Remuneration

Our employees are helping shape Zurich Insurance Group (Zurich) into an organization of the future, one that delivers a positive customer experience, values and nurtures its people and acts responsibly for society and the planet. Zurich’s remuneration philosophy is an integral part of our overall offer to employees and supports them in making a positive contribution to the success of the company. Based on established remuneration principles, the Group operates a balanced and effectively managed remuneration system that considers the interests of key stakeholders, such as customers, shareholders and employees. Zurich’s remuneration system and practices are embedded in the Group’s Enterprise Risk Management framework and include key safeguards, in particular:

• Emphasis on longer-term, deferred remuneration for the most senior positions and Group key risk-takers.
• Risk-based performance assessment for the Executive Committee (ExCo), members of the Group leadership team and Group key risk-takers.
• Variable remuneration of employees in control and assurance functions is structured to avoid conflicts of interest by linking to Group metrics, rather than the metrics of the businesses they oversee.
• Ability to apply risk adjustments and exercise malus (all participants) and clawback (ExCo members and some additional participants) for variable remuneration.
• Minimum share ownership requirements for the Board, Group CEO and other members of the ExCo.

The Group’s incentive plans link awards to appropriate performance criteria selected to support the execution of the Group’s strategy. The overall amount of variable remuneration awarded or allocated is considered in connection with the Group’s long-term economic performance.

The awards under the Group’s short-term incentive plan (STIP) are driven by:

• The profitability achievements of the relevant business, as well as customer experience for most participants. The customer transactional net promoter score (TNPS) is used as a global best-practice metric for measuring customer experience.
• Individual performance against goals, as well as demonstrated behaviors in line with Zurich’s code of conduct, purpose and values. The Group’s performance and development cycle of goal setting, regular career and progress conversations and a year-end review, guides employees throughout the year to achieve their goals. The performance of members of the ExCo is assessed against financial measures supporting strategy execution, as well as targets relating to customers and employees. This is supported by an additional consideration of execution against strategic priorities, including ESG factors and a risk-based review.

The Group’s long-term incentive plan (LTIP) is structured to promote the risk awareness of participants and to encourage participants to operate the business in a sustainable manner. The LTIP is utilized for a defined group of the most senior positions, including those with a significant influence on the risk profile of the Group. The performance criteria are reviewed and agreed by the Board annually, ahead of the commencement of the performance period, to ensure alignment with the Group’s strategic and financial targets.

For the 2024-2026 performance period, the LTIP metrics include the relative total shareholder return (TSR) position, average business operating profit after tax return on equity (BOPAT ROE), cumulative net cash remittances and operational CO2 equivalent (CO2e) emissions supporting the Group’s operational CO2e emissions reduction targets. Further information can be found in the remuneration report of the Annual Report 2023.