Zurich Insurance Group Ltd · SIX:ZURN
Zurich Insurance — Investor Presentation (December 2018)
36 slides from Zurich Insurance's investor presentation, December 2018
Slide 1: Corporate Governance and Sustainability at Zurich
Corporate Governance and Sustainability at Zurich December 2018 Zurich Insurance Group
Slide 2: Disclaimer
Disclaimer 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’). Forward-looking statement
Slide 3: Key messages
Key messages A focus on our customers drives our strategy and we are using innovation to support Strategy this focus while seeking to simplify our business to improve our customer propositions Board We have a highly diverse board combined with strong governance Governance Our remuneration architectu
Slide 4: Index
Index SECTION PAGE Strategy and financial update 5-10 Board composition and assessment 11-12 Remuneration update 13-17 Sustainability – Introduction 18-20 Our role as an employer 21-22 Our role as an insurer 23-24 Our role as an investor 25 Our role in the communities 26-27 Sustainability – Outlook
Slide 5: A clear strategy developed by us, for all our stakeholders
STRATEGY AND FINANCIAL UPDATE A clear strategy developed by us, for all our stakeholders FOCUS ON THE CUSTOMER We will focus our significant investments on improving our quality of service and the experience of our customers. A laser focus on investing for the benefit of our customers will guide all
Slide 6: Our proposition to investors
STRATEGY AND FINANCIAL UPDATE Our proposition to investors HIGHLY CASH GENERATIVE BUSINESS MODEL SUPPORTING AN ATTRACTIVE AND GROWING DIVIDEND, BASED ON: A balanced Industry leading Stable, consistent Consistent growth and diverse capital levels and conservatively with scope to global business manag
Slide 7: 2017-2019 Financial targets
STRATEGY AND FINANCIAL UPDATE 2017-2019 Financial targets1 BOPAT ROE2 in excess of 12% and increasing, despite higher equity base USD 1.5bn in net savings by 2019 compared to the 2015 baseline Z-ECM target ratio of 100-120% Cash remittances in excess of USD 9.5bn over 2017-2019 period © Zurich 1 BOP
Slide 8: Well on track to achieve all 2017-2019 targets
STRATEGY AND FINANCIAL UPDATE Well on track to achieve all 2017-2019 targets BOPAT ROE (%)1 Z-ECM RATIO (%) CUMULATIVE CASH REMITTANCES (USDBN) 12.3% 134% >9.5 120% 12.1% >7.0 >12.0% 100% 3.7 FY-17 HY-18 Target2 HY-18e3 Target range FY-17 & FY-18e 2017 - 2019 Target CUMULATIVE NET EXPENSE SAVINGS (U
Slide 9: Key businesses strengthened while exiting non-core activities; customer focus improved
STRATEGY AND FINANCIAL UPDATE Key businesses strengthened while exiting non-core activities; Customer focus improved with tangible results CUSTOMER FOCUS YIELDING POSITIVE RESULTS IN RETAIL Leadership in Latin America strengthened NET PROMOTER SCORE CUSTOMER RETENTION HY-18 vs. FY-17 (ppts) HY-18 vs
Slide 10: Leveraging new technologies to redesign customer interactions
STRATEGY AND FINANCIAL UPDATE We are leveraging new technologies to redesign customer interactions, increase service offerings and digitize core processes STRENGTHENING OUR KNOWLEDGE NEW CAPABILITIES AND BROADER REINVENTING THE OF THE CUSTOMER SERVICE OFFERINGS CUSTOMER EXPERIENCE Strengthened custo
Slide 11: A balanced Board composition
CORPORATE GOVERNANCE A balanced Board composition BOARD COMPOSITION DIVERSITY1 Gender Nationality Experience, skills and knowledge Luxembourg Switzerland 0% 10% 20% 30% 40% 50% 11% 11% Insurance Singapore 11% Sector 45% Female Banking Male 55% Germany 11% 33% US Non-Financials 22% IT & Technology Sp
Slide 12: Best practice recommendations of external assessor implemented
CORPORATE GOVERNANCE Best practice recommendations of external assessor1 implemented EXTERNAL ASSESSMENT CYCLE EXTERNAL ASSESSMENT CYCLE 2013-2015 2016-2018 Strengthened experience in insurance sector and Increased engagement in strategy setting and execution monitoring Emerging Markets Enhanc
Slide 13: Standing committees regularly reporting and submitting proposals to the Board
