Zurich Insurance Group Ltd · SIX:ZURN
Zurich Insurance — ESG Presentation (December 2020)
43 slides from Zurich Insurance's sustainability presentation, December 2020
Slide 1: Corporate Governance and Sustainability at Zurich
Corporate Governance and Sustainability at Zurich Zurich Insurance Group December 2020
Slide 2: Key messages
Key messages • Delivery over 2016-19 created a simpler, more agile and efficient company; Strategic update • Accelerating our customer focused strategy and the digitalization of the business Resilience through • Group has been resilient through the crisis the crisis • Actions have led to improved cu
Slide 3: Strategic update
@ ZURICH Strategic update
Slide 4: Over 2017-19 we delivered on our targets and on the transformation of the company
STRATEGIC UPDATE Over 2017-19 we delivered on our targets and on the transformation of the company 2017 – 2019 TARGETS ACHIEVEMENTS TARGET FY-19 Simplified and flexible organization BOPAT ROE >12% 14.2%1 Delayered structure Simplified IT landscape Simplified products and services EXPENSE USD 1.5bn U
Slide 5: At the end of last year we set new challenging targets and a clear direction
STRATEGIC UPDATE At the end of last year we set new challenging targets and a clear direction for the group 2020 – 2022 AMBITION OUR PATH TO TARGET Customer led BOPAT ROE >14% 1 Modular and personalized CASH USD >11.5bn Serving customer needs REMITTANCES Transparent Z-ECM 100-120% Intuitive and conv
Slide 6: Our solid foundation allowed us to manage the COVID-19 crisis
STRATEGIC UPDATE Our solid foundation allowed us to manage the COVID-19 crisis with improved satisfaction levels of customers and employees SUPPORT FOR CUSTOMERS STRENGTHENED CUSTOMER FOCUS INCREASED EMPLOYEE SATISFACTION Retail NPS NPS place to work move3 >USD 100m 1 +22 1 Oct-19 Jul-20 ~USD 300m 2
Slide 7: We are accelerating the execution of our customer focused strategy and digitalization
STRATEGIC UPDATE We are accelerating the execution of our customer focused strategy and the digitalization of our business ACCELERATED DEVELOPMENT OF DIGITAL SERVICES New Global Business Platforms unit focusing on Strengthened position in accident and health with the digital services acquisition of
Slide 8: Leadership team strengthened and reorganized to provide further focus
STRATEGIC UPDATE Leadership team strengthened and reorganized to provide further focus in support of our strategy MANAGEMENT TEAM REFRESHED AND STRENGTHENED 1 IN SUPPORT OF THE STRATEGY WE HIGHLIGHTED LAST YEAR GROUP CHIEF EXECUTIVE OFFICER – Mario Greco BUSINESS HEADS FUNCTIONAL HEADS Farmers Group
Slide 9: We are well positioned for future success
STRATEGIC UPDATE We are well positioned for future success RESILIENT STRATEGY A balanced Industry leading Stable, consistent Focus on customers and and diverse capital levels with and conservatively underwriting discipline global business strong liquidity managed balance sheet Focus on the customer
Slide 10: Sustainability
@ ZURICH Sustainability
Slide 11: We want to be known as one of the most responsible and impactful businesses
“We want to be known as one of the most responsible and impactful businesses in the world” Group CEO Mario Greco © Zurich December 2020 Corporate Governance and Sustainability at Zurich 11
Slide 12: We delivered strong progress against our priorities
SUSTAINABILITY We delivered strong progress against our priorities, enhancing the resilience of our business, our employees and communities • Established Group-wide Climate approach to align our business with a 1.5°C future • Contributed to the development of carbon footprint methodologies in cooper
Slide 13: Delivery against our ambition is widely recognized by external assessors
