Specific standard indicators

ERGO Sustainability Reporting 2017

Economic Performance

  • As insurers, we face today a multitude of challenges. Changes in customer needs, long-term low interest rates, the digitalisation of all areas of life and work, and new disruptive business models – all of these factors are rapidly changing our environment and intensifying competition.

    At ERGO, we have put down solid foundations for a sustainable, successful future with our ERGO Strategy Programme. Fit, digital and, thus, successful - that is what we have set out to be. In order to achieve these objectives, we must become leaner and more efficient. And we have to energetically drive the digitalisation processes in the Group onwards. We plan to complete the extensive restructuring programme by 2021. This is of substantial importance for us to continue to be able to fulfil our obligations towards our clients, our employees and Society.

    We consistently manage our business with a focus on customers, service and earnings. Our management is concentrated on integrated controlling for our lines of business and their administration processes, a modern risk-management system, and value-based and risk-oriented controlling for all business activities. These activities include all forms of life, annuity and health insurance, and virtually all branches of property and casualty insurance, as well as legal protection.

    Our objective is to record, evaluate and diversify all aspects of risks. This empowers us to create sustainable value for our shareholders, customers and employees. Sustainably increasing our corporate value is the guiding principle of our entrepreneurial mindset and action. This also includes our active capital management. We deploy valued-based controlling systems consistently and subject them to a process of continuous development.

    We tailor our products and services to meet the needs and requirements of our individual customers. We remain in ongoing exchange with them to know these needs and requirements. Our demand on ourselves is to provide needs-oriented consultation with perfect-fit products – understanding the personal concerns of the customer and applying this understanding accordingly. In this regard, we are investing massively in digitalisation and are working intensively to offer our customers, online and offline, intuitive, efficient access to our products and services. It is our goal to provide them with a seamlessly integrated spectrum of customer experience.

    Communication with stakeholders and their community environment is important for ERGO so that new challenges and changes can be identified at an early stage, and appropriate solutions can be developed. We regard ourselves as part of the community and, wherever possible, our aim is to change it for the better. We create added value for the community as an employer and through our business activity. We also generate value through our many initiatives relating to community involvement.

  • In the financial year 2017, total premium income was 18.5 billion euros (2016: 18.6 billion euros).

    Key financial figures
    Munich Re Annual Report 2017

    Our expenditure for community involvement (e.g. donations, social sponsorships, foundations) was almost 2.6 million euros.

    Key figures for community involvement

  • Our business as an insurer is impacted by claims due to natural catastrophes caused by the consequences of climate change. At the same time, we also perceive business opportunities in this challenge. We strive to support innovative solutions for climate protection, e.g. with insurance policies for technologies which generate renewable energies.

    Our group-wide Corporate Responsibility Strategy is aligned to the shared-value Approach. This means that we aim, within the framework of our business activities, to interconnect economic growth and social progress in order to meet significant global challenges. We have, therefore, set our sights on mitigating the impact of climate change, improving world-wide access to health care for all groups in society, and strengthening the risk awareness within our Group and of our stakeholders. For example, together with our project partner Climate-KIC (the largest public-private climate initiative of the European Union), we are active in the field of adaptation to climate change in providing support to young companies that are working on climate protection solutions. In our project partnership with the company SOLARKIOSK, we finance solar-energy run kiosks, which generate reliable electricity in rural areas of Kenya with underdeveloped infrastructure.

    In 2017, 34.4 percent of our expenditure on social commitment (donations, social sponsoring) went to climate change related projects.

    Key figures for community involvement

    We also contribute to CO2 reduction within our own Company. By 2015, we had achieved our goal of carbon-neutral operations for all our sites worldwide (see also G4-DMA-EN).

  • In the year under review, there were no tax grants from the public sector for ERGO in Germany. This indicator is not recorded for the international units of ERGO Group AG.

  • ERGO develops insurance policies which are tailored to the financial situation and living circumstances of people in developing countries. For example, in India the German-Indian joint-venture company HDFC ERGO is offering a wide range of microinsurance policies in rural areas, such as health, accident and fire insurance. Cooperation with local institutions has frequently proven effective in achieving the aim of reaching as many people as possible. These initiatives are often supported by non-governmental organisations and microfinance institutions. ERGO uses these activities to support infrastructure development in regions with restricted access to financial services.

    MEAG is the asset manager of ERGO and Munich Re and invests in global infrastructure projects. These include equity investments in projects such as solar plants and wind farms, as well as shareholdings in a high-voltage grid and a natural-gas grid.

  • As a major employer and provider of work, the ERGO Group exerts a positive impact on business and community development at its locations.

