Corporate Governance and Sustainability at Zurich

Zurich Group December 2020 © Zurich December 2020 December Key messages Remuneration Corporate Governance Sustainability the crisis Resilience through Strategic update • • • • • • • • and and strategy architecture aligned Remuneration to and performance execution against the targets Group's to committed and Board management addressing the needs of all stakeholders Addressing unprecedented changes in our society through climate, in data and impactful businesses the to world the responsible being one Committed most of and people strategies have Actions customer led and improved satisfaction to scores the has through crisis Group been resilient Accelerating our customer focused strategy of digitalization and the business the 2016over Delivery - 19 created created a simpler,19 more agile and efficient company; Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate 2 Strategic update © Zurich December 2020 December 2 1 transformationcompany of the Over 2017 STRATEGICUPDATE 2017 FY OperatingBusiness Profit after tax return on equity, excluding unrealized gains and losses. - 19 19 Z – - ECM reflects midpoint estimate with erroran margin of +/ 2019 TARGETS 2019 REMITTANCES CASH Z SAVINGS EXPENSE BOPAT ROE - ECM - 19 19 we deliveredourtargetson andthe on USD >9.5bn USD 1.5bn 100 TARGET >12% - 120% - 5ppts. USD 1.6bn 10.9bn 14.2% FY 129% USD - 19 2 1 ACHIEVEMENTS ACHIEVEMENTS Strengthened business and culture Improved efficiency Simplified and flexible organization Reinvigorated growth with low earnings volatility Built culture of customer focus and innovation Improved the Commercial profitability Strengthened position of our key countries Reduced corporate center expenses Over Simplified products and services Simplified IT landscape Delayered structure - delivered on USD 1.5bn savings program Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate 4 © Zurich December 2020 December 2 1 a andforclear the direction group ofAt thelast end STRATEGICUPDATE 2020 Before capital deployment. OperatingBusiness Profit after tax return on equity, excluding unrealized gains and losses. – 2022 AMBITION 2022 SHARE GROWTHSHARE EARNINGS PER Z REMITTANCES CASH BOPAT ROE - ECM year wechallengingnewtargets set USD >11.5bn 100 >5% p.a. TARGET >14% - 120% 1 2 OUR PATH OUR TO Supporting society and community Intuitive and convenient Transparent Serving customer needs Modular and personalized Customer led Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate 5 © Zurich December 2020 December 3 2 1 satisfaction with improvedlevelsand of employees customers solidOurallowed foundation us tothe manage COVID STRATEGICUPDATE SUPPORT FOR CUSTOMERS SUPPORTFOR HY ExchangesFarmers GWP impact of premium refunds announced on April referencesFor 30,all 2020. to Farmers Exchanges see the disclaimer and cautionary statements. - 20 20 vs. FY - 19. 19. NPS data reflects commercial business. 1 >USD100m ~USD300m 2 STRENGTHENED CUSTOMER FOCUS STRENGTHENED 1 Retail NPS Retail move 3 - INCREASED SATISFACTION EMPLOYEE INCREASED • • • • Support during COVID 19 19 crisis mobility due mobility to changing workloads Ramp their families for and benefits Hospitalization employees home of Provision and equipment office IT Rapid working move from to home Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate - up of rapid reskilling to talent up rapid facilitate reskilling of Oct - 19 NPS place NPSto place work - 19crisis: +22 Jul - 20 6 © Zurich December 2020 December 1 theand digitalization ofbusiness our Weaccelerating areexecution the of ourcustomerfocusedstrategy STRATEGICUPDATE Zurich CustomerZurich Active Strengthened position in position Strengthened accident with and the health appointment appointment of Middle of U.S. aMarket Head North Strengthened management America team with the customer facilitate interactions during lockdown Enhanced digital tools agents’ to increase productivity and the of of portfolio acquisition SMECSS Versicherung AG in • • brand and renewed brand contract and renewed years for 10 in partnership Deutsche exclusive to Extended Bank Postbank Launched long Management. - term term strategic with alliance Orange in ACCELERATED ROLLACCELERATED SERVICES DEVELOPMENT ACCELERATED DIGITAL OF - OUT OF ZCAM OF OUT Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate 100% integration 100%integration with sales channels next customer need intelligence driven insights to Artificial predict 360 to drive changecultural Groupof New role TransformationChief Officer Officer to speed digital transformation Groupof New role Information Chief and Digital digital services New ° Global Business Business Platforms Global focusing unit on customer customer view 1 7 © Zurich December 2020 December 2 1 ofstrategy ourfocus in support Leadershipteam strengthenedand reorganized tofurther provide STRATEGICUPDATE MANAGEMENT AND STRENGTHENED TEAM MANAGEMENT REFRESHED BUSINESS HEADS BUSINESS EXECUTIVEOFFICER GROUPCHIEF Existing ExecutiveExisting Committee member with new responsibilities. Per 1, January 2021 Kristof Terryn Kristof North Zurich America Alison Martin Alison EMEA JeffDailey Group,Farmers Inc. New Executive Committee members 2 Jack Howell Jack Global Business Platforms 2 Tulsi Naidu Tulsi APAC Laurence Maurice America Latin James James Shea Commercial Insurance – Mario GrecoMario FUNCTIONAL HEADSFUNCTIONAL Ericson Chan Ericson Officer Digital Chief Information & Angehrn Urban Chief Officer Peter Giger Chief OfficerRisk George Quinn Chief Financial Officer 1 NEW MANAGEMENT NEW TEAM MANAGEMENT THE OFLAST WE IN YEAR STRATEGY HIGHLIGHTEDSUPPORT • • • • Further increases diversity of Further increases team diversity the