Accelerating Sustainable Progress

2019 Sustainability Report Accelerating sustainable progress In this report we introduce our enhanced Group Sustainability Strategy and describe the actions we have taken to accelerate sustainable progress.

About the front cover Website 2019 Sustainability Report “Mitigating climate risk and reports.swissre.com/ Accelerating advancing the energy transition” sustainable sustainability-report/2019/ progress is a key ambition of our Group Sustainability Strategy. In this report you can find out more about the strategy and the risk transfer solutions we developed in 2019.

For further information, please see pages 9–14 and 25–31. Contents

Executive statement 2 Who we are and what we do 4 Our approach to sustainability 8

Creating solutions for sustainability 22 Extending our risk intelligence 32 Being a responsible investor 40 Engaging in dialogue with our stakeholders 48 Reducing our footprint 56 Engaging our people 64 Ensuring good corporate governance and compliance 74 Providing transparency 79 The Swiss Re Foundation 80

Independent Assurance Report on the Swiss Re 2019 Sustainability Report 82 Memberships, commitments and index listings 84

Swiss Re | 2019 Sustainability Report 1 Executive statement

Walter B. Kielholz Chairman of the Board of Directors

We believe that with our enhanced Group Sustainability Strategy we have positioned ourselves well to address pressing sustainability challenges and benefit from related opportunities for our business. The strategy builds on our successful track record and further sharpens our commitment. It clearly defines sustainability as a strategic, long-term value driver and embeds this approach throughout our re/insurance value chain. It thus supports our ability to meet our vision to “make the world more resilient”, which gives our company a strong sense of purpose benefiting all our key stakeholders.

You can find out more about our Group Sustainability Strategy and its key elements in this report, on pages 9–14.

Climate change has long been a key sustainability topic for Swiss Re, since it can have strong long-term implications for the re/insurance business. Tackling the issue effectively will be challenging and require Dear stakeholders, a true multi-stakeholder effort. The year of 2019 was an important one for sustainability. We are determined to support this effort The momentum around the topic has increased noticeably, and to help set the agenda. In 2019, especially with regard to climate change. While this has we made three important commitments to achieve net-zero CO2 emissions: raised expectations on businesses, it is also creating new • Across the whole Swiss Re Group by opportunities for positive action. Particularly in our regular 2050, as a signatory to the UN Global Compact Business Ambition for 1.5°C interactions with clients and brokers, investors and • In our investment portfolio by 2050, as regulators, we have noticed rapidly growing awareness a founding partner of the UN-convened Net-Zero Asset Owner Alliance of sustainability as a key long-term value driver. • In our own operations already by 2030

Below we would like to highlight some of the concrete actions we took during the reporting year to implement our Group Sustainability Strategy.

In our core re/insurance business, we made some important steps towards decarbonising our business model. Through our Sustainable Business Risk Framework, we continued with the implementation of our thermal coal policy, with the aim of reducing our exposure to thermal coal utilities and mining. We also

2 Swiss Re | 2019 Sustainability Report Christian Mumenthaler Group Chief Executive Officer

worked with peers to develop a robust carbon footprinting methodology, which will allow us to measure and address the carbon risks embedded in our re/insurance business. As a next step, we will start shifting away from the most carbon-intensive risks in the oil and gas industry over the next years.

In our asset management, we systematically integrate environmental, social and developed as well as emerging countries, governance (ESG) criteria across our whole private- as well as public-sector clients. Our Sustainability Report continues to investment portfolio. This makes economic Working in close partnership has again serve as the official disclosure document sense and helps the real economy to shift proved to be essential for creating solutions for two voluntary commitments we to a more sustainable path. As a co-founder that meet our clients’ needs. have made to the United Nations: the of the UN-convened Net-Zero Asset Owner UN Global Compact and the UNEP FI Alliance, we also joined the Science Based Exchanging know-how on workable Principles for Sustainable Insurance. Targets Initiative and will develop and apply solutions and addressing gaps as part of a You can view the fully-linked reference science-based emissions reduction targets. true multi-stakeholder approach is essential tables in the online version of the report. After reaching our goal of holding green to tackle sustainability challenges. This We will continue to honour both bonds of at least USD 1.5 billion, we is why we place great emphasis on regular commitments as part of our Group expanded our commitment to include social dialogue with our stakeholders. Swiss Re Sustainability Strategy and report on and sustainability bonds and set ourselves Institute plays an important role in this: our activities to meet their principles. a new goal of USD 4 billion to be reached combining our internal expertise with by the end of 2024. world-class research, it serves as the platform for our high-quality conferences guiding the future development of Achieving net-zero emissions in our own and publications, including the sigma series sustainability, chiefly disclosures, standards operations by 2030 is a challenging and the annual SONAR Report. Often, our or legislative proposals. ambition. After more than halving our CO2 senior managers join the debate, for example emissions per employee since 2003 and by sharing their views on specific topics We would like to conclude by thanking offsetting all our remaining emissions, it in blogs or at major conferences. On the our employees for the great work they requires us to further double down on our following pages, you can read summaries have delivered for Swiss Re day in and day reduction efforts. All remaining emissions of various dialogue highlights from 2019. out. The initiatives and achievements then need to be removed from the we describe in this report are due to their atmosphere and stored permanently. As part of our stakeholder engagement, we commitment and know-how. Our goal, in We tackle this challenge by supporting continue to be a member of the Task Force turn, is to offer our employees an attractive, nascent carbon removal technologies, and on Climate-related Financial Disclosures inclusive and cooperative work environment in 2019 completed our first purchase of (TCFD) and the EU Technical Expert Group that inspires them to shape viable responses carbon removal certificates generated by (TEG) on Sustainable Finance. Both bodies to the big issues we all face, thus creating a pioneering biochar project in Finland. are working on important frameworks long-term value for all of our stakeholders.

Through our Group Sustainability Strategy we focus on a number of specific topics: climate change, renewable energy, health, Zurich, 19 March 2020 agriculture and infrastructure – while seeking to use the possibilities offered by digitalisation. In this report, you can read about a selection of transactions we completed in 2019 to offer our clients effective re/insurance protection against Walter B. Kielholz Christian Mumenthaler risks in these areas. The transactions span Chairman of the Board of Directors Group Chief Executive Officer

Swiss Re | 2019 Sustainability Report 3 Who we are and what we do

Our vision: We make the world more resilient.

Swiss Re at a glance we deploy our capital strength, expertise and innovation power to enable the risk- The Swiss Re Group is a leading wholesale taking upon which enterprise and progress provider of reinsurance, insurance and in society depend. other insurance-based forms of risk transfer. Dealing directly and working Working with our clients and partners, we through brokers, our global client base help to protect assets and lives around the consists of insurance companies, mid- to globe – for a resilient future. large-sized corporations and public-sector clients. From standard products to tailor- Headquartered in Zurich, Switzerland, made coverage across all lines of business, Swiss Re has operations across the world.

Our global presence

Europe (including Middle East and Africa)

Net premiums earned and fee income in 2019 12.0 (USD billions) (USD 11.0 billion in 2018)

Number of office locations* as of 31 December 2019 34 (33 in 2018)

Number of employees (regular staff) as of 31 December 2019 9 565 (9 099 in 2018)

* Counting each location with offices once; not counting data centres

4 Swiss Re | 2019 Sustainability Report At the end of 2019, we had 80 office Swiss Re Ltd, the Group’s holding company, Our strategy locations in more than 30 countries. is a joint stock company, listed in accordance Our Group strategy helps us meet our Based on “net premiums earned and fee with the International Reporting Standard financial targets and to make the world income from policyholders”, our ten biggest on SIX Swiss Exchange, domiciled in Zurich, more resilient. markets in 2019 were: the US, the UK, and organised under the laws of Switzerland. China, Australia, Japan, Germany, Canada, No other Group companies have shares You can get more information on our Switzerland, Ireland and France. They listed. strategy in the 2019 Business Report at: accounted for approximately 79% of the reports.swissre.com/2019/business- Group’s total business over the year. report/our-business/our-strategy.html.

Americas Asia-Pacific Total

18.2 8.4 38.6 (USD 16.2 billion in 2018) (USD 7.3 billion in 2018) (USD 34.5 billion in 2018)

33 13 80 (34 in 2018) (15 in 2018) (82 in 2018)

3 418 2 418 15 401 (3 624 in 2018) (2 220 in 2018) (14 943 in 2018)

Swiss Re | 2019 Sustainability Report 5 Who we are and what we do

The Swiss Re Group

Reinsurance Corporate Solutions Life Capital Reinsurance provides clients and Corporate Solutions provides risk Life Capital supports and incubates entities brokers with reinsurance products, transfer solutions to large and mid-sized in the B2B2C primary business, B2B insurance-based capital market corporations around the world. Its corporate business as well as the closed instruments and risk management innovative, highly customised products book space.* As a key part of Swiss Re’s services. Reinsurance operates and standard insurance covers help to strategic growth plan, Life Capital provides globally through two segments – make businesses more resilient, while alternative access to new Life & Health and Property & Casualty and Life & Health. its industry-leading claims service Property & Casualty risk pools. It creates provides additional peace of mind. simple and transparent digital propositions that make insurance products simpler and more accessible, helping boost the business of our partners.

* Following completion of the sale of ReAssure, pending the required regulatory approvals, Life Capital will focus on its open book businesses.

Operational Group structure Group CEO

Group CFO Group Finance

Group CRO Group Risk Management Americas Chairman SRI & Group CUO Swiss Re Institute (SRI) EMEA Group CIO Group Asset Management Asia Group COO Group Operations Regional Presidents Group CHRO Group Human Resources

Group CLO* Group Legal**

Group Functions & Group Legal

Business Unit Business Unit Business Unit Reinsurance Corporate Solutions Life Capital

Proper t y & Life & Casualty Health * The Group CLO reports with a dual reporting line to the Group CEO and the Group COO. ** Group Legal is not a Group Function.

6 Swiss Re | 2019 Sustainability Report The financial figures in the table at the The information in the lower table shows top provide information on the scale of the the distribution of Group income to key Swiss Re Group and income generated: stakeholders (employees, government total capitalisation broken down in terms of taxes and shareholders). debt and equity, sales/revenues, operating costs and net income.

Financial highlights

USD millions 2018 2019 Total assets 207 570 2 3 8 5 6 7 Total investments 147 302 103 7461 Total liabilities 178 843 207 530 Total debt 10 135 10 323 Common shareholders’ equity 27 930 29 251

Total revenues 37 047 49 314 Premiums earned and fee income 34 461 38 594 - P&C Reinsurance 16 095 19 275 - L&H Reinsurance 12 835 13 004 - Corporate Solutions 3 925 4 166 - Life Capital 1 606 2 149 Net investment income – non-participating business 4 075 4 171

Total expenses –36 497 –48 405 Claims and claim adjustment expenses –14 855 –18 6 8 3 Life and health benefits –11 769 –13 0 8 7 Net income 421 727

1 The Group agreed to sell its subsidiary ReAssure Group plc in December 2019 to Phoenix Group Holdings plc. The corresponding held for sale assets and liabilities, including investments and debt are separately disclosed on the balance sheet. Further details on the agreed sale are provided in Note 11 “Assets held for sale“ of the 2019 Financial Report, page 249.

Attribution of Group income to key stakeholders

USD millions (unless otherwise stated) 2018 % 2019 % Income before tax and variable compensation 863 100% 1 218 100% Variable compensation1 373 43% 351 29% Income tax expense 69 8% 140 11% US GAAP net income attributable to shareholders 421 727 of which paid out as dividend2 1 659 192% 1 76 6 145% of which share buyback 1 020 118% 1 0103 83% of which added to retained earnings within shareholders’ equity –2 258 –2 0 4 9

1 Aggregate compensation for all employees was CHF 2 310 million in 2019. See 2019 Financial Report, page 142. 2 FY 2019 is estimated based on the average monthly CHF/USD FX rate as of February 2020. The dividend is subject to AGM approval and the amount depends on the final number of dividend eligible shares and FX rates upon dividend payout. 3 Includes shares bought back between 6 May 2019 and 18 February 2020 as part of the buyback programme authorised at the AGM 2019. The total amount represents an estimate translated at the respective period average rate.

Swiss Re | 2019 Sustainability Report 7 Our approach to sustainability

Through our Group Sustainability Strategy, we aim to reinforce our efforts to make the world more resilient and sustainable, thus helping to maintain our competitiveness today and in future.

8 Swiss Re | 2019 Sustainability Report Swiss Re has a long-standing commitment Key elements of our Group Sustainability to being a responsible company. In our Strategy understanding, a guiding principle of acting At its highest level, the strategy states our responsibly is to take a long-term view Sustainability Mission, derived from and play our part in enabling sustainable Swiss Re’s vision of making the world progress, to the benefit of our clients and more resilient, to the benefit of all our key society at large. This principle is integrated stakeholders. It expresses what we do into our value framework as part of what and what we aim for: we call “doing business the Swiss Re way” and into our Code of Conduct.

Group Sustainability Strategy We insure, invest, operate and share our Feedback from our stakeholders confirms that Swiss Re is widely regarded as a knowledge in a way that sustainability leader, reflecting our many tackles sustainability achievements to date. It is notable, however, that the momentum around sustainable challenges and creates development has intensified recently, long-term value. opening up new opportunities to businesses for decisive action. Building on our successful track record, our Group Executive Committee Our 2030 Sustainability Ambitions has thus decided to further strengthen our provide this mission with topical focus areas. efforts and to develop an enhanced Group Initially, we have selected three overarching Sustainability Strategy. ambitions that describe how we can have a significant positive impact in terms of This enhanced strategy defines sustainability supporting sustainability and strengthening as a strategic, long-term value driver and resilience (see pages 12–13 for further embeds this approach throughout our details): re/insurance value chain. At its core, it involves managing and monitoring risks and Mitigating climate risk and opportunities associated with environmental, advancing the energy transition social and governance (ESG) issues. Sustainable re/insurance covers both the Building societal resilience liability and the asset side of our balance sheet, our own operations and dialogue Driving affordable insurance with our stakeholders. In our core business, with digital solutions it aims to develop innovative solutions, improve business and investment performance on a risk-adjusted basis, Finally, we have defined three Principles and thus to contribute to environmental, to guide our practical work: social and economic sustainability. Embed Lead Website Quantify Learn more about our vision, mission and values at: www.swissre.com/about-us/ our-vision-mission-and-values.html

Swiss Re | 2019 Sustainability Report 9 Our approach to sustainability

The illustration below shows how the elements of our Group Sustainability Strategy interact with each other:

Our 2030 Our sustainability ambitions principles

Mitigating Embed climate risk and sustainability advancing the in all our energy transition business activities

We insure, invest, operate Lead Building and share our knowledge sustainability- societal in a way that tackles linked solutions resilience sustainability challenges and embrace opportunities and creates long-term value

Quantify Driving aﬀordable sustainability insurance with performance digital solutions and impact

Adjusting our terminology You can learn more about our Group Reflecting our enhanced Group Sustainability Strategy and related aspects Sustainability Strategy and its accelerating on the following pages: the crucial link relevance for our business, we have changed between sustainability and resilience (page our terminology and replaced our former 11), our three 2030 Sustainability Ambitions umbrella term of “corporate responsibility” (pages 12–13), our Climate Action Plan with “sustainability”. In line with this (page 12), our approach to the UN change, our annual review is now called Sustainable Development Goals (page 14) Sustainability Report instead of and the full, adjusted set of our Sustainability Corporate Responsibility Report. Topics with related targets (pages 16–19).

Website

Learn more about our Group Sustainability Strategy at: www.swissre.com/sustainability/ group-sustainability-strategy.html

10 Swiss Re | 2019 Sustainability Report Swiss Re’s vision is to make the world more resilient, thus enabling communities to quickly bounce back after a disaster. Through our Group Sustainability Strategy we help reduce risks that may weaken resilience and develop re/insurance solutions offering protection against them.

Resilience and sustainability: the link

Making the world more Sustainability denotes the principle translates into offering protection against resilient is Swiss Re’s vision. of achieving economic and social such risks where viable, supporting efforts development that can be maintained in to reduce them and to prevent them Sustainability as a strategic the long term, ie without overusing (“adaptation” and “mitigation”). This in priority supports our ability to precious resources. Major challenges that turn helps strengthen resilience. undermine sustainable development, eg meet this vision. Here’s how: climate change, insecure food supplies, Finally, companies that make sustainability health funding gaps, ageing infrastructure a priority across all aspects of their Resilience describes the ability of etc. can weaken resilience because they businesses are better qualified to adjust individuals, organisations, communities create new risks or aggravate existing to the changing risk landscape – they and entire societies to bounce back ones, further widening the protection gap. become more sustainable themselves. after major setbacks such as financial or In Swiss Re’s own case, this enhances human loss due to natural disasters, Our focus on sustainability seeks to our long-term prospects of continuing pandemics and other risks. Effective identify and address the challenges that to meet our vision of making the world re/insurance protection plays a vital role threaten stable long-term development. more resilient. in strengthening this ability. From the perspective of a re/insurer this

Swiss Re | 2019 Sustainability Report 11 Our approach to sustainability

2030 Sustainability Ambitions

Mitigating climate risk towards net-zero carbon emissions by Furthermore, we promote sustainable and advancing 2050, in line with the Paris Agreement. practices in our own operations to the energy transition We do this in a number of ways. demonstrate good stewardship, lead by The effects of climate example and drive long-term performance. change are already With our underwriting and innovative We have adopted a holistic strategy to evident and impacting our risk landscape: re/insurance solutions, we can help responsible investing, including warmer average temperatures, rising communities and businesses get back on investment practices for our assets to sea levels, longer and more frequent their feet quickly after a disaster, as well consider environmental, social and heatwaves, as well as more intense as prepare them for more frequent and governance (ESG) criteria in our precipitation events. These phenomena severe climate impacts. investment decisions. Limiting global are becoming the new normal and will warming is part of this effort, and we are increasingly impact our way of life, our We build partnerships with clients and reinforcing it by further reducing our own health and our natural environment. governments to develop scalable solutions carbon footprint across our operations, Urgent questions we need to ask are how to mitigate and adapt to climate change. investments and re/insurance offerings. to tackle climate change, how to advance This includes offering solutions that the transition to renewable energy, and support the transition to more sustainable, We are implementing our Group how we can best adapt to and mitigate low-carbon energy systems by managing Sustainability Strategy through a climate risk. the risks associated with renewable structured process and are currently energy projects and making them more working on bringing it to life by defining Our response attractive to investors with re/insurance targets, metrics and actions for our three Swiss Re’s main responses to this backing. Overall, it is our goal to be a 2030 Sustainability Ambitions. Adopting challenge are to make societies more leading re/insurance capacity provider for a sequential approach, we have first resilient to the growing risks of climate the development of renewable energy started to develop a Climate Action Plan, change and natural hazards, as well solutions. which also serves as our climate strategy as evolving our way of doing business (see below).

Our Climate Action Plan Swiss Re first detected the potential long-term challenges For specific targets related to these objectives, take a look at the posed by climate change some 30 years ago. Consequently, “Mitigating climate risk and advancing the energy transition” it has become our most important sustainability issue: For a section on pages 16–17. We will report against these targets re/insurer, climate change constitutes a key topic because it in our 2020 Sustainability Report. leads to an increase in the severity and a change in the patterns of natural catastrophes such as windstorms, floods, excessive Key achievements of 2019 rainfall, heatwaves and drought. In combination with growing Below you can see a selection of key actions we took in 2019 asset concentrations in exposed areas and more widespread that are relevant for our Climate Action Plan, with references insurance protection, this will cause a steady rise in losses. to further content in the report: • We committed to net-zero emissions on the liability and Climate change continues to be an essential element in our asset side of our balance sheet by 2050 (pages 33 and 47). enhanced Group Sustainability Strategy: “Mitigating climate risk • We committed to net-zero emissions in our own operations and advancing the energy transition” is one of our three overarching already by 2030 (page 57). 2030 Sustainability Ambitions. In the process launched to • We continued to implement our thermal coal policy in the define metrics and setting targets, we have put the initial focus treaty business. In 2019, we had over 300 engagements on this topic and started to develop a Climate Action Plan. with clients across the globe on the topic of thermal coal (page 35). Building on our commitments and initiatives of recent years, our • Many of our clients have introduced a thermal coal policy Climate Action Plan, which also serves as our climate change of their own and are helping us reduce our carbon exposure strategy, combines three objectives: in our treaty business (page 37). • We took a further important step in the development of 1. We aim to become the leading re/insurance company our carbon steering mechanism and developed a policy on physical climate risk. to shift away from the most carbon-intensive oil and gas production (page 35). 2. We aim to become a leading provider of re/insurance solutions for low-carbon transition opportunities.

3. We build partnerships to develop scalable solutions to mitigate and adapt to climate change.

12 Swiss Re | 2019 Sustainability Report Building societal Driving affordable resilience insurance with digital Technological and economic solutions development, population By embracing the growth, ageing populations opportunities offered by new and other societal trends are increasingly technologies and the digital transformation, putting people and assets at risk. Swiss Re’s we aim to develop solutions that make responsible investment strategy, as well as insurance more affordable, accessible and its work in the areas of health and longevity, available to customers. Technology not only agriculture and infrastructure represent some allows us to deliver greater efficiencies of the ways we help build societal resilience through the entire insurance value chain, but and reduce related vulnerabilities. also to provide innovative insurance covers and share our risk knowledge more widely. Our response Today, billions of people are either uninsured Our response or underinsured for life and health risks. Our goal is to use technology to provide Health gaps are widening, such as those affordable insurance for more types of risks caused by our ageing populations or chronic and across broader income levels. illnesses like diabetes. At the same time, as Technology can help streamline processes, the world population increases, so too must which eventually leads to more customer- global food production. But climate change friendly access to insurance and more and rising food prices pose a serious threat, affordable coverage. Another benefit not least to farmers and the agricultural comes from utilising our parametric industry. We share our knowledge, apply solutions to speed up claims payments to new technologies and partner with clients customers, eg via their smart devices. and other stakeholders to come up with Ultimately, we want to help close the innovative solutions to address these protection gap by offering risk cover to a challenges. To this end, our goal is to greater number of individuals through a ensure health and wellbeing across all simplified insurance value chain. age groups, as well as affordable and sustainable agriculture to enhance the By combining smart analytics and devices livelihood of society. we can enhance our risk knowledge as well as advice to customers to improve Furthermore, economic growth depends on risk prevention, mitigation and crisis investment in infrastructure. However, the management. For example, we can funding gap for both maintaining existing improve our natural catastrophe modelling infrastructure and building new infrastructure and understanding of risk exposures by is widening. As a re/insurer and long-term combining our proprietary, internal data investor, we both underwrite the projects sources with external ones. Furthermore, needed – from transport infrastructure customers can benefit from education and to urban spaces or renewable energy behaviour change platforms that provide infrastructure – and provide capital to advice on nutrition, exercise, sleep and infrastructure projects to help narrow the other activities. financing gap. While creating new possibilities to deliver value directly to our customers and closing protection gaps, leveraging technology and using big data also raises some questions. Various regulators around the world have started to evaluate the need for regulations on the topic of big data and digital responsibility or have issued first guidelines. At Swiss Re, we seek to understand and proactively address the digital challenges surrounding the digital transformation, including developing digital best practices and integrating digital responsibility aspects into our solutions and businesses to manage the risks of digital societies.

Swiss Re | 2019 Sustainability Report 13 Our approach to sustainability

Our approach to the UN Sustainable We have analysed our Reinsurance Development Goals Underwriting Portfolio from an SDG Swiss Re endorses the UN Agenda 2030. perspective and will use the insights for our Since the Sustainable Development Goals portfolio steering. As we look to develop (SDGs) were launched in 2015, we have further products supporting sustainability, continuously refined our approach to using an important criterion will be how we can the SDG framework and defining how our contribute to the SDGs. business contributes to achieving the goals. As part of our responsible investment We started by mapping the SDGs to our strategy, we have developed an approach Sustainability Topics (formerly Corporate to measuring the impact of our thematic Responsibility Topics), clearly showing investments and aligning it to the SDGs where we contribute to the SDGs (see (see page 44). table on pages 16–19). Going forward, we will further focus on We then explored how to use our Group mapping, measuring and disclosing our SDG Sustainability Strategy to further align our contributions and impacts. Below you can activities with the SDGs, and understand see all the SDGs we address through our related strengths, opportunities and risks. activities:

www.un.org/ sustainabledevelopment/

Our external commitments • UNEP FI Principles for Sustainable Based on our commitment to Insurance (PSI): for our Public sustainability, we have committed Disclosure of Progress, to a number of external charters see online report and initiatives: • Principles for Responsible Investment • Paris Pledge for Action, see page 33 (PRI): see page 47

• UN Global Compact Business Ambition • Task Force on Climate-related Financial for 1.5°C, see page 33 Disclosures (FSB-TCFD): see 2019 Financial Report, pages 151–167 • Net-Zero Asset Owner Alliance, see page 47 • ClimateWise (www.cisl.cam.ac.uk/)

• IDF commitment with UN Development • RE100: see page 59 Programme, Germany and the UK, see page 50 • EP100: see page 59

• UN Global Compact: for our • CDP (formerly Carbon Disclosure Communication on Progress, Project) (www.cdp.net) see online report

14 Swiss Re | 2019 Sustainability Report How we determine materiality Insights from dialogue with our Our process to identify Sustainability stakeholders Topics A key question for any company that seeks Our role as ultimate risk-taker in society When identifying our material Sustainability to advance sustainability is what this means that we have an intrinsic interest in Topics, we draw both on our internal, means in the context of its own business maintaining active and ongoing dialogue embedded risk expertise and the insights and industry: which topics are “material” with our key stakeholders. Generally we gain from our stakeholder dialogue. In to achieving this goal? speaking, this dialogue works in both addition, we take into account the views directions: Our partners expect us to share of various standard-setters on materiality, In order to identify these material our risk expertise, thus helping them – eg: reporting requirements, materiality Sustainability Topics, we use both our and society at large – to form effective definitions by sustainability rating agencies, internal risk expertise and ongoing dialogue responses. In turn, we also benefit from multilateral discussions such as the UN with our stakeholders. this exchange because it helps us sharpen Sustainable Development Goals (see page our understanding of key risks, including 14), relevant academic research and Insights from our internal risk expertise sustainability issues, and to set priorities. regulatory developments. As a leading re/insurer, we act as ultimate risk-taker in society, which requires us to With regard to such issues, we consider As part of our enhanced Group Sustainability have a very sound understanding of the risk the following groups as our principal Strategy, we reviewed the materiality of landscape. This risk expertise embedded in stakeholders: our Sustainability Topics (formerly Corporate our company and the deep understanding • Clients: cedents, brokers, corporate Responsibility Topics). In doing so, we of re/insurance markets also give us a solid clients, government entities, multilateral tapped the key sources described above foundation to identify material sustainability organisations and conducted the following steps: issues. In many areas of our business, we • Financial community: investors/ • Benchmarking and gap analysis by the have special teams, functions and processes shareholders, rating agencies, shareholder Group Sustainability Strategy project to identify and address issues relevant to associations, stock exchanges core team sustainable development. • Employees • Interviews and roundtable discussions • Political and legal entities: multilateral with key internal decision-makers In our core re/insurance business there are organisations (UN), governments, • Exchanges with our sustainability risk units such as our Public Sector Solutions regulators, standard-setting boards stakeholders (eg investor meetings, events global function, the Weather, Agro & MGA • Civil society: general public, NGOs, at the Centre for Global Dialogue, project- team in our Corporate Solutions Business academia and business-related interactions) and Unit, the P&C Structured Solutions team in external experts (academia, NGOs, our Reinsurance Business Unit and many Swiss Re Institute plays a key role in our consulting firms) more that identify underinsured markets and stakeholder dialogue. It incorporates • Revised list of material topics finalised by risks, and seek to expand re/insurance successful Swiss Re brands, such as the Group Sustainability Risk unit, based on protection through commercially viable sigma publication series and the Centre for Group Sustainability Strategy and former solutions. Global Dialogue, our in-house conference list of material topics venue in Rüschlikon near Zurich. Swiss Re In our risk management, meanwhile, we Institute acts as a coordination point for have a process and the capabilities to research output from research-focused identify risks we feel we should not re/insure, business lines within Swiss Re and from be it for ethical reasons, because they might external partners. Our renowned expertise increase loss potential, or both. We conduct publications form another important this analysis through our Sustainable element of our stakeholder dialogue. Business Risk Framework and other tailor-made risk management tools. Complementing the insights we gain directly through dialogue with our stakeholders, We also maintain a formal process to identify we also evaluate and use data provided emerging risks called SONAR (systematic by specialised third-party organisations observation of notions associated with risk). such as RepRisk (www.reprisk.com), This enables us to spot, at an early stage, Sigwatch (www.sigwatch.com), MSCI newly developing or changing risks that may (www.msci.com) and Sustainalytics have a significant impact on our business, (www.sustainalytics.com), as well as including risks related to sustainability issues. the results of academic research.