    Indirect positive environmental effects are generated by our insurance tariffs designed to support environmentally conscious customers and environmentally benign technologies. For example, ERGO promotes the growing market of electric cars with particularly favourable tariffs in motor liability and fully comprehensive insurance. Since January 2016, ERGO has also been marketing the Elektro Plus module in motor insurance in order to provide an even better package which meets the insurance requirements for electric and hybrid vehicles. Special insurance solutions support the use of renewable energies. For example, operators of photovoltaic plants can conclude a photovoltaic and reduced-yield insurance agreement with us. This offers protection if the expected annual energy yield for the system is not achieved. At the same time, the policy provides insurance against theft, material failure or damage caused by snow pressure. Our homeowners’ insurance also covers damage caused by fire or storm to photovoltaic, solar and heat-pump systems used for private purposes. In insurance for commercial buildings, environmentally conscious owners can also insure additional costs for replanting and improved energy efficiency. Since September 2014, ERGO has played a pioneering role in insuring residential buildings in areas subject to high risk of flooding in Germany.

    ERGO develops insurance policies which are tailored to the financial situation and living circumstances of people in developing countries and emerging economies. For example in India, the German-Indian joint-venture company HDFC ERGO is offering a wide range of microinsurance policies, such as weather index, health, accident, fire and special insurance for farmers. On behalf of the Indian government, HDFC ERGO was the first private insurance company to launch a weather insurance policy for failed harvests on the market in 2010 (for further information see G4-FS7 and G4-FS13).

Environmental Performance

  • Environmental protection has been an important issue at ERGO for many years. Since 2010, we have had our own Environmental Guidelines. These guidelines acknowledge our responsibility for environmental and climate protection and our active promotion of environmental awareness among our employees.

    Our standardised environmental management system helps us to record, assess and minimise the environmental impact of our business operations systematically and consistently. This collected data forms the basis for steering consumption so that it is as environmentally benign as possible. It also helps us to continuously improve our performance.

    The CO2 footprint of our business activity forms the key indicator for measuring and evaluating environmental performance. We calculate our CO2 emissions annually from energy, paper and water consumption, business trips, and waste in standardised form and according to high quality standards. This was confirmed in 2017 by Ernst & Young for selected quantitative environmental data in the Munich Re Group (see verification statement by Ernst & Young).

    Our large locations in Germany, United Kingdom, Ireland and Spain were certified in 2017 in conformity with the international standard ISO 14001. During the year under review, certified environmental management covered 42 percent of our employees (2016: 41.6 percent). The systems at our certificated locations are regularly audited by an independent external environmental auditor. Once all the requirements have been complied with, certification is upheld – a continuous process which generates consistent improvement.

    The top priority of the Company’s environmental strategy at ERGO is to keep energy consumption and CO2 emissions as low as possible and to conserve natural resources.

    Since 2015, we have been neutralising unavoidable CO2 emissions of our worldwide business operations through procurement of certificates. We also intend to continuously reduce our CO2 footprint in the future. By 2020, our CO2 emissions are projected to fall by 35 percent (baseline year 2009), through measures including procurement of green electricity.

    We install modern building and plant technology in order to minimise energy consumption at our locations. Every employee has the obligation to help reduce the consumption of resources – including by saving energy, paper and water, and by avoiding waste and business trips. This is why we promote open dialogue and provide regular information and updates about our activities in areas of environmental concern. We are promoting employee awareness of environmentally friendly behaviour group-wide. For example, we encourage cycling to work by establishing appropriate infastructure, i.e. covered and lockable bicycle parking spaces, bike racks, repair kits, solar pumps, showers and changing rooms, besides also encouraging our employees to cooperate in car-sharing pools when commuting. Wherever possible we make a contribution to the expansion of electro-mobility. In 2016, we installed two charging stations available for public use at our location in Cologne (in cooperation with the energy supplier RheinEnergie and the operator TankE). Eight loading stations for e-cars are available to our employees in Düsseldorf.

    Sustainability Programme
    Responsibility / Environment

  • Because ERGO is a financial services provider, the direct requirement for materials is essentially restricted to consumption in the office setting. In particular, this relates to the paper used. In 2017, the consumption of printing and photocopying paper per employee rose by almost 24 percent. The increase in the consumption of paper is to be attributed to the takeover of the companies of Munich Health.

    Paper consumption1
    2017 2016 2015
    Total paper consumption t 9182 701 674
    Paper consumption per employee t 0.031 0.025 0.024
    1Printer and copy paper
    2The increase in paper consumption can be attributed to the takeover of Munich Health entities.

    Explanations for the environmental indicators (standards used and conversion factor) see under our key environmental figures.

  • The statistics that we collect concerning the use of recycling materials include only the key figures for printing and photocopying paper. In 2017, recycled paper made up 48.5 percent of the entire paper consumption (2016: 38.5 percent). The reasons for the decline in 2016 lie, among other things, in the change of supplier for the ERGO Group in Germany. As a counter-measure, since 2016, environmentally friendly products are suggested for each office material order at the ERGO Group in Germany.

    Last year, the percentage of usage of environmentally friendly office materials at the ERGO Group in Germany was 48.1 percent (2016: 19.8 percent). The 2018 objective of achieving 25 percent has thus been more than fulfilled by a wide margin. Environmentally friendly products are products which are issued with a corresponding certificate, such as the “Blauer Engel” (Blue Angel) eco-label in Germany.