executive Group of Increases innovative development focus in retail platforms further Supports the of acceleration the digitalization of business Further strengthens capabilities digital Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate 8 © Zurich December 2020 December Wewell are positionedfor success future STRATEGICUPDATE global business global and diverse A balanced strong liquidity strong levels capital with leading Industry RESILIENT sheet managed balance and conservatively Stable, consistent + underwriting discipline underwriting customers Focus on and Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate STRATEGY customer Focus on the Simplify Innovate 9 Sustainability © Zurich December 2020 December Mario Mario Greco Group CEO in businesses the world” responsible the most and impactful “Webe to as known want one of Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate 11 © Zurich December 2020 December resilienceourofemployees ourbusiness,communities and We deliveredstrongagainstprogress our priorities,enhancingthe SUSTAINABILITY Insurer Community Employer Investor • • • • • • • • • • operationalize our Collaboration with the Science Based Target initiative and the UN avoided and benefit to 5m people) Exceeded Launched toeffort Expanded our 2019 thermal coal Contributed to the development of Established Expanded Global Flood Resilience Program Z Zurich Foundation talent to where it is most needed Increased internal talent mobility reflected in the record eNPS score and highest point increase ever Prioritized the safety and wellbeing of employees during COVID USD USD 5bn of impact investment Group - net wide Climate approach develop sustainable products and services pledge CHF 20m - zero investment journey , oil sands and shale oil policy as as a means of carbon footprint methodologies to to support vulnerable charities portfolio; portfolio; now prioritizing on reaching our impact targets ( to to align our business with a 1.5 to to 200 additional communities in order to reach 4m people by 2024 with aim of setting first 2025 target in Q1 2021 filling vacant positions and addressing priority ; ; first results with - 19 crisis - backed Net in cooperation with industry bodies duringthe COVID ; ° employees felt highly supported which is C C future - Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate Zero Asset Owner Initiative to Climate Climate Change Resilience - 19 crisis work, aligning internal 5m tons of CO2 12 © Zurich December 2020 December 4 3 2 1 by externalassessors Delivery against ourambition widely is recognized SUSTAINABILITY OUR OUR RATINGS CDP CDP FTSE S&P MSCI ESG ReportRating July 2020 Climate Climate Change 2020 score. Global ESG Score Industry Industry Classification Benchmark ( ICB ), Dec 1 2020 2020 (previously RobecoSAM 2019 ), 100% percentile ‘A #1 Absolute Score of - ’ in insurance group Management Level ‘AA’ (out of (out of 5.0) rating 3 1 4.4 2 4 • • • • PARTNERS ENGAGEMENT OUR LONG OUR Member of Insurance Development Forum Member of Coalition for Climate Resilient Investment Founding member of the Net Zero Asset Owner Alliance Lead author of the World Economic Forum Global Risk Report - TERM TERM COMMITMENT Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate 13 © Zurich December 2020 December society for with systemic sustainablerisks mitigation preventionand 2020 pandemicfinancial crisis andreinforced theto prepare need SUSTAINABILITY WORK SUSTAINABILITY A DIGITAL SOCIETY CONFIDENCE IN A CHANGING CLIMATE • • • • • • new organizational capabilities for the future Acceleration of digitization and technology adoption increases the urgency for companies to build Remote work poses new operational and mental health challenges to be addressed by employers Multiplication of cyber attacks tested ability to ensure data security in digital society 2020 crisis accelerated digitization and technology adoption and need to foster confidence further insurability of climate risks and ensure an efficient transition to a low carbon world It also highlightedthe need for insurance to create awareness with the public orderin to ensure we e.g. face pandemics, 2020 crisis reinforced society’s risk awareness, underscoring the need to prepare for the complex risks changing weather patterns, rising sea levels Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate 14 © Zurich December 2020 December 1 of1.5˚C ourpledge Wedeveloped have groupa CLIMATEA CHANGING • • • • TARGETS SCIENCE that enabling companies to claim that greenhouse gas (GHG) emission reductions goals are “science goals reductions gas (GHG) emission greenhouse that to claim companies enabling that Science reduction in paper Elimination of single (data center, commuting) Expand scope of operations CO2 footprint byoffices 2022 Target of 100% renewable electricity in on fact Set targets to reach Net Zero by 2050 based - based Targets Initiative is an NGO collaboration between CDP, World Resources Institute (WRI), the World Wide Fund forFund N Wide (WRI), World the Institute World CDP, Resources between an NGOis collaboration Initiative Targets based ▪ ▪ - - BASED BASED CO2 REDUCTION based methodologies develop methodology in insurance withCollaborate industry to being developed with SBTi Investment Net - use in 2020 - use plastic and 80% - Zero methodology 1 • • • SOLUTIONSSUSTAINABLE FORINNOVATION - wide climate approachin supportwide increased resilience in our customers Incentivize sustainable behaviors and Develop new customer propositions Scale existing sustainable solution offerings - based” and in line with what t with and line in based” Future Plan Our 1.5˚C he latest climate science says is necessary to meet the goals of the