IMPORTANT INFORMATION

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Shareholder Rights Directive II – How does Zurich Insurance Group comply?

The Shareholder Rights Directive 2017/828 (SRD II) amends Directive 2007/36 (SRD I) and promotes long-term shareholder engagement and enhances the transparency between EU-listed companies and their investors.  Zurich Insurance Group and many of its subsidiaries (Zurich) - including Zurich Life Assurance plc - are institutional investors in various EU markets and comply fully with the requirements set out in the Directive.

In keeping with this, Zurich has made its full shareholder voting records available online. The voting records related to Zurich Life Assurance plc are available here. The voting records related to Zurich Insurance Group are available here.

Engagement policy (Article 3g para 1): Does Zurich have a proxy voting and engagement policy?

Yes. Active ownership (defined by Zurich as proxy voting and engagement) is a vital part of Zurich’s role as a responsible investor. More detailed information can be found in Zurich’s Proxy Voting Policy & Guidelines (Appendix 1), as well as Zurich’s engagement policy, which can be found in the appendix of our Responsible Investment White Paper (Appendix 7). The investment team within Zurich Life Assurance plc is deemed to be one of Zurich’s internal asset managers.  Zurich Life Assurance plc is fully aligned with Zurich’s approach to proxy voting and aligned to those aspects of the Zurich Engagement Policy relevant to it as one of Zurich’s internal asset managers.  

Engagement policy (Article 3g para 1): Does Zurich report annually on implementation and progress?

Zurich has been a signatory to the Principles for Responsible Investment (PRI) since 2012. As such, we are required to report in detail on an annual basis on our environmental, social and governance (ESG) integration practice, relationships with external asset managers, as well as proxy voting and engagement. All PRI transparency reports since inception of Zurich’s membership can be found on Zurich’s responsible investment webpage as well as directly on www.unpri.org. At Zurich Life Assurance plc, we have a substantial volume of direct engagements each year with the companies we invest in, either individually or with other institutional investors. This is an important aspect of the way we work as well as being intrinsic to being a responsible investor and an active owner of assets. It is our stance that active ownership and engagement can alter how companies behave, to the benefit of investors and broader society.

Investment strategy (Article 3h para 1): Does Zurich have procedures in place to ensure that the main elements of its equity investment strategy are consistent with the profile and duration of its liabilities, in particular long-term liabilities?

Zurich’s Group Investment Management has defined a clear and systematic approach to investing, supported by both industry best practice and academic research. Applying this approach globally to all investment activities is of great value to Zurich. Not only does the approach provide consistency and discipline, it also helps safeguard against investment decisions becoming pro-cyclical, that is, taking on additional investment risk during ‘good times’ and being forced to reduce risk by selling investments at the worst possible moment during times of market stress. Long-term orientation and asset-liability management (ALM) – that is, making sure that Zurich’s investment portfolio is consistent with the profile and duration of its liabilities – are cornerstones of this process, which is described in full detail in Zurich’s Value Creation Paper.  The vast majority of equity assets managed by Zurich Life Assurance plc reflects liabilities to policyholders who have invested in our unit-linked funds, either dedicated equity funds or multi-asset funds of which equities form a part.  The nature of unit-linked funds means that it is not possible to determine the duration of the liabilities to policyholders. Our aim is to invest in assets consistent with the expectations of policyholders. For example, an Irish equity fund will contain (only) appropriate Irish equities. An Asset Liability Management process exists within Zurich Life Assurance plc to ensure that the profile of assets aligns with the profile of liabilities.

Investment strategy (Article 3h para 1): Does Zurich have procedures in place to ensure that the main elements of its equity investment strategy contribute to the medium to long-term performance of its assets? Does Zurich have procedures in place to monitor both financial and non-financial medium to long-term performance of investee companies?

Yes. Performance management is an integral part of Zurich’s investment philosophy. Another integral part is being a responsible investor, which means fully integrating ESG criteria into our investment process. Further details about Zurich’s investment philosophy can be found in Zurich’s Value Creation Paper and full details on how we apply ESG integration can be found in our Responsible Investment White Paper. As an active investment manager, Zurich Life Assurance plc monitors the financial and non-financial performance of investee companies. Systematic active voting according to pre-agreed guidelines – which are aligned with our responsible investment approach – is clear evidence of this.

Arrangements with asset managers (Article 3h para 2): Does Zurich use external asset managers, and how are arrangements with them made?

At Zurich, Group Investment Management always aims to appoint the most suitable manager for each portfolio, whether internal or external. Globally around two-thirds of Zurich's assets are managed by external asset managers. The primary focus for Zurich Life Assurance plc is policyholders’ monies, most of which are managed locally by the Zurich Life Assurance plc internal team of investment managers. Zurich Life Assurance plc also provides access to a number of regulated funds which are managed by other regulated providers.  The choice of funds currently made available by Zurich Life Assurance plc is not driven by how these funds and their providers engage with their investee companies. However, this Directive and other EU regulations are increasing the level of information made available by such funds and the providers who manage them and we   may review our criteria for choosing funds in the future.

More information about Zurich’s investment philosophy can be found in Zurich’s Value Creation Paper, a full chapter in our Responsible Investment White Paper talks about Zurich’s process behind external manager selection, as well as how Zurich expects external asset managers to comply with its responsible investment strategy, including ESG integration, and active ownership such as proxy voting and engagement.

All of the documents mentioned above are available at: https://www.zurich.com/en/sustainability/responsible-investment

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