report 2011/2012 corporate responsibility · report 2011/2012. 2 | rsa ... 12 cr governance and...

CORPORATE RESPONSIBILITY REPORT 2011/ 2012

2 | RSA | Corporate Responsibility 2011

Feedback on this report is encouraged and can be directed to us via the following address:

[email protected]

For further information on our approach to corporateresponsibility, including policies, please visit:http://www.rsagroup.com/rsagroup/en/corporate-responsibility

Alternatively, if you would like to discuss our activities or

have a country specific question please contact:

Group wide enquiries: James Wallace or Shafna [email protected]@gcc.rsagroup.com

UK enquiries: Paul [email protected]

UK charitable enquiries: Olivia [email protected]

Scandinavian enquiries: Dorte [email protected]

RSA Canada enquiries: Sarah [email protected]

Johnson (Canada) enquiries: Melissa [email protected]

Irish enquiries: Sinead [email protected]

Italian enquiries: Barbara [email protected]

Asia & Middle East enquiries: Matthew [email protected]

Latin American enquiries: Gisella [email protected]

Corporate Responsibility 2011 | RSA | 3

Introduction

CONTENTS INTRODUCTION

4 CEO overview

7 Our business

11 Our approach

12 CR governance and management

16 Materiality

18 Our value to society

CUSTOMERS

26 Brilliant service

COMMUNITY

30 Supporting local communities

32 Secondments

35 Our community work around the world

EMPLOYEES

37 High standards

38 Employee engagement

ENVIRONMENT

44 Our environmental performance

52 WWF Partnership

54 The Arctic challenge

SUPPLIERS

58 Responsible procurement

REPORTING

60 Scope and approach

62 Environmental data tables

64 Data trends 2008-2011

66 GRI Index

72 Independent assurance statement and commentary


insurance company’ in the Gallup database and rank inthe top three companies globally in Financial Services.

Behaving responsibly begins at home with ouremployees and we work hard to ensure thisextends to how we interact with people,communities and the environment in which weoperate. We endorse the principles of the UNGlobal Compact and are committed to integratingthe principles in the UN Declaration of HumanRights and the International Labour Organizationcore labour standards. We are active in the UNEnvironment Programme Finance Initiative.

Our approach to Corporate Responsibility (CR)remains practical and focused on three key themes:

• The environment - Our partnership with WWFcontinued to focus on key business relevant issues.As a leading marine insurer we are a member of the Sustainable Shipping Initiative (SSI), analliance of global companies and NGOs working to deliver a vision of a sustainableindustry. Our Global Renewable Energy businessis a leading insurer of wind, solar and other low-carbon technologies and we published research

We responded to severe weather events in Thailand,Oman and the Baltics, as well as the Slave Lakewildfire, the second most costly catastrophe inCanada’s history. Our business helped customersrecover from these events as well as flooding inmany locations around the world, including Ireland,Denmark and Jeddah.

I am proud of how our staff handled these events.As an insurer, we play a vital role in helping peopleand businesses recover when the worst happens.Helping customers get their lives back on track isour first priority.

Excellent customer service is a major focus across all our regions. In 2011 we laid the groundwork forthe launch of a global customer engagement surveywhich will give us a consistent view of how ourcustomers view us in approximately 30 countriesacross the globe.

Having engaged employees is vital for customerservice and I am delighted that we have achievedour ambitious target (set in 2008) to achieve upperquartile performance in the Gallup engagementsurvey. We are now also the world’s ‘most engaged

In 2011 we delivered a strong performancein tough economic and market conditions.Premiums rose by 9% during a record yearof natural catastrophes and a challengingenvironment for investment yields.

CEO INTRODUCTION


CR aligns with our core business it creates a long-term sustainable programme and one where we areable to lend our expertise as insurers. As it growsincreasingly important for business to be moreresponsible, I am confident that RSA will continue to demonstrate the vital role insurance can play in a more sustainable society.

Simon LeeGroup CEO

A highlight of 2011 was the launch of our ArcticChallenge with WWF. It encouraged more than60% of our employees to actively participate inreducing their carbon footprint, develop the bestbusiness green idea and fundraise for WWF orother green charities. The campaign increasedawareness of our partnership with WWF and therole insurers can play in combating climate change.

We will continue to deliver against our strategy in2012. We will expand our road safety programmeto Bahrain and Singapore, launch a Group-wideGreen Network of environmental champions andcontinue to introduce products with environmentalbenefits. We achieved our target to reduce theamount of carbon in relation to our net writtenpremium by 40% this year. The target will beextended to a 50% reduction to be achieved by2020, set against 2006 baselines.

Insurance plays a vital role in our economy andsociety. Our CR programme aims to support thegrowth of our business, engage our employees andgive something back to our communities. By ensuring

with WWF on how to overcome the barrierspreventing the widespread adoption of renewableenergy. In our own operations we have increasedthe use of renewable energy, improved energyefficiency in our offices and are building a strongenvironmental culture among our employees;

• Safety - In 2011, we extended our work on roadsafety around the world. This included a neweyesight campaign in the UK, encouraging strongerregulation around eyesight tests for driving licencerenewals. Our Scandinavian programme continuedto grow with more than 170,000 high visibilityvests and reflectors being handed out in the wintermonths to protect members of the public; and

• Social inclusion - We launched a Global CharitableProgramme in 2011 to support employees and localcommunities. Employees anywhere within RSA cannow apply for matched funding, a charitable grant,or up to a three month charitable secondment.The programme aims to help improve employeeengagement even further, support local communityorganisations and promote RSA in the community.

Insurance plays a vital role in our economy andsociety. Our CR programme aims to support thegrowth of our business, engage our employees and give something back to our communities.

Introduction


Road SafetyAs a leading motor insurer we are committed to helping improve safety on theroads. Our long running reflector programmes in Scandinavia, Lithuania andEstonia have distributed more than 65,000 high visibility vests to protect peoplecommuting to and from school and work.


OUR BUSINESS

RSA is a leading general insurer, operating in 33 countries and providing products and services in over 140 countries. RSA is afocused general insurer. Our products include:

• Commercial insurance services for businesses (e.g. property, motor, marine and energy generation);

• Personal insurance products (e.g. household, motorand pet insurance) sold directly to consumers; and

• Personal insurance sold to consumers throughintermediaries such as insurance brokers and agents.

From 1 January 2012, the Group was restructured intofour regions: Scandinavia, Canada, UK and WesternEurope, which includes Ireland and Italy, and EmergingMarkets, which is unchanged. The 2011 financial resultsare prepared according to the previous structure: UK, International and Emerging Markets.

6,4625,837

6,7377,455

8,138

NET WRITTEN PREMIUMS (£m)

+9% Growth

OverseasUK

2011

2010

2009

2008

2007

2007

2008

2009

2010

94.594.9 94.6

96.4

2011

94.9

COMBINED OPERATING RATIO (%)

94.9%1.5pt improvement

2007

2008

2009

2010

2011

7.717.01

9.168.25

8.82

DIVIDEND FOR THE YEAR (p)

+4% Growth

Introduction


45%*

Personal

Commercial

UK & WESTERN EUROPE

NWP £3,701m

52%

48%

*Of total 2011 Group NWP

Personal

Commercial 58%

42%

14%*

EMERGING MARKETS

NWP £1,103m

UK AND WESTERN EUROPE

• In the UK, we operate as RSA through intermediariesand as MORE TH>N in the Direct market.

• In Ireland, we operate as RSA through intermediariesand as 123.ie in the Direct market.

• Our Italian operation is purely intermediated,operating as RSA through brokers and non-tied agents.

• We have RSA branded Specialty operations inBelgium, France, Germany, the Netherlands, Spainand Italy.

• Largest Commercial lines insurer in the UK.

• 4th largest UK Personal lines insurer overall, 4th inHome, 5th in Motor and a market leader in Pet.

• 2nd largest general insurer and a leading Directinsurer through 123.ie in Ireland.

• Small operation in Italy predominantly focused on Motor.

EMERGING MARKETS

• Our main focus is on Large and Complex risks,Motor, Small and Medium Enterprises (SME),Marine and Affinity.

• In Latin America, we operate as RSA inArgentina, Brazil, Chile, Colombia, Mexico,Uruguay and the Dutch Caribbean.

• In Central and Eastern Europe, we operate asLietuvos Draudimas in Lithuania, as Balta inLatvia, as RSA in Estonia, as Link4 in Poland, as InTouch in Russia and as Direct Pojišt’ovna in the Czech Republic.

• In Asia and the Middle East, we operate as RSA in China, Hong Kong, Singapore, UAE andBahrain and we operate as Al Alamiya in SaudiArabia and as Al Ahlia in Oman.

Latin America

• Number 1 general insurer in Chile.

• The largest private insurer in Uruguay.

• A leading Marine insurer in Brazil.

Central and Eastern Europe

• Number 1 general insurer across the Baltics.

• A leading Direct writer in Poland, Russia and the Czech Republic.

Asia and the Middle East

• A leading international insurer in the Middle Eastand number 2 insurer in Oman.

• In Asia, we have Commercial lines hubs in HongKong, Singapore and mainland China.

• Royal Sundaram, our associate in India, is the 4thfastest growing private insurer.


18%*

Personal

Commercial

CANADA

NWP £1,483m

32%

68%

23%*

Personal

Commercial

SCANDINAVIA

NWP £1,824m

46%

54%

SCANDINAVIA

• We operate as Codan in Denmark and Norwayand as Trygg-Hansa in Sweden.

• We have a multi-channel distribution model,selling our products through call centres,intermediaries and affinity partners.

• The 3rd largest insurer in Denmark and Swedenwith a growing business in Norway.

• Leading positions in Renewable Energy,Personal Accident and Marine.

CANADA

• We distribute products through intermediariesunder the RSA brand. Our Direct offering is Johnson.

• Our affiliated broker network, Noraxis, is a top 5Canadian broker.

• In January 2011, we completed the acquisition ofGCAN, a leading Mid-Market, Large and SpecialtyCommercial insurer.

• 3rd largest general insurer overall, up fromnumber 10 in 2005.

• 2nd largest Affinity writer through Johnson.

• A leading Marine insurer.

UK & WESTERN EUROPE

EMERGING MARKETS

SCANDINAVIA

CANADA

Introduction


RSA and WWF PartnershipWe are working with WWF to investigate emerging environmental risks andexplore how the insurance industry can respond to the opportunities andchallenges of climate change.


A major element of our strategy is our partnershipwith the environmental NGO WWF, launched in2009 in the UK, Canada, Sweden, Denmark andChina. We are supporting conservation projectsrelevant to our business, developing new productswhich respond to the risks of environmental change,as well as engaging internally and externally toincrease awareness of environmental issues. Thepartnership focuses on three relevant environmentalissues: flooding and water, climate change and themarine environment. Examples of our work withWWF are included throughout the report.

OUR APPROACH TO CORPORATE RESPONSIBILITY

We are committed to doing the right thingas individuals and as a company. We seekto manage our business in a responsibleand ethical manner, to make a positiveimpact on the environment and supportthe communities in which we operate.

Our strategyWe focus on three broad themes that we considerare important to our business, that differentiate usfrom our competitors and where we believe we canmake a significant contribution: safety, inclusion andthe environment.

External recognition in 2011

Ranked Bronze in theDow Jones SustainabilityInvestor Index;

Granted CaringCompany status forninth year running bythe Hong Kong Councilof Social Service.

Named BestWorkplace inLithuania by theMinistry of theEconomy;

Awarded PrimeStatus by OekomResearch;

ReceivedSunday TimesBest GreenCompaniesAward;

Achieved Platinum status in Business in theCommunity’s CR Index;

Named in theSuper SectorLeaders categoryin FTSE4GoodIndex;

Key CR developments in 2011 were:

• Expanding our work on road safety in the UK and other countries (see page 19);

• Developing a global employee engagementcampaign with WWF to raise awareness of therisks of climate change (see page 54);

• Launching a global matched funding, charitableawards and secondment programme (see page 32);and

• Achieving our target to reduce gross tonnes CO2

per £m net written premiums (NWP) by 2020(against 2006 levels) nine years early.

Introduction


Risk managementCorporate responsibility is fully embedded in theGroup’s Risk Framework which assesses emergingrisks across the entire business and forms part of ourcore management processes. Environmental, socialand governance risks are prioritised on the likelyfinancial and operational impact on the Group, suchas damage to our reputation, non-compliance withlegislation and poor relationships with stakeholders,and form part of our wider risk register.

The main CR risks identified in 2011 were:

• Ensuring compliance with the UK CarbonReduction Commitment (CRC) Energy Efficiency Scheme;

• A record year of extreme weather events and disasters;

• Political upheaval in the Middle East;

• Legislation including Solvency II capitalrequirements for insurers; and

• Changes to the UK Corporate Governance Code aimed at promoting greater genderdiversity at board level.

CR policyThe Group CR policy applies to all operations,including wholly or majority-owned subsidiaries andassociated companies where RSA has managementcontrol. The policy sets out commitments to:

• Improve our environmental performancereducing our direct and indirect impacts;

• Support employees who want to contribute to their communities;

• Uphold Human Rights in our operations andsupply chain;

• Provide excellent customer service and productsthat contribute to society;

• Work with suppliers to improve their social andenvironmental impacts;

• Engage with relevant stakeholders, including ourpeers and business partners, and contribute topublic policy debates to encourage moreresponsible behaviour;

• Regularly review our CR strategy, approach andperformance with the Group ExecutiveCommittee and Board; and

• Provide an annual, independently verified reportof our CR performance.