Paris Agreement. of Paris the the goals to meet is necessary says science climate latest he ature (WWF), and the United Nations Global Compact (UNGC). Aim is to define measurement methodology methodology measurement (UNGC). Compact to define Global Aim is Nations United (WWF),the and ature • • • • • MITIGATE RISK CLIMATE by 2023 through the Zurich Flood Resilience Alliance Catalyze USD 1 billion investment Further increase impact investees Engage with carbon intense industries and transition risk from exposureNatCat and customer’s Mitigate Zurich’sexposure to climate risk manage our climate risks framework to understand, quantify, and Implement a global risk assessment Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate 15 © Zurich December 2020 December andto supporttransition resilience industries across Wereviewing, areenhancing and adapting servicesproductsand CLIMATEA CHANGING • PIPELINETO PRODUCT SUPPORTTRANSITION for for transition We are products, traditional adapting in insurance solutions innovating addition to • RENEWABLEENERGY • SEQUESTRATION CARBON CAPTURE AND (CCS) • SUSTAINABLEAGRICULTURE and sequester and carbonsequester adopting practices sustainable that regenerate soil health New transfer for risk designed solutions farmers are who by by our customers marketplace rapidly and evolving increasing investment our Reviewing in customer solutions order to address economy global build product Scaling existing our to offering meet accelerating - out out of and emerging green CCS hydrogen • • LAUNCHED Our unique Our approachunique along value chain. entire change risks the physical climate and to offer anatural hazards approach holistic that launched services We newly – – – as baseline. as using the developed assessment Climate is Change risk Current assessment Risk with to exposure natural currenthazards. C Our mitigate currentexperts help companies and exposures. risks trackfuture urrent Risk urrent Risk – CLIMATE CHANGE RESILIENCE SERVICES CHANGE CLIMATE A ssessment identifies, quantifies and identifies, ssessment assesses the associated risks Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate 16 © Zurich December 2020 December 1 approachsustainability to addressrisks Inwe underwriting are applyingand risk a engagement CLIMATEA CHANGING • • WHAT WHAT WE DO Progress on Progress customers numbers within UW Portfolio per July 2020 − − − the expanded and to: scope In 20172019, − − − − introduced In our 2012,on: position two infrastructure for sands oil oil include oil sands, shale, and purpose further coal, restrict and thermal transactions with human areas, and oil / / mining environmentally gasin dam construction, banned weapons, - year review year period review from 2019 – SCOPE - rights implications rights implications - sensitive - built built PROCESS RELATIONSHIP 5A CONTINUE CONTINUE 4. ENGAGE4. 1. DETECT1. 5B 3. DEVELOP3. POSITION ASSESS 2. DIVEST COAL/OIL SANDS POSITIONCOAL/OILSANDS UNDER UPDATED COMPANIES FLAGGED - based • • Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate have have for been cleared continued relationship a only have 49%the Of that7% been reviewed, be will majority complete by 2021 ongoing with thatreview expectation the the of 51% flagged parent under companies are Ongoing 51% 7% Cleared 1 42% renewed No new/ 17 © Zurich December 2020 December transitionto supportportfolio Wedeveloping are insurancecarbonintensity methodology CLIMATEA CHANGING ZURICH’S CARBON INTENSITY MANAGEMENT INTENSITY ZURICH’SCARBON APPROACH MANAGEMENT – UNDERSTAND PORTFOLIO FOOTPRINT GWP vs Carbon Footprint GWP Carbon FootprintCarbon Contribution Contribution to sustainability multiple aspects of EDUCATE of of transition pathways on operational impact dialogue with customers ENGAGE in open internally on Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate support transition and services that and develop products ENABLE intensity in UW portfolio measurement of carbon ENSURE review, adapt fact - based 18 © Zurich December 2020 December 2 1 Wea areglobal insuranceresponsibleleaderinvestmentsin CLIMATEA CHANGING • • • • • Excluding cash, passive funds, Index tracking, sovereign bonds, hedge funds, asset funds, hedge bonds, tracking, sovereign Index funds, passive cash, Excluding of by part be PRI for selected MSCI of ESGrating; sector RI percentile Top Target Target of net managed managed assets roll Completed out proxy of voting in to all voting process, and engagement) for requirements ESG data,integration (training, managers that meet are Zurich’sorPRI signatories assets 100%of Close to managed by asset issuer asset relevant where we classes, have of choice integrated and ESG in risks opportunities all 2 to to avoid 5m tons of CO2 and benefit 5m people by investing USD 5bn INTEGRATION - zero CO2 portfolio in 2050 • • • • Active Ownership Process Integration Information Training - house house “PRI Leaders’ Group” due to performance in selecting, appointing and monitoring external managers external monitoring and appointing selecting, in to performance due Group” Leaders’ “PRI • • • • - backed securities securities backed Environmental Finance Environmental Bond Awards 2020 and ‘Best Impact Report of the Year (for investors)’ at Awards: ‘Impact Asset Owner of the Year 2019 (GSG)’ and measure environmental social impact Further improved proprietary framework to per 2020)4mpeople Q3 targets (2.9mtons CO2avoided of and benefited future Focusing efforts on reaching our impact ourExceeded USD impact 5bntargetportfolio – 49% of AuM as per 31.12.2 per of 49% AuMas IMPACT INVESTING • • • Profitability Measurability Intentionality 019 019 • • • • research research bodies Collaborating with industry and 