The Industry’s Contribution to Community Impact Development

Insurance Information Institute  I.I.I. Members ACE USA Acuity Aegis Insurance Services Inc. of America, Inc. Insurance Group American Agricultural Insurance Company The Industry Goes Green American International Group, Inc. Argonaut Group Arthur J. Gallagher & Company Auto Club South Insurance Company n this issue of Impact, we focus on the and more companies and associations are Beazley Group plc “greening” of the insurance industry by establishing “green” programs, we will Bituminous Insurance Companies I Catlin Group highlighting what community programs continue to report on them. Chubb Group of Insurance Companies companies have undertaken to support We’re also taking a little poetic Church Mutual Insurance Company CNA environmental and conservation issues. license with this issue by featuring the CUMIS Insurance Society, Inc. De Smet Farm Mutual Insurance Company And as you can see, insurers are finding efforts of insurance broker Lockton of South Dakota many creative ways to accomplish this Associates – we’re not reporting on their Dryden Mutual Insurance Company Erie Insurance Group goal around the country, as well as in “green” efforts, but of their efforts in Farmers Group, Inc. their own backyards. “Green”sburg, Kansas. When a series GEICO Gen Re From simple steps like replacing of tornadoes destroyed this area last Germania Insurance standard light bulbs with energy-effi- year, Lockton volunteers travelled to Glencoe U.S. Holding Group Grange Insurance Companies cient bulbs and driving electric cars to Greensburg to assist with the rebuilding GuideOne Insurance launching global climate initiatives, this efforts. The Hanover Insurance Group Inc. The Harford Mutual Insurance Companies issue touches upon the efforts of just a As always, we appreciate your Harleysville Insurance Group few companies – ACE, AIG, Chubb, thoughts on this issue and welcome any Holyoke Mutual Insurance Company Erie, GEICO, , Munich ideas you have for future stories. James River Group, Inc. Liberty Mutual Group Re, , , Travelers, XL Lloyd’s and Zurich, as well as the Institute for Lockton Companies Marsh Inc. Business & Home Safety (IBHS). More Max Capital Group MetLife Auto & Home Michigan Millers Mutual Insurance Co. Millville Mutual Insurance Company Missouri Employers Mutual Insurance Munich America, Inc. Inside: Nationwide New York Life Insurance Company The Norfolk & Dedham Group A Good Neighbor is a Green Neighbor...... 3 North Pointe Insurance Group Ohio Mutual Insurance Group Rising to the Challenge of Building a “Green” Environment...... 5 OneBeacon Insurance Group Palisades Safety and Insurance Association Addressing Climate Change Globally...... 7 Pennsylvania Lumbermens Mutual Insurance Company Taking an Integrated Approach...... 9 Plymouth Rock Assurance Corporation Teaching Kids to Do Good and Go Green...... 10 Safeco Insurance Companies Scor U.S. Corporation A Commitment to the Environment...... 12 SECURA Insurance Companies Selective Insurance Group Green Team Targets Renewable Energy Sector...... 13 State Auto Insurance Companies State Compensation Insurance Fund Protecting Endangered Species...... 14 State Farm Mutual Automobile Insurance Company Rebuilding Efforts in “Green”sburg...... 16 The Sullivan Group Swiss Reinsurance America Corporation Taking Care of Business and the Environment...... 18 TIAA-CREF The and Fire Insurance Co., Launching a Global Climate Initiative...... 21 Ltd. Travelers Winds of Change...... 22 Unitrin Property and Casualty Insurance Group Responsible Building Is Strong by Design...... 24 USAA Being “Green” Makes Good Business Sense...... 26 Utica National Insurance Group West Bend Mutual Insurance Company Westfield Group W. R. Berkley Corporation XL Global Services Summer 2008 Vol. 14 No. 1 Impact is published by the Insurance Information Institute, 110 William Street, XL Insurance Company, Ltd. New York, N.Y. 10038; 212-346-5500. Editor: Diane Portantiere; ©2008 Insurance Information Institute, www.iii.org Zurich North America A Good Neighbor is a Green Neighbor

ith more than 17,000 coming to my office into an electronic work together twice a week or more. State Farm agents in the format and sends them to me as e- My wife and I traded in our vehicles W U.S. and Canada, there’s mail,” said Mee. “I can save those as for hybrid cars, and I ride my bicycle no shortage of green neighbors. Many electronic files on my computer. Then, to the office on Saturdays, weather agents started efforts to be green with I can print out just a single page if I permitting,” explained Kohl. “I hired steps as simple as recycling everyday need it, rather than the entire docu- a shredding company to shred and trash — keeping tons of garbage out ment. It costs $20 a month to use this recycle all paper with customer infor- of landfills — and are moving on to service, but I’m saving about $150 a mation. This keeps the information bigger efforts. month in paper and toner. Any paper confidential and ensures it will be Receiving junk mail faxes daily that doesn’t have confidential informa- recycled properly.” gave Tim Mee, an agent from tion on it, I use again as scratch paper Plainview, New York, an idea. “I or in the printer.” thought there had to be a better way State Farm agent William Kohl Shirley Light uses solar panels to pro- to deal with these faxes and found a of Surprise, Arizona, encourages his vide electricity for her office. program called MyFax (www.myfax. team to car pool. “I give gift certifi- Photos courtesy of Juliana Thoennes, State Farm. com). Now, MyFax converts all faxes cates to team members who ride to

 Shirley Light, an agent in green steps. Winslow, Arizona, has reduced electric Reduce, reuse and recycle are energy use in her office. “I installed everyday activities for agent Chuck energy-efficient, compact fluorescent Watkins of Feasterville, Pennsylvania. lighting in the main work areas and “We’ve reduced by using compact use a programmable thermostat to fluorescent light bulbs, driving our run the heating and cooling system,” cars 60 miles per hour or less on the said Light. “These steps are saving highway, turning down the thermo- energy and money. I had a solar panel stat, and installing an on-demand, installed on the roof of my office, and tankless water heater,” said Watkins. a recent electric bill was more than “We reuse zip lock bags, plastic take- $200 less than it was at the same time out containers and paper or plastic “This car is tiny, but it has everything last year. The panel was expensive, bags. We recycle newspapers, maga- I need — heater, directional signals, but through rebates and tax credits, I zines, boxes, cans, glass and plastic. seatbelts and a trunk!” says State Farm should see a return on that investment The document shredding company Agent Shirley Light. “It goes 30 miles within the next six years. we use sells the shredded material to a “I had an energy audit done on paper company to be recycled. per hour for about 40 miles on each the office to see what else we can do “And, we try to involve our chil- charge, and it costs only a penny per to save energy.” Light plans to pur- dren — because the earth was not mile to drive.” chase a wind generator and install given to us by our parents — it has natural lighting features as her next been loaned to us by our children.” n

Measuring Green program to measure and reduce greenhouse gas State Farm has a long a history of being environ- emissions. State Farm has reduced its emissions mentally responsible. More than 67,000 employees by more than 38% since 2002. across the U.S. and Canada combine with the • A composite Energy Star rating of 82, indicating Agency Force to deliver some remarkable accom- that State Farm buildings, on average, are more plishments, including: energy efficient than 82 percent of comparable • A customer electronic billing and payment option buildings. That’s up from 49 in 1999. that eliminates more than 3 million pieces of • Van pool programs in offices across the U.S. mail per year. and Canada with more than 1,250 riders, and a • The third-largest non-governmental, eco-friendly shuttle service that moves 400,000 employees fleet in the nation. each year among corporate buildings, eliminating • A 26-year-old company-wide recycling program that that number of individual car trips. includes paper, plastic, aluminum, glass, carpet, • More than 1 million square feet of carpet electronics, light bulbs, batteries, and more. Last kept from landfills by recycling, downcycling, or year, more than 972 tons of material was kept out reusing carpet that comes out of its facilities. of landfills from its corporate headquarters alone. • More than 147,000 pieces of out-of-date • Inaugural membership in the Business Round- electronic equipment sent to an asset recovery table’s Climate RESOLVE initiative, a voluntary vendor for reuse or recycling in 2007.