Swiss Re | 2019 Sustainability Report 15 Our approach to sustainability

Our Sustainability Topics, SDG links, targets & key achievements

For all of our Sustainability Topics we have set targets – some of their principal links to the UN Sustainable Development Goals, them quantitative, others qualitative. On the following four pages, the targets we have set for them and what we achieved during we briefly describe why these topics are important for Swiss Re, the reporting year.

Our Sustainability Topics Links to the UN Sustainable Development Goals* Our targets Key achievements

Mitigating climate risk and advancing the energy transition • Completed: Based on our commitment to the United Nations, advise • By the end of 2019, advised a total of 120 (sub-)sovereigns on 50 sovereigns and sub-sovereigns on climate risk resilience by 2020 climate risk resilience and offered them protection of USD 10.0 The effects of climate change and global warming are already evident and shaking up our and offer USD 10 billion of re/insurance protection against this risk. billion, thus meeting our commitment one year ahead of schedule risk landscape: warmer average temperatures, rising sea levels, longer and more frequent (page 27). heatwaves and more weather extremes. We continue to evolve our way of doing business • New: As a member of the Insurance Development Forum (IDF), towards a low-carbon economy in line with the Paris Agreement. Our key objectives are: collectively commit to offer up to USD 5 billion of risk capacity for • Were involved in further offshore wind farm projects, including climate risk insurance benefiting up to 500 million individuals by 2025. the first large commercial project to be constructed in France and • We aim to become the leading re/insurance company on physical climate risk. expanding our engagement in Taiwan, Asia’s most important • Use our capacity and technical expertise to provide effective market for offshore wind (page 30). • We aim to become a leading provider of re/insurance solutions for low-carbon risk covers for complex offshore wind farm projects. transition opportunities. • Revised our oil and gas policy with the goal of shifting away from • New: Achieve net-zero emissions across the Swiss Re Group by 2050. the most carbon-intensive oil and gas production in the next years. • We build partnerships to develop scalable solutions to mitigate and adapt (page 35). to climate change.

Building societal resilience • In cooperation with key stakeholders, create solutions to improve • Completed a number of innovative transactions providing insurance food security by giving farmers protection against natural perils. protection to smallholder farmers against various natural perils, Technological and economic development, population growth, ageing populations and eg in Mexico, China and Cambodia (pages 26–29). other societal trends are putting people and assets in jeopardy. With our re/insurance • Advance our understanding of the societal impact of insurance and solutions and investments we help reduce societal vulnerabilities. Our key objectives are: develop metrics to measure our impact on stakeholders. • Through our Group Sustainability Strategy further explored the relevance and implications of the UN Sustainable Development • New: In partnership with Women’s World Banking, bring life and health • We provide affordable health and longevity solutions to our customers to ensure Goals for Swiss Re and how we can further align our activities with insurance to two million low-income customers by the end of 2020. healthy lives and to promote wellbeing across all age groups. them, both in re/insurance and our investments (pages 14 and 44). • We support sustainable agriculture and enhance livelihoods across the re/insurance • By the end of 2019, brought life and health insurance protection to value chain through our risk knowledge and solutions. 219 000 beneficiaries through our partnership with Women’s • We facilitate sustainable and resilient infrastructure through our risk transfer products. World Banking (page 27).

Driving affordable insurance with digital solutions • Refine our understanding of societal challenges related to the • Continued our engagement in discussions with peers, regulators, digital transformation. academics and trade associations on how to embrace the Our customers are seeking quick, intuitive and streamlined digital experiences to make opportunities offered by digitalisation in a responsible and ethical • New: Increase our digitally enabled value propositions for people and their lives safer and healthier. With our digital solutions we increase the availability way (page 53). and affordability of re/insurance and risk knowledge worldwide. Our key objectives are: businesses, using new and evolving technologies as well as analytical capabilities, eg in the area of agriculture and natural catastrophes. • We leverage technology to provide affordable cover for more types of risks across all income levels and ensure efficient claims handling. • We apply smart analytics and devices to enhance our risk knowledge and advice to improve risk prevention, mitigation and crisis management. • We develop digital best practices, integrate ethical aspects into our digital business and provide solutions to manage the risks of digital societies.

Managing sustainability risks • Adjusted: Consistently identify new sustainability risks, adapt the • Continued with the implementation of our thermal coal policy Sustainable Business Risk Framework accordingly and apply it to the and sharpened our oil and gas policy, with the goal of gradually Sound risk management is essential for a re/insurer. Besides the core categories of full scope of our business. decarbonising our business model (pages 34–35). our risk landscape (insurance, financial market and credit risk), we also pay attention to other significant risks we may be exposed to, including sustainability risks. We define • Adjusted: Increase the share of structured and automated sustainability • Recorded a small decrease in the number of transactions referred sustainability risks as ethical concerns related to potential environmental and socio- assessments in the Sustainable Business Risk process. to our team of in-house experts for individual Sustainable Business Risk assessments (page 36). economic impacts of our business transactions, and the reputational risks they may entail. • Engage with clients and industry partners on how to address and The risk assessments we make through our Sustainable Business Risk Framework, reduce sustainability risks in business transactions, especially in • During 2019, had over 300 engagements with clients in the an advanced risk management instrument, flow directly into our re/insurance and high growth markets. context of implementing our thermal coal policy (pages 35 and 37). investment decisions.

* Note: SDG 17 “Partnerships for the Goals” is important for most of our Sustainability Topics.

16 Swiss Re | 2019 Sustainability Report Our Sustainability Topics Links to the UN Sustainable Development Goals* Our targets Key achievements

Swiss Re | 2019 Sustainability Report 17 Our approach to sustainability

Our Sustainability Topics Links to the UN Sustainable Development Goals* Our targets Key achievements

Investing responsibly • Integrate ESG criteria systematically along our overall • At the end of 2019, close to 100% of our Strategic Asset Allocation investment process. considered ESG aspects (page 42). Institutional investors such as re/insurers are naturally suited to invest responsibly because of the businesses’ long-term nature. Swiss Re systematically integrates • Completed: Meet our investment target for green bonds of at least • By the end of 2019, we held USD 1.8 billion in green bonds, environmental, social and governance (ESG) considerations along the investment USD 1.5 billion. exceeding initial goal (page 43). process through its three-cornerstones approach: Enhancement (eg by applying • New: Hold at least USD 4 billion in green, social and sustainability ESG benchmarks), Inclusion (ie thematic investments) and Exclusion. bonds by the end of 2024. • New: Achieve a net-zero greenhouse gas emission investment portfolio by 2050.

Engaging our people • Continue to build an engaged, inclusive and agile organisation. • Sixty-eight percent of our employees are of the opinion that Swiss Re offers an environment that is open to and inclusive of We want to be an organisation where diverse talents come together globally to apply individual differences (page 72). fresh perspectives and knowledge to “make the world more resilient”. For this it is imperative that we build an engaged, inclusive and agile organisation. Throughout the • Fifty-nine percent of our employees are experiencing progress on year, we check-in with our employees through pulse surveys to measure progress, which developing a more agile culture (page 72). also gives them an opportunity to engage in dialogue and share ideas for improvement.

Ensuring good corporate governance and compliance • Continuously assess our corporate governance against regulatory • For an overview of key focus areas and highlights in 2019, developments, best practice and new stakeholder demands. see our 2019 Financial Report (pages 80–82). We consider good corporate governance as a key precondition to ensure sustainability throughout the Group’s activities and indispensable to maintaining long-lasting, valuable • Manage compliance risks through maintaining adequate frameworks, • Continued development of Compliance tools through new data relationships with our stakeholders. We conduct business in a legal, fair, ethical and delivery of effective training and awareness to our employees and analytics to improve assurance activities and build towards transparent way by adhering to best practices at all times, and apply the principles of our oversee effective implementation within the business. continuous monitoring of the Compliance Risk frameworks. Code of Conduct across all company lines and regions. Delivery of mandatory compliance training as well as risk-based targeted training also continued (pages 76–78).

Reducing our footprint • Until 2020, keep per-capita CO2 emissions from our own operations at • By the end of 2019, achieved a further reduction of our per-capita 2013 levels, which we had reduced by 49.3% in the ten years since CO2 emissions by 10.6% since 2013 (page 58). As a leading global re/insurer, we are directly affected by the consequences of climate 2003. change. Based on our strong commitment to sustainability, we consider it important to • By the end of 2019, achieved an accumulated reduction in our reduce the environmental impact caused by our own operations, thus leading by example. • Reduce our energy intensity by an average 2% per year until 2020. energy intensity of 39.0% since 2013 (pages 58–59). Tackling our CO2 emissions and reducing energy consumption have been key targets • Obtain 100% of power used for our own operations from renewable • By the end of 2019, covered 92% of our power consumption from across the Group, reflected by our pioneering initiatives such as the Greenhouse Neutral sources by 2020. renewable sources (page 59). Programme, the COyou2 Programme and co-founding RE100. In 2019, we took another major step by committing to reach net-zero emissions in our operations already by 2030. • Have all of our tier 1 and tier 2 vendors ESG-assessed by the end of • By the end of 2019, completed ESG assessment for 35% of our tier 2020. 1 and tier 2 vendors, and during 2019 re-assessed approximately 50% of assessed tier 1 and tier 2 vendors due to expired scorecards • New: Achieve net-zero emissions in our operations by 2030. (page 63). • In 2019, bought first batch of 100 tonnes carbon removal certificates (page 62).

Empowering communities • Contribute to resilient societies by increasingly engaging Swiss Re • Added two new components to our skills-based volunteering employees with their skills and expertise. programme. In total, Swiss Re expert volunteers supported The Swiss Re Foundation reflects the social and humanitarian values of Swiss Re. It our partners during more than 6 100 hours (for more information, • New: By 2021, aim to have improved financial access to basic partners with social entrepreneurs, aid organisations, researchers, Swiss Re employees see www.swissrefoundation.org). and clients to help communities increase their resilience. The Foundation’s initiatives healthcare for a total of one million low-income people. address the causes and effects of risks in three focus areas – climate risk management • By the end of 2019, had helped give 500 000 and natural hazards, access to health and income opportunities, and societal resilience – people access to healthcare (for more information, both in emerging and developing countries and in regions where Swiss Re has offices. see www.swissrefoundation.org).

* Note: SDG 17 “Partnerships for the Goals” is important for most of our Sustainability Topics.

18 Swiss Re | 2019 Sustainability Report Our Sustainability Topics Links to the UN Sustainable Development Goals* Our targets Key achievements

Swiss Re | 2019 Sustainability Report 19 Our approach to sustainability

Sustainability governance The Group EC members who head • The Group Chief Operating Officer (Group Swiss Re’s Business Units and Group COO) is responsible for the Group-wide Board of Directors Functions have explicit tasks related operations functions. This responsibility At Swiss Re’s highest governance level, to sustainability, which include but are includes overseeing Communications, the Board of Directors (BoD) is responsible not limited to the following: Human Resources, the Corporate Real for overseeing the development and • The Group Chief Risk Officer (Group CRO) Estate & Services (CRES) division, Global adoption of the Group Sustainability Strategy is responsible for providing the BoD and Sourcing and IT. CRES steers and monitors and related policies. Detailed tasks have Group EC with independent assurance the reduction of Swiss Re’s environmental been assigned to three BoD committees. that all of Swiss Re’s risks are being footprint and is in charge of Swiss Re’s • Based on regular updates from appropriately modelled, governed and Greenhouse Neutral Programme to reduce management and the sustainability team, managed, and that adequate controls our own CO2 emissions as well as the the Chairman’s and Governance are in place. As part of executing these new commitment to reach net-zero CO2 Committee monitors and reviews general responsibilities, the Group CRO is charged emissions in our operations by 2030. progress on the Group’s Sustainability with establishing the Group’s Risk Strategy including all sustainability-related Management Framework for all risk external engagements. categories, including sustainability and About the content of this report • The Board’s Investment Committee emerging risks. In addition, the Group CRO reviews Swiss Re’s Asset Management is also chairing the GSC. In this role, We address our Sustainability Topics across activities and, as part of this, receives he guides the GSC coordination the different areas of our business where regular updates on Group Asset of sustainability activities across the they are relevant. These implementation Management’s responsible investing Swiss Re Group. areas are listed below and provide the basic approach. • The Group Chief Investment Officer (Group chapter structure for our 2019 Sustainability • The Board’s Finance and Risk Committee CIO) has overall responsibility for Group Report: defines the Group Risk Policy, reviews Asset Management and its investment risk capacity limits, monitors adherence result, and with that also for the consistent Business solutions to risk tolerance, and reviews all top risk integration of environmental, social and Within our core business of re/insurance, issues and exposures, including those governance (ESG) aspects along the we strive to develop innovative solutions that with a specific sustainability dimension. investment process. The Group CIO is help tackle key environmental and social responsible for investment decisions challenges. To achieve this, we work with our within the Strategic Asset Allocation clients and partners in both the private and Group Executive Committee implementation, including those related public sectors. While the BoD is responsible for oversight, to responsible investing and is informed the Group Executive Committee (Group EC) of ESG updates through various channels Risk intelligence approves the implementation of the Group including the Asset Management We develop and apply tailor-made tools to Sustainability Strategy. Investment Committee. extend the scope of our risk management. • The Group Chief Financial Officer (Group This enables us to identify and appropriately As part of its mandate, it approves detailed CFO) is responsible for the Group-wide address sustainability-related and emerging sustainability policies such as the thermal Finance function with a focus on steering risks in our core business. coal policy introduced in 2018. Furthermore, and achieving the Group’s financial it sets and monitors risk capacity limits targets. He is also responsible for Investments (including for natural catastrophes), and Swiss Re’s investor relations and public We integrate ESG criteria across our determines product policy and underwriting disclosures, including the Group Annual investment portfolio. Our approach is based standards. As we are implementing our Report (which includes our Climate- on the three strategic pillars Enhancement, Group Sustainability Strategy, we have related Financial Disclosures). Inclusion and Exclusion. introduced a number of qualitative key • The Chairman Swiss Re Institute and performance indicators for the Group EC and Group Chief Underwriting Officer (Group Stakeholder dialogue its individual members. CUO) is responsible for steering capital to Through regular dialogue with our clients, the most attractive areas in underwriting investors and other stakeholders, we help In order to optimise coordination at Group that are of strategic importance for the develop effective responses to sustainability level, the Group EC has established a Group Group’s underwriting, and overseeing and other key issues, by raising awareness Sustainability Council (GSC), chaired by the research and development that improves of both the risks and opportunities arising Group Chief Risk Officer. The GSC is an both capital allocation and risk selection. from them. advisory body to the Group EC. It is The Institute’s research agenda also composed of Group EC members and further includes sustainability and resilience- Our own footprint senior management representatives. related topics. We apply best-practice standards of resource management to our properties and logistic operations as well as guidelines to our sourcing activities. In doing so, we continually reduce Swiss Re’s direct environmental impact.

20 Swiss Re | 2019 Sustainability Report Our people Report profile and reporting Furthermore, we continue to report against Drawing on the know-how and experience frameworks the Principles for Sustainable Insurance, of a diverse, multigenerational group of PSI (www.unepfi.org/psi). Our Public people, we want to ensure our employees Our Sustainability Report covers the whole Disclosure of Progress is also available in can contribute to an organisation that is Swiss Re Group as it was organised on the online version. constantly looking for new ways to improve 31 December 2019, ie the publicly listed the wellbeing of society – where how we holding company Swiss Re Ltd, its three achieve results is as important as what Business Units Reinsurance, Corporate we achieve. Solutions and Life Capital, and all directly or indirectly held subsidiaries. (On 6 December Corporate governance and compliance 2019, Swiss Re announced the agreement Online content By adhering to the highest standards of to sell ReAssure to Phoenix Group Holdings Our CoP for the UN Global Compact governance and compliance, we seek to plc. The transaction is expected to close in and our PSI Public Disclosure of Progress maintain effective checks and balances mid-2020, subject to regulatory and antitrust are available at: reports.swissre.com/ between the top corporate bodies and to approvals.) sustainability-report/2019/ ensure the application of laws, rules and introduction/our-approach-to- regulations, and ethical standards in our All the main chapters of the report have sustainability/report-profile-and- business. Swiss Re’s commitment to received independent assurance from reporting-frameworks.html sustainability is fully integrated into our PricewaterhouseCoopers. Their assurance Code of Conduct. report is included on pages 82–83. In our 2019 Financial Report we provide Online content Active in society detailed Climate-related financial disclosures, Playing an active role in society beyond our More detailed information on reporting as developed and recommended by the core business is important to us. Globally, scope, reporting period and publishing Financial Stability Board (www.fsb-tcfd.org). we empower vulnerable communities to rhythm is available in the online version Content in the 2019 Financial Report become more resilient to risk and, where of the report: reports.swissre.com/ we have offices, we encourage volunteering sustainability-report/2019/ You can view our Climate-related Financial activities and support local institutions. introduction/our-approach-to- Disclosures in the “Sustainability” chapter, sustainability/report-profile-and- pages 151–167. Within these core chapters, the content reporting-frameworks.html primarily reflects our three 2030 Sustainability Ambitions and other Our Sustainability Report incorporates Sustainability Topics, as displayed and our 2019 Communication on Progress Sustainability index representation described on pages 16–19. Our activities (CoP) for the UN Global Compact Swiss Re is a member of various as an active citizen in society are described (www.unglobalcompact.org). You can sustainability indices, including the in detail in the separate Activity Report view the full list of references to the Dow Jones Sustainability World and published by the Swiss Re Foundation. Compact’s ten principles in the online Europe, FTSE4Good, Euronext Vigeo version of the report. Europe 120, Bloomberg Gender- Online content Equality Index and the MSCI ESG A full, interactive overview showing Leaders Indexes (2019). In July 2019, where and how we have addressed our Swiss Re received an AAA rating on Sustainability Topics in 2019 is available the MSCI ESG assessment. in the online version of the report: reports. swissre.com/sustainability- Our most important index listings and report/2019/introduction/our- ratings are displayed on page 85. approach-to-sustainability/overview- implementation-in-2019.html

Swiss Re | 2019 Sustainability Report 21 Creating solutions for sustainability

Our re/insurance solutions help address key environmental and social challenges. We focus on mitigating climate risk and advancing the energy transition, building societal resilience, and driving affordable insurance with digital solutions to advance access to insurance.

22 Swiss Re | 2019 Sustainability Report By managing risks and covering losses, Thus, our solutions frequently include: Natural catastrophes and re/insurance creates stability and enables • Public-sector partners: Besides direct climate change economic growth. However, some insurers and corporate clients, we also environmental and social challenges may develop risk transfer solutions for, and Natural catastrophes are a key risk in our undermine sustainable progress if left in cooperation with, governments and property and casualty (P&C) business. unaddressed. Helping our clients and various public-sector organisations. The damage caused by storms, floods, society tackle such risks is a key part of our • Index-based insurance products: We droughts, earthquakes and other natural commitment to sustainability and of our are a pioneer in creating innovative catastrophes can affect millions of lives and vision to make the world more resilient. insurance solutions that use an index the economies of entire countries. In 2019, to determine payments. large natural catastrophe losses were mainly Building on our efforts in recent years, our • Insurance-linked securities (ILS) or driven by typhoons Hagibis and Faxai in focus is on the three overarching 2030 catastrophe bonds: We are a leading Japan, Hurricane Dorian in the Atlantic, and Sustainability Ambitions we have defined developer of these products, which wildfires, floods and hailstorms in Australia. in our Group Sustainability Strategy: enable cedents to transfer large risks • Mitigating climate risk and advancing to the capital markets. Providing effective re/insurance protection the energy transition against such large natural catastrophes • Building societal resilience Across our efforts, we seek to develop creates significant benefits for our clients • Driving affordable insurance with digital solutions that improve access to insurance and for society at large. In 2019, our clients solutions protection, especially in emerging markets. in P&C Reinsurance paid us USD 2.94 billion If governments and communities are of natural catastrophe premiums (for losses We develop our solutions as part of our financially protected against such risks larger than USD 20 million), equivalent to established risk modelling and underwriting as windstorms, earthquakes, drought and approximately 15% of total premiums in this activities or by creating innovative new flooding, they can better cope with the business segment. products in close cooperation with our immediate consequences of a disaster. clients and partners. On pages 25–29 you can read about some Just as importantly, our solutions help of the innovative solutions we have create the conditions for sustained social developed to offer our clients protection and economic development because they against natural catastrophe and other risks. protect investments, allow governments to stabilise budgets and give people the Worldwide economic as well as insured financial stability required to build and losses from natural catastrophes were high maintain businesses. in each of the past three years, but have steadily increased on average for more than

USD 2.94bn Natural catastrophe premiums in our P&C Reinsurance business (USD 2.29 billion in 2018) Natural catastrophe data In our 2019 Financial Report, we provide detailed quantitative information on natural catastrophe perils: the four perils with the highest expected annual losses (page 164) and the liquidity requirements stemming from four extreme loss scenarios (Insurance risk stress tests, page 71).

Swiss Re | 2019 Sustainability Report 23 Section_LevelCreating solutions 1 for sustainability Section_Level 2

The link between climate change and natural catastrophes continues to be of high relevance for Swiss Re. In our Group Sustainability Strategy we have devoted one of its 2030 Sustainability Ambitions to this topic: Mitigating climate risk and adancing the energy transition.

20 years. The main reasons for this are accounting for an increasingly large share While the impact of climate change will economic development, population growth, of natural catastrophe losses. increase gradually over the coming decades, urbanisation and a higher concentration most of our business is renewed and of assets in exposed areas. To assess our property and casualty re-priced annually, and our risk models business accurately and to structure sound are refined regularily. Risks are normally This general trend will continue. But, risk transfer solutions, we need to clearly covered for 12 months (up to five years for crucially, economic losses will be further understand the economic impact of natural catastrophe bonds). Thus, re/insurance aggravated by climate change. The scientific catastrophes and the effects of climate premiums do not reflect expected loss consensus is that a continued rise in change. This is why we invest in proprietary, trends over the coming decades. Rather, average global temperatures will have a state-of-the-art natural catastrophe models, for underwriting and risk management significant effect on weather-related developed and advanced by a team of purposes, our models provide an estimate natural catastrophes. According to the around 40 scientists, as well as from regular of the current risk. But as natural catastrophe Fifth Assessment Report (AR5, 2014) and collaboration with universities and scientific losses continue to rise as a result of the the Special Report on Global Warming institutions. different factors listed above, our models of 1.5°C (SR15, 2018), published by the will gradually factor in this trend. Intergovernmental Panel on Climate Change Based on our research, there is a trend (IPCC, www.ipcc.ch), a changing climate towards increasing losses from secondary In addition to providing re/insurance covers, gradually leads to shifts in the frequency, perils1. These are often highly localised we offer our clients strategic expertise and intensity, spatial extent, duration and timing small to mid-sized events, or a resulting integral risk assessments of natural disasters of extreme weather events. effect of a primary peril that can include and climate adaptation. These include free hurricane-induced rainfall, storm surge, client access to Swiss Re’s CatNet® tool If climate change remains unchecked, as well as drought and wildfire outbreaks. (swissre.com/reinsurance/property-and- the makeup of the main drivers will thus We explicitly factor the main risk trends casualty/solutions/property-specialty- gradually shift, with climate change into our modelling to underwrite solutions/catnet.html), which includes our catastrophe business sustainably, and recently launched Global Storm Surge Zones build global resilience. service, and our expertise publications (for examples, see pages 50–53). Content in the 2019 Financial Report

You can view our Climate-related Financial Disclosures in the "Sustainability" chapter, pages 151–167. 1 sigma 2/2019, Natural catastrophes and man-made disasters in 2018: “secondary” perils on the frontline

24 Swiss Re | 2019 Sustainability Report Strengthening risk resilience: As neither the investors in the SREC expanded flood coverage and new policy 2019 highlights securitisation nor the Green Bank own the options. Benefiting from partnering with rooftop solar panels, traditional insurance Swiss Re, a growing number of private In this section, we describe a selection of was not available for this risk. Through our insurers are now bringing new flood the innovative transactions and initiatives know-how, we were able to develop an protection offerings to their customers. we were involved in during 2019 to help alternative parametric solution that satisfied strengthen risk resilience. These transactions the needs of both investors and the bank, Increasingly, customers of local private help meet the three 2030 Sustainability and allowed the SREC securitisation insurers can choose to add the new, optional Ambitions defined in our Group to be brought to the investment market flood and water backup coverage to their Sustainability Strategy (for details, see pages as planned. existing homeowner policies. The fact that 9–14), often more than one at the same time: they can get access to comprehensive flood • Mitigating climate risk and advancing insurance protection through a traditional the energy transition insurance policy shows that this peril is • Building societal resilience insurable in the private market. While flood • Driving affordable insurance with digital risks are such that no one insurer can solve solutions Helping close the flood protection gap this challenge alone, our innovative approach in the US and partnerships with local insurers mean The transactions help our clients and their that communities can become more resilient communities become more resilient to the and recover more quickly after a storm event. risks they face, by ensuring that adequate funding is in place when it is needed.

