The role of the Control Functions in compensation
The role of Swiss Re’s Control Functions (defined as Group Risk Management, Compliance and Group Internal Audit) in compensation matters is well established.
Risk and control-related behaviour assessment
Swiss Re bears risks in the course of its business activities, including market, credit and liquidity, underwriting, operational (including legal and compliance) and reputational risk. The Control Functions annually perform an independent assessment of risk and control-related behaviours of the Group and each of the business functions, and of Swiss Re’s Key Risk Takers individually.
These reports are delivered to key executives including the Group Chief Risk Officer and the Group Chief Human Resources Officer on an annual basis.
Key Risk Takers
Swiss Re’s Key Risk Takers are executives in core risk-taking positions who decide on business and people strategies, approve budgets and can materially influence financial results or expose Swiss Re to significant operational or reputational risks.
In 2019, Swiss Re identified 175 positions, held by 180 employees throughout the year, who qualify as Key Risk Takers. This group consists of the members of the Group EC, Business Unit EC members, other key executives and roles with core risk-taking authority. The list of Key Risk Takers is reviewed on a regular basis by Group Risk Management and Human Resources.
Influence of the behavioural assessment on compensation
The risk and control-related behaviour assessment of Group and business functions provides additional input to help determine the Group API pool and its allocation to each business function. The assessment of each Key Risk Taker serves as an additional factor when considering individual performance and compensation outcomes.
Independence of the Control Functions
In order to ensure the continued independence of Control Functions, their compensation approval processes differ in that key annual compensation decisions for these functions are approved at the Board level. This includes the approval of the aggregate API pools of the Control Functions and the approval of the individual compensation for the head of each Control Function.