Zurich Insurance Group Ltd · SIX:ZURN
Zurich Insurance — ESG Presentation (November 2021)
48 slides from Zurich Insurance's sustainability presentation, Nov 30, 2021
Slide 1: Delivering an ambitious ESG strategy at Zurich
Delivering an ambitious ESG strategy at Zurich November 30, 2021 Investor presentation Zurich Insurance Group
Slide 2: Key messages
Key messages We are well on track to deliver on our 2020-2022 targets Strategy Update Increasing customer satisfaction and investing in our capabilities is supporting growth Embedding ESG We are integrating ESG in all aspects of our business conduct Customer solutions We are increasing our efforts t
Slide 3: Index
Index TOPIC SLIDE NUMBER Strategy update 4-8 ESG ambition 9-14 Our 1.5˚C future 15 - 26 Confidence in digital society 27 - 29 Work sustainability 30 - 35 Communities 36 - 38 Corporate governance 39 - 41 Remuneration 42 - 47 © Zurich November 2021 Delivering an ambitious ESG strategy at Zurich 3
Slide 4: Strategy update
@ ZvRICH Strategy update
Slide 5: Strategy update key messages
STRATEGY UPDATE Strategy update key messages We are well on track to deliver on our 2020-2022 targets; all our businesses are growing Execution with improved underlying performance and continued focus on efficiency We are creating value through increased customer satisfaction while simplifying produ
Slide 6: We are well on track to deliver on our 2022 targets
STRATEGY UPDATE We are well on track to deliver on our 2022 targets WE HAVE ADAPTED TO THE CHANGED ENVIRONMENT TO 2020 – 2022 TARGETS DELIVER 2020 – 2022 TARGETS Target HY-21 Commercial Taken advantage of favorable market BOPAT ROE >14% 13.0% conditions to improve profitability and quality of the EP
Slide 7: Increased customer satisfaction drives net customer growth
STRATEGY UPDATE Increased customer satisfaction drives net customer growth HIGHER CUSTOMER SATISFACTION IMPROVED RETENTION NET CUSTOMER GROWTH ACROSS THE GROUP1 +2.5 million EMEA net new customers4 Farmers +10 +16 +6 +7 +19 +3ppts EMEA1 Asia Pacific1 Latin America +3 +2ppts Flat +12 APAC2 Farmers3 +
Slide 8: ESG topics are an integral part of the insurance industry's purpose
STRATEGY UPDATE Environmental, Social and Governance topics are an integral part of the insurance industry’s purpose INSURANCE PURPOSE THREAT ILLUSTRATION Risk mitigation Unaffordable insurance Home insurance in flood prone areas Risk measurement Immature risk modeling Emerging risks (e.g. cyber, bi
Slide 9: ESG ambition
ESG ambition ESG is embedded in our governance and business conduct, confirming our ambition to become one of the world’s most responsible and impactful businesses
Slide 10: ESG is fully embedded in our governance
ESG AMBITION ESG is fully embedded in our governance Overall strategic responsibility and oversight Board of Directors Governance, Nominations & Audit Committee Risk & Investment Committee Remuneration Committee Sustainability Committee1 Responsibility within area of responsibility Sustainability st
Slide 11: ESG is embedded in the way we run our business
ESG AMBITION ESG is embedded in the way we run our business Partners and Customers Employees Operations Underwriting Investing communities Accompany on Workforce Science-based Global climate risk Engage on investees Sustainable Net Zero transition diversity CO2e targets assessment Net Zero transitio
Slide 12: We are taking decisive steps in our sustainability strategy
ESG AMBITION We are taking decisive steps in our sustainability strategy OUR 1.5˚C FUTURE CONFIDENCE IN A WORK DIGITAL SOCIETY SUSTAINABILITY Commitment to no longer Global implementation Increased gender underwrite new greenfield oil of Data commitment diversity at Executive exploration projects1;
Slide 13: Our ESG reporting monitors strategy execution
