The General Meeting of shareholders annually elects the external auditor.
Duration of the mandate and term of office of the lead auditors
PricewaterhouseCoopers Ltd (PwC) was appointed as the external auditor of Swiss Re Ltd when the company was founded on 2 February 2011. PwC had been elected as the external auditor of the previous parent company of the Group, Swiss Reinsurance Company Ltd, at its Annual General Meeting 1991 and had been re-elected annually since then. The Annual General Meeting 2018, following the proposal of the Board of Directors, based on the recommendation by the Audit Committee, re-elected PwC for a term of one year as external auditors.
Alex Finn became lead auditor responsible for the auditing mandate of the former parent company, Swiss Reinsurance Company Ltd, on 23 September 2011. With Swiss Re Ltd becoming the new holding company of the Group, he also became lead auditor for the Swiss Re Ltd audit mandate. In line with the Swiss Code of Obligations and to foster external auditor independence, the lead audit partner rotates out from his or her role after seven years. Alex Finn therefore handed over to Roy Clark following the election of PwC as external auditors by the Annual General Meeting 2018. The second lead auditor, Bret Griffin, was appointed following the election of PwC as external auditors by the Annual General Meeting 2014. He handed over to Frank Trauschke in May 2018.
Fees for audit and non-audit services
in USD m
Audit-related fees included transaction-related support as well as assurance services required by Swiss Re’s regulators and by management on a large programme. Tax fees comprised support for the transfer pricing documentation process and advice on a number of tax assignments. Other non-audit fees included permitted advisory services related to various projects.
Information tools pertaining to the external audit
The external auditor is accountable to the Audit Committee, the Board of Directors and ultimately to the shareholders. The Board of Directors reviews the external auditor’s professional qualifications and is assisted in its oversight by the Audit Committee.
Cooperation and flow of information between the auditor and the Audit Committee
The Audit Committee liaises closely with the external auditor. The lead auditors participate as advisors at all Audit Committee meetings. For more information, see Work methods.
The external auditor provides the Audit Committee with regular updates on the audit work and related issues as well as with reports on topics requested by the Audit Committee.
The Audit Committee reviews and approves in advance all planned audit services and any non-audit services provided by the external auditor. It discusses the results of annual audits with the external auditor, including reports on the financial statements, necessary changes to the audit plans and critical accounting issues.
The external auditor shares with the Audit Committee its findings on the adequacy of the financial reporting process and the efficacy of the internal controls.
It informs the Audit Committee about any differences of opinion between the external auditor and management encountered during the audits or in connection with the preparation of the financial statements.
Evaluation of the external auditor
It is the Audit Committee, which is responsible for recommending an audit firm to the Board of Directors for election at the Annual General Meeting of shareholders. As opposed to the European Union (EU), there is no law in Switzerland which provides for a mandatory rotation of the external auditor after a certain number of years. The Audit Committee closely monitors the regulatory developments in the EU and elsewhere on the topic. In order to be able to recommend an audit firm for election by the shareholders and in line with good corporate governance, the Audit Committee annually and thoroughly evaluates the credentials of the current external auditor and presents its findings to the Board of Directors. PwC has proven record of professionalism and efficiency and fully meets the high demands made by Swiss Re as a global re/insurance Group.
The Audit Committee’s assessment of the external auditor is based on the external auditor’s qualifications, independence and performance. The Audit Committee furthermore evaluates annually the performance of the lead auditors.
At least once a year, the external auditor submits a report to the Audit Committee describing the external auditor’s own quality control procedures, including any material issues raised by its most recent internal reviews or inquiries or investigations by governmental or professional authorities within the preceding five years, as well as any steps taken to deal with any such issues.
At least once a year, the external auditor provides a formal written statement delineating all relationships with the company that might affect its independence. Any disclosed relationships or services that might interfere with the external auditor’s objectivity and independence are reviewed by the Audit Committee, which then recommends appropriate action to be taken by the Board.
This assessment measures the external auditor’s performance against a number of criteria, including: understanding of Swiss Re’s business; technical knowledge and expertise; comprehensiveness of the audit plans; quality of the working relationship with management and clarity of communication. It is compiled based on the input of key people involved in the financial reporting process and the observations of the Audit Committee members.
The Audit Committee annually reviews the audit fees as well as any fees paid to the external auditor for non-audit services, based on recommendations by the Group CFO.
Swiss Re Ltd’s Articles of Association foresee that the Annual General Meeting may elect a Special Auditor for a term of three years which would be responsible for the special audit reports that are required by Swiss law in connection with changes in capital. Currently there is no Special Auditor elected.