PSI disclosure of progress

Developed by the UN Environment Programme’s Finance Initiative (UNEP FI) in collaboration with leading re/insurance companies, the Principles for Sustainable Insurance (PSI) provide a framework for the global insurance industry to address environmental, social and governance (ESG) risks and opportunities.

Swiss Re and the PSI

Swiss Re is keen to support the spread of sustainable business practices in the re/insurance industry. As a signatory, Swiss Re supports the PSI’s call for transparency. Swiss Re also provides one of its Board members. Details of its progress on implementing the PSI’s principles during 2023 can be found in the below sections.

This is a summary overview, for further information please refer to the Sustainability Report 2023 (abbreviated SR in the below).

PSI Principle 1: We will embed in our decision-making environmental, social and governance (ESG) issues relevant to our insurance business

Swiss Re has established a Group Sustainability Strategy 2023–2025 which focuses on two sustainability ambitions: advancing the net-zero transition and building societal resilience. Swiss Re implements the strategy with a focus on the following activities:

• Committing to a decarbonisation pathway and setting GHG emission reduction targets for assets, liabilities and operations.

• Providing risk transfer solutions and investments to advance the net-zero transition across different sectors.

• Narrowing the natural catastrophe protection gap by offering respective re/insurance products and services, including advancing climate adaptation.

• Fostering financial inclusion with a focus on household financial protection and healthcare protection.

• Engaging with clients and stakeholders, building on Swiss Re’s risk knowledge.

In addition, sustainability is integrated into Swiss Re’s corporate governance via a dedicated sustainability governance framework, which describes the roles and responsibilities as they relate to defining, approving, implementing, enhancing and monitoring the strategy. The Board of Directors and each of the Board committees as well as the Group Executive Committee (Group EC) and all Group EC members have explicit responsibilities related to sustainability, see SR, Sustainability governance,
pages 23–25.

Key actions taken in 2023:

• In 2023, Swiss Re further developed and implemented the Group Sustainability Strategy. The implementation of the first ambition, advancing the net-zero transition, focused on setting new underwriting targets as well as on measuring and managing Swiss Re’s underwriting carbon footprint in selected areas. The Group also remained on track to deliver on its GHG-related targets for Swiss Re´s investments and operations. See SR, Sustainability targets and progress in 2023, pages 18–19.

• Swiss Re further specified the second sustainability ambition, building societal resilience, with a more granular definition of disaster resilience and financial inclusion, see SR, Sustainability in underwriting, page 42.

• Swiss Re also further developed its ESG Risk Framework. See SR, Business conduct and overarching policies, pages 32–34.

• Swiss Re enhanced its sustainability governance and refined the compensation-linked criteria to support the Group Sustainability Strategy. See SR, Sustainability governance, pages 22–26, and the Swiss Re website.

PSI Principle 2: We will work together with our clients and business partners to raise awareness of ESG issues, manage risk and develop solutions

Helping clients and society tackle environmental and social challenges is part of Swiss Re’s commitment to sustainability and its vision to make the world more resilient. In addition, Swiss Re considers stakeholder collaboration and dialogue prerequisites for building a more sustainable and resilient world. Engagement with clients and other stakeholders is therefore part of the two ambitions of the Swiss Re Group Sustainability Strategy: advancing the net-zero transition and building societal resilience. See SR, Swiss Re’s approach to sustainability, page 17.

Swiss Re implements the strategy with a focus on the following activities:

• Offering risk insights and risk transfer solutions that help clients address key environmental and social challenges.

• Maintaining a dialogue with clients and other stakeholders on sustainability topics, also as part of Swiss Re’s ESG Risk Framework.

• Sharing expertise as a responsible investor.

• Conducting ESG assessments in Swiss Re’s supply chain and engaging vendors on the topic of decarbonisation.

• Sharing, co-creating and advancing risk expertise via industry-focused publications, client programmes and conferences.

Key actions taken in 2023:

• In line with the Group Sustainability Strategy (GSS), Swiss Re assists its clients and partners in accelerating the transition to a low-carbon economy by de-risking transition projects and infrastructure, for example, in areas such as renewable energy. In 2023, Swiss Re wrote direct insurance and facultative reinsurance for 14 772 wind and solar energy generation facilities, and launched the Centre of Competence for Renewable Energy, which complements Swiss Re’s extensive experience and expertise in providing direct insurance for renewable energy projects. See SR, Sustainability in underwriting, page 41.