REMUNERATION Standing committees regularly reporting and submitting proposals to the Board1 REMUNERATION COMMITTEE • Regularly evaluates the Group’s remuneration architecture and Zurich’s remuneration rules • Reviews the remuneration of the members of the Board GOVERNANCE, NOMINATIONS & CORPORATE •
Slide 14: Remuneration structure and degree of variability varies per level of employment
REMUNERATION Remuneration structure and degree of variability varies per level of employment 2017 REMUNERATION PER ELEMENT1 Base salary benchmarked towards local relevant market median DIRECTORS CEO STIP 1% 6% • 1 year performance period, paid in cash 22% • Award mainly driven by relevant BOP and se
Slide 15: Variable remuneration outcomes with strong link to business performance
REMUNERATION Variable remuneration outcomes with strong link to business performance results including financial, customer and people metrics BUSINESS PERFORMANCE DRIVING THE SIZE OF STIP POOL AVERAGE STIP AWARD LEVEL AS % OF TARGET • Business Operating Profit and qualitative customer metrics – at t
Slide 16: A strong governance framework ensuring alignment of interest with Shareholders
REMUNERATION A strong governance framework ensuring alignment of interest with Shareholders REMUNERATION GOVERNANCE Topic Recommended by Zurich’s approval Shareholders’ approval Remuneration Board Remuneration Committee REMUNERATION architecture Board Risk & Investment Committee1 Organizational Rule
Slide 17: The governance framework is supported by additional safeguards
REMUNERATION The governance framework is supported by additional safeguards SAFEGUARDS TO REMUNERATION Notice period of max 12 months1 Minimum share ownership2 Claw back clause1 Malus on STIP and LTIP3 Hedging prohibited for share-based remuneration3 Risk based assessment for Key risk takers 1 For E
Slide 18: Standing committees regularly reporting and submitting proposals to the Board
SUSTAINABILITY - INTRODUCTION Standing committees regularly reporting and submitting proposals to the Board1 GOVERNANCE, NOMINATIONS & CORPORATE RESPONSIBILITY COMMITTEE • Oversees the Group’s governance and measures it against best practice REMUNERATION COMMITTEE to ensure that the shareholders’ ri
Slide 19: The Board approves the Group sustainability business strategy
SUSTAINABILITY – INTRODUCTION The Board approves the Group sustainability business strategy to safeguard the future of the company and society RESPONSIBILITIES WITH REGARD TO SUSTAINABILITY Board governance, Sustainability leaders Group sustainability team Country champion nomination & corporate cou
Slide 20: Group's focus on sustainability widely recognized by external bodies
SUSTAINABILITY – INTRODUCTION Group’s focus on sustainability widely recognized by external bodies OUR RATINGS OUR LONG TERM COMMITMENT ‘AA’ rating Outperformed 93% of other companies in peer group Rated in the 94% percentile amongst insurance companies Absolute Score of 4.0 (out of 5.0) © Zurich De
Slide 21: Our employees are at the heart of our strategy
SUSTAINABILITY – OUR ROLE AS AN EMPLOYER Our employees are at the heart of our strategy EMPLOYEES BY GENDER1 OUR WORKFORCE EMPLOYEE ENGAGEMENT North America Asia Pacific ENPS ‘place to work’ 53 600 16’230 5’291 EMEA +32% 49% 21’490 +5 +9 51% -23 Male Female CC 2017 2018 H1 2018 H2 2018 1’186 Glassdo
Slide 22: Progressing on our strategic journey
SUSTAINABILITY – OUR ROLE AS AN EMPLOYER Progressing on our strategic journey • FROM OPERATIONAL EXCELLENCE… TO CUSTOMER-LED AND ENABLING THE TRANSFORMATION Simplified customer-focused operating model Talent management discipline Improved leadership focus, alignment and capability Integrated
Slide 23: Ensuring responsible and sustainable business practices
SUSTAINABILITY – OUR ROLE AS AN INSURER Ensuring responsible and sustainable business practices to protect our reputation and our customers OUR APPROACH TO ESG IN INSURANCE1 ENVIRONMENT Rare Earths Water Scarcity SOCIAL Animal Transportation Diamonds Conflict Minerals Protected Areas World Heritage
