Swiss Re and Sustainability: A contribution to making the ...d66f7674-c18d-4774...Swiss Re uses its experience, expertise and financial strength to provide cutting-edge solutions to

Swiss Re and Sustainability: A contribution tomaking the world more resilientPresentation at University of Zurich, “Business & Society” Vorlesung – 11. November 2019Irene Perrin, Senior Sustainability Consultant

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Sustainability Risk

Framework

Macro trends and emerging

risks

Approach to sustainability

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Protection gap & climate

change strategy

Sustainability@Swiss Re | October 2019

Who we are:

The Swiss Re Group is a leading and highly diversified global re-insurer, founded in Zurich, Switzerland, in 1863. We operate around the world and have about 14,200 employees who contribute to our success.

We are organized in three Business Units:

Our Reinsurance Business Unit offers reinsurance products and related services for property and casualty, as well as for life and health businesses.

Corporate Solutions offers commercial insurance to mid-sized and large corporations.

Life Capital manages open and closed life insurance books.

We also support the public sector with our Public Sector Solutions team to help increase insurance penetration around the world.

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Sustainability@Swiss Re | October 2019

Swiss Re Group at a glance

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150+Years experience

Leading and highly diversified global reinsurer, founded in Zurich (Switzerland) in 1863

A.M. BEST MOODY’S S&P

Aa3 AA-History of proven strength, consistently maintaining an A+ rating, makes Swiss Re a reliable partner

Financial strength

Swiss Re offering

Highly diversified, Swiss Re offers both traditional and innovative products in Property & Casualty and Life & Health business across all geographies

USD35bn

Market-leading position

Swiss Re’s Gross premium written totaled almost USD 35bn in 2018, thus reaffirming the leading position in the industry

32%* 21%*47%*

*% of Net premium earned in 2018

A+

Americas EMEA Asia

Our Vision: We make the world more resilient

Together, we apply fresh perspectives, knowledge and capital to anticipate and manage risk. That’s how we create smarter solutions for our clients, helping the world rebuild, renew, and move forward.

Macro trends and emerging risks

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Sustainability@Swiss Re | October 2019

Tomorrow’s risk landscape is shaped by macro trends and their interconnections

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Competitive and business environment Technological and natural environment

Political environment Societal environment

Sustainability@Swiss Re | October 2019

Global macro risk trends interdependencies map 2019

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Trends

Risks

Source: Global Risk Report 2019, World Economic Forum

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Emerging risk examples

A changing climate Ageing in dignityAlgorithms are only human too

Approach to sustainability

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Sustainability is a strategic topic across stakeholder groups

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Clients and peers

scale up sustainability activities and

exchange their views with us

Investors

make environmental, social and

governance (ESG) factors a standard in

decision-making

Regulators and government

put sustainability and climate change

on top of their agenda

Employees

are attracted by andcontribute to

innovative sustainability

solutions

Sustainability@Swiss Re | October 2019

Our approach to sustainability

Sustainability as a guiding principle

Taking the long-term view, playing our part in enabling sustainable progress

Swiss Re Group vision

We make the world more resilient

Swiss Re Group mission

Together, we apply fresh perspectives, knowledge, and capital to anticipate and manage risk. That’s how we create smarter solutions for our clients, helping the world rebuild, renew, and move forward.

Corporate Responsibility Map

Focusing on relevant Corporate Responsibility Topics

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Sustainability mission

We insure, invest, operate and share our knowledge in a way that tackles sustainability challenges and creates long-term value.

Sustainability@Swiss Re | October 2019

Swiss Re’s Sustainability Map gives an overview of the topics we address

See for further information 2018 CR Report

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Sustainability Risk Framework

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Sustainability@Swiss Re | October 2019

Societal topics

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Swiss Re’s Sustainability Risk FrameworkA risk management instrument to identify, assess and tackle environmental and human rights risks

Sustainability@Swiss Re | October 2019

The Guardian, June 2016

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Headline risk

Reuters, January 2017

NU Property & Casualty, October 2019

Financial Times, September 2019

Financial Times, February 2017

Unfriend Coal Coalition, Oct 2019

NY Times, February 2019

Sustainability@Swiss Re | October 2019

SUSTAINABILITY UMBRELLA GUIDELINES NUMBER OF SENSITIVE BUSINESS RISK REFERRALS

0

100

200

300

400

500

2013 2014 2015 2016 2017 2018

proceed proceed with conditions abstain

Human rights

We only support companies that respect human rights in all their practices. No business is conducted with countries and companies that are complicit in severe human rights violations

Environmental protection

We aim to limit our contribution to environmental degradation worldwide. We will not involve ourselves with companies that cause irreversible damage to ecologically sensitive areas

• Animal testing

• Dams

• Defence industry

• Forestry and logging

• Mining

• Nuclear weapons proliferation

• Oil and gas

• Thermal coal

SUSTAINABILITY SECTOR POLICIES

Sustainability Risk Framework in practice

Swiss Re’s Sustainability Risk Framework with umbrella policies for human rights and environmental protection as well as sectorial policies provides a solid framework for the assessment and decision making for sustainability-related risks

Swiss Re’s Sustainability Risk Framework ensures responsible and sustainable business practices by identifying, mitigating and eliminating

potential environmental, social and governance (ESG) risks inherent to our business transactions and investments

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Introduction of online SBR

Assessment ToolIntroduction of thermal coal

policy

See for further information Sustainability Risk Framework publication

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Main concerns in key sectors

Sustainability@Swiss Re | October 2019

SBR methodology and risk referral process: we continuously refine and strengthen our approach to managing sustainability risks

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Sustainability risk referral process

See for further informationSustainability Risk Framework publication

Where we said “no”Dam construction abuses in S.E. Asia

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Any underwriting process for a dam in South East Asia involves a thorough sustainability risk assessment by our SBR team.