    Recycled Paper consumption1
    2017 2016 2015
    Proportion of total materials used that were recycled t 445 270 308
    Proportion of paper used that was recycled % 48.5 38.5 45.7
    1 Printer and copy paper

    Explanations for the environmental indicators (standards used and conversion factor) see under our key environmental figures.

  • In the financial year 2017, direct energy consumption amounted to 599,108 gigajoules (GJ). The primary energy source was almost exclusively natural gas.

    Direct energy consumption
    2017 2016 2015
    Direct energy consumption GJ 599,108 554,785 577,375
    Direct energy consumption by primary energy source
    Natural gas GJ 216,871 188,701 176,323
    Natural gas consumption for CHPs1 GJ 379,783 363,812 398,847
    Heating oil GJ 0 0 0
    Fuel for emergency generator GJ 2,454 2,094 2,112
    Solar energy2 GJ 0 0 0
    Direct energy consumption per employee GJ 20.16 19.66 20.27
    1 Thermal power stations with combined heat and power technology
    2 Solar energy generated at our locations in Nuremberg and Bristol is fed into the public power network.

    In the financial year 2017, the indirect energy consumption amounted to 525.077 GJ. The most important energy sources are electricity (produced by both conventional and regenerative means) and district heating and cooling.

    Indirect energy consumption
    2017 2016 2015
    Indirect energy consumption GJ 525,077 517,003 510,676
    Indirect energy consumption by primary energy source
    Electricity purchased from outside the country GJ 100,604 113,731 108,652
    Green electricity purchased GJ 186,474 164,768 163,899
    District cooling GJ 23,157 25,435 18,985
    District heating GJ 214,842 212,970 219,140
    Indirect energy consumption per employee GJ 17.67 18.32 17.93

    Explanations for the environmental indicators (standards used and conversion factor) see under our key environmental figures.

  • See G4-EN3

  • In the financial year 2017 the specific energy consumption per employee was 37.83 gigajoules (GJ) (2016: 37.98 GJ).

    In order to reduce our energy consumption sustainably and in the long term, we are implementing various energy efficiency measures. Over the last years, we have, in particular, modernised our building technology.

    All drivers of company cars throughout Germany have to participate in an ecodriving training course designed to save fuel. In 2017, ERGO trained 96 further drivers. A central contribution to sustainable mobility are our company car regulations which have been valid since 2014 and were updated in 2016 with lower CO2 emissions. This guideline states that CO2 emissions from company cars must be below 150 g / km. We are gradually converting our company fleet to fuel-efficient models. In 2017, the average CO2 emissions of the company car fleet, according to manufacturer specifications, was 112 g/km in Germany.

    We also provide our employees with an infrastructure for video and web conferencing, thus, creating alternatives to business trips.

    Explanations for the environmental indicators (standards used / conversion factor under our key environmental figures).

  • The locations of ERGO withdraw their water from the local (municipal) networks. In 2017, total water consumption amounted to 440,479 cubic metres (2016: 450,366 m³). Consumption per employee was 14,82 cubic metres.

    Water1
      2017 2016 2015
    Water consumption in total 440,479 450,366 445,744
    Water consumption per employee 14.82 15.96 15.65
    1 from the local (municipal) networks

    Explanations for the environmental indicators (standards used and conversion factor) see under our key environmental figures.

  • 2017 saw a rise in our total emission of greenhouse gases (scope 1-3 according to the GHG Protocol) to 95,045,181 tonnes. The specific emissions per employee amounted to 3,336 kg. This data refers to the CO2 equivalents.

    Greenhouse gas emissions
      2017 2016 2015
    Greenhouse gas emissions kg 95,045,181 92,535,959 92,230,528
    Greenhouse gas emissions by scope
    Scope 11 kg 40,090,210 37,564,782 43,290,371
    Scope 22 kg 46,401,451 46,597,249 38,043,192
    Scope 33 kg 8,553,519 8,373,928 10,896,965
    Greenhouse gas emissions per employee kg 3,336 3,279 3,238
    1 Includes direct energy and business travel by car
    2 Includes direct energy
    3 Includes paper, water, waste, business travel by air and rail

    Explanations for the environmental indicators (standards used and conversion factor) see under our key environmental figures.

  • see G4-EN15

  • see G4-EN15

  • see G4-EN15

  • The entire ERGO Group has been working CO2-neutrally since the end of 2015. We compensate for unavoidable CO2 emissions, after deducting green electricity, by purchasing CO2 certificates. In 2017, certificates for 70,000 tonnes of CO2 were purchased. ERGO supported the following projects through the purchase of certificates:

    • Energy-efficient ovens for the Kampala region, Uganda
    • Wind-power plant in Shandong Province, China

    We intend to continually reduce our CO2 footprint in the future. By 2020, our CO2 emissions are targeted to fall by 35 percent (baseline year 2009); measures include the purchase of green electricity.

    The data quality of environmental indicators are continually being improved at our reporting Locations.