Overall responsibility for CR lies with the Group CEO Simon Lee. The Boardroutinely discusses CR issues affecting theGroup and conducts an annual review ofperformance and future strategy.

The Group Executive Committee acts as the CR Steering Committee, supported by a Group CR team. The Steering Committee meets twice ayear to oversee development, implementation andprogress of the CR strategy and monitor compliancewith our global CR, Environmental, Human Rightsand Community policies. It provides a commonreference point for regional businesses, where CRmanagers or coordinators are in place in all operatingcountries. Country and site-based community andenvironment committees determine and respond to local priorities.

CR targets are included in the objectives for allGroup CR Committee executives. All countries arerequired to comply with Group CR, Human Rights,Environmental and Community policies. Individualcountry operations set CR targets, in line with localmarket conditions, which are then assessed by theGroup CR function. See our Annual Report forcoverage of corporate governance.

CR GOVERNANCE AND MANAGEMENT


Reinsurance is normally bought on a catastrophebasis - providing protection against losses fromindividual catastrophic events. RSA also buysreinsurance on an aggregate basis where appropriate,which protects us from losses arising from the manysmaller, more frequent events which could resultfrom climate change. This approach helps usminimise losses to our business in the event ofextreme weather conditions.

InvestmentsPremiums from customers are invested in low riskinvestments to ensure capital is available for claimsand customers have financial security. The majorityof our UK equity investments are managed by F&C Asset Management. F&C applies a responsibleengagement overlay to RSA equity funds. F&C has one of the largest Governance and SociallyResponsible Investment teams in Europe, enabling it to follow a policy of active engagement across itsportfolios on environmental, social and governanceissues. In 2011, F&C engaged with 29 companiesheld in our portfolios on these issues.

Asset Management Committee, which overseesour investment strategy.

Insurance riskThe insurance industry also faces specific social andenvironmental risks related to existing and emergingissues such as climate change. These risks alsopresent opportunities to develop products thatrespond to the changing needs of customers.

We manage exposure to these risks by:

• Developing technical expertise in ourunderwriting and claims teams;

• Pricing products according to the level of riskinvolved using evidence based modelling;

• Regularly reviewing our risk models to identifyexposures to new and emerging risks and ensurethese are priced correctly;

• Developing and shaping products that encouragemore responsible behaviour and appeal topreviously underserved areas of the market;

• Working with customers, civil society andgovernments to raise awareness of the stepspeople can take to reduce their risk; and

• Buying reinsurance to protect against claims.

We are responding to these issues by:

• RSA achieved the CRC Energy EfficiencyScheme certification in 2011 and our submissionwas internally audited before submission to theregulators;

• We responded to incidents around the world in 2011 including flooding in Thailand, Denmarkand Ireland. Our emergency response and claims handling teams ensure we reach affectedcustomers promptly with advice and support;

• We held additional high-risk country reviews toassess fast-changing Human Rights issues andensure our employees were safe;

• We are an early adopter of Solvency II and areworking with regulators to pilot the legislation; and

• Improving gender diversity remains a focus for us and we are committed to improving femalerepresentation at all levels through support,training and awareness.

A Non-Executive Director, Noël Harwerth, chairsthe Board Risk Committee, which meets at leastquarterly. It comprises the Group CEO, othermembers of executive management and one otherNon-Executive Director. The Board Risk Committeesets the risk limits to be observed by the Global

Corporate responsibility is fully embedded in theGroup’s Risk Framework which assesses emergingrisks across the entire business and forms part ofour core management processes.

Introduction


Human rightsAs a signatory of the United Nations GlobalCompact we are committed to eliminatingdiscrimination and protecting Human Rightsinternally and in our immediate sphere of influence.We regularly review all countries to ensure theycomply with our Human Rights policy and identifythose which may pose a major risk to ouremployees or reputation. Our Human Rights policyensures we actively monitor requests for insurancein high risk countries. We have identified no risk ofchild or forced labour in any of our operations dueto the nature of our business, meaning that this typeof abuse is very unlikely.

Stakeholder engagementUnderstanding risks, and how best to respond tothem, benefits from engagement with a wide groupof organisations and individuals. This also helpsimprove other people’s understanding of ourapproach and knowledge of the insurance industry.

We gather feedback on our approach andperformance through a wide range of internal andexternal channels including:

Stakeholder Group Examples of engagement in 2011

Customers We raise awareness of our environmental products and services through customer communications

including websites and policy documents. Customers in approximately 30 countries responded to our first

Global Customer Engagement survey that sought feedback on our service levels.

Employees Our Arctic Challenge competition aimed to raise employees’ awareness of the risks of climate change.

As part of this, employees were encouraged to consider how RSA can reduce its environmental impact.

Our CR strategy was also discussed at our annual Employee Consultative Forum.

Investors We engaged directly with major investors on CR issues and responded to investor surveys including

Carbon Disclosure Project, Dow Jones Sustainability Index, FTSE4Good, Oekom and Vigeo.

NGOs Our three year partnership with WWF continues and we sought NGO feedback on our approach

through our opinion leader survey. We are also a member of Forum for the Future who conduct an

annual materiality review for us.

Suppliers We organised supplier workshops in the UK and Scandinavia to identify ways we can work together to

reduce the environmental impact of our supply chain.

Communities We operate community-based road safety campaigns in Asia, the Baltics, Chile, the Middle East, Scandinavia

and the UK. Local charitable committees engage with communities to identify partners and channel support.


Opinion leader surveyIn 2011, we commissioned research to gatherperceptions on the insurance industry from 66external stakeholders including investors, insurancebrokers, consumer bodies, NGOs and otheropinion leaders. We asked participants to prioritisewhat they considered to be the most importantissues facing the industry. The top three were:

• Building transparent relationships with customersand brokers;

• Building trust and confidence in the insuranceindustry; and

• Identifying, mitigating and managing environmentalimpacts and climate change.

We also asked participants to identify what theythought would be the most important issues facingthe insurance industry in ten years’ time. Climatechange and other environmental risks wereidentified by two-thirds of respondents, making thisthe highest ranking long-term issue for the secondconsecutive year. Sustaining profitability emerged asa top three issue having been identified by nearlyhalf of respondents.

Building trust and confidence in the industry alsoremained a priority issue. Key to tackling this isensuring we meet customers’ expectations andoffer consistently excellent levels of customerservice. In 2011, we organised our first globalcustomer engagement survey and established anew Group-wide customer service division toensure we continue to maintain our high standards.

Public policyWe take part in public policy debates on issuesrelevant to our business, including through industrybodies such as the Association of British Insurersand the Confederation of British Industry. In ourengagement with policymakers we aim to improvetheir understanding of the key issues facing ourbusiness and make sure the insurance industry can continue to play a valuable role in society and the economy.

We always comply with local laws and with ourPublic Affairs Policy. We do not make politicalcontributions and we receive no forms of financialassistance from governments.

We also collaborate with a range of industryorganisations and internationally agreed standards,including::

• The Association of British Insurers (ABI);

• The ClimateWise Initiative;

• The Chartered Institute of Purchasing andSupply’s Financial Services Purchasing Forum CRworking group;

• The Sustainable Shipping Initiative;

• The United Nations Global Compact; and

• The United Nations Environment ProgrammeFinance Initiative (UNEP-FI) Insurance WorkingGroup, including participation in the workinggroup on the Principles for Sustainable Insurance.

Introduction


Our 2011 materiality assessment confirmed thatfinancial and social inclusion, flood risks associatedwith climate change, safety and disasters remain keyissues for us. We are tackling these through ourstrategic focus on safety, the environment, socialinclusion (see page 19) and community activities (see page 30). Rising up the agenda this year areissues concerning the economy and public spending.While we have little control over these, they areimportant considerations for the company as theywill affect the environment in which we operate.

MATERIALITY

OUR ABILITY TO INFLUENCE

STA

KEH

OLD

ER V

IEW

S

High priority

Low priority

Medium priority

ObesityWater scarcity

CorruptionEcosystem decline

Supply chainProduct innovationDiversity

Direct environmental impactBusiness ethics

TranparencyCustomer service

Employee wellbeingEmployee training

Social inclusionFlooding / ClimateSafetyDisasters

New technologyEnergy security

UrbanisationEmerging markets

Resource prices

Ageing populations Investments

Economic situation

Limited influence or no ability Able to influence or encourage mitigation Direct control or ability to mitigate

Issues being flagged in any of the processes areassessed against:

• Significance to RSA (including importance tostakeholders);

• Alignment to our core business; and

• Our ability to influence.

Every year we compile a risk matrix tohelp determine the material issues forour CR strategy and reporting.

Issues are assessed through a variety of channels.These include our group risk framework,stakeholder engagement process, externalbenchmarking, investor assessments, sustainabilityratings and the employee CR survey, as well as amateriality review by Forum for the Future.

Work in the communityEmployee volunteering is a key part of our community strategy. On the hottestday of 2011, our UK Underwriting and Claims team spent the day painting andgardening at Montem Primary School, London.


Introduction


RSA makes a fundamental contributionto society, and the economy, by employingapproximately 23,000 people and making£310m in tax payments (see the table for details).

Beyond this direct contribution, our industry is vitalfor thriving communities and businesses, providingproducts that protect individuals and companiesagainst a wide range of risks. We help people andorganisations recover when the worst happens,whether that is a relatively small localised incidentsuch as a car accident or a major disaster such as anearthquake or flooding. The confidence and peaceof mind that insurance provides is as important asthe financial protection - confidence for people totravel, buy a home, ship cargo or construct an office.

We can also play a part by developing products andservices which respond to climate change and otherenvironmental risks, improve safety on the roads, inhomes and at work and which support social inclusion.

OUR VALUE TO SOCIETY

7,856 7,179

745 629

134 116

(5,213) (4,884)

(1, 674) (1.392)

(96) 172

1,752 1,820

Creation of Value 2011 £’m 2010 £’m

Net earned premiums

Net invested return

Other operating income

Net claims and benefits

Underwriting, policy acquisition and other costs

Additional gains, losses and other movement

Total

3,766 3,491

35 270

3,801 3,761

Opening shareholders' funds

Retained (above)

Closing shareholders' funds

982 939

3 3

310 233

117 118

305 257

35 270

1,752 1,820

Distribution of Wealth 2011 £’m 2010 £’m

Employees

Corporate responsibility

Government (taxes and social security)

Servicing of finance

Shareholders (dividend and minority interest)

Retained for investment

Total


Night time visibility on the roads is an issue for many of our markets, particularly in NorthernEurope during winter. Our long running reflectorprogrammes in Scandinavia, Lithuania and Estoniahave distributed more than 65,000 high visibility veststo protect people commuting to and from schooland work in the dark. In 2011, we extended this tothe UK, distributing vests to cyclists in Manchester andPeterborough. Through our pet insurance businesswe also helped dog owners keep their pets visibleat night on the road with reflective coats.

As a leading motor insurer we are committed tohelping improve safety on the roads. We do thisthrough products which provide discounts for safer driving and through specific programmes toencourage safety awareness among drivers andother road users.

For example, in the UK, we published research onthe dangers of driving with poor eyesight and calledfor improved sight tests for drivers. The researchfound that drivers with blurred vision struggle tostay in lane and keep a consistent speed as well asfinding it difficult to read road signs. The strain alsoincreases the risk of fatigue. Through a partnershipwith the optician chain Specsavers we make it easierfor people to obtain eye health services and glasses.

In Scandinavia and the UK we provide driver trainingand certification schemes for commercial customers.Our approach extends to road safety campaigns,such as MORE TH>N in the UK, which works withthe Children’s Safety Education Foundation toprovide safety advice in 40 schools each year. We will expand this programme to Bahrain andSingapore in 2012.

SafetyThe insurance business is about protecting peopleagainst risk. Individuals and businesses buy insuranceto help them when things go wrong but it is in allour interests to keep people, property andpossessions safe.

Insurance products and services can encouragecustomers to adopt safer behaviours and help toidentify risks so they can be prevented or mitigated.We help customers manage risks with targetedsafety advice through policy documents and weprovide additional information for customersthrough our network of brokers, websites and themedia. In some cases we provide people with safetyadvice about specific risks such as floods and stormsvia services like SMS messaging. In Canada, we alsoconduct safety surveys to advise customers how toprotect their homes from risks such as theft and fire.For commercial customers, our Global Consultinggroup conducts site visits to assess the risks they faceand review their contingency plans. The Risk Managedteam works with large companies to develop bespokeinsurance products and identify risk managementprocedures ranging from routine maintenance tomanagement of hazardous substances.

ROAD SAFETYWe operate community-basedroad safety campaigns aroundthe world

Introduction

SOLA

R

POWER BIOENERG

Y

HY

DRO

POWER W

IND

EnvironmentAs an insurer, any change in the intensity orfrequency of extreme weather conditions canhave a huge impact on our business and customers.We aim to lead our industry in responding toenvironmental change, highlighting the challengesand opportunities, developing relevant products and services and improving the environmentalperformance of our operations.