SUSTAINABILITY Delivery against our ambition is widely recognized by external assessors OUR RATINGS1 OUR LONG-TERM COMMITMENT ‘AA’ rating1 #1 in insurance group2 Absolute Score of 4.4 (out of 5.0)3 OUR ENGAGEMENT PARTNERS ‘A-’ Management Level4 • Lead author of the World Economic Forum Global Risk R
Slide 14: 2020 pandemic and financial crisis reinforced the need to prepare society for systemic risks
SUSTAINABILITY 2020 pandemic and financial crisis reinforced the need to prepare society for systemic risks with sustainable prevention and mitigation • 2020 crisis reinforced society’s risk awareness, underscoring the need to prepare for the complex risks we face e.g. pandemics, changing weather pa
Slide 15: We have developed a group-wide climate approach in support of our 1.5˚C pledge
A CHANGING CLIMATE We have developed a group-wide climate approach in support of our 1.5˚C pledge Our 1.5˚C SCIENCE-BASED CO2 REDUCTION MITIGATE CLIMATE RISK TARGETS Future Plan • Implement a global risk assessment • Set targets to reach Net Zero by 2050 based framework to understand, quantify, and
Slide 16: We are reviewing, enhancing and adapting products and services
A CHANGING CLIMATE We are reviewing, enhancing and adapting products and services to support transition and resilience across industries PRODUCT PIPELINE TO SUPPORT TRANSITION LAUNCHED – CLIMATE CHANGE RESILIENCE SERVICES • We are adapting traditional insurance products, in addition to innovating so
Slide 17: In underwriting we are applying a risk and engagement-based approach
A CHANGING CLIMATE In underwriting we are applying a risk and engagement-based approach to address sustainability risks WHAT WE DO – SCOPE PROCESS COMPANIES FLAGGED UNDER UPDATED COAL/OIL SANDS POSITION1 1. DETECT 2. ASSESS No new/ renewed • In 2012, introduced our position on: Ongoing 42% − banned
Slide 18: We are developing insurance carbon intensity methodology
A CHANGING CLIMATE We are developing insurance carbon intensity methodology to support portfolio transition ZURICH’S CARBON INTENSITY MANAGEMENT APPROACH UNDERSTAND PORTFOLIO FOOTPRINT – GWP vs Carbon Footprint EDUCATE internally on ENSURE fact-based multiple aspects of measurement of carbon sustain
Slide 19: We are a global insurance leader in responsible investments
A CHANGING CLIMATE We are a global insurance leader in responsible investments 1… INTEGRATION IMPACT INVESTING ADVANCING TOGETHER • Training • Intentionality • Innovation • Information • Measurability • Collaboration • Process Integration • Profitability • Public advocacy • Active Ownership • ESG ri
Slide 20: … and a market leading impact investor
A CHANGING CLIMATE … and a market leading impact investor IMPACT INVESTING PORTFOLIO (USDbn) ACHIEVEMENTS • Invested over USD 5.4bn in multi-asset impact investments, which 5.0 helped avoid 2.9m tons of CO2 and benefited 4m people per Q3 2020 4.6 • Managing one of the largest private sector impact p
Slide 21: Results demonstrate that our holistic responsible investment climate strategy is working
A CHANGING CLIMATE Results demonstrate that our holistic responsible investment climate strategy is working OUTCOMES Operationalizing our pledge • Next step: set science-based interim targets for 2025 by Q1 2021, based on following actions to net-zero emission portfolios • Published “Protocol for ta
Slide 22: We are consistently improving the sustainability of our operations
A CHANGING CLIMATE We are consistently improving the sustainability of our operations through the reduction of our CO2 emissions METRIC TONS CO2 EMITTED BY OWN OPERATIONS EMISSION REDUCTION INITIATIVES (in ‘000 and per FTE)1 • Dynamic Working – space reductions with enhanced experience 264 • Purchas