  • As a financial service provider, our business operations do not produce any ozone-depleting substances.

  • Sources of nitrogen oxide (NOx) and sulfur dioxide emissions (SO2) include our thermal power stations, our vehicle fleet, and the business and commuter traffic movements of our employees. Of the emissions mentioned above, we include those caused by business journeys of our employees and by car fleet usage. These are compensated by the purchase of CO2 certificates.

  • Our waste water is discharged sanitary water. The amount almost exactly corresponds to the amount of water withdrawn (see section EN8). We channel all such water into the local drainage System.

  • In the financial year 2017, the amount of waste per employee was approx. 250 kg. In the previous year, the amount was 288 kg. The temporary increase in the amount of waste produced was due to the renovation and maintenance works that were carried out at some of our locations in Germany.

    Our group-wide applicable Environmental Guidelines have the goal of steadily reducing the amount of waste we produce. The type of waste disposal, however, depends to a considerable degree on the respective infrastructure for waste disposal and the local regulations. Wherever possible, waste and recyclable materials are separated, recycled and disposed of through regional service suppliers.

    Waste by type and disposal method
    2017 20161 2015
    Waste t 7,517 8,115 6,381
    Waste by type and disposal method
    Recycled materials t 4,100 4,501 3,525
    Incinerated waste t 1,850 1,970 1,126
    Landfill waste
    t 499 468 7031
    Specialist waste disposal for reuse / recover t 2 4 3
    Compost t 744 730 636
    Other waste t 322 442 388
    Waste per employee t 0.25 0.29 0.22
    1 Increase in waste resulting from renovation and refurbishment measures at our German sites.

    Explanations for the environmental indicators (standards used and conversion factor) see under our key environmental figures.

Social Performance - Labour practices and decent work practices

  • We are well aware of our responsibility as the employer of around 27,400 people. As far as we are concerned, a sense of responsibility means ensuring that ERGO is future-proof and remains competitive. The objective is to make sales more agile and to provide a more digital structure for the Company. Comprehensive structural measures are necessary in order to achieve this goal. These changes have lead to a painful but unavoidable reduction in the number of jobs. We have made arrangements to ensure that job cuts are made within a framework that is as socially responsible as possible.

    We activate the potential of our employees by actively promoting them, giving them leeway for their work-life balance to optimise family needs and the world of work while safeguarding their health – this is the platform for our success. We support the professional development of our employees with individual training programmes and prepare them for new functions.

    Our independent sales partners can take part in comprehensive training packages which focus on service and advisory competence. ERGO participates in the initiative of the German Insurance Association “Gut beraten – Die Weiterbildung der Versicherungsvermittler in Deutschland” (Well-advised – Advanced training for insurance agents in Germany) in order to consistently maintain the quality and relevance of advanced training for insurance agents at a high Level.

    ERGO benefits from the varied qualifications, experiences and mindsets of its workforce. We want to be more proactive in promoting this diversity and the potential of our employees. ERGO is one of the signatories of the “Charta der Vielfalt” (Charter of Diversity). All the signatories make a commitment to creating a working environment that is free of prejudice and exclusion. Employees should be respected – irrespective of their gender, nationality, religion, disability, age, sexual orientation or identity. Our Code of Conduct for employees also contains clear prohibition of discrimination.

    ERGO is committed to integration of people with disabilities into the Company. At our German sites, a dedicated integration team with representatives of disabled people in the Company, the human resources department and the Works Council ensures that the needs of disabled people are taken care of over the long term. This could,for example, be through provision of appropriate equipment in the workplace or offering opportunities to work for a trial period. At our locations in Poland and Spain, the “Integralia” company foundations are working towards fostering integration of disabled people into the workplace. Both DKV Seguros and ERGO Hestia are offering workplaces which are adapted to the needs of the disabled. Both company foundations offer comprehensive advice to encourage other employers to follow suit.

    The Group in Germany takes part in the initiative “Fair Company” which is dedicated to fair and paid internships and opportunities for university graduates.

    Sustainability Programme

  • In 2017, employees had worked on average 14 years for the ERGO Group (2015: 13.6 years). The fluctuation rate of in-house employees and salaried field staff in Germany in 2017 was 16.3 percent (2016: 11.5 percent). The increase in the fluctuation rate is related to structural changes occurring at ERGO within the scope of the ERGO Strategy Programme (see also Management Approach Employees). A total number of 2,887 employees were recruited in the reporting year (433 in Germany and 2,451 abroad).

    These figures are not categorised according to age and gender, since this data is not of management relevance to ERGO.

  • ERGO has a comprehensive advanced training programme directed towards employees at all levels of hierarchy. In 2017, our in-house employees and salaried field staff in Germany attended training sessions amounting to more than 80,051 days (2016: 77,212). The average number of days invested for training of each employee was 5.2 days in 2017 (2016: 4.7 days). In autumn 2016, the new group-wide international Group trainee programme EXPLORE of the Munich Re Group started with placements at ERGO and other business areas.
    This indicator is not recorded in our international companies.