 Rising to the Challenge of Building a “Green” Environment

ince 1985, when the Company has helped to protect more than protecting the environment through was formed to provide much- 275,000 acres of precious conservation its innovative ACE Land Legacy Fund. Sneeded capacity in the insurance lands. ACE’s participation in this vital We were delighted to partner with marketplace, ACE has been a global global environmental conservation ini- The Conservation Fund in supporting leader in providing risk management tiative still continues. projects that conserve wilderness areas solutions to businesses. And that The ACE Land Legacy monies are for future generations.” includes finding solutions to the ongo- also helping The Conservation Fund ACE’s commitment to climate ing battle to preserve and protect the acquire 40 acres known collectively as change awareness and improving the environment. the Draper properties that sit along the environment of the communities In 2005, the ACE Group of Delaware Bay adjacent to, and within around the world in which it does Companies announced its par- the acquisition boundary of, the Prime business has long been a key focus for ticipation in global environmental Hook National Wildlife Refuge. This the Company. This pledge of support conservation with the creation of the initiative also includes the purchase by ACE extends beyond charitable ACE Land Legacy Fund, which is of 71 acres that connect the Arabia contributions to include the ongoing administered by The Conservation Mountain Heritage Area with Panola hands-on support and involvement of Fund, a non-profit organization that Mountain State Park near , its employees. ACE has served as a cor- forges critical partnerships to conserve Georgia, and a significant timberland porate sponsor of the annual America’s legacy of land and water preservation effort in the Redwood River Day Rescue organized by Friends resources. Since its creation in 2005, Region of Northern California. of the Chicago River, including serv- the ACE INA Foundation has made Evan G. Greenberg, chairman and ing as the Education Sponsor. The a total of $550,000 in commitments chief executive officer, ACE Limited, sponsorship has helped to preserve the to the ACE Land Legacy Fund, which commented, “ACE is committed to environmental integrity of the Chicago River watershed and included active support from Chicago-based ACE employee volunteers through their participation in the annual day of envi- ronmental clean up projects. Marcie Massa, executive assistant in ACE’s Chicago office, organized the “Clean Up” day for ACE employ

ACE employees in the Chicago office joined nearly 4,000 volunteers at the Chicago River’s 16th annual Chicago River Rescue Day and participated in the effort to clean and repair more than 60 river-edge sites in the city and the

suburbs. Photos courtesy of ACE.

 ACE’s commitment to climate change awareness and improving the environment of the communities around the world in which it does business has long been a key focus for the Company.

ees in her office, and remarked on a difference in the community. These rebuild a facility in an environmen- the day’s activities, “Our job was to programs provide a unique opportu- tally-friendly way after an insured loss. pull the ‘Garlic Mustard Weed,’ and nity for our employees to connect with Speaking about this product this effort was much-needed among their community and to work hand- launch and ACE Group’s growing the watershed as it invades forested in-hand with other members of groups portfolio of green products, Kurt habitats where it can displace native interested in preserving our parks.” Husar, senior vice president, ACE plants and alter soil composition and ACE’s ongoing participation in USA Global Property, said, “ACE is a structure—which can be detrimental environmental initiatives helped to leader in providing risk management in preserving a healthy ecosystem. establish the framework for the launch solutions to meet the evolving needs of The hands-on experience of making a of ACE Green—the Company’s global our diverse client base. We’re pleased difference in our environment was so employee environmental program. to blend our traditional property rewarding for us, and it was hearten- Launched early in 2008, this initiative products and services with an insured’s ing to see the positive results of our has resulted in the implementation of desire to rebuild their properties after hard work.” numerous energy-reduction activities, an insured loss to a more environmen- Meanwhile in , ACE including better systems for collect- tally-friendly standard.” has continued its sponsorship of ing recyclables and reducing paper use ACE’s Environmental Risk The Fairmount Park Conservancy’s through more electronic transmission Division, part of its U.S.-based retail “Growing the Neighborhood” of documents. operating division—ACE USA— program, which seeks to revitalize This past year ACE announced recently made a donation to American Philadelphia’s community parks its participation in the Environmental Forests’ Global ReLeaf campaign to through financial and volunteer sup- Protection Agency’s (EPA) Climate fund the planting of 5,000 trees in port from local companies. As part of Leaders program. Launched in 2002, five locations across the United States. this initiative, ACE donated $100,000 Climate Leaders is an EPA industry- This support of American Forests over fours years to fund improvements government partnership that works helps to ensure the protection of forest at three city parks per year. In addi- with companies to develop long-term, ecosystems and their benefits for future tion, each year, typically in June, ACE comprehensive climate-change strate- generations. ACE Environmental Risk employees show their support for the gies. Partners set a greenhouse gas made this donation in appreciation for program by joining neighbors and reduction goal and inventory their its clients’ support in 2007. friends of the chosen parks for a clean- emissions to measure progress. By ACE takes a holistic approach up event. Volunteer activities include reporting data to the EPA, partners to helping find solutions to ongoing trimming back vegetation, painting, create a lasting record of their accom- environmental concerns. Whether it’s planting flowers and collecting litter plishments and identify themselves as with its philanthropic participation and other debris. a corporate environmental leader. in global environmental initiatives, or Eden Kratchman, executive direc- The ACE green initiative has also hands-on support through employee tor of the ACE INA Foundation, spawned the development of new volunteerism efforts, or the introduc- said, “As a company, ACE strongly insurance products and risk manage- tion of new environmentally-friendly supports civic volunteerism and work- ment services, including the launch of products and risk management solu- ing with other partners. We place ACE Green Building Restoration, a tions-—ACE is committed to helping tremendous value on the collective stand-alone policy and endorsement to preserve the integrity of the envi- efforts of all of us who want to make that can provide coverage to help ronment for future generations. n

 Addressing Climate Change Globally

n May 2006, American Inter- house gas (GHG) emissions. AIG from non-delivery of tradable carbon national Group (AIG) became the companies are developing and expand- credits from energy and forestry proj- Ifirst U.S. insurance company to ing products and services that promote ects, and that give customer discounts announce a policy on climate change. investment in, and the deployment on premiums for properties that meet By making a statement, AIG recog- of, technologies and activities that LEED green building standards. nizes the scientific consensus that mitigate GHG emissions and that sup- AIG Investments invests in re- global climate change is a reality and port the carbon market. These include newable energy and energy efficiency that it is highly likely in large part the insurance solutions—such as the AIG projects, both through private equity result of human activities, primarily ecoPractice and the Advanced Energy and project debt financing. A Sustain- the burning of fossil fuels and tropical Solutions Group—that help custom- able Investment team has been es- deforestation, that have led to increas- ers mitigate both their climate change tablished to assess private equity ing concentrations of greenhouse gases in the earth’s atmosphere. In addition, AIG recognizes that climate change poses significant risks to mankind. At the same time that AIG issued a statement on climate change, the company also established the Office of Environment and Climate Change. Designed to be a focal point on the issue, this corporate-level office has a mandate to: support businesses as they develop products and services risks and their GHG emissions by investments in GHG mitigating that help customers address climate supporting renewable energy and other technologies. The AIG Global Real change; advance the policy discus- GHG mitigating technologies globally. Estate Group continues its leader- sion and advocate for “cap and trade” Other new insurance products, ship role as developer and investor of legislation in the U.S. and abroad and launched or in development, include ‘green’ buildings around the world. engage employees and reduce the envi- those that address select risks associated AIG Financial Products has invested ronmental impacts of AIG’s operations with technology design deficiencies directly in renewable energy and par- worldwide. from U.S. alternative fuel facilities, ticipated as a credit support provider In its focus on the business oppor- that provide incentives for constructing in a large transaction of carbon credit tunities related to climate change, ‘greener’ buildings and installing more recognized under the Kyoto Protocol. AIG’s policy responds to the demands efficient energy systems following a At a corporate level, AIG is lob- and needs of customers and investors loss in both commercial and residential bying for legislation in the U.S. and with an interest in reducing green- buildings, that insure monetary losses Europe to support both mandatory

 AIG is committed to improving the emissions performance of its operations, through energy efficiency, purchase of renewable energy, and offsetting the company’s greenhouse gas emissions.

limits on GHG emissions and emis- The company is actively promot- around the world participated on five sions trading as a mechanism to help ing awareness of climate change with committees that assessed the environ- achieve the required reductions in an its clients and employees and recently mental impacts of AIG’s operations economically sound way. In the U.S., held forums on climate change with and identified ways to reduce those AIG participates in the U.S. Climate major accounts in both China and the impacts. The committees included Action Partnership (USCAP), a group U.K., as well as led several internal Facilities (with an Energy sub-com- of 32 major corporations and environ- forums that raised the topic with AIG mittee), Sourcing & Transportation, mental groups promoting immediate employees. Information Technology, Human federal cap-and-trade legislation. The For constituents worldwide, AIG Resources & Communications, and company also participates in several has also developed an environment Green Ambassadors. lobbying coalitions in Europe and and climate change section that’s a The Be Green initiatives include aligns itself to groups of like-minded part of the corporate responsibility energy efficiency measures and companies that support climate change portion of the company’s Web site. temperature adjustments to reduce solutions such as Combat Climate In 2006, AIG conducted its first electricity use in owned and leased Change, the Corporate Leaders’ GHG inventory, finding that most AIG buildings worldwide; improved Group and the Association of British of AIG’s emissions come from the recycling and equipment disposal; pur- Insurers’ ClimateWise program. AIG generation of the electricity purchased chasing supplies and equipment that works with the World Economic for its buildings and from commer- meet higher environmental standards; Forum, the World Resources Institute, cial flights for business travel. AIG is encouraging employees to use mugs the International Emissions Trading committed to improving the emis- rather than disposable cups; measures Association, the Carbon Disclosure sions performance of its operations, to reduce paper use; encouraging Standards Board and other leading through energy efficiency, purchase of employees to participate in “green” non-profit groups to promote climate renewable energy, and offsetting the volunteer activities and others. change policy solutions. company’s greenhouse gas emissions. A Be Green intranet site has been AIG is a member of the advi- AIG has funded multi-benefit forestry launched and a volunteer network of sory board and provides funding for and agricultural carbon offset projects employee “Green Ambassadors” has Resilient Coasts: Reducing Risks and in China and the U.S. that generate been established to help implement Adapting to Climate Change, a project voluntary verified emission reductions the plan and provide feedback and being run by the H. John III and sequestration (VERs) equal to the ideas on a local level. Center for Science, Economics and 620,000 metric tons of the emissions AIG views climate change as an the Environment and Ceres. Along in the 2006 inventory. issue that cuts across many of the busi- with Lloyd’s, AIG is also a primary In late May, AIG launched Be ness lines and the operations of the sponsor of a project, convened by the Green, an initiative that will engage company. By putting AIG’s environ- Insurance Information Institute and employees in a campaign to reduce mental house in order, AIG supports the Harvard Center for Health and the the environmental impacts of AIG’s the business units that are developing Global Environment, that assesses how business operations around the and marketing eco-friendly products to incorporate climate change risk into world. For several months prior to and backs the corporate advocacy and catastrophe modeling. the launch, employees in locations public policy work in this area. n