Improving the resilience of small and medium-sized businesses in Parametric windstorm insurance for California, US solar panels in Connecticut, US Earthquakes pose a significant risk in We support the development of scalable California, and at present most of the losses solutions to mitigate, and adapt to, climate faced by small and medium-sized businesses change. This includes offering solutions that would be uninsured. Even if these businesses support the transition to more sustainable, escape property damage, they risk having low-carbon energy systems by managing to shut down due to power outages, supplier the risks associated with renewable energy issues or employees not being able to projects and making them more attractive For a long time, the inability to effectively commute to work. Additionally, obligations to investors with re/insurance backing. underwrite flood risk made private insurers to continue paying employee wages or lease reluctant to offer coverage to homeowners, payments can cause financial difficulties. In 2019, Swiss Re tailored an innovative with many considering the risk “uninsurable”. named windstorm insurance solution for a Thus, approximately 85% of all homeowners In response, Swiss Re and our insurance Green Bank in the US, using a parametric in the US are currently without flood partners Falls Lake (www.fallslakeins.com) trigger. The Bank financed the installation of insurance. As more severe storms with and Arrowhead General Insurance Agency more than 14 000 solar panels on residential higher precipitation have led to rising flood (www.arrowheadgrp.com) have launched and commercial rooftops across the state losses, this protection gap and its impact an innovative parametric insurance solution of Connecticut as part of a solar renewable on human lives has continued to grow. for commercial clients called Quake Assist. energy credit (SREC) securitisation, which The product offers coverage for earthquake- aimed to pool the revenue stream from Thanks to technological advances around related business interruptions, with fast, the produced electricity into an investable flood mapping and modelling, we have simplified claims payments based on the security. The Green Bank was concerned recently been able to improve the accuracy earthquake’s magnitude and the distance about the potential risk of hurricanes of our flood risk assessments. On this basis, of the insured’s location from its epicentre. causing damage to the rooftop solar panels, we are now able to provide private insurers interrupting the revenue stream for SREC with satellite and digital evaluation tools, securitisation investors.

Mitigating climate risk and advancing the energy transition Building societal resilience Driving affordable insurance with digital solutions

Swiss Re | 2019 Sustainability Report 25 Creating solutions for sustainability

Since claims are paid quickly once the It is estimated that there are eight million Due to the size and complexity of the project, parametric trigger conditions are met, rural farmers in Mexico, who cultivate a panel of insurers and reinsurers, including business owners face less financial approximately 22 million hectares of Swiss Re, were consulted and invited to uncertainty and can manage their budgets agriculture land. However, agriculture participate in the insurance programme more effectively. The solution thus enables insurance is largely unavailable to many design discussions to ensure an optimal California’s small and medium-sized of them. In view of this protection gap, we insurance solution could be provided. businesses, which provide the economic continue to develop our electronic pricing Based on our large infrastructure project backbone of most communities, to become platform and expand distribution with engineering and risk knowledge, we more resilient, ultimately helping to protect local partners to ensure that many more gained the leading reinsurer position on people’s livelihoods and financial security smallholder farmers gain access to cover the construction and post-construction in this earthquake-prone region. and the opportunity to reinforce their and insurance covers. In this role, we have been their communities’ livelihoods. able to support the larger ambitions of the project that include creating better access to suburban areas, stimulating economic development and growth, as well as providing important quality-of-life improvements to Providing crop insurance to smallholder all Parisians. farmers in Mexico Supporting greater sustainability through As a growing global population fuels the Grand Paris Express project In particular, this unparalleled project will demand for higher crop output, offering bring significant improvements to the city’s protection against loss of, or damage to, environment by drastically reducing vehicle crops and livestock is becoming increasingly congestion, noise and air pollution, as well as important. Agricultural insurance thus material increases in efficiency by reducing provides significant benefits to communities, travel times between key locations. In the particularly by protecting smallholder end, the Grand Paris Express will be more farmers’ incomes against such risks. than just a new transport network, it intends to revitalise Paris as a leading global city. In the context of significantly reduced state and federal government subsidies for agriculture insurance in Mexico, Swiss Re Corporate Solutions has recently launched, together with a local distribution partner, an agriculture insurance programme to Facilitating sustainable transport in protect small-scale farmers who face being Europe with the Brenner Base Tunnel impacted the most by reduced crop yields. Our local distribution partner has been enabled with an internet-based pricing tool After more than ten years of planning, that allows them to quickly and efficiently the City of Paris is working on the largest provide farmers insurance quotes as well as public transport project in Europe, issue policies within 24 hours. In 2019, the known as the Grand Paris Express programme brought agriculture yield (www.societedugrandparis.fr/). This insurance to Mexican farmers in the states ambitious development aims to double of Guanajuato (for wheat), Sinaloa (for corn, the size of the existing metro system wheat and beans) and Sonora (for corn by adding 200 kilometres of new tracks and wheat). In parallel, we also prepared and 68 new stations. Expected to carry insurance distribution for barley crops in up to two million passengers per day the states of Guanajuato, Michoacán, Jalisco when completed, it represents a major and Querétaro. Looking ahead, we plan step forward in the city’s public to broaden the coverage to production in transportation thinking. greenhouses as well as livestock.

The Brenner Base Tunnel (www.bbt-se.com) is the main element of the new Brenner railway from Munich to Verona and one of the most important infrastructure projects in Europe. At 64 kilometres, the tunnel will be

Mitigating climate risk and advancing the energy transition Building societal resilience Driving affordable insurance with digital solutions

26 Swiss Re | 2019 Sustainability Report Our commitments … to the United Nations

Many of our recent efforts to expand our then Group CEO Michel M. Liès made insurance protection cover losses from the following pledge: “By the year 2020, natural catastrophes and weather volatility Swiss Re commits to having advised 50 (eg drought or excessive rainfall). As sovereigns and sub-sovereigns on climate bn climate change is predicted to increase risk resilience and to have offered them USD 10.0 these losses, such transactions also help USD 10 billion against this risk”. Total amount of climate communities strengthen their climate protection offered to resilience. Furthermore, we have found We have agreed with the United Nations sovereigns and sub-sovereigns that partnering with public-sector clients, to report publicly on the progress we make since 2014 especially national and regional on this commitment. By the end of 2019, (USD 8.2 billion by 2018) governments, is an effective way to we had advised 120 sovereigns and develop solutions. sub-sovereigns on climate risk resilience and offered a total of USD 10.0 billion in Building on these experiences, we made re/insurance protection, thus reaching our a significant commitment to the United target one year ahead of schedule. Nations at its Climate Summit in September 2014. Personally addressing the government leaders present at the summit,

Total climate protection offered to (sub-)sovereigns since 2014

by 2017 by 2018 by 2019 Number of (sub-)sovereigns advised 66 96 120 Amount of climate protection offered (in USD) 5.3 billion 8.2 billion 10.0 billion

… with Women’s World Banking

Lack of health insurance is a major Encouraged by the success of the Egypt protection gap in many parts of the world. programme, we have formed a partnership In particular, it affects low-income women with Women’s World Banking who work in the informal sector, by running (www.womensworldbanking.org/), its 219 000 a market stall with fruits or vegetables, initiator, to extend this concept to two Customers benefiting from insurance offering laundry services or undertaking million consumers globally by the end cover by the end of 2019 similar activities. To date, these micro- of 2020. Women’s World Banking is entrepreneurs usually lack any sort of dedicated to developing market-driven insurance protection against loss of income financial solutions for underserved women due to illness. in emerging markets, thereby promoting economic stability and prosperity. In 2018, we started to help expand a pioneering health microinsurance Our partnership will aim for replicating programme that targets this protection insurance schemes, similar to that in Egypt, gap in Egypt. By the end of 2019, the in further countries. In 2019, the focus was programme covered around 219 000 on building the necessary foundation to customers with health and life insurance; scale and replicate this insurance solution and during the year, cover was extended in the future. to additional family members.

Swiss Re | 2019 Sustainability Report 27 Creating solutions for sustainability

the longest underground railway connection This one-policy protection solution relieves in the world, linking Austria and Italy. When some of the financial and emotional burden completed in 2026, this pioneering work for the “sandwich” generation. By integrating of engineering will not only greatly improve Protecting families across generations coverage and simplifying the process for passenger travel through the heart of in Asia individuals who want to have their children Europe but, more importantly, help shift the and parents insured, it strengthens the European freight sector from road to rail, financial resilience and support systems for thus allowing a material reduction in heavy multi-generation families in Asia. road vehicle traffic.

Swiss Re Corporate Solutions’ long-standing expertise in the field of infrastructure and tunnel construction, coupled with its capacity to underwrite large risks and Making Shaanxi Province in China more a strong understanding of local insurance resilient through natural catastrophe regulations, allowed us to be appointed cover insurance leader and co-leader for the With more than 300 million farmers, China Austrian and Italian sides of the project. is one of the world’s largest food producers. With both parts of the tunnel being worked It is also one of the most exposed to extreme on simultaneously, the project’s technical weather events due to its vast size, complex complexity has required a rigorous geographical environment and varied underwriting process, including the climate. Insurance is widely recognised examination of the physical aspects of Asia is expecting a significant increase in in China’s disaster relief approach as a key the work, as well as meeting the clients’ its ageing population over the next 15 years. factor in enhancing resilience. To this end, local regulation and risk management It is estimated that, by 2035, 450 million provincial governments are increasingly requirements. people will be 75–84 years old. For using insurance instruments to support relief traditional three-generation households, programmes and facilitate recovery and As a key element of the wider Trans- this means that the current “sandwich” rebuilding efforts. European Transport Network, the Brenner generation of working adults is experiencing Base Tunnel is central for the European an increasing financial burden since they In 2019, Swiss Re developed a parametric economy. Given that about 40% of all are taking care of their children’s needs natural catastrophe programme for the trans-alpine transport currently goes over (eg tuition fees and childcare), as well as Agriculture Bureau of Shaanxi Province, the Brenner Pass, the tunnel will remove their ageing parents who are living longer in partnership with a local Chinese insurer. a significant infrastructure bottleneck and in retirement due to medical advances. This The programme covers drought, excessive make a major contribution to improving the comes in addition to juggling housing loan rain and heavy rainfall in seven counties sustainable transport of goods. Ultimately, costs, saving for their own retirement and around the city of Shang Luo, where poverty it will promote faster and more building a financial safety cushion to protect remains a particular concern. When the environmentally friendly high-capacity against unexpected events. strength of one of the named disasters goes transport for freight and passengers, beyond a pre-defined trigger point, the and help reduce CO2 emissions. To help manage these financial risks, we programme quickly makes payouts to the co-developed, with our local Asian insurance Agriculture Bureau, which can then use partners, an award-winning product that the funds to initiate recovery efforts in the breaks new ground by providing cover to affected areas. The financial stability and the policyholder, as well as their children security gained in this way help mitigate the and parents. Customers can get insurance impact of natural disasters on the livelihoods against mortality, disability and a host of of the region’s farmers. critical illnesses. Coverage is included automatically for the policyholder’s children Shaanxi’s disaster management and financial and parents without them having to go preparedness planning highlight ways to through medical checkups – the alleviate the costs and impacts of natural policyholder just needs to register the catastrophes. This contributes to greater family members to be covered. This is a resilience of low-income communities in the breakthrough in providing a smoother region and strengthens their food security. and more efficient customer experience and simplifies the underwriting process for insurance buyers.

Mitigating climate risk and advancing the energy transition Building societal resilience Driving affordable insurance with digital solutions

28 Swiss Re | 2019 Sustainability Report insurance products and our reinsurance know-how, we were able to develop a solution that Making Indonesia more resilient by Agriculture insurance for rice farmers accurately meets the needs of rice farmers insuring state assets in Cambodia in non-irrigated areas. This includes the Indonesia is Southeast Asia’s largest ability to quickly compensate farmers for economy as well as the world’s fourth-most total or partial losses of crop output. populous country. At the same time, Indonesia is particularly susceptible to Crop insurance not only helps farmers natural catastrophe risks because it is in reduce the risk of losing their production a seismically active region. Despite the inputs for current crops, but also means substantial risk of disasters and the related they can avoid having to take out additional need for insurance across the archipelago and/or larger loans to finance future crops. nation, Indonesia has not previously Ultimately, getting access to adequate insured state assets due to the difficulties financial protection means farmers can in assessing the different types of risks overcome the risks caused by uncertain existing across its more than 17 000 islands. weather and stabilise their livelihoods.

For 2019, Swiss Re was named the lead reinsurer for the Indonesian government’s natural disaster insurance programme, which is supported by a consortium of 56 insurance and reinsurance companies. Insuring offshore wind farms The programme helps protect critical public Insurance plays an important role in ensuring assets such as ministry and institutional the financial security of farmers, particularly buildings against earthquake, flood and fire, in countries with a large agricultural sector. as well as a number of man-made risks. In Cambodia, for example, about three With the programme planned to continue million people, or almost 20% of the through 2023, the government and country’s population, are engaged in rice consortium have designed and agreed on farming. The crop thus plays a major role in a flat-rate insurance scheme that, in a first securing livelihoods, but production is highly step, provides coverage for 1 360 buildings dependent on the right weather conditions. and assets owned by the Ministry of Finance. As it is particularly sensitive to excessive or insufficient soil moisture, flood and drought Swiss Re’s Public Sector Solutions team has conditions can have a catastrophic impact played a key role in advising the Indonesian on rice crop yields. government on the risk financing initiative and for developing a holistic approach. While With our local partners Agribuddy the initial coverage includes the assets of (www.agribuddy.com) and Forte Insurance the Ministry of Finance, assets owned by (www.forteinsurance.com), Swiss Re ten further ministries and agencies will be supports Cambodian rice farmers with soil “Mitigating climate risk and advancing the reviewed in 2020. In 2021, the number of moisture index insurance in 90 communes energy transition” is one of the key ambitions included ministries can increase to 20 and, across multiple provinces. By using of our Group Sustainability Strategy (for in 2022, to 40, with the ultimate goal being innovative soil moisture index data from more information, see page 12.) We offer to cover all ministries and institutions for satellite imagery, our expertise in parametric a range of re/insurance solutions to manage 2023. As a leader in developing solutions the risks of different kinds of renewable at the sovereign and sub-sovereign level, energy projects. At the end of 2019, we we are honoured to help boost were providing risk cover to more than Indonesia’s resilience. 4 000 wind and solar farms.

Offshore wind is considered one of the most promising renewable energy sources. Swiss Re Corporate Solutions has both the large capacity and the technical expertise to help manage its complex risks. We are

Mitigating climate risk and advancing the energy transition Building societal resilience Driving affordable insurance with digital solutions

Swiss Re | 2019 Sustainability Report 29 Creating solutions for sustainability

continually enhancing our understanding Expansion in Taiwan Embracing this transformation, we have of these risks and share our insights with We also continued our strong engagement developed Magnum Go, an online life our clients as well as other insurers. As an in Taiwan, the most important offshore insurance solution. It helps small and initiator and co-founder of the European market in Asia. It witnessed significant medium-sized insurers respond to Wind Turbine Committee established ten growth again in 2019, which led to tight digitalisation and their customers’ changing years ago, we were instrumental in launching insurance capacities. We were able to buying demands by providing a simple the Offshore Code of Practice (OCoP), a respond to this situation by becoming the and standardised approach to automated best-practice guide for risk management lead insurer for some major projects: underwriting. This cloud-based digital in the sector. Mirroring these efforts, we are Formosa II and Greater Changhua 1 & 2a. solution ensures data security, reduces now considered a lead market for offshore Formosa II comprises 47 turbines with a total operating costs and improves regional wind risks. In recent years, Swiss Re capacity of 378 megawatts. Once complete, customers’ access to life insurance products. Corporate Solutions has participated in it is estimated to displace 18 750 kilotonnes Magnum Go has been integrated into a numerous offshore wind projects, including of CO2e over its lifetime, while powering the French insurer’s existing online presence, wind farms, stand-alone offshore sub- equivalent of 380 000 households annually. enabling them to benefit from an easy-to- stations and stand-alone export cables. Changhua 1 has 75 turbines with a capacity use, flexible and personalised consumer of 605 megawatts and Changhua 2a has experience, which delivers instant In 2019, we were involved in a number 36 turbines with a total capacity of 295 underwriting decisions that previously of new offshore wind farm projects, megawatts. All three projects are situated would have taken weeks. which included the following highlights: in the Taiwan Strait. Helping our life insurance clients take First offshore wind farm in France advantage of the benefits of underwriting Europe continues to be the region with the automation, as well as removing lengthy largest number of offshore wind projects. paper-based application processes and Within Europe, the leading markets to date reducing errors and omissions, Swiss Re’s have been the UK, Germany and Denmark. Increasing accessibility to life insurance Magnum Go allows for a leaner and more Recently, the first large commercial projects with the Magnum Go digital solution efficient distribution approach. Ultimately, have been launched in France. In 2019, this scalable digital solution increases ease we agreed to provide insurance to the first of access to life insurance, thereby helping of these projects to be constructed, the to close the protection gap and contributing St-Nazaire Offshore Wind Farm (Parc éolien to better individual and social welfare. en mer de St-Nazaire, www.parc-eolien-en- mer-de-saint-nazaire.fr).

This wind farm is being developed by Eolien Maritime France, a joint venture co-owned by EDF Renewables Our iptiQ programme (www.edf-renouvelables.com). Situated Our Life Capital Business Unit was created between 12 and 20 kilometres off the coast in January 2016 and is dedicated to of the Loire-Atlantique department, it will developing Swiss Re’s primary life and health comprise 80 turbines with a total capacity business. It operates through three wholly of 480 megawatts. When fully operational, owned subsidiaries in three lines of business: the wind farm is expected to cover 20% ReAssure for closed books, elipsLife for of the department’s power consumption. Group L&H insurance and iptiQ for individual New technologies are changing the way L&H and P&C insurance. (On 6 December Construction is scheduled to be completed life insurers write business, handle sensitive 2019, Swiss Re announced the agreement by 2022. Swiss Re Corporate Solutions data and engage customers. At the same insures this pioneering project with the time, these technologies are also shifting largest share, both in the construction and customers’ expectations when it comes operational phases. to their life insurance buying experience. They want more convenient transactions, customisable products, faster decision- making and less intrusive underwriting practices. Website

Learn more about Magnum Go at: www.swissre.com/reinsurance/ life-and-health/solutions/magnum- go.html

Mitigating climate risk and advancing the energy transition Building societal resilience Driving affordable insurance with digital solutions

30 Swiss Re | 2019 Sustainability Report to sell ReAssure to Phoenix Group Holdings plc. The transaction is expected to close in mid-2020, subject to regulatory and antitrust approvals.) iptiQ reflects Swiss Re’s commitment to introduce more people in society to the benefits of financial protection against life’s uncertainties – in particular to closing the gap between the amount of savings or insurance that someone has, and the amount needed in the event of misfortune. iptiQ works in partnership with established and trusted brands, combining Swiss Re’s vast experience and expertise in designing protection products with the partner companies’ own know-how.

Our partners can choose from numerous product configurations in order to get easy-to-understand protection products with clear and transparent pricing. By entering the P&C market in 2019, iptiQ expanded its L&H products offer from term life, whole life, critical illness and disability to a broad P&C proposition including, for example, property cat, cyber, private liability and household insurance. iptiQ has grown strongly since its creation in 2016. To illustrate, our inforce policy count has increased from 175 000 to 377 000 from 2018 to 2019 (core business), supported by an increase from 19 to 29 distribution partners between year-end 2018 and year-end 2019. iptiQ’s overriding goal is to offer simple, streamlined, digital solutions that remove the traditional hurdles to purchasing protection and thereby protecting a larger amount of people. Website

Learn more about iptiQ at: www.swissre.com/life-capital/ iptiq.html

Swiss Re | 2019 Sustainability Report 31 Extending our risk intelligence

We address sustainability, cyber, political and emerging risks in our core business transactions. For this, we have developed specific tools and know-how.

32 Swiss Re | 2019 Sustainability Report Risk management is an integral part of Towards decarbonising our Swiss Re’s business model and key to the business model controlled risk-taking that underpins our financial strength. It is embedded throughout Swiss Re supports the worldwide reduction our business and ensures that the Group and of greenhouse gas emissions and contributes the three Business Units have the necessary to the goal of limiting global warming to expertise, frameworks and infrastructure to 1.5°C above pre-industrial levels. We support good risk-taking (see 2019 Financial continuously review measures to assist Report, pages 52–53 and 61–77). the transition to a low-carbon economy and, formalising our commitment, in 2015 Sound risk management is essential for a signed the Paris Pledge for Action re/insurer. Tight control of our risk exposures (www.parispledgeforaction.org) to affirm guarantees that we can fulfil our role in our support for the Paris Agreement. society as ultimate risk-taker and be a reliable partner to our clients when they need us. Our efforts to fulfil the Paris Pledge for The core categories of our risk landscape Action include the development of suitable comprise insurance risk (property and re/insurance solutions for our clients, casualty, life and health) as well as financial our Responsible Investing strategy and market and credit risk. In addition, we reducing the footprint of our own operations. consider it essential for a company committed In our risk management, we focus on the to sustainability that it pays attention to carbon intensity and the associated risks further significant risks we may be exposed embedded on the liability side of our to, especially in the longer term. balance sheet.

Sustainability, cyber, political and emerging Our commitment to reach net-zero risks are particularly relevant in this respect. emissions We have developed instruments and In 2019, we made a public commitment to know-how that help us identify and assess reach net-zero emissions by 2050 across our all of them. This allows us to determine those whole business, by signing the UN Global risks we think we should avoid – because Compact Business Ambition for 1.5°C. This of their potential to increase losses, for joins our active role as a founding partner ethical reasons or both. of the UN-convened Net-Zero Asset Owner Alliance, through which we have also made In 2019, we placed special emphasis on a net-zero commitment specifically taking measures that have the long-term for our investment portfolio by 2050 (see goal of decarbonising our business page 47). model and addressing the carbon risks embedded in it.

Website

Learn more about how we address political risks at: www.swissre.com/sustainability/ risk-intelligence/political-risks.html

Swiss Re | 2019 Sustainability Report 33 Extending our risk intelligence

In 2018, we introduced our thermal coal policy. Reducing our re/insurance cover to thermal coal utilities and mining is one of the steps we have taken towards decarbonising our business model.

Thermal coal policy With our 2019 net-zero commitment on the Through our Sustainable Business Risk liability side and by joining the Powering Framework (see pages 35–37), we Past Coal Alliance (poweringpastcoal.org/) continued with the implementation of our in 2019, we are fully committed to a total thermal coal policy in our underwriting, phase-out of thermal coal from our business including direct, facultative and treaty in the long term. business. We first introduced this policy in mid-2018, pledging not to provide Carbon steering re/insurance to businesses with more than The introduction of our thermal coal policy 30% exposure to thermal coal utilities was designed as a first step towards the or mining. development of a comprehensive carbon- risk steering mechanism to measure our For transactions located in low- and carbon intensity and associated risks middle-income countries that derive more embedded in our re/insurance business. In than 70% of electricity from coal, existing 2019, we helped launch a project with peers power plants (ie operational before 2018) via the CRO Forum (www.thecroforum.org) can be covered until 2025 if there is to develop a robust carbon footprinting Website evidence that the insured is implementing methodology to quantify these exposures. Learn more about our efforts to an effective emission reduction strategy. It is expected to serve as an industry-wide decarbonise our business model at: Implementation of the thermal coal policy standard and thus support our carbon www.swissre.com/sustainability/ for treaty business will follow a staggered steering towards reaching net-zero emissions risk-intelligence/decarbonisation.html approach until 2023. on the liability side of our business by 2050.

34 Swiss Re | 2019 Sustainability Report Phasing out the most severe climate- The Sustainable Business Risk Framework related transition risks consists of: In 2019, we took another important step • Two umbrella policies on human rights in our carbon steering mechanism and and environmental protection plus eight developed a policy to shift away from specific guidelines on sensitive sectors the most carbon-intensive oil and gas or issues production. • The Sustainable Business Risk (SBR) process comprising an online assessment From July 2021, we will no longer provide tool and a referral tool – due-diligence individual insurance covers for those oil and mechanisms to assess our business gas companies that are responsible for the transactions world’s 5% most carbon-intensive oil and • Company exclusions gas production. • Country exclusions beyond mere compliance with international trade From July 2023, we will no longer provide controls (ITCs) individual insurance covers for those oil and gas companies that are responsible for the Policies and guidelines world’s 10% most carbon-intensive oil and Our Sustainable Business Risk Framework gas production. is based on the overarching principles of respecting human rights and protecting the environment, encapsulated in two umbrella Our Sustainable Business Risk policies that are valid for all our transactions. Framework In addition, specific guidelines apply these overarching principles to eight sectors or In a market environment, profitable business issues in which we perceive major activities create economic value. sustainability risks: the defence industry; Occasionally, however, they may also have oil and gas; mining; dams; animal testing; adverse effects on the environment and forestry, pulp and paper, and oil palm; certain vulnerable groups. If such impacts nuclear weapons proliferation; and are ignored, they may pose a threat to thermal coal. societies’ long-term sustainable development. We regularly review all the policies and guidelines of our Sustainable Business Risk For companies this situation can create Framework to ensure they stay abreast dilemmas. A particular business transaction of relevant new risk developments and may be economically beneficial and in stakeholder expectations. In 2019, we compliance with all legal and regulatory continued with the implementation of our requirements, yet may have significant thermal coal policy, engaging with over environmental or social downsides. 300 clients in the process, and revised our Swiss Re recognises that such dilemmas oil and gas policy. These improvements to exist and develops effective responses the Sustainable Business Risk Framework through a well-defined approach and by form an important part of the efforts we have taking decisions based on ethical principles. taken towards gradually decarbonising our business model (see pages 33–34). Our Sustainable Business Risk Framework is an advanced risk management instrument The Sustainable Business Risk process designed to identify and address the Each of the two umbrella policies and potentially negative effects of our transactions eight sector guidelines of our Sustainable on local communities, workforces and the Business Risk Framework contains criteria environment. This framework applies to all and qualitative standards which define of our business transactions in re/insurance precisely when a transaction may present as well as investments, to the extent that a sustainability risk. We assess such we can influence their various aspects. transactions through our Sustainable Business Risk (SBR) process with its two due-diligence mechanisms.

