Powering the ‘Race to Zero’ in Insurance | Keshav R. Murugesh in Conversation with John Keppel

Keshav R. Murugesh - Group CEO, WNS:

Well, hello, and welcome to this edition of “The Turning Point”. I am Keshav Murugesh and I am the Group CEO of WNS. The Turning Point, as the name suggests, is about stories with a difference that made a difference. And we will have them narrated by the very leaders that made them happen.

Today we are in for a real treat. My guest is a multidimensional leader and a visionary who sees sustainability as more than just a buzzword. To him, it's a symphony where every note, be it environment, people, health, diversity, or customer relations, plays in harmony. Meet John Keppel, the trailblazer who holds the title of the first Chief Sustainability Officer at Zurich Insurance.

As the Chief Sustainability Officer, John is responsible for leading Zurich UK's sustainability initiatives, aligned with the Zurich Group's ambition to become one of the most responsible and impactful companies in the world. Further, he is responsible for leading regulatory and legal requirements in terms of sustainability, and ensuring the company delivers on its net-zero commitments as a business while acting as a visible catalyst for change in the insurance sector.

He stepped into this role after five years as the Chief Operating Officer and thus brings a very unique approach encompassing business, people, as well as communities to corporate sustainability. So, he is responsible for the P&L of the Engineering Business and the Customer Office, which has marketing, customer sentiment monitoring, and complaints handling. He is also a keen sponsor of Zurich UK's Pride Employee Resource Group. Prior to Zurich, John was President of EMEA and Asia region, and a member of the Board at Information Services Group. He also held executive roles at Accenture and Capgemini in the past.

In today's session, John will share Zurich Insurance's turning points in bringing scale to their initiatives on climate change, sustainability, diversity, as well as inclusion. Thank you, John, for taking the time to be with us.

Okay, so John, insurers excel at managing risk. How do you think insurance companies can leverage this advantage to imagine the ESG landscape? And in doing so, what do you think would be the key components and metrics for relevance as well as effectiveness?

Keshav R. Murugesh - Group CEO, WNS:

Okay, so John, insurers excel at managing risk. How do you think insurance companies can leverage this advantage to imagine the ESG landscape? And in doing so, what do you think would be the key components and metrics for relevance as well as effectiveness?

John Keppel - Chief Sustainability Officer, Zurich Insurance:

Thank you, first for having me. Delighted to be here, and delighted to share some experiences. I think you are right, insurance companies have been managing ESG risks, and particularly, climate perils for as long as they have been around. That is really one of the principal things that insurance companies are here to do, and have done very successfully. So, managing the climate risks is not really new for insurance companies. What is new is the pace that we are having to deal with that at, that everybody is joining forces with us to try and achieve a pretty unique global outcome. And that is quite an interesting and exciting time and challenges us in new ways.

So what are we doing? We're doing many of the things that all other organizations are doing. We are also focusing on trying to leverage the experience we have built over those 150 years, in the case of our organization, into advisory services to help our customers understand those risks and how those risks might manifest for their businesses. Try and give them the benefit of that experience, help coach them and educate them about what they can do in their businesses to make them more sustainable, to make them more protected. And those additional services over and above providing straight insurance services, are really making an impact with those customers.

The other element is really about engaging with those customers and making sure we really understand what is happening in their sectors, which is different. We support a very, very broad range of sectors across the globe. In addressing the metrics point, like a lot of organizations, we are surrounded by metrics. There are hundreds, if not thousands of metrics, that we measure ourselves by, and tracking all of the different elements that will ensure that we take ourselves as an organization net zero. Then our TCFD disclosures and reporting, which all organizations are now starting to embrace holistically. And then we are starting to set ourselves some more challenging targets around how we measure the decarbonization of our investment portfolio and how we will eventually measure the decarbonization of our underwriting portfolio as well.

So, there are many, many more metrics that our business will have to get used to, but that is kind of nothing new for us.

Keshav R. Murugesh - Group CEO, WNS:

Very interesting. I mean, when you hear the term ESG, it sounds so simple, but it looks like there is a lot happening at Zurich, driven by you.

Well, talking about climate change, improving resilience to its adverse impact is extremely critical. What were those turning points at Zurich that amplified its focus on climate change? And based on your journey, what significance do you think climate disclosure and GHG hold for insurers?

John Keppel - Chief Sustainability Officer, Zurich Insurance:

If I can think of a turning point, not unique to Zurich, actually, I think it is probably the Paris Agreement that got a lot of global entities really, really focused on the challenge ahead, and battling to try and achieve a one-and-a-half-degree future. I think the conversation has clearly moved on from Paris, but I think that really mobilized the organization. I think that is when we realized that the role as insurers was quite key, that there was a role for us, along with banks and the community of financial services really, to play a key role in how we would get that transition. That was probably enhanced further by the Glasgow COP, and nudged another step forward in terms of the creation of GFANZ and other organizations around the financial services role.