 Taking an Integrated Approach

he impacts of climate change the global response to climate change are redefining how some busi- by identifying emerging risks and Tnesses and individuals operate. opportunities and facilitating effective In the insurance industry, the visible strategies across the enterprise. results can range from products To keep Travelers’ climate change that target green markets to services focus on track, the committee issues a that help customers prepare for and report to management that is updated respond to the risks associated with cli- on an ongoing basis, not only to cel- mate change as well as internal policies ebrate successes, but also to stimulate that reduce the carbon footprint for an and chart the progress on future goals. individual business. The successes include introduc- But are incremental steps enough? ing many products that encourage Travelers corporate headquarters is Are insurers doing everything possible customers who are committed to Energy Star-certified. Photo courtesy of Travelers. to be part of the solution if policies are being environmentally responsible. written with the environment in mind, For example, Travelers was the first buildings are retrofitted for energy effi- company to extend up to a 10 percent ciency and employees are encouraged discount for coverage of hybrid cars on is emphasized throughout the offices, to save gas by working from home? a national level. In addition, the com- and a paper suppression initiative is Like many of its industry counter- pany has boiler and machinery policies well under way. parts, Travelers is already an active that cover the replacement of damaged While continuing to expand green member of the corporate sustainability equipment with upgraded equipment products and work toward efficiency movement with innovative products, that protects the environment and in its own operations, Travelers is also risk reduction measures and smart operates more efficiently. Similarly, its focused on being an effective partner business practices that focus on climate commercial green building coverage for many public policy initiatives change. And two years ago, Travelers enhancements encourage the use of that support effective climate change decided that to be most productive on environmentally friendly materials. adaptation strategies and promote the issue required bringing the com- Travelers has also been a leader environmentally responsible practices. pany’s best minds together to focus on in reducing the impact of its own These include: the many challenges of climate change. activities. The company’s two main • Participation with the Business To enhance and coordinate campuses in St. Paul, Minnesota, and Roundtable Climate Resolve Travelers’ efforts — from internal Hartford, Connecticut, have been Initiative Group and the EPA’s steps to reduce carbon emissions to certified as Energy Star rated by the Climate Leaders Program. After external initiatives that support effec- Environmental Protection Agency. establishing its carbon footprint tive adaptation strategies to address the Since the mid-1980s, the St. Paul baseline, Travelers set a goal of impacts of climate change — Travelers campus has been heated by a water- reducing carbon emissions by formed a Climate Change Committee and-steam-driven system that today 7 percent from 2006 to 2001. that has the unequivocal support of is largely fueled by clean wood waste. • Travelers was invited to become the top leadership. The goal for the Hybrid vehicles have been added to the first insurance company to join Committee is, among other things, to the corporate fleet, more than 3,000 the Pew Center on Global Climate increase the company’s participation in employees work from home, recycling Continued on page 28

 Teaching Kids to Do Good and Go Green

rie Insurance employees believe located within walking distance of the an ‘elemiddle school,’ explained that taking care of the earth is insurer’s corporate headquarters in Erie Insurance employee Bonnie Emore than just a one-day proj- Erie, Pennsylvania. Daughenbaugh, chair of the Adopt-a- ect. It’s an ongoing endeavor. That’s On a recent Earth Day, Erie School Partnership. “A small marker the lesson employee volunteers taught Insurance volunteers taught students was placed at the tree base in honor of Pfeiffer-Burleigh School students to go green by planting a tree outside the occasion.” when they helped the school mark the school’s main entrance. The group In another effort, “reduce, reuse Earth Day by planting a tree, promot- of planters included eighth grade and recycle” were the themes of two ing a public recycling campaign and students led by Erie School District school art projects conducted in making a clean sweep of city streets Superintendent Dr. James Barker. conjunction with the Erie Insurance/ and storm drains. The employee “do “We came up with the idea of Pfeiffer-Burleigh Earth Day celebra- good and go green” initiative was an planting a tree to commemorate Earth tion. The first art project was initiated outgrowth of Erie Insurance’s 20- Day and to mark the graduation of by employee Heather Love, Erie year Adopt-a-School partnership with the first eighth grade class to gradu- Insurance tutor chair. Every student Pfeiffer-Burleigh, an inner-city school ate since Pfeiffer-Burleigh became at Pfeiffer-Burleigh created slogans

Erie School District Superintendent Dr. James Barker (center) helps three Pfeiffer- Burleigh students (left to right): Kiev, Toya and Dy’Jsean, with their Earth Day tree planting. Looking on are Erie Insurance vol- unteers (back, left to right): Cindy Kerchoff; Mary Hanks and Cheryl Bulger.

10 and pictures on brown paper grocery bags borrowed from a local supermar- ket. More than 750 bags were then returned to the store for distribution to customers on Earth Day. “This project spread the word about taking care of the environment far beyond the walls of Pfeiffer- Burleigh,” said Barker. “We’re proud of the part these students played in com- municating these important messages.” Pfeiffer-Burleigh student Rostislav Melnik’s colorful recycling poster (right) The second Earth Day art project was one of three prize winners. engaged kids in kindergarten through grade three in a poster contest to encourage recycling. Erie Insurance selected the top three posters. And the efforts of the students the sidewalks and streets. “It was a tough job given the and volunteers went beyond the “Students collected 538 cigarette number of entries,” said Erie Insurance school’s walls. Suited in orange safety butts in the short time they had to employee Diann Graham, who judged vests, students and their Erie Insurance collect litter,” reported Margarita hundreds of posters along with fellow mentors also made a clean sweep of Dangel, education director, Lake Erie- employee volunteer Dave Jakubowski. the neighborhood around Pfeiffer- Allegheny Earth Force. “It’s important to teach kids to Burleigh School. They also cleaned half a dozen be conservers rather than consumers,” Under the direction of Erie- storm drains that empty into Lake noted Jakubowski. Allegheny Earth Force, a local Erie. With winter debris and rubbish “If this planet is going to sustain non-profit youth organization dedi- swept into garbage bags, students then future generations, we need to begin cated to engaging young people to spray-painted this message near the educating our children in our elemen- improve the environment and their drains: “Pollution mistake. Drains to tary schools and even at a younger age.” communities, students literally swept Lake.” “I learned so much from these children,” said Kim Lane, Erie Insurance fifth-grade employee repre- sentative, who helped with the drain clean-up. “Maybe if we had been a little more educated about the environment when we were young, things would not have reached the point they are now,” added Lane. “Working with these kids is very fulfilling. Together, we will make a difference.” n

Erie Insurance fifth grade representa- tive Kim Lane, (back, right) joins eighth grade students in the neighborhood clean-up project.