16initiatives Co (PRI) Investment Signatories of UN ourSBTi in net and strong collaboration Asset Alliance, withOwner Founding signatory the to UN - Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate Chair Chair Bond and Green Principles of Social 1 … ADVANCING ADVANCING TOGETHER - zero zero journey - backed Principles for backed Principles Responsible • • • Public advocacy Collaboration Innovation - backed Net backed Net Zero 19 © Zurich December 2020 December a … and impact market leadinginvestor CLIMATEA CHANGING 1 IMPACT IMPACT INVESTING PORTFOLIO(USD 4 th Social and Social Sustainability Bonds InfrastructureImpact Debt 2013 largest privatelargest sector impact portfolio under Operating Principles for Impact Management 0.2 2014 0.7 2015 1.0 2016 1.7 Green Bonds PrivateImpact Equity 2017 2.8 bn ) 2018 3.8 2019 4.6 HY 5.0 - 20 • • INVESTMENT EXAMPLES • • • • ACHIEVEMENTS helped avoid 46,000 t of CO2 through renewable energy production Invested USD 160m thein green bonds of a European utility, which emerging markets Committed USD 25m to a private equity fund focusing on health care in Scaled approach in order to increase number of asset classes – – – focusing on Delivered/upheld/maintain stringent impact investing strategy market's most disciplined impact investing framework Managing one of the largest private sector impact portfolio under helped avoid 2.9m tons of CO2 and benefited 4m people per Q3 2020 Invested over USD 5.4bn multiin Profitability Measurability Intentionality Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate - asset asset impact investments, which 1 20 © Zurich December 2020 December climate workingstrategy is Results demonstrate ourholisticthat responsible investment CLIMATEA CHANGING Financing the transition Advocating policy focused on and tar sand policy flagged by our thermal coal Engaging with companies by 2050 to net Operationalizing our pledge - zero zero emission portfolios • • • • • • • • • • OUTCOMES emission of 5m tons CO2 p.a. Continued scaling green investments as part of ongoing commitment to impact investing and to help avoid the Encouraging governments to set ambitious NDCs under the Paris Agreement Promoting a global price on carbon, established at a level that drives real economy to a 1.5 Using COVID Divesting from Encouraged and accelerated transition plans for companies that are both an underwriting client and an investee Established Developed “Financial Sector SBT Framework” jointly with Science Owner Alliance Published“Protocol for target setting” (now under public consultation), developed jointly with Net Next step: set science baseline of financed emissions for public equity, credit and real estate - 19 stimulus packages to build back better by including climate considerations companies in breach of our policy thresholds with no credible transition plans - based interim targets for 2025 by Q1 2021, based on following actions - Based Target Initiative (published in October) Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate ° C C trajectory - Zero Asset 21 © Zurich -4 -3 -2 -1 0 1 2 3 4 5 December 2020 December 1 throughthe emissionsofCO2 reduction our Weconsistently areimproving sustainability the of ouroperations CLIMATEA CHANGING (in ‘000 and ‘000and per (in FTE) TONSOPERATIONS METRIC EMITTED BY OWN CO2 controlled controlled by the company; as defined by the Greenhouse Gas Protocol CorporateScope 1: emissionsDirect Accounting fromand sourcesReporting ownedStandard or reportedcontrolled on by the company; Scope 2: Indirect emissions from purchased electri 2007 264 4.5 Total 2015 109 2.4 Scope 1 Scope 1 2016 2.1 92 Scope 2 Scope - 2017 31% 2.1 90 Scope 3 Scope 2018 1.9 82 CO2 per per FTECO2 2019 1.8 76 0 25 50 75 100 125 150 175 200 225 250 275 • • NEW SCIENCE • • • • EMISSIONREDUCTION INITIATIVES base year, 2029 target year) defining our new science centers, employee commuting, printed paper,and waste as part of reporting under scope 3 to include emissions sources from data In order to take greater accountability, we will expand our emissions well as other energy related emissions not included in scope 1 and 2 Our scope 3 emissions currently account for air, rental and rail travel as Smart travel (e.g. LEED Platinum Headquarters in North America and Switzerland) Energy efficiency 2022 (RE100) Purchasing renewable power Dynamic Working cit y; Scope 3: Indirect, upstream and/or downstream emission sources not owned or Zur – - ich.com BASED TARGET BASED OPERATIONS FORTARGET stronger approval processes, leveraging technology – space space reductions with enhanced experience - based target for operations (planned 2019 Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate – 100% renewable power target by end 22 © Zurich December 2020 December thestrengthen resilienceandofcustomersemployees our Enablinginspiring anda confidencein digital society will help CONFIDENCE A IN DIGITALSOCIETY • • use of use of Data & AI Assurance Framework to ensure ethical Develop an Artificial Intelligence (AI) (Trust, Transparency, Fairness) and underpinningprinciples Deliver on our Data Commitment ETHICAL USE OFDATA ETHICAL USE & AI CUSTOMERS PLACE US ON HONOR THE TRUST TRUST HONORTHE • • DATA & PROTECTIONCYBER SECURITY and education cyber risk coverage, service ecosystem Protect and enable customers through robust cyber and information security Proactively embed ’Privacy by design’and CYBER SECURITY SECURITY CYBER CAPABILITIES CONTINUALLY STRENGTHEN • • • BUSINESS RESILIENCE RESILIENCE & DIGITALIZATIONBUSINESS automation with product simplification and intelligent Deliver dynamica customer experience digital enterprise Enable data a our Business Resilience Framework Protect and recover