Zurich Insurance Group Ltd · SIX:ZURN
Zurich Insurance — ESG Presentation (November 2022)
51 slides from Zurich Insurance's sustainability presentation, November 2022
Slide 1: Stepping up our ESG ambition
Stepping up our ESG ambition November 2022 Investor presentation Zurich Insurance Group
Slide 2: Index
Index TOPIC SLIDE NUMBER Strategy 4-9 ESG ambition 10 - 16 Customer 17 - 25 Planet 26 - 33 People 34 - 37 Communities 38 - 40 Corporate governance 41 - 45 Remuneration 46 - 50 © Zurich November 2022 Stepping up our ESG ambition 2
Slide 3: Key messages
Key messages We have demonstrated focused execution, are well on track to exceed all targets for the Strategy 2020-2022 period and will continue to pursue an ambitious agenda for the 2023-25 cycle In line with our ambition to become one of the world’s most responsible and impactful ESG ambition busi
Slide 4: Strategy
@ ZURICH Strategy
Slide 5: Key messages
STRATEGY Key messages We have demonstrated resilience, adaptability and focused execution over the previous Focused execution two strategic cycles and are well on track to exceed all targets for the 2020-2022 period We have reduced capital and earnings volatility through targeted actions across our
Slide 6: On track to exceed all targets, outperforming an ambitious plan
STRATEGY On track to exceed all targets, outperforming an ambitious plan for the second consecutive strategic cycle 2020-2022 Targets Delivering across all our businesses • Reclaimed leading position Target Progress Commercial • Balanced global portfolio and reduced volatility • Strengthened technic
Slide 7: Consistently delivering superior value for our shareholders
STRATEGY Consistently delivering superior value for our shareholders, with low volatility of earnings and attractive dividend Total shareholder return (USD) Stable, growing earnings and attractive dividend (Indexed to 100% as of January 1, 2016)1 (FY-16 to FY-21)2 300% Diluted earnings per share (CH
Slide 8: We have a clear strategic vision, driving focused execution
STRATEGY We have a clear strategic vision, driving focused execution towards fully delivering our ambition OPTIMIZED GLOBAL FOOTPRINT COMPLEMENTARY DISTRIBUTION CLEAR STRATEGIC PRIORITIES Business operating profit by region (%)1 FY-21 share of premiums (%)2 Focus on customer Transforming to become a
Slide 9: Continuing to pursue our strategic vision, accelerating ambition for 2023-2025
STRATEGY Continuing to pursue our strategic vision established in 2016, accelerating ambition for 2023-2025 strategic cycle consistent strategy, Increased Ambition Financial Targets for 2023 – 20251 Deliver cross-cycle outperformance in Commercial based on technical excellence and opportunistic grow
Slide 10: ESG ambition
ESG ambition In line with our ambition to become one of the world’s most responsible and impactful businesses, we are stepping up our ambitions and actions around customers, planet and people
Slide 11: Our 2023-2025 ESG strategy builds upon established progress
ESG AMBITION Our 2023-2025 ESG strategy builds upon established progress Topic Ambition Deployment Enablers • Strengthen customers’ Support sustainable sustainability Customers transformation • Customer care (data commitment, Sustainability culture claims) • Decarbonization of insurance, investment
Slide 12: Accelerating ESG ambition across own operations and leveraging role as underwriter and investor
ESG AMBITION Accelerating ESG ambition across own operations and leveraging role as underwriter and investor Progress to date Additional targets for the upcoming cycle • Launched Zurich Resilience Solutions Customers • Global data transparency score up 30% since 2020 Support transformation Increase
Slide 13: Our ESG strategy is part of the way we run our business
ESG AMBITION Our ESG strategy is part of the way we run our business Partners and Customers Employees Operations Underwriting Investing communities Stren then customers’ Employee skill Climate resilience for Net zero approach Sustainable Net zero target for 2030 sustainability development customers
Slide 14: We foster innovation as an accelerator for our ESG ambition
ESG AMBITION We foster innovation as an accelerator for our ESG ambition Innovation championship Pre-financed carbon removal agreements Examples Offers software helping companies Based on storage of harvested engage their staff or customers to take biomass from degraded farmland in positive actions
Slide 15: ESG reporting is increasingly following the financial reporting governance processes
ESG AMBITION ESG reporting is increasingly following the financial reporting governance processes Integrated sustainability disclosure Progress on assurance Sustainability reporting • Developed strong non-financial • Oversight by Audit Committee. • Journey to improve non-financial disclosure as part
Slide 16: Zurich is highly rated by external assessors
ESG AMBITION Zurich is highly rated by external assessors ESG ratings and rankings Our long-term commitments ‘AAA’ rating1 Absolute Score of 4 (out of 5.0)2 ‘A’ Leadership Level3 Our engagement partners • Lead author of the World Economic Forum Global Risk Report • Founding member of the Net Zero As
Slide 17: Customer
Customer We support our customers’ transformation to a sustainable future across the insurance value chain
Slide 18: We will support customers through their transition