11 A Commitment to the Environment

wiss Re is committed to sup- children with severe emotional, physi- hybrid cars, solar panels and purchases porting environmental causes cal or learning disabilities through of Energy Star-rated appliances, win- Slocally, raising awareness about animal assisted therapy and other nature dows or furnaces. environmental issues globally, and and environment related activities. The results of the first year are funding environmental investments by In 2007, Swiss Re received the very positive, with more than 400 staff their employees. Swiss Re’s American Corporate Good Neighbor Award for — over 5 percent of eligible employees headquarters is in Armonk, New Environmental Excellence from the worldwide — taking part in the pro- York (Westchester County) and the Grassroots Environmental Education gram. The subsidized investments vary company is active in their support of organization in Westchester County, from one region to another, depending environmental issues and organizations New York. The award recognized Swiss on local circumstances and condi- locally and globally. Swiss Re was the Re’s leadership in sustainability, specifi- tions; the program has supported 130 first insurance company to commit to cally the state-of-the-art Swiss Re U.S. staff — 116 of them in the U.S. — in becoming carbon-neutral, a goal the headquarters which was designed to pro- acquiring a low-emission hybrid car, company achieved in 2003. One of tect the adjacent Kenisco reservoir and while 170 employees in Switzerland the goals included in this initiative is to minimize overall environmental impact. received contributions towards annual reduce Swiss Re’s CO2 emissions by 30 Swiss Re also sponsors a COYou2 travel passes for public transport. An percent per employee through 2013. program aimed at encouraging its additional 80 staff members around Overall, Swiss Re has already reduced employees to make their own per- the world were granted subsidies with the company’s carbon emissions by sonal investments in CO2-reducing energy- and electricity-related invest- over 25 percent from 2003 - 2007. measures to support the company ments, including the installation of Locally, Swiss Re is a corpo- commitment to address climate solar panels and heat pumps. rate sponsor of Green Chimney’s change. In the United States, Swiss Re Swiss Re has also taken a lead- Children’s Services of Brewster, New employees can receive subsidies of up ing role in raising global awareness York. Green Chimney’s is a nonprofit to $3,300 for investments in environ- of the risks posed by climate change. organization dedicated to assisting mentally friendly technologies such as Continued on page 27

Swiss Re’s state of the art headquarters in the U.S. was designed to protect an adja- cent reservoir and minimize overall environmental impact.

Photo courtesy of Swiss Re.

12 Green Team Targets Renewable Energy Sector

ecognizing the growth of the renewable energy. Energy Star equipment and other renewable energy industry, The U.S. Green Building items certified as green by the U.S. RChubb’s recently created green Council reports that the annual U.S. Green Building Council or Green energy team will expand its focus on market for green building products Buildings Initiative. providing custom-tailored insurance and services is experiencing rapid Other Customarq Classic features products and services to manufacturers growth, increasing from $7 billion in include business income and extra who create the technology to produce 2005 to $12 billion in 2007. While expense insurance to help compa- green energy as well as companies that Chubb has been offering insurance nies with green properties quickly own and operate green buildings. products and services to renewable restore their operations after a loss. “We have served the energy sector energy producers and distributors for For example, an insured business can for decades and, as the marketplace has more than 20 years, the green energy be reimbursed for the extra expenses become more environmentally aware, team will expand the company’s focus it incurred to purchase power from we have broadened our expertise to to include manufacturers who create a public utility until its alternative meet insurance needs,” explained Peter the technology that allows compa- power-generating equipment is Thompson, vice president, Chubb & nies to produce green energy, such as repaired or replaced. Son, and worldwide energy manag- wind turbine and solar panel manu- “We recognize that it may take er for Chubb Commercial Insurance. facturers, and companies that own longer for businesses to rebuild a “The creation of Chubb’s green energy and operate green buildings. green building to its pre-loss condi- team will allow us to look beyond tra- Green construction is also on tion, so our Customarq Classic policy ditional renewable energy production the rise. The market value of new insures these businesses for the loss and distribution risks.” green building construction this of income they incur during that The renewable energy market year is more than $12 billion and time,” said Thompson. “As businesses is a high-growth industry through- is expected to be $60 billion by increasingly take steps to protect the out the world. In the United States 2010, according to McGraw-Hill’s environment, Chubb can help them alone, 25 states have enacted renew- Construction Greening of Corporate protect their investments.” able portfolio standards, policies that America SmartMarket Report. To Under the Customarq Classic require electricity providers to obtain capitalize on this growth, Chubb’s policy, an insured business also can a minimum percentage of their power “green team” has introduced and be reimbursed for registration and from renewable energy resources, or will continue to develop new insur- certification fees relating to green mandates for the use of renewable ance products and services aimed at standards, as well as the costs of energy by early 2007. The U.S. etha- customers operating green buildings. hiring accredited design and recon- nol sector, which is one section of the For example, Chubb’s Customarq struction professionals, diverting renewable energy industry, has also Classic policy enables businesses recyclable debris after a loss to recy- more than doubled its production of to restore green buildings to their cling facilities rather than landfills ethanol to 7 billion gallons in 2007 original condition after a loss. The and other green services. The Chubb from 3.4 billion in 2005, accord- policy insures property on a replace- green energy team will also intro- ing to the American Coalition for ment-cost basis for green features duce a new “Green Upgrade” feature Ethanol. Thompson pointed out that such as vegetative roofs, solar panels, which will enable policyholders to Europe and Asia are also experienc- geothermal systems, wind turbines, “go green.” This “Green Upgrade” ing vast growth in the production of groundwater collection systems, Continued on page 28

13 Protecting Endangered Species

f Kermit the Frog were going to tion, the AZA invited the Gecko to re-record his 1970 hit “Being communicate its preservation efforts IGreen,” his famed line “It’s not via television, radio and newspaper easy being green” would definitely take ads. on a whole new meaning. There are four GEICO-AZA For the famous green amphibians television spots currently running. and their relatives including toads, They each feature the Gecko humor- salamanders, newts and caecilians, it’s ously interacting with either an otter, not easy being green because they are giraffe, jellyfish or gorilla. The human becoming extinct. character in one of the spots is played To combat the potential amphib- by Sir David Attenborough, one of ian extinction crisis, the Association the world’s most acclaimed broadcast- of Zoos and Aquariums (AZA) desig- GEICO’s Gecko discusses wildlife con- ers and naturalists, who is one of the nated 2008 as the “Year of the Frog” servation with a jellyfish. pioneers of the nature documentary. to help increase efforts to protect these Many participating zoos and aquari- endangered species. ums are joining the awareness effort by Amphibians are only one of promoting the advertisements on their thousands of endangered species.* In “This partnership is a natural fit Web sites. an effort to educate the public about for both GEICO and AZA,” said Ted Another part of the AZA partner- the need for wildlife conservation, the Ward, GEICO’s vice president of mar- ship is GEICO’s “traveling gecko” AZA recently teamed up with GEICO keting. “Having the Gecko promote exhibit featuring live geckos. This to develop a joint public awareness animal rights protection is a good exhibit will provide important educa- project. GEICO’s very own green cause and puts GEICO in a favorable tion on the background of geckos and spokescreature, the GEICO Gecko, light with the general public.” their threat of extinction. is helping spread the word about the Founded in 1924, the AZA is These adaptable lizards have decline in animal species and popula- the leading accrediting organization conquered a variety of habitats rang- tions. He’s taped a series of television for zoos and aquariums and has insti- ing from tropical beaches and lush and radio commercials and GEICO is tuted rigorous standards for animal rainforests to frigid mountain slopes sponsoring a traveling AZA exhibit of care, education, wildlife conservation and parched deserts. More than 1,100 geckos from around the world that are and science. It currently has over 200 species occur worldwide living on facing extinction. member zoos and aquariums. every continent except Antarctica. GEICO will promote wildlife Gecko diversity, and biodiversity in conservation through its support of the general, depends on “islands.” The 200 AZA-accredited zoos and aquari- term “island” includes areas of land ums nationwide during a three-year surrounded by barriers of trees, moun- partnership. As part of the collabora- tains, water, ice or deserts. When groups of animals get separated from larger populations, new habitat islands GEICO’s traveling exhibit features live are created. The groups can evolve geckos. Photos courtesy of GEICO. quickly and often create new species.