critical services with Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate DELIVERING A A RESILIENT DELIVERING DIGITALEXPERIENCE - driven, customer - focused, 23 © Zurich December 2020 December 1 DIGITALIZATION& RESILIENCEBUSINESS CYBERSECURITY& DATA PROTECTION OF DATA AI & ETHICALUSE in digital a society Executingagainst ourambitionenables a higherconfidence CONFIDENCE A IN DIGITALSOCIETY Board for theBoard Centre for Cybersecurity of the World Economic Forum EXECUTION EXAMPLESEXECUTION • • • • • • protection protection privacy of and state educational Provide guidance for to customers and promote society range a Deliver comprehensive of cyber products to SMEs Measurement cycle Commitment as the globally of part Performance Measure and against drive execution our Data allowing us to allowing improve value for for money customer the from Greater in confidence consumers digitalization and supports lowers resilience costs business transformation of Enabling the digitalization through business and simplification product acceleration digital of demonstrated to ability Successfully maintain critical services to customers COVID during research in cooperation WEFthe with - of - the 1 - art cyber management risk on based - 19 crisis Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate 24 © Zurich December 2020 December 3 2 1 Zurich capabletoday a diverse is and organization WORK SUSTAINABILITY FEMALE FEMALE REPRESENTATION EMPLOYEESBY GENDER Average tenure per as 30.09.2020. Headcount as per 30.09.2020 (excl. CoverMore). Headcount and female representation data as per 01.10.2020 Leadership Leadership team ExCo 1 Dec Dec Oct Oct 1 Male EMPLOYEES - - - - 2019 2019 2020 2020 55,369 2020 51% 49% Female 23% 27% 25% 27% 5 4 Boomer, <1964; Gen X, 1965 Annualized turnover (voluntary and involuntary) as per 30.09.2020 OUR ORGANIZATIONAL ORGANIZATIONAL OUR FOOTPRINT Nationalities 113 Latin 7,161 North America 17,221 Average Tenure (years) 10 - 1979; Gen Y, 1980 3 1,270 Turnover CC Average 9% Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate - 1994. 4 20,251 EMEA 2 Boomer 16% 5 Asia Pacific Asia Gen X 6,098 42% 5 Gen Y 43% 5 25 © Zurich December 2020 December 1 strongerandskills digital customer Weequipping are ourforfutureemployees the with WORK SUSTAINABILITY • • • • 2018 Offer career Offer choicescareer that match our peoples’ talents and ambitions Prioritize development of current workforce over external hires; Support and develop the skills our people need for the futur and organization support Duringthe COVID Pandemic, promote an Enhanced Organizational Health, ENPS and feedback tools to focussed on building skills for the future Built a compelling Shifted – 2020 PROGRESS 2020 Talent Management to to address the heightened risks to our people Employee Employee Value Proposition - Centric discipline from ‘buy’ to ‘build’ increased Employee Wellbeing culture of ‘listen and act’ for for our people • • • • • 2021 proof proof the organization and drive business growth Strengthen and continue to diversify the talent pipeline into work program and other opportunities to bringmore young people Scale youth employment learning to build skills for the future Drive internal talent mobility foundation for employees to be owners of their career Create an Focus on delivering our – 2023 PLANS2023 e o f work; Keep many as jobs as possible in integrated rewards and career framework Work Sustainability commitments by expanding the Zurich Apprenticeship Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate as as a core component of work - house as opposed to outsourcing; as as the to to future 1 - based 26 © Zurich LEADERSHIP TEAM LEADERSHIPTEAM HIRESINTERNAL % VOLUNTARY TURNOVER EXECUTIVE HIRING EXECUTIVE SPEND(USDm) December 2020 December 2 1 peopleOurstrategy workingis multipleonlevels WORK SUSTAINABILITY Amounts Amounts recorded in Finance systems for Executive Hiring Vendors. 2020 data as2020 per Sep Leadership Team % internal hires as per 01.10.2020 2020 2019 2019 4.6 All 7% 2019 1% High PerformersHigh 2020 55% 5% 1.7 2020 63% 2% 2 1 PROVIDED DURING DURING PROVIDEDCOVID SUPPORTFORRECOGNITION INTERNAL - 2020 - 19 CRISIS: 19 EXTERNAL EXTERNAL RECOGNITION Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate 27 © Zurich December 2020 December 1 Wellbeing,D&I andEngagement Employee Weembedded havepriorities Sustainability,includingWork WORK SUSTAINABILITY • • • • OUR D&I ONACCELERATING EFFORTS • • • • SUSTAINABILITY WORKEMBEDDING COMMITMENT OUR 2020 % 2020 positions filled internally as per 30.09.2020. practices practices using an externally audited tool and process Markets with >100 employees assessed for discriminatory pay Zurich signed the UN Women’s Empowerment Principles Further harmonized global Parental leave policies Global Employers list for LGBT+ We are the only insurer to be recognized winning America’s Workforce Presidential Award Expanded apprenticeships and opportunities for work Launched a global learning platform of >16k world to align resources to where they are needed most Maximised talent mobilization in short positions filled internally from 45% in 2019 to 54% in 2020 Shifted Talent Management from ‘buy’ to ‘build’,increasing % - term and project in Stonewall’s - class courses - 2020 Top based learning, - based roles 1 PROMOTING STRONGER ENGAGEMENT EMPLOYEESTRONGER PROMOTING • • • • WELLBEING PANDEMIC THROUGHEMPLOYEE SUPPORTING new ways of working and employee care People managers and employees equipped with expertise relating to employees and managers Online wellbeing training sessions with separate learnings for both Large scale and rapid implementation of remote working (people first approach) High and tangible