Investing responsibly

Almost all our own assets are managed by a PRI signatory or asset manager that fulfills our minimum requirements for responsible investment. This ensures that also our externally managed assets are handled according to our values.

Total asset base of balance sheet assets of approximately USD 170 billion of own assets

Insurance investment management is relatively complex. Everything starts with the business footprint of our insurance activities. Whether we sell car insurance in Italy, life insurance in Japan, insure buildings in Chile, or protect companies against natural catastrophes in Australia – the type and geography of our business determine where we will have to invest the resulting premiums, and how long we need to look after the money before claims might need to be paid. To effectively manage investment risks relative to those insurance liabilities, Zurich has a very strong focus on Asset-Liability Management (ALM). The first step in this process establishes a portfolio of investments that closely replicates our insurance liabilities and consists primarily of duration-matched government bonds.

Insurers are required, by the financial regulator, to hold certain assets. For instance, Zurich must back certain local currency liabilities by holding corresponding sovereign bonds. We must also take into account tax considerations, requirements to balance investment income and total return, as well as other constraints that vary widely across local jurisdictions.

As a result, investment choices can be restricted in some asset classes, such as sovereign bonds.

It is also worth noting that only around 5 percent of Zurich’s assets is held in cash. At any given point in time, most of our investment portfolio is invested, often for many years, and hence not available for new investments. This long-term view allows us to be a strategic and reliable investor in long-termed asset classes such as real estate, infrastructure or private equity.

Zurich holds investments in over 800 different portfolios, on over 200 different balance sheets in over 40 jurisdictions, managed by over 40 different external, as well as internal, asset managers. This complexity naturally limits the ability to apply specific processes and approaches in every single instance. Due to the complex reality of insurance asset management, we match the responsible investment tools at our disposal with the asset classes where they have most practical influence on value creation, risk management and positive outcomes.

If you want to learn more about how investment management creates value for the overall business, read the value creation paper.

Asset class breakdown

Guided by our ALM strategy, we apply our responsible investment principles on an asset class level.