%). We also continue to focus on speed as an opportunity. When, in November, we checked the pulse on whether our employees are experiencing progress on agility, 59% of them responded positively, which is encouraging.
These bodies are elected by local employees and have clearly defined information and consultation rights. Although there are significant local differences in the applicable legislation, their rights typically concern: working conditions, benefits, reorganisation and restructuring, redundancies, disciplinary actions and conflict cases.
At our Zurich headquarters, where almost a quarter of our total workforce is employed, we work closely with the Personnel Committee (PECO). Representing the interests of our Swiss-based employees, PECO aims to create and maintain a positive working environment. It is involved in changes or adaptations to the General Working Conditions or other important policies, such as the Social Plan. PECO also seeks to ensure the de-facto equality of men and women, and places special emphasis on the challenges faced by employees with family obligations.
In the UK, similar activities are conducted by the Employee Liaison Group (ELG), and at our Munich office we have a works council with clearly defined codetermination rights in several areas. Other offices in Europe (eg in France, Italy, Luxembourg and Denmark) also have works councils or staff delegates, depending on the size of the branch and local regulations.
India Average number of sick days per head 8.9 8.8 8.7 Average number of active employees 935 1 039 1 181 Number of employees who have recorded absence due to illness 999 1 094 1 261
Switzerland Average number of sick days per head 4.4 4.7 4.2 Average number of active employees 3 348 3 239 3 165
Number of employees who have recorded absence due to illness 1 881 1 834 1 824 * excludes staff of subsidiaries
Being a parent at Swiss Re At Swiss Re, we understand that having children and bringing them up is a source of great joy and that one’s life takes on a new quality that shapes day-to-day routines. We want to help our employees balance their career and family responsibilities, allowing them to always put their families first. To this effect, we offer a range of programmes and support services.
In Bratislava – one of our high growth locations – we have honoured the concept of “maternity buddies” since 2015: Every mother on maternity leave has a maternity buddy who informs her about current activities in the team, news concerning the organisation as well as open positions to encourage their return. To enable parents to concentrate on challenges at work – knowing that their children are in good hands and being properly cared for – we started partnering with the TwinCity Kindergarten, a day care provider located in the same premises as Swiss Re.
Environmental, social and governance (ESG) issues dominated the corporate governance discussions in key jurisdictions during 2019. There is an understanding that corporate actions do not take place in a vacuum, but within a dynamic landscape of evolving ESG issues and risks. ESG issues are linked to a variety of areas, for which the boards already have oversight, therefore they cannot be viewed in isolation. It is not surprising that many of the main corporate governance trends in 2019 such as diversity, scrutiny of executive remuneration and workforce and stakeholder engagement are to some extent related to the wider discussion around ESG issues.
We expect the ESG trend to intensify further over the next few years. One reason for the increased focus on ESG issues is the greater transparency with respect to corporate reporting in general and with respect to ESG
disclosures in particular. Companies are increasingly asked about their approach to sustainability and corporate social responsibility. They recognise that a good reputation, including an elaborated response to ESG matters, can be a strategic asset. A failure to respond appropriately to ESG issues can be a long-term and strategic risk. Employees, in particular millennials, contribute to the focus on ESG issues as they expect their companies to reflect their values. Finally, investors are also increasingly focusing on ESG issues.
Comprehensive information on Swiss Re’s corporate governance is available on pages 80–117.
Our Code of Conduct (Code) is one of the key documents governing the management of risks and driving the culture within our company. It sets the framework and defines the basic compliance and integrity principles we adhere to globally. The Code is built on the five Swiss Re values, which guide us in making responsible decisions and achieving results using the highest ethical standards: integrity, team spirit, passion to perform, agility and client centricity.
The Code also offers practical guidance and examples for deciding the appropriate course of action and solving ethical dilemmas. It further sets out how all employees should react when they observe a possible breach of the principles in the Code. All employees are obligated to uphold both the letter and spirit of the Code, policies, standards and the Group’s corporate governance principles in their daily business activities, and to respect and obey applicable laws and regulations in all jurisdictions where we do business.
Assurance Assurance activities to monitor adherence to the Code are a core part of our Compliance Programme. Compliance performs independent risk-based monitoring to ensure the adherence and the efficiency of processes and controls mitigating our key
compliance risks across Swiss Re. In 2019, we implemented new data analytics technology to set the foundation for continuous monitoring and will continue to further develop and roll out our continuous monitoring capabilities in 2020.
Our Global Framework on Anti-Bribery and Corruption, supported by a Global Policy on Financial Crime and our Global Standard on Anti-Bribery and Corruption, emphasise that bribery, facilitation payments and hospitality where the giver is not present are always prohibited, and provide guidance on how to deal with public officials and on other procedures to be followed. Tools to support employees in carrying out their anti-bribery responsibilities in accordance with the framework are also in place. For example, a gift and hospitality register exists for employees through which they can request approval for gifts, hospitality, sponsorships, charitable and political contributions above thresholds specified in the policy and standard.
