Auditors

KPMG will be proposed to shareholders for election at the AGM 2020 as the new external auditor for the financial year 2021.

Duration of the mandate and term of office of the lead auditors

PricewaterhouseCoopers Ltd (PwC) was appointed as the external auditor of SRL 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 2019, 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.

In line with the Swiss Code of Obligations and to foster external auditor independence, each of the two lead audit partners rotates out of 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. Bret Griffin handed over to Frank Trauschke in May 2018.

Information tools pertaining to the external audit

Responsibilities

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 Working methods of the Board of Directors and its committees.

PwC provided reports on selected topics at each of the Audit Committee meetings during the reporting year: At the 29 January meeting, PwC provided the External Auditor Update, which covered the PwC Quality, Performance and Assurance Report as well as the audit-related, tax and non-audit services. At the 19 February Audit Committee meeting, it provided the Q4 and Full-Year Audit Report and on 13 March, the PwC Final Board Report. At the meeting on 15 April, PwC provided the US GAAP and EVM control reports as well as the PwC Quality Assessment. At the Audit Committee meeting on 2 May, it provided the Q1 PwC Report and at the 30 July meeting, the H1/Q2 PwC Report. Furthermore, PwC provided the Audit Plan PwC/fees Report at the 2 October meeting and the 9M/Q3 PwC Report on 30 October.

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 that is responsible for recommending an audit firm to the Board of Directors for election at the Annual General Meeting. Unlike in the European Union, there is no law in Switzerland that provides for a mandatory rotation of the external auditor after a certain number of years. The Audit Committee closely monitors regulatory developments in the EU and elsewhere on this topic. In order to be able to select and recommend an audit firm for election by the shareholders and in line with good corporate governance, the Audit Committee thoroughly evaluates the credentials of the current external auditor annually based on the following main criteria: Investment in the client relationship, quality of delivery, quality of the people and services and focus on client value. The Audit Committee presents the findings of the evaluation to the entire Board of Directors. PwC has a 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 furthermore based on the external auditor’s qualifications, independence and performance. The Audit Committee also evaluates annually the performance of the lead auditors.

Qualifications

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.

Independence

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.

Performance

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.

Auditor rotation 2021

Considering that PwC has carried out the mandate as external auditor for the Swiss Re Group since 1991, the Board of Directors will propose to the shareholders at the AGM 2020 the election of KPMG as the Group’s new external auditor for the financial year starting on 1 January 2021.

In September 2018, the Audit Committee decided to launch a tender process in Q1/2019 for a new external auditor of the Group. After a thorough tender process, the Board of Directors decided, as proposed by the Audit Committee and in line with the main criteria mentioned in the chapter on the evalution of the external auditor (above), to propose KPMG to the AGM 2020 for election as the new external audit firm to replace PwC for the financial year starting on 1 January 2021. On 31 July 2019, Swiss Re publicly announced the Board of Director’s decision to nominate KPMG as the new auditor as part of the news release on the H1/2019 US GAAP results. For the news release, please refer to: www.swissre.com/media/news-releases/nr-20190731-hy-2019-news-release.html

Audit fees

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.