swiss re and sustainability: a contribution to making the ...d66f7674-c18d-4774...swiss re uses its...
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Swiss Re and Sustainability: A contribution tomaking the world more resilientPresentation at University of Zurich, “Business & Society” Vorlesung – 11. November 2019Irene Perrin, Senior Sustainability Consultant
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Sustainability Risk
Framework
Macro trends and emerging
risks
Approach to sustainability
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Protection gap & climate
change strategy
Sustainability@Swiss Re | October 2019
Who we are:
The Swiss Re Group is a leading and highly diversified global re-insurer, founded in Zurich, Switzerland, in 1863. We operate around the world and have about 14,200 employees who contribute to our success.
We are organized in three Business Units:
Our Reinsurance Business Unit offers reinsurance products and related services for property and casualty, as well as for life and health businesses.
Corporate Solutions offers commercial insurance to mid-sized and large corporations.
Life Capital manages open and closed life insurance books.
We also support the public sector with our Public Sector Solutions team to help increase insurance penetration around the world.
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Sustainability@Swiss Re | October 2019
Swiss Re Group at a glance
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150+Years experience
Leading and highly diversified global reinsurer, founded in Zurich (Switzerland) in 1863
A.M. BEST MOODY’S S&P
Aa3 AA-History of proven strength, consistently maintaining an A+ rating, makes Swiss Re a reliable partner
Financial strength
Swiss Re offering
Highly diversified, Swiss Re offers both traditional and innovative products in Property & Casualty and Life & Health business across all geographies
USD35bn
Market-leading position
Swiss Re’s Gross premium written totaled almost USD 35bn in 2018, thus reaffirming the leading position in the industry
32%* 21%*47%*
*% of Net premium earned in 2018
A+
Americas EMEA Asia
Our Vision: We make the world more resilient
Together, we apply fresh perspectives, knowledge and capital to anticipate and manage risk. That’s how we create smarter solutions for our clients, helping the world rebuild, renew, and move forward.
Macro trends and emerging risks
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Sustainability@Swiss Re | October 2019
Tomorrow’s risk landscape is shaped by macro trends and their interconnections
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Competitive and business environment Technological and natural environment
Political environment Societal environment
Sustainability@Swiss Re | October 2019
Global macro risk trends interdependencies map 2019
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Trends
Risks
Source: Global Risk Report 2019, World Economic Forum
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Emerging risk examples
A changing climate Ageing in dignityAlgorithms are only human too
Approach to sustainability
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Sustainability is a strategic topic across stakeholder groups
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Clients and peers
scale up sustainability activities and
exchange their views with us
Investors
make environmental, social and
governance (ESG) factors a standard in
decision-making
Regulators and government
put sustainability and climate change
on top of their agenda
Employees
are attracted by andcontribute to
innovative sustainability
solutions
Sustainability@Swiss Re | October 2019
Our approach to sustainability
Sustainability as a guiding principle
Taking the long-term view, playing our part in enabling sustainable progress
Swiss Re Group vision
We make the world more resilient
Swiss Re Group mission
Together, we apply fresh perspectives, knowledge, and capital to anticipate and manage risk. That’s how we create smarter solutions for our clients, helping the world rebuild, renew, and move forward.
Corporate Responsibility Map
Focusing on relevant Corporate Responsibility Topics
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Sustainability mission
We insure, invest, operate and share our knowledge in a way that tackles sustainability challenges and creates long-term value.
Sustainability@Swiss Re | October 2019
Swiss Re’s Sustainability Map gives an overview of the topics we address
See for further information 2018 CR Report
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Sustainability Risk Framework
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Sustainability@Swiss Re | October 2019
Societal topics
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Swiss Re’s Sustainability Risk FrameworkA risk management instrument to identify, assess and tackle environmental and human rights risks
Sustainability@Swiss Re | October 2019
The Guardian, June 2016
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Headline risk
Reuters, January 2017
NU Property & Casualty, October 2019
Financial Times, September 2019
Financial Times, February 2017
Unfriend Coal Coalition, Oct 2019
NY Times, February 2019
Sustainability@Swiss Re | October 2019
SUSTAINABILITY UMBRELLA GUIDELINES NUMBER OF SENSITIVE BUSINESS RISK REFERRALS
0
100
200
300
400
500
2013 2014 2015 2016 2017 2018
proceed proceed with conditions abstain
Human rights
We only support companies that respect human rights in all their practices. No business is conducted with countries and companies that are complicit in severe human rights violations
Environmental protection
We aim to limit our contribution to environmental degradation worldwide. We will not involve ourselves with companies that cause irreversible damage to ecologically sensitive areas
• Animal testing
• Dams
• Defence industry
• Forestry and logging
• Mining
• Nuclear weapons proliferation
• Oil and gas
• Thermal coal
SUSTAINABILITY SECTOR POLICIES
Sustainability Risk Framework in practice
Swiss Re’s Sustainability Risk Framework with umbrella policies for human rights and environmental protection as well as sectorial policies provides a solid framework for the assessment and decision making for sustainability-related risks
Swiss Re’s Sustainability Risk Framework ensures responsible and sustainable business practices by identifying, mitigating and eliminating
potential environmental, social and governance (ESG) risks inherent to our business transactions and investments
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Introduction of online SBR
Assessment ToolIntroduction of thermal coal
policy
See for further information Sustainability Risk Framework publication
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Main concerns in key sectors
Sustainability@Swiss Re | October 2019
SBR methodology and risk referral process: we continuously refine and strengthen our approach to managing sustainability risks
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Sustainability risk referral process
See for further informationSustainability Risk Framework publication
Where we said “no”Dam construction abuses in S.E. Asia
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Any underwriting process for a dam in South East Asia involves a thorough sustainability risk assessment by our SBR team.