    Basic and advanced training at the ERGO Group in Germany
    2017 2016 2015
    Number of trainees (including agency trainees) 949 1,042 1,172
    Ratio of trainees to working staff % 5.1 5.2 5.7
    Cost of advanced training per employee 811 743 820
    Advanced training days per employee 5.2 4.7 5.9
    Total advanced training days1 80,051 77,212 102,0982
    Advanced training days for sales partners2 38,9233 32,282 37,750

    1 Training days in total include in-house and salaried field staff.
    2 Advanced training days of salaried and self-employed field staff. Figures include central advanced training programmes organised by ERGO as well as decentral trainings within the scope of the “Gut beraten” (Good advice) initiative of the German Insurance Association and its Code of Conduct for sales of insurance products.
    3 The increase in advanced training days compared to the previous year is primarily due to the new training as a securities consultant.

  • We support knowledge acquisition and development for staff appropriate to their career phase through e-learning packages, training sessions on a needs basis and stays abroad.

    We strive to accommodate family/work and work/life balance in order to ensure that our employees’ professional and private interests are reconciled. The respective measures fall within the responsibility of our companies and are locally managed and implemented as required.

    In Germany, for example, within the scope of the Group Works Agreement on better compatibility of family and work, we have set up various work/leisure time models, enabling the employees to strike a balance between the various challenges which occur in particular life phases and the needs of their job. Regulations in this respect include, for example, temporary part-time, working from home, sabbaticals, and the option to convert tariff-based and company-related special bonuses into leisure time.

    ERGO is particularly keen to recruit and develop the next generation of managers. Our Talent Identification Process (TIP) in Germany is directed towards strategic advanced development of our employees based on a systematic analysis of their potential talents. This process involves highlighting attractive development opportunities presented at ERGO for talented employees, high-flyers and managers in the early stages of their careers. ERGO offers comprehensive mentoring programmes for promoting female managers. An experienced manager acts as a mentor for each potential junior manager providing support and encouragement. These tandem partnerships are matched so that the mentees are provided with optimum support in accordance with their skills and future requirements. We are working on an international strategy for the development and support of our management employees. In 2019, a corresponding group-wide programme will begin. 

  • The annual employee interview is an important tool for HR development at ERGO in Germany. Supervisors use the meeting to provide their employees with systematic feedback and to agree suitable measures for advanced career training. We expect our managers to offer their employees this kind of performance assessment and development planning every year. We do not collect any participation rates because participating in these annual meetings is voluntary for employees.

    The feedback concepts of our international companies are locally managed and implemented as required. Collection of data on the group-wide percentage of participation does not occur.

  • In 2017, the proportion of female employees was approximately equal to previous years at 59 percent (2016: 58.8 percent). The proportion of women in management positions (based on all management levels) for in-house staff and salaried field staff in Germany increased slightly in comparison to previous years. It now lies at 24.7 percent (2016: 24.3 percent). The objective is to increase this ratio in Germany to at least 25 percent by the end of 2020. If the international companies are included, the ratio of women in management positions was 35.3 percent at the end of 2017 (2016: 33.8 percent).

    The number of disabled employees among the German in-house staff and salaried field staff is now 1,147 (2016: 1,157).

    The Management Board of the ERGO Group AG consists of six members: one woman and five men. The Chair is held by Dr. Markus Rieß.
    The Supervisory Board, which is the highest supervisory body in the Group, consists of 16 people: six women and ten men.

    Employee structure of in-house staff (IHS) and salaried field staff (FS) by age and gender at the ERGO Group
    2017 2016 2015
      IHS FS IHS FS IHS FS
    Proportion of women and men
    Women % 59 51.2 58.8 47.8 59 46.9
    Men % 41 48.8 41.2 52.2 41 53.1
    Average age Y 43.2 44.9 43 45.2 42.4 44.9
    Age structure
    Employees under 30 % 11.8 10.5 14.3 12 15.5 12.5
    Employees between 30 and 50 % 61.4 53.4 61.1 53.7 62.2 54.2
    Employees over 50 % 26.8 36.2 24.6 34.3 22.3 33.3
  • The basic salaries for pay-scale employees covered by collective agreements working at German locations are defined on the basis of the relevant contractual regulations (collective agreement for the insurance industry). Since the job evaluation is carried out independently of the holder of the job, the principle applied here is that the same functions receive equal remuneration irrespective of gender.

    In 2015, ERGO carried out an independent salary analysis in Germany with the assistance of the Logib-D tool in order to detect potential differences in salary between men and women. According to the analysis, the salary of men was on average 2.1 percent higher compared with that of women. According to a survey of Germany’s Federal Statistical Office, the difference in Germany was 21 percent in total – the differences in salary between women and men at ERGO were, thus, well below average. Nevertheless, we are continuously working towards further improving this percentage.

    This indicator is not recorded internationally.