Website Website

Learn more about our Sustainable You can download a summary of our Business Risk Framework at: main human rights and environmental www.swissre.com/sustainability/ protection concerns at: risk-intelligence/sustainable-business- www.swissre.com/sustainability/ risk-framework.html risk-intelligence/sustainable-business- risk-framework/policies.html

Swiss Re | 2019 Sustainability Report 35 Extending our risk intelligence

Sustainable Business Risks referred to our Number of Sustainable Business Risk expert team in 2019, by sector/issue 30referrals0 and decisions taken

25.2% Oil and gas 200 21.0% Mining (excl. thermal coal) 21.0% Thermal coal 100 14.7% Dams 7.6% Other: human rights 0 4.6% Defence 2016 2017 2018 2019 2.9% Other: environmental issues 1.7% Forestry, pulp and paper, and oil palm Proceed 1.3% Animal testing Proceed with conditions Abstain

238 The online tool stores the relevant In 2018, however, the number of referrals Sustainable Business Risk sustainability risk information for these rose from 178 to 247 (see chart above). transactions referred to our sectors and thus provides our underwriters This increase was mainly driven by the team of sustainability experts with an efficient means to check the introduction of our thermal coal policy. Many (247 in 2018) potential impact of their transactions on of the coal-related referrals were submitted human rights, labour rights and the by our underwriters to have the thermal coal environment. For transactions that reveal exposures of specific transactions clarified. low to medium risks, they need to carry out In 2019, the number of referrals fell again, additional due diligence based on industry to 238 transactions. Of those we issued and country advice provided by the tool. negative recommendations in 37 cases and positive recommendations with conditions If the potential human rights or in 42 cases. environmental risks of a transaction are assessed as high but the responsible Company exclusions underwriter wants to pursue it, it is The policies of our Sustainable Business automatically transferred through the SBR Risk Framework specify certain criteria referral tool to Swiss Re’s in-house team that may lead us to exclude a company from of sustainability experts. These specialists both our re/insurance transactions and then conduct in-depth research to decide our investments, to the extent that such whether the transaction at hand is an exclusion is permissible (eg by virtue acceptable on ethical grounds. of mandatory law or internal policies) and possible (eg if existing documentation This decision takes the form of a binding relating to such re/insurance transactions recommendation either to go ahead with and investments provide for it). These criteria the transaction, to go ahead with certain include: involvement in prohibited war conditions attached or to abstain. If there material; verifiable complicity in systemic, is disagreement about the recommendation, repeated and severe human rights violations; the case can be escalated to the next causing repeated, severe and unmitigated management level and, ultimately, to the damage to the environment; unregulated Group Chief Risk Officer and the Group proliferation of nuclear weapons; and Executive Committee. unethical/cruel animal testing practices.

Since we introduced the SBR assessment Country exclusions tool in 2015, we have continually fine-tuned Swiss Re also excludes certain countries it, thus strengthening our underwriters’ from its business that have particularly poor ability to integrate sustainability risk human rights records. This step goes further assessments into their decision-making. than compliance with ITCs. Our goal is to Between 2015 and 2017, this led to refrain from directly underwriting risks or a marked, and steady, decrease of SBR making investments in entities that are based referrals to our in-house sustainability in these countries. We review the list of experts.

36 Swiss Re | 2019 Sustainability Report excluded countries annually based on At Swiss Re’s headquarters, our Energy line A cyber risk assessment is conducted at independent human rights assessments and of business team held an in-person meeting least annually to inform senior management update it if warranted. with its broker community on the industry’s of the design and status of Swiss Re’s journey towards net-zero emissions. The Cybersecurity Programme. The assessment As the Sustainable Business Risk Framework discussion centred on the question of how allows for the revision of controls to respond is based on the principles of respecting the oil and gas industry can embrace the to technological developments, evolving human rights and protecting the environment, low-carbon transition and how the insurance threats and changed cyber risk exposures. the SBR process with its two due-diligence sector can offer support for this. Areas identified that require improvements tools, company exclusions and country are addressed to enhance Swiss Re’s cyber exclusions is our principal means to ensure In partnership with other re/insurers, we security resilience. compliance with the UN Global Compact are also developing risk assessment tools in our core business. designed to help the industry better Furthermore, Swiss Re issues an annual understand and manage sustainability risks. Service Organisation Controls (SOC) 2 Training One of these ongoing partnerships is the report, which provides assurance to our Ever since we introduced our comprehensive UNEP FI Principles for Sustainable Insurance clients that we provide our services in a Sustainable Business Risk Framework eleven (PSI, www.unepfi.org/psi). reliable, secure and compliant manner. years ago, we have made considerable The SOC 2 report contains the opinion of efforts to raise awareness of sustainability In 2019, the PSI launched the first guide an independent auditor who has tested issues among our underwriters and client for the re/insurance industry to preserve the design and effectiveness of our controls managers. Through training, we ensure protected areas such as World Heritage according to international standards. that they know how to properly apply the Sites. We actively contributed to the framework with its underlying principles development of this guide, which is a of respecting human rights and protecting significant step forward in making the Emerging risks the environment. In recent years, we have protection of World Heritage Sites a market focused on high growth markets where standard. It confirms our long-standing Re/insurers operate in a rapidly changing we want to expand our business. commitment to preserve protected areas, and increasingly complex risk landscape. enshrined in several policies of our Demographic, economic, technological, A couple of years ago, we developed a new Sustainable Business Risk Framework. socio-political, regulatory or environmental eLearning course for our in-house training. trends may change existing risks or create While this continues to be compulsory for new ones. In addition, growing all our employees who work in underwriting Cyber risks interdependencies between these and with our clients, it is now mandatory developments can lead to accumulations of for all our new entrants, as well. In 2019, Swiss Re has cyber risk on its radar and has risk and create significant knock-on effects. a total of 3 000 employees completed the implemented multiple layers of protection People’s risk perceptions are shifting, liability mandatory training course. to minimise these risks. Correspondingly, and regulatory regimes continue to evolve we maintain a Group-wide Cybersecurity and stakeholder expectations are growing. Client and industry interaction Programme designed to protect the Over the year, we had a number of important confidentiality, integrity and availability This complex landscape provides fertile external engagements on sustainability of data and IT systems. Our Cybersecurity ground for “emerging risks” – newly risks with clients, brokers, investors, industry Programme is based on the ISO 27001 developing or changing risks that are not peers and civil society groups such as standard for information security yet entirely understood and managed. environmental and humanitarian NGOs. management, which covers key areas of Such risks are difficult to quantify, and We held in-person meetings with clients management, technical and physical their potential impact on society and the operating in sensitive sectors such as mining, controls, legal, compliance and business re/insurance industry is not yet sufficiently forestry, and oil and gas, discussing potential continuity management. accounted for. measures they could take to address their sustainability risks. Effective governance of the programme is Detecting and investigating such risks seen as crucial, which is why it is overseen early on forms an important part of our As part of our ongoing efforts to implement by both the Group Chief Risk Officer and comprehensive approach to risk our thermal coal policy (see page 34), we Group Chief Operating Officer, and is management. In analysing how risks are had over 300 engagements with clients robustly implemented through a three-lines- evolving and related to each other, we seek across the globe in 2019. Many of them of-defence model. Additionally, Swiss Re has to assess their potential impact on Swiss Re. introduced a thermal coal policy themselves a committee in place that provides Group- This is vital to reduce uncertainty and and in turn are helping us reduce our carbon wide management oversight and direction prevent unforeseen losses, raising awareness exposure in our treaty business. in information security, cyber defence and within the Group and across our industry. data protection risks, with the Group Chief Information Security Officer ensuring that the Board of Directors is regularly informed on relevant matters.

Website

Learn more about how we address emerging risks at: www.swissre.com/sustainability/ risk-intelligence/emerging-risks.html

Swiss Re | 2019 Sustainability Report 37 Extending our risk intelligence

In many geographical areas climate change is leading to more frequent heat days. This is likely, eg, to increase the risk of strokes, cardiovascular diseases and accidents. At Swiss Re, we treat such climate-related implications on life and health re/insurance as an emerging risk.

Emerging risk case study: life and health implications of climate change

Swiss Re has highlighted risks from climate factors producing impacts on L&H insurers becoming more vulnerable to climate change since the 1980s and has achieved and their respective lines of business. change effects. a reputation as a pioneer and thought leader on this topic in the re/insurance Developing fast as a real and present-day By providing financial risk transfer industry. Some climate change impacts, problem, emerging L&H risks connected to solutions to individuals, infrastructure eg sea-level rise, are relatively easy to climate change not only impact traditional providers and others, the insurance model accurately, and risk transfer L&H covers, but are also a concern in the industry can support building resilience offerings can be adjusted on a yearly basis. context of workplace accident insurance. to emerging L&H risks on many levels. Other effects are more complex, however, The most significant impacts are expected Importantly, this includes the provision because they involve knock-on and from the following causes: changing of risk expertise and the fostering of risk cascading effects. Such emerging risks patterns in infectious diseases, which dialogue. may build up over a long period without increase the likelihood of pandemics; more any visible impacts, but when loss events frequent heat days leading to more strokes, For a pioneering research collaboration, are finally triggered, they can be severe. cardiovascular problems and accidents; see Climate Change Futures. Health, and a rise in respiratory and other chronic Ecological and Economic Dimensions. An important area where emerging risks diseases. A Project of The Center of Health and the connected to climate change are likely to Global Environment, Harvard Medical occur is life and health (L&H) re/insurance. Major impacts are also expected for School. Sponsored by: Swiss Re and Building on Swiss Re’s own expertise and public health systems, eg due to famine the United Nations Development on our long-standing cooperative efforts and migration, and the vulnerability of Programme, 2005. with research institutions, we dedicated the healthcare sector may thus increase. a special feature to this topic in our 2019 Hospitals and other critical health In 2019, we contributed to a new position SONAR Report, with related content on infrastructures are not only dependent on paper published by The CRO Forum’s interactive web pages. Its central piece professional care providers, but also on Emerging Risk Initiative: The heat is on is an infographic which depicts key basic sanitary conditions, power supplies – Insurability and Resilience in a Changing etc – all of which are themselves Climate, January 2019.

38 Swiss Re | 2019 Sustainability Report Our SONAR framework You can learn more about one of these topics Strategic foresight SONAR (systematic observation of notions – the life and health implications of climate Identifying and addressing emerging risks associated with risk) is our Group-wide change – in the case study on page 38. can be challenging. Their novelty and framework specifically designed to manage To share some of our key insights on these interconnectedness make it difficult to and communicate emerging risks. Firmly emerging risks with external audiences, determine when a particular risk notion must embedded in the Group’s risk management we published the sixth edition of our be considered an emerging risk. Timing is organisation, SONAR allows us to identify, comprehensive SONAR Report in 2019 of crucial importance. If measures to price assess and report these risks in a timely (see to the left). and, eventually, exclude a particular risk are manner and to factor them into our strategic taken too early, we may not be able to offer business decisions. Further activities on emerging risks our clients adequate re/insurance protection; identified in the past if measures are taken too late, we may end The SONAR process involves several The emerging risks we have previously up with increased loss potential. Given these integrated layers. The first is an interactive examined in more detail and featured in our challenges, we believe it is essential to intranet platform which enables our former Corporate Responsibility Reports foster risk dialogue with various partners. employees to share and discuss risk notions since 2007 are: By sharing perceptions and assessments, based on trends and developments in the all parties can gain a better understanding re/insurance landscape. This allows for 2007: Electromagnetic fields of potential emerging risks. bottom-up identification and peer reviews. Website 2008: Critical infrastructure Our emerging risk specialists periodically You can read about our most important cluster and further assess these risk notions 2009: Carbon nanotubes strategic initiatives concerning emerging for their potential impact on our business. risks at: Further “early signals” are harvested from 2010: Smart grids www.swissre.com/sustainability/ external research institutions and experts, risk-intelligence/emerging-risks/ and digitally enabled horizon scanning tools 2011: Cyber attacks strategic-initiatives.html are also deployed. Finally, our specialists carry out in-depth investigations and internal 2012: 3D printing reviews on selected topics. 2013: New forms of mobility

2014: Electronic cigarettes Swiss Re SONAR: New emerging risk insights 2015: The Internet of Things Swiss Re’s SONAR Report features emerging risk themes 2016: Human-induced earthquakes that have the potential to impact the re/insurance industry. 2017: Antimicrobial resistance These topics derive from our SONAR process and have been 2018: Algorithmic decision-making assessed by our emerging risk management experts in Since we first identified these emerging recent years. risks, we have followed up on several of them www.swissre.com/institute/ in our core business and together with our research/sonar/sonar2019. stakeholders, eg Critical infrastructure and html Cyber attacks: Website

You can read more about these activities at: www.swissre.com/sustainability/ risk-intelligence/emerging-risks/

Swiss Re SONAR case-study-critical-infrastructure.html New emerging risk insights and May 2019 www.swissre.com/sustainability/ risk-intelligence/emerging-risks/ case-study-cyber-attacks.html

Swiss Re | 2019 Sustainability Report 39 Being a responsible investor

We are convinced that integrating environmental, social and governance (ESG) considerations into our investment portfolio makes economic sense. Our Responsible Investing strategy is based on the three strategic cornerstones Enhancement, Inclusion and Exclusion.

40 Swiss Re | 2019 Sustainability Report “We make the world more resilient” is whose cash flows match the durations and Swiss Re’s vision. More than ten years ago, currencies of our re/insurance liabilities. our Asset Management unit embarked on a Therefore, we generally invest the majority journey to not only generate risk-adjusted, of our portfolio in higher-quality fixed income stable long-term returns, but to also consider securities with stable long-term returns. environmental, social and governance (ESG) At the end of 2019, such investments aspects in our investment decisions. With accounted for 79% of our total assets this approach, our Asset Management has under management1 (see graph below). been contributing to the Group’s vision. Including ESG criteria along the investment In 2017, we reached a key milestone on this process makes economic sense, especially journey. As one of the first re/insurance for long-term investors, as it improves companies, we integrated ESG benchmarks risk-adjusted return profiles and reduces into our investment portfolio, which was a downside risks. Our Responsible Investing significant step forward from considering strategy relies on the three cornerstones ESG as an “add-on” approach only. Two Enhancement, Inclusion and Exclusion, of years later, we are even more convinced which Enhancement is the most meaningful that taking ESG criteria into account has for Swiss Re. a positive impact on the performance of our investment portfolio in the long term. Overall investment portfolio Reflecting this, we further refined our USD 134.5 bn, as of 31 December 2019 Responsible Investing strategy and made new commitments in 2019. Most notably, we acted as a founding partner of the UN-convened Net-Zero Asset Owner Alliance (www.unepfi.org/net-zero- alliance/), committing to transitioning Swiss Re’s investment portfolio to net-zero greenhouse gas (GHG) emissions by 2050. 6% Cash and cash equivalents 4% Short-term investments Our Responsible Investing 42% Government bonds strategy 34% Credit bonds 5% Equities* Asset-liability management (ALM) continues 3% Mortgages and other loans to be the foundation of our investment 6% Other investments philosophy. To meet future claims and (incl. policy loans) benefits, we invest the premiums generated by our underwriting activities in assets * Includes equity securities, private equity and Principal Investments

Website

Learn more about our approach to responsible investing at:

www.swissre.com/responsible- 1 Asset classes considered are government bonds, investing credit bonds, and mortgages and other loans.

Swiss Re | 2019 Sustainability Report 41 Being a responsible investor

Swiss Re’s approach to responsible investing

Enhancement Inclusion Exclusion

Focus on themes and create related Exclusions based on internal Consistent integration mandates, such as green bonds, sustainability risk assessments, of ESG criteria renewable or social infrastructure such as thermal coal

Systematic integration of ESG considerations along investment process and into portfolio

Enhancement www.unpri.org/). We work closely with Enhancement refers to the systematic our external managers to ensure they integration of ESG criteria along the entire consider ESG and climate-related aspects in investment process, from the Strategic their investment processes. Before external Asset Allocation (SAA) to monitoring and managers are appointed, we perform reporting. Today, close to 100% of our thorough due diligence on them to confirm SAA considers ESG aspects. their compliance with our responsible investing principles. This includes a review With a share of 42% of total assets under of the managers’ ESG considerations in their management at the end of 2019, investment decisions and monitoring, as government bonds (incl. agency) constitute well as of their commitment to responsible the largest holding within our investment investing. After they have been mandated, portfolio. We have been successfully the managers’ individual performances applying a minimum ESG rating threshold of are monitored in line with the Swiss Re BB for investments within this relevant asset Responsible Investing Policy and measured class for several years (see overview on page against ESG-related benchmarks. The 45). Any potential exception to the minimum managers are required to report regularly ESG rating distribution across rating would be driven by ALM on their responsible investment activities. our corporate credit and listed considerations. equities portfolio in % By consistently applying these prerequisites, As part of our active risk management, we we were able to further improve the ESG 7.6 announced in 2017 that we had switched profile of our portfolio throughout the year, AAA 6.7 to ESG benchmarks consisting of better- as shown in the graph on the left. rated companies from an ESG perspective AA 16.6 16.1 for our actively managed listed equities In recognition of our stringent Responsible A 25.7 and corporate credit portfolios. Limited Investing strategy, in 2019 we were selected 25.0 leeway for deviations is given, whereby such to the PRI Leaders’ Group on asset owners’ 23.3 investments are required to have either a selection, appointment and monitoring BBB 22.9 positive ESG trend or provide compensation of external managers in listed equity and/or 13.5 for the underlying ESG risk (see overview private equity. BB 14.2 on page 45). The implementation of these 3.7 benchmarks allows us to have both the right For our real estate portfolio, we focus on B 4.5 measurement and appropriate incentives certified buildings, such as the MINERGIE® 0.9 CCC 2.0 for our portfolio managers in place. If standard (www.minergie.ch/ ) in benchmarks are not applicable, a minimum Switzerland, or the world-wide known 8.7 NR 8.6 ESG rating threshold is applied to our Leadership in Energy and Environmental mandates. Design certification (LEED, www.usgbc.org/ 31 December 2019 leed). By the end of 2019, the value of our 31 December 2018 At the end of 2019, approximately 45% MINERGIE®-certified buildings reached of our investment portfolio was managed USD 0.4 billion or 23% of our Swiss portfolio. externally, and more than 98% of those assets were managed by signatories to the Furthermore, through our externally Principles for Responsible Investment (PRI, managed portfolio we predominantly invest

42 Swiss Re | 2019 Sustainability Report Swiss real estate portfolio in the Australian, UK and US real Inclusion estate markets, reaching a total size of Thematic investments are an ideal way to USD 2.1 billion by the end of 2019. tackle specific sustainability topics. We mainly target investments that contribute In the US, the investment managers’ to a low-carbon economy and facilitate the approach to sustainability includes the mitigation of climate change. An effective “GreenGuide: Sustainable Property way to do this is by investing in infrastructure Operations”, a best-practice guideline renewables and green bonds. For the latter for sustainable and efficient real-estate we use the Green Bond Principles (GBP) operations; ULI GreenPrint Foundation issued by the International Capital Market 23% MINERGIE®-certiﬁed (americas.uli.org/research/centers- Association (ICMA, www.icmagroup.org/) 77% No certiﬁcation initiatives/greenprint-center/), a global as guiding principles for our investments. environmental management platform; and We were holding USD 1.8 billion in green the LEED certification from the U.S. Green bonds as of year-end 2019. GRESB Score DevelopmenDevelopmentt Building Council. We also benchmark the portfolio against GRESB (gresb.com/), an To further expand our thematic investments, 78 82 industry-driven organisation transforming we also include social and sustainability 71 the way capital markets assess the ESG bonds in our allocation, investing in bonds performance of real assets. It outperformed whose use of proceeds helps tackle the the GRESB average of 72/100 with a score challenges faced by underserved groups of 82/100. or populations. This enables us to embrace positive social impacts as an additional In Australia and the UK, the investment thematic focus. For social bonds we use 2017 2018 2019 managers’ approach to sustainability the Social Bond Principles (SBP) and for includes the National Australian Built sustainability bonds the Sustainability Bond Environment Rating System (NABERS, Guidelines (SBG) issued by the ICMA as www.nabers.gov.au/) rating scheme guiding principles for our investments. and the BREEAM (www.breeam.com/) Overall, we increased our target for our certification framework, respectively. green, social and sustainability bond mandate to USD 4 billion, to be achieved by the end of 2024.

Inclusion is one of three cornerstones of our Responsible Investing strategy. Our thematic investments include social infrastructure projects such as hospitals, student dorms and affordable housing.

Swiss Re | 2019 Sustainability Report 43 Being a responsible investor

Infrastructure is an attractive asset class for Exclusion introduced an absolute coal threshold in our investment portfolio given its credit Swiss Re’s approach to Exclusion is based 2019: We are committed to not investing quality and inherent liquidity premium. Our on our Group-wide Sustainable Business in mining companies that produce at least infrastructure investments are assessed Risk Framework. This advanced risk 20 million tonnes of coal per year and in against a catalogue of ESG parameters to management tool sets company-wide power utility generators with more than evaluate the underlying sustainability risk. criteria for what we consider as acceptable 10 gigawatts of installed coal fire capacity. business and which may thus lead to the • 13% of our infrastructure investments exclusion of a company or a country from our For further information on how we manage are allocated to renewable energy such investment scope. Swiss Re’s Sustainability climate risk in our investment portfolio, as wind farms and solar panels. Risk Management team is responsible for please read our Climate-related financial reviewing and updating the framework on a disclosures published in the 2019 Financial • 21% of our infrastructure investments regular basis. Further information is available Report (pages 151–167). are allocated to social infrastructure such in this report on pages 35–37. Additionally, Content in the 2019 Financial Report as hospitals, student dorms or affordable we consider the way companies conduct housing projects. their business by screening their alignment For more information, see our with the ten principles of the UN Global Climate-related Financial Disclosures, In our 2019 Financial Report, we disclose Compact (www.unglobalcompact.org/). pages 151–167. further information on our climate change- related investment risk exposure (pages To mitigate the risk of stranded assets in 151–167). the light of the accelerating transition to a net-zero GHG economy, we avoid In the context of our Inclusion approach, we investments in companies that generate also measure our real-world impact and align 30% or more of their revenues from thermal it to the Sustainable Development Goals coal mining or that use at least 30% thermal (SDGs, sustainabledevelopment.un.org/). coal for power generation. We have also As part of our Responsible Investing strategy, divested from companies with more than we mainly focus on the five SDGs shown 20% revenues from oil sands operations. in the graph below. Further strengthening our efforts, we

Our thematic investments support the SDGs

Renewable and social infrastructure loans Green real Green, Impact estate social and private sustainability equity bonds

≈1 5 0 0 ≈100 000 ≈7 3 0 0 ≈3 800 MW ≈1 100 000 ≈91 000 ≈234 000 m2 hospital students student of installed households affordable of green real beds provided dorm renewable with access housing units estate floor with school rooms energy to modern energy space infrastructure capacity services ThematicInvestments

USD 1.0bn USD 1.3bn USD 1.9bn USD < 150mn

Supported SDGs Supported

As of 31 December 2019

44 Swiss Re | 2019 Sustainability Report Overview of ESG considerations in Swiss Reʼs investment portfolio

Enhancement Inclusion Exclusion

• Investment universe requiring ESG ratings BB and better, taking ALM considerations Government into account bonds • Green, social and sustainability bond mandate considering ICMA Principles and/or Guidelines

• Active mandates benchmarked against ESG BB and Better index with limited leeway to deviate from the benchmark Credit • Reinvestment universe of buy-and-hold mandates restricted to ESG rating BB and better • ESG inclusion in infrastructure loans

Listed • Active mandates benchmarked against equities MSCI ESG Leaders indices restricted to BB and better

• New investments are only made into Private Private Equity funds that adhere to equity ESG guidelines • Swiss Re reviews ESG performance and compliance for each potential investment

• Benchmarked against different sustainability standards depending on Real the location of the property (Minergie estate standard, LEED certification, GRESB scoring, NABERS rating, BREEAM certification)

The number of points reflects the level of ESG integration for the respective asset class.

Swiss Re | 2019 Sustainability Report 45 Being a responsible investor

Responsible investing governance The SAA & Markets Committee reviews and Our voting activities in 2019 framework discusses operational decisions related to Swiss Re’s Responsible Investing strategy Our Asset Management operates within a and advises the co-heads SAA & Markets on well-defined framework. Strong governance related decisions and improvements. The is key to including ESG considerations along Asset Management Investment Committee the investment process in a structured and reviews and discusses strategic decisions controlled way. Our Responsible Investing and improvements related to Swiss Re’s strategy is based on clear principles, Responsible Investing strategy and advises procedures and responsibilities consistent the Group Chief Investment Officer (Group 95% Votes cast with Swiss Re’s Code of Conduct and formal CIO) on them. 5% No votes cast commitment to sustainability. The overall responsibility for our Responsible The Swiss Re Responsible Investing Policy Investing strategy lies with the Group CIO, Our voting behaviour in 2019 describes our approach, specifies roles who signs off investment decisions within and responsibilities in the organisation, and the Group’s Strategic Asset Allocation. defines implementation and monitoring standards for ESG criteria in the Group’s investment portfolio. How we engage

The policy is reviewed periodically and Voting and engagement updated if required. It is complemented by We believe that ESG considerations, the Swiss Re Asset Management Voting and especially good corporate governance and 88% Voted with management 98% Votes cast Engagement Policy, which provides guiding transparency towards shareholders, are 10% Voted against management 2% No votes cast principles that apply to all our voting and key drivers for sustainable value creation. 2% Abstained engagement activities and is consistent We recognise our shareholder rights and 0% Votes withheld with regulatory developments such as the responsibilities as an integral part of our Shareholder Rights Directive 2017/828 commitment to responsible investing. (SRD II). It rounds off the integration of our To reflect this pledge in our voting and Enhancement approach and specifically engagement behaviour, we have defined expresses our commitment to our role as principles in our Asset Management Voting an active shareholder. and Engagement Policy and will report on them going forward (see: www.swissre. Swiss Re’s Head Responsible Investing com/voting-and-engagement-overview). (Head RI), with support of a dedicated team, We review our constitutive voting and develops and coordinates the implementation engagement principles periodically to of the Responsible Investing strategy within keep them aligned with best practice. the unit. As part of this, the Head RI steers the ESG Advisory Board, a committee In the case of internally managed equities, 93% Voted with management formed by representatives of all investment we make use of our influence as a 6% Voted against management units as well as Legal, Compliance and responsible shareholder by directly 1% Abstained Group Risk Management. The ESG Advisory exercising our voting rights and engaging 0% Votes withheld Board reports on responsible investment with companies in which we are invested. activities in the various investment units, For externally managed portfolios, we develops and reviews improvement ideas, work with the relevant portfolio managers shares knowledge and monitors to execute our proxy votes and related implementation progress. engagement activities.