In the course of one such assessment, we discovered testimonials of forced labour, violent resettlement, intimidation and absence of local consent to the project.

We decided to forgo involvement in the project as we did not see any potential for redress of the situation and we did not want to tacitly approve and so indirectly profit from such practices.

Where we said “no”Smelter pollution in Latin America

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We were approached with a request for a property cover on a smelter in Latin America.

Our SBR analysis showed that environmental controls on the site had been lacking for decades which had resulted in high pollution levels of air, top soil and ground water.

This was reflected in the poor health of the local community, especially the children.

Given that the company had not implemented any remediation over the past decades and had not respected the community’s right to health, we declined to offer the company cover.

Protection gap and Climate Change Strategy

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Sustainability@Swiss Re | October 2019

Societal topics

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Swiss Re works on closing the protection gap

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Disaster losses are still mostly uninsured

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0

50

100

150

200

250

300

350

400

450

500

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

Insured losses Uninsured losses 10-year moving average insured losses 10-year moving average total economic losses

Insured vs uninsured losses, 1970 – 2018, in USD billion at 2018 prices

Source: Swiss Re Institute

Economiclosses =

insured + uninsured

losses

Sustainability@Swiss Re | October 2019

Societal topics

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Swiss Re’s climate change strategyManaging climate and natural disaster risk is at the core of what we do

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Swiss Re's comprehensive climate change strategy: four pillars

Developing products and servicesto mitigate or adapt to climate risk

Raising awareness about climate change risks through dialogue with clients, employees and the public, and advocating a worldwide policy framework for climate change

Tackling our own carbon footprint and ensuring transparent, annual emissions reporting

Advancing our knowledge and understanding of climate change risksquantifying and integrating them into our risk management, underwriting and investment frameworks where relevant

1 2

3 4

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Sustainability@Swiss Re | October 2019

Developing products and services that address climate change

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Managing Climate and Natural Disaster Risk Advancing Sustainable Energy Solutions

• Insuring Flood: Swiss Re is at the forefront of modelling flood risks, allowing to insure more and more people against this hazard

• Tropical Cyclone: “Loss of income” covers in the US: policies pay out a lump sum in the immediate aftermath of the event for businesses to cover business interruption losses such as cancellations in hotels

• Cover provided to offshore wind farms in Taiwan

• First solar revenue “put”: an insurance product that can guarantee up to 95% of a solar farm’s expected output

• ~3 400 wind and solar farms insured

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Societal topics

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Societal topicsWe explore new topics and shape our position on emerging societal challenges

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We partner for food security

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Protecting Kenyan livestock farmers against drought• Swiss Re helped to launch Kenya Livestock Insurance Program (KLIP) in

2016, the first-ever government livestock insurance scheme in Africa

• KLIP is an index-based scheme using satellite imagery to assess the state of grazing conditions; when a certain threshold is reached, the insured automatically receive a lump sum payment, allowing them to provide their livestock with feed and water

• In 2017, the programme made payouts to 14 000 Kenyan herders, thus saving an estimated 70 000 livestock sustaining 100 000 people

Supporting an agricultural e-voucher scheme in Zambia• Swiss Re supported government-run electronic voucher scheme in Zambia

(E-FISP programme) by offering pricing and reinsurance capacity in 2018

• E-FISP offers smallholder farmers a diversified range of agricultural inputs (such as inorganic fertilisers and seeds) that best meet their actual needs based on local conditions

• All inputs are insured through a weather index insurance programmedesigned by local insurance partners

Swiss Re uses its experience, expertise and financial strength to provide cutting-edge solutions to improve food security by giving farmers protection against natural perils

By providing such insurance solutions to the agricultural sector, Swiss Re plays a vital role in combatting hunger and poverty

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Outlook and conclusion

A learning journey

New Group Sustainability

Strategy

Engagement with internal &

external stakeholders

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Sustainability@Swiss Re | October 2019

Discussion & Links

Contacts

Irene Perrin, Senior Sustainability Consultant, Group Qualitative Risk Management

Further information• 2018 Corporate Responsibility Report (link)• Highlights of Swiss Re’s sustainability

approach (link)• Corporate Responsibility Web portal (link)• Risk Knowledge (link)• Swiss Re Institute (link)• Sonar report (link)

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Sustainability@Swiss Re | October 2019

Legal notice

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©<year> Swiss Re. All rights reserved. You are not permitted to create any modifications or derivative works of this presentation or to use it for commercial or other public purposes without the prior written permission of Swiss Re.

The information and opinions contained in the presentation are provided as at the date of the presentation and are subject to change without notice. Although the information used was taken from reliable sources, Swiss Re does not accept any responsibility for the accuracy or comprehensiveness of the details given. All liability for the accuracy and completeness thereof or for any damage or loss resulting from the use of the information contained in this presentation is expressly excluded. Under no circumstances shall Swiss Re or its Group companies be liable for any financial or consequential loss relating to this presentation.