• When it comes to building societal resilience, Swiss Re works with its clients to reduce the protection gap by developing products that offer protection from large risk events such as natural catastrophes and man-made disasters, particularly those impacting physical assets. Additionally, Swiss Re helps its clients and partners develop reinsurance solutions that support the financial inclusion of primary insurance beneficiaries. In 2023, premiums for natural catastrophe covers amounted to USD 5.7 billion. Swiss Re also reinsured 212 million life and health policies, resulting in an estimated 278 million family members supported by its clients’ life and health policies. See SR, Sustainability in underwriting, pages 42–43.

• As part of its ESG Risk Framework, Swiss Re continued to engage with clients on identified sustainability issues and discuss remediation plans with them when such need was identified. See SR, Sustainability in underwriting, page 39.

• Swiss Re holds annually a Sustainability Client Programme, which serves as entry-level training for clients on implementing sustainable business practices. See SR, Sustainability in underwriting, page 45.

• As expertise plays a key role in driving investment-related sustainability activities forward, Swiss Re is a member of relevant organisations, partnerships and initiatives, notably the Principles for Responsible Investment (PRI) and the Net-Zero Asset-Owner Alliance (AOA). See SR, Responsible investing, page 55.

• When selecting new products and vendors, Swiss Re examines whether external vendors comply with the Swiss Re Code of Conduct. Swiss Re also requires vendors to perform regular ESG assessments and started to engage with them specifically on decarbonisation. See SR, Sustainable operations, page 94.

PSI Principle 3: We will work together with governments, regulators and other key stakeholders to promote widespread action across society on ESG issues

As a risk-taker in society, Swiss Re has an intrinsic interest in pursuing productive dialogues with its stakeholders. Drawing on the expertise from its core business, it strives to identify and understand key risks and opportunities, takes a role in discussions about them and broadly shares its risk knowledge.

Swiss Re focuses on the following activities:

• Developing risk transfer solutions for, and in cooperation with, governments and various public sector organisations, eg via Swiss Re’s Public Sector Solutions, to help build resilience against shocks that impact communities and economic stability.
• Sharing, exchanging and co-creating knowledge through many channels, eg its publications, dialogue platforms, and client and partner events, as well as cooperation with governments, NGOs and academic institutions.

Key actions taken in 2023:

• Swiss Re’s cover in 2023 of the two earthquakes in Turkey and Morocco are examples of public-private partnerships providing risk transfer solutions to support communities with post-disaster recovery efforts. In addition, as part of its participation in the Insurance Development Forum, Swiss Re continued to work in 2023 on projects in Mexico, Ghana and Nigeria, and also contributed to the launch of a pilot project in Uzbekistan to provide climate-vulnerable farmers with access to agriculture insurance. See SR, Sustainability in underwriting, page 43.
• Through relevant industry organisations such as the Swiss Insurance Association and Swiss Sustainable Finance, and through its participation in the development of the Swiss Climate Scores, Swiss Re contributed to discussions about financial market developments related to responsible investing in Switzerland.
• Swiss Re Institute continued to translate Swiss Re’s and research partners’ risk knowledge into industry-focused publications, client programmes and conferences. See SR, Sustainability in underwriting, page 45.
• Swiss Re also continued to engage with other companies on reducing emissions from operations. See SR, Sustainable operations, page 95.
• A selection of Swiss Re’s sustainability-related memberships in global organisations, partnerships and initiatives can be found in SR, Appendix, Memberships,
  pages 118–119.

PSI Principle 4: We will demonstrate accountability and transparency in regularly disclosing publicly our progress in implementing the Principles

Since 2012, Swiss Re has disclosed its progress on implementing the Principles annually as part of its sustainability reporting. Swiss Re’s Sustainability Report 2023 is the Group’s primary means of reporting its progress on the implementation of the Group Sustainability Strategy. For a comprehensive overview of Swiss Re’s performance in 2023, the Sustainability Report should be read in conjunction with the Financial Report.

As of reporting year 2023, the Sustainability Report provides transparency on non-financial matters as required under Article 964a et seqq. of the Swiss Code of Obligations, see SR, Climate-related financial disclosures on pages 56–87. Other reporting frameworks considered by Swiss Re are the Sustainability Accounting Standard for the insurance industry as defined by the Sustainability Accounting Standards Board (SASB) (see Swiss Re’s SASB reference table) and the standards issued by the Global Reporting Initiative (GRI) (see Swiss Re’s GRI reference table). In 2023, the Group also reported against the Ten Principles of the UN Global Compact (see Swiss Re’s Communication on Progress). For more information on the scope of the report and reporting frameworks considered, see SR, Appendix, About this report, page 120.