ESG AMBITION Our ESG reporting monitors strategy execution, meeting stakeholders’ needs while ensuring compliance ZURICH SUSTAINABILITY STRATEGY REPORTING STANDARDS ADOPTED; REGULATORY AND COMMITMENTS STAKEHOLDER RELEVANT REQUIREMENTS Strategy execution metrics for our Standards that we have committ
Slide 14: Zurich is highly rated by external assessors
ESG AMBITION Zurich is highly rated by external assessors ESG AMBITION OUR LONG-TERM COMMITMENT ‘AA’ rating1 In Top 1% of insurance peer group2 Absolute Score of 4.2 (out of 5.0)3 OUR ENGAGEMENT PARTNERS ‘A-’ Leadership Level4 • Lead author of the World Economic Forum Global Risk Report • Founding m
Slide 15: Our 1.5˚C future
Our 1.5˚C future We are driving, together with the industry, towards the 1.5˚C future and have set ambitious operational and investments interim targets
Slide 16: Bringing sustainable products to support the energy transition
1.5˚C FUTURE – CUSTOMERS SOLUTIONS We are accelerating our efforts to bring sustainable products to support the energy transition of our P&C customers SUSTAINABLE SOLUTION DEFINITION DEEPENING INSIGHTS ACROSS INDUSTRIES • Solution designed or adapted to support sustainable activities or • Reviewing
Slide 17: Innovative unit-linked ESG offerings to our Life customers
1.5˚C FUTURE – CUSTOMERS SOLUTIONS We have launched innovative unit-linked ESG offerings to our Life customers INNOVATIVE UNIT-LINKED ESG PRODUCTS UNIT-LINKED ESG APPROACH • Launched insurance industry-first carbon neutral world equity fund • The business is local in nature and is managed accordingl
Slide 18: Building our 1.5˚C future engagement strategy
1.5˚C FUTURE – REDUCING CO2e FOOTPRINT We are building our 1.5˚C future engagement strategy with customers and investees ✓ REVIEW OF OUR COAL AND OIL ❑ NOW IDENTIFYING CO2e ❑ DETERMINING BEST TYPE OF SANDS ENGAGEMENTS COMPLETED1 HEAVY EMITTERS ENGAGEMENT APPROACH In top Not renewed/divested % financ
Slide 19: Deepening our commitment to the energy transition in underwriting
1.5˚C FUTURE – REDUCING CO2e FOOTPRINT Deepening our commitment to the energy transition in underwriting WE CONTINUE TO REDUCE OUR TO FURTHER SUPPORT THE ENERGY WHILE INCREASING OUR FOCUS ON EXPOSURE TO FOSSIL … TRANSITION, WE WILL… RENEWABLE ENERGIES 2022+: Focus on exploration and production1 Proa
Slide 20: Net Zero Insurance Alliance commitment for underwriting portfolios
1.5˚C FUTURE – REDUCING CO2e FOOTPRINT While building a deeper understanding of how underwriting portfolios can help achieve the Paris agreement ZURICH’S COMMITMENT AS FOUNDING MEMBER OF NET ZERO INSURANCE ALLIANCE Transitioning all operational and attributable greenhouse gas (GHG) Establishing scie
Slide 21: Our underwriting framework ensures awareness of key ESG concerns
1.5˚C FUTURE – REDUCING CO2e FOOTPRINT Our underwriting framework ensures awareness and mitigation of key ESG concerns PRIORITIZED KEY AREAS Escalation process supports the increased focus sustainability risks across lines of business 1 Thermal coal, oil sands & oil shales Banned weapons Dam constru
Slide 22: Interim CO2e investment reduction targets while financing climate solutions
1.5˚C FUTURE – REDUCING CO2e FOOTPRINT We are committing to interim CO2e investments’ reduction targets while financing climate solutions NET ZERO APPROACH FINANCING CLIMATE SOLUTIONS Committing to interim CO2e reduction 77% of Impact investments are targets for corporate bonds, equity and Environme
Slide 23: Interim investment targets for 2025 with engagement and proxy voting
1.5˚C FUTURE – REDUCING CO2e FOOTPRINT Zurich has defined interim investments targets for 2025 towards a 1.5˚C future, with engagement and proxy voting 2025 TARGETS TOWARDS A 1.5˚C FUTURE POLICY ENFORCEMENT Reduce Carbon Emission Reduction of greenhouse gas emissions1 for listed Supporting sharehold
Slide 24: With a long track-record in impact investing