We review the voting policies of external managers during the due diligence process to confirm compliance with our policy. In addition, external managers are required to report on voting and engagement activities conducted on Swiss Re’s behalf.

46 Swiss Re | 2019 Sustainability Report In 2019, we exercised 95% of our voting with other industry participants to develop Being a member of the ICMA Green and rights of our listed equity mandates. We responsible investing as a standard investing Social Bond Principles since 2017 supports voted on 6 536 voting items through our approach. our view that the industry needs a more external managers. We voted in line with standardised responsible investing market the respective management resolution In this context, we hosted the “Sustainability environment with agreed definitions, recommendation in 5 716 cases (88%) Leadership Series– Responsible investing standards, methodologies and best practices and against it in 683 cases (10%). In in practice” conference in September 2019. to move the long-term investor base further 131 cases (2%), we abstained from voting. The event featured expert speakers as well towards systematic ESG integration. The remaining votes were withheld. as panel sessions and served as a platform to share first-hand insights on the As we are determined to stay a leader in In addition to shares in listed companies, implementation of responsible investing responsible investing and to continuously investments in our equity portfolio include strategies, discuss policy developments play a decisive role in making the world more equity exchange-traded funds (ETFs). and look at the latest trends in stewardship resilient, we went one step further in 2019. The fund managers cast votes on these across a fast-evolving market. You can To accelerate the transition to a low-carbon ETFs in line with their own voting policies find more information about the event on economy and to mitigate climate change, and processes. page 54. we co-founded the UN-convened Net-Zero Asset Owner Alliance. In this role, we Promoting responsible investing In 2019, we also launched the brochure committed to aligning our investment Shifting the large institutional asset base Responsible Investing – Our approach, portfolio with the 1.5°C goal stated in the towards sustainable investments would mark which provides an update on the Paris Agreement by having a net-zero GHG a big step forward in making the world more implementation of our Responsible Investing emission investment portfolio by 2050. resilient. Swiss Re’s brand promise “We’re strategy and outlines our most recent smarter together” is also applicable to commitments: We joined the global Science Based Targets responsible investing. www.swissre.com/ri-our-approach. initiative and will develop science-based emission reduction targets We interact with policymakers and other We first formalised our commitment to (sciencebasedtargets.org). Our commitment market participants to promote ESG responsible investing in 2007 by signing also includes advocating for and engaging considerations in the investment process. thePrinciples for Responsible Investment. on corporate and industry action as well as As an example, we contribute to the In 2012, we signed the Principles for public policies for a low-carbon transition European Commission’s Technical Expert Sustainable Insurance (PSI, www.unepfi. of economic sectors. Group on Sustainable Finance and org/psi/), a further step to formally endorse specifically participate in the development our commitment to corporate responsibility. of climate-transition and Paris-aligned Both the PRI and PSI are taken into account benchmarks and of ESG reporting needs within our comprehensive responsible The UN-convened Net-Zero Asset for benchmarks. As an active member of investing framework. All PRI signatories are Owner Alliance is an international the OECD’s long-term investor network, we required to provide in-depth reporting on group of institutional investors delivering also engage in the development of policy their responsible investment activities. on the commitment to transition their proposals regarding sustainable infrastructure Our Transparency Report is available on investment portfolios to net-zero GHG and ESG. Furthermore, as part of relevant the PRI website. emissions by 2050. As of year-end industry organisations we shape and 2019, the then 16 members advise on sustainable financial market We have once again been recognised by represented nearly USD 4 trillion in developments in Switzerland. the PRI for our thought leadership in the assets under management. The Alliance field of responsible investing, achieving our shows united investor action to align Knowledge sharing is another key aspect best-ever rating and being nominated to the portfolios with a 1.5°C scenario, of promoting responsible investing. We offer 2019 Leaders’ Group (www.swissre.com/ addressing Article 2.1c of the Paris all Asset Management employees various pri-leaders-group). Agreement. internal ESG training opportunities to ensure www.unepfi.org/net-zero-alliance/ consistent know-how across the Group. Furthermore, we are in an ongoing dialogue

Swiss Re | 2019 Sustainability Report 47 Engaging in dialogue with our stakeholders

We engage in regular dialogue with our stakeholders. By co-creating knowledge and sharing expertise, we help society advance effective responses to key risks.

48 Swiss Re | 2019 Sustainability Report Our re/insurance solutions help our clients • Political and legal entities: multilateral institutions. Swiss Re Institute with its and partners manage the risks they face. This organisations (UN), governments, established brands such as the sigma series in turn fosters stability and enables economic regulators, standard-setting boards and the Centre for Global Dialogue plays growth. However, many of today’s risks • Civil society: general public, NGOs, a key role in our stakeholder dialogue (for are complex and may threaten sustainable academia further information, see below). progress. To find effective, long-term responses to such risks, partners from the Our role as a risk knowledge company Our focused efforts give us valuable public and the private sector need to work and ultimate risk-taker in society means that feedback and new insights for risk together. For this reason, we attach great we have an intrinsic interest in pursuing management and product development, importance to engaging in an active dialogue productive dialogues with our stakeholders. sharpening our understanding of key perils with our principal stakeholders, which Drawing on the expertise from our core and sustainability issues. The three 2030 include: business, we identify key risks and take Sustainability Ambitions of our Group • Clients: cedents, brokers, corporate an active role in discussions about them. Sustainability Strategy provide an important clients, government entities, multilateral focal point for these efforts. organisations We share, exchange and co-create • Financial community: investors/ knowledge through many channels, eg shareholders, rating agencies, our publications, international dialogue shareholder associations, stock platforms, client and partner events, as well exchanges as cooperation with governments, non- • Employees governmental organisations, and academic

Swiss Re Institute Swiss Re has long been recognised as a knowledge leader The cutting-edge risk knowledge generated in this way is shared within the re/insurance industry. We believe that a superior through publications, client programmes and conferences. understanding of the risks we all face supports the Group’s Swiss Re Institute incorporates successful Swiss Re brands such vision of making the world more resilient. as the sigma publication series, the annual SONAR Report and the Centre for Global Dialogue. Swiss Re Institute plays an essential role in achieving this objective. It conducts and publishes superior risk research to drive Based on its mandate and key activities, Swiss Re Institute better decisions and innovation in the re/insurance industry. It supports the Group’s commitment to sustainability. It helps curates risk and market data to enable solutions that create value identify emerging risk trends and fosters dialogue with our clients for clients and to guide the Group’s strategic direction. It acts as and other stakeholders to advance sustainable risk solutions. a coordination point bundling all research activities across Swiss Re and works with selected partners to explore the future of risk coverage, assess changes in the risk landscape and act as a catalyst for industry change.

Website

You can find more information about Swiss Re Institute at: www.swissre.com/institute/

Swiss Re | 2019 Sustainability Report 49 Engaging in dialogue with our stakeholders

Dialogue on our 2030 Mitigating climate risk and advancing • We hosted the fourth annual Oasis Sustainability Ambitions the energy transition conference in Zurich. Oasis is an open- source catastrophe modelling platform As part of developing our Group that eases the exchange of models in Sustainability Strategy, we defined our the re/insurance industry. It reflects the 2030 Sustainability Ambitions, combining industry’s willingness to join forces and insights from our own risk expertise and control rising costs by providing access from our stakeholders. We consider these to new and existing model providers, Ambitions to be highly relevant for our ultimately enhancing the diversity of clients, the re/insurance industry and models and risk views. society as a whole. They denote topical • We contributed our know-how to the focus areas where we believe Swiss Re can development of the 2019 Task Force on have a significant positive impact in terms Climate-related Financial Disclosures of supporting sustainability. Thus they also (TCFD) Status Report, as well as hosted help us meet our vision to make the world the Industry Stakeholder Workshop more resilient (for further details, see pages convened by the International Association 9–13): of Insurance Supervisors (IAIS) and the Sustainable Insurance Forum (SIF) on Mitigating climate risk and the “Implementation of the advancing the energy transition The effects of climate change are already Recommendations and Guidance of the evident and impacting our risk landscape: Task Force on Climate-related Financial warmer average temperatures, rising sea Disclosures and Supervision of Climate Building societal resilience levels, longer and more frequent heatwaves, Change Risks” event. as well as more weather extremes. These • We produced the sigma issue 2/2019: phenomena are becoming the new normal “Secondary natural catastrophe risks”, Driving affordable insurance and will increasingly impact our way of which took a look at global insured losses with digital solutions life, our health and our natural environment. from natural catastrophe events, as Urgent questions we need to ask are how well as provided a detailed analysis of to tackle climate change, how to advance the “secondary” effects of primary perils. the transition to renewable energy, and While underwriting catastrophe risks how we can best adapt to and mitigate means looking at peak risks, increasingly climate risk. it also requires taking into consideration forward-looking trends on secondary perils. In 2019, our stakeholder dialogue on this • Swiss Re’s Chairman Swiss Re Institute 2030 Sustainability Ambition included and Group Chief Underwriting Officer, the following highlights: Edi Schmid, published a blog titled: • We attended the UN Climate Action “Averting a collision course with climate Summit in New York and signed two change”. This article emphasised how important commitments: the UN Global climate change and urban growth are Compact Business Ambition for 1.5°C impacting weather-related disasters and (see page 33) and the UN-convened underinsurance, as well as how efforts Net-Zero Asset Owner Alliance (see must converge with broader actions page 47). In addition, the Insurance on climate change and support more Development Forum (IDF) announced sustainable business models. a series of coordinated commitments • We contributed to the Chief Risk Officer with the UN Development Programme, (CRO) Forum Emerging Risk Initiative Germany and the UK to increase position paper titled: “The heat is on – insurance protection in climate-exposed Insurability and Resilience in a Changing countries. Swiss Re has endorsed this Climate”. The aim of the paper was to commitment together with a number of provide the insurance sector, risk peer companies.* professionals and other stakeholders with a clear understanding of climate change implications for the re/insurance industry, and to help equip them to challenge their businesses and clients in their responses to climate change.

* Further companies that have initially endorsed the IDF commitment are: Allianz, Aon, Axa, Munich Re, Renaissance Re, Scor, Willis Tower Watson.

50 Swiss Re | 2019 Sustainability Report Building societal resilience In 2019, our stakeholder dialogue on this • With a broad panel of experts from 2030 Sustainability Ambition included the politics, science, business and risk following highlights: engineering, Swiss Re Corporate Solutions • Through Swiss Re Institute, numerous held a webinar on “The European food stakeholders assembled at our “Expert industry: Increasing resilience and Forum on Mental Health”, where experts strengthening food security”. Topics exchanged viewpoints on the current addressed included biodiversity, mental health landscape and how insurers digitisation and competition – all key can make a difference to improve it. factors to resilience in the European Further on the topic, our Reinsurance food industry. Further on this topic, Solutions Asia Pacific Team Lead, Li Hui Jeffrey Khoo, Head Food & Agriculture Lee, published a blog article titled: Sales Asia, published a blog article titled: “World Mental Health Day: Preventing “Let’s protect those who secure our and Breaking Taboos”, to advance food”, outlining thoughts on food security awareness of this global health challenge considering the ever-growing world in the Asia-Pacific Region. population, as well as how to better • We held a number of Engineering & protect smallholder rice farmers, who Construction events in locations that remain largely uninsured, but who Technological and economic included Sao Paolo and Kuala Lampur, generate 90% of the rice crops in the development, population growth, ageing as well as the Engineering Underwriting Asia-Pacific Region. populations and other societal trends are Forum in Zurich. These events brought • As part of our Digital Ecosystems increasingly putting people and assets together stakeholders to discuss Series (September 2019), we published at risk. Swiss Re’s Responsible Investing infrastructure development, investment the research report titled “Health strategy, as well as its work in the areas of and insurance, as well as focused on the ecosystems: striving towards an integrated health and longevity, agriculture and advancement of holistic and sustainable and seamless patient experience”. The infrastructure represent some of the ways infrastructure development. Further on study not only found that re/insurers can we help build societal resilience and the topic, Marcela Bortolamedi Cochrane, play a key role in disease prevention, reduce related vulnerabilities. Property & Specialty Underwriting supported by digitally integrated health Operations Officer, published a blog ecosystems, but also that such digital article titled: “Helping the world rebuild ecosystems allow for higher quality and and renew”, outlining Swiss Re’s role better health outcomes for patients, at in supporting a holistic approach to lower costs. sustainable infrastructure development • We produced the sigma issue 5/2019: and our involvement in the Madaster “Indexing resilience”. As an industry first, Project, which is focused on finding ways Swiss Re Institute and the London School to reduce infrastructure’s carbon of Economics jointly developed new footprint by re-using building materials. resilience indices that provide a more holistic assessment of economic health than gross domestic product. The findings indicate that the world economy has become less resilient and that there is a record-high global protection gap within three main areas of risk – natural catastrophes, mortality and healthcare.

Online content

In the online version of our 2019 Sustainability Report you can find links to further information on these activities.

Swiss Re | 2019 Sustainability Report 51 Engaging in dialogue with our stakeholders

Driving affordable insurance with • As part of our Digital Ecosystems Series digital solutions (January 2019), we published the research report titled “Extending the boundaries of value creation in insurance”. The study took a look at how different digital ecosystems are creating new markets by combining a variety of services and vendors on one platform to offer consumers a holistic and “power of choice” user experience. Further, by leveraging digital ecosystems, it is expected that reinsurers and insurers will be better able to customise their products to customers’ needs. • We co-organised “The Power of Predictions” conference together with the Gottlieb Duttweiler Institute and IBM. Swiss Re Institute positioned the effects of better predictions in the insurance By embracing the opportunities offered industry, and how financial markets and by new technologies and the digital risk allocation will evolve. In addition, transformation, we aim to develop solutions we presented emerging trends and risks that make insurance more affordable, that are key for the insurance industry accessible and available to customers. and future of societies. Technology not only allows us to deliver • We produced the sigma issue 4/2019: greater efficiencies through the entire “Advanced analytics”, which investigated insurance value chain, but also to provide how re/insurers will be able to unlock innovative insurance covers and share our new frontiers in property and casualty risk knowledge more widely. re/insurance. Through the use of structured and unstructured data sources In 2019, our stakeholder dialogue on this from new sensor networks and platforms, 2030 Sustainability Ambition included the re/insurers will be able to price new following highlights: markets and risk classes, as well as make existing processes more efficient. • As part of our Digital Ecosystems Series (May 2019), we published the research report titled “Mobility ecosystems: striving towards a seamless interface for customers”. The study found that urbanisation, changing demographics and greater environmental awareness are putting pressure on existing mobility infrastructure. It also found that rapid urbanisation means that societies will increasingly need sustainable and resilient mobility solutions, including a more dynamic use of existing systems, as well as newer tech-enabled mobility platforms.

Online content

In the online version of our 2019 Sustainability Report you can find links to further information on these activities.

52 Swiss Re | 2019 Sustainability Report Digital responsibility Digitalisation across the re/insurance value reports, as well as giving feedback to Additionally, we contributed to the report chain is accelerating. It is expected that consultations and responding to regulatory “Promoting Responsible Artificial it will enhance the value provided to questionnaires. Intelligence in Insurance”, published by customers as well as foster closing of the Geneva Association (www. protection gaps. Thus, it is important to The European Insurance and Occupational genevaassociation.org/research-topics/ actively promote digitalisation to harness Pension Authority (EIOPA) has appointed a digitalization/promoting-responsible- these advantages. However, the use of Swiss Re employee to its consultative artificial-intelligence-insurance). The artificial intelligence and digital personal expert group for digital ethics and to chair publication analysed a selection of ethics data also raises ethical concerns regarding the workstream on Fairness and Non- guidelines issued by governmental and fairness, inclusion, hardship and solidarity. Discrimination. The outcomes of this work non-governmental organisations, as well In this context, we have started to develop are expected to be published in 2021. as private companies. It took a close look our own ethical guidance to enable swift at the topics of transparency, explainability digitalisation in the company, while at In 2019, we supported the finalisation of and fairness, which are particularly the same time ensuring that we maintain a three-year research project on “Between complex for re/insurers to interpret and customers’ trust, differentiate our services, Solidarity and Personalization – Dealing implement. It also explores how to address and safeguard our reputation as a leading with Ethical and Legal Big Data Challenges the key trade-offs that arise in applying re/insurance company. in the Insurance Industry”, conducted by these principles. researchers at the University of Zurich Various regulators around the world have and the University of Applied Sciences For Swiss Re’s commitment to data started to evaluate the need for regulations HTW Chur. The project was funded by protection and privacy compliance, on the topic of big data / digital ethics Switzerland’s National Research see page 77. or have issued initial guidelines. Swiss Re Programme 75 on “Big Data”. The final actively engages in discussions with report has been published and is available regulators by participating in regulatory at www.nfp75.ch/en/projects/module-2- expert groups, contributing to studies and societal-and-regulatory-challenges/ project-christen.

General sustainability topics global sustainability and resilience by and other topics. Discussions cover closing the protection gap for all Swiss Re’s approach to managing risks stakeholders, and how great progress and seizing opportunities on ESG topics, can be made through public-private including advances to our leading partnerships as well as technology- Sustainable Business Risk Framework, enabled parametric solutions. and how we integrate ESG criteria across • Swiss Re Institute hosted our our investment portfolio. “Sustainability Leadership Series – • We engaged with the NGO Oceana, Responsible investing in practice” event. under the UNEP FI Principles for You can read more about this event on Sustainable Insurance, and became a page 54. signatory committing to the reduction • Swiss Re’s Chairman Swiss Re Institute and elimination of illegal, unreported and and Group Chief Underwriting Officer, unregulated (IUU) fishing. To this end, Edi Schmid, published a blog titled: “Risk, we have appropriate risk management resilience and the road to a sustainable protocols and due-diligence procedures future”. This article emphasises the in place to help reduce the risk of insuring importance of both resilience and vessels or companies that act contrary sustainability, as well as thinking about to agreed international governance Our three 2030 Sustainability Ambitions them in the context of the Resilience frameworks and international law covering provide a key focus for our stakeholder Index for countries that was developed IUU fishing. dialogue. At the same time, we regularly jointly by Swiss Re Institute and the • Swiss Re’s Group Chief Executive Officer, engage in the wider sustainability London School of Economics. Closing the Christian Mumenthaler, was part of the discussion and contribute to other topics protection gap makes economic common Climate Leaders panel session at the we consider relevant. sense and the new Resilience Index is 2019 World Economic Forum, as well a good example of how risk knowledge as quoted in an article for Reactions Below are some further sustainability- can help guide decision-making and magazine. He continues to be outspoken related highlights of our stakeholder strengthen societal resilience. and action-oriented on mitigating climate dialogue in 2019: • Our Chairman of the Board of Directors, change, having indicated that speed, • Swiss Re’s Head Property & Specialty Walter B. Kielholz, annually conducts industry-wide collaboration and taking Underwriting Reinsurance, Mike Mitchell, governance roadshow meetings with a long-term view are key in enabling published a blog titled: “Now, more than Swiss Re’s largest shareholders to provide the critically important transition to a ever insurance is vital to the sustainability an update on corporate governance and low-carbon economy. of the world’s economies”. This article engage on environmental, sustainability emphasised the importance of improving and governance (ESG) issues, strategy

Swiss Re | 2019 Sustainability Report 53 Engaging in dialogue with our stakeholders

Sustainability Leadership Series – Responsible investing in practice

There is increasing recognition that Investor Relations and Asset Management and regulators, and finally considering the sustainability can have a significant impact units hosted the “Sustainability latest trends and outlook on investment on a company’s financial performance, Leadership Series – Responsible investing stewardship and shareholder engagement. and it is becoming a crucial consideration in practice” event, which brought together in the investment decision-making 80 participants from the investment The acknowledgement that ESG process. community, re/insurers, campaign groups, considerations are not just a “nice-to- national and international regulatory have” was reiterated numerous times We were among the first in the bodies, academia and policymakers. during the event, with emphasis put on re/insurance industry to move close to how it makes economic sense to integrate 100% of our Strategic Asset Allocation The event served as a platform to share ESG factors into investment decisions. to environmental, social and governance first-hand insights on the implementation At the same time, there was agreement (ESG) benchmarks. We believe that of responsible investing strategies, that all stakeholders need to continue long-term investors are best equipped to discuss policy developments and look at taking action if society as a whole is lead the way in embedding sustainability the latest trends in stewardship across to achieve the climate goals set in the into the conventional investment process, a fast-evolving market. During the event, Paris Agreement. and that bringing key industry participants four panels discussed ESG aspects from together to exchange knowledge and different perspectives. Participants took experiences is the best way to move the stock of lessons learned thus far by asset dialogue forward. managers who have taken active steps to integrate ESG into their investment With this in mind, on September 12–13, decisions, looking at this by asset class, 2019, Swiss Re Institute, together with our discussing the view-point of policymakers

Panel discussion during the event (left to right): Guido Fürer, Chief Investment Officer, Swiss Re; Lady Lynn Forester de Rothschild, Founder and CEO, Coalition for Inclusive Capitalism; Patrick Odier, Managing Partner, Lombard Odier; Philippe B. Brahin, Head Investor Relations, Swiss Re.

Website

You can find more information about this event at: www.swissre.com/institute/ conferences/sustainability-leadership- responsible-investing.html

54 Swiss Re | 2019 Sustainability Report Collaboration with (inter-) Our work with (inter-)governmental Working with academic institutions governmental and academic agencies to share risk management Through Swiss Re Institute (find out more on expertise page 49), we build and manage partnerships institutions • With Public Sector Solutions, we have with world-class academic and research a team that works strategically with institutions, guide Swiss Re’s internal capital In recent years, we have collaborated with public-sector bodies to improve risk allocation and business steering processes, various (inter-)governmental and academic resilience: and provide our stakeholders with cutting- institutions both to promote effective – Directly with sovereigns or sub- edge risk research. approaches to sustainability challenges sovereigns and their agencies, and to share our expertise on managing recently with the Indonesian • We support EPFL on its Center for specific risks. government to insure its state assets Digital Trust (www.c4dt.org/), which aginst natural disasters; with the aims to create a technical, legal and Our work with (inter-)governmental Pacific Alliance (Chile, Colombia, ethical framework that delivers strong agencies to promote effective Peru and Mexico) to structure an guarantees and reduces the cost of sustainability responses earthquake cat bond; with the Federal achieving trust in the digital world. • In Europe, we continued our Emergency Management Agency • With GEM Foundation engagement with regulators to highlight (FEMA) to create a reinsurance cover (www.globalquakemodel.org), we the important role insurers play in programme for its National Flood create global, transparent, uniform supporting the transition to a low- Insurance Program; with the hazard and risk models, and carbon, more resource-efficient and government and prefectures of two open-source software for seismic sustainable economy in line with the Chinese provinces to establish major risk assessment. European Green Deal. We provided input natural catastrophe insurance • With the Institute of Insurance to the European Insurance and schemes, and with the UK Economics at the University of St. Gallen, Occupational Pensions Authority’s government as part of a programme HSG (www.ivw.unisg.ch/), we conduct (EIOPA) Opinion on Sustainability within set up to make flood insurance more industry-wide studies to better Solvency II. Swiss Re participated in affordable for homeowners understand market dynamics. climate change-focused regulatory • – With development agencies such as • We collaborate with the Center for roundtables hosted by EIOPA and the UK the United States Agency for Interacting Urban Networks at NYUAD Prudential Regulation Authority (PRA). International Development (USAID), (nyuad.nyu.edu/en/research/centers- In addition, Swiss Re staff attended the UK’s Department for International labs-and-projects/center-for-interacting- several leading groups on relevant Development (DFID), the Swiss urban-networks.html), which aims regulatory topics such as the European Agency for Development and at promoting fundamental research that Commission Technical Expert Group on Cooperation (SDC), the World Bank, can ultimately be translated into ESG benchmarks, PRA/FCA (Financial the Asian Development Bank (ADB), pragmatic ideas for increasing the Conduct Authority) Climate Risk the Inter-American Development Bank livability of our cities. Financial Forum and EIOPA’s Technical (IADB) and the German Development • With the University of Peking in Beijing Expert Group on Cat Risks. Bank (KfW) (www.pku.edu.cn) we carry out an • In the US, we have maintained regular • We have regularly contributed to platforms economic analysis on the health status dialogue with the National Association such as the World Economic Forum, of the middle-aged and elderly in China. of Insurance Commissioners (NAIC), B20, G20 and G8 to share our insights • We collaborate with NNEdPro Global principally on climate change and on key risks, and have supported the Centre for Nutrition and Health natural catastrophes. United Nations Framework Convention (www.nnedpro.org.uk) to develop • In Japan we are a member of the TCFD on Climate Change (UNFCCC) process. knowledge application models which (Task Force on Climate-related Financial help promoting nutrition to achieve Disclosures) Consortium, which was better public health. established in May 2019. The inaugural • With UC Berkeley (www.berkeley.edu/), TCFD Summit took place in October we explore how sustainability issues 2019. In Singapore we were actively impact financial risk through maximum involved in the development of a set drawdown. of environmental risk management guidelines by the Monetary Authority Take a look at our website for further of Singapore (MAS) for the insurance information on our collaborative projects: sector. The guidelines are to be issued www.swissre.com/institute/partnerships. in 2020 after a public consultation html exercise.

Content in the 2019 Financial Report

For our participation in the Financial Stability Board’s Task Force on Climate- related Financial Disclosures, see page 152.

Swiss Re | 2019 Sustainability Report 55 Reducing our footprint

We want to lead by example and work to minimise the environmental impact of our operations. Bringing our CO2 emissions to net-zero and reducing energy consumption are key targets across the Group.