14 AZA Conservation Tips

Left: Greg Kalinsky, 1. Driving less is one of the most important ways to reduce individual contribution to regional vice president clobal climate change. of GEICO’s San Diego 2. Bike, walk, carpool or make use of public regional office and transportation to reduce your carbon Jim Maddy, president footprint. 3. Replace incandescent light bulbs with and CEO of the AZA. compact fluorescent bulbs (CFLs) which Right: GEICO’s Gecko use 75 percent less energy and last 10 welcomes visitors to times as long. 4. Turn off lights and computers when the San Diego Zoo. not in use. 5. Set thermostat 2 degrees cooler in the winter and 2 degrees warmer in the summer. But if the habitat islands are too small, GEICO will make a contribution to 6. Unplug electronics when not in use. species go extinct. The greatest threat wildlife conservation. But equally as 7. Replace showerheads with ultra low-flow to biodiversity is the shrinking and important to GEICO is the enthu- version to cut shower water use by fragmenting of habitats by humans. siasm and involvement of GEICO 50 - 80 percent. The gecko tour, hoping to raise associates around the country. 8. Turn off the faucet when brushing teeth and shaving. awareness to this shrinking popula- They were inspired by the com- 9. Install faucet aerators to conserve water. tion, will visit six AZA-member pany’s recent partnership with the 10. Wait until you have a full load to run the locations throughout the country AZA, and took avid interest in AZA’s washing machine or dishwasher. in 2008, and will continue to tour Earth Day “Party for the Planet” in 11. Eliminate single-use disposable items. Try through 2010. The tour kicked off April. A number of GEICO’s region- replacing paper towels with washable rags; on January 5, 2008 at the San Diego al locations held Earth Day-themed use a thermos for coffee; keep a cloth sack handy for purchases. Zoo. The whole community came to celebrations in an effort to help 12. Use less paper and avoid excess packaging. the zoo in celebration of conservation. all associates learn more about the 13. Find a recycling center in your area at Greg Kalinsky, GEICO’s San Diego importance of wildlife preservation. www.earth911.org. regional vice president, and Rynthia Here are some of the activities 14. Many AZA-accredited zoos and aquariums Rost, GEICO vice president of pub- that GEICO associates created: offer free cell phone and battery recycling. 15. Use paper products made from recycled fiber. lic affairs, attended the event along • Associates at GEICO’s headquarters 16. Switch to low-VOC paint. with several state and local dignitaries, in Washington D.C. celebrated with 17. Cook with local, organic foods. GEICO associates and local residents. the president of AZA, Jim Maddy, 18. Search out shade-grown coffee and chocolate. “The exhibit captures the per- who brought a number of traveling 19. Add drought resistant native plants to your sonality of the Gecko and delivers the animals from the Columbus Zoo yard, garden or window-box. message of wildlife conservation in a to the campus. The visiting animals way that catches you and makes you included two clouded leopard cubs, understand what is at stake — but not an alligator, a flamingo and an conservation. GEICO associates know, in a scary way,” said Rost. “When we armadillo. however, their work is not nearly kicked off the exhibit in San Diego, • Associates also organized a nation- done. Every day they learn new ways the five geckos in the planetarium wide trivia contest to highlight the to improve the environment. Public seemed to know they were on stage, alarming statistics about environ- Affairs Coordinator Sarah Berner hanging from branches, and perched mental conditions. added, “We can only hope to set a upside down on the light fixtures pan- • Hundreds of reusable shopping bags good example and encourage everyone els. The children really enjoyed it.” were distributed to associates at all to step up and lend a hand.” n The exhibit next traveled to the major GEICO locations to use for Houston Zoo in April, visited the grocery and retail purchases. *The World Conservation Union (ICUN) indicates there were 16,306 endangered species Denver Zoo and will head to Omaha, Through education, community 2007, and the list is growing every year. It adds Nebraska this summer. At each zoo outreach and sponsorship programs, that threatened species are only part of our world’s location over the next three years, GEICO and its associates are helping conservation issues.

15 Rebuilding Efforts in “Green”sburg hen a series of tornadoes foundations poured, the two houses his wife were living in a FEMA trailer destroyed Greensburg, had walls but the community build- on their construction site. Their son, W Kansas, and five surround- ing did not, and none had roofs. The Brady, along with his wife and two ing counties in May 2007, Lockton building supplies, siding, roof trusses children, were staying in a house Associates immediately asked what and two-by-fours had been purchased they owned, but used as a rental in could be done to help. After the town through federal grant and homeowner’s Haviland, about ten minutes away. evaluated its needs, it was decided insurance money and were at the sites, The house Brady and his family lived that a group of volunteers from ready for the Lockton team to start in before the tornado was the family Lockton would travel to Greensburg working. Due to limited funds and farmstead. Owned by Steve, it was the to assist with the rebuilding efforts. manpower, the community has relied house that Steve and, subsequently, Lockton Companies, an insurance heavily on volunteer labor for its clean- Brady grew up in. broker, has long been known for its up and rebuilding efforts. On both houses, the Lockton community involvement, but its asso- The Lockton team split up into team’s main goal was to get the roof ciates had never tried anything this four separate groups and got to work. trusses up as the concrete was poured ambitious before. One team’s work of cleaning up and the walls were in place. In the late Lockton’s Matt Pateidl, environ- debris was equally important as the afternoon of the second day, all the mental risk consultant, and Kristine construction projects. Five months trusses on the main level were up, but Krausse, community relations spe- after the storm, the volume of debris the second story still needed to be done. cialist, met with members of the that was still there astounded the The team was tired and ready to call it South Central Tornado Recovery team. They spent the day cleaning day, but Ralph, a Greensburg resident, Organization (STRCO), the group up several acres of farmland around retired builder and relative of Steve and charged with the clean-up and rebuild- the community center site, called Brady’s, who had been working with ing efforts for the entire region, to Volunteer Village. In addition to the team throughout the day, said ‘Do discuss how Lockton could help. Matt basic housing and trash debris, the you have it in you to finish?’ That com- and Kristine conveyed to James Bond team found crushed farm machinery, ment reenergized the team and they of STRCO that Lockton had 80 ready billiard balls, eight-track tapes, dolls worked until sunset and finished all the and willing associates and a number of and toys, and a lot of clothing. trusses on the house. tools and supplies; they just needed a Early one morning, Volunteer “When the last truss was finally date for the trip. Village started as a slab of concrete. nailed in place, Ralph approached me,” When the caravan of Lockton vol- Lockton’s team assembled and put recalled Pateidl. “I offered my hand and unteers pulled into town, they were met up all the walls of the 3,000 square he pulled me into a tremendous hug. It by residents and members of SCTRO. foot community center. By the next was a great sense of accomplishment to With the help of STRCO, Lockton evening, Volunteer Village had four finish the project and help these people was the first corporation to organize completely installed outside walls with after all they had been through.” a volunteer effort of this magnitude. siding and paint, all of the roof trusses The Lockton team did more than Most other volunteers had come from in place and the appropriate door and help with the clean up and construction relief and church groups. The team window openings complete. of buildings. They also met with resi- toured the town and the two houses The two houses the Lockton team dents and listened to their accounts of and a community center that needed was working on belong to a father surviving the tornado, heard residents’ Lockton’s help. All three structures had and son, Steve and Brady. Steve and memories of their town and their plans

16 Lockton associates help rebuild the town of Greensburg, Kansas.

Photos courtesy of Lockton Companies.

for the future. Pam Enright, director of inter- few deaths was nearly incomprehen- Metzner. “This camera allows firefight- national benefits for Lockton Benefit sible, given the devastation the tornado ers to see in zero visibility conditions, Group, had a special connection to caused that day. even in pitch dark or in a room filled Greensburg and some of its residents. “I had some time to search out with smoke. The traditional method Both of her parents had grown up there the lots of land that my family owned. of searching a room was crawling on and graduated from Greensburg High The homes were gone, save a handful your hands and knees, feeling your School back in the 1950s. Two of the of bricks. All that was left were gaping way around the room. With the imag- town’s businesses are owned and man- holes in the ground where the founda- ing camera, a firefighter can stay at the aged by her uncle and his two sons. tions had been. It was heartbreaking. doorway and scan the room to locate During the trip, Pam was able to spend As you can imagine, my family is so victims. This technology has reduced time with both of her cousins and hear thankful that Lockton and so many of the search time from minutes to mere directly from them how the disaster had the associates gave of their time and seconds.” affected their lives, families, businesses, effort to help rebuild Greensburg,” Lockton and Fireman’s Fund and ultimately what it could mean added Enright. presented the camera to the fire depart- for their future. The family intends Lockton’s partnership with ment earlier this year. In addition, to stay in Greensburg and rebuild Greensburg and its residents has not Mark Henderson, chief operating offi- their businesses, but all admit that ended. Tom Metzner, senior loss con- cer of Lockton’s Kansas City property the process is slow and painful. They trol consultant, had an opportunity to and casualty operation, has sparked a have an amazingly good attitude given visit with the Greensburg firefighters fundraising campaign that has gener- their circumstances, and they look at and discuss their challenges and needs. ated more than $30,000 from Lockton things now as “their new normal,” said Tom worked with Fireman’s Fund’s associates and friends. The “LEAD” Enright. Heritage Program, which identifies Fund, or Lockton Emergency Athletic “It was unbelievable, driving fire departments in need of equipment Department Fund, is funding items into Greensburg that first day. Nearly and tools.With more than 15 years as that the local high school athletic everything was gone—homes, busi- a volunteer firefighter, Tom is keenly department needs. It is hoped that nesses—even the tops of the trees. It aware of the role good equipment and the fund can touch as many students’ was virtually impossible to get my bear- tools play in protecting residents and lives as possible and rebuild the sports ings,” recalled Enright. “Greensburg is a property. program. Watching the Greensburg small town and had beautiful old trees, “Through the Heritage Program, Rangers play football last fall, the wide streets and many old, wonderful Lockton and Fireman’s Fund pur- Lockton team saw the importance of houses. The tornado literally had ripped chased a thermal imaging camera for helping rebuild the school and its sports it all apart. The fact that there were so the Greensburg Fire Department,” said program, as well as the town. n

17 Taking Care of Business and the Environment

hile XL Capital’s global insurance operations may W be busy helping many customers manage the most compli- cated of environmental risks, XL has certainly not overlooked managing and minimizing the environmental impact of its own operations. With a long his- tory of providing environmental risk products, participating in local pres- ervation projects and a recent move into a new “green” office building, XL is focusing more on environmental protection activities in the local com- munities where it operates. XL completed and moved into its first “green” office building in Exton, Pennsylvania, to accommodate its growing Environmental, Design Professional, Excess & Surplus, and Program business units there. XL worked with local developer, The Hankin Group, to design and con- struct a new 150,000 square foot office building using sustainable design principles. The building was designed to qualify for “silver cer- tification” under the Leadership in Energy and Environmental Design (LEED) Green Building Rating System from the U.S. Green Building Council. LEED certification provides inde- pendent, third-party verification that a building project meets the highest XL’s Peter Chin makes repairs to a dune fence. Photos courtesy of XL. green building and performance mea- sures. Silver certification is the 3rd

