ERGO Compliance Management System

The duties of the ERGO Compliance unit include:

1. Systematic identification and analysis of relevant risks;
2. Defining and continuously improving corporate compliance rules and guidelines;
3. Informing, training and advising members of the Management Boards, staff and sales partners;
4. Monitoring that regulations are adhered to and identifying breaches.

ERGO Compliance carries out these tasks on behalf of ERGO Group AG, its German insurance companies and its IT service provider ITERGO. In the other companies, both nationally and internationally where ERGO is the majority shareholder, local Compliance Officers report to ERGO Compliance.

Furthermore, ERGO Compliance remains in close contact with the compliance team at our parent company Munich Re.

Duties ERGO Compliance

Risk analysis

The core of the Compliance Management System is a systematic and comprehensive risk analysis, and the results create the basis for the activities of ERGO Compliance.

ERGO Compliance assesses the relevant risks in the individual business segments according to a uniform method and involves the respective experts and people in charge in the Company.

The risk analysis comprises the following steps:

1. Development of risk scenarios
2. Checks of company units or business processes in which these risks could occur
3. Assessment of their possible impact and their probability
4. Specification of whether action is required, and if so, which measures are required beyond those already in place

The risk analysis is carried out at least once each year and ad hoc where required. The ERGO Board of Management is regularly notified of the results and any major changes.

Rules and guidelines

Adhering to laws and regulations in the respective countries is, of course, obligatory for all employees, as well as abiding by corporate standards. It is only in this way that economical, liability and reputation risks can be avoided by ERGO in the long term.

One of the most important rules is the Code of Conduct for staff, which states our requirements for ethical behaviour of employees, senior executives and management, and was last updated in 2011.

Furthermore, ERGO drafted and introduced a binding Code of Conduct for self-employed sales agents in Germany in 2011. Here, in addition to the requirements for ethical behaviour, major principles have been set out for collaboration and the common understanding of how to deal with customers.

There are also corporate rules for various topics. Example:
The Guidelines on Incentives specify the rules for tendering, planning, procuring and organising incentives for in-house staff and sales forces. ERGO’s international companies are also obliged to comply with the main points contained in these Guidelines since June 2014. They are required to implement these basic standards in their organisations.

Where individual rules do not apply for all ERGO organisations abroad, ERGO is developing successive minimum standards there.

The ERGO Guidelines are reviewed regularly and updated where necessary.

Furthermore, there are voluntary self-commitments such as participant in initiatives of the German insurance industry for example, or international initiatives, including the UN Global Compact or the UN Principles for Sustainable Insurance.
ERGO, along with our operating companies as well as our sales company ERGO Beratung und Vertrieb AG in Germany, adopted the Code of Conduct for selling insurance products which was initiated by the German Insurance Association (GDV). The provisions of the ERGO Code of Conduct for self-employed sales agents as well as the Code of Conduct for selling insurance products by the GDV define our cooperation with sales agents.

We strive to offer top-quality insurance cover to our customers and to safeguard a consistently high quality level of advice. The adequacy, implementation and efficiency of the system for compliance with the industry’s Code’s rules within the Company has been reviewed by external auditors for the period from 1 July to 31 December 2015. Their audit report (only available in German) confirmed that the implemented rules and measures are efficient and meet the Code’s requirements.

ERGO also imposes special requirements on external service providers: they must sign an anti-corruption agreement and have corresponding processes for preventing and fighting corruption. For example, the supplier must ensure that no agreements have been made with third parties in terms of pricing and that no benefits have been offered or obtained relating to an ERGO contract. In the same way, service providers must confirm compliance with the principles of the UN Global Compact.

Information, training and advice

Regular communication on compliance topics is an important part of our Compliance Management System and heightens employees’ awareness, thereby reinforcing the culture of compliance within the organisation. This is achieved through internal communication channels such as the intranet or print magazines, as well as regular training events. The latest guidelines are always available on the intranet.

Regular training sessions impart the compliance objectives and help in attaining standardised common understanding. Participation is mandatory for employees, senior executives and members of the Board of Management, both in-house and in sales forces.

Trainings include an online module as well as a training session where ERGO Compliance informs Board members and managers directly. They act as multipliers and pass on the relevant content covered in the training materials to their teams.

Our Board members and all executive employees working in-house and in the field in Germany have been trained on Compliance topics in 2017 and have a new training cycle in 2019. We also regularly conduct trainings on anti-trust law requirements.

Identifying and handling breaches

Violations of statutory provisions or Code of Conduct rules and internal guidelines are not tolerated at ERGO, they are clarified and punished as appropriate. Each incident is individually assessed and sanctioned depending on the extent of the infringement. Checks are also carried out as to whether guidelines or processes in the Company need to be changed.

The Reputation and Integrity Committee (RIC) deals with serious violations. The Committee can express recommendations regarding appropriate sanctions in the event of a breach. If this recommendation is not followed, the Committee can bring the case to the ERGO Board of Management.

Violations are identified in a variety of ways. Apart from regular enquiries conducted among in-house staff and sales forces in Germany, employees who wish to report an infringement of laws or other serious breaches can contact the ERGO Compliance unit in confidence. This applies to the employees of all companies, both nationally and internationally.

Furthermore, the local Compliance Officers for each company where ERGO Compliance is not directly responsible, report on relevant events each quarter. These include major cases of fraud and breaches of compliance, supervisory topics and major infringements of applicable rules. The reports are assessed by ERGO Compliance and then pursued by the units responsible.

Employees who do not wish to contact ERGO Compliance directly can also make contact through an independent external ombudsman, who is also obliged to maintain strict confidentiality.