56 Swiss Re | 2019 Sustainability Report As a knowledge company in the financial individual locations. Some of them define services sector, we do not cause large additional environmental targets that reflect environmental impacts through our own specific local conditions and challenges. operations. Nonetheless, we firmly believe that as a company committed to Since 2015, our entire CRES division sustainability we should minimise our has been certified according to the ISO environmental footprint, thus leading 14001 environmental management by example. standard (www.iso.org), replacing the location-based approach previously used. For our core re/insurance business, climate This means that all our operations and change represents a key topic. Reflecting employees are covered by an

this, we have been focusing on our own CO2 ISO 14001-certified environmental emissions and energy consumption for many management system (EMS). years. Our pioneering initiatives include the Greenhouse Neutral Programme and the Complementing the ISO 14001 certification COyou2 Programme. Both are now into their of our Group-wide EMS, we have achieved second cycles, running from 2013 to 2020. ISO 50001 certification for the energy management system of our main locations Furthermore, we apply sustainability in the EU. guidelines to our sourcing activities. Extending our efforts beyond our company, For our recently completed office buildings we continue to play an active role in the in New York, Zurich (Swiss Re Next) and Swiss Climate Foundation. Bangalore we have also received the Leadership in Energy and Environmental Design (LEED, usgbc.org/leed) certification, Management system and the most widely used green building rating certification system worldwide to evaluate the overall environmental performance of a building. Website We operate an integrated global In addition, we have received certification You can find out more about our management system at our Corporate Real for our Campus Mythenquai in Zurich as engagement in the Swiss Climate Estate & Services (CRES) division, which a “2000-Watt site in transformation”. Foundation at: interlinks quality and environmental www.swissre.com/sustainability/ management, and ensures that similar footprint/partner-initiative-swiss- processes are seamlessly managed. Committing to reach net-zero climate-foundation.html Through a systematic, Group-wide reporting emissions by 2030 process, we monitor our environmental performance and implement appropriate In 2019, we made a major new commitment: Website improvement measures. to reach net-zero emissions in our own You can find out more about operations by 2030. This is an ambitious our certification from Environmental objectives and targets goal. It requires us to double down on our the 2000-Watt society at: are defined centrally at our headquarters, efforts to cut emissions and to shift from www.swissre.com/sustainability/ but responsibility for implementing conventional carbon offsetting to carbon footprint/2000-watt-society.html improvement measures also lies with the removal. On pages 60 and 62 you can find CRES departments in our regions and out more about our net-zero commitment and our early engagement in the nascent carbon removal market. Website

You can find out more about our commitment to reach net-zero emissions in our operations at: www.swissre.com/sustainability/ footprint/co2netzero-programme.html

Swiss Re | 2019 Sustainability Report 57 Reducing our footprint

Our Greenhouse Neutral CO2 emissions per employee (full-time equivalent, FTE), Swiss Re Group Programme 2013 2018 2019 Change in % Change in % Climate change has been Swiss Re’s most kg/FTE kg/FTE kg/FTE since 2018 since 2013 important sustainability issue for some Scope 1 Heating 378 244 210 –13.8 –44.4 30 years. It is a key topic for a re/insurer Scope 2 Power1 824 584 472 –19.1 –42.7 because it leads to more extreme and more Scope 3 Business travel 3 713 3 892 3 8 4 2 –1.3 3.5 frequent weather events. Reflecting this, Copy paper 40 16 13 –15.7 –66.3 “Mitigating climate risk and advancing Waste 50 33 28 –13.7 –43.1 the energy transition” is one of the three Water 12 11 8 –23.7 –30.1 ambitions of our enhanced Group Technical gases 27 6 52 764.3 92.1 Sustainability Strategy (see pages 9–13). Commuting2 1 250 1 000 1 000 0.0 –20.0

The Greenhouse Neutral Programme Total 6 294 5 786 5 6 2 7 –2.7 –10.6 has been the principal means to reduce 1 Calculation based on a market-based approach taking into account the purchase of renewable energy the emissions from our own operations. instruments, with the exception of the UK, where the government requires companies to report an average It combines two commitments: firstly, grid factor (see table at the bottom for our reporting of emissions from electricity). 2 Commuting data are gathered bi-annually by means of a survey. The figures are rounded and fraught with to reduce our CO2 emissions per employee considerable uncertainty. (full-time equivalent, FTE); secondly, to offset all the remaining emissions by purchasing high-quality emission reduction credits, thus making our company fully Underlying environmental data, Swiss Re Group greenhouse neutral. Change in % Change in % We originally launched the Greenhouse 2013 2018 2019 since 2018 since 2013 Neutral Programme in 2003 for a Heating kWh/FTE 1 931 1 190 1 0 2 3 –14.0 –47.0 ten-year period. During that time, we Power kWh/FTE 4 533 3 405 2 917 –14.3 –35.6 gradually reduced our CO2 emissions Energy intensity kWh/FTE 6 464 4 595 3 9 4 0 –14.3 –39.0 by 49.3% per employee (FTE) and compensated all the remaining emissions. Business travel km/FTE 13 492 14 310 14 2 2 8 –0.6 5.5

Goals and scope Copy paper kg/FTE 34 14 11 –19.7 –66.9 Seamlessly continuing from the Recycling paper % 71 65 61 –5.8 –13.8 programme’s first phase, we launched a FSC label % 96 96 97 1.1 1.1 second commitment cycle running from 2013 until 2020. However, after almost Waste kg/FTE 181 134 119 –11.0 –34.1 halving our CO2 emissions per employee Water m3/FTE 16 14 11 –20.0 –30.0 in the previous ten years, the potential for further reductions has now been significantly smaller. Thus, our target until the end of 2020 is to keep our CO2 emissions per Indirect emissions from purchased electricity, Swiss Re Group employee stable at the 2013 level. In view of our expansive business strategy, In line with the Scope 2 Guidance of the Greenhouse Gas (GHG) Protocol, we report the especially in high growth markets, we emissions associated with our electricity consumption according to both a location-based regard this as an ambitious goal. approach representing the CO2 intensity of the grids where we operate and a market-based method taking into account emission reductions from instruments such as Renewable Energy Certificates (RECs) and Guarantees of Origin (GOs).

% Location-based Market-based Instrument Percentage total total types kWh

1 0 . 6 t CO2e t CO2e Total reduction of CO2 emissions Switzerland1 820 300 GOs 33% per employee since 2013 US2 6 659 192 RECs 21% GOs, UK3 5 424 5 424 residual mix 19%

RECs, Rest of the world4 10 223 1 880 GOs, residual mix 27% Total 2 3 12 6 7 79 6 100% 1 All Swiss electricity producers are required by law to declare the quality and quantity of the electricity produced. Swiss Re buys 100% green-labelled electricity (naturemade star). 2 In the US, we purchase green-e labelled Renewable Energy Certificates (RECs) for our total power consumption. 3 The UK government claims all green credentials of renewable electricity produced in the country. Even though over 80% of the electricity we consume in the UK comes with Renewable Energy Guarantees of Origin (REGOs), we report the same emission figures for location- and market-based approaches. 4 Our next biggest power consumption is India with 7% and Slovakia with 4% of the Group’s total consumption.

58 Swiss Re | 2019 Sustainability Report Using renewable power Goals of our Greenhouse Neutral Purchasing power from renewable rather RE100 and EP100 Programme until 2020: than conventional sources has been a At the end of 2019, approximately • Maintain the emissions reductions principal measure of our Greenhouse Neutral 92% of the power we purchased we achieved between 2003 Programme. Concluding a gradual build-up across the Group came from and 2013 regarding power that started in 2005, we are now using renewable energy sources. We are consumption, heating and business 100% renewable power at all of the Group’s committed to raising this figure to travel locations where it is available in reliable and 100%, which is why we helped • Fully offset the remaining emissions trustworthy quality (ie at a total of 30 establish the Climate Group’s RE100 • Continuously reduce energy locations in Europe, North America, Asia and initiative in 2014 as a founding intensity (power consumption Oceania). This means that approximately member. and heating) by 2% per year 92% of our total power consumption came (kWh/FTE) from renewable sources at the end of 2019. The goal of this initiative is to unite • Obtain 100% of power from the world’s most influential companies renewable sources by the end To assess the quality of the renewable power in a shared commitment to use 100% of 2020 available in individual locations and select renewable power by 2020. To achieve suitable sources, we use a Minimum this, the RE100 group approaches Standard that clearly states how we define policymakers and regulators at renewable power and what requirements national and sub-national level to make In the current cycle, the programme it needs to meet. renewable energy more available. covers the following emission sources: RE100 grew substantially again in • Heating (Scope 1) We pursue the following impactful green 2019 and now includes more than • Power consumption (Scope 2) power options, with decreasing preference: 220 of the world’s largest companies. • Business travel, copy paper use, waste • Direct investments in our own solar plants www.theRE100.org generation, water use, technical gases (eg at Armonk, Swiss Re Next in Zurich) and employee commuting (Scope 3) • Indirect investments via long-term virtual Going beyond these collective efforts, power purchase agreements from newly we have recently started to build In 2019, our total CO2 emissions per built plants solar power plants at our own offices. employee (FTE) decreased by 2.7% • Sourcing of high-quality renewable energy and were thus 10.6% lower than in 2013. certificates (eg naturemade star in In 2016, we also signed up to the We achieved this overall reduction mainly Switzerland and NaturEnergie in Germany) EP100 initiative, launched by the by further cutting power consumption at Climate Group (www.theclimategroup. our business locations and moving into more Reducing energy consumption org) and the EE Global Alliance energy-efficient buildings, eg in New York In parallel with our switch to using renewable (eeglobalalliance.org/). This is a and Zurich (Swiss Re Next). power, we have made continuous efforts to shared commitment by leading global lower the actual amount of energy consumed companies to double their energy per employee (FTE) or, in other words, to productivity or, in other words, to get reduce our energy intensity. Through many more economic output from each unit small measures to improve energy efficiency of energy. % and by concentrating back-office tasks in www.theclimategroup.org/project/ 39.0 fewer and more energy-efficient buildings, ep100/ Total reduction of energy intensity we managed to cut our energy intensity by per employee since 2013 a total of 46.5% between 2003 and 2013.

For the current phase of our Greenhouse Neutral Programme from 2013 until 2020, our goal is to continuously reduce our energy intensity by 2% per year. At the end of 2019, the total reduction we had reached since 2013 was 39.0%. We partly achieved this by decommissioning existing office buildings and moving into more energy-efficient ones.

Swiss Re | 2019 Sustainability Report 59 Reducing our footprint

Global CO2 emissions Billion tonnes per year

Business as usual emissions 40 Stringent emission reduction eﬀorts

to keep warming below 2°C 30 Net-emission path

Emissions that cannot 20 be reduced yet

0 net-zero

–10 Need for billions of tonnes of negative emissions –20 2010 2020 2030 2040 2050 2060 2070

Source: based on a graph published by the IPCC

Committing to reach net-zero emissions in our operations by 2030

Over the years, we have set ourselves technologies. Scientists further predict existing internal carbon price to a stringent ambitious targets to address our own CO2 that it will take billions of tonnes of carbon steering levy. footprint. In 2003, we were one of the first negative emissions to keep warming large companies worldwide to commit to below 2°C – the longer emission Secondly, we will start to buy impactful becoming greenhouse neutral. In 2014, reduction efforts are deferred, the more. carbon removal certificates, which are we pledged to cover all our energy significantly more expensive than consumption from renewable sources by Swiss Re has decided to play a leading role conventional carbon offsets. The latter 2020 and, to motivate other companies again in this accelerated effort to mitigate cannot be used to substantiate a net-zero to do the same, co-founded the RE100 climate risk. Thus, in 2019 we committed emissions claim, though (see page 62). initiative. To see where we stand on this to reaching net-zero emissions in our The new carbon steering levy will address journey at the end of 2019, see page 59. operations by 2030. This underscores our both objectives at the same time – pledge to reach net-zero emissions by cutting emissions from flights that are With these internal measures we have 2050 both in our re/insurance business not absolutely needed and raising funds played a pioneering role in the fight against (see page 33) and in our investment to support carbon removal projects. climate change. Today, however, climate portfolio (see page 47). scientists clearly state that efforts need Carbon removal is still a nascent industry. to be reinforced: to keep global warming To achieve net-zero in our operations, Our early engagement will help it grow well below 2°C, the world needs to we need to do two things: Firstly, we will and deliver at scale by 2050. It will, reach net-zero emissions by 2050 (see double down on our efforts to reduce however, not be feasible to buy high- illustration above). Put simply, net-zero emissions. As approximately 70% of our quality removal certificates for all our emissions means that for every tonne CO2 footprint stems from business travel, emissions immediately. Any surplus funds of CO2 that cannot be reduced yet, we will focus on flight emissions, starting generated through the carbon steering another tonne needs to be removed from with a reduction target of at least –15% levy will be channelled back to our business the atmosphere and stored permanently in 2020. Afterwards, further reductions for sustainability-focused initiatives. through so-called carbon removal will be incentivised by ramping up our

60 Swiss Re | 2019 Sustainability Report We have also continued our efforts to create We continuously monitor all travel budgets Offsetting our remaining CO2 emissions more flexible and modern office environments and collect travel data centrally. Furthermore, The second commitment of our Greenhouse that offer our employees optimal working we introduced an internal carbon price on air Neutral Programme is to compensate all CO2 conditions while, at the same time, using travel in 2014, which uses the “polluter pays” emissions we cannot yet avoid. For the seven space and resources more effectively. The principle. It allocates the costs of the Verified emission sources covered by it, we bought spread of digital communication and devices Emission Reductions (VERs) we need to buy and retired Certified Emission Reductions makes it possible to work seamlessly across to offset our CO2 emissions to the Group’s (CERs) as well as a first batch of third-party different locations and devices, creating the Global Functions in proportion to their verified carbon removal certificates for a total foundation for a more flexible and informal respective share of air travel; previously they of 76 340 tonnes of CO2e in 2019. To meet workplace setup that encourages teamwork. had been borne centrally by Group Finance. our commitment to net-zero emissions, At Swiss Re Next in Zurich, for example, this we will gradually need to switch from open-workplace concept is a key feature. Despite these measures, the amount of conventional carbon offsetting to carbon Although further reducing our environmental kilometres travelled per employee and the removal (see pages 60 and 62). footprint is not the primary driver of these associated emissions increased for a number efforts, their potential to lower the energy of years, mainly driven by our continued External verification of our CO₂ reporting intensity of our locations is nevertheless expansion in high growth markets. After Ever since we first launched our Greenhouse substantial. falling by 6.0% in 2018, the average total Neutral Programme in 2003, we have distance travelled by each of our employees disclosed our CO2 emissions, their principal Minimising business travel remained roughly the same in 2019, at sources and relative performance over As a result of the substantial cuts we have 14 228 km/FTE. time. The method we use to calculate our achieved in CO2 emissions from power emissions is based on the guidelines of consumption and heating since 2003, As part of our commitment to net-zero the Greenhouse Gas Protocol, the most business travel easily constitutes Swiss Re’s emissions, we will replace the existing widely used emissions accounting standard largest emission source today. Since the internal carbon price on air travel through a (www.ghgprotocol.org/). business trips our employees take are stringent carbon steering levy (see page 60). ultimately driven by client needs, they are Before our emission figures are published, difficult to influence. However, we have Paper, water and waste PricewaterhouseCoopers checks them taken several measures to reduce the need We also calculate and compensate to verify our calculations. Their complete for business travel and to curb unnecessary the CO2 emissions from further sources assurance report for the whole Sustainability business trips. along our supply chain (Scope 3), ie copy Report is included on pages 82–83. paper, waste generation and water use. For a start, we have built up a dense network The overview of our emissions sources on of video conferencing equipment across the page 58 shows, however, that these are Sustainability in our supply chain Group. Recently, we replaced these facilities less relevant in our business than other with state-of-the-art technology, which environmental impacts, which is why we To run our operations, we continuously creates a real-time, life-size virtual meeting have not set quantitative reduction goals procure a wide range of goods and services. experience in specially designed rooms. for them. In line with our overarching Group Sourcing By the end of 2019, we had a total of Standard, we select suppliers that offer the 155 video conference facilities worldwide. Furthermore, it is difficult for us to influence best value for money, meet high quality In total, we hosted 97 743 video calls in water use and waste generation at locations standards and adhere to Swiss Re’s Code 2019, amounting to 71 884 hours. where we rent office space. In the office of Conduct. buildings we own ourselves, however, we ensure that appliances meet high standards Furthermore, as a signatory to the UN Global of water efficiency. Compact (www.unglobalcompact.org/), we are committed to honouring all its ten As paper use is more responsive to principles. Amongst other things, these 76 340 managerial action, we have taken a number prohibit any sort of discrimination or the use

Tonnes of CO2e compensated of measures to reduce the average amount of child or forced labour, and require that in 2019, thereof 100 tonnes through used by our employees in recent years. New the freedom of association and the right to carbon removal certificates IT solutions such as “pull printing” (which collective bargaining be upheld. These eliminates uncollected printouts), web-based principles of the UN Global Compact are collaboration and document management incorporated into our Code of Conduct by platforms have led to a significant decrease reference and specifically cover our of paper use in all our locations. Average paper use per employee fell strongly again by 19.7% in 2019, resulting in a total reduction of 66.9% since 2013. 35% Share of our tier 1 and 2 vendors ESG-assessed by the end of 2019 (30% by the end of 2018)

Swiss Re | 2019 Sustainability Report 61 Reducing our footprint

Moving from carbon offsets to carbon removal to compensate our unavoided emissions

In 2003, Swiss Re committed to become offsets in terms of accountability, social for removal certificates, is still to emerge. greenhouse neutral with the intention to and environmental safeguards etc. We Hence, we find ourselves in a similar compensate any unavoided emissions have exclusively supported Gold Standard- situation as in 2003. Through our early through the purchase of CO2 reduction certified projects (www.goldstandard.org), engagement we will help develop the certificates, or carbon offsets. Greenhouse which means they have come with the carbon removal market by creating neutrality was a thought-leading concept same level of co-benefits as the CDCF demand and by motivating clients and at the time. Carbon offset markets as we projects. To fund our offsetting campaign peers to join our commitment. know them today did not yet exist, so according to the “polluter pays” principle, Swiss Re invested in a fund specifically in 2014 we introduced a small levy on our Living up to this ambition, we seized the set up to help develop CO2 reduction employees’ business flights. opportunity to participate in the very projects and issue the resulting offsets to first marketplace for sellers and buyers its investors. We chose the Community In 2019, Swiss Re committed to achieve of carbon removal certificates – the Development Carbon Fund (CDCF) run net-zero emissions in our own operations Finnish start-up Puro (puro.earth/). In by the World Bank, as it was the first fund by 2030 (for details, see page 60). This their inaugural auction held in May 2019, designed not only to generate emission major new commitment requires us to Swiss Re secured a first batch of 100 reductions, but also community benefits move away from conventional carbon carbon removal certificates generated by through the projects it finances: access offsets, where we pay others to avoid a biochar project in Tampere. Biochar locks to clean water, improved health conditions, their emissions in our place, as this type away the CO2 that plants have removed creation of jobs, women empowerment of compensation is not enough to reach from the air to grow their biomass. Mixed and more. net-zero emissions. Instead, unavoided with soil, biochar endures for hundreds of emissions need to be compensated years and improves soil quality by retaining By 2008, carbon offset markets had through carbon removal (see illustration moisture and nutrients. matured to the point where we were able below). to buy enough offsets to compensate all our outstanding emissions back to 2003. Net-zero emissions is the thought-leading Over time, labels and standards had concept of today. Yet the carbon removal emerged that guaranteed the quality of industry, let alone a fully fledged market

Post 2020: compensation through carbon removal in line with net-zero

2 tonnes 1 tonne of CO 1 tonne 1 tonne 1 tonne 1 tonne 1 tonne of CO emitted of CO of CO emitted of CO avoided of CO of CO emitted + = emitted + = emitted emitted = elsewhere elsewhere net-zero CO

1 tonne Prior to 2003: no emissions 2003–2020: compensation through of CO compensation strategy in place conventional carbon oﬀsetting + removed

relationships with external service providers requirements as part of the overall evaluation they cover cleaning services and agents, under the headings of human rights, labour process. We take a fresh look at existing refrigerant agents and building materials. conditions, environmental impacts and strategic suppliers in our periodic contract anti-corruption. reviews and visit individual suppliers In 2016, we signed up for EcoVadis to inspect them onsite. Internally, we hold (www.ecovadis.com), a collaborative The procurement of all goods and services regular awareness trainings with our platform for sustainable supply chain from external vendors is conducted in sourcing staff. management, which covers a wide range accordance with our Group Sourcing of screening criteria across the topics Standard, which also incorporates these For some sourcing categories, we have also of environmental impacts, human rights, headings from the UN Global Compact. developed Minimum Standards that further labour practices, ethics and sustainable When selecting new products and suppliers, specify our requirements. Besides power procurement. This allows us to assess the we examine whether they comply with these (see page 59) and paper (see page 61), sustainability performance of our suppliers

62 Swiss Re | 2019 Sustainability Report Biochar production is a promising method to remove CO2 from the atmosphere. Mixed with soil, biochar particles endure for centuries and improve plant growth by retaining moisture and nutrients.

more systematically with the help of key aware of climate change. The programme recent years. Many new employees there performance indicators and to engage them offers subsidies for a range of investments have made use of the opportunity to claim in improvements. It also helps us reduce through which our employees can reduce subsidies, eg for highly energy-efficient and manage potential sustainability risks their private carbon footprints. To our fridges and washing machines as well as in our supply chain. knowledge, it was the first global corporate bicycles for their daily commute to work. initiative of its kind at the time. In Europe, in general, mobility remains a For our tier 1 and tier 2 vendors (who popular category, with bicycles the most account for approximately 80% of our The investment options we offer for subsidies common type of subsidy. outsourced spending), we have set ourselves are clearly specified in the programme. the goal of having all of them ESG-assessed Some of them are supported at all our In our Asian locations, energy-efficient home by the end of 2020. At the end of 2019, locations, while others vary to account for appliances were particularly popular. In the the assessment had been completed for regional differences in climate, living Americas region, both home appliances and approximately 35% of these vendors. conditions etc. Our subsidies cover 50% home infrastructure subsidies were sought- In addition, due to expired scorecards we of the investment amount up to a locally after subsidy categories. had to re-assess approximately 50% of our determined maximum allowance. assessed tier 1 and tier 2 vendors during All regular employees are entitled to apply 2019. and new employees can submit subsidy requests after three months following their From 2020 we will take a multi-layered and hire start date. integrated approach to sustainable supply chain management, using various solutions In 2019, we granted a total of 3 436 to assess and screen suppliers and supply subsidies spread across three product networks against sustainability criteria. categories: home appliances, home infrastructure and mobility. Over the past six years, electricity-powered mobility The COyou2 Programme has become more prominent, with 1 000 subsidies for e-bikes, e-motorbikes, Reducing our own carbon footprint is an e-cars and plug-in hybrid electric cars. important part of our efforts to tackle climate change. In 2007, we launched the COyou2 Among the larger Swiss Re locations, 3 4 36 Programme because we wanted to make uptakes per employee were highest in COyou2 subsidies granted to our our commitment more tangible for our Slovakia and India. Our office in Slovakia employees in 2019 employees and help them become more has witnessed particularly strong growth in (2 924 in 2018)

Swiss Re | 2019 Sustainability Report 63 Engaging our people

We are an organisation where diverse talents come together globally to apply fresh perspectives and knowledge to make the world more resilient.

64 Swiss Re | 2019 Sustainability Report Our vision is to offer our employees Employee data, Swiss Re Group meaningful work with a clear purpose in an Change in % attractive, flexible and inclusive work 2017 2018 2019 2018–2019 environment where everyone can contribute. Headcount Our organisation is constantly looking for Regular employees 14 485 14 943 15 4 01 +3.1 new ways to improve the wellbeing of EMEA total 8 630 9 099 9 5 6 5 +5.1 society and prepare for the changing needs Switzerland 3 369 3 303 3 274 –0.9 of the future, drawing on the know-how and Slovakia 1 337 1 537 1 651 +7.4 experience of a diverse, multigenerational EMEA (without Switzerland/Slovakia) 3 924 4 259 4 640 +8.9 group of employees. We look to collaborate in the spirit of “Let’s be smarter together”, Americas total 3 740 3 624 3 418 –5.7 convinced that only by doing this we can Asia-Pacific total 2 115 2 220 2 418 +8.9 maximise our full potential. We are India 983 1 088 1 224 +12.5 passionate about building an environment Asia-Pacific (without India) 1 132 1 132 1 19 4 +5.5 of trust, respect, collaboration and Temporary employees 355 252 297 +17.6 responsibility, in which how we achieve Attrition rate 7.2% 7.6% 8.6% results is every bit as important as what EMEA total 7.4% 7.5% 8.6% we achieve. Switzerland 4.7% 6.0% 5.7% Slovakia 13.3% 12.1% 12.1% Swiss Re is a global company with a EMEA (without Switzerland/Slovakia) 7.8% 7.1% 9.5% presence in all major markets and more than 30 countries. As of 31 December Americas total 4.5% 6.0% 7.4% 2019, we employed 15 401 people (regular Asia-Pacific total 11.3% 10.4% 10.6% staff) from 115 nationalities, equalling India 12.9% 11.0% 13.0% 14 737 full-time equivalents. 62.1% work in Asia-Pacific (without India) 10.1% 9.9% 8.3% Europe, the Middle East and Africa (EMEA), 22.2% in the Americas and 15.7% in the Average tenure regular staff (in years) 7.1 7.3 7.2 Asia-Pacific (APAC) region. EMEA total 7.6 7.5 7.5 Switzerland 9.4 9.8 9.9 This represents growth of 3% compared to Slovakia 3.5 3.6 4.0 2018, mainly in the EMEA and APAC regions, EMEA (without Switzerland/Slovakia) 7.3 7.2 7.0 and a reduction in the Americas. It is in line with the evolution of our business and our Americas total 7.6 8.0 8.3 focus on growth in new markets. The fastest Asia-Pacific total 4.7 4.9 4.9 growing locations are our shared service India 4.0 4.1 4.1 centres in Bratislava, Slovakia and Bangalore, Asia-Pacific (without India) 5.3 5.7 5.8 India, which provide us with access to new talent pools.