Social Performance - Human rights

  • As a subsidiary of Munich Re, which was one of the signatories of the UN Global Compact, ERGO is committed to upholding human rights. The principles of the Global Compact include a commitment to maintaining, promoting and implementing basic values in relation to human rights, decent working conditions, environmental protection and combatting corruption within our area of influence.

    We expect our suppliers and service providers also to comply with the principles of the UN Global Compact. Furthermore, we base our approach on the Principles for Responsible Investment (PRI) and the Principles for Sustainable Insurance (PSI). On the basis of the PSI, we have defined our goal as focusing even more effectively, within our core business, on environmental, social and economic criteria – also known as ESG criteria (Environment, Social, Governance). By signing the PRI, we have also made a commitment to systematically implement ESG criteria in the management of our Investments.

    Sustainability Programme

  • We have a commitment to consider ESG aspects (Environment, Social, Governance), including human rights criteria, in the management of our investments. The Principles for Responsible Investment (PRI) and the General Investment Guidelines of our parent company Munich Re define the group-wide framework for this approach.

  • No cases of discrimination at ERGO in Germany are known to us for the year under review. This indicator is not internationally assessed.

Social Performance - Society

  • Lawful, honest and fair action is crucial to success for ERGO. As a financial services provider, we are largely dependent on trust. In order to avoid damage to our reputation, we have formulated clearly defined rules of conduct for employees and sales partners.

    The Code of Conduct for staff, senior executives and members of the management of ERGO Group AG and its domestic and international subsidiaries provides all our employees with guidelines to help them act ethically and with integrity.

    We have defined the principles for cooperation with sales partners in a Code of Conduct for self-employed field staff.

    ERGO, along with all its German insurance companies and the sales company ERGO Beratung und Vertrieb AG, has adopted the Code of Conduct for sale of insurance products, initiated by the German Insurance Association (GDV). An external auditor verified the appropriateness and effectiveness of the measures developed and implemented within the framework of the Code.

    ERGO has its own Compliance Management System to ensure compliance with statutory, regulatory and internal rules within the Company. The Compliance Division monitors compliance with the principles laid down in our Codes of Conduct. Employees of ERGO in Germany can report any breaches anonymously and confidentially to an external ombudsman who acts as a neutral instance. We are consistent in investigating any indication of misconduct and we apply sanctions that are appropriate to the seriousness of the breach of rules.

    Our group-wide Corporate Responsibility Strategy is aligned with the so-called shared-value approach. In our business, we aim to combine economic and societal progress and, in doing so, meet important global challenges that can be only resolved in cooperation with others. In this regard, we are guided by the Sustainable Development Goals of the United Nations.

    We have identified three challenges, which are of particular relevance for us as a company, for our customers and for society in general:

    • mitigating the effects of climate change,
    • improving access to healthcare and
    • enhancing risk awareness.

    Strategy
    Corporate Governance

  • ERGO develops insurance policies which are tailored to the financial situation and living circumstances of people in developing countries and emerging economies. For example in India, the German-Indian joint-venture company HDFC ERGO is offering a wide range of microinsurance policies, such as weather index, health, accident, fire and special insurance for farmers.

    In order to reach as many people as possible, cooperation with local institutions has proven to be successful, often with the support of NGOs and micro-finance institutions.

    For this purpose, HDFC ERGO uses the so-called public Common Service Centres (CSC), which can be seen a kind of Citizens Advice Bureau. Here, people living in rural areas can take out insurance policies easily in order to protect themselves against life risks such as illness, accidents or crop failure due to weather conditions. There are well over 5,500,000 such CSCs throughout India.

    Furthermore, in cooperation with the HDFC BANK Sustainable Livelihood Initiative, HDFC ERGO has introduced micro insurance in cooperation with a hospital group. This insurance offers a fixed daily benefit for customers in the case of hospital stays for a very low contribution (less than 3 Euro). The new product was well received: in the first three months, more than 50,000 customers took out such an insurance policy.

    Microinsurance


  • See answer to FS13.

  • The functions of ERGO Compliance in Germany include systematic risk analysis and ongoing development of our compliance rules, training and advice for employees, and prevention of corruption. Within the scope of corruption prevention, ERGO Compliance regularly carries out reviews in German ERGO companies in the insurance sector to determine which business processes may be prone to risks of corruption. If necessary, ERGO Compliance agrees with the process owners on suitable risk-reduction measures. The ERGO Compliance Unit also defines minimum standards for the international companies, which must be complied with.

    The foreign insurance companies of the ERGO Group carry out risk analyses on corruption and define individually appropriate measures, whenever necessary.

    ERGO Compliance System

  • We train our employees in compliance and prevention of corruption in order to achieve a clear understanding within the company of those actions which comply with the rules and those which do not. All managers and employees of ERGO in Germany received training in 2017.

    The international companies of the ERGO Group provide compliance training with a focus on relevant specific risks. The topic of corruption will be addressed by training measures on the Code of Conduct.

    We obligate our business partners to comply with the principles of Global Compact and our anti-corruption Agreement.