Through our major partnership with WWF, we are raising awareness of environmental risks withemployees, customers and the business community.Examples of our joint activities are shown throughoutthis report. They include research on environmentalrisks, water management, renewable energy andawareness-raising activity such as the Arctic Challengeemployee competition (see page 54). For moreinformation see our joint websitewww.wwfrsapartners.com

The marine environment is a strong focus, reflectingour role as one of the world’s leading marine insurers.RSA is a member of the Sustainable Shipping Initiative

(SSI), an alliance of global companies and NGOsfounded by WWF and the Forum for the Future. SSIis working towards realising the Vision 2040 whichwas agreed in 2011. The Vision sees an innovative,accountable industry using a diverse mix of energysources efficiently, providing safe, healthy and securework environments and contributing to theresponsible governance of the oceans.

Another focus area is renewable energy. Our GlobalRenewable Energy business is a leading insurer of wind,solar and other technologies which make a crucialcontribution to meeting energy demand andsupporting the transition to a low-carbon economy.Our partnership with WWF is investigating how theindustry can help remove the barriers facing renewableenergy generation. In 2011, we published ‘Insuranceand Renewable Energy’ which looks at the issuespreventing the widespread adoption of renewableenergy. The report outlines how government, insurers,manufacturers, utility companies, financial institutions,environmental organisations and civil society canwork to overcome these challenges.


Risk mappingRisks, especially from severe weather, are oftenlocation-specific. Our geographical assessment toolmaps factors such as flood plains, unstable groundconditions and crime to identify levels of risk inindividual localities. This helps to set premiums so customers in safer areas do not overpay and itmeans we can give vulnerable customers advice onhow to protect themselves. These tools also helpcustomers if there is a major incident such as anearthquake or flood. Our loss adjusters can quicklysee which customers are likely to have beenaffected and can contact them before they call us.

We are expanding the use of risk mapping to cover new markets. In 2011, for example, weworked with the national Insurers Association in theCzech Republic to introduce INTERMAP, a floodrisk mapping tool. In Columbia, our underwritingand technical teams developed an internalGeographical Information System to map floodhazards during the rainy season.

RENEWABLEENERGYFor more information onRenewable Energy visitwww.specialty-rsagroup.com

Road safety in schoolsIn the UK, MORE TH>N works with the Children’s Safety Education Foundationto provide road safety advice in 40 schools during 2011.


Introduction

Demonstrating natural flood defences in East LondonIn 2011, we completed the phase 1 construction of an innovative flood alleviation and river restoration project at Mayesbrook Park in East London.The project aims to show how natural flood management techniques can reduce the risk of flooding in towns and cities across the UK and beyond.

The concrete banks of the Mayes Brook - a small stream that runs through the park - are being replaced with natural banks and a one hectare floodplain to naturally store floodwater and protect local homes from flooding. Up to six ponds are being excavated which will collect rainwater runofffrom the roof of a training centre being constructed for the Olympics. Some of the stored water will be absorbed into the ground with the restchannelled into the brook.



We use our underwriting and risk managementexpertise directly to help clients seize environmentalopportunities and manage their risks. Examples includeinsurance to cover the costs of accidental damage at sites protected under EU law, known as Natura2000 sites. Products such as these are increasinglyimportant in helping customers respond to legislation,including the European Union Environmental LiabilityDirective. Operating on the ‘polluter pays’ principle,companies are responsible for the costs of remedyingenvironmental damage that they have caused tonatural resources such as flora, fauna and habitats.

Working with WWF, we are also developing productfeatures that encourage customers to reduce theirimpact on the environment. We already providediscounts for fuel-efficient vehicles and in 2011MORE TH>N launched a green home insurancepolicy to help encourage customers to reduce theirenvironmental impacts and address environmentalconsiderations during the claims handling process.

Customers can upgrade to more flood resistant andenergy efficient building materials for an additionalcost in the event of a claim. The policy builds onour Greener Home Endorsement policy in Canada that gives customers the option to replacedamaged property with more environmentallyfriendly alternatives.

Elsewhere, Codan customers can benefit from anew energy efficient window replacement scheme,helping them to save energy and reduce their CO2

emissions. Damaged windows are replaced withenergy efficient alternatives and customers can get afree energy report showing how much energy theycan save by replacing all their windows with energyefficient alternatives. On average, customers cansave between £100 and £700 per year and reducetheir CO2 emissions by up to 1.5 tonnes per year.

While the biggest contribution we can make isthrough our business and our external activities, wemust also manage our own operations responsibly.

We have increased the use of renewable energy,improved energy efficiency in our offices (see page 44)and are building a strong environmental cultureamong our employees. Our Arctic Challenge,organised in cooperation with the WWF, challengedemployees around the world to reduce their carbonfootprint, raise money for charity and come up withideas to reduce RSA’s environmental impact. Thewinning teams travelled with WWF to the Arctic toexperience, first hand, the impacts of climate change.

We use our underwriting and risk managementexpertise directly to help clients seize environmentalopportunities and manage their risks.

Introduction


Global charity secondmentsIn 2011, we launched a global charitable secondment programme. Twenty fouremployees from across the Group were selected to spend between one weekand three months working at a charity of their choice.


Emerging markets present opportunities to extendinsurance to previously excluded or underservedgroups. Micro insurance schemes open uppossibilities for people with very low incomes toobtain protection against damage to their homesand their crops. These people often benefit mostfrom the protection insurance offers. We work withgovernment bodies and intermediary organisationssuch as BASIX in India to meet their needs.

Our community and employee volunteeringprogrammes provide financial contributions alongwith practical skills to foster social inclusion. We canhelp to address the root causes of many claims byfocusing on poverty alleviation, education and crimereduction. During 2011 we extended charitablebenefits to all employees in RSA.

We encourage employees across the Group tosupport disadvantaged groups through our global

matched funding programme. Recognising the valueour employees can bring to charitable organisations, in2011 we also launched a global charitable secondmentprogramme giving employees the opportunity tospend up to three months working for a charity oftheir choice (see page 32).

Social inclusionSome customers and markets call for a tailoredapproach that meets the needs of particular groupsand we develop products that respond to thoseneeds. This is especially important for customerswho have found mainstream products unsuitable or unavailable.

We are major insurers of social housing in the UK,and provide micro insurance services for lowincome customers in Emerging Markets.

Tenants in social housing tend to be on lowerincomes and may find it difficult to pay premiums in the usual way. Our low-cost product in the UKallows weekly premiums, payable in cash, if thecustomer does not have a bank account. It is alsopossible to pay the premium as part of the rent,with the landlord passing the insurance element tous. These innovations help to make us one of thebiggest insurers of social housing in the UK, serving170 housing associations.

2011In 2011 we launched a globalcharitable secondment programmewith twenty four individuals workingwith charities around the world

Introduction

Breaking down the barriers to insurance

“A lack of access to insurance is a significant factor infinancial exclusion in the UK - almost half of low-incomehouseholds have no home contents insurance. People onlow incomes often struggle to set up insurance. For examplethey may not have a bank account and cannot pay throughcredit/debit card or direct debit.”

“Our Tenants Contents Insurance scheme is a homecontents policy which aims to be affordable for socialhousing tenants. We understand the challenges that thesecustomers face and offer a range of options to help meettheir needs. This includes insurance cover for relativelysmall sums, and no cancellation or mid-term amendmentfees. We also offer various payment methods and flexiblepayment schedules which can be weekly, fortnightly,monthly or annually.”

“Offering accessible insurance products continues to be an important and growing part of RSA’s business. As thescheme enters its 16th year we continue to review andupdate it to ensure that it remains affordable to those who need it the most.”

Katie Balme, Schemes Account Manager, UK

We sell protection against risk toindividuals and businesses in over 130countries. People buy our productsdirectly but we also sell through brokersand other intermediaries.

Our main responsibility to customers is to provideproducts and services which meet their needs atcompetitive prices and reflect the risks involved. Inthe event of a claim, loss adjusters help customersassess any damage that has occurred and the workthat needs to be carried out to repair it.

Providing brilliant service is one of our Brand Beliefsand a major focus across all our regions. Brilliantservice is about building trust with our customers bydelivering what we promise, getting the basics right,making it easy for them to deal with us and doingthe day to day things well.

Greener Home endorsementWe all have a responsibility to protect theenvironment and the growing risks of climatechange so it is increasingly important that each of us takes measures to reduce our impacts. In Canada,RSA is making these steps a little easier with theintroduction of the Greener Homes endorsement.

The Greener Home endorsement gives customersthe opportunity to do something for the environmentat a marginal cost. For an additional CAN $10 addedto their insurance premium, RSA Canada customerswith Platinum Plus, Comprehensive or BroadHomeshield cover now have the option to replacedamaged items with environmentally-friendly, non-toxic or energy efficient alternatives.

This means that in the event of a claim, a homeownerhas the option of upgrading to sustainable buildingmaterials and appliances. This helps to reduce theenvironmental impacts of the restoration and canalso lead to future energy and carbon savings fromenergy efficient alternatives.

CUSTOMERS



RSA Canada has received positive feedback frombrokers, with one requesting a similar benefit withother RSA Canada products. While the endorsementis relatively new, success comes from being able to deliver a financially viable product which givescustomers the option to reduce their impacts in a simple way.

Customer satisfactionGetting clear, actionable customer feedback isessential for delivering on this commitment. Weconduct surveys throughout the claims process tounderstand how we can improve our service levels.

Feedback shows that customers are increasinglylooking for a more personalised service, such as ourpersonal customer managers and dedicated claimsmanagers in the UK. Other important issues includea reliable and consistent claims experience, dealingwith complaints the first time and the length of timetaken settling a claim.

In 2011, we launched our Customer & Brilliant Serviceprogramme to improve customer satisfaction levelsacross the Group by embedding a more customer-orientated culture and creating a more consistentcustomer experience. We conducted our first Group-wide Customer Engagement survey covering 30countries to measure our baseline performance. We will use the scores to establish a common set ofindicators to measure customer satisfaction levels inour businesses. Understanding these, and measuringthem over time, will help compare performance anddevelop plans to improve target areas.

Also in 2011 we launched a Group-wide CustomerChampion Network to share examples of bestpractice. For example, in the UK we produced a‘brilliant service’ map which sets out guidelines toimprove customer satisfaction levels, such as beingclear on what customers want.

Some examples of excellent customer service fromacross our businesses last year include:

• Improvements, following feedback with brokers,led to a 5% increase in personal lines sales inIreland;

• In the UK we were awarded the Insurance Timesaward for Claims Initiative of the Year for ourHome Claims Customer Tracker. When dealingwith home claims there are a number of externalsuppliers that we deal with to keep customersmoving, from booking hotels for customers tostay in, right through to getting the decorators in.The tracker shows us where customers are onthis journey and helps us to offer a seamlessservice; and

• In Latvia, we introduced an online claimsapplication platform which allows customers toupload and download documents 24 hours a day, reducing the time it takes for us to respond.Ninety three percent of customers using theservice found it “very easy” to use.

Our main responsibility to customers is toprovide products and services which meettheir needs at competitive prices and reflectthe risks involved.

Custom

ers


Treating customers fairlyTreating customers fairly (TCF) is a key part ofdelivering excellent service, as well as being aregulatory requirement in the UK. It relies onhaving the right culture in place and equippingpeople with the skills to deliver brilliant service and do the right thing.

An excellent service culture is reinforced throughtraining, internal communications and recognition ofoutstanding performance. All UK employees mustcomplete a TCF training module every year and in2011 92% of employees passed the course.

We also have a network of TCF champions whowork to ensure continued progress. TCF workinggroups monitor progress and the Executive Teamand Board review performance every month.

Dealing with complaintsUnfortunately, there are times when customers feelwe have not met their expectations. If customers aredisappointed with our products or service we ensureit is easy to raise a concern. We take all complaints

very seriously and have robust processes in place toensure they are handled fairly and in a timely manner.

Training is mandatory for UK employees so everyoneknows how to identify and handle a complaint orrefer it to the most appropriate person. Since thebeginning of 2010 we have been required by the UK Financial Services Authority (FSA) to publishcomplaints data for our UK operations.

During 2011 we received just over 16,000complaints in the UK, equivalent to about 0.3% ofour customers. We upheld 52% of these complaintstaking appropriate action to resolve them quicklyand to the customer’s satisfaction. On average, 90%of all complaints were resolved within eight weekswhich is the maximum permitted time by the FSA.In the UK, if a customer is not satisfied with the waywe deal with their complaint they can refer it to the independent complaints body, the FinancialOmbudsman Service (FOS). Just under 970 caseswere referred to the FOS during 2011. Of these,39.5% of our decisions were overturned in the

customer's favour, putting us ahead of the generalinsurance industry average of 48%. Over a third ofthe decisions overturned were cases where theOmbudsmen agreed with our decision but we were required to make additional compensation.

We use the lessons learnt from all complaints toamend our processes and improve our customerservice. Following recommendations from theOmbudsman we amended policy literature to help draw customers’ attention to key exclusions at point of sale.

Full details can be found on our website at:http://www.rsagroup.com/rsagroup/en/aboutus/commitments

Training is mandatory for UK employees soeveryone knows how to identify and handlea complaint or refer it to the mostappropriate person.

Excellent service cultureProviding brilliant service is one of our Brand Beliefs and a major focus across allour regions. An excellent service culture is reinforced through training, internalcommunications and recognition of outstanding performance.