levels of employee care, support and engagement 201 - 23 7 H1 + - 5 18 H2 + - 9 18 Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate +75 H1 + 22 - 19 H2 + 30 - 19 H1 52 - 20 28 © Zurich December 2020 December 1 ZurichtheFoundation Z communitiesSupporting throughemployeevolunteeringand COMMUNITIES NUMBER OF VOLUNTEERING HOURS PER (2019) EMPLOYEE VOLUNTEERING OFNUMBER HOURS CHARITABLE CONTRIBUTIONS IN CHARITABLE OFNET INCOME %(2019) projections projections by charities Thenumber of lives positively impacted is based on the following assumptions: a) a family consists of 4 people, b) basic nee Zurich Peer 3 Peer 2 Peer 1 0.0 0.2 0.4 0.6 0.8 1.0 Peer 1 1.1% Zurich 0.9% 0.8 Peer 2 0.6% Peer 3 0.4% Peer 4 2.2 0.3% 2.3 2.6 0.0 0.5 1.0 1.5 • • FOUNDATIONZURICHZ COVID EXTRA SUPPORT DURING – – of which: USD 12m in grants given out per Jun existing partnerships 200 1.2 1.2 m other 7.8 m food and medicine charities supported in 32 countries, of which 150 were d d s upport has been granted for averagean period of 3 months. The impact represents initial short - term assistance Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate - 20 benefitting 1m people - 1 19 CRISIS 19 , 29 © Zurich December 2020 December locally for positive impact Foundation Zhas a Zurichthree COMMUNITIES Flood Flood and other single Global and local relationships/grants ADAPTING TOCLIMATE CHANGE E n talent talent and money, and by helping Engagement opportunities Multiple g Focus on Focus on adaptation a Partnering for success g e Scaling for impact in urban settings m e n - hazard resilience t o f Z u - r hazard resilience i c h e m p l o y e s t e a s k , e t h h o e l d i e r r f s a b m e t i t l e i e r u s , n Z d u e r r IMPROVING MENTALIMPROVING WELLBEING s i t c Stress and anxiety, reducing stigma a h’ Scaling for impact and franchising n - d s pillar strategyrelevant topillar be v c Engagement opportunities Local relationships/grantsLocal u u Focus on Focus on prevention l n s Partnering for success t e o r a m b i e l i t r y s , , we d i s deliver greater impact and c t r i b u t o r s, s u p p l i e r s , retired reat e e a more empathetic ecosystem for Zurich and m p l o y e Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate e s | ENABLING EQUITY SOCIALENABLING Th Focus on Focus on empowerment Engagement opportunities Local relationships/grantsLocal r o Partnering for success u Equity of opportunity g Scaling for impact h incentivised giving of time, ZZF . 30 © Zurich December 2020 December 2 1 additionalprogramcovering communitiesto an 200 ~4m people ZZurichareand Zurich expandingFoundationFlood theResilience COMMUNITIES • • • • PROGRAM’S PURPOSE • • • • AND MAIN ACHIEVEMENTS PROGRESS Insurance Insurance Development Forum; FloodZurich Resilience Alliance analysis; events to identify improvements opportunities and best practices Deploy Zurich’s Post Focus on practical ways to strengthen community flood resilience spent on pre Increase investments proportion from current 13% of aid that is only 1$ invested in prevention saves 5$ in future losses e.g. e.g. IDF Key collaboration on pre as part of their flood and resiliencecoastal plan UK government recommends our resilience measurement framework methodologies, incl. our Post Global awards and recognitions for the program and its 25.2% of total financial advocacy target of USD 1bn achieved 2 , LWR - event resilience and risk reduction 3 , SDC 4 - Event Review Capability to review large flood and the UNDRR office - event resilience and scaling of our tools with - Event Review Capability (PERC) 1 4 3 Swiss Agency Swiss for Development and Cooperation Lutheran World Relief; Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate 31 © Zurich Dece resilienceourofemployees ourbusiness,communities and We deliveredstrongagainstprogress our priorities,enhancingthe SUSTAINABILITY m ber 2020 ber Insurer Community Employer Investor • • • • • • • • • • operationalize our Collaboration with the Science Based Target initiative and the UN avoided and benefit to 5m people) Exceeded Launched toeffort Expanded our 2019 thermal coal Contributed to the development of Established Expanded Global Flood Resilience Program Z Zurich Foundation talent to where it is most needed Increased internal talent mobility reflected in the record eNPS score and highest point increase ever Prioritized the safety and wellbeing of employees during COVID USD USD 5bn of impact investment Group - net wide Climate approach develop sustainable products and services pledge CHF 20m - zero investment journey , oil sands and shale oil policy as as a means of carbon footprint methodologies to to support vulnerable charities portfolio; portfolio; now prioritizing on reaching our impact targets ( to to align our business with a 1.5 to to 200 additional communities in order to reach 4m people by 2024 with aim of setting first 2025 target in Q1 2021 filling vacant positions and addressing priority ; ; first results with - 19 crisis - backed Net in cooperation with industry bodies duringthe COVID ; ° employees felt highly supported which is C C future - Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate Zero Asset Owner Initiative to Climate Climate Change Resilience - 19 crisis work, aligning internal 5m tons of CO2 32 Governance & Remuneration © Zurich December 2020 December 1 managementdeliverstrategic on priorities Aindependent diverseandBoard, positionedto well support CORPORATEGOVERNANCE BOARD BY BY KNOWLEDGEBACKGROUND, EXPERIENCE, BOARD SKILLS AND COMPOSITION BOARD Distribution Distribution of members per November 2020; Female Accounting&Auditing Legal Legal & Regulatory IT IT & Technology Non financials 45% Economics Insurance