Our gift and hospitality threshold requirements are set in the context of our industry, regulatory requirements and risk exposure. In 2019, the Global Standard was updated to apply stricter thresholds for hospitality, sponsorships and charitable contributions following the perfromance of an industry benchmarking. Lower thresholds applicable to public officials’ gifts & hospitality, including donations, remained unchanged. Also, in 2019, we released a new data analytics dashboard built on Tableau to support assurance activities by improving monitoring capabilities of the framework. The dashboard provides an overview of gift and hospitality register entries and supplements other existing reports.
Data protection We could not work successfully with our business partners, clients and individual consumers around the world without maintaining their trust regarding the data they provide to us. The Code highlights that we need to handle personal data with the greatest care and use it only for legitimate business purposes.
Our Global Framework on Data Protection, with a global policy and standard as well as targeted standards, addresses our commitment to protecting personal data and respecting privacy rights across our operations. We use internationally recognised data protection and privacy principles that ensure compliance with a complex and constantly changing set of laws and regulations, and we provide proper training and awareness sessions to our employees. Procedures for reporting security incidents and notifying on data breaches are established.
Money laundering The Code draws attention to the risk of becoming involved in money laundering and emphasises the importance of due diligence.
All investigations of alleged Code violations involving either an employee or external contractor are handled by the Investigation Coordination Process (ICP). ICP, which is managed by the Compliance function, serves as a central coordinating unit across all Swiss Re offices globally and ensures that all investigations are handled in a consistent and fair manner. If, following an investigation, the allegations are substantiated, ICP will issue recommendations regarding any appropriate disciplinary or non-disciplinary actions that should be taken. ICP also ensures that any such actions are applied consistently across the Group.
Misconduct cases are systemically presented and discussed with executive management, as well as with legal entity boards as part of the reports to board audit committees. In 2019, ICP cases reflected the following indicators: • 93 cases were investigated by ICP in 2019, and 74 were closed.
• The reporting intake methods for the ICP cases that were investigated in 2019 were: through internal channels, including reporting directly to Compliance, via line managers and via Human Resources (67%), from external sources (15%), the whistleblowing hotline (14%) and process detection (4%).
• The categories of ICP cases investigated in 2019 included external Fraud (31%), Discrimination and Harassment (including bullying) (20%), internal Fraud (15%), Insider Trading (accidental trading within a close period) (11%) and various Other Code of Conduct Violations (23%) – none of these other violations individually exceeded 10%.
In March 2019, a new annual attestation process was launched to all permanent and temporary employees to acknowledge personal accountability for complying with specific requirements related to the Code of
Conduct and Global Compliance Policies and Standards which includes, for the avoidance of doubt, responsibility for Conflict of Interest and Gift and Hospitality Register disclosures.
In 2017, we enhanced the mandatory training escalation process for all Groupwide Compliance eLearnings to enable timely completion of assignments. Employees not complying with their mandatory eLearning assignments on time without valid reasons are subject to potential disciplinary action. For 2019, we achieved 100% completion of all mandatory eLearning assignments including new hire and refresher training.
The Swiss Re Foundation reflects Swiss Re’s social and humanitarian values. Our vision is to help societies build capacity to mitigate health, environmental and economic risks, as well as to recover quickly from setbacks. We do this in emerging countries and where Swiss Re has office locations.
Together with our partners we aim to achieve measurable and sustainable impacts. We support them not only through evidence-based grant funding, but also by giving them access to the broad expertise of Swiss Re’s employees, allowing them to learn, prototype and scale effective solutions. In this way, we strive to foster resilient societies and support Swiss Re’s sustainability objectives.
Our ambition 2019 was a year of transformation for the Swiss Re Foundation, as we began to put our strategy for 2019–2021 to the test. We strengthened our resilience-building in three areas, which are aligned with Swiss Re’s 2030 Sustainability Ambitions: natural hazards and climate risk management, access to health and income opportunities, and innovation to build societal resilience. To further reinforce our contribution, we phased out water as a focus area and will wind down the ReSource Award programme in 2020.
Our 2019 activities focused on healthcare access. For example, we teamed up with the digital health pioneer Living Goods and dedicated our Entrepreneurs for Resilience Award to digital innovations that make healthcare more easily accessible to underserved communities. For the first time, we also supported a randomised controlled trial of the University of Zurich to inform our future activities: Researchers will test the impacts of a health insurance product designed for unprotected lowincome families in Kenya.