So that was probably, although probably, catalyst turning points for Zurich. I think this stuff comes from the top in terms of leadership, and our group CEO Mario Greco is extremely committed to ensuring that we play a leading role in this change, and that we take our responsibilities seriously. So I think, that is probably the turning points and the key leadership elements for us as an organization.

Around disclosures, we need the data. We desperately need data. Insurance organizations thrive on data, and without it we struggle, to be honest. So, we have to have data, and the disclosures that we are all now starting to deliver, are going to give us that source of data that can allow us to support decision-making going forward. So, not only our disclosures. but those of all our customers are really, really important to us.

Keshav R. Murugesh - Group CEO, WNS:

So clearly, this is a journey that has to be driven from the top, as you just mentioned.

Keshav R. Murugesh - Group CEO, WNS:

So John, Zurich is one of the partners of the Blue Carbon Initiative, which actually happens to be England's largest seagrass recovery operation; something that caught my attention very recently. What makes it even more compelling, is your customers rallying behind this cause. Now being at the helm of customer sentiments at Zurich Insurance, what is your guidance to companies on integrating customers into their sustainability initiatives?

John Keppel - Chief Sustainability Officer, Zurich Insurance:

I think for us it is a huge win-win. We love the idea of integrating some of what we're trying to achieve with what customers can do. So, the Blue Carbon activity that we participate with the Marine Conservation Society, allows customers who have the misfortune of an escape of water claim, some sort of problem in the house, we contribute on their behalf as a result of that claim to this Blue Carbon Initiative, which as you say is really supporting the reconstruction of seagrass ecosystems around the UK. The UK is an island. So, working on things that impact the coastal erosion, that impact coastal ecosystem, seemed a very logical and sensible thing to do. We wanted to do something that was a bit more local and a bit closer to our customers that they could connect with a bit more. So that was why we participated in that initiative.

In terms of finding things for organizations that you can connect your sustainability objectives with your customers, it really depends on your business. It is a little bit harder for us, our business is intermediated. Sometimes it can be hard to create these little magic moments, if you like, with customers. So, we found one there that worked for us. I think lots of businesses could do the same, and many, many do the same, trying to connect their customers with their sustainability ambitions and initiatives. And I think, it works extremely well and helps with customer sentiment, loyalty, all the metrics that we work hard on.

Keshav R. Murugesh - Group CEO, WNS:

Yeah, people actually love to be connected to such causes and where it involves nature; it is such an important thing for us.

So John, on the people side of ESG, Zurich Insurance has truly embraced its DEIB philosophy, which is Diversity, Equity, Inclusion and Belonging. So, what motivates Zurich to ensure its voice is diverse, its approach is equitable, its demeanor is inclusive, and most importantly, its workforce feels that they truly belong?

John Keppel - Chief Sustainability Officer, Zurich Insurance:

I do not think we think we have solved that by any stretch of the imagination. We think we've got lots of work to do on this front. We genuinely, from the top of the organization, want to create an environment that we would want to work in; that is the basic premise, I think, of it. Whether it is the leadership team in the Exec, or whether it is the extended leadership team in our senior leadership group, the commitment is genuine and very strong to try and make the organization somewhere where we would want to encourage our children to work or our friends to work. That is the basic ethos of it.

We do not represent the communities that we serve, it is as simple as that, and we ask ourselves lots of challenging questions about why that is the case, how that has come to be and what we can do about to try and change it? So for us, the journey has only just begun. We do a lot of good work with the employee community that we have, and we try and make sure that that employee community feels as welcome and supported as they can possibly be. But we ask ourselves some more tough questions about why we still do not represent our customers and the communities that we serve as well as we would like to, on any of those metrics, whether that be gender or racial diversity or any other lens that you care to take to it. We are fairly robust with ourselves, I would say, in terms of challenging the organization to do better, and to look at all the ways we recruit, all the ways that we promote, all the ways that we reward people, to make sure that we can make Zurich a more inclusive, a more representative organization each year that passes.

Mr. Keshav Murugesh - Group CEO, WNS:

So John, this is an interesting one. You know, organizations sometimes are caught in the pincer squeeze of regulations in their pursuit of doing good and doing things well. How has Zurich Insurance deftly balanced these seemingly contradictory aspects?

John Keppel - Chief Sustainability Officer, Zurich Insurance:

Yeah, I guess it is probably the last point that we would challenge. I do not think that doing well and doing good are mutually exclusive. I think we are trying to make sure we can find paths where those things are actually complementary. So, there is a lot of regulatory activity, be it from financial services regulation or governmental legislation that is impacting this area, and that is causing us some challenge, no question. But actually, understanding the intent behind those desires from regulators and from legislators, is important. Making sure that we, to some extent, place ourselves in their shoes, what are they trying to achieve, and try and act before we're asked to or challenged to, is really the way that we go about it.

So, the first bit would be, and not mutually exclusive, we can do both, we aim to do both, and we believe we will do both. And then secondly, making sure that we have really understood the intent, so that our response is not taking us in the wrong direction or impacted in any way.

Keshav R. Murugesh - Group CEO, WNS:

That is fantastic.