Banking 1 55% 9% 9% Male Board Board members are allocated to one or more nationality, sectors and/or specialization areas based on their individual profile 18% 18% 18% Germany UK 8% Singapore 17% 36% 36% 8% 33% US 1 25% 8% Switzerland Specialization Sector 50 • • • • of the moment: key Up addressingto challenges Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate resilience in times of resilience COVID Business and employee ESG Dataprotection Digitization Age (years) Age(years) 72 - 19 34 © Zurich December 2020 December growthtoin ensurevalue enterprise Boardactively Thebalances of the all needsstakeholders CORPORATEGOVERNANCE Creating social impact and enhance resilience well as attractive and stable returns Providing a strong capital base as GOVERNANCE GOVERNANCE PROCESSES & & STRONG INCLUSIVE CULTURE solutions with positive social and environmental impact At the center of activities, developing products and Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate sustainability of purchased services while ensuringhighquality and Acting as a reliable business partner trust and security of workplace skills and developing talent, Training employees with future 35 © Zurich December 2020 December 1 componentof long Seniormanagementincludescompensationsignificant REMUNERATION 2019 REMUNERATION STRUCTURE 2019REMUNERATION At target, a percentageas of total remuneration considering ExCo members active for the full year, including the Group CEO. LTIP 41% DIRECTORS EXCO Fixed 100% 100% 25% STIP 34% Fixed - term deferredremunerationterm 1 LTIP 49% STIP EMPLOYEES 9% LTIP CEO 3% 88% 22% Fixed 29% STIP Fixed LTIP STIP FIXED REMUNERATIONFEES / • • • • • • • • • years years for ExCo Three assessed weight, over with equal 3years Pre Annual target allocation performance preof assessment Award mainly driven by as relevant well BOP individual and as TNPS (80/20), 1 For Directors paid fees includes in and years cashshares (5restricted) sales benefits and flexible expatriate/cross in with Benefits market line local in plans years recent in with line relevant market practice Base salary benchmarked towards relevant market local median - year performance year performance period, in paid cash - defined defined performance criteria - year cliff year vesting; cliff Half vested shares of sales - Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate defined defined targets – – can include , medical life cover,include can NIAS ROE, remittance NIAS cash and TSRrelative - border allowances – shift away from defined benefit shift away from defined - restricted restricted for 3additional 36 © Zurich December 2020 December 1 Zurichsignificanthas created to shareholdersvalue REMUNERATION TOTAL SHAREHOLDER RETURN SINCE (USDJAN 2016) RETURN 1,TOTAL SHAREHOLDER Source: Source: Datastream as of December 31, 2019. 100% 120% 140% 160% 180% 200% 220% 20% 40% 60% 80% 0% 2016 STOXX STOXX Insurance600 2017 2018 Zurich InsuranceZurich Group 2019 2020 TOTAL(%) 106% 41% 1 CAGR (%) 20% 9% DIVIDEND PER SHARE (CHF)PER DIVIDEND SHARE FY 17 - 16 FY 18 - 17 Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate +6% FY 19 - 18 FY 20 - 19 37 © Zurich December 2020 December nonfinancial and metrics Remunerationframeworkfinancial includes REMUNERATION pool funding pool for Measures STIP STIP STIP STIP AWARDED AS OF% TARGET Target Target Cards Management by Performance DRIVERS DRIVERS FOR EXECUTIVE COMMITTEE MEMBERS FY 65% - 15 109% FY - 16 Group Group BOP ESG projectsStrategic & targets Customers Customers & Employees KPIs 106% FY 80% - 17 109% FY Customer Customer Experience - 18 20% 109% FY 30 - 19 10 - 40% - 20% 50% Ø 100 Financial KPIsFinancial LTIP PREDEFINED PERFORMANCE LTIPPREDEFINEDPERFORMANCE METRICS LTIP VESTING LEVEL AS % OF TARGET In line with In line 2020 FY 0% - 16 - 2022 strategic targets 121% FY - 17 Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate FY 83% - 18 149% FY - 19 1/3 1/3 1/3 178% FY - 20 Cash RemittanceCash Relative Relative TSR NIAS ROE Ø 106 38 © Zurich December 2020 December 2 1 of STIP participant variable pay Customer importantis experiencean driverformajority the REMUNERATION ROLL OUT OUT TNPSOFROLL Includes Group,Includes Region, Control Function, Leadership Team, Commercial Insurance TNPS for Transactionalstands above business units; NetFarmers Promoter is alsoSystem measure Country TNPS used for country employees Global TNPS used for Group functions 67% 67% of GWP and policy fees IN FUNDINGPOOLSTIP countries 2018 6 – with with NPS being the global best practice standard for customer experience mea 2 – 1 STIP STIP pool funding weighting of 20% – STIP STIP pool funding weighting of 20% 83% 83% of GWP and policy fees countries countries 2019 16 d against customer metrics on a separate basis. surement. covering 81% of STIP participants Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate 88% 88% of GWP and policy fees countries 2020 20 39 © Zurich December 2020 December 2 1 Governanceapproachaligns interest with shareholders REMUNERATION REMUNERATION REMUNERATION GOVERNANCE Remuneration Remuneration report addresses remuneration architecture, rules and disclosures. On recommendation of Group CEO. Total variable remuneration pool Board of Directors remuneration Relevant Relevant chapters within the Zurich Remuneration Rules Remuneration architecture Group Group CEO remuneration Remuneration Remuneration report Organizational Rules ExCo remuneration STIPfunding pools LTIP vesting level TOPIC 2 Board Board Risk & Investment Committee after CEO proposal & GRM review Board Board Remuneration Committee Board Remuneration Committee Board Remuneration Committee Board Remuneration Committee Recommended Recommended by Group Group CEO 1 