Custom

ers

The RSA global charitysecondment programme

“My secondment was spent volunteering at a home forabandoned women and children in Goa, India. Day-to-day Iworked with up to five other volunteers to help feed babies andhandicapped children, wash mountains of clothes, and bathethose who were too old or disabled to do so themselves.”

“Despite the hard work there was always an atmosphere of camaraderie among the volunteers, missionaries and theresidents and I looked forward to every single day. My favouritetimes were when the laundry had been hung out to dry on therooftop, the dishes were clean, people had been bathed, and we had time to sit down and get to know the residents. Thewomen were eager to talk about what they had been throughand what they planned to do with their lives, and the childrenloved to play and revelled in the attention from the volunteers.”

“Stepping away from my day-to-day life as Assistant to the UAECEO & Head of the Administration function for the UAE andinto a new world gave me an opportunity to reflect on how Iapproached my professional and personal life. I always knew thatthe success of my role is largely based on managing relationships.The secondment helped me to appreciate that every individualhas their own life story no matter where they are from or whatposition they are in. Understanding this and appreciating bothsimilarities and individual differences helps to build stronger andmore rewarding relationships.”

Nadia Bangera, PA to UAE CEO & Executive AdministrationManager, United Arab Emirates

Two week’s secondment to Mother Teresa’s Missionaries charityin Goa, India

Our global presence means we operatein diverse communities and cultures.Supporting local communities engagesand motivates employees, strengthensour reputation and enables us to betterunderstand the markets we serve.

We support projects that align with our CR strategyand where our skills and experience can have alasting impact, focusing on:

• Safety;

• Social inclusion; and

• Environment.

Employees are an integral part of our communitystrategy. Our volunteering programmes help tomotivate employees and build valuable skills whichcan be used in the workplace. Engaging with localcommunities is increasingly important in attractingand recruiting the best candidates. We encourageemployees to support initiatives that use their skillsand experience so that we can have a lasting impacton communities.

Over 5,100 employees participated in voluntaryactivities in 2011, giving more than 17,300 hours.

2012 target:

• Launch of new matched funding facility acrossglobal operations. Double the amount of moneyavailable for matched funding.

In 2011, we contributed £2.6 million to communityprojects, equivalent to 0.42% of pre-tax profits. We launched our global matched funding facilitythat provides employees across the group withaccess to centralised funds, ensuring we can helpmore people in more places. We match employeedonations for registered charities up to a maximumvalue of £250 for individuals and up to £1000 forteams of three of more.

COMMUNITY


Total companydonations

0

£

Volunteering Give as you earn

Employee gifts Employeeraised funds

£2.6

MIL

LIO

N

£2.8

MIL

LIO

N

£2.4

MIL

LIO

N

£180

,000

£889

,000

£480

,000

£1.2

MIL

LIO

N

£120

,000

£20,

000

£653

,000

£247

,000

£307

,000

£120

,000

£120

,000

£400

,000

09TOTAL DONATIONS 10 11Restated figures

Employee volunteeringWe encourage employees to support initiatives that use their skills andexperience so that we can have a lasting impact on communities.


Com

munity


In 2011, we launched a global charitable secondmentprogramme as part of our commitment to giving allemployees access to the same opportunities tosupport their communities. Twenty four employeesfrom across the Group were selected to spendbetween one week and three months working at acharity of their choice. To accompany the launch, weannounced a Group Community Awards programme,following the success of a similar awards scheme inthe UK. The awards recognise the exceptional effortsof employees who support charities throughfundraising and volunteer work. Employees cannominate charities they have supported for a £500donation, while outstanding contributions are eligiblefor a £5,000 donation.

Cathy Kuhlmann Senior Consultant, Canada Windfall Ecology Centre

Julie Andrew Client Services Underwriting, Canada Nova Scotia SPCA Metro Shelter

Nicole Moore Personal Lines Underwriter, Canada Oakville and Milton Humane Society

Emma Harvey Motor Claims Handler, Ireland Barnardos

Diana Doherty Underwriter, Ireland Belarusian Orphanage Project (BOP)

Sharon Harding Customer Manager, Liverpool Claire House Children’s Hospice

Val Frew Customer Manager, Liverpool Children’s Heart Association

Martha Keenan Team Leader, Peterborough Sue Ryder Care

Lucy Isley Claims Handler, Peterborough Sue Ryder Care

Navpreet Kaur Customer Manager, Sunderland Macmillan Cancer Support

Nicholas Golding Liability Claims Specialist, Homeworker, UK Patshull Scout Camp Site

Elaine Clough Team Leader, Halifax The Scout Association

Julie Vincent PA, GCC, UK AidCamps International

CHARITABLESECONDMENTS

CANADA

UK

IRELAND


Jette Guldbæk Madsen IT Quality Manager, Denmark True North

Marie Ursing Group Leader, Bodily Injury, Sweden The Swedish Childhood Foundation

Svetlana Shustova Supplier Relationship Management Leader, Russia Karabanovo and Kostino Children’s Homes

Kestutis Gadeikis Chief Actuary, Lithuania Junior Achievement Lithuania (JAL)

Raja Bahrin Marine Risk Manager, Singapore Mercy Relief Singapore

Diana Thomas Communications Manager, Singapore Metta Youth Centre

Malin Fredriksson Head of Property, AME, Singapore vMaD

Khawar Osama Business Development Manager, Oman Young Pakistani Expatriate Society (YPES)

Corina Roxana Pernas Account Executive, Argentina Fondo Verde

Nadia Bangera Executive Administration Manager and PA to UAE CEO Missionaries of Charity, Kolkata, India

Pilar Emilia Mondaca González Risk Preventions, Chile Fundación Niño y Patria

DENMARK

SWEDEN

RUSSIA

LITHUANIA

CHILE

SINGAPORE

ARGENTINA

OMAN

UAE

UK INTERNATIONAL EMERGING MARKETS

Com

munity

1 2 3 4

4 5 6 7

8 9 10 10

11 12 13 14



IrelandEmployees from RSA Ireland collected over€1,200 through “Daisy Day” street collectionsfor Aware, the national mental health support charity.

USAIn Miami, LARO employees took a day out oftheir busy schedules to volunteer for the NGO,Habitat for Humanity.

DenmarkEmployees volunteered to spend their earlymornings handing out reflective vests as part ofour partnership with the Children’s AccidentFoundation to improve road safety.

SwedenTrygg-Hansa organised a national life buoyspotting competition to increase awarenessaround safety at sea before the start of theswimming season.

ChileEmployees at RSA Chile raised a record breaking4 million Chilean pesos during a three monthcampaign to support children and young people.

ItalyRSA Italy supported nurseries for children fromdifficult backgrounds in Milan and Genoa throughfundraising and volunteering.

ColombiaRSA Colombia employees helped build achildren’s library and donated over 500 books.

Czech RepublicEmployees organised a breakfast for a localorphanage and donated gifts and road safetyaccessories.

UKMore than 100 employees signed up to help to mentor teenagers from under-privilegedbackgrounds aspiring to pursue careers in business.

ArgentinaEmployees raised funds to provide Christmas giftboxes for low-income families.

LatviaFor the second year running, around 230employees volunteered over 900 hours to cleanup litter from public areas as part of the ‘The BigClean-up’ event.

ChinaEmployees organised a charity sale andvolunteered to support a local school.

JohnsonThe third annual food bank donation week wasthe most successful to date with a total of 40,000items donated.

RSA CanadaOver 600 employees and their guestsparticipated in the RSA 5K Fun Run/Walk tosupport WWF-Canada, raising over $15,000Canadian dollars.

OUR COMMUNITY WORK AROUND THE WORLD

1

2

9

3

6

8

7

10

4

5

13

14

12

11


Com

munity


Canadian runOver 600 employees and their guests participated in the RSA 5K Fun Run tosupport WWF Canada, raising over $15,000 Canadian dollars.


EMPLOYEES

Our business depends on the knowledge,experience and creativity of ouremployees. We expect the higheststandards from them.

In return, we encourage their professional

development, provide attractive benefits and

support their wellbeing. Engaged employees are

motivated employees so we regularly seek their

opinions and feedback to ensure they continue to

provide an excellent customer experience.

In 2011, we employed more than 23,100 people in

34 countries. Approximately 8,500 are based in the

UK, 7,900 in our International business (Scandinavia,

Canada, Ireland and Italy) and 6,700 in our Emerging

Markets business (Latin America, the Baltics, Central

and Eastern Europe, Asia and the Middle East).

37% UK

34% INTERNATIONAL

29% EMERGING MARKETS

TOTAL WORKFORCE

Ethics

2012 target:

• Roll out Code of Conduct guide and RSA policies to all markets.

We are committed to promoting ethical conduct in all our businesses and expect employees to actethically, with integrity and to take responsibility fortheir behaviour and actions.

All new employees are made aware of our BrandBeliefs which set out what we stand for, how weshould behave towards each other and the actions wemust take to meet our customers’ needs. The Beliefsare supported by our Group Ambition and Purposeand specific policies covering fraud, confidentiality,market abuse, competition and money laundering.They are translated into the local languages usedwhere we operate.

In 2011, we rolled out a guide explaining ourprinciples and policies and how they underpin the

Brand Beliefs, including guidance on gifts andhospitality in line with the UK’s Bribery Act, to over75% of our employees. The booklet is supported bya training programme to ensure employees knowwhat is expected of them and how to behave.

Our whistle-blowing policy encourages employeesto report any breaches of our policy and illegalactivity. We operate a 24-hour, confidential hotlinefor employees to raise concerns anonymously.

Employee engagement

2012 targets:

• Achieve an upper quartile score in our globalemployee survey; and

• Conduct third annual CR Survey and exceed3,000 responses.

We support a culture of open and honest dialoguein all our markets and actively encourage employeesto provide feedback through surveys and meetings.We use information gathered to help guide ourcorporate and CR strategies.

Employees

Supporting a living wage

“The Living Wage campaign calls for every worker in the UK to be earning enough to provide their family with theessentials of life. An hourly rate is calculated annuallyaccording to the cost of living. This currently exceeds thelegal minimum wage by 37% in London and 18% nationwide.”

“RSA takes its responsibilities to its people and the widercommunity very seriously and when we were approached bythe Living Wage campaign last year we were pleased to takeaction. Not only are we ensuring that our own employeesare fairly rewarded but we are also encouraging ourcontractors and suppliers to pay a fair wage to their people.”

“We gathered together a number of people from across ourUK operations to identify where pay was too low for ouremployees and our suppliers. For our own employees wecould act quickly ensuring all employees were paid at leastthe Living Wage by mid 2011. Progress with our diversenetwork of suppliers was more of a challenge but we haveacted with pace, aligned our own employees quickly and we are working with our suppliers to implement the same standards.”

Ian Templeman, Head of Employee Relations and Policy, UK


Every manager and team leader with five or more employees responding to the questionnairereceives a report on their team’s performance andwas encouraged to create a plan for tackling lowscoring areas.

Performance Management SurveyThe Performance Management Survey provides anopportunity for employees to express their viewson our performance management system.

In 2011, over 17,300 people completed the survey -our highest ever response rate - giving us a stronginsight into employee perceptions. Our overall scorewas 80% favourable, compared with 78% in 2010.The highest scoring responses were:

• ‘I have documented personal goals / objectivesrelating to my work’ ( 96% favourable);

• ‘I have had a formal performance review in thelast 12 months’ (95% favourable); and

• ‘My leader shared my performance rating withme’ (94% favourable - a 14% increase on 2010).

The Global Employee EngagementSurveyThe annual Global Employee Survey, developed in partnership with Gallup, is an opportunity foremployees across the business to provideanonymous feedback. The survey enables us to trackand benchmark our performance against the globalGallup database of over five million responses.

We achieved world-class engagement levels withour overall engagement score increasing to 4.34 in2011. Our result puts us in the 75th percentile ofthe Gallup database meaning we met our target of being in the top quartile in 2011.

Across the Group we made progress against anumber of key questions, including:

• In the last seven days, I have received recognitionor praise.

The question in which we performed best was:

• Last year, I have had opportunities at work tolearn and grow.

Our focus area for further improvement is thefollowing question:

• The mission and purpose of my company makesme feel my job is worthwhile.


• Group CR performance and strategy; and

• Group HR strategy.

We recognise the right of employees to freedom of association and collective bargaining. We seekconstructive dialogue with recognised independenttrade unions, ensuring a regular and open dialogueon business issues and early consultation on changesaffecting the workforce. In the UK, Unite is formallyrecognised through a partnership agreement whichcovers collective consultation and bargaining onbehalf of non-management employees. Managerialemployees are represented under a separateconsultative agreement. Successful Unionengagement was essential to gain support for our global charitable secondment programme.

CR Employee SurveyOur CR Employee Survey provides an opportunityfor employees to give feedback on how they thinkwe are performing as a responsible business andwhat they consider to be the most important CRissues for RSA. In 2011, we decided to delay ourthird employee CR survey to early 2012 to focusour communication efforts on the Arctic Challenge.

Areas for improvement include:

• Making sure personal goals are aligned with ourBrand Beliefs and our Group strategy;

• More recognition of team work as well asindividual contributions; and

• Improved coaching and developmentopportunities.

To tackle these we launched a new goal-settingapproach that puts more emphasis on the BrandBeliefs and team working. In 2012 we will begin anew round of capability reviews that will provideemployees with an opportunity to identify and discusspersonal development objectives with their linemanagers. We also continue to improve our onlineLearning Zone in response to suggestions fromacross the Group (see Training and Development).