    ERGO Compliance Management System

  • In the financial year 2017, ERGO International completed internal inquiries into alleged embezzlement and fraud at a subsidiary in Russia, which had been ongoing since 2016. The final report from an international accounting firm found that the company was extensively damaged by two local former general managers and a few former employees as a result of dealing in stolen cars and excessive commission payments for brokering international insurance policies for motor vehicles. The auditors estimate the total amount of fraudulent business transactions to be in the region of a low eight-digit sum. ERGO promptly dismissed the employees who were responsible for this. On the basis of the expert opinion, the company is currently assessing whether legal claims for damages can be brought against the former employees involved. The fraud was uncovered by the Compliance System of ERGO in the middle of 2016. ERGO has since carefully reviewed the case with forensic and legal support and has also cooperated with local authorities in this regard.

  • One of the most frequent reasons for dissatisfaction among customers is their feeling of being treated unjustly. The Complaints Management of our companies seeks solutions to these issues. At the same time, our customers’ complaints are an incentive for us to constantly keep improving. We therefore evaluate them with the objective of eliminating errors and improving services and processes.

Social Performance - Labelling of products and services

  • We want to fully understand what customers expect of their insurance, what their needs are and what they are critical of. In order to find out their needs and best address them, ERGO uses various instruments.

    Our customers in Germany and Austria can, for example, have an active role in shaping the company with tips, suggestions and constructive feedback as participants of the ERGO Customer Workshop or members of the ERGO Customer Advisory Board.

    German customers can also use the online form on our website to provide us with feedback. ERGO uses clear language to explain to our customers exactly what they are getting, and the Company avoids using complicated specialist language. Our dedicated standards guarantee clear, comprehensible language and these have been certified for communication by external experts. We therefore avoid unnecessary jargon and foreign words. We formulate our texts to ensure they are as short and comprehensible as possible.

    If customers have a claim, we make it our business to provide them with rapid assistance and sustainable solutions. They are invited to publicly rate our products and services on the websites of our German companies.

    The ERGO Customer Advocates deal with issues which, from the perspective of the customer, were not resolved satisfactorily even after processing through the .

  • The aim is for our customers to understand us better. The first step towards this goal is to communicate in comprehensible language in our letters and in our contractual conditions. This includes some general rules for writing, and internal software for checking documents. Our Clear Language Initiative is now part of everyday routine for work at ERGO in Germany. The TÜV (German Association for Technical Inspection) Saarland reviews the principle of comprehensibility within the entire Group in Germany. So far, ERGO is the only insurer in the marketplace to undergo this voluntary audit.

  • We are not aware of any cases during the year under review.

  • We work consistently on precisely determining where the satisfaction of our customers lies, because they are, in our opinion, the most important controlling parameter. In the year under review, we surveyed over 51,000 customers (2016: 45,000), who had had contact with ERGO in Germany shortly before. The feedback they gave us provided us with information on issues such as the comprehensibility of our letters, the handling of enquiries, the time it took to actually deal with issues, and the desired timescale. The surveys were carried out by an external market research company.

    The international companies of the Group have also made a commitment to carry out a customer survey at least once a year.

    We have drawn on the results of the surveys to initiate improvements to processes and in sales.

    If customers feel that they have been treated unfairly, the internal complaint management system in Germany is available to provide explanations and dialogue. In cases in which customers feel unfairly treated, ERGO’s Quality and Complaints Management is available to answer any questions they may have. If issues are not solved satisfactorily, customers can turn to the ERGO Customer Advocates Team.

    The ERGO Customer Advisory Board covers the entire spectrum of our customers in Germany. The Customer Advisory Board has 25 members and meets twice a year. The valuable ideas help us to make our processes even more customer-focused and empower us to develop needs-based products and service packages. At the end of April 2017, the ERGO Customer Advisory Board started its third period of office following a further selection procedure (see also G4-FS15).

  • No breaches became known to us during the year under review.
    This indicator has not been recorded for international companies.

  • No breaches became known to us during the year under review.
    This indicator has not been recorded for international companies.

  • In the reporting year, no corresponding fines were imposed on any of the companies of the Group in Germany by supervisory authorities. Furthermore, there were no reports of any corresponding fines imposed against international ERGO companies in the reporting year.

Financial sector supplement aspects

  • We observe environmental, social and governance criteria – known as ESG criteria – in order to establish sustainability systematically in our business. The Principles for Sustainable Insurance (PSI) are the platform for embedding these criteria in our core business.

    At ERGO in Germany, we are incorporating sensitive issues in standard contracts (tariff business, for example in private customer business) and in individual business (conditions negotiated on an individual basis, for example in business with major customers and Group business). A joint CR committee of Munich Re and ERGO regularly provides all the relevant organisational units with an updated list of sensitive issues. The underwriting guidelines are reviewed in the light of these issues and revised as necessary.

    A specially developed ESG audit list provides support for employees in evaluating risks to be insured. Since 2015, ESG criteria have been checked systematically when developing new products or when modifying existing products in tariff business.