We have seen an increase in voluntary Website attrition in the last few years and witness higher attrition rates in markets such as You can learn more about working Bangalore and Bratislava where generation Y at Swiss Re at: employees represent 86.7% and 84.7% of www.swissre.com/about-us/diversity- the workforce, respectively. The average inclusion-in-Swiss-Re/our-people.html tenure of Swiss Re employees remains high at slightly more than seven years, testament Website to the engaging and fulfilling work environment we seek to offer. (For detailed You can learn more about job geographical data on attrition rate and opportunities at Swiss Re at: tenure, see table to the right.) careers.swissre.com/

Swiss Re | 2019 Sustainability Report 65 Engaging our people

The Swiss Re employee • Build for the future: At Swiss Re, we In addition, we regularly review and adapt experience embrace and build a diverse workforce our leadership development programmes. that brings together the best of multiple In 2019, we put a special focus on Swiss Re has a clear People Strategy that generations, cultures, skill sets and embracing agility. The goal is to equip our sets out what we want to achieve in order thinking. Our aim is for our employees to leaders at all levels to cope with challenges to create an environment that enables each live a flexible, inclusive and open culture such as creating joint movement amongst of our employees to give their personal where all perspectives are valued. We employees, responding faster to business best. We regard our People Strategy as our create meaning for our employees by changes and empowering everybody to “North Star”: It provides us with clarity and connecting our work to the core purpose take a leadership role. direction, it is embedded in everything we of our company: to make the world do and defines our ambition for the future more resilient. For senior leaders, we launched the new of Swiss Re. CEO-sponsored Pathfinder Experience Swiss Re is committed to collecting and Programme to build a community of change The strategy has four core themes: responding to employee feedback, as it catalysts who will reinforce the agile, • Lead and develop: We aim to be known helps us understand where we are on the forward-looking principles described above. in the market for both our technical journey to bring our People Strategy with its We also developed the Explorer Programme expertise and our leadership capabilities. four core themes to life. This is one way in for our leadership talents, which enables Our employees inspire and engage which we measure progress, but we also them to take on additional leadership each other across all levels through use a set of key performance indicators responsibilities and to lead in an ambiguous honest, constructive and timely dialogue to provide us with a comprehensive picture. and dynamic environment. and feedback. We invest in the career development of our people, which we Below we describe key actions we took Developing our employees see as a shared responsibility, with leaders in 2019 across these four core themes. In a world where the ability to learn and investing their time and resources and adapt quickly is increasingly crucial, the employees taking ownership to drive effective development of our people is key their development. Lead and develop for our enduring success. • Empower and collaborate: We empower and enable our people to make decisions In our People Strategy, we put a strong focus We firmly believe in the 70/20/10 approach and drive performance, while at the on developing our leaders, our leadership to learning. It advocates a blended approach same time ensuring that we maintain an pipeline and our employees at all levels. to learning, consisting of actions that reflect appropriate risk culture. We encourage In addition, we offer various programmes “on-the-job experiences”, eg rotations all employees to work together and to young adults moving into the workforce, and stretch assignments (70%), “learning collaborate across organisational and the most prominent being our award- from others”, eg mentoring and coaching geographical boundaries for the wider winning graduates@swissre programme. (20%) and structured learning (10%). benefit of Swiss Re. • Drive the business: We want our Investing in our leadership and In 2019, we introduced our new learning employees to operate with a truly a strong pipeline experience platform called LearningOne. commercial mind-set and a clear sense The Swiss Re employee experience is very It is a one-stop shop aimed at making the of accountability. They should all take much dependent on our leaders. They serve learning experience more effortless for all accountability proactively and hold each as role models and play an important role in our employees, by enabling them to easily other responsible for performance in the growth and development of our people access all the learning offerings they require. terms of both results and behaviour. whilst being focused on delivering results. It finds the required content wherever it is We ensure reward is fair and competitive, We recognise that being a good leader is hosted – inside or outside the company – although this should not be the main not easy. We therefore strengthen the while artificial intelligence personalises the reason why people want to work for leadership capabilities of our line managers learning offering for every individual. This our company. and prepare them to meet the challenges of supports the democratisation of learning a rapidly changing work environment. We because experts working for our company do this through targeted skills programmes can now share their learning quickly and that strengthen our leaders’ skills both in widely and be credited for their contributions. people and general management. All this is helping us in our journey to become more agile.

Classroom and inhouse eLearning data, Swiss Re Group 2017 2018* 2019

Total learning hours 234 609 165 4 40 174 4 2 0 Learning hours per employee 15.0 11.0 10.8 Learning costs per employee (in USD) 785 513 434 * In 2018 we began changing Swiss Re’s learning landscape with LearningOne, adopting a new learning philosophy that gives our employees access to bite-sized learning nuggets at their personal convenience. We no longer track these learning hours, which explains the significant drop from 2017 to 2018.

66 Swiss Re | 2019 Sustainability Report In 2019, our Global Business Solution Centre Bangalore was recognised for “Excellence NASSCOM award for “Excellence in in Learning & Skills Development” at the Learning & Skills Development” in India NASSCOM Global Capability Centres Conclave.

With more than 1100 employees, largely and job movements across regions leading academic institutions such millennials, our Bangalore team has and functions. Our ambition to truly live as the National Insurance Academy adopted a holistic approach to continuous “diversity and inclusion” has translated (niapune.org.in/) in Pune and learning, while putting a special focus into offerings such as gender intelligence BIMTECH – Birla Institute of Management on early leadership development workshops, female mentorship Technology (www.bimtech.ac.in/) in initiatives, including a social responsibility programmes and LGBTI+ integration. Noida. Through these partnerships, programme. Ensuring that all its we also get an opportunity to shape and employees understand Swiss Re’s value In a bid to tap into the best re/insurance build the academic curricula, as well as chain and helping them to be “future talent in the country, Swiss Re Bangalore raise awareness of the talent potential ready” has been enabled through different has signed Memorandums of in re/insurance. trainings and by encouraging job rotations Understanding with some of India’s

Through the introduction of LearningOne, Our innovative approach to learning has we have reduced classroom training (see been recognised externally through multiple table to the left), but continue to offer awards. We are especially proud of the courses on topics where the focus is more NASSCOM award we received in India, on practising than on knowledge transfer. one of our fastest growing locations where These topics include sales, negotiation and learning is crucial to our success (see above). presentation skills, emotional intelligence NASSCOM (www.nasscom.in/) is the and interpersonal effectiveness, change premier trade body and chamber of management and leadership skills. commerce of the tech industry in India and comprises over 2800 member companies, including Indian as well as multinational organisations with a presence in India.

Swiss Re | 2019 Sustainability Report 67 Engaging our people

Our graduates@swissre programme offers university graduates from across the globe the opportunity to discover the exciting world of a leading global re/insurer. In 2019, the programme won an award from TheJobCrowd for the fourth year in a row.

Award from TheJobCrowd – for the fourth year in a row

In 2019, our graduates@swissre To determine the ranking, our graduates you rate the work/life balance, training programme again won an award from were asked to complete a survey about and ethical/environmental balance? TheJobCrowd (www.thejobcrowd.com), working for Swiss Re. The survey included The results from our graduates were with first place in the Banking & Finance questions such as: What are the best overwhelmingly positive. category. TheJobCrowd is a popular job things about your company? What review website for graduates in the UK. attracted you to the company? How do

Engaging the next generation: more on-the-job learning. These training graduates@swissre sessions are specifically designed for the Website Every year, our award-winning graduates@ programme and focus on Swiss Re’s core You can learn more about the swissre programme provides entry positions business areas. The programme was graduates@swissre programme at: for university graduates and offers an first launched in 2007, and we still have careers.swissre.com/go/ excellent opportunity for young talents to 380 graduates working for Swiss Re from Careerstarters/2744101/ discover the exciting world of a leading this 12-year period. global re/insurer. Our graduates recognise our strong focus on Over a period of 18 months, the graduates their development, which helped us win an receive on-the-job training in their respective award from TheJobCrowd for the fourth year functions. We have recently introduced a in a row (see above). modern learning experience and encourage

68 Swiss Re | 2019 Sustainability Report Empower and collaborate Drive the business For most employees, total compensation comprises base salary and the Annual We empower and enable our people to make Our employees work hard to fulfil our vision Performance Incentive (API), which is linked decisions and drive performance. In a global of making the world more resilient, and we to both individual and company company such as Swiss Re, employees need hold each other accountable for performance performance. to collaborate across the organisation and in this context. The way we have evolved different geographies. In this context, our our approach to managing performance Swiss Re has several incentive programmes employees tell us that our Own the Way and, consequently, reward our people that reflect the long-term nature of our You Work programme makes a noticeable supports this. business: both the Value Alignment Incentive difference. We also have high hopes that Plan (VAI), as the deferred part of the API, applying agile methods will further improve Managing performance and the Leadership Performance Plan (LPP) the way we can empower our people and Our performance management approach aim to reward sustained business enable them to collaborate even more. supports our aim for a high-performance performance rather than short-term results. culture in which our individual and team This helps align shareholder and employee Owning the way we work goals, as well as behaviours, are aligned to interests more closely. The VAI applies to Our trademarked programme Own the Way our firm’s purpose and business strategy. We employees who have a total API in excess You Work is a cultural initiative which gives want our employees to reach their potential of a defined threshold, and the LPP is our managers and employees autonomy to and be fully supported in their work, which awarded to our senior management and decide how, when and where they carry also links back to our approach to learning select key employees. out work, in compliance with the applicable (see section “Lead and develop”). laws, rules and regulations of their particular We also encourage our employees to own region. Coupled with cutting-edge Our Leadership Imperatives are fully Swiss Re shares by providing opportunities technology and flexible workplace solutions, embedded in our performance management to participate directly in the long-term the programme shapes an ambitious and approach, focusing both on what people success of the Group through the Global creative company culture, where everyone achieve and how they achieve their goals. Share Participation Plan. can perform at their best. Including these behaviours in performance and feedback discussions allows for robust, The balanced compensation package is Experimenting with agile methods forward-looking conversations, better generally complemented by competitive Swiss Re has been an early mover with performance differentiation and transparent pension plans and other employee benefits. regard to agile working methods and created pay-for-performance. Such benefits include, for example, the cross-functional teams by market and for key Continuous Contribution Award, which clients many years ago, bringing together Following the encouraging results from the recognises the loyalty, commitment and roles like client management, underwriting, Performance Management Pilots conducted continuous contribution of our employees claims handling and technical accounting to over two years with over 2 000 employees, by offering them opportunities at defined deliver value to our clients as one. Recently, we are now moving ahead with Continuous milestones to enjoy additional paid time-off. further units have started to implement agile Performance Management, which will Health benefits and financial protection in organisational structures, removing remove year-end ratings and focus on the case of ill health are a further important traditional hierarchies and experimenting qualitative aspects of performance part of many of our packages. We provide with agile methods (eg Scrum). We expect management. We are committed to making medical, life and disability insurance in these units to have a role model effect Swiss Re a more commercial, nimble and excess of state provisions in most locations. for others. agile company by enabling our employees Furthermore, we support employees to adapt quickly and smartly to changing in accumulating retirement benefits to business needs. supplement any state provisions.

Together, we are moving Swiss Re towards In addition, the COyou2 Programme has a culture of continuous performance continued to offer our employees subsidies dialogue by placing more emphasis on for a range of climate-friendly investments frequent conversations between employees they want to make in their private lives and their managers that provide forward- (see page 63). Website looking, ongoing and timely feedback. Further information on Swiss Re’s approach You can find out more about our Own Rewarding our people to compensation and benefits can be the Way You Work programme at: Our compensation framework is designed found in our 2019 Financial Report (pages www.swissre.com/about-us/diversity- to attract, motivate and retain the qualified 120–149). inclusion-in-Swiss-Re/own-the-way- talent the Group needs to succeed globally you-work.html and to create a tangible link between performance and pay. The aim is to provide compensation that is competitive in local Content in the 2019 Financial Report labour markets and to ensure that our Further information on Swiss Re’s approach employees focus on delivering outstanding to compensation can be found in our 2019 results while supporting appropriate and Financial Report (pages 120–149). controlled risk-taking.

Swiss Re | 2019 Sustainability Report 69 Engaging our people

Build for the future Our global Together with Pride employee network comprises over 1 000 allies and At Swiss Re, we embrace and build a diverse LGBTI+ employees and has active local workforce that brings together the best of chapters in Australia, Brazil, Canada, multiple generations, cultures, skill sets and Germany, India, Mexico, Slovakia, thinking. We can only unleash the motivation Switzerland, the UK and the US. To honour and creativity of our employees if they can Pride Month, we decorated our buildings in all be who they are and feel included. An different locations with rainbow colours to inclusive culture is key to our business show our support for the LGBTI+ community. success: in today’s fast-changing world we can only thrive with a culture that celebrates In the US, the new employee resource diverse teams, encourages fresh perspectives group Mosaic was launched to promote an and fosters innovative thinking to create inclusive environment for people of colour, smarter solutions for our clients. A with the aim of enhancing their professional commitment to inclusiveness is therefore and personal development. Nearly 500 fundamental to our organisational colleagues across the Americas joined the performance and to reaching the goals event virtually and in-person to engage on set out in our People Strategy. Throughout the topic of allyship as a driver of inclusion. the year, we continued with several inclusion initiatives. Achieving gender equality at Swiss Re At Swiss Re, we believe that increasing Promoting an inclusive culture gender balance in leadership is a strategic We know that our employees’ lives and imperative critical to our future business experiences are unique, and we believe in success. Swiss Re is a signatory to the UN championing that uniqueness. Uniqueness Global Compact and deeply committed to in leadership and in thought – in fact, in the UN Sustainable Development Goal #5: every way we work together and live our “To achieve gender equality and empower all values. A key aspect of our People Strategy women and girls”. We are proud to have is to prevent stereotyping of individuals been included in the Bloomberg Gender- based on any dimension of diversity. Equality Index (GEI, www.bloomberg.com/ The philosophy of managing and attracting gei) for the second year in a row, an diverse talent is fully embedded in our achievement which underscores our strong development offering for managers. commitment to gender-related topics and an inclusive work environment. Swiss Re is committed to provide an equal and safe work environment for LGBTI+ We recognise that women continue to be (lesbian, gay, bisexual, transgender, intersex) underrepresented at executive/senior employees, and is a signatory to the United management levels, as shown in the table Nation’s Free & Equal Standards of Conduct below. The figures have been improving to tackle discrimination against LGBTI+ but not as fast as we had hoped. Our Group people. In the last two years, we have Executive Committee (Group EC) members equalised our leave (parental & bereavement), are committed to driving this change, and gift and insured (medical, death & critical closely monitor the talent flows in their illness) benefits for our employees and their respective units and locations to actively partners: all of these benefits now extend improve the situation. to LGBTI+ partners as well as unmarried heterosexual partners across our locations globally – for the few locations where a significant cultural or legal barrier still exists, we continue to work on solutions. Website

You can find out more about our efforts to foster an inclusive culture at: www.swissre.com/about-us/diversity- inclusion-in-Swiss-Re/inclusive-culture. Women in management positions, Swiss Re Group (in %) html 2017 2018 2019

Website Total workforce 47.3 47.9 48.4

You can find out more about our efforts Executive/senior management positions* 23.3 24.5 26.7 to improve gender balance at: All management positions** 33.3 34.2 35.4 www.swissre.com/about-us/diversity- *”Executive/senior management positions“ comprises the management levels of Director/Senior Vice President upwards. inclusion-in-Swiss-Re/gender-balance. **”All management positions“ refers to Vice President and above. html

70 Swiss Re | 2019 Sustainability Report We are also focused on increasing the Listening to our employees number of women who join Swiss Re at all levels, ensuring diverse candidate slates We foster a culture of open dialogue and as well as diverse selection panels. frequent feedback at all levels, where “Gender Promotion Ratio” is a key internal employees and managers engage in regular, performance metric for each of our Group EC personal exchange. In particular, we want to members: It compares the ratio of female assess our progress in fostering an engaging promotions into middle management and work environment and an agile, commercial above with the ratio of women in the “donor culture, which are both key to our present pool”. Whilst we are doing well here, and future success. we recognise the need to do more overall to address imbalances in the gender For the past five years, we sought feedback composition of our workforce. from all our employees in a more formal manner through an annual Employee Our global Female Sponsorship Initiative Engagement Survey (EES), run by our started in 2017 and came to a successful external provider Aon, now known as close in March 2019 with very encouraging Kincentric (www.kincentric.com/). Besides results. In that, we identified a pool of helping to foster an open culture, it has also sponsors and sponsorees and paired them enabled us to measure progress against for an engagement that lasted 18–24 the objectives of our People Strategy. months, with the aim of preparing the sponsorees for leadership positions and A key feedback received from our line strengthening our female talent pipeline. managers, which is supported by external We are committed to following up on the trends, is the need to become more flexible career steps of these women as part of our in our survey approach. Acting on this, we overall talent pipeline and on integrating have shifted from an annual survey to a pulse the concept of sponsorship into our talent check approach: shorter, more regular and development programmes. lighter surveys on themes important to evolve our organisation. This also enables us to act more quickly on the results and take targeted actions.

Swiss Re | 2019 Sustainability Report 71 Engaging our people

The first of these pulses carried out early in Employee relations 2019 focused on the topics of engagement and agility, while also measuring progress Many of our locations have active employee on specific priorities such as talent, pay and groups. These employee representatives leaders creating excitement for the future. play an important part in the company’s success by contributing valuable perspectives As with our annual surveys in previous years, and by helping us identify employment- we experienced high response rates for our related challenges. We support and pulses: 80% in May and 69% in November. appreciate the cooperation with these groups. Our Group Employee Engagement score established in the May pulse was 64%, These bodies are elected by local employees 2 percentage points lower than in 2018 and have clearly defined information and and slightly below Aon’s GlobalFinance & consultation rights. Although there are Insurance industry average. The Engagement significant local differences in the applicable score is calculated based on how employees legislation, their rights typically concern: speak about their organisation, on their working conditions, benefits, reorganisation desire to work for it and their motivation and restructuring, redundancies, disciplinary to contribute to business success. actions and conflict cases. We continue to compare our results with external benchmarks. At our Zurich headquarters, where almost a quarter of our total workforce is employed, One question was whether our employees we work closely with the Personnel have plenty of good things to say about Committee (PECO). Representing the Swiss Re, another whether they recommend interests of our Swiss-based employees, Swiss Re as an employer. We are pleased PECO aims to create and maintain a positive that both questions scored excellent results: working environment. It is involved in 72% (2 percentage points higer than in changes or adaptations to the General 2018) and 74% (1 percentage point higher), Working Conditions or other important respectively. policies, such as the Social Plan. PECO also seeks to ensure the de-facto equality of men Given our desire to build a more agile culture, and women, and places special emphasis we place special emphasis on measuring on the challenges faced by employees with our progress in this respect. One of family obligations. Swiss Re’s biggest strengths has been reconfirmed by our employees – that we In the UK, similar activities are conducted by have an environment that is open to and the Employee Liaison Group (ELG), and at our inclusive of individual differences (68%). Munich office we have a works council with We also continue to focus on speed as clearly defined codetermination rights in an opportunity. When, in November, several areas. Other offices in Europe (eg in we checked the pulse on whether our France, Italy, Luxembourg and Denmark) employees are experiencing progress on also have works councils or staff delegates, agility, 59% of them responded positively, depending on the size of the branch and which is encouraging. local regulations.

Website

You can learn more about the Swiss Re Alumni Network at: www.swissre.com/about-us/sr-alumni- network.html

72 Swiss Re | 2019 Sustainability Report Caring for the wellbeing of our Being a parent at Swiss Re employees At Swiss Re, we understand that having children and bringing them up is a source of We appreciate that today’s fast-moving and great joy and that one’s life takes on a new demanding work environment can pose quality that shapes day-to-day routines. We challenges to the health of our employees want to help our employees balance their and we do our best to provide them with career and family responsibilities, allowing support. In our efforts, we consider a healthy them to always put their families first. To this mind to be as important as a healthy body. effect, we offer a range of programmes and We offer free, locally available Employee support services. Assistance Programmes, through which our employees can get confidential, impartial In general, our employees can count on and professional assistance on issues of a diverse options, such as additional family personal or work-related nature. To help our allowance, one-off childbirth allowance, people stay physically fit, we provide onsite additional paid maternity and paternity leave, fitness centres and classes, for instance in or the option to take unpaid leave. These Switzerland and Bangalore. benefits are tailored to the local needs of our workforce and therefore differ from region Pathways, our mental health network, has to region. the mission of allowing employees to bring their whole selves to work, to allow them In Switzerland, for instance, we have to feel accepted and included and to reduce extended our parental leave regulations the stigma potentially surrounding mental and now offer our fathers and secondary health issues. Since 2017 the network carers the possibility to extend their leave has been instrumental in raising awareness by up to six weeks to a total of eight weeks, and a better understanding by creating a made possible by a 50/50 cost-sharing network of mental health champions and arrangement between employees and organising first aid trainings, lunch & learns, Swiss Re. talks and educational videos available to all. A few highlights from 2019 activities In Bratislava – one of our high growth include: a mental health TEDx co-organised locations – we have honoured the concept by Swiss Re in Bangalore; a session on of “maternity buddies” since 2015: Every mental health awareness and stress at work mother on maternity leave has a maternity in Armonk; a mental health awareness buddy who informs her about current week in Folkestone and London; stress activities in the team, news concerning the management seminars in Bratislava; and organisation as well as open positions to mindfulness practice sessions in Zurich. encourage their return. To enable parents to concentrate on challenges at work – We monitor absences due to illness (see knowing that their children are in good table below showing sick leave days in hands and being properly cared for – we Switzerland, Slovakia and India over the last started partnering with the TwinCity three years) and respond to negative trends Kindergarten, a day care provider located when they occur. in the same premises as Swiss Re.

Employee health data: Sick leave data for Switzerland, Slovakia and India, regular staff*

Country Measurement 2017 2018 2019 India Average number of sick days per head 8.9 8.8 8.7 Average number of active employees 935 1 039 1 181 Number of employees who have recorded absence due to illness 999 1 094 1 2 61 Slovakia Average number of sick days per head 5.3 5.2 5.6 Average number of active employees 1 116 1 276 1 4 31 Number of employees who have recorded absence due to illness 958 1 110 1 2 9 5 Switzerland Average number of sick days per head 4.4 4.7 4.2 Average number of active employees 3 348 3 239 3 16 5 Number of employees who have recorded

absence due to illness 1 881 1 834 1 8 2 4

* excludes staff of subsidiaries

Swiss Re | 2019 Sustainability Report 73 Ensuring good corporate governance and compliance

Environmental, social and governance (ESG) issues have grown in importance and become the key focus areas in Europe, the US and other jurisdictions.

74 Swiss Re | 2019 Sustainability Report Corporate governance disclosures in particular. Companies are Corporate governance framework increasingly asked about their approach Swiss Re’s corporate governance framework Environmental, social and governance (ESG) to sustainability and corporate social ensures sustainability, fosters transparency issues dominated the corporate governance responsibility. They recognise that a good and a quality assessment of the Swiss Re discussions in key jurisdictions during 2019. reputation, including an elaborated response Group’s organisation and business. There is an understanding that corporate to ESG matters, can be a strategic asset. actions do not take place in a vacuum, but A failure to respond appropriately to ESG The Board of Directors has the ultimate within a dynamic landscape of evolving ESG issues can be a long-term and strategic responsibility for the success of Swiss Re Ltd issues and risks. ESG issues are linked to a risk. Employees, in particular millennials, (SRL) and the Swiss Re Group within a variety of areas, for which the boards already contribute to the focus on ESG issues as framework of effective and prudent controls. have oversight, therefore they cannot be they expect their companies to reflect their It is responsible for the overall direction, viewed in isolation. It is not surprising that values. Finally, investors are also increasingly supervision and control of SRL and the many of the main corporate governance focusing on ESG issues. Swiss Re Group and of the Group Executive trends in 2019 such as diversity, scrutiny of Committee (Group EC) as well as for executive remuneration and workforce and In our Sustainability Report, we provide supervising compliance with applicable stakeholder engagement are to some extent a short overview on Swiss Re’s corporate laws, rules and regulations. Such related to the wider discussion around governance framework. For full details, responsibilities are non-transferable and rest ESG issues. please see our 2019 Financial Report, with the entire Board. At least three-quarters pages 80–117. of the members of the Board of Directors We expect the ESG trend to intensify further must be independent members. SRL defines over the next few years. One reason for the independence in line with best-practice increased focus on ESG issues is the greater corporate governance standards. The Board transparency with respect to corporate of Directors has delegated the management reporting in general and with respect to ESG of SRL and the Swiss Re Group to the Group EC.

Content in the 2019 Financial Report

Comprehensive information on Swiss Re’s corporate governance is available on pages 80–117.

