13 th China Rendezvous Xian September 24 2012

13 th China Rendezvous Xi’an September 24, 2012 Michael J. Morrissey President & CEO International Insurance Society

International Insurance Society § Oldest and largest global insurance industry association; nearly 1, 000 members in over 95 countries § A forum for the cross border exchange of ideas and strategies by insurance professionals § Unique membership composition of senior life and nonlife insurance executives, insurance regulators and risk management/insurance academics § Manages the Insurance Hall of Fame, and presents the global industry’s most prestigious conference, the IIS Annual Seminar

A global sustainability framework and initiative of the United Nations Environment Programme Finance Initiative

Why the insurance industry? A global risk sharing system 2011 world premium volume of over $4. 5 trillion Service providers (e. g. cat model vendors, loss adjusters, rating agencies) Regulators Insurer

Why the insurance industry? Major institutional investors 2010 global assets under management of over $24 trillion

Why the insurance industry? Uniquely positioned to tackle environmental, social and governance (ESG) issues Risk carrier ESG issues Risk manager Investor

ESG issues in an insurance context ■ Span a wide range of business risks and interrelated with “emerging risks” and “reputation risks” ■ Can be interrelated issues Example: o Rapid population growth and movement of over 50% of the world’s population to cities Increasing vulnerability of cities and coastal areas to rising frequency of extreme weather events, floods, earthquakes and other catastrophe risks, as well as issues of pollution, congestion and disease o Cities Responsible for over two-thirds of global energy consumption and greenhouse gas emissions ■ Are dynamic and can change over time ■ Becoming a widely accepted term in the investment and insurance industries

Examples of ESG issues that can be relevant to insurance ■ ■ ■ ■ Climate change and extreme weather events Natural catastrophe risks Disaster risk reduction Resource depletion Biodiversity loss and ecosystem degradation Water management and scarcity Food insecurity Pollution Human rights and labour standards Social and financial exclusion Emerging health risks and pandemics Ageing populations Regulations (building codes, workplace and product safety standards, environmental regulations) Disclosure, transparency and accountability Business principles and ethics

Research foundation (2008 -09) ■ First-ever global survey on ESG issues and the insurance industry ■ Supported by leading academic institutions ■ Supported by the UNEP Executive Director & HRH The Prince of Wales

What is sustainable insurance? ■ Not about philanthropy ■ Recognises fundamental economic value of natural capital, social capital and good governance ■ Strategic approach o All activities in the insurance value chain, including interactions with stakeholders, are done in a responsible and forward-looking way o Identify, assess, manage and monitor risks and opportunities in the insurance business associated with environmental, social and governance issues o Reduce risk, develop innovative solutions, improve business performance o Contribute to environmental, social and economic sustainability

Primary aims of the Principles for Sustainable Insurance (PSI) Initiative ■ Create voluntary and aspirational global principles, including possible actions, to better understand manage risks and opportunities in the insurance business associated with environmental, social and governance issues ■ Establish a United Nations and global insurance industry initiative to promote the global adoption and implementation of the Principles

The 2011 PSI development process: Global, inclusive and consultative NORTH AMERICA 12 -13 June Guelph, Ontario, Canada UNEP FI GLOBAL ROUNDTABLE 19 -20 October Washington DC, USA UNEP FI-PSI TEAM GLOBAL MEETING 7 -9 December Rüschlikon, Switzerland EUROPE 25 -26 October Munich, Germany MIDDLE EAST & NORTH AFRICA 18 -19 September Dubai, UAE ASIA 10 -11 November Tokyo, Japan Over 500 insurance industry players and stakeholders LATIN AMERICA & THE CARIBBEAN 16 -17 May São Paulo, Brazil AFRICA 15 -16 March Johannesburg, South Africa OCEANIA 11 -12 August Auckland, New Zealand

Scope of the Principles ■ All lines of insurance è Accident & Health è Agroforestry è Aviation è Casualty/Liability è Credit & Surety è Engineering è Life è Marine è Motor è Property ■ All insurance market participants è Risk carriers (i. e. insurers, retrocessionaires) è Risk intermediaries (i. e. agents, brokers) è Risk service providers (e. g. risk model vendors) ■ All regions è Africa, Asia, Europe, Latin America & the Caribbean, Middle East & North Africa, North America, Oceania

Structure of the Principles Aligned with an insurer’s spheres of influence Public Governments, regulators & other key stakeholders Clients & business partners Own business strategies & operations

1 We will embed in our decision-making environmental, social and governance issues relevant to our insurance business. 2 We will work together with our clients and business partners to raise awareness of environmental, social and governance issues, reduce risk and develop solutions. 3 We will work together with governments, regulators and other key stakeholders to promote widespread action across society on environmental, social and governance issues. 4 We will demonstrate accountability and transparency in regularly disclosing publicly our progress in implementing the Principles.