CUSTOMER We will support customers through their transition, in addition to growing sustainable solutions and acting with empathy Supporting transitions and Differentiating Providing customer care with scaling sustainable via sustainability impact empathy solutions • Understanding, engaging with and
Slide 19: We offer traditional solutions to commercial customers in hard to abate industries
CUSTOMER We offer traditional solutions to commercial customers in hard to abate industries, whilst balancing risk Committed to working with existing customers in hard to abate Acting with caution to support transitionary technology industries as they drive necessary R&D for the transition Rapidly c
Slide 20: We contribute to industry organizations to drive transition
CUSTOMER We contribute to industry organizations to drive transition and to understand and address challenges together Industry Examples of underwriting challenges with transitionary technology Industry support Offshore oil becomes offshore wind Significant risks during construction and Chair of IUM
Slide 21: We underpin our actions by developing sustainable solutions
CUSTOMER We underpin our actions by developing sustainable solutions that support or incentivize positive actions for planet and people 2021 sustainable solutions 1 Offerings on environmental and social topics (Top-line2 USDm) • Sustainable energy • Low carbon construction • Mobility solutions 14% E
Slide 22: Contact with customers at the point of claim provides further opportunity
CUSTOMER Contact with customers at the point of claim provides further opportunity to demonstrate sustainable values Our claims sustainability ambitions are rolled out globally Claims contributes to sustainable solutions Area of impact Example ambition Climate resilience and loss mitigation • Define
Slide 23: We are growing our ESG offering to our Life customers
CUSTOMER We are growing our ESG offering to our Life customers, also by developing innovative in-house solutions Building ESG capabilities for Life customers Strategy roll-out • Launched insurance industry-first carbon neutral world equity In-house investment solutions fund with low-carbon investmen
Slide 24: We provide customer care with empathy to ensure meaningful relations
CUSTOMER We provide customer care with empathy to ensure meaningful relations Inspiring trust and supporting meaningful relationships • Updating customer communication blueprint to promote simplicity, transparency and empathy (e.g., global empathy training) • Increasing collaboration with customer i
Slide 25: We execute against our ambition to enable higher confidence in a digital society
CUSTOMER We execute against our ambition to enable higher confidence in a digital society Ambition Delivery Implementation of data commitment Ethical use of data and artificial • Further increase in scope of review related to effectiveness, intelligence strength and robustness of processes and contr
Slide 26: Planet
Planet We are driving the net zero transition, strengthening our commitment in underwriting
Slide 27: Our climate strategy is articulated through concrete actions
PLANET Our climate strategy is articulated through concrete actions in the customer and planet pillars Set Exclusions where Offer sustainable Engage ambitious targets necessary solutions • Leverage climate change • Thermal coal, oil sands and oil • Target top 65% of financed • Continue to expand exp
Slide 28: We are engaging with our customers in line with our net zero ambition
PLANET We are engaging with our customers in line with our net zero ambition Understanding emissions as part of a balanced portfolio1 Becoming net zero leveraging actionable insights Expected Expected 2022 Net Zero by 2023 2030 Insurance Methodology Set CO2e Delivery of first developed 3% Alliance a
Slide 29: Our underwriting framework ensures awareness and mitigation of key ESG concerns
PLANET Our underwriting framework ensures awareness and mitigation of key ESG concerns Prioritized key areas Escalation process supports the increased focus on sustainability risks across lines of business1 Thermal coal, oil sands and oil shales Banned weapons Dam construction Local Country Sustaina
Slide 30: Responsible investments follows three interlinked targets for 2025
PLANET Responsible investments follows three interlinked targets for 2025 towards a net zero carbon future Net Zero approach Engagement Financing to investing climate solutions3 • 25% reduction of CO2e intensity • Engage with top 65% emitters • New: 5% of invested assets (tCO2e/USDm invested at mark
Slide 31: On track with investments engagement targets
PLANET On track with investments engagement targets Engagements on net zero Engagement approach Undertakings % of total financed emissions % of financed emissions • Upgrade Zurich proxy voting policy by allowing escalation of failed engagement on target setting by voting against 21% Collectively cha
Slide 32: Additional target for impact investments to reach 5% of proprietary investments
PLANET We are raising the bar with an additional target for impact investments to reach 5% of proprietary investments by 2025 Impact investment portfolio (USDbn) Generating a positive impact1 Target: 5% of invested assets committed to impact investments by 2025 5% 4.6m tonnes CO2e avoided per year 7
Slide 33: We are delivering on very ambitious emission reduction targets in our operations
PLANET We are delivering on very ambitious emission reduction targets in our operations Reduction of absolute carbon emissions (in metric tonnes)1,2 Targets and ambitions • Following the COVID impact on commuting and travelling, we have reduced -73% further our target from 50% to 60% reduction in CO