Slide 23: Enabling and inspiring 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 & AI DATA PROTECTION & CYBER SECURITY BUSINESS RESILIENCE & DIGITALIZATION HONOR THE TRUST CONTINUALLY STRENGTHEN DELIVERI
Slide 24: Executing against our ambition enables a higher confidence in a digital society
CONFIDENCE IN A DIGITAL SOCIETY Executing against our ambition enables a higher confidence in a digital society EXECUTION EXAMPLES • Measure and drive execution against our Data Commitment globally as part of the Performance Measurement cycle ETHICAL USE OF DATA & AI • Deliver a comprehensive range
Slide 25: Zurich today is a capable and diverse organization
WORK SUSTAINABILITY Zurich today is a capable and diverse organization EMPLOYEES BY GENDER1 OUR ORGANIZATIONAL FOOTPRINT 2 EMPLOYEES North America EMEA Asia Pacific 55,369 17,221 20,251 6,098 49% 51% CC 1,270 2020 Male Female FEMALE REPRESENTATION1 Latin America Dec-2019 27% 7,161 ExCo Oct-2020 25%
Slide 26: We are equipping our employees for the future with stronger digital and customer skills
WORK SUSTAINABILITY We are equipping our employees for the future with stronger digital and customer skills 2018 – 2020 PROGRESS 2021– 2023 PLANS • Shifted Talent Management discipline from ‘buy’ to ‘build’ • Focus on delivering our Work Sustainability commitments1 • Built a compelling Employee Valu
Slide 27: Our people strategy is working on multiple levels
WORK SUSTAINABILITY Our people strategy is working on multiple levels VOLUNTARY TURNOVER INTERNAL RECOGNITION FOR SUPPORT EXTERNAL RECOGNITION 7% PROVIDED DURING COVID-19 CRISIS: 5% 2% 1% 2019 2020 All High Performers LEADERSHIP TEAM % INTERNAL HIRES 1 2019 63% 2020 55% EXECUTIVE HIRING SPEND (USDm)
Slide 28: We have embedded priorities including Work Sustainability, Wellbeing, D&I
WORK SUSTAINABILITY We have embedded priorities including Work Sustainability, Wellbeing, D&I and Employee Engagement EMBEDDING OUR WORK SUSTAINABILITY COMMITMENT SUPPORTING EMPLOYEE WELLBEING THROUGH PANDEMIC • Shifted Talent Management from ‘buy’ to ‘build’, increasing % • High and tangible levels
Slide 29: Supporting communities through employee volunteering and the Z Zurich Foundation
COMMUNITIES Supporting communities through employee volunteering and the Z Zurich Foundation NUMBER OF VOLUNTEERING HOURS PER EMPLOYEE (2019) Z ZURICH FOUNDATION EXTRA SUPPORT DURING COVID-19 CRISIS Zurich 2.6 Peer 1 2.3 • 200 charities supported in 32 countries, of which 150 were existing partnersh
Slide 30: Z Zurich Foundation has a three-pillar strategy
COMMUNITIES Z Zurich Foundation has a three-pillar strategy to be relevant locally for positive impact ADAPTING TO CLIMATE CHANGE IMPROVING MENTAL WELLBEING ENABLING SOCIAL EQUITY Focus on adaptation Focus on prevention Focus on empowerment Flood and other single-hazard resilience Multiple-hazard re
Slide 31: Expanding the Flood Resilience program to an additional 200 communities
COMMUNITIES Zurich and Z Zurich Foundation are expanding the Flood Resilience program to an additional 200 communities covering ~4m people PROGRAM’S PURPOSE • 1$ invested in prevention saves 5$ in future losses1 • Increase investments proportion from current 13% of aid that is only spent on pre-even
Slide 32: We delivered strong progress against our priorities
SUSTAINABILITY We delivered strong progress against our priorities, enhancing the resilience of our business, our employees and communities • Established Group-wide Climate approach to align our business with a 1.5°C future • Contributed to the development of carbon footprint methodologies in cooper
Slide 33: Governance & Remuneration
@ ZURICH Governance & Remuneration
