Board supervision of Executive
The Board of Directors maintains effective and consistent oversight and monitors the execution of responsibilities it has delegated to the Group EC through the following control and information instruments.
Participation of Board members at Executive Management meetings
The Chairman is invited to all meetings of the Group EC and Business Unit Executive Committees and receives the corresponding documentation and minutes.
The Board committees are entitled to conduct or authorise special investigations at any time and at their full discretion into any matters within their respective scope of responsibilities, taking into consideration relevant peer group practice and general best practice. The committees are empowered to retain independent counsel, accountants or other experts if deemed necessary. No special investigations were conducted in the reporting year 2019.
Involvement of the Group EC in meetings of the Board of Directors
The Group EC members attend Board meetings as deemed appropriate by the Chairman and the other Board members. The presence of the entire Group EC was required for four Board meetings in 2019, and selected members were invited to six further Board meetings. The Group EC members do not attend the constituent meeting of the Board of Directors following the Annual General Meeting and the Board self-assessment session.
Involvement of the Group EC in Board committee meetings
As a matter of principle, selected members of the Group EC as well as further senior management members participate in Board committee meetings as advisors. The attendance rate of the Group EC members at Board and Board committee meetings was 95.8% in 2019 (the attendance rate represents the total actual attendance time of all members at all meetings in the year under review, 2019, in relation to the corresponding target attendance time). A detailed summary of Group EC and further senior management participation in Board committee meetings is provided in Working methods of the Board of Directors and its committees.
Periodic reports to Board of Directors and its committees
The Group EC and further senior management members regularly provide the Board of Directors with different types of reports, in particular the following reports:
Executive Report (quarterly)
This comprehensive report gives an update on current business developments, covering the Group Functions and the Business Units, including major business transactions, claims, corporate development and key projects.
US GAAP Board Report (quarterly)
The report provides factual financial highlights from an accounting perspective, with a focus on historical development of the business as an informational basis before the publication of results.
EVM Board Report (annually)
The report provides factual financial highlights from an economic perspective, with a focus on historical value creation.
Group Performance Management Report (semi-annually)
The report tracks the actual performance of the Group and the segments against pre-defined financial targets, analyses the impact of management actions and provides information on current challenges.
Global Outlook for Insurance, Reinsurance and Financial Markets (quarterly)
The report describes trends and provides forecasts regarding the economic environment, the property & casualty/life & health (re)insurance markets and the financial markets.
Swiss Solvency Test Report (annually)
The report provides the legally required update on the assessment of solvency according to the Swiss Solvency Test (SST) of the Group, Swiss Reinsurance Company Ltd, Swiss Re Corporate Solutions Ltd and Swiss Re Life Capital Reinsurance Ltd.
Swiss Re Liquidity Report (annually)
The report describes the liquidity position of the Group in current and in stressed market conditions.
In addition, reports are submitted to the Board committees, such as:
- Regular updates on claims
- Regular updates on reserving/reserve movements
- Group Legal Report (quarterly)
- Compliance Report (quarterly)
- Group Internal Audit Report (quarterly)
- Group Tax Report (annually)
- Group Risk Update (quarterly)
- Derivative Use Update (semi-annually)
- Report on Capital, Liquidity and Treasury Activities (quarterly)
- Global Regulatory Risk Report (annually)
- Financial Risk Management Update (quarterly)
- Own Risk and Solvency Assessment Report (ORSA) (annually)
Embedded throughout the business, the Group Risk Management function ensures an integrated approach to managing current and emerging threats. Risk Management plays a key role in the business strategy and planning process, where Swiss Re’s risk appetite framework facilitates risk/return discussions and sets boundaries to Group-wide risk-taking.
The Board of Directors keeps itself abreast of key risk themes and receives the following annual reports from Group Risk Management: the Swiss Solvency Test Report, the Swiss Re Liquidity Report, the SONAR Report on emerging risks, the Sustainability Report, as well as the Own Risk and Solvency Assessment Report. In addition, Group Risk Management provides the Finance and Risk Committee with regular Group Risk Updates from the Group CRO, semi-annual reports on derivate use, as well as annual reports on Global Regulatory Risk. The Investment Committee on its part receives quarterly reports on Financial Risk Management.
These reports cover compliance with the Group’s risk tolerance criteria, major changes in risk and capital adequacy measures and a description of the Group’s main risk issues, including related risk management actions. The Finance and Risk Committee regularly reports to the entire Board of Directors. For further information on Swiss Re’s Risk Management, please see the Risk and Capital Management Report (for Risk Management in particular).
Duty to inform on extraordinary events
As soon as the Group CEO or other members of the Group EC become aware of any significant extraordinary business development or event, they are obliged to inform the Board of Directors immediately.
Right to obtain information
The Board of Directors has complete and open access to the Group CEO and the other members of the Group EC, the Chief Compliance Officer and the Head of GIA. Any member of the Board of Directors who wishes to have access to any other officer or employee of the Group will coordinate such access through the Chairman. The Vice Chairman and the chairpersons may approach the Group EC members as well as further key executives directly if they require information to support their respective (Board committee’s) duties. Any member of the Board of Directors may request at Board meetings to obtain information on any aspect of the Group’s business. Outside Board meetings, any member can direct a request for the provision of information and business records to the Chairman.
Group Internal Audit
GIA is an independent assurance function, assisting the Board of Directors and Group EC to protect the assets, reputation and sustainability of the organisation. GIA assesses the adequacy and effectiveness of the Group’s internal control system and adds value by improving the Group’s operations.
GIA applies a risk-based approach, performing its own risk assessment as well as making use of risk assessments performed by the Group’s Risk Management and other assurance functions (after reviewing the quality of the assurance work performed). Based on the results of the risk assessment, GIA produces an annual audit plan for review and approval by the Audit Committee. The audit plan is updated on a quarterly basis according to the Group’s evolving needs. GIA provides formal quarterly updates on its activities to the Audit Committee, which include audit results, the status of management actions required, the appropriateness of the resources and skills of GIA and any changes in the tools and methodologies it uses.
The Head of GIA meets at least once per quarter with the Audit Committee and immediately reports any issue that could have a potentially material impact on the business of the Group to the Chair of the Audit Committee.
GIA has unrestricted access to any of the Group’s property and employees relevant to any function under review. All employees are required to assist GIA in fulfilling its duty. GIA has no direct operational responsibility or authority over any of the activities it reviews.
GIA staff govern themselves by following the Code of Ethics (Code) issued by the Institute of Internal Auditors (IIA). The IIA’s International Standards for the Professional Practice of Internal Auditing constitute the operating guidance for the department. The Code is available online.
For information regarding the external auditors, please refer to Auditors.