ConsultationOur annual European Consultative Forum bringstogether employee representatives and managementto discuss our strategy and performance. In 2011, 27employee delegates from 17 countries discussed arange of issues including:

• Wider European business performance and anupdate on our Central and Eastern Europeanbusinesses;

Reward and recognition

2012 target:

• Maintain 90% of employees with personalperformance linked to rewards.

Remuneration plays a critical role in attracting,retaining and motivating our best employees. Our benefit packages are designed to be fair andcompetitive, based on recognising professionalmerit. The pay of approximately 90% of employeesis linked to their performance.

In the UK we support the Living Wage Foundationand all direct employees are paid at least the livingwage (£8.30 per hour in London and £7.20 in therest of the UK). We are one of the few companiesworking with suppliers to ensure the same appliesfor all onsite contractors, such as catering andcleaning staff.

UK employees can use our flexible benefits websiteto pick from a number of benefits, including criticalillness cover, discounted shopping vouchers and theoption to buy or sell holiday time. Similar benefitprogrammes are available across the Group.

We also offer non-financial incentives and awardsthat recognise employees who have performedparticularly well. Our annual Platinum Awardsrecognise individual employees at all levels whohave performed exceptionally well.

We achieved world-class engagement levelswith our overall engagement score increasingto 4.34 in 2011.

Employees


Other development plans include:

• Our Global Technical Graduate programme aimsto create a strong talent pipeline in our coredisciplines of Underwriting, Claims and Actuarial;

• Fast Track is a two-year leadership developmentprogramme for high performing employees. Theprogramme provides training, coaching andnetworking opportunities across the company;

• The Technical Academy aims to help us identifytalented people and develop structured careerpaths for technical staff, enabling them to buildthe skills and qualifications they need to succeed;

• Our Global Marketing Academy focuses on thelatest marketing techniques, tools and industryknow-how and covers a number of marketingtopics, including customer insight, brandmanagement, proposition development and marketing communications;

• RSA’s Leadership Development Programmeseeks to identify, develop and equip the Group’sfuture leaders with the skills and mindset to drivebusiness growth. Senior insight sessions help togenerate ideas and solutions that addressenvironmental and social challenges; and

• The Executive Development Programme is aseven-month course for senior leaders that aimsto develop their leadership, team working andproject management skills. Participants work onprojects that look at key business challengesfacing the company.

Training and developmentContinuous learning and development opportunitiesensure employees have the skills and qualificationsneeded to provide technical know-how andexcellent customer service.

We want employees to realise their full potential.Employees discuss their personal developmentneeds with their managers during annual capabilityreviews and put in place development plans.

Over 20,000 employees in 28 countries have accessto our online Learning Zone. The site providesemployees with information on the training anddevelopment courses available to them. It includes asection to help employees improve their core skills,such as effective planning and communication, aswell as a project management toolkit and externallinks to leading personal development websites.

Twenty eight countries can access the LearningZone which contains a mixture of high qualitylearning solutions and exercises that can betailored to individual development areas.

Graduate volunteeringOur Graduates are given the opportunity to develop teamwork and leadershipskills through volunteering. In 2011, some of our UK Graduates visited theHackney Marshes Centre to help with ongoing conservation projects.


Employees


DiversityAs a global business, we have an inherently diverseworkforce which reflects the range of customers we serve. We foster an inclusive culture whichvalues different ways of thinking and backgrounds,helping us to better understand and anticipatecustomers’ needs.

Improving representation of women in managementpositions across the Group remains a focus for us. In2011, women made up more than 50% of our globalworkforce and approximately 30% of managers. Weoffer a wide range of programmes to encourage andsupport female employees, including flexible working,equal pay reviews and childcare support.

In the UK, we work with the NGO OpportunityNow to benchmark our diversity performance and support female employees. In Scandinavia, wepartner with a future female leaders' forum whichprovides support for female employees throughmentoring, workshops and peer groups designed to help them get the most from their career.

Management gender split as a percentage Male Female

TOTA

LW

OR

KFO

RC

E

49.5

8

50.4

2

POLA

ND

78 22

RSA

CA

NA

DA

RUSS

IA

SCA

ND

INA

VIA

SIN

GA

POR

E

UA

E

UK

43 57 64 64 71 49 7436 29 51 2636

OM

AN

94 6

HO

NG

KO

NG

IND

IA

IREL

AN

D

JOH

NSO

N

LIT

HU

AN

IA

79 21 92 61 55 5539 45 45

MEX

ICO

77 238

CZ

ECH

REP

UBL

IC10

0

0

CO

LOM

BIA

62 38

CH

INA

52 48

AR

GEN

TIN

A

BA

HR

AIN

& K

SA

BRA

ZIL

CH

ILE

88 13 94 80 8520 156

%70

8090

100

6050

4030

2010

0


to 16. There were no reported fatalities. Themajority of injuries are minor non-reportableincidents e.g. minor cuts and strains.

By protecting and promoting wellbeing we canreduce absenteeism and improve productivity. Wework with First Assist to provide employees with awide range of information and advice on how to livea healthier lifestyle via our intranet site. For example,employees can:

• Sign up for weekly motivational emails, dailyactivity guides, recipes and diet tips;

• Have their health scored and progressmonitored; and

Health, safety and wellbeingSafety is a shared responsibility between our GroupHuman Resources team, site health and safetycoordinators and employees who are expected to behave responsibly and be accountable formaintaining a healthy and safe environment. To ensurethat all new employees understand our policies andprocedures we provide health and safety informationas part of our induction process. An intranet sitecontains everything employees might need to knowabout safety, health and wellbeing in the workplace.

In 2011, we saw an increase in the number ofreportable injuries due to countries aligning theircategorisation of injuries. The number of accidentsper 1,000 employees decreased from 16.5 in 2010

Reportable injuries

Minor non-reportable injuries

Accidents per 1,000 employees

88

352

18.99

85

340

9.05

84

352

11.14

Group 2009 2008

34

348

16.5

2010

79

287

16

2011 2007

In 2011, women made up more than 50%of our global workforce and approximately30% of managers.

• Create customised workout plans to suit their goals.

In the UK we offer access to a free and confidential24-hour counselling service through First Assist to helpwith both personal and work-related problems.

We also organise health and wellness weeks in ourUK, Scandinavian and Latin American markets whereemployees receive information about healthierlifestyles and diets.

2012 targets

• Launch an online diversity training module toimprove management awareness of diversity and its benefits.

Employees


Our biggest direct environmental impact is thecarbon dioxide emissions from energy we use in ouroffices, especially emissions from electricity. Emissionsfrom travel are also significant and come mostly fromcars, but air travel has increased because of theGroup’s growing international presence.

Absolute CO2 emissions are not comparable over time because we have been extending thedata to cover newly acquired businesses. Totalgross emissions per £m NWP reflect underlyingperformance and this measure fell by 1.3 tonnesper £million NWP in 2011, reflecting the progressmade in energy efficiency programmes across theGroup. Since our 2006 baseline, these have fallenby 55% meaning we met our target for a 40%reduction by 2020.

Group-wide energy use decreased from just over121,000 MWh in 2010 to 113,900 MWh in 2011.During 2011 we explored the potential to arrangea global energy contract but this did not prove tobe cost effective, or lead to an overall reduction in CO2 emissions. All our UK offices and Codanheadquarters use 100% renewable energy.

We take climate change and otherenvironmental issues seriously, believingthey present risks and opportunities forour business and society.

Our approach is to minimise the impacts of ouroperations, particularly greenhouse gas emissionsfrom our buildings and travel. We are also targetingother environmental impacts that are significant toour business, such as paper use, waste and water.

We develop products and services that support low-emission technologies, and work with high profilepartners such as WWF to encourage customers to adopt climate-friendly behaviour (see page 52).

Our strategyOur environmental and climate change strategy is to:

• Measure and report our CO2 emissions andother impacts;

• Set targets for reducing them;

OUR ENVIRONMENTAL PERFORMANCE

• Improve energy efficiency, waste disposal, travelimpacts and resource use in our buildings anddaily operations;

• Offset remaining CO2 emissions in countrieswhich fully apply the previous steps; and

• Work with suppliers to improve the environmentalfootprint of our supply chain (see page 58).

In 2011 we achieved our long-term group target fora 40% reduction in gross tonnes CO2 per £m netwritten premiums (NWP) by 2020 against 2006levels. Individual countries set additional targetscovering key environmental impacts relevant to their circumstances.

Energy and emissions

2012 target:

• Carry out due diligence on global energyprocurement contracts.


Group-wide energy useGroup-wide energy use decreased from just over 121,000 MWh in 2010 to113,900 MWh in 2011. All our UK offices and Codan headquarters use 100%renewable energy.

Environment


Carbon emissionsWe offset our remaining carbon emissions in theUK and Ireland, which have been carbon neutralsince 2006 and 2008 respectively, by investing inrenewable energy projects in India that complywith the robust, internationally recognisedVoluntary Carbon Standard (www.v-c-s.org). In 2011, total offsets decreased by 6,530: due to reduced absolute CO2 emissions in the UK and Ireland.

* Group carbon dioxide equivalent emissions (tonnes).

1. Scope 1: All direct GHG emissions.

2. Scope 2: Indirect GHG emissions from consumption of purchased

electricity, heat or steam.

3. Scope 3: Other indirect emissions.

–

–

–

77,247

14.1

–

77,247

14.1

2011 2010 2006 (baseline)

Scope 11

Scope 22

Scope 33

Total gross

Gross tonnes CO2 per £m NWP

Carbon offsets

Total net emissions

Net tonnes CO2 per £m NWP

12,902

28,344

21,836

63,082

7.7

27,470

35,612

4.3

16,544

32,441

19,250

68,236

9.0

34,000

34,236

4.5

7,380

8,628

5,828

Scope 1 Scope 2 Scope 3

UK (including GCC)

International

Emerging Markets

6,596

2,487

3,820

12,097

7,377

8,870

GROUP GREENHOUSE GAS EMISSIONS (TONNES OF CO2E* EQUIVALENT)

GEOGRAPHIC BREAKDOWN OF CO2E EMISSIONS FOR 2011 (TONNES CO2)


40

2.72011

3.1

2.93

2.92

2007

2008

2009

3.002010

CO2 EMISSIONS PER CAPITA(tonnes per employee)

ENERGY CONSUMPTION IN OUR OFFICES (MWh)

0

100,000

Electricity use Gas use

MWh

75,337

23,731

2011

2011

71,234

21,989

83,224

36,100

70,270

28,241

2009

2009

74,457

28,764

2010

2010

2007

2007

2008

2008

16,676 BUSINESS TRAVEL

Carbon dioxide emissions equivalent by source (tonnes)

7,437 COMPANY OWNED VEHICLES

1,689 PAPER

3,996 ESTIMATED SITES

33,356 PREMISES

CO2 EMISSIONS BY SOURCE 2011

26,073 UK

18,491 INTERNATIONAL

18,589 EMERGING MARKETS

CO2 EMISSIONS BY REGIONCarbon dioxide emissions equivalent by source (tonnes)

Environment


Resource use Managing our paper use, water consumption and waste helps to reduce our demand on theenvironment as well as saving money. This alsohelps reduce emissions because of the energyinvolved in producing materials such as paper,providing clean water and managing waste.

air and car use and promoting more sustainablealternatives. For example, in the UK we offer a cycle to work scheme that provides discounts oncycling equipment. In Canada, we are working with American Express to review our travel policywith the aim of setting a travel reduction target. In Ireland, we surveyed employees to get a betterunderstanding of how they travel to work andidentify ways to lower their impact.

TravelIn 2011, business travel (including company vehicles,road, air and rail) accounted for approximately 38%of our total carbon footprint, up from 30% in 2010,due to our growing international presence andimproved business performance.

We aim to reduce the environmental impact ofemployee travel by encouraging the use of videoand teleconferencing, setting reduction targets for

PAPER USE (tonnes)

3000

0

557

1,049

995

1,772

2,156

2,674

2003

2004

2005

2006

2007

2008

2,576

2009

2,249

2010

2,289

2011

TOTAL WASTE GENERATED (tonnes)

10,000

0

2,7985,787

6,334

4,698

5,014

4,440

3,559

2011

2003

2004

2005

2006

2007

2008

3,306

2009

3,944

2010

WATER USE (cubic metres)

300,000

0

222,532207,506

239,252

247,941

261,884

253,159

192,933

2011

2003

2004

2005

2006

263,386

2009

198,739

2010

2007

2008


• In Mexico, we installed rainwater collection tanksfor irrigation, removing the need to use municipalwater supplies.

Embedding a green cultureWe promote an environmentally responsible cultureamong employees, encouraging them to cut theirfootprint at home as well as work.

Green Teams and local champions around theGroup drive activity by organising Green Days andsupporting international events such as Earth Hour.

In the lead up to Earth Hour, Johnson, Scandinavia,the UK and other countries organised ClimateWeeks that aimed to show employees how evensmall actions can together make a big impact. Eachday employees explored one of five environmentalissues: food, water, waste, travel and energy. Johnsonemployees were set accompanying challenges suchas bringing in a waste free lunch and travelling towork without using their cars. A range of activitiesfor UK employees included visits to recycling facilitiesand green driving demonstrations to teach themabout the steps they can take to reduce theirimpacts in the office and at home.

