Roads to Resilience

There is an expectation that employees should always inform top management if they think issues are arising. To facilitate this, there is a “ well publicised and well used internal hotline process that goes directly to the General Counsel … [such reporting can be anonymous as] there are aspects of a whistle-blower … that need to be investigated and taken seriously ” (CEO Global Life). Cultural values are reinforced from the top of the organisation: “ Our group CEO Martin Senn is very, very frequently communicating the importance of integrity; very strong messages about integrity and values and having the right approach to our customers ” (Chief Risk Officer General Insurance). “ One of the big challenges of any insurer is that as an underwriter of risk, our business is subject to a fairly rigid framework of processes and controls, with the inherent danger that our people do not think beyond the process. This in part is why I spend time visiting our locations, with a view to encourage a dialogue that is candid and two-way ” (CEO UK General Insurance). Many companies expect non-executive directors to contribute to risk awareness. At Zurich, non-executive directors are provided with extensive training in risk matters by the Chief Risk Officer. This covers actuarial and financial management practices and also specific topics, such as Solvency II. The Zurich Risk Policy describes all these core practices and the associated regulations: “ We appoint very senior people onto our board and in addition we offer them training if they feel they need it; some of it is done by the risk group, some of it by other technical people, I think we have a strong and broad programme ” (Chief Risk Officer General Insurance). In the case of Zurich, resilience is a clear organisational objective rather than an emergent property. This is in part due to the nature of the industry, but also due to the form of differentiation, pursued by Zurich, as both interviewees’ comments and the 2012 annual report demonstrate: ‘Our resilience is because we make our customers resilient’ and ‘Our resilience is part of the (customer) value proposition’. Hence resilience is built into the organisational structure, roles and processes and management practices, but is reinforced by the culture and expected behaviours of employees at all levels. An important aspect of resilience at Zurich is the way that management recognises that company strategy needs to be evaluated through a risk management lens. Therefore the strategy itself, the range of products, businesses and markets served, need to support resilience. “ For me, in terms of resilience it comes back to strong financial management, risk management and governance, ultimately supported by highly capable individuals; you need the right mix of skills and capabilities. But you also need enough depth and breadth of real grounded experience to understand the connectivity of functions across what is quite a complex business and you need to have the behavioural set and culture where individuals take personal responsibility for being part of driving and supporting a successful organisation. Ultimately, I think it is about how you marry all those facets together that allows you to develop resilience ” (CEO, UK General Insurance). Summary

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Appendix A Case study: Zurich