Slide 24: ESG is embedded in our core offering to customers
SUSTAINABILITY – OUR ROLE AS AN INSURER ESG in embedded in our core offering to customers ESG PRODUCTS MAP EXAMPLES Offering of “Natural Hazard Radar” online tool to Swiss customers for detection of risks to property from floods Offering Z Choice Pollution liability insurance in US incentivising env
Slide 25: A global leader with regard to responsible investments
SUSTAINABILITY – OUR ROLE AS AN INVESTOR A global leader with regard to responsible investments RESPONSIBLE INVESTMENT IS INTEGRAL TO OUR INVESTMENT PHILOSOPHY AND APPROACH Integration Impact Investing Advancing Together Training Intentionality Innovation Information Measurability Collab
Slide 26: Helping communities dealing with floods
SUSTAINABILITY – OUR ROLE IN THE COMMUNITIES Helping communities dealing with floods ZURICH’S FLOOD RESILIENCE PROGRAM The resilience program developed with our partner, aims at preventing the prevalence of floods and allowing communities to recover as fast as possible The Z Zurich Foundation ha
Slide 27: We have a multifaceted approach to Climate Change
SUSTAINABILITY – OUR ROLE IN THE COMMUNITIES We have a multifaceted approach to Climate Change PHYSICAL RISK ASSESSMENT COMPANY STRATEGY REPORTING & DISCLOSURE Developing the capabilities Zurich’s operations are Reporting in accordance with to assess and quantify climate carbon neutral since 2
Slide 28: We are strengthening our sustainability ambition
SUSTAINABILITY – OUTLOOK We are strengthening our sustainability ambition to be even more comprehensive We identified three transformational themes, material for Zurich’s future and that will guide our ambition A CHANGING CLIMATE WORFORCE IN TRANSITION CONFIDENCE IN A DIGITAL ECONOMY Providing insig
Slide 29: Standing committees regularly reporting and submitting proposals to the Board
RISK MANAGEMENT Standing committees regularly reporting and submitting proposals to the Board1 REMUNERATION COMMITTEE GOVERNANCE, NOMINATIONS & CORPORATE RESPONSIBILITY COMMITTEE RISK AND INVESTMENT COMMITTEE • Oversees the Group’s risk management, in particular the Group’s risk tolerance and measur
Slide 30: The Board ensures that Zurich's Risk position is within its risk appetite
RISK MANAGEMENT The Board ensures that Zurich’s Risk position is within its risk appetite and tolerance limits RESPONSIBILITIES WITH REGARD TO RISK MANAGEMENT Board Risk & Investment Chief Executive Officer Chief Risk Officer Business Units Committee • Delegates responsibilities • Reports to the Gro
Slide 31: Protecting data and safeguarding confidential information
RISK MANAGEMENT Protecting data and safeguarding confidential information of our stakeholders is of high importance GOVERNANCE REGULATORY REQUIREMENTS • 3 lines of defence model embeds multi-layered security taking • Make existing data and use of data more transparent and into account people, proces
Slide 32: Our current capital authorizations protect shareholders' rights
CAPITAL AUTHORIZATIONS Our current capital authorizations protects shareholders’ rights while providing the company with flexibility CURRENT CAPITAL AUTHORIZATIONS IN ARTICLES OF ANTI DILUTION MEASURES AND CAPITAL MANAGEMENT IN ASSOCIATION1 2018 FULLY IMPLEMENTED Type of capital Current structure in
Slide 33: Notes
Notes © Zurich December 2018 Corporate Governance and Sustainability at Zurich 33
Slide 34: Notes
Notes © Zurich December 2018 Corporate Governance and Sustainability at Zurich 34
Slide 35: For further information
For further information CALL US VISIT OR FOLLOW US Investor Relations and Rating Agencies 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 For Corporate Governance and Corporate Responsibil
Slide 36: Calendar
CALENDAR: February 7, 2019, Annual results 2018 April 3, 2019, Annual General Meeting 2019, Zurich May 9, 2019, Update for the three months ended March 31, 2019 August 8, 2019, Half year results 2019 © Zurich Insurance Company Ltd Corporate Governance and Sustainability at Zurich 36
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