In 2011, absolute water consumption increased asmore countries began recording and reporting theirdata for the first time. Paper consumption increasedfor the same reason. Despite these overall increases,some individual countries reported a fall in waterand paper consumption reflecting steps to cutresource use (see page 50).

Examples include:

• In the Czech Republic, we introduced newrecycling facilities and printer settings to reducewaste and paper use. Each department has itsown reduction targets which are evaluatedquarterly. We encourage employees to turn offthe heating and air conditioning when windowsare open and also to switch off lights, projectorsand computers when not in use;

• Ireland moved from print to online versions ofour internal and broker magazines. The BrilliantService team also managed to reduce printedpolicy documentation by an estimated 50%;

• RSA Canada’s commercial team in Quebec saved70,000 sheets of paper by adopting a paperlesssubmission system for its SME and Mid-Marketcustomers; and

Raising employee awareness is a key goal of ourpartnership with WWF. We challenged employees tocome up with ideas for new products or initiatives thatwould help RSA reduce its environmental impact.

Raising employee awareness is a key goal of ourpartnership with WWF. We challenged employeesto come up with ideas for new products or initiativesthat would help RSA reduce its environmentalimpact as part of the Arctic Challenge competition.The winning team designed a novel incentivescheme that encourages employees to buy fuelefficient cars by giving them preferential rates. If 30% of UK employees took up the scheme, theycould save over 17,300 tonnes of CO2 over thenext 5 years.

2012 Group targets:

• Launch a Group-wide Green Network;

• Reduce by 50% gross tonnes CO2 per £m netwritten premiums (NWP) by 2020 against 2006baseline; and

• Continue to develop and roll out products withenvironmental benefits in our main marketsincluding the UK, Canada and Scandinavia.

Environment


- We reduced our electricity consumption by 33.5%

- Paper consumption increased

- We reduced our waste by 43%

- Reduce electricity 2%- Reduce paper 2%- Reduce waste 8%

- Incorporate newly acquired 123 businesses into environmental reporting system

- We achieved a reduction of 0.05% in electricityconsumption

- We significantly reduced our consumption ofnatural gas by 11.8%

- Paper consumption increased by 6 tonnes- Our waste increased by 29% - Our recycling increased by 1%

- 123 businesses were not incorporated in the2011 environmental reporting system

- Maintain 2011 electricity usage levels- Maintain 2011 gas usage levels - Maintain 2011 water usage levels - Maintain 2011 paper usage levels- Maintain 2011 waste disposed levels- Recycle 80% of waste- Reduce local flights.

Performance in 2011

- We achieved a 21.6% reduction in electricityconsumption

- Water consumption increased by 15.4%

- We reduced our gas consumption by 22.1%

- We reduced our office paper consumption by 28%

- We reduced our office waste by 43%

- In 2011 our QRC recycling increased to 69%

2012 target

- Reduce electricity by 2%- Reduce water by 1%- Improve position in CRC league table- Develop a new product offering support to

SMEs on carbon reduction- Increase the uptake of our cycle to work

scheme by 20%

PERFORMANCE AGAINST TARGETS

✓

✗

✓

✓

✓

✓

✓

✗

✓

✓

✓

✓✓✗

✓

➡ ✓ ✗Ongoing Achieved Not achieved

2011 target

UK

- Reduce electricity consumption by 3%

- Reduce water consumption by 3%

- Reduce gas consumption by 3%

- Reduce office paper by 4%

- Reduce office waste by 3%

- Increase QRC recycling to 65%

Group Corporate Centre

- Reduce electricity by 3%

- Reduce paper consumption by 2%

- Reduce waste by 4%

Ireland

- Ensure rail, electricity, gas, paper, waste andrecycling remain at the same levels


Ongoing from 2011

2012 target

- Increase Johnson recycling 1%

- Reduce paper 2%- Increase recycling 1%- Reduce waste 2%- No increase in water, electricity and travel- Use video conference usage

➡ ✓ ✗Ongoing Achieved Not achieved

On target

Performance in 2011

- We increased the amount of recycling at

Johnsons by 43%

- Our paper consumption reduced by 10.2%

- We increased our recycling by 11%

- We achieved a 46% reduction in waste

- Our water consumption increased by 3%

- Our electricity consumption increased by 3.3%

- Our travel increased by 48%

✓

✓

✓

✓

✗

✗

✗

➡

2011 target

Canada

- Increase Johnson recycling 1%

RSA Canada

- Reduce paper consumption by 2%

- Increase recycling at RSA Canada by 1%

- Reduce waste by 2%

- Maintain current levels of water and electricityconsumption and travel

Scandinavia

All targets for completion by 2013. Targets applyto Denmark, Sweden and Norway individually.- Reduce CO2 5%- Reduce electricity 5%- Reduce paper 5%- Reduce waste disposed 3%- Reduce air travel 3%- Reduce road travel 7%- Maintain gas and water at present levels

Environment


We are working with WWF to investigate emergingenvironmental risks and explore how the insuranceindustry can respond to the opportunities and challengesof environmental change. As well as joint research, weare working together to develop products that helpcustomers reduce their environmental footprint andraise climate awareness among employees.

WEB

ENGAGEMENT

PRODUCTS

RESEARCH

CONSERVATION

Mapping threats to ecosystems to minimise risk and engage localstakeholders in workshops

Developing Marine Protection Areas for a sustainable fishing industry

Seeing is Believing Green Employee Idea Competition

Developing a roadmap on sustainable urban drainage systems

Environmental Education road shows across UK sites

Analysing the impact of water escapes in the home and how to minimiserisk and water scarcity

Lead sponsors of the WWF Earth hour and commitment to reducecarbon by 15% in our home insurance policies by 2013

Restoring an urban river to investigate ecologically sensitive flood defenceswith the Thames River Restoration Trust

PARTNERING FOR PROGRESS

CANADA

UK


Research of barriers to renewable energy and energy efficient buildings in China

Researching emerging risks for insurance through technical briefingstwice a year - marine risks launched

Assessing the business case for integrating environmental risk intobonds, fixed income and pensions

Assessing environmental risks in the Arctic through mapping humanactivity and biodiversity hotspots

National competition in schools raising the importance of climate issueswith children

Establishing a regional forum in the Baltic Sea to use resources sustainably

WWF's Earth Hour employee volunteering week, raising the profileof climate change in schools

Sponsorship of national environmental website to show support ofTrygg-Hansa

Climate risk research programme for businesses

Lead sponsors of WWF's Earth Hour with 450volunteers encouraging businesses to sign up

Climate challenge schools programme with winningschool researching climate risk in Greenland

Launch of Energi Midt energy and leak reductiondevice for homes in 2010

DENMARK

SWEDEN

CHINA

GROUP


Environment

A few steps on ice, a journey of a life time

“As we stepped onto snow for the first time in our lives andwatched the sun rise over a vast blanket of white we knewthat this trip was going to be a once in a lifetime experiencefor us all. “

“Our journey to the Arctic started long before the 30 hourtrip from Chennai to Churchill. As part of the challenge welogged over 200 hours of voluntary work to support WWFIndia's 'Save the Tiger' campaign. Contacting people fromacross the country we worked to raise awareness of thecritical state of our iconic national animal. The response wasfantastic with over US $9,000 raised for the campaign.”

“Seeing first-hand the changing landscape of the Arctic andthe plight of the polar bear has transformed the way I think.In such an extreme and fragile environment you get anappreciation of the impacts of our actions and how they are affecting the natural habitat of wildlife and ecosystems in other corners of the world. It showed how everything we do is inter-linked and inter-dependent”

Prashant Singh, Vice President & Head Retail (South) & Agency, India

Three winning teams - from the UK, Oman and India -spent time with leading WWF scientists in Canada’s farnorth learning about the link between environmentaland insurance risks. The teams saw the pressure thatfalling fish stocks are having on the livelihoods of localfishermen and the potential impact that this could have on RSA’s business as the leading insurer of fishingvessels in Canada. They learnt that a significant reasonfor declining fish stocks is spiralling seal numbers. Seal populations are increasing partly as a result of less sea ice which means that their natural predators, polarbears, aren’t able to hunt. They also discovered howless ice is contributing to rising sea levels and globalwarming as more energy from the sun is absorbed bythe sea. This in turn has the potential to impact RSAcustomers through extreme weather events aroundthe world.

On returning home, the winning employees havebecome ambassadors for change, sharing theirexperiences with colleagues and inspiring interest in sustainability issues.

SEEING IS BELIEVING - THE ARCTIC CHALLENGE

In 2011, we focused our efforts on doingwhat we can as an organisation to tacklethe challenges and opportunities thatclimate change brings.

We launched a new initiative to raise the profile ofour WWF partnership among employees and bringthese risks and opportunities to life.

The ‘Arctic Challenge’ saw over 10,000 of ouremployees in 33 countries taking part in a competitionto win the opportunity to travel to the Arctic to see at first-hand the impact of climate change. The competition challenged teams to reduce theircarbon footprint by walking and cycling rather thandriving, to raise money for charity and to developideas to reduce RSA’s environmental impact.

The results were impressive, with over three billionsteps walked, 6,600 hours of volunteering given andover £100,000 raised for charity. The green ideas being implemented in 2012 have the potential to save around 15,000 tonnes of carbon and up to£600,000 in costs.


Polar bears in the ArcticIn the last two decades, polar bear numbers in Canada's far north havedeclined by 22% as a result of melting sea ice. Without the ice they need tohunt, polar bears are being forced to scavenge for food in local towns.


Environment


Churchill

Chukchi Sea

Laptev Sea

Barents Sea

East Greenland

Baffin Bay

Davis Strait

Foxe Basin

McClintock Channel

Northern Beaufort Sea

Southern Beaufort

Sea

Viscount Melville

Bay

Arctic Ocean

Kane Basin

Bay

Southern Hudson Bay

Western Hudson Bay

Gulf of Boothia

East Greenland

Kara Sea

A changing landscapeRising temperatures have been having a majorimpact on the Arctic and the many uniquespecies and communities that live there. Ice coveris already less than half what it was when recordsbegan, and within ten years could almost be gonein the summer months. The melting sea ice leavesmany lucrative but potentially destructiveopportunities for human activity. These include

new fishing grounds, a shorter shipping routebetween the Pacific Ocean and Europe and majornew drilling fields for petroleum. In 2011, thethree winning teams from RSA's Arctic Challengewere given the opportunity to see first hand theimpact that climate change is having on theenvironment, the people and the long termeconomy of the region.

The bear territory encompassing 5 million square milesin northern Canada, Alaska, Greenland, Norway andnorthern Russia. Current estimates suggest 20-25,000polar bears live in the wild.

International Shipping Routes PAME & CAFF 2009

Ice extent March 2011 NSIDC

Ice extent September 2011 NSIDC

Decrease Unknown Stable Increase

2,5 to 3,0

0,5 to 1,0less 0,2

Key

Polar bear sub-populationsPopulation estimates - Thousands

Population trends

Churchill and Nunavut, Canadian territory

Unknown figure

Environment


SUPPLIERS

Improving standards in our supply chain is a key part of being a responsiblebusiness. The scale and diversity of oursupply chain presents a variety of socialand environmental risks that we manageby working with suppliers to encouragemore sustainable business practices.

A significant component of our supplier spend ishandled by our claims teams who, through a globalnetwork of over several thousand suppliers, providemotor, household and other services on behalf ofour customers. The rest of our supplier spendrelates to our direct operations including IT,consulting, travel, maintenance and security.

Supplier standardsOur Responsible Procurement Principles governhow we interact with our suppliers and set out thesocial and environmental standards we expect themto meet. These are available from our procurementteams via our intranet and are communicated tosuppliers as part of contract agreements.

As a signatory to the United Nations Global Compactwe are committed to eliminating discrimination and protecting Human Rights internally and in ourimmediate sphere of influence, including our suppliers.The nature of our industry means suppliers areextremely unlikely to be complicit in seriousenvironmental and social abuses such as child labour.

Engaging and assessing suppliers

2012 targets:

• Ensure 85% of our supply chain is assessedagainst our CR standards; and

• Extend the number of suppliers in Canadareceiving CR questionnaires to 30.

Suppliers are assessed against our ResponsibleProcurement Principles from an early stage in theprocurement process. Our assessments not onlyidentify whether they represent significantenvironmental or social risks but also how they can help us improve our performance.

In 2011, procurement teams in the UK and Canadasent CR assessment questionnaires to suppliersrepresenting 70% of our supply chain based on

spend. The questionnaires assess a supplier’s CRcredentials against a range of issues including labourstandards, environmental management and HumanRights. We targeted the largest and highest riskcategories of procurement to ensure we minimiserisk and maximise opportunity for additional benefitsin the supply chain. In cases where we identify asupplier as high risk we make our concerns knownand work with them to address any issues.

Our procurement teams receive regular training andguidance on CR issues in their assessment of supplychain risks. CR specialists also work with regionalprocurement managers to ensure that environmentaland social standards are incorporated into buyingdecisions and existing supplier relationships.

Sustainable claims

2012 target:

• Run four supplier workshops with two beingonline workshops in the UK. Reviewopportunities for workshops in Scandinavia.

In the UK we organised a supplier workshop toidentify opportunities for us to work together toreduce shared risks including environmental impacts.


We plan to use this experience to expand theworkshops in 2012.

One of the key ways that we can help to promotemore sustainable practices is through our networkof service providers, such as motor vehicle repairersand construction companies.