1.5˚C FUTURE – REDUCING CO2e FOOTPRINT With a long track-record in impact investing IMPACT INVESTMENT PORTFOLIO (USDbn) GENERATING A POSITIVE IMPACT OF1 5.8 2.9 million tons CO2e avoided per year 4.6 3.8 3.8 3.7 million people benefited per year 2.8 3.1 2.7 1.7 0.2 2.4 PORTFOLIO DETAILS 1.0 0.2 0.9
Slide 25: Strong CO2e emissions reduction targets in our operations
1.5˚C FUTURE – REDUCING CO2e FOOTPRINT We are leading the way with strong CO2e emissions reduction targets in our operations Our overall operational decarbonization target TARGETS reduction reduction 50% in CO2e by 70% in CO2 by 20251 20291 AMBITIONS Air travel Sustainable food Car fleet Paper Susta
Slide 26: Zurich sets 1.5˚C future targets: 50% by 2025, 70% by 2029
1.5˚C FUTURE – REDUCING CO2e FOOTPRINT After decreasing its CO2e by 30% over 5 years, Zurich sets 1.5˚C future targets – 50% reductions by 2025, 70% by 2029 DECREASE IN OPERATIONAL CO2e FOOTPRINT 4 280 Restated baseline for 260 2019 includes new 3 2.4 Restated 240 Scope 3 emissions 2.1 2.1 1.9 1.8 2
Slide 27: Confidence in a digital society
Confidence in a digital society We have largely rolled-out our Data Commitment to our global operations
Slide 28: Enabling confidence in a digital society
CONFIDENCE IN A DIGITAL SOCIETY Enabling and inspiring confidence in a digital society will help strengthen the resilience of our customers and our employees ETHICAL USE OF DATA PROTECTION BUSINESS DATA & ARTIFICIAL & CYBER SECURITY RESILIENCE & INTELLIGENCE (AI) DIGITALIZATION Deliver on our Data P
Slide 29: Executing against our ambition for digital society confidence
CONFIDENCE IN A DIGITAL SOCIETY Executing against our ambition enables a higher confidence in a digital society • Global implementation of Data commitment completed at 90% in EMEA and North America and at 80% in LatAm and APAC ETHICAL USE • Defined and started field testing of AI Assurance Framework
Slide 30: Work Sustainability
Work Sustainability Our Work Sustainability agenda is delivering a more diverse, better skilled and more satisfied workforce
Slide 31: Zurich a capable and diverse organization
WORK SUSTAINABILITY Zurich a capable and diverse organization EMPLOYEES BY GENDER1 OUR ORGANIZATIONAL FOOTPRINT Employees North America EMEA Asia Pacific 18,746 22,235 6,736 56,248 Male 48% Female CC 1,561 51% 2021 FEMALE REPRESENTATION1 Latin America 6,970 ExCo Leadership Team 2021 36% 2021 28% Ave
Slide 32: People priorities aligned with business strategy
WORK SUSTAINABILITY We ensure our people priorities align closely with our business strategy whilst listening to the voice of the employee ONGOING FOCUS FOR OUR PEOPLE PRIORITIES WORK SUSTAINABILITY ACHIEVEMENTS Adapting to a new normal and shifting employee needs Continued expansion of apprenticesh
Slide 33: Continuing to develop our existing workforce
WORK SUSTAINABILITY Continuing to develop our existing workforce VOLUNTARY TURNOVER LEADERSHIP TEAM % INTERNAL HIRES 1 LEARNING & DEVELOPMENT3 6% 5% Zurich has continued to 4% 3% All 2020 55% build our learning offering +36,4% High Performers 2021 75% resulting in learning hours +94% increasing by 9
Slide 34: Hybrid Working Model
WORK SUSTAINABILITY Hybrid Working Model: the opportunity to create a healthier and more resilient organization Within the last 18 months, we have achieved what previously We are at an historical moment in time as we move to a more would have been thought impossible: hybrid working model with: • mor
Slide 35: Listening to our employees
WORK SUSTAINABILITY Listening to our employees Zurich has held onto double digit gains over our pre-pandemic WELLBEING SUPPORTED BY ZURICH 14% results for our “Place to Work” NPS 58% +44 (+46 H1-21) 29% +72 +52 +49 +49 SUPPORT BY ZURICH DURING COVID 7% 18% 75% +30 +68 (+68 H1-21) +22 +9 +5 8% SUPPOR
Slide 36: Communities
Communities Z Zurich Foundation is responding to communities most immediate needs while building long-term resilience
Slide 37: Z Zurich Foundation at the heart of Zurich's ambition