    Responsible design and fair sale of insurance products is a top priority at ERGO. When we sell our products, a consistently high level of high-quality advice is a top priority. Our sales partners in Germany operate on the basis of a standardised advice tool known as the “ERGO Kompass” (ERGO Compass), which focuses on the customers’ current life situation. This enables them to survey customer needs selectively and offer concrete proposals for tailor-made protection.

    We have laid down the principles for cooperation with our sales partners in Germany within a Code of Conduct for self-employed sales agents. This defines the key principles of cooperation and understanding of fair dealings with customers, and goes beyond the requirements for ethical conduct. ERGO has also joined the Code of Conduct for selling insurance drawn up by the German Insurance Association (GDV). An external auditor assesses the appropriateness and effectiveness of the measures developed and implemented under the Code.

    We are also committed to consider ESG aspects in the management of our investments. The Principles for Responsible Investment (PRI) and the General Investment Guidelines of our parent company Munich Re define the group-wide framework for this approach. Structured into asset classes, this defines specific criteria for the investment, including the sustainability of the Investments.

    Our standardised environmental management system helps us to record, assess and minimise the environmental impact of our business operations, products and services systematically and consistently. Our large locations in Germany, United Kingdom, Ireland and Spain were certified in 2017 in conformity with the international standard ISO 14001. During the year under review, certified environmental management covered 42 percent of our employees (2016: 41.6 percent). The systems at our certificated locations are regularly audited by an independent external environmental auditor. Once all the requirements have been complied with, certification is upheld – a continuous process which generates consistent improvement.

    In addition, ERGO uses internal communication channels such as Intranet and the staff magazine to regularly inform employees about current sustainability issues and projects. We also use a variety of events to communicate to employees our interpretation of sustainability at ERGO. The regular environmental audits of the individual departments carried out within the framework of environmental management also continuously raise the awareness of employees for the environmental and social requirements in our business areas. We also raise the awareness of our employees at the local sites in working groups, through our internal media and by means of campaigns.

  • Total premium income1 business fields
      2017 2016 Change previous year (%)
    Life Germany € million 3,525 3,735 -5.6
    Health € million 4,855 4,727 2.7
    Property-casualty Germany € million 3,293 3,194 3.1
    Direct insurance € million 1,057 1,094 -3.4
    Travel insurance
    € million 464 452 2.7
    International € million 5,352 5,3872 -0.6
    Total € million 18,548 18,5892 -0.2
    1Fully consolidated figures
    2
    Previous year's figures including the international primary health business of Munich Re
  • On behalf of the Indian government, HDFC ERGO General Insurance Company (HDFC ERGO), in which ERGO now has a 49 percent stake, was the first private insurance company to launch a weather-based crop insurance scheme (WBCIS) for failed harvests on the market in 2010. The background to this is that around 80 percent of harvest failures in India are due to the weather, whereas less than one quarter of Indian farmers are insured. The structure of the product is simple and flat-rate payments are made if a specified temperature or level of precipitation is exceeded or not achieved. Gross premiums amounting to the equivalent of around 159 million euros were written and 2.36 million farmers were insured during the course of 2017/2018.

  • Our insurance products include an environmental benefit if they support environmentally benign and innovative technologies. For example, ERGO promotes the growing market of electric cars with particularly favourable tariffs in motor liability and in fully comprehensive insurance. Since January 2016, ERGO has also been marketing the Elektro Plus module in motor insurance in order to provide an even better package meeting the insurance requirements for electric and hybrid vehicles. Special insurance solutions support the use of renewable energies. Our residential buildings insurance also covers claims caused by insured hazards to photovoltaic, solar and heat-pump systems used for private purposes. Operators of photovoltaic plants are able to conclude a photovoltaic and reduced-yield insurance with us (see also G4-EC8).

  • See G4-DMA

  • MEAG is the asset manager of ERGO and Munich Re. It is in regular communication with the management of many companies. These contacts are also used to address ecological or social issues as part of our comprehensive risk analysis. However, MEAG does not record concrete figures on the scope of these meetings in a standardised way.

  • We have made a commitment to observe environmental, social and economic criteria in the management of our investments. We therefore define appropriate guidelines for our asset manager MEAG so that investments are always compliant with our sustainability requirements. The Principles for Responsible Investment (PRI) and the General Investment Guidelines of our parent company define the framework for this. Concrete investment criteria are defined in these guidelines in accordance with asset classes, including guidelines on sustainability.

    ERGO invests more than half of the premiums received from customers in companies which take account of economic, ethical, social and environmental criteria. We invest in shares and corporate bonds which are listed in sustainability indexes. We carry out regular assessments for sustainability and the indexes used include the following ones:

    • Dow Jones Sustainability World Group Index,
    • FTSE4Good,
    • Ethibel Sustainability Index.

    Sustainability ratings drawn up by the agencies oekom research AG and Systainalytics are also used. We also monitor government bonds for sustainability. This is based on the internal sustainability country rating of Munich Re, which is in turn based on the Country Risk Monitor of the rating agency Sustainalytics.