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Various external stakeholders, among them regulators, rating agencies, investors, and accounting bodies, have placed emphasis on the importance of a sound risk management program in the insurance industry. Regulatory requirements, such as the Swiss Solvency Test in Switzerland and the regulatory principles of Solvency III in the European Union, have emphasized a risk-based and economic approach, based on comprehensive quantitative and qualitative assessments and reports.

Rating agencies are now interested in enterprise risk management as a factor in evaluating companies' creditworthiness. Standard & Poor's, a rating agency with a separate rating for ERM, has rated Zurich's overall ERM as "strong." Reinsurance and credit risk controls remain "excellent." Market, asset/liability management (ALM), reserving, catastrophe, and operational risk controls, as well as strategic and emerging risk management, are seen as "strong." Zurich is rated either "excellent" or "strong" in all of the Standard & Poor's dimensions for ERM.

Zurich also seeks external expertise from its International Advisory Council and Natural Catastrophe Advisory Council to better understand and assess risks, particularly regarding areas of complex change. In addition, the Investment Management Advisory Council provides feedback to Investment Management on achieving superior risk-adjusted returns versus liabilities for the Group's invested assets. Zurich also organizes various regional Risk Management Councils comprised of key customers, which engage to help identify and address issues together.

Zurich is involved in a number of international industry organizations engaged in advancing the regulatory dialogue and sound risk management practices pertaining to the insurance industry. It is also a standing member of and actively contributes to the Emerging Risk Initiative of the CRO Forum (an organization composed of the chief risk officers of major insurance companies and financial conglomerates that focuses on developing and promoting industry best practices in risk management).

Zurich actively participates in professional risk management bodies such as the Risk and Insurance Management Society (RIMS), the Institute of Risk Management (IRM), the Federation of European Risk Management Association (FERMA), and the Association of Insurance and Risk Managers in Industry and Commerce. For example, Zurich's staff serves on the RIMS ERM Committee and on the global Education Advisory Board of the IRM. It is also involved in various working groups in the Conference Board, supports the Red Cross in crisis recovery, and collaborates with other entities to help promote better risk identification, assessment, prevention, and mitigation.

Zurich is a main contributor to the Global Risk Report that is produced by the World Economic Forum in cooperation with other corporations (Swiss Re, Marsh & McLennan Companies, the Oxford Martin School [University of Oxford], the National University of Singapore, and the Wharton Risk Management and Decision Processes Center [University of Pennsylvania Center for Risk Management] []). The

Zurich Risk Radar

Exhibit 14.4 Zurich Risk Radar

report's assessment of the most pressing global risks and the interconnections among them provides valuable information for risk mitigation worldwide. Supporting the report is also part of the Group's commitment to corporate responsibility by sharing Zurich's expertise to help businesses, nations, and society.

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