You know, the dawn of a new year always marks new beginnings and new excitement in the pursuit of all our goals. So, what are your plans to further scale up your sustainability drive and create a more positive impact?

John Keppel - Chief Sustainability Officer, Zurich Insurance:

Yeah, I mean, as you noted at the start, I've not been in the role that long, the role has not existed that long. So, it is an interesting challenge to work out what the immediate priorities are, and then what the medium and long-term priorities are. I think, for us as an organization, we are well on the path to our own net-zero journey. That is actually not that hard for us; we are not a heavy manufacturer, we are not an oil and gas company. So, it is important that we are seen to be making those strides and making those strides rapidly and decarbonizing our operation, and we are well on the way to doing that. Our target is to fully achieve that by 2030. And there will be some last-mile hard things and challenges. Nevertheless, we are confident and we believe it is important that we meet that objective head-on and meet it head on rapidly.

The harder bit for us and the really challenging piece for us, is to work with our customers, those that we invest in and indeed those that we support with underwriting, to help them navigate the changes in their business. And that is why creating capabilities like Zurich Resilient Solutions, that advisory capacity to lend our experience to customers, to help them benefit from that experience, is going to be really important. That is why the data that we talked about a couple of minutes ago, is really important, because we can understand what is happening inside the industries that we are supporting. The reality is, that we enable far, far more carbon than we emit. That is the nature of our business. We support the businesses of many, many other organizations, and we have to support them, we have to challenge them to switch their agendas to a far, far greener one in timescales that are going to support the global ambition here. So, part of it is about us and a big part of it is going to be about what we do to impact the organizations that we support.

Keshav R. Murugesh - Group CEO, WNS:

So now we are going to change gears really and add a dash of, what I call, spontaneity. So, we are now moving to our rapid-fire round, And I have a few questions for you. We want very brief, crisp answers based on what comes straight into your head.

The first is, one sustainability myth that you would love to debunk.

John Keppel - Chief Sustainability Officer, Zurich Insurance:

It does not cost more to be sustainable.

Keshav R. Murugesh - Group CEO, WNS:

Brilliant. Your go-to activity for relaxation and personal sustenance.

John Keppel - Chief Sustainability Officer, Zurich Insurance:

Playing guitar and being with the family. I think the family would prefer that I do not combine those two things, but those are the two things I turn to.

Keshav R. Murugesh - Group CEO, WNS:

Great answer. Recycle, reuse, reduce. Rank them in the order of your sustainable preference.

John Keppel - Chief Sustainability Officer, Zurich Insurance:

So, this one is a bit of a passion. So, reduce, reduce, reduce. That is the one that is important. I think in our world, the modern society, we demand way too much. If we can demand less, these problems will shrink and our solutions to them will work much faster. So, reduce, reduce, reduce, please.

Keshav R. Murugesh - Group CEO, WNS:

Learning point for me. The mountains, the ocean, the forest or the cities, your favorite holiday spot?

John Keppel - Chief Sustainability Officer, Zurich Insurance:

The mountains.

Keshav R. Murugesh - Group CEO, WNS:

And the most pivotal life skill for sustainable living? I know you said reduce, but what else?

John Keppel - Chief Sustainability Officer, Zurich Insurance:

Probably related to reduce, be content.

Keshav R. Murugesh - Group CEO, WNS:

Yeah, that is great. And one objective to describe who you are, and one more to describe what you are not.

John Keppel - Chief Sustainability Officer, Zurich Insurance:

I think, my wife would say I am hardworking and also hard work. I am not sure what that tells me about myself. I think, I try and be open, I try and be honest. That is kind of how I approach all situations. And I think, I do not panic easily. So, maybe it is about being calm in response to crisis, which is probably ideal in the role that I am now in.

Keshav R. Murugesh - Group CEO, WNS:

Excellent. And a childhood habit that you have held on to for all these years?

John Keppel - Chief Sustainability Officer, Zurich Insurance:

Oh, that is probably easy. My mother forbade us from putting salt on our food. So, I do not salt any food, much to the dismay of my family.

Keshav R. Murugesh - Group CEO, WNS:

So, reduce as well as take care of your health. Okay.

Keshav R. Murugesh - Group CEO, WNS:

So John, it is really been an enlightening experience hearing your insights. You have taken the mystic out of sustainability and rendered it tangible and actionable. It is evident that with the right mix of purpose, vision, as well as fervor, we can address today's challenges without compromising the needs of the future. We take away an important message from today's interaction, and that is, turning points for the next better can be as proactively sought, as reactively managed.

It has been wonderful having you here, John. Thank you so much for your time. And I think all that you spoke about is so useful and music to my ears.

John Keppel - Chief Sustainability Officer, Zurich Insurance:

Well, thank you for having me. It has been a really, really enjoyable day, an enjoyable conversation. And it is lovely to spend some more time with you Keshav.

Keshav R. Murugesh - Group CEO, WNS:

I hope you enjoyed today's Turning Point story. Stay focused, happy, healthy and safe until we meet again.