18 With a long history of providing environmental risk products, participating in local preservation projects and a recent move into a new “green” office building, XL is focusing more on environmental protection activities in the local communities where it operates.

highest LEED certification for com- • Locating the project near public - Installing carpets made from mercial buildings. transportation; either post-consumer or post- According to Peter Chin, XL’s • Reducing water consumption by industrial recycled content which head of corporate administrative using low-flow fixtures to reduce at the end of its useful life can be services, which oversees XL’s facilities the burden on municipal water recycled back to its fibers; worldwide, “XL’s new office build- supplies and wastewater systems; - Selecting paints with low VOC’s ing in Exton is bringing nearly 500 • Reducing energy consumption by (volatile organic compounds) employees under one roof. Even more using efficient lighting fixtures, which means they have a low importantly, the building is doing it daylight responsive controls, and odor content and result in with minimal environmental impact Energy Star rated equipment and minimal off gassing or, in other as a result of the “green” design prin- appliances; words, the release of gases from ciples. This new building project is • Purchasing “Green Energy” such as the paint; the first of its kind for us and will be renewable energy technologies; - Using woods from certified for- the first of our offices to seek LEED • Using regional materials and ests (not endangered woods). certification.” materials with recycled content The woods have an earth friend- Both the base building and to minimize the environmental ly stain and water based finish; the interior of the new office were impact. This included: - Choosing wall covering products constructed to achieve LEED silver - Putting fabric materials in furni- that are recyclable and are either certification by employing a number ture and other furnishings which made from recyclable content or of best practices including: are made with recycled content; renewable resources;

Left: Volunteers from XL clean debris from nearby French Creek. Above: XL volunteers take a break from a beach clean-up.

19 - Mounting man-made ‘stone’ countertops that are recyclable and made of recycled contents — crushed glass and concrete. Rich Corbett, who heads XL’s Global Environmental Insurance divi- sion in Exton, said, “We help our clients manage the environmental risks that their operations may pose to the environment, public health and within our local community. XL’s commitment to green design has taken our environmental stewardship to a whole new level.” Being able to work from a “green” building further solidifies The clean-up of a creek yielded all this garbage, thanks to XL volunteers. Corbett and his team’s commitment to environmental protection. While they employ their environmental underwriting skills to help customer’s remove invasive plant species, imple- employees planted trees, helped environmental risk management ment erosion control measures, and build a footpath in the park’s for- efforts, XL’s Exton employees have a repair trails to water access. est, and performed other outdoor longstanding history of environmen- XL’s Green Team and their col- maintenance; tal stewardship outside of the office. leagues across the globe were out in full • ’s Parks Through an employee-organized force on May 21 — XL’s Global Day Department, which needed help volunteer group called “The Green of Giving this year — assisting with with a variety of clean-up activities; Team”, they contribute to a variety many local environmental initiatives. • The Tri-State Bird Rescue in of environmental projects throughout For the third consecutive year, XL’s Delaware, which required much- the year, partnering with several local 4,000 employees spent their day giving needed maintenance at its rehabili- environmental organizations to lend back to communities which have sup- tation facility which helps return their time and environmental exper- ported the company’s growth over the birds that are injured, orphaned, or tise to help preserve or restore local last 22 years. XL initially launched its exposed to oil pollutants back to natural resources. One beneficiary Global Day of Giving in 2006 in cel- their natural environment. of XL’s Green Team’s volunteerism ebration of its 20th Anniversary. “XL has provided us with a is the Green Valley Association, an This year, many of XL’s com- greener workspace and has encour- organization devoted to protecting munity service projects focused on aged our environmental preservation water quality and quantity. For the environmental protection efforts. work through efforts like our Global last several years, XL employees have Worldwide, XL employees helped a Day of Giving,” said Corbett. “As helped with the restoration of a two- variety of environmental organiza- we continue to work with clients to acre section of French Creek, near tions with their preservation and ensure that their business operations their office. The property is a former education efforts including: do not negatively impact the environ- brownfield, or polluted site, and is • Bermuda’s Aquarium Museum ment, we do it knowing that we don’t the only brownfield in Pennsylvania & Zoo, which needed help with just ‘talk the talk’. We’re putting our to be returned to its natural status. landscaping and clean up activities best foot forward and ‘walking the To keep it in its natural state, XL around its on-site reservoir; walk’, making sure that we do our volunteers help with general mainte- • Switzerland’s Tierpark Goldau, part in helping to protect our natural nance activities including helping to a wild animal park, where XL resources in whatever way we can.” n

20 Launching a Global Climate Initiative

n January 2008, Zurich Financial is having a deep knowledge of what Council (CCAC) consists of both Services announced that it was risks threaten which segments of soci- internal functional leaders and exter- Ilaunching a global Climate ety how, and to applying that insight nal advisors. The CCAC reports to Initiative. The primary focus of the through the development of products Zurich’s Group Management on initiative is to understand the emerging and services that enable customers to strategic and operational issues associ- weather, financial and regulatory risks adapt to those risks and continue oper- ated with climate change. Advice will associated with climate change and to ating productively. The climate change be rendered at both formal meetings develop products and services that help challenge is precisely the type of situ- and on an informal dialogue basis. customers cope with these risks. ation in which Zurich’s skills sets will In January 2008, Zurich announced Over the past several years, Zurich assist its stakeholders in adaptation. the first two external members of the has focused itself on establishing There are three primary pillars of CCAC: former U.S. Congressman operating platforms, talent manage- Zurich’s Climate Initiative — an inter- Sherwood Boehlert and Ernst Ulrich ment programs, financial processes nal Climate Office, a Climate Change von Weizsäcker, Dean of Donald and strategic objectives to ensure the Advisory Council, and development of Bren School of Environmental Science company maintains a sustainable path an applied research program. & Management at the University of for profitable growth and operational Zurich’s internal Climate Office California, Santa Barbara. transformation. is charged with driving an understand- In addition, former U.K. Prime Zurich is now systematically ing of climate-related risks across all Minister Tony Blair serves as a general looking at areas where it can most business segments and divisions. The advisor to Zurich on a variety of mat- effectively apply its global capabilities, Climate Office is fully embedded in ters, including providing insight on particularly as they relate to areas of Zurich’s underwriting infrastructure, issues related to climate change. risk that are important to its diverse demonstrating Zurich’s market- The applied research program customer segments around the world. focused climate change approach. works to partner Zurich with orga- At the 2007 World Economic Key elements of Zurich’s Internal nizations and institutions to examine Forum in Davos, Switzerland, the Climate Office are: champion climate the critical economic, finance and issue of climate change surfaced as a change strategy throughout global policy issues associated with climate leading topic of discussion. At that business by providing central source change. The first such partnership is point in time, Zurich committed of climate change knowledge and with Dean von Weizsäcker’s Donald itself to developing a concrete plan to facilitating integrated product and Bren School of Environmental Science address climate change in a respon- initiative development; monitor the & Management (Bren School) at sible, meaningful and sustainable implementation and impact of climate the University of California, Santa manner — the result being Zurich’s change products and initiatives; pro- Barbara. Through this particular Global Climate Change Initiative. vide regular communications updates partnership, Zurich has funded a Climate risks, such as potential for across the businesses; engage internal Distinguished Visitors program to lawsuits, regulations and/or legislation and external experts, e.g. academics, attract scholars and global thought- are an emerging area of exposure for analysts and cultivate strategic partner- leaders to focus on climate changes Zurich’s customers across the globe. ships, including the Climate Change issues, strategies and solutions. Risk management is what Zurich Advisory Council; make customer rec- The Bren School has developed specializes in and successfully delivers ommendations. its list of Distinguished Visitors and for its customers. The key to success Zurich’s Climate Change Advisory Continued on page 27