Slide 34: A diverse and independent Board, well positioned to support management
CORPORATE GOVERNANCE A diverse and independent Board, well positioned to support management deliver on strategic priorities BOARD COMPOSITION1 Singapore 8% Switzerland Germany 25% 17% Age (years) Female 45% 50 72 55% Male UK 8% 8% Luxembourg 33% US BOARD BY BACKGROUND, EXPERIENCE, SKILLS AND KNOWLED
Slide 35: The Board actively balances the needs of all stakeholders
CORPORATE GOVERNANCE The Board actively balances the needs of all stakeholders to ensure growth in enterprise value At the center of activities, developing products and solutions with positive social and environmental impact Training employees with future Providing a strong capital base as skills an
Slide 36: Senior management compensation includes significant long-term deferred remuneration
REMUNERATION Senior management compensation includes significant component of long-term deferred remuneration 2019 REMUNERATION STRUCTURE 1 FIXED REMUNERATION / FEES DIRECTORS CEO • Base salary benchmarked towards local relevant market median • Pensions in line with relevant market practice – shift
Slide 37: Zurich has created significant value to shareholders
REMUNERATION Zurich has created significant value to shareholders TOTAL SHAREHOLDER RETURN (USD SINCE JAN 1, 2016) 1 DIVIDEND PER SHARE (CHF) TOTAL (%) CAGR (%) 220% 106% 20% 200% +6% 20 180% 19 18 160% 17 140% 41% 9% 120% 100% 80% 60% 40% 20% 0% FY-16 FY-17 FY-18 FY-19 2016 2017 2018 2019 2020 STOX
Slide 38: Remuneration framework includes financial and non financial metrics
REMUNERATION Remuneration framework includes financial and non financial metrics STIP AWARDED AS % OF TARGET LTIP VESTING LEVEL AS % OF TARGET 178% 109% 106% 109% 109% 149% Ø 100 121% 65% 83% Ø 106 0% FY-16 FY-17 FY-18 FY-19 FY-20 FY-15 FY-16 FY-17 FY-18 FY-19 STIP DRIVERS FOR EXECUTIVE COMMITTEE ME
Slide 39: Customer experience is an important driver for STIP participant variable pay
REMUNERATION Customer experience is an important driver for the majority of STIP participant variable pay ROLL OUT OF TNPS IN STIP POOL FUNDING 1 Global TNPS used for Group functions2 – STIP pool funding weighting of 20% Country TNPS used for country employees – STIP pool funding weighting of 20% 88
Slide 40: Governance approach aligns interest with shareholders
REMUNERATION Governance approach aligns interest with shareholders REMUNERATION GOVERNANCE BOARD APPROVAL TOPIC Recommended by Board Remuneration Committee Remuneration architecture Board Risk & Investment Committee1 Relevant chapters within the Organizational Rules Zurich Remuneration Rules SHAREHO
Slide 41: For further information
For further information (use the links to navigate through the Zurich website) Annual Report 2019 Sustainability at Zurich - overview Corporate Governance report 2019 (incl. Remuneration report) Corporate Governance Structure at Zurich Sustainability highlights 2019 Zurich’s role as an insurer Zuric
Slide 42: Disclaimer and cautionary statement
Disclaimer and cautionary statement Certain statements in this document are forward-looking statements, including, but not limited to, statements that are predictions of or indicate future events, trends, plans or objectives of Zurich Insurance Group Ltd or the Zurich Insurance Group (the Group). Fo
Slide 43: For further information
For further information CALL US VISIT OR FOLLOW US Investor Relations and Rating Agency Management Richard Burden +41 44 628 96 40 Francesco Bonsante +41 44 628 00 68 Samuel Han +41 44 625 32 57 Michèle Matlock +41 44 625 28 50 Gianni Vitale +41 44 625 48 26 Events Patricia Heina +41 44 625 38 44
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