The API is a discretionary, variable component of the compensation package for employees. Combined with the base salary, it provides competitive total cash compensation when an employee achieves his or her performance targets.

In 2012 Swiss Re started introducing the concept of Target API along with a revised Performance Management framework that provides equal weighting to “behavioural” criteria along with quantitative “results”. In this way, API is awarded both for objectives achieved and for demonstration of desired behaviours. The Target API is set in advance for each employee based on multiple factors, including market benchmarks with payout linked both to individual performance and to Swiss Re’s results.

The weighting of corporate versus individual performance will vary with seniority within the organisation. Higher ranks will have a greater proportion of their API linked to the results of the Group as well as their Business Unit.

When the variable annual compensation level for an employee exceeds a pre-defined amount, the variable pay is delivered in two components: a cash incentive payment (cash API) and a deferred Value Alignment Incentive (VAI).

Employees also have the opportunity to take some or all of their cash API in the form of Swiss Re shares at a discount of 10% (the Incentive Share Plan), encouraging alignment with shareholder interests. At the end of a one-year period, the employee assumes full ownership of the shares.