Criteria The management reporting processes with respect to the sustainability reporting 2019 were assessed against the internal and external policies and procedures as set forth in the following: • “Internal Environmental Performance
Indicators for the Financial Industry” published by the Verein für Umweltmanagement in Banken, Sparkassen und Versicherungen e.V. (VfU) published in 1997 and 2011; • “The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (Revised Edition)” published in 2004 by the World Resources Institute and the World Business Council for Sustainable Development; • DEFRA Guidelines to DEFRA/DECC’s GHG Conversion Factors for Company Reporting. AEA for the Department of Energy and Climate Change (DECC) and the Department for Environment, Food and Rural Affairs (DEFRA); • The framework document “Environmental Performance Indicators (EPI) Reporting at Swiss Re”, version 1.1 from December 2015 including Annex; and
Inherent limitations The accuracy and completeness of environmental indicators are subject to inherent limitations given their nature and methods for determining, calculating and estimating such data. Our assurance report should therefore be read in connection with Swiss Re’s internal guidelines, definitions and procedures on the reporting of its sustainability performance.
Swiss Re’s sustainability reporting guidelines Assessing whether the methodology applied by Swiss Re is in line with the reporting criteria; • Interviews and management inquiry Evaluating the sustainability reporting and underlying performance indicators by performing analytical procedures and interviewing selected key contacts to assess whether the internal Environmental Performance Indicators Reporting guidelines and sustainability guidance were consistently applied by the selected locations; Performing inquiries of personnel responsible for internal sustainability reporting and data collection at the Swiss Re corporate level to evaluate the reporting and aggregation process and to assess its appropriateness; • Reconciliation of CO2 emissions data Reconciling the CO2 emissions data for energy consumption, business travel, copy paper, waste, water, technical gases and commuting and sustainability data and information to the data used for the internal sustainability reporting of the selected locations; • Assessment of the key figures Performing tests on a sample basis of evidence supporting selected sustainability data and information (natural catastrophes and climate change, the commitment to the UN, the commitment with Women’s World Banking, sustainable business risk transactions referred to the team of sustainability experts, responsible investments, CO2 emissions and reductions, energy consumption for heating and electricity, business travel data, sustainable supply chain data, the COyou2 programme, HR data and information, diversity and inclusion, employee health data) to assess their completeness, accuracy, adequacy and consistency; • Review of the documentation Reviewing the relevant documentation on a sample basis, including Swiss Re’s sustainability-related policies, the management of reporting structures, the documentation and systems used to collect, analyse and aggregate reported sustainability data and information; • Assessment of the processes and data consolidation Reviewing the appropriateness of the management and reporting processes for sustainability reporting; and assessing the processing and consolidation of data at Swiss Re’s Group level; and
• Review of certified emission reductions and removals Reviewing the retirement of 76 340 tonnes of CO2e: 57 600 certified emission reductions (CERs) with additional Gold Standard label, 18 640 CERs from the Community Development Carbon Fund, 100 CORCs (verified CO2 Removal Certificates from the puro.earth marketplace).
Chief Risk Officer (CRO) Forum The CRO Forum is a group of professional risk managers from the insurance industry that focuses on developing and promoting industry best practices in risk management. The Forum consists of Chief Risk Officers from large multi-national insurance companies. www.thecroforum.org
ClimateWise ClimateWise supports the insurance industry to better communicate, disclose and respond to the risks and opportunities associated with the climate-risk protection gap. This is the growing divide between total economic and insured losses attributed to climate change. www.cisl.cam.ac.uk/business-action/ sustainable-finance/climatewise
RE100 and EP100 Led by The Climate Group in partnership with CDP, RE100 is a global corporate leadership initiative bringing together influential businesses committed to 100% renewable electricity. theRE100.org/
The Climate Group The goal of The Climate Group is a world of no more than 1.5°C of global warming and greater prosperity for all. It brings together powerful networks of businesses and governments, which shift global markets and policies, towards this goal. www.theclimategroup.org/
UN Global Compact The UN Global Compact supports companies to do business responsibly by aligning their strategies and operations with its ten principles on human rights, labour, environment and anti-corruption; and to take strategic actions to advance broader societal goals, such as the UN Sustainable Development Goals, with an emphasis on collaboration and innovation. In 2019, we signed the UN Global Compact Business Ambition for 1.5°C. www.unglobalcompact.org/
UNEP Finance Initiative (UNEP FI) UNEP FI is a partnership between UNEP and the global financial sector to mobilise private sector finance for sustainable development. It works with more than 300 members – banks, insurers, and investors – and over 100 supporting institutions to help create a financial sector that serves people and the planet while delivering positive impacts. www.unepfi.org
WEF Alliance of CEO Climate Leaders The Alliance of CEO Climate Leaders is a global network of chief executive officers who see the business benefits of bold and proactive action to ensure a smooth transition to a low-carbon and climateresilient economy. www.weforum.org/projects/alliance-ofceo -climate-leaders
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