Swiss Re | 2019 Sustainability Report 75 Ensuring good corporate governance and compliance

Swiss Re’s Code of Conduct provides key Compliance: Code of Conduct Our Code of Conduct principles that guide Swiss Re in making responsible decisions and achieving results Our Code of Conduct (Code) is one of the files.swissre.com/ using the highest ethical standards (see key documents governing the management codeofconduct/index.html section "Compliance: Code of Conduct" to of risks and driving the culture within our the right). company. It sets the framework and defines

the basic compliance and integrity principles Code of Conduct Swiss Re’s Corporate Governance Guidelines we adhere to globally. The Code is built on Our Company. Our Code. provide Swiss Re’s harmonised governance the five Swiss Re values, which guide us in principles and standards ensuring a making responsible decisions and achieving consistent and tailored corporate governance results using the highest ethical standards: approach across the Swiss Re Group. integrity, team spirit, passion to perform, agility and client centricity. The Articles of Association define the legal and organisational framework of SRL as the The Code also offers practical guidance Group’s holding company. The Bylaws define and examples for deciding the appropriate the governance framework of SRL and the course of action and solving ethical Group, including the responsibilities and dilemmas. It further sets out how all authorities of the Board of Directors, employees should react when they observe Chairman, Vice Chairman, Lead Independent a possible breach of the principles in the compliance risks across Swiss Re. In Director, Board committees, Group EC, Code. All employees are obligated to uphold 2019, we implemented new data analytics Group CEO and of the other individual Group both the letter and spirit of the Code, technology to set the foundation for EC members including the Regional policies, standards and the Group’s continuous monitoring and will continue Presidents, as well as the relevant reporting corporate governance principles in their to further develop and roll out our continuous procedures. The Board Committee Charters daily business activities, and to respect monitoring capabilities in 2020. outline the duties and responsibilities of and obey applicable laws and regulations the six Board Committees: Chairman’s and in all jurisdictions where we do business. Policies Governance Committee, Nomination Our Code addresses the following key Committee, Compensation Committee, compliance topics under two headings, Audit Committee, Finance and Risk “Our responsibility towards one another and Committee and Investment Committee. Swiss Re” and “Our responsibility towards By adhering to the our business partners and society”: highest standards, we ensure behaviour Our responsibility towards one across the Group that another and Swiss Re • Business information and information is compliant and technology demonstrates integrity. • Communication • Conflicts of interest • Diversity & inclusion and fair We regularly review and update the Code to and equal treatment reflect changes in regulations and principles. • Fraud The Code was overhauled in 2016 to include • Health, safety and security real-life examples and clearer guidance for • Intellectual property day-to-day business situations. In 2019, updates were made to the Code, among Our responsibility towards our others to reflect Swiss Re’s commitment to business partners and society deliver products and services that create • Bribery and corruption long-term value. The Code is supported by • Data protection detailed policies and standards that • Inside information document Swiss Re’s requirements in line • Fair competition with applicable laws and regulations. It is • International trade controls and available to our employees in eight economic sanctions languages: English, French, German, Italian, • Licensing and permanent Japanese, Portuguese, Slovak and Spanish. establishment • Money laundering Assurance • Sustainability and human rights Assurance activities to monitor adherence to Website the Code are a core part of our Compliance You can learn more about our approach Programme. Compliance performs to compliance and integrity at: independent risk-based monitoring to ensure www.swissre.com/about-us/corporate- the adherence and the efficiency of governance/Compliance.html processes and controls mitigating our key

76 Swiss Re | 2019 Sustainability Report Below we present additional information Our Global Framework on Data Protection, Sustainability and human rights on some key topics in the Code: with a global policy and standard as well The Code includes our formal commitment as targeted standards, addresses our to sustainability and human rights, providing Bribery and corruption commitment to protecting personal data a guiding principle for our efforts to act as The Code addresses our position on bribery and respecting privacy rights across our a responsible company. and corruption. It clearly states that “we operations. We use internationally conduct business fairly without accepting recognised data protection and privacy Whistleblowing or offering benefits intended to improperly principles that ensure compliance with a Swiss Re is strongly committed to influence decision-making”. complex and constantly changing set of maintaining a culture in which employees laws and regulations, and we provide proper feel free to voice their concerns and report Our Global Framework on Anti-Bribery and training and awareness sessions to our suspected misconduct. Accordingly, Corruption, supported by a Global Policy employees. Procedures for reporting security Swiss Re explicitly prohibits any retaliatory on Financial Crime and our Global Standard incidents and notifying on data breaches action against employees who report on Anti-Bribery and Corruption, emphasise are established. suspicions of misconduct in good faith and that bribery, facilitation payments and has implemented processes to support good hospitality where the giver is not present We also contribute thought leadership on faith reporting. are always prohibited, and provide guidance data protection by conducting expert on how to deal with public officials and on sessions during insurance industry events There are several ways in which alleged other procedures to be followed. Tools to and by hosting events through the Swiss Re violations of the Code can be reported, both support employees in carrying out their Institute that look at the future of regulations, by internal and external sources. For our anti-bribery responsibilities in accordance new technologies, digitalisation, cross- employees, the options are described in the with the framework are also in place. For border data processing, big data and Code and include an external, independently example, a gift and hospitality register exists innovation in life and health insurance. We operated whistleblowing hotline, which for employees through which they can offer additional information about our global can be used anonymously (where legally request approval for gifts, hospitality, data protection and privacy approach on permitted). Our whistleblowing hotline sponsorships, charitable and political our public website. is also available to externals via our public contributions above thresholds specified in website. The hotline includes translation the policy and standard. Money laundering services into numerous languages and is The Code draws attention to the risk of available globally. Our gift and hospitality threshold becoming involved in money laundering and requirements are set in the context of our emphasises the importance of due diligence. All investigations of alleged Code violations industry, regulatory requirements and risk involving either an employee or external exposure. In 2019, the Global Standard Our Global Framework on Anti-money contractor are handled by the Investigation was updated to apply stricter thresholds Laundering, supported by a Global Policy on Coordination Process (ICP). ICP, which is for hospitality, sponsorships and charitable Financial Crime and our Global Standard on managed by the Compliance function, contributions following the perfromance of Anti-money Laundering sets out in detail serves as a central coordinating unit across an industry benchmarking. Lower thresholds key requirements and guidance in relation all Swiss Re offices globally and ensures that applicable to public officials’ gifts & hospitality, to our anti-money laundering and counter- all investigations are handled in a consistent including donations, remained unchanged. terrorism financing efforts, including and fair manner. If, following an investigation, Also, in 2019, we released a new data due-diligence obligations concerning “know the allegations are substantiated, ICP will analytics dashboard built on Tableau to your counterparty”, counterparty and issue recommendations regarding any support assurance activities by improving politically exposed persons (PEP) screening, appropriate disciplinary or non-disciplinary monitoring capabilities of the framework. and the reporting of any suspicious activities. actions that should be taken. ICP also The dashboard provides an overview ensures that any such actions are applied of gift and hospitality register entries and In 2018, the Global Standard on Anti-money consistently across the Group. supplements other existing reports. Laundering was updated to align process requirements of the framework to Swiss Re’s Data protection business operating model. The Global We could not work successfully with our Framework on Anti-money Laundering business partners, clients and individual was updated to distinguish between key consumers around the world without requirements described in the Global maintaining their trust regarding the data Standard on Anti-money Laundering and they provide to us. The Code highlights that related processes described in the Global we need to handle personal data with the Anti-money Laundering Process Document. greatest care and use it only for legitimate Updates to anti-money laundering process business purposes. documents for specific business operating units were also performed to further support the framework.

Website

You can learn more about our global approach to data protection and privacy at: www.swissre.com/about-us/data- protection-brochure.html

Swiss Re | 2019 Sustainability Report 77 Ensuring good corporate governance and compliance

Misconduct cases are systemically cases involving external Fraud. In these Conduct and Global Compliance Policies and presented and discussed with executive cases rather than disciplinary action, other Standards which includes, for the avoidance management, as well as with legal entity forms of resolution are mandated such as: of doubt, responsibility for Conflict of Interest boards as part of the reports to board audit additional training activities or increased and Gift and Hospitality Register disclosures. committees. In 2019, ICP cases reflected supervision. the following indicators: • In each case, regardless of the outcome, In addition, we deliver mandatory global • 93 cases were investigated by ICP in we ensure that any lessons learned from eLearnings to remind and increase 2019, and 74 were closed. the investigation are communicated within understanding of our key compliance risks • Of the 74 cases closed in 2019, 64% were the Compliance function as well as to any and policy requirements. Last year, global substantiated and 36% were not relevant stakeholders. In addition, we eLearnings were delivered on Fraud substantiated. ensure that training and communications Awareness and Anti-money Laundering • The reporting intake methods for the ICP are updated, and controls and processes and Terrorist Financing. We also conducted cases that were investigated in 2019 are adapted as necessary. global eLearnings on the following were: through internal channels, including compliance risks over the period from reporting directly to Compliance, via line Training 2016 to 2019: managers and via Human Resources All new permanent and temporary • Anti-bribery and corruption (67%), from external sources (15%), the employees joining Swiss Re must undergo • Fair competition whistleblowing hotline (14%) and process mandatory eLearning training. In June 2019, • Conflicts of interest detection (4%). a new Compliance eLearning for all new • Licensing and permanent establishment • The categories of ICP cases investigated in employees was launched. The eLearning • Data protection 2019 included external Fraud (31%), focuses on the Code and additional ethical • International trade controls and economic Discrimination and Harassment (including behaviour in accordance with Swiss Re’s sanctions bullying) (20%), internal Fraud (15%), values. It also includes individual modules Insider Trading (accidental trading within a on the following compliance topics: In addition, local compliance officers close period) (11%) and various Other • Anti-bribery and corruption regularly provide needs-based training on Code of Conduct Violations (23%) – none • Anti-money laundering and terrorist compliance risks tailored to their respective of these other violations individually financing locations and/or areas of business. exceeded 10%. • Conflicts of interest • Of the 93 cases that were investigated, • Data protection Training on Code topics falling outside the 31% were due to the actions of external • Fraud Compliance mandate is managed similarly actors and 69% were due to the actions of • Fair competition by the responsible functional areas. internal personnel. • Insider trading • Disciplinary actions, including termination, • International trade controls and economic In 2017, we enhanced the mandatory written warnings, verbal warnings and sanctions training escalation process for all Group- performance rating adjustments, were • Licensing wide Compliance eLearnings to enable taken in 38% of substantiated cases. The timely completion of assignments. relatively low percentage of such actions Completion of the training is tracked and Employees not complying with their should not be taken as an indication of a instances of non-completion are escalated mandatory eLearning assignments on time weak Compliance culture. It is important to until resolution. without valid reasons are subject to potential note that each investigation is fact- and disciplinary action. For 2019, we achieved circumstance-specific. There are certain In March 2019, a new annual attestation 100% completion of all mandatory circumstances where disciplinary actions process was launched to all permanent and eLearning assignments including new hire are nearly always imposed, such as where temporary employees to acknowledge and refresher training. active employees are found to have personal accountability for complying with engaged in intentional misconduct. specific requirements related to the Code of Validity for third parties However, there are also circumstances Third parties representing Swiss Re – such where allegations would be considered as consultants, intermediaries, distributors substantiated but may not lead to and independent contractors – should be disciplinary action, such as cases involving carefully selected and need to comply with unintentional breaches, cases where the the Code and relevant policies. When we perpetrator(s) cannot be identified, and work with such third parties, we provide them with information about the relevant requirements and, in the event of any infringements, take appropriate action, up to and including terminating a contract.

Policy governance A Policy Management Tool serves as a central place for finding Swiss Re policies and standards. Eight Global Policies contain more detailed principles all employees have to be aware of, supporting the principles set out in the Code. Where necessary, underlying Global Standards are in place to provide additional detail on the specific requirements.

78 Swiss Re | 2019 Sustainability Report Providing transparency

On some specific topics, we provide transparency by publishing full policies or statements on our website.

Data Protection and Swiss Re Modern Privacy Compliance Slavery Act Transparency at Swiss Re Statement

www.swissre.com/about-us/data-protection- www.swissre.com/about-us/modern-slavery- brochure.html statement.html

Swiss Re Swiss Re’s Policy Tax Policy Engagement

www.swissre.com/sustainability/transparency/ www.swissre.com/about-us/tax-policy.html policy-engagement.html

Swiss Re | 2019 Sustainability Report 79 The Swiss Re Foundation

We want to build resilient societies.

Who we are Our ambition Our achievements 2019

The Swiss Re Foundation reflects Swiss Re’s 2019 was a year of transformation for the social and humanitarian values. Our vision Swiss Re Foundation, as we began to put is to help societies build capacity to mitigate our strategy for 2019–2021 to the test. WE health, environmental and economic risks, We strengthened our resilience-building KICKED OFF as well as to recover quickly from setbacks. in three areas, which are aligned with We do this in emerging countries and where Swiss Re’s 2030 Sustainability Ambitions: Swiss Re has office locations. natural hazards and climate risk 18 management, access to health and income PROJECTS Together with our partners we aim to opportunities, and innovation to build achieve measurable and sustainable societal resilience. To further reinforce impacts. We support them not only through our contribution, we phased out water as evidence-based grant funding, but also a focus area and will wind down the by giving them access to the broad ReSource Award programme in 2020. expertise of Swiss Re’s employees, allowing them to learn, prototype and scale effective Our 2019 activities focused on healthcare solutions. In this way, we strive to foster access. For example, we teamed up with resilient societies and support Swiss Re’s the digital health pioneer Living Goods 6 95 0 0 0 0 sustainability objectives. and dedicated our Entrepreneurs for TOTAL COMMITMENTS Resilience Award to digital innovations that IN CHF make healthcare more easily accessible to underserved communities. For the first time, we also supported a randomised controlled trial of the University of Zurich to inform our future activities: Researchers will test the impacts of a health insurance product designed for unprotected low- income families in Kenya. 1 7 6 9 At the Swiss Re Foundation we are able to SWISS RE VOLUNTEERS amplify our impact by inspiring Swiss Re’s employees to support our partners with their time and know-how. By participating in our skills-based volunteering initiatives and Community Days, they can experience resilience-building outside their daily Website business in hands-on situations.

You can find detailed information about the Swiss Re Foundation at: 17 859 www.swissrefoundation.org VOLUNTEERING HOURS

80 Swiss Re | 2019 Sustainability Report For the 2019 Swiss Re Foundation Entrepreneurs for Resilience Award, we chose Kenya-based CarePay as the winner. CarePay has developed a mobile wallet that lets people save, pay for and manage healthcare using a single app.

Foundation Report

The Swiss Re Foundation in 2019

The Swiss Re Foundation in 2019 Illness and disease are universal, whilst access Voices for to healthcare is not. The Swiss Re Foundation resilience is partnering with Living Goods, a pioneer in digital health solutions, to strengthen healthcare delivery in poor, rural areas of Kenya by recruiting and How we’re improving basic healthcare delivery with our partner Living Goods training community health workers who bring page 4 quality healthcare right to people’s doorsteps.

Swiss Re | 2019 Sustainability Report 81 Independent Assurance Report on the Swiss Re 2019 Sustainability Report

To the Executive Management of • The retirement of 76 340 tonnes of CO2e Inherent limitations Swiss Re Ltd, Zurich (Swiss Re) (CO2 equivalents) described on page 61 The accuracy and completeness of We have been engaged to perform a limited of the 2019 Sustainability Report. environmental indicators are subject to assurance engagement on the consolidated • The consolidated data and information inherent limitations given their nature CO2 emissions reporting and sustainability disclosed in the 2019 Financial Report in and methods for determining, calculating topics and sections disclosed with the sections “Climate-related financial and estimating such data. Our assurance the Swiss Re 2019 Sustainability Report disclosures (TCFD)” on page 152, “Climate report should therefore be read in connection (“2019 Sustainability Report”) as well governance” on page 153, “Climate with Swiss Re’s internal guidelines, with the Swiss Re 2019 Financial Report. strategy” on pages 154–161, “Climate definitions and procedures on the reporting risk management” on pages 162–163, of its sustainability performance. Scope and subject matter “Climate metrics and targets” on pages Our engagement focused on the following 164–167. Swiss Re’s responsibility data and information disclosed in The Executive Management of Swiss Re the 2019 Sustainability Report and Criteria is responsible for both the subject matter 2019 Financial Report of Swiss Re and The management reporting processes with and the criteria as well as for selection, its consolidated subsidiaries, for the respect to the sustainability reporting 2019 preparation and presentation of the selected financial year ended 31 December 2019: were assessed against the internal and information in accordance with the criteria. • The management and reporting processes external policies and procedures as set This responsibility includes the design, with respect to the consolidated forth in the following: implementation and maintenance of related sustainability reporting as well as the • “Internal Environmental Performance internal control relevant to the calculation control environment in relation to the Indicators for the Financial Industry” of the sustainability indicators that is free aggregation of data and information; published by the Verein für Umwelt- from material misstatement, whether due • The organizational measures and internal management in Banken, Sparkassen und to fraud or error. key controls in place at the corporate Versicherungen e.V. (VfU) published in level regarding aggregation of information 1997 and 2011; Our responsibility obtained from the subsidiaries and • “The Greenhouse Gas Protocol: Our responsibility is to express a limited reporting functions; A Corporate Accounting and Reporting assurance conclusion on the sustainability • The consolidated data and information Standard (Revised Edition)” published indicators based on the procedures we disclosed in the 2019 Sustainability in 2004 by the World Resources Institute have performed and the evidence we have Report in the sections “Creating solutions and the World Business Council for obtained. We conducted our limited for sustainability” on pages 22–31, Sustainable Development; assurance engagement in accordance with “Extending our risk intelligence” on pages • DEFRA Guidelines to DEFRA/DECC’s GHG the International Standard on Assurance 32–39, “Being a responsible investor” Conversion Factors for Company Engagements 3000 (revised), “Assurance on pages 40–47, “Engaging in dialogue Reporting. AEA for the Department of Engagements other than Audits or Reviews with our stakeholders” on pages 48–55, Energy and Climate Change (DECC) and of Historical Financial Information”, and, “Reducing our footprint” on pages 56–63, the Department for Environment, Food in respect of greenhouse gas emissions, “Engaging our people” on pages 64–73 and Rural Affairs (DEFRA); with the International Standard on and “Compliance: Code of Conduct” on • The framework document “Environmental Assurance Engagements 3410, “Assurance pages 76–78; Performance Indicators (EPI) Reporting Engagements on Greenhouse Gas • The consolidated CO2 emissions 2019 at Swiss Re”, version 1.1 from December Statements”, issued by the International (Scope 1, 2 and 3 in adherence with the 2015 including Annex; and Auditing and Assurance Standards Board. Greenhouse Gas Protocol) in the tables • The defined internal guidelines, by which These standards require that we plan and of the 2019 Sustainability Report entitled sustainability data and information perform this engagement to obtain limited “CO2 emissions per employee (full-time are internally gathered, collated and assurance about whether the identified equivalent, FTE), Swiss Re Group” on aggregated. sustainability indicators are free from material page 58, “Underlying environmental data, misstatement. Swiss Re Group” on page 58 and “Indirect emissions from purchased electricity, Swiss Re Group” on page 58 in the 2019 Sustainability Report covering the reporting period from 1 October 2018 to 30 September 2019;

82 Swiss Re | 2019 Sustainability Report A limited assurance engagement undertaken Summary of the work performed • Review of the documentation in accordance with ISAE 3000 (revised) Our assurance procedures included, Reviewing the relevant documentation and ISAE 3410 involves assessing the amongst others, the following work: on a sample basis, including Swiss Re’s suitability in the circumstances of Swiss Re’s • Evaluation of the application of sustainability-related policies, the use of applicable criteria as the basis for the Swiss Re’s sustainability reporting management of reporting structures, preparation of the sustainability data and guidelines the documentation and systems used to information, assessing the risks of material Assessing whether the methodology collect, analyse and aggregate reported misstatement of the sustainability data applied by Swiss Re is in line with the sustainability data and information; and information whether due to fraud or reporting criteria; • Assessment of the processes and data error, responding to the assessed risks • Interviews and management inquiry consolidation as necessary in the circumstances, and Evaluating the sustainability reporting Reviewing the appropriateness of the evaluating the overall presentation of and underlying performance indicators management and reporting processes for sustainability data and information. A limited by performing analytical procedures and sustainability reporting; and assessing assurance engagement is substantially interviewing selected key contacts to the processing and consolidation of data less in scope than a reasonable assurance assess whether the internal Environmental at Swiss Re’s Group level; and engagement in relation to both the risk Performance Indicators Reporting • Review of certified emission assessment procedures, including an guidelines and sustainability guidance reductions and removals understanding of internal control, and the were consistently applied by the selected Reviewing the retirement of 76 340 procedures performed in response to the locations; Performing inquiries of tonnes of CO2e: 57 600 certified emission assessed risks. The procedures selected personnel responsible for internal reductions (CERs) with additional Gold depend on the assurance practitioner’s sustainability reporting and data collection Standard label, 18 640 CERs from the judgement. at the Swiss Re corporate level to Community Development Carbon Fund, evaluate the reporting and aggregation 100 CORCs (verified CO2 Removal Our independence and quality controls process and to assess its appropriateness; Certificates from the puro.earth We are independent of the Swiss Re in • Reconciliation of CO2 emissions data marketplace). accordance with the International Code Reconciling the CO2 emissions data for of Ethics for Professional Accountants energy consumption, business travel, We have not conducted any work on data (including International Independence copy paper, waste, water, technical gases other than outlined in the subject matter Standards) issued by the International Ethics and commuting and sustainability data as defined above. We believe that the Standards Board for Accountants (IESBA and information to the data used for the evidence we have obtained is sufficient Code) that are relevant to our audit of the internal sustainability reporting of the and appropriate to provide a basis for our financial statements and other assurance selected locations; assurance conclusions. engagements in Switzerland. We have • Assessment of the key figures fulfilled our other ethical responsibilities Performing tests on a sample basis Conclusion in accordance with the IESBA Code. of evidence supporting selected Based on our work described in this report, sustainability data and information nothing has come to our attention that Our firm applies International Standard on (natural catastrophes and climate causes us to believe that the sustainability Quality Control 1 and accordingly maintains change, the commitment to the UN, data and information outlined in the scope a comprehensive system of quality the commitment with Women’s World and subject matter section has not control including documented policies and Banking, sustainable business risk been prepared, in all material aspects, procedures regarding compliance with transactions referred to the team in accordance with suitable criteria. ethical requirements, professional standards of sustainability experts, responsible and applicable legal and regulatory investments, CO2 emissions and requirements. reductions, energy consumption for heating and electricity, business travel Zurich, 19 March 2020 data, sustainable supply chain data, PricewaterhouseCoopers AG the COyou2 programme, HR data and information, diversity and inclusion, employee health data) to assess their completeness, accuracy, adequacy and consistency; Paul de Jong Konstantin Meier

Swiss Re | 2019 Sustainability Report 83 Memberships, commitments and index listings

Listed here is a selection of Swiss Re’s most important memberships, commitments and index listings with regard to corporate responsibility.

Memberships FSB Task Force on Climate-related Paris Pledge for Action and commitments Financial Disclosures By joining the Paris Pledge for Action, The Financial Stability Board (FSB) is an businesses, cities, civil society groups, international body that monitors and makes investors, regions, trade unions and other CDP recommendations about the global financial signatories have promised to ensure CDP is a not-for-profit charity that runs system. Its Task Force on Climate-related that the ambition set out by the Paris a global disclosure system for investors, Financial Disclosures (TCFD) has developed Agreement is met or exceeded to limit companies, cities, states and regions to voluntary, consistent climate-related financial global temperature rise to less than 2°C. manage their environmental impacts. risk disclosures for use by companies in www.parispledgeforaction.org www.cdp.net providing information to investors, lenders, insurers and other stakeholders. Principles for Responsible Investment Chief Risk Officer (CRO) Forum www.fsb-tcfd.org (PRI) The CRO Forum is a group of professional risk The PRI is the world’s leading proponent managers from the insurance industry that Insurance Development Forum (IDF) of responsible investment. It works to focuses on developing and promoting industry The IDF is a public/private partnership led understand the investment implications best practices in risk management. The Forum by the insurance industry and supported by of environmental, social and governance consists of Chief Risk Officers from large international organisations. It aims to optimise (ESG) factors and to support its multi-national insurance companies. and extend the use of insurance and its international network of investor signatories www.thecroforum.org related risk management capabilities to build in incorporating these factors into their greater resilience and protection for people, investment and ownership decisions. ClimateWise communities, businesses, and public www.unpri.org ClimateWise supports the insurance industry institutions that are vulnerable to disasters to better communicate, disclose and respond and their associated economic shocks. Principles for Sustainable Insurance (PSI) to the risks and opportunities associated with In 2019, we endorsed IDF's commitments to Launched at the 2012 UN Conference on the climate-risk protection gap. This is the increase insurance protection in climate- Sustainable Development, the UNEP FI growing divide between total economic and exposed countries. Principles for Sustainable Insurance (PSI) insured losses attributed to climate change. www.insdevforum.org serve as a global framework for the insurance www.cisl.cam.ac.uk/business-action/ industry to address environmental, social and sustainable-finance/climatewise Klimastiftung Schweiz governance risks and opportunities. (Swiss Climate Foundation) www.unepfi.org/psi/ European Commission’s Technical Expert The Swiss Climate Foundation is a voluntary Group on Sustainable Finance (TEG) initiative by business for business. The RE100 and EP100 The TEG assists the European Commission Foundation’s mission is to promote climate Led by The Climate Group in partnership with in the development of a unified classification protection and strengthen Switzerland CDP, RE100 is a global corporate leadership system for sustainable economic activities, and Liechtenstein as business locations. initiative bringing together influential an EU green bond standard, methodologies Swiss Re is one of the foundation’s members businesses committed to 100% renewable for low-carbon indices, and metrics for and is sponsoring its managing director. electricity. climate-related disclosure. www.klimastiftung.ch/en/ theRE100.org/ https://ec.europa.eu/info/publications/ sustainable-finance-technical-expert- Net-Zero Asset Owner Alliance In partnership with the Alliance to Save group_en The Net-Zero Asset Owner Alliance is an Energy, The Climate Group’s EP100 initiative international group of institutional investors brings together a growing group of energy- delivering on the commitment to transition smart companies committed to improving their investment portfolios to net-zero their energy productivity and doing more GHG emissions by 2050, showing united with less. investor action to align portfolios with a www.theclimategroup.org/project/ep100 1.5°C scenario. Swiss Re is a co-founder of the Alliance. www.unepfi.org/net-zero-alliance/

84 Swiss Re | 2019 Sustainability Report Swiss Sustainable Finance (SSF) Selected index listings and ratings By shaping and informing on best practice and creating supportive frameworks and tools, SSF supports its members and MSCI AAA rating (July 2019) cooperates with other actors in order for the Swiss financial centre to achieve a leading position in sustainable finance. www.sustainablefinance.ch Dow Jones Sustainability Indices, Bronze Class The Climate Group The goal of The Climate Group is a world of no more than 1.5°C of global warming and greater prosperity for all. It brings together powerful networks of businesses and Bloomberg Gender-Equality Index governments, which shift global markets and policies, towards this goal. www.theclimategroup.org

UN Global Compact The UN Global Compact supports companies to do business responsibly by Ethibel Sustainability Index (ESI), Excellence Global aligning their strategies and operations with its ten principles on human rights, labour, environment and anti-corruption; and to take strategic actions to advance broader societal goals, such as the UN Sustainable Development Goals, with an emphasis on collaboration and innovation. In 2019, we signed the UN Global Compact Euronext Vigeo Eiris indices: Europe 120 Business Ambition for 1.5°C. www.unglobalcompact.org

UNEP Finance Initiative (UNEP FI) UNEP FI is a partnership between UNEP and FTSE4Good Index Series the global financial sector to mobilise private sector finance for sustainable development. It works with more than 300 members – banks, insurers, and investors – and over 100 supporting institutions to help create a financial sector that serves people and the planet while delivering positive impacts. ISS QualityScore Enviromental, Social & Governance www.unepfi.org

WEF Alliance of CEO Climate Leaders The Alliance of CEO Climate Leaders is a global network of chief executive officers who see the business benefits of bold and ISS ESG Prime proactive action to ensure a smooth transition to a low-carbon and climate- resilient economy. www.weforum.org/projects/alliance-of- ceo-climate-leaders

Swiss Re | 2019 Sustainability Report 85 Contact details

Contact address Sustainability, Emerging and Political Risk Management Martin Weymann Telephone +41 43 285 9555 [email protected]

86 Swiss Re | 2019 Sustainability Report © 2020 Swiss Re. All rights reserved. Title: 2019 Sustainability Report Accelerating sustainable progress Production: Group Qualitative Risk Management Group Communications Graphic design and production: Swiss Re Corporate Real Estate & Services/ Media Production, Zurich Photographs: GettyImages (Cover and pages 8, 22, 24, 29, 30, 32, 34, 38, 40, 43, 48, 50, 51, 52, 53, 56, 75) Marc Wetli (p. 2) Braschler/Fischer (p. 3) Swiss Re (pages 6, 11, 25, 29, 54, 65) Société du Grand Paris; Gérard Rollando (p. 26) Brenner Basistunnel BBT SE (p. 26) Mirella Mellonmaa (p. 63) NASSCOM (p. 67) Fredi Lienhardt Photography (p. 68) CarePay (p. 81)

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