21 Winds of Change

he debate on climate change Today there is fairly strong con- successfully against your more conser- — although certainly noth- sensus that climate change can no vative competitors. On the other hand, T ing new — has been close longer be avoided, and that human if you wait too long, global warming to ’s heart for many years. activity is largely responsible. But will could run out of control, reaching the The Munich Re Group has been a we succeed in controlling it within critical temperature level at which the leader in the field of climate change acceptable limits? The game, aimed game is lost for everybody. Should research for more than 30 years. It at those at least 12 years old, gives you buy emission chips and build grey established the first and foremost players a chance to try. As in real life, cities, or should you invest heavily in research center in the insurance sec- the game emphasizes the need for know-how and build green cities? And tor in the mid-70s related to climate teamwork to overcome the challenges how will you survive the disasters that change and global warming — long climate change presents. So together may strike you at any time? Save for a before these became a “fashionable” with up to three other players, the rainy day, or buy insurance, and if so, topic — with almost three dozen sci- goal becomes to make good use of the how much? entists in its GeoRisk department who Winds of Change and prevent them Some of the specific challenges the are dedicated to this subject. from developing into a devastating players are faced with include: The company has always felt storm. • To successfully manage the risks a societal obligation to do its part For example, with “grey” cities, of climate change and to win the to help promote understanding of you can earn a high income, but you game, global warming has to be the complex issues surrounding this create global warming by using fossil kept below 2°C. important topic. fuels. In the long term, this destroys • Overshooting the 2°C threshold is With this in mind, the company your (and all of our) well-being. possible for a limited time, but only developed in concert, with the Euro- Sooner or later, you must replace grey at a considerable and incalculable pean Climate Forum, Winds of cities by climate-friendly “green” cities. risk. Change, a board game to highlight These are free of emissions, creating • Players can use carbon capturing the challenges that humankind faces income and welfare that is sustainable. and sequestration to actively remove as a result of climate change. The But the players are faced with difficult CO2 from the atmosphere. game’s premise is fairly simple: we are choices — just like in real life. If you • Emission permits are used as a all winners, or all losers, when it comes switch too early from grey to green mechanism for limiting CO2 emis- to climate change. cities, you may not be able to compete sions. • Players need to make risky invest- ments in technological know-how if Opposite page: Munich Re employees they want to build green cities. The learn to play the Winds of Change. more know-how, the higher their income from green cities. Pictured, left to right are: Neisha To minimize climate change Sammy, Jean Fellows-Johansson, Kevin impacts, players can purchase insur- Burnett, Josh Kuhns and Dennis Smith. ance policies.The game illustrates the Photo courtesy of Munich Re. climate challenge in a playful way

22 Today there is fairly strong consensus that climate change can no longer be avoided, and that human activity is largely responsible. But will we succeed in controlling it within acceptable limits?

and it can be used in team learn- GeoRisks Research, said, “Thanks to (about 47 U.S. Dollars) and has already ing, schools, focus groups, etc. It the game, difficult issues of climate been distributed to some journalists. includes several features that are hotly change becomes more comprehen- Munich Re will be donating some debated in climate policy-making; sible.” Thomas Loster, chairman of games to select schools in the future. including,among others: investments the Munich Re Foundation, which Although “it’s only a game,” it in R&D, technological learning offers microinsurance solutions to is fair to say that everyone recognizes and innovation, de-carbonizing the disadvantaged people in disaster-prone that the challenges of climate change economy, ocean uptake of CO2, the regions, hopes that “Winds of Change are “anything but.” Indeed, if the play- 2 degrees limit, and insurance against will increase awareness of the climate ers choose wisely, then they can save extreme weather events. change challenge among the general the earth from impending peril. If they Professor Peter Hoeppe, head public.” don’t, then the world we hold precious of Munich Re’s Department of The game sells for about 30 Euros will disappear. n

23 Responsible Building Is Strong by Design

roperty owners today are inun- states where Fortified building tech- Windows and doors with a dated with information about niques have recently been incorporated higher design pressure rating will Phow to make their home more with environmental design. add to the protection from exposure sustainable. This new information is Natural threats from earthquakes to wind and water. in large part the result of a broadening and high winds are a reality for The stone-coated steel roofing societal movement away from long- homeowners in much of the Pacific panels may look like a regular shake held views about “disposable” building Northwest. A newly constructed house roof, but they are designed to hold materials and practices. Fortunately overlooking Puget Sound in Seattle up to high winds, hail and fire. The for homeowners that are feeling a bit offers peace of mind from disasters panels are installed using an interlock- overwhelmed by all of the new design while embracing environmentally ing structure and a unique horizontal ideas, there is one construction pro- sound building practices. fastening method. gram that clearly rises to the top when The 4,100 square foot, three bed- On the environmental side, the it comes to creating a house that is room, four bathroom home “is the first home is equipped with a geothermal both good for the environment and house west of the Rockies to earn the heating system that taps into the when severe weather threatens. Fortified designation,” noted Chuck natural heat in the earth. The system The Institute for Business & Vance, IBHS project manager. “It was pumps water through a series of sealed Home Safety’s (IBHS) Fortified…for built as a NextGen First to the Future pipes buried below the home, which safer living® new construction Home and is an example of just how then pump the water into a radiant designation program uses building well the concepts of durability and sus- floor heating system that heats the code-plus practices that complement tainability can work together.” home from the ground up. the guidelines set out for “green” The IBHS Fortified criteria are Other technologies that make this building. The result is a safer, more tailored for a specific geographic region home greener include its construction durable home that works with the and provide overall disaster resistance using Insulated Concrete Forms (ICF) environment, rather than against it. above what is required by local building in place of traditional wood fram- “Green, energy-efficient, and codes. The Fortified program focuses ing, and Structurally Insulated Panels disaster-resistant building technologies on especially vulnerable areas of a (SIPS) that combine framing and insu- are made for one another,” said Julie home, including doors and windows, lation into one product. Rochman, president and chief execu- the roof and the foundation. The combination of using ICF tive officer of IBHS, “and Fortified Fortified features include upgrad- and SIPS and geothermal heating can construction is a perfect solution if ed roof-to-wall and wall-to-foundation help the homeowners save 30 percent you are interested in reducing energy connections. These will allow the to 70 percent on energy bills. consumption, protecting the environ- house to hold up against 130 mph When it comes to battling severe ment, and protecting your family and peak wind gusts and better enable the tropical conditions, homes in Bermuda community from Mother Nature’s structure to withstand earthquakes and Antigua traditionally have proven wrath.” Light-weight roofing materials to perform well. The developers of a Recognition for these complimen- were used to help resist high wind, Florida community took a page from tary pairings is growing among builders, hail impact and fire, while a secondary history when designing the first com- local governments and consumers from moisture barrier beneath the roof cov- munity where every house will be Florida to Washington State — two ering will prevent water intrusion. Fortified…for safer living®.

24 The community of Alys Beach that are reinforced with metal rods. In the tradition of island homes, sits in the Florida Panhandle, which The interiors are constructed the architects included porches, gal- has been hammered by a series of hur- using conventional stud walls, but that leries and gated openings that take ricanes in recent years. At first glance, is where tradition ends. The walls are advantage of the sea breezes. This there clearly is something different covered with spray foam insulation allows 30 percent to 40 percent of the about this sprawling homestead that before drywall is attached. The finish- useable space to remain comfortable has risen from the sugary sands. ing touch is a plaster veneer on the without installing air conditioning. Developer Jason Comer and interior and a stucco finish that results The Antiguan practice of using EBSCO Gulf Coast Development, in the cool exterior appearance. The clerestories takes advantage of natural Inc. embraced Bermudian architec- result is walls that are 11 inches thick, light from above, while outside pavers ture in constructing this community, a fact that adds to the energy efficiency make the most of the area’s propensity which will eventually have 900 homes, and disaster resistance of the homes. for rainfall by directing 35 percent of all built to the Fortified standard. The The concrete roof tiles are mor- the water back into the ground. property also will include a 22-acre tared and then secured in place using The community is still under con- nature preserve, an amphitheater, a steel screws. The overhangs are shallow struction, with 45 homes occupied or beach club and spa, and a town center. to minimize the chance of hurricane nearing completion. It is slated to be From the concrete tile roofs to the winds lifting off the roof. The Fortified fully occupied by 2020. smooth white exteriors that cover walls program requires that these houses With more Americans living in made from filled concrete blocks, Alys be capable of withstanding 160 mph vulnerable geographic areas than ever Beach exudes both the airy romance winds, because of their location along before, and the increased concern of the Caribbean and the confident the Gulf Coast. about environmental impacts, there strength of a community that is built In addition to being disaster has never been a better time to think to last. The homes, which range from resistant, the homes — and the entire about building a Fortified home. 2,500 square feet to 3,200 square feet, community — are intended to embrace “Fundamental to sustainability were built using concrete masonry units proven environmental practices. is getting a good set of bones,” stated

Continued on page 27 IBHS’ Fortified home in Seattle, Washington. Photo courtesy of IBHS.