COMMUNITIES Z Zurich Foundation at the heart of Zurich’s ambition to be one of the most impactful and responsible businesses in the world 2020 CHF 32m invested in community grants (+136% Vs. 2019), and CHF 32m worth HIGHLIGHTS of new and extended multi-year grants were approved 2020-2024 TARGET 3.2
Slide 38: Z Zurich Foundation creates brighter futures for vulnerable people
COMMUNITIES In 2021, the Z Zurich Foundation further develops to create brighter futures for vulnerable people around the world SUSTAINING SCALING-UP IMPROVE COVID-19 CLIMATE MENTAL RESPONSE RESPONSE WELLBEING • CHF 8m invested • 300 communities • Building on a (forecast) (from 75 in 2020) strong se
Slide 39: Corporate Governance
Corporate Governance Our governance strives for the highest level of quality and integrity November 2021
Slide 40: A diverse and independent Board
CORPORATE GOVERNANCE A diverse and independent Board, well positioned to support management delivery on strategic priorities BOARD COMPOSITION1 BOARD BY LENGTH OF TENURE Singapore 8% Switzerland SMI 2021 Germany 31% Male 23% Avg of 30%2 45% 55% 45% 55% Female 8% 8% < 5 years 5-10 years UK Luxembourg
Slide 41: Board leadership and commitment to key strategy and policy issues
CORPORATE GOVERNANCE Board leadership and commitment to key strategy and policy issues KEY FOCUS AREAS IN 2020-2021 BOARD MEETING ATTENDANCE1 84% 93% 97% 95% 100% 100% Sustainability – continued discussion with 94% 97% 100% 94% 93% 100% 99% 97% 100% management of related governance particularly as t
Slide 42: Remuneration
Remuneration Our remuneration reflects business outcomes
Slide 43: Senior management compensation includes long-term deferred remuneration
REMUNERATION Senior management compensation includes significant component of long-term deferred remuneration 2020 REMUNERATION STRUCTURE1 FIXED REMUNERATION / FEES Directors CEO • Base salary benchmarked towards local relevant market median • Pensions in line with relevant market practice – shift a
Slide 44: Zurich has created significant value for shareholders
REMUNERATION Zurich has created significant value for shareholders TOTAL SHAREHOLDER RETURN (USD SINCE JAN 1, 2016)1 DIVIDEND PER SHARE (CHF) 250% TOTAL (%) CAGR (%) 126% 16% +4% 200% 20 20 19 18 17 49% 8% 150% 100% 50% 0% 2016 2017 2018 2019 2020 2021 FY-16 FY-17 FY-18 FY-19 FY-20 STOXX Europe 600
Slide 45: Remuneration framework includes financial and non-financial metrics
REMUNERATION Remuneration framework includes financial and non-financial metrics STIP AWARDED AS % OF TARGET ACROSS THE GROUP LTIP VESTING LEVEL AS % OF TARGET 109% 106% 109% 109% 189% 97% 178% Ø 106% 149% 121% Ø 144% 83% FY-16 FY-17 FY-18 FY-19 FY-20 Vesting in: 2017 2018 2019 2020 2021 STIP DRIVER
Slide 46: Exploring additional ESG metrics in variable remuneration
REMUNERATION Exploring embedding additional ESG metrics in variable remuneration INCENTIVE MEASUREMENT QUALITY VEHICLE OPTIONS CONSIDERATIONS CHALLENGES Short-term incentive Strategically relevant ESG data maturity plan currently incorporates measures non-financial measures: Track record availabilit
Slide 47: Governance approach aligns interest with shareholders
REMUNERATION Governance approach aligns interest with shareholders BOARD APPROVAL TOPIC RECOMMENDED BY Board Remuneration Committee Remuneration architecture Board Risk & Investment Committee1 Relevant chapters within the Organizational Rules Zurich Remuneration Rules SHAREHOLDERS’ APPROVAL Remunera
Slide 48: For further information
INFORMATION For further information CALL US VISIT OR FOLLOW US INVESTOR RELATIONS AND RATING AGENCY MANAGEMENT Jon Hocking +41 44 628 18 34 Francesco Bonsante +41 44 628 00 68 Samuel Han +41 44 625 32 57 Michèle Matlock +41 44 625 28 50 Fabian Wiederkehr +41 44 625 33 08 EVENTS Patricia Heina +41 44
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