BOARD APPROVAL Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate SHAREHOLDERS’ APPROVAL Consultative Consultative Vote Binding vote 40 © Zurich December 2020 December furtherForinformation (use the links to navigate through the Zurich website) Information security at Zurich Our Group’s Being a responsible tax payer Zurich’s HR factbook 2019 Sustainability highlights2019 Corporate Governance report 2019 (incl. Remuneration report) Annual Report 2019 Data Data commitment and privacy protection Code Code of Conduct Zurich Climate Change Whitepaper Climate Change Zurich’s role in society Zurich’s role as Zurich’s role as an investor Zurich’s role as an insurer Corporate Governance Structure at Zurich Sustainability at Zurich an employer - overview overview Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate 41 © Zurich December 2020 December ISSUER AND WILL THAT CONTAIN INFORMATION DETAILED ABOUT THE COMPANY AND MANAGEMENT, AS WELL AS FINANCIAL STATEMENTS. EXEMPTION FROM AND REGISTRATION, ANY PUBLIC OFFERING OF SECURITIES TO BE MADE IN THE BE WILL MADE BY MEANS OF A THIS COMMUNICATION DOES NOT CONTAIN AN OFFER SECURITIES OFFOR SALE IN THE UNITED STATES; SECURITIES MAY NOT BE OFFERED OR SO This communication doesnot constitute an oroffer an invitation for the sale or purchasesecurities of in any jurisdiction. Personsrequiring advice shouldconsult an independentadviser. It shouldnotedbe that past performance notis a guide to future performance. Please also note that interim results not are Exchanges, but is providedto support an understanding the ofperformance Farmersof Group, Inc. and Farmers Insurance CompCompany Ltd and Zurich Insurance Group Ltd, haveownership any interest in the Farmers Exchanges. Financial informa fact the for Farmers Exchanges andthat incapacity provide certain non domiciledinter All references to “Farmers Exchanges” mean Farmers Insurance Exchange, Fire Insurance Exchange, Truck Insurance Exchange and obligation to publiclyupdate or reviseany theseof forward Group or potentially exposingthe Groupto additional lossesif terms or conditions are retroactively amended wayby andlegis of interpreted the byGroup and may be subject to regulatory, legislative, governmental and litigation statements were made the on basisof circumstances prevailing at a certain time and the on basisspecificof terms and condit direct bearing on the resultsoperations of of Zurich Insurance Group Ltd and its Group and whetheron the targets will be ac morbidity experience; (vii)policyrenewal and lapse rates; increased(viii) litigation activity and regulatory actions; and in particular; (iii)performance of financial markets; (iv)levelsof interest rates and currency exchange rates; (v)frequen (or pastfrom results). Factors suchas (i) general economic conditionsand competitive factors, particularly keyin markets; other factors that couldcause actual results and plans and objectivesZurichof Insurance Group Ltd or the Groupto differ m expected developments. Unduereliance shouldnot be placed on suchstatements because, by their nature, they are subjectconditions,to k dividend policy and underwriting and claims results, as well as statements regarding the Group’s understanding ofInsurance Group Ltd the or Zurich Insurance Group(the Group). Forward Certain statements in this document are forward Disclaimer cautionaryand statement - insurance exchanges owned theirby policyholders with governance oversight theirby Boards of Governors. Farmers - looking statements, including, but not limited to, statements that predictioare - looking statements, whether to reflect new information, future even - claims servicesclaimsand ancillary servicesto the Farmers Ex - looking statements include statements regarding the Group - related related developments aff (ix cy, ) changes )in laws and regulations inand the policiesof regulators may have a (i severity and development insuredof claims events; (vi)mortality and nec the riskofi) globala economicdownturn, the financialin services industries ate hie lat ion ge changes. Neither Farmers Group, Inc., nor its parent companies, Zurich essarily indicative of full year results. ive or regulatory action. Zurich Insurance Group Ltd undertakes no rially thosefrom expressed or impliedthe in forward ved. Specificallyrelation in with the COVID nsor of indicate future events, trends, plansor objectives of Zurich now s (ins particular applicable exclusions)insuranceof policiesas written neral economic, financial and insurance market conditionsand ts or circumstances or otherwise. ecting ecting the extent potentialof lossescoveredby member a of the tio any the n about n the Farmers Exchanges is proprietary to the Farmers Group, Inc. Group, Inc. and its subsidiaries appointedare as the attorneys andn unknown risksand uncertainties and can affected be by ’s targeted ’s targeted profit, return on equityexpenses,targets, pricing ir subsidiariesand affiliates. The three Exchanges Californiaare . Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate LD LD PR IN THE THE IN UNITED STATES ABSENT OR REGISTRATION OSPECTUS THAT MAY BE OBTAINED FROM THE - 19 related statements, such - lookingstatements - in - 42 © Zurich December 2020 December furtherForinformation Patricia Patricia Heina Events Gianni Vitale Michèle Matlock Samuel Han Francesco Bonsante Richard Burden and Rating AgencyInvestor Relations Management US CALL +41 44 625 48 26 +41 44 625 28 50 +41 44 625 32 57 +41 44 628 00 68 +41 44 628 96 40 +41 44 625 38 44 VISIT OR FOLLOW US FOLLOWORVISIT   Follow Follow us Financial results and reports Investor Relations website Corporate Governance and Sustainability at Zurich at Sustainability and Governance Corporate 43