In the course of one such assessment, we discovered testimonials of forced labour, violent resettlement, intimidation and absence of local consent to the project.
We decided to forgo involvement in the project as we did not see any potential for redress of the situation and we did not want to tacitly approve and so indirectly profit from such practices.
Where we said “no”Smelter pollution in Latin America
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We were approached with a request for a property cover on a smelter in Latin America.
Our SBR analysis showed that environmental controls on the site had been lacking for decades which had resulted in high pollution levels of air, top soil and ground water.
This was reflected in the poor health of the local community, especially the children.
Given that the company had not implemented any remediation over the past decades and had not respected the community’s right to health, we declined to offer the company cover.
Protection gap and Climate Change Strategy
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Sustainability@Swiss Re | October 2019
Societal topics
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Swiss Re works on closing the protection gap
Sustainability@Swiss Re | October 2019
Disaster losses are still mostly uninsured
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0
50
100
150
200
250
300
350
400
450
500
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
Insured losses Uninsured losses 10-year moving average insured losses 10-year moving average total economic losses
Insured vs uninsured losses, 1970 – 2018, in USD billion at 2018 prices
Source: Swiss Re Institute
Economiclosses =
insured + uninsured
losses
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Societal topics
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Swiss Re’s climate change strategyManaging climate and natural disaster risk is at the core of what we do
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Swiss Re's comprehensive climate change strategy: four pillars
Developing products and servicesto mitigate or adapt to climate risk
Raising awareness about climate change risks through dialogue with clients, employees and the public, and advocating a worldwide policy framework for climate change
Tackling our own carbon footprint and ensuring transparent, annual emissions reporting
Advancing our knowledge and understanding of climate change risksquantifying and integrating them into our risk management, underwriting and investment frameworks where relevant
1 2
3 4
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Sustainability@Swiss Re | October 2019
Developing products and services that address climate change
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Managing Climate and Natural Disaster Risk Advancing Sustainable Energy Solutions
• Insuring Flood: Swiss Re is at the forefront of modelling flood risks, allowing to insure more and more people against this hazard
• Tropical Cyclone: “Loss of income” covers in the US: policies pay out a lump sum in the immediate aftermath of the event for businesses to cover business interruption losses such as cancellations in hotels
• Cover provided to offshore wind farms in Taiwan
• First solar revenue “put”: an insurance product that can guarantee up to 95% of a solar farm’s expected output
• ~3 400 wind and solar farms insured
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Societal topics
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Societal topicsWe explore new topics and shape our position on emerging societal challenges
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We partner for food security
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Protecting Kenyan livestock farmers against drought• Swiss Re helped to launch Kenya Livestock Insurance Program (KLIP) in
2016, the first-ever government livestock insurance scheme in Africa
• KLIP is an index-based scheme using satellite imagery to assess the state of grazing conditions; when a certain threshold is reached, the insured automatically receive a lump sum payment, allowing them to provide their livestock with feed and water
• In 2017, the programme made payouts to 14 000 Kenyan herders, thus saving an estimated 70 000 livestock sustaining 100 000 people
Supporting an agricultural e-voucher scheme in Zambia• Swiss Re supported government-run electronic voucher scheme in Zambia
(E-FISP programme) by offering pricing and reinsurance capacity in 2018
• E-FISP offers smallholder farmers a diversified range of agricultural inputs (such as inorganic fertilisers and seeds) that best meet their actual needs based on local conditions
• All inputs are insured through a weather index insurance programmedesigned by local insurance partners
Swiss Re uses its experience, expertise and financial strength to provide cutting-edge solutions to improve food security by giving farmers protection against natural perils
By providing such insurance solutions to the agricultural sector, Swiss Re plays a vital role in combatting hunger and poverty
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Outlook and conclusion
A learning journey
New Group Sustainability
Strategy
Engagement with internal &
external stakeholders
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Sustainability@Swiss Re | October 2019
Discussion & Links
Contacts
Irene Perrin, Senior Sustainability Consultant, Group Qualitative Risk Management
Further information• 2018 Corporate Responsibility Report (link)• Highlights of Swiss Re’s sustainability
approach (link)• Corporate Responsibility Web portal (link)• Risk Knowledge (link)• Swiss Re Institute (link)• Sonar report (link)
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Sustainability@Swiss Re | October 2019
Legal notice
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©<year> Swiss Re. All rights reserved. You are not permitted to create any modifications or derivative works of this presentation or to use it for commercial or other public purposes without the prior written permission of Swiss Re.
The information and opinions contained in the presentation are provided as at the date of the presentation and are subject to change without notice. Although the information used was taken from reliable sources, Swiss Re does not accept any responsibility for the accuracy or comprehensiveness of the details given. All liability for the accuracy and completeness thereof or for any damage or loss resulting from the use of the information contained in this presentation is expressly excluded. Under no circumstances shall Swiss Re or its Group companies be liable for any financial or consequential loss relating to this presentation.