In 2011, we mapped the carbon footprint of ahome insurance policy to understand how muchcarbon dioxide an individual home insurance policyis responsible for. The analysis showed that theaverage carbon footprint of a policy is equivalent to 8.4kg of CO2 - the majority of this comes fromenergy and equipment used in call centres.Understanding where the greatest impacts lie willallow us and our suppliers to target their reductionefforts more effectively as we work towards ourgoal of reducing the amount of CO2 in the averageMORE TH>N home insurance policy by 2013.

Other examples include our work with UK serviceprovider, EVS, to move away from automaticallyreplacing damaged electrical goods towards asystem of repairing what can be saved. Repairingdamaged electrical goods means our household

content claims service is able to reduce purchases of new goods, lowering the environmental impactand saving money.

Our motor claims teams repair thousands ofvehicles every year. We are assessing the potentialto increase the amount of recycled parts we use in vehicle repairs which can lead to fewer vehiclesbeing written off and lower costs. This involvesaddressing customer attitudes towards the use ofrecycled materials, as well as practical matters suchas safety and sourcing.

2012 targets:

• Reduce the amount of CO2 in MORE TH>Nhome policy by 15% by 2013;

• Launch internal assessment on developing asustainable supply chain; and

• Implement water escape policy in the UK forholiday homes.

One of the key ways that we can help to promotemore sustainable practices is through our networkof service providers, such as motor vehiclerepairers and construction companies.

Suppliers

HOME POLICY CARBON FOOTPRINT

2.7% CLAIM PROVIDERS OFFICE ENERGY

5.2% END OF LIFE

2.4% OTHER

47.4% CALL CENTRES

3.8% MAIL SCANNING UNITS

23.3% POLICY PACKS

15.2% CLAIM PROVIDERS TRAVEL


relevant to the CR strategy, findings are flagged tothe Group CR Steering Committee for discussion.

We actively encourage feedback on our approachand this report through the contact list at the frontof this report.

For more information on the mechanisms we use togather stakeholder opinions, feedback receivedduring 2011 and our process for prioritising findings,see the Our approach and CR Governance andManagement sections of this report.

AssuranceRSA actively engages external assurers to ensure the data and claims within this report are fair andaccurate. A summary of the assurance processprovided by PWC and their assurance report isavailable on page 72.

In addition to the external assurance by PWC, ourenvironmental data is quality assured by Ecometrica,a Carbon Disclosure Project accredited specialistenvironmental consultancy. For further informationsee the environmental data section.

All environmental data is calculated in accordancewith coefficients and standards including IPCC,WBCSD/WRI, IEA, UNFCC, Carbon Trust and DEFRA.

Corrections in historical data have been detected andhave resulted in changes if the data has accountedfor more than 2 percent of the published total.

Further information on our reporting, indicators andboundaries can be found at www.rsagroup.com

Inclusivity & responsivenessWe actively seek out stakeholder views in ourapproach to responsible business. CR stakeholderengagement is carried out at least once per year inthe regions where dedicated full-time CR personnelexist, i.e. UK and Scandinavia. The wider Group CRstakeholder engagement process incorporates andprovides an opportunity for other countries toparticipate. Priority stakeholders include insurancebrokers, trade bodies, charities, investors, regulatorsand more.

Ongoing dialogue is carried out through collaborativeforums (e.g. ABI, UNEP-FI, etc), supplier workshops,consumer focus groups, broker road shows, investorengagements and a variety of external ratings. Where

How we reportThe 2011 RSA Insurance Group plc CorporateResponsibility Report covers the calendar year of2011. The Report continues where the 2010Corporate Responsibility Report left off as part of ourannual reporting cycle. Reports are published in Mayfor the Annual General Meeting of shareholders.

The report is published in conjunction with anonline pdf followed by a refreshed Group internetsite and aligned with the Group Annual Report &Accounts. Multi-lingual summaries are produced inJune. The report is intended for the expert CRcommunity, responsible investors, commercialtenders and senior internal stakeholders.

This report covers all our UK, International andEmerging Markets businesses, including whollyowned subsidiaries, leased premises, relationshipswith suppliers and our joint ventures. In 2011 there were two major acquisitions: GCAN inCanada and 123 in Ireland.

Where smaller countries have fewer than fiftyemployees, data is collected where possible utilisingaudited assumptions. These assumptions are based onthe majority of reported RSA data and cross checkedagainst national averages. Any assumptions usedwithin data are audited by an external third party.

REPORTING

The report covers all our UK, International and Emerging Marketsbusinesses, including wholly owned subsidiaries, leased premises,relationships with suppliers and our joint ventures.


Renewable energyOur Global Renewable Energy business is a leading insurer of wind, solar and other technologies which make a crucial contribution to meeting energydemand and supporting the transition to a low-carbon economy. Our jointreport with the WWF, ‘Insurance and Renewable Energy’, looks at the issuespreventing more widespread adoption of renewable energy and how they can be overcome. See www.wwfrsapartners.com R

eporting


Reported data covers our operations in our UK,International and Emerging Markets businesses. The carbon footprint below covers 100% of theorganisation with 10% estimated. This proportionhas reduced by 2% since last year due to theimplementation of data collection systems in newly acquired businesses.

All CO2 baselines are calculated with up to datecoefficients including IPCC, WBCSD/WRI, IEA,UNFCC, Carbon Trust and DEFRA. Thesecalculations and data have been verified byEcometrica, a specialist environmental consultancy.

Ecometrica Comment on DataQuality for RSA’s 2011 GreenhouseGas Assessment The data provided for the 2011 RSA globalassessment has increased in accuracy from thatprovided for the 2010 assessment.

Around 85% of the total emissions associated with the 2011 global operations of RSA have beencalculated from actual or robust data where minor orno assumptions were required. In particular the dataprovided by the Latvia, Lithuania, Russia, Mexico,Denmark, Sweden, Norway, UK, QRC and Irelandsites were complete, requiring no extrapolation by Ecometrica.

In general, data relating to electricity, flights andcompany owned vehicles were of good quality, with the majority of sites providing consumption anddistance data. Data (complete or otherwise) wassubmitted for sites employing 21,613 FTE (94% ofemployees). For the remaining sites, covering 1,461FTE, total emissions were estimated based uponemployee number.

The main limit to data quality and calculation accuracywas travel data supplied in cost format or numberof journeys format rather than distance format. Thisrequired estimates on the average cost or distance ofjourneys which introduced high uncertainty into the

emissions calculations. Waste data was also oftenmissing from site data, requiring waste emissions tobe estimated based on the data provided by othersites, pro-rated by FTE number. Cost data were theonly electricity data provided for Oman, Saudi Arabia,Singapore, United Arab Emirates, RSA CanadaCalgary, Argentina and Brazil.

Charlotte WylieSenior Analyst

ENVIRONMENTAL DATA TABLES

Group carbon dioxide equivalent emissions (tonnes)

Total tonnes per full time equivalent

4.0

2.5

3.1

2.7

2.9

1.8

-

1.6

1.1

3.0

2.9

4.6

2.2

3.4

2.7

2.8

1.2

-

3.2

-

3.1

3.1

3.1

2.2

2.7

1.7

2.0

2.5

1.6

3.4

2.2

-

2.7

CO2e Emissions 2008 20072011

3.9

2.3

2.8

2.6

2.9

2.0

-

2.2

1.1

2.9

2.9

2009

4.2

2.5

2.7

2.4

2.3

2.3

1.7

2.9

1.3

-

3.0

2010Country/Region

UK

Scandinavia

Canada

Ireland

Italy

Central & Eastern Europe

Baltics

Latin America

Asia & Middle East

Estimated

Total

Group carbon dioxide equivalent emissions (tonnes per full time equivalent)

* Corrections in historical data.

2008 20072011 2010

Total tonnes UK

Scandinavia

Canada

Ireland

Italy


Baltics

Latin America

Asia & Middle East*

Estimated

Total

26,073

8,309

7,953

1,429

802

2,224

2,733

6,844

4,393

2,323

63,082

31,314

7,893

6,666

1,305

896

2,075

3,311

5,593

2,126

7,056

68,236

31,588

7,243

7,473

1,402

1,116

2,705

-

3,971

1,710

7,796

65,003

2009

34,381

7,414

8,214

1,341

1,080

3,928

-

2,920

1,910

3,594

64,782

39,862

6,950

8,037

1,404

954

2,758

-

1,413

-

10,468

71,846

CO2e Emissions Country/Region


Carbon dioxide emissions equivalent by source (tonnes)

22,942

2,560

3,552

881

607

1,155

-

1,499

660

33,856

28901

2667

3,398

923

719

1,335

-

752

-

38,695

15,985

3,223

3,631

932

489

643

917

4,476

1,746

32,041

Impact 2008 20072011Country/Region

UK

Scandinavia

Canada

Ireland

Italy


Baltics

Latin America

Asia & Middle East

Total

Non-energysite emissions(tCO2e)

870

194

73

41

30

91

-

195

142

1,636

1,729

133

79

34

27

100

-

129

-

2,231

390

181

241

15

15

45

140

134

85

1,244

21,926

2,937

3,296

1,017

762

1,582

-

2,036

700

34,256

2009

21,133

4,025

3,063

978

592

1,746

1,202

2,507

748

35,988

2010

697

267

343

20

51

107

-

346

192

2,023

1,287

212

524

13

36

113

149

509

51

2,894

UK

Scandinavia

Canada

Ireland

Italy


Baltics

Latin America

Asia & Middle East

Total

Companyowned vehicles(tCO2e)

5,915

2,419

2,490

294

255

1,605

-

247

196

13,421

4,830

2,486

2,761

340

57

1,163

-

161

-

11,798

3,585

1,219

83

283

4.6

97

1,443

625

98

7,437

Impact 2008 20072011Country/Region

UK

Scandinavia

Canada

Ireland

Italy


Baltics

Latin America

Asia & Middle East

Total

Business travel(tCO2e)

4,654

2,240

2,098

124

189

1,077

-

978

912

12,272

4,401

1,663

1,799

107

151

160

-

371

-

8,652

5,413

3,439

3,689

110

275

69

106

1,429

2,147

16,676

3,781

2,258

1,016

274

2

936

-

695

121

9,083

2009

3,708

1,783

85

86

5

177

1,760

886

59

8,549

2010

5,184

1,782

2,818

91

301

80

-

894

697

11,847

4,294

1,700

2,676

146

233

35

124

1,650

1,060

11,918

UK

Scandinavia

Canada

Ireland

Italy


Baltics

Latin America

Asia & Middle East

Total

(1) Regional figures when calculated to full decimal places totals 35,988 tonnes

(1)

Site energyconsumption(tCO2e)

Reporting


Environmental data is reported by regions due tothe number of individual countries reporting.

ENVIRONMENTAL DATA TRENDS 2008-2011

Electricity

(Abs: MWh)

(Norm: kWh/fte)

31,929

13,463

10,938

1,618

1,327

2,772

4,637

7,880

894

4,306

4,223

4,377

2,952

3,465

3,039

2,440

4,125

528

Performance indicator 2010Country

UK

Scandinavia

Canada

Ireland

Italy


Baltics

Latin America

Asia & Middle East

Absolute Norm

Gas

(Abs: MWh)

(Norm: kWh/fte)

20,070

14

5,007

778

-

1,468

1,215

213

-

2,707

4

2,004

1,419

-

1,609

639

112

-

UK

Scandinavia

Canada

Ireland

Italy


Baltics

Latin America

Asia & Middle East

34,724

10,794

11,556

1,641

1,731

4,349

-

5,501

938

4,270

3,386

4,342

2,994

4,520

3,265

-

3,005

631

2009

Absolute Norm

35,054

10,635

12,860

1,369

890

4,522

-

4,087

853

4,073

3,587

4,899

2,738

2,386

2,069

-

2,236

481

2008

Absolute Norm

24,872

14,062

13,823

1,617

1,149

1,405

3,440

12,666

2,303

2,962

3,804

6,191

1,918

2,922

1,574

1,962

6,317

1,145

2011

Absolute Norm

16,462

10

2,971

908

185

1,056

-

213

-

2,024

7

2,023

1,657

483

793

-

248

-

21,737

11

3,878

720

495

1,151

-

249

2,526

7

2,587

1,440

1,326

527

-

291

15,982

17

3,989

685

0

0

899

2,159

0

1,903

4.7

1,786

813

0

0

520

1,077

0


Water

(Abs: m3)

(Norm: m3/fte)

67,265

37,219

25,354

2,564

2,365

1,664

13,390

44,642

4,276

9

12

10

5

6

2

7

23

3

Performance indicator 2010Country

UK

Scandinavia

Canada

Ireland

Italy


Baltics

Latin America

Asia & Middle East

Absolute Norm

Total Waste

(Abs: t)

(Norm: kg/fte)

2,320

435

476

61

108

103

104

292

45

313

136

190

111

282

113

55

153

27

UK

Scandinavia

Canada

Ireland

Italy


Baltics

Latin America

Asia & Middle East

Paper

(Abs: t)

(Norm: kg/fte)