25 Being “Green” Makes Good Business Sense

n response to the booming green • Designing interior office space to Liberty Mutual also works construction market, on Earth open up building perimeters to closely with outside vendors to en- IDay 2008 Liberty Mutual’s increase daylight and outside views; sure that they follow environmentally Commercial Property operation intro- • Installing low-flow sinks and toilets; friendly procedures. For example, duced one of the most flexible green • Incorporating room occupancy the company requires that cleaning commercial property endorsements in sensors in all office and common vendors recycle plastic cleaning prod- the industry. Yet even before today’s areas; and uct containers and use microfiber current “green tidal wave” hit cor- • Installing recycled/recyclable carpet products, which use fewer chemicals porate America, Liberty Mutual had and under-floor air distribution in the cleaning process than mops. begun following environmentally sus- systems. To further reduce energy usage tainable design in its own buildings. Going beyond LEED certification, and improve indoor air quality, the While the company has imple- Liberty Mutual has implemented a vari- cleaners use backpack vacuum clean- mented the U.S. Green Building ety of other “green” initiatives that have ers that use less energy and have Council’s LEED (Leadership in had a tremendous impact including: better air quality than standard Energy and Environmental Design) • Replacing over 10,000 standard vacuums. Green Rating System for all new lightbulbs with energy-efficient The majority of Liberty Mutual’s construction, as well as its 22 owned bulbs that use under one watt of print vendors are FSC-certified (Forest properties and nine million square energy per square foot — effectively Stewardship Council), which ensures feet of leased space, it did not do so to cutting wattage use in half; that every organization involved in a follow a fad. Every “green” initiative • Upgrading an HVAC system by print product — from the company undertaken by Liberty Mutual must replacing four 25-year-old chiller harvesting the trees, to the mill and meet a litmus test of being a sensible plant units with three new energy down through the rest of the pro- program that saves money while efficient units. The reduction in cessing chain right up to the printer reducing the company’s impact on the energy usage from the new units creating the final product — uses environment. was so significant that the local elec- responsible, environmentally-friendly LEED certification requirements tric utility provider called Liberty materials and processes. that meet this test include: Mutual to ask what happened; Overall, being “green” at Liberty • Purchasing construction materials • Recycled nearly 8.5 million pounds Mutual translates to resource conserva- that originate within a 500-mile of paper, which saved over 71,000 tion and preservation. The company radius of the work site; trees and 29 million gallons of works to control consumption of • Using low VOC (volatile organic water; and energy and other resources through compounds) adhesives, sealants, and • Upgraded its automobile fleet of activities that have impact and are paints; 2,700 vehicles so that 28 percent cost-effective. This strategy of focus- • Installing white, reflective roofing; of the fleet vehicles are flex-fuel ing on meaningful energy reduction • Setting aside preferred parking for — able to use E85 fuel — and 11 activities lets Liberty Mutual behave hybrids and other low-emitting, additional vehicles are Partial Zero responsibly to both the environment fuel-efficient vehicles; Emissions Vehicle certified. and to its policyholders. n

26 RESPONSIBLE BUILDING durable construction with environ- COMMITMENT continued from page 25 mental design.” continued from page 12 Clearly, the nation’s housing stock John Kiefer, vice president of E3 can and will be greatly improved as On a global scale, in 2007 Swiss Re Building Sciences, an engineering con- consumers and developers make well- launched the Climate Adaptation sulting firm in Naples, Florida. Kiefer informed, environmentally responsible Development Programme (CADP) is currently working with IBHS to choices about where and how homes designed to drive the development of gain the Fortified designation for the are built. Also, individual families and a market for the transfer of weather- first affordable ‘’green’’ house built in entire communities will be better off related risks in the emerging markets. the Liberty City area of Miami-Dade than ever before The products traded on these mar- County, Florida The home is being “By marrying stronger building kets, weather derivatives, protect built by Lundy’s Palmetto Homes of techniques with green building prac- small farmers from the drought- Miami with financial help from the tices, homeowners everywhere can rest related failure of their harvests and Miami-Dade Housing Foundation and easier knowing they are doing what is resulted food shortages. These instru- the Housing Finance Authority. right for their families and the planet,” ments allow people in countries This could be the start of creating said Rochman. “We all need to remem- lacking formal agricultural insurance safer and cost-effective homes that ber that even the greenest house can to protect against crop losses. The embrace environmental practices in a end up in a landfill if it’s not built to first step in Swiss Re’s CADP was state that is at the mercy of hurricanes stand up to Mother Nature.” to insure 150,000 people in Kenya, and other severe weather. The Fortified program is active Mail and Ethiopia, working in close “A strong house is going to be in 13 states. So far this year, new collaboration with the International a better option for a number of rea- homes have been unveiled in Florida, Research Institute for Climate and sons,” said Kiefer. “It just makes sense Georgia, Louisiana and Washington Society of Columbia University and on so many levels to bring together State. n the Millennium Promise Alliance. n

GLOBAL CLIMATE As part of this partnership, the needs and options. INITIATIVE Bren School will assess Zurich’s own A final important item to note continued from page 21 carbon footprint and develop a con- is that Zurich’s Climate Initiative sistent approach as to how Zurich can is not a public relations stunt. It’s will soon be in the process of defining actively manage its carbon emissions in directly embedded in the business and arrangements for a series of seminars a meaningful and sustainable manner. reports to Zurich’s global chief under- beginning in Fall 2008. Significant emphasis is being placed writer officer. Zurich has already been Zurich is in active discussions with upon the development of a strategic exploring such options in the past and the Bren School to address research protocol and approach for evaluating pioneered discounted premiums on activities in water management and the carbon footprint of a services-based hybrid and alternative fuel vehicles in energy related issues. Specific areas of company as part of the project. The North America as far back as in 2005. discussion surround unique impacts school has assigned a team to the carbon Similar offers exist in Germany and of hydroelectric power and specialized footprint project and representatives are Switzerland. options for water scarcity management. actively meeting met and exchanging Recently or soon to be launched Individual discussions related to other information. Zurich expects that the products include: political insurance climate-related risk issues and research work done under this project will not risk for carbon credit projects; politi- options have been wide-ranging and only help Zurich determine how to best cal insurance risk for a hydroelectric collaborative in nature and the com- approach carbon footprint management, power plant in Sri Lanka; dedicated pany expects additional activities, both but also it can be used by other service alternative energy team established in the short- and long-term, to emerge providers and stakeholders in consider- with global focus; and a series of green and develop. ing their carbon footprint management oriented propositions in the U.K. n

27 GREEN TEAM Chubb is doing its part to save the world. This portability is especially continued from page 13 environment with its ePolicy, a important following a disaster in secure electronic insurance policy that which customers’ personal files may feature will help businesses that sus- streamlines the delivery of personal have been destroyed along with their tain a property loss to their non-green insurance policies and reduce envi- homes. buildings add energy-conserving fea- ronmental waste. Chubb has been phasing in tures when rebuilding. The ePolicy will shorten the poli- and promoting its new ePolicy As governments worldwide cy distribution process by several days nationwide since September 2007. intervene to accelerate the green build- and will enable customers to receive If 20 percent of Chubb custom- ing market, the technology behind their policies in a more secure format. ers opt to receive ePolicy renewals developing green building standards Also, ePolicy will help reduce the and endorsements, Chubb will save continues to change rapidly and amount of trees consumed and the about 1,000 trees and nearly one present new complexities to the mar- pollution caused by the byproducts of million gallons of water and pre- ketplace. paper production. vent the creation of 46 tons of solid Thompson said Chubb’s green Chubb’s ePolicy will enable waste and the emission of 113 tons energy team is made up of under- customers to receive their policies of greenhouse gases. writers with expertise in areas such and related policy documents via e- “Chubb is not just embracing as property, machinery, marine, mail and store them electronically as the green movement, but as we do in information and network technol- securely encrypted PDF attachments. all other property and casualty areas, ogy, environmental and loss control Since the policy is stored electroni- we’re committed to being a leader in services. cally, customers can access it on their this growing market segment,” said In addition to the green team, laptops at anytime or anywhere in the Thompson. n

Integrated approach munities more resilient to existing conferences, including the National continued from page 9 hazards and to avert the worst Association of Mutual Insurance consequences of climate change. Companies seminar on going green, Change Business Environmental Travelers has committed signifi- the Minnesota E3 Conference on Leadership Council (BELC). The cant financial support, as well as renewable energy, the Connecticut recent Pew Center report on how expertise from the company’s risk Business & Industry Association businesses are adapting to climate control, underwriting and catastro- Panel on climate change, and the change and the risks they face phe management professionals. University of Maryland Climate featured Travelers as one of three • In addition, Travelers sponsors or Change Conference. companies profiled. participates in a number of other Climate change is not something • Travelers’ work with the Wharton influential organizations and ini- that can be addressed with a single Risk Management and Decision tiatives, including the Institute silver bullet. Every green effort helps, Processes Center as a sponsor of its for Business and Home Safety but companies have to move beyond latest report on the growing threat (IBHS), The Minnesota Climate single-step solutions. of hurricane risks and flood hazards, Change Advisory Group and the From inside out, insurers should and the role of mitigation, insurance Catastrophe Modeling Forum con- be taking an integrated approach that and capital market instruments in vened by the Insurance Information builds “green” into diverse aspects managing those risks. Institute and Harvard Medical of their business. Travelers is embrac- • Sponsorship of the Resilient Coasts School’s Center for Health and ing this strategy with its corporate- Initiative, created by Ceres and the Global Environment. Travelers chartered Climate Change Committee the Heinz Center to foster public also has participated in a number — and encourages others to work on policy that will make coastal com- of climate change seminars and similar coordinated approaches. n

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