Benefits of becoming a signatory company ■ Publicly demonstrating your organisation’s adoption of sustainable insurance aims and its accountability and transparency to the public in managing ESG issues ■ Access to UNEP and UN system expertise and resources on ESG issues, policymaking and science ■ Access to UN events to dialogue with governments and other stakeholders on ESG issues, risk management and insurance ■ Access to UNEP FI research, networks, events and capacity building services spanning ESG issues, insurance, investment and banking ■ Access to the Annual General Meeting of signatories

Non-companies can join as supporting institutions ■ Examples: insurance supervisors or regulators, insurance associations, insurance institutes or academies ■ Publicly demonstrate their organisations’ support for sustainable insurance aims ■ Will be updated on and can be invited to relevant acitivities of the PSI Initiative

Hallmarks of the PSI Resiliency Stakeholder dialogue Inclusiveness Principles Sustainable Insurance Risk management Sustainability Responsibility Innovation Transparency Accountability

PSI support from the highest levels of the United Nations Achim Steiner UN Under-Secretary-General & UNEP Executive Director “The Principles for Sustainable Insurance are a foundation upon which the insurance industry and society as a whole can build a stronger relationship—one that puts sustainability at the heart of risk management in pursuit of a more forward-looking and better managed world. ”

Global launch of the Principles The insurance industry and sustainable development 19 June 2012, Rio de Janeiro, Brazil

Founding PSI signatory companies § Represent about USD 500 billion in gross premiums written or over 10% of world premium volume § Have combined total assets of over USD 5 trillion 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Achmea (Netherlands) AEGON (Netherlands) Aviva (UK) AXA (France) Bradesco Seguros (Brazil) Delta Lloyd (Netherlands) ING (Netherlands) Insurance Australia Group (Australia) Interamerican Hellenic Insurance Group (Greece) Itau Seguros (Brazil) La Banque Postale (France) MAPFRE (Spain) Mitsui Sumitomo Insurance (Japan) Mongeral AEGON (Brazil) 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. Munich Re (Germany) RSA Insurance Group (UK) Sanlam (South Africa) Santam (South Africa) SCOR (France) Sompo Japan Insurance (Japan) Sovereign (New Zealand) Storebrand (Norway) Sul. America (Brazil) Swiss Re (Switzerland) The Co-operators Group (Canada) 26. Tokio Marine & Nichido Fire Insurance (Japan)

Turning the PSI into practice A United Nations-backed insurance industry initiative to promote the global adoption and implementation of the Principles ESG research, training and other implementation support services across insurance lines and geographies Insurance industry signatories across all regions Hub for dialogue with UN system (UNEP, UNFCCC, UN REDD, UN Global Compact, UNISDR, WHO, WMO) Mainstream sustainable insurance Help build a resilient, inclusive and sustainable society Hub for dialogue with governments, regulators and other key stakeholders Country, regional and academic networks

The Chinese insurance industry and the PSI: Initial thoughts ■ How can insurers maximise their role as risk managers to better understand reduce risk and make insurance more accessible and affordable? ■ How can insurers contribute to a sustainable economy in their role as institutional investors? ■ How can insurers help determine the key sustainability risks and opportunities for China and the appropriate risk management responses? ■ How can insurers work together effectively with governments, regulators and other stakeholders to build resilient communities? ■ How can the Chinese Insurance Regulatory Commission and Chinese insurance associations promote the adoption and implementation of the PSI? ■ How can the PSI Initiative support the Chinese insurance industry? ■ What are the links between the PSI, macroprudential surveillance and financial stability?

Thank You Michael J. Morrissey President & CEO International Insurance Society