1,216

236

431

112

46

6

103

55

44

164

74

172

204

120

7

54

29

26

UK

Scandinavia

Canada

Ireland

Italy


Baltics

Latin America

Asia & Middle East

89,492

27,421

24,619

2,436

3,592

9,158

-

106,223

446

11,005

9,173

9,250

4,445

9,378

7,854

-

167,544

317

2009

Absolute Norm

90,539

19,600

26,068

2,346

10,627

11,789

-

31,511

454

10,519

6,980

9,930

4,692

28,490

5,395

-

20,854

311

2008

Absolute Norm

97,361

62,079

26,937

2,739

1,912

1,500

13,161

12,306

4,537

12

17

12

3.2

4.9

7.7

7.6

9.8

2.8

2011

Absolute Norm

1,813

347

327

92

49

117

-

369

193

223

109

123

169

127

88

-

201

129

2,315

319

233

235

50

153

-

236

18

269

114

89

469

133

70

-

182

145

1,595

384

342

79

14

46

107

147

85

190

104

153

94

36

118

62

73

44

1,111

453

496

113

94

37

-

82

191

137

142

186

207

244

31

-

81

139

1,344

367

307

29

149

82

-

243

152

156

124

117

58

399

38

-

133

86

949

336

419

120

25

5

81

244

110

113

91

188

142

63

14

47

146

63

Reporting


GRI INDEX

Strategy & analysis6

FullyFully

FullyFullyFullyFullyFullyFullyFullyFullyFullyFully

FullyFullyFullyFullyFullyFullyFullyFullyFullyFullyFullyFullyFully

GRI G3 guideline UNGC Principles ClimateWise PrinciplesReported

CEO IntroAnnual Report

How we reportAnnual ReportAnnual ReportAnnual ReportAnnual Report/ About usAnnual ReportAnnual ReportAnnual Report/ About usAnnual Report/ About usAbout us

How we reportHow we reportHow we reportHow we reportHow we reportHow we reportHow we reportHow we reportHow we reportIncluded in target sectionsHow we reportGRIHow we report

Section

1.11.2

Organisational profile 2.12.22.32.42.52.62.72.82.92.10

Report parameters 3.13.23.33.43.53.63.73.83.93.103.113.123.13

The Global Reporting Initiative's (GRI) G3Sustainability Reporting Guidelines provide acomprehensive set of indicators covering theeconomic, environmental and social impacts of a company's performance.

The following table sets out all the company profile disclosures, core and additional performanceindicators and financial services sector supplementaryindicators contained in the GRI G3 Guidelines.

We indicate whether our reporting covers theirrequirements fully or partially. Where an indicator isnot considered material to our business we havemarked this ‘Not material’.

The page numbers provide signposts so you can findmore information in this report on our disclosure.AR refers to our Annual Report and Accounts 2010.

This year, GRI have assessed our disclosure againstthe GRI G3 Guidelines and have declared that wemeet application level B+.

Where applicable, we have also included thecorresponding United Nations Global Compact(UNGC) and ClimateWise Principles for reference.


Governance, commitmentsand engagement

61,10

FullyFullyFullyFully

FullyFully

FullyFullyFully

Not ReportedFullyFullyFully

Fully

Fully

Fully

Fully

Fully

FullyPartiallyPartially


Annual reportAnnual reportAnnual reportAnnual report / Ourapproach / CR governanceAnnual reportCR governance (all execs on committee)Our approachCR governanceAnnual report / CR governancePrecautionary PrincipleOur approachOur approachOur approach / CR governanceOur approach / CR governanceOur approach / CR governanceOur approach / CR governance

Annual reportwww.cdproject.net (RSA)None

Section

4.14.24.44.5

4.64.7

4.84.94.10

4.114.124.134.14

4.15

4.16

4.17

Economic performance Disclosure onManagementApproach• Economic

performance• Market presenceEC1 CoreEC2 CoreEC4 Core

1

2

Reporting


Environmental performance

5

FullyFullyFully

Fully

FullyFullyPartiallyPartially

FullyFullyFullyFullyFullyFullyFullyPartiallyFullyFullyFullyFully


Environment

Environment1569 GjElec - 271,642 GjGas - 103,549 GjDistrict Heat - 64,674 GjEnvironmentCustomers / EnvironmentEnvironmentEnvironmentEnvironmentEnvironmentEnvironmentEnvironment (all landfill)EnvironmentCustomer / EnvironmentNoneEnvironment

Section

Disclosure onManagementApproach• Materials• Energy• Water• Emissions, effluent

and waste• TransportEN1 CoreEN3 CoreEN4 Core

EN5 AdditionalEN6 AdditionalEN7 AdditionalEN8 CoreEN16 CoreEN17 CoreEN18 AdditionalEN22 CoreEN23 CoreEN26 CoreEN28 CoreEN29 Additional

7

1,38,95

1,3,58

3,58,9


Labour practices anddecent work 6

FullyFully

FullyPartiallyPartially

PartiallyFullyPartiallyFully

Fully

PartiallyPartiallyFullyFully

PartiallyFullyFullyFullyFully


Employees

Employees30 daysEmployees93%

Customer / Suppliers

About usSuppliers (part of CR module)Human rights policy / SuppliersHuman rights policy / SuppliersHuman rights policy / Suppliers

Section

Disclosure onManagementApproach• Employment • Labour/management

relations• Occupational health

and safety• Training and

education• Diversity and equal

opportunityLA1 CoreLA5 CoreLA7 CoreLA12 Additional

Human rights Disclosure onManagementApproach• Investment and

procurementpractices

• Non-discrimination• Freedom of

association andcollective bargaining

• Child labour• Forced and

compulsory labourHR1 CoreHR2 CoreHR5 CoreHR6 CoreHR7 Core

1

1,2

22,32,5

2,4 Reporting


Society

FullyFullyPartiallyFullyFully

FullyFully

Partially

Fully

Partially


Annual Report /Employees / Customer

Bribery sectionGuide sent to allemployees / Onlinetraining for all (Codanspring 2011) Our approachNone

Customer

National regulatorycomplianceCustomer

Section

Disclosure onManagementApproach• Corruption• Public policySO2 CoreSO3 Core

SO5 CoreSO6 Additional

Product responsibility Disclosure onManagementApproach• Customer health

and safety• Marketing

communications• Customer privacyPR3 Core

PR5 Additional

2

10

10


Financial services sectorsupplementary indicators

PartiallyPartially

FullyFully

FullyFullyPartiallyFullyPartially


Customer / EnvironmentHigh Risk CountryScreening ProcessAbout us / SuppliersAnnual ReportCR governanceAbout usAbout usCustomerCustomerCustomer

Section

FS1 CoreFS2 Core

FS5 CoreFS6 CoreFS9 CoreFS10 CoreFS12 CoreFS13 CoreFS14 CoreFS15 Core

2 52 1

2 42 4

2 3,4

2

Reporting


To the stakeholders of RSA We have been engaged by RSA Management to obtain moderate assurance (review) that RSAadheres to the AA1000 AccountAbility Principlesand to obtain limited assurance (review) thatselected quantitative non-financial data for 2011 onpages 30, 42, 43, 46-48 and 62-65 in the CorporateResponsibility Report 2011 (the Report) are reliable.

Criteria for the preparation of reportingThe criteria for the preparation of the non-financialdata and information are evident from the RSAReporting Guidelines which can be found athttp://www.rsagroup.com/rsagroup/en/corporate-responsibility/our-approach/reporting-guidelines.The RSA Reporting Guidelines contain informationconcerning which of RSA’s activities and functionsare included in the reporting, types of data andregistration and collection methods applied.

Management’s responsibilityAdherence to the AA1000 AccountAbility Principlesof Inclusivity, Materiality and Responsiveness is the responsibility of Management. Furthermore,Management is responsible for preparing the non-financial data as well as for establishing data

collection, registration and internal control systemswith a view to ensuring reliable reporting byspecifying acceptable reporting criteria and data to be collected for intended users of the Report.

Assurance provider’s responsibilityAs an assurance provider, it is our responsibility, on the basis of our work, to make observations and recommendations with respect to the natureand extent of RSA’s adherence to the AA1000AccountAbility Principles and to review thereliability of the non-financial data presented in the Report.

We have not in 2011 performed any tasks orservices for RSA or other clients compromising our independence, nor have we been responsiblefor the preparation of any part of the Report. Thus,we are independent as defined in the AA1000Assurance Standard (AA1000AS (2008)), and weconsider our team qualified to have carried out thisindependent assurance engagement. Our team ofexperts holds competencies within performingassurance of non-financial data, AA1000 adherenceand within assessing such data and information. Inaddition, our team has competencies with regard to assessing sustainability management systems.

Scope, standards and criteria usedWe have planned and performed our work on the basis of AA1000AS (2008), using the criteria inthe standard to perform a Type 2 engagement, andin accordance with the International Standard onAssurance Engagements (ISAE) 3000, “Assuranceengagements other than audits or reviews ofhistorical financial information”. The assuranceobtained is limited, as our work compared to that ofan engagement with reasonable assurance has beenlimited to, principally, inquiries, interviews and analyticalprocedures related to registration and communicationsystems, data and underlying documentation.

We have worked to obtain:

• Moderate assurance (review) that RSA adheresto the AA1000 AccountAbility Principles;

• Limited assurance (review) that the quantitativenon-financial data for 2011 in the Report arereliable.

Methodology, approach, limitation and scope of workOur methodology has included procedures toobtain evidence of Management’s commitment tothe AA1000 AccountAbility Principles and of theimplementation of systems and procedures insupport of the principles at corporate level.

Our methodology has also included procedures toobtain evidence of the non-financial data for 2011presented in the Report. The procedures chosen aredependent on our judgment, including the assessmentof the risks of material data misstatements. In conducting those risk assessments, we haveconsidered internal controls relevant to thepreparation and presentation of environmental and social data in order to design assuranceprocedures which are appropriate under the circumstances.

Based on an assessment of materiality and risk, our work has included:

(i) Enquiries and interviews with members ofExecutive Management, staff from the CorporateResponsibility department as well as managementof selected corporate functions at group andregional level regarding RSA’s adherence andcommitment to the AA1000 AccountAbilityPrinciples as well as the existence of systems andprocedures to support adherence to the principlesand embedding of the principles at corporate level;

(ii) Inquiries regarding procedures and methods toensure that social and environmental reportinginclude data from the Group’s affiliates, and that

INDEPENDENT ASSURANCE STATEMENT ON RSA’SCORPORATE RESPONSIBILITY REPORT 2011

Reporting


these data have been registered, consolidatedand incorporated in compliance with the socialaccounting policies and environmentalaccounting policies. Through interviews withaffiliates in UK, Italy, Ireland, Lithuania, Chile,Canada and Scandinavia and based on requests and selected documentation, we havefurthermore assessed the existing systems fordata collection and registration, and proceduresto ensure reliable reporting.

ConclusionRegarding AA1000APS (2008)Based on our review, nothing has come to ourattention causing us not to believe that RSAadheres to the AA1000 AccountAbility Principles.

Regarding dataBased on our review, nothing has come to ourattention which causes us not to believe thatquantitative non-financial data for 2011 on pages30, 42, 43, 46-48 and 62-65 in the CorporateResponsibility Report 2011 has been stated inaccordance with the methodology and criteriadescribed in the RSA Reporting Guidelines.

Observations and recommendationsAccording to AA1000AS (2008), we are requiredto include observations and recommendations forimprovements in relation to RSA’s adherence to the AA1000 AccountAbility Principles.

Regarding Inclusivity:RSA’s business principles, brand beliefs and corporateresponsibility (CR) policy suite constitute a strongcommitment to accountability and engagement withstakeholders which is rooted at the executive leveland supported by the Group’s solid CR governancestructure. RSA has a robust approach to spotting andunderstanding sustainability trends and how thesecan affect RSA and its stakeholders. This approachincludes procedures to engage with key stakeholdergroups on CR issues.

In 2011 we have seen that stakeholder engagementon sustainability issues has been further integratedinto core business functions, thereby facilitating theorganisation’s ability to learn and improve. Theengagements range from the global formal partnershipwith WWF to informal networks and dialogue withsuppliers at both group and local level. Furthermore,RSA has developed new policy guidelines to supportlocal implementation of the Group’s CR strategy.

To support this process we recommend that RSAManagement (at group level as well as local level)

communicate more clearly about the links betweenCR and the commercial strategy and that RSAencourages local management teams to evaluatewhether specific issues in the local context requirelocal amendments to the group CR strategy.

Regarding Materiality:RSA uses a wide range of sources from CR employeesurveys over third-party led external stakeholderfeedback and materiality assessment to benchmarkingin the materiality determination process whichdefines the Group’s annual CR strategy and thereport content. In 2011 RSA has brought togetherCR managers from across the globe in London to take part in the materiality assessment process.

Although RSA has an advanced approach toassessing materiality, the process could furtherbenefit from a consistent set of materiality criteriaacross all stakeholder inputs.

Regarding Responsiveness:As a Group, RSA responds to material stakeholderissues through its commitments to accountabilityand engagement in the core and strategic CRthemes environment, social inclusion and safety byconsidering the markets’ different levels of maturityand available resources. Responsiveness is also evidentfrom on-going CR communication, including the

annual CR report, as well as through the businessprocesses, products and services in which CR is beingintegrated. We would encourage a greater focus ondilemmas for the organisation in future.

PricewaterhouseCoopersStatsautoriseret Revisionspartnerselskab Copenhagen, May 20, 2011

Birgitte Mogensen State Authorized Public Accountant

Jens Pultz PedersenMSc in Engineering

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