Slide 34: People
People Our people sustainability aspiration supports the life-long employability of our people, while delivering on customer needs
Slide 35: Zurich is a talented and diverse organization
PEOPLE Zurich is a talented and diverse organization Female representation1 Our organizational footprint North America EMEA Asia Pacific 20,025 23,606 6,856 Employees Board 59,440 2022 55% 48% Corporate Male Center 2021 55% 1,670 Female 52% 2020 45% 2022 Latin America Executive Committee Senior Mana
Slide 36: We are continuing to develop our existing workforce
PEOPLE We are continuing to develop our existing workforce Listening to our employees (ENPS) Internal hires 1 Learning and development 1 Leadership team Learning hours (‘000) +77pts 975 852 2021 67% +54 471 451 400 504 2022 84% 2021 Q3-22 Mandatory Non-Mandatory All hires Average hours per learner p
Slide 37: The purpose of our people sustainability ambition
PEOPLE The purpose of our people sustainability ambition is to future-proof our people and our organization Strategic ambition Purpose Increase Promote Support life-long Accelerate share of diversity and skills-based employability internal develop careers for our people hires1 talent while deliverin
Slide 38: Communities
Communities Z Zurich Foundation is responding to communities most immediate needs while building long-term resilience
Slide 39: Z Zurich Foundation supports Zurich to bring its sustainability ambition to life
COMMUNITIES Z Zurich Foundation supports Zurich to bring its sustainability ambition to life and at scale within communities 2021 CHF 31m invested in community grants in 2021, in line with 2020, Highlights and CHF 13m worth of new and extended multi-year grants were approved 3.7m lives positively im
Slide 40: At the heart of Zurich's ambition to be one of the most impactful
COMMUNITIES At the heart of Zurich’s ambition to be one of the most impactful and responsible businesses in the world The Foundation’s strategic pillars address major global issues for which we have a strong expertise and infrastructure Adapting to climate change Improving mental wellbeing A decade
Slide 41: Corporate Governance
Corporate Governance Our governance strives for the highest level of quality and integrity
Slide 42: A diverse and independent Board, well positioned to support management
CORPORATE GOVERNANCE A diverse and independent Board, well positioned to support management delivery on strategic priorities Board composition1 Board by length of tenure Singapore 7% Germany Switzerland SMI 2021 Male 22% 36% Avg. of 27%2 45% 42% 58% 55% Female 7% UK < 5 years 5-10 years 7% 22% Luxem
Slide 43: 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 2021-2022 2021 Board meeting attendance1 Strategy – definition of targets and actions to pursue Board 97% long-term strategy around customer focus, innovation and Audit Committee 97% simplificat
Slide 44: The Board is responsible for the ESG ambition and its delivery
CORPORATE GOVERNANCE The Board is responsible for the ESG ambition and its delivery Overall strategic responsibility and oversight Board of Directors Governance, Nominations & Audit Committee Risk & Investment Committee Remuneration Committee Sustainability Committee1 within area of responsibility S
Slide 45: Swiss corporate law reform requires changes to our Articles of Association
CORPORATE GOVERNANCE Swiss corporate law reform requires changes to our Articles of Association Gear heel Swiss corporate Capital-related Other features of law reform changes the reform New law enters into force Capital band will replace Implementation of lower on January 1, 2023 authorized share ca
Slide 46: Remuneration
Remuneration Our remuneration is aligned with strategic goals and reflects business outcomes
Slide 47: Senior management compensation includes significant component of long-term deferred remuneration
REMUNERATION Senior management compensation includes significant component of long-term deferred remuneration 2021 remuneration structure1 Fixed remuneration / Fees Directors CEO • Base salary benchmarked towards local relevant market median • Pensions in line with relevant market practice 29% • Ben
Slide 48: 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) 300% CAGR 250% 252% +5% 22 20 20 200% 19 18 17 150% 154% 132% 100% 50% 0% FY-16 FY-17 FY-18 FY-19 FY-20 FY-21 2016 2017 2018 2019 2020 2021 2022 Zurich SMI ST
Slide 49: 2022 ExCo STIP metrics focused on customers and financials
REMUNERATION 2022 ExCo STIP metrics focused on customers and financials while supporting the Group’s overall strategy 2022 executive committee STIP framework Enhanced disclosure for Group CEO STIP Measure Weight Achievements Outcome narrative STIP funding based on business performance BOP 100% Finan
Slide 50: Proposal to include new metrics starting in 2023
REMUNERATION Proposal to include new metrics starting in 2023, complementing established set of balanced performance criteria LTIP vesting grid used to assess performance from 2023 on Proposed new metrics in LTIP • Alignment to new external target commitment. • Operational CO2e reduction targets to
Slide 51: 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 Björn Bierfreund +41 44 625 23 13 Francesco Bonsante +41 44 628 00 68 Samuel Han +41 44 625 32 57 Michèle Matlock +41 44 625 28 50 Events Patricia Heina +41 44
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