Work methods of the Board of Directors and its committees

Governance Corporate governance and compensation report

a. General work methods of the Board of Directors and its committees

Extraordinary meetings are called at short notice if and when required. Board members can also join such meetings by video or telephone conference. A quorum is constituted when at least half of the members of the Board or the Board committee are present in person or partic-ipate using some alternative means of communication.

In addition to the regular and extraordinary meetings, the Board and its committees can make decisions in writing. These resolutions by written agreement have equal validity to decisions made in regular or extraordinary meetings. Resolutions by written agreement of the Board of Directors may be adopted if no Board member calls for discussion of the motion. A quorum is constituted when at least half of the members express their agreement or disagreement with the resolution. Written resolutions of Board committees may be adopted if all committee members express their agreement or disagreement with the resolution.

The Chairman of the Board is responsible for defining the agendas for the meetings of the Board and its committees in close cooperation with the chairpersons of the committees and in consultation with the Chief Executive Officer. A number of recurring issues are discussed periodically at the regular meetings.

The members of the Board of Directors receive an invitation to Board and committee meetings with a list of the agenda items approximately two weeks before each meeting. They also receive written documentation on the items for discussion, so that they can prepare thoroughly.

The first set of pre-reading material is usually sent out with the invitation two weeks prior to the meeting, followed by a second delivery one week later.

In the meeting, the agenda items are usually introduced by a presentation, followed by a dis-cussion and, where necessary, a resolution on the item. The presentation is given by an expert from the Executive Committee or Executive Board or by other employees having the requisite specialist knowledge.

Specific subjects can be discussed in a closed session with a reduced number of participants.

Depending on the item being discussed, these closed sessions consist solely of Board mem-bers (private session) or Board memmem-bers and the Chief Executive Officer (executive session).

Minutes are kept of the discussions and the resolutions of each meeting and are approved usually at the next Board or Board committee meeting.

b. Specific work methods of the Board of Directors

The Board meetings are attended by members of the Board and, in an advisory capacity, by the members of the Executive Committee as well as the company secretary.

In 2007, there were eight regular and four extraordinary Board meetings, and the Board made eight decisions in writing. The Board meetings lasted 5.5 hours on average. Between one and 14 agenda items were discussed per meeting, with an average of seven items per meeting.

The average attendance rate was 99.0% at the regular meetings throughout the year. Average attendance including extraordinary meetings, which were often called at short notice, was 90.3%. Whenever possible, Board members who are unable to attend an extraordinary meet-ing give their views on the agenda items to the Chairman before the meetmeet-ing.

Governance Corporate governance and compensation report

c. Specific work methods of the Audit Committee

The Audit Committee normally meets eight times a year. The first two meetings of the year mainly deal with the annual closing. In the subsequent meetings, the committee focuses on topics such as embedded value, the internal control system, or legal, regulatory and compli-ance issues. The committee receives a status report from Group Internal Audit about four times a year. The meetings at the beginning of May, August and November are mainly dedi-cated to the discussion and approval of the quarterly results.

Besides the committee members and the company secretary, selected individuals are invited to attend Audit Committee meetings in an advisory capacity. In 2007, the following people exercised an advisory role on the committee:

Peter Forstmoser, Chairman of the Board of Directors Walter B. Kielholz, Vice Chairman of the Board of Directors Jacques Aigrain, Chief Executive Officer

Ann F. Godbehere, Chief Financial Officer (until 28 February 2007) George Quinn, Chief Financial Officer (as of 1 March 2007) David Doyle, Head of Group Internal Audit (until 28 February 2007) Clare Bousfield, Head of Group Internal Audit (as of 1 March 2007)

The two lead auditors representing the external auditor are also invited to Audit Committee meetings. The Head of Group Internal Audit and the two lead auditors of the external auditor are normally present in executive sessions of the committee.

In 2007, there were nine Audit Committee meetings, including one extraordinary meeting.

No resolutions were taken by written agreement. On average, the meetings lasted 2.5 hours.

Between one and ten agenda items were discussed per meeting, with an average of six items.

Average attendance was 95.0% at the regular meetings throughout the year and 91.1%

including the extraordinary meeting, which was called at short notice.

d. Specific work methods of the Compensation Committee

The Compensation Committee normally holds five regular meetings per year. The main purpose of the January and February meetings is to set the total amount for bonus payments in the organisation, including bonuses for Executive Board members, as well as to allocate benefits from the long-term incentive plans. The June and September meetings are to review the com-pensation principles and instruments. In December, the committee undertakes an initial assessment of Executive Board members’ performance for the pending bonus allocation and decides on any amendments to the compensation system for the following year.

Besides the committee members and minutes taker, selected individuals are invited to attend Compensation Committee meetings in an advisory capacity. In 2007, the following people exercised an advisory role on the committee:

Peter Forstmoser, Chairman of the Board of Directors Walter B. Kielholz, Vice Chairman of the Board of Directors Jacques Aigrain, Chief Executive Officer

The Compensation Committee enlisted the help of Mercer Human Resources Consulting to provide support and advice for compensation issues during the reporting year. Mercer supported the committee in organising benchmark studies and reviewing and amending the compensation philosophy.

Governance Corporate governance and compensation report

In 2007, there were five regular meetings of the Compensation Committee. There were no extraordinary meetings and no resolutions by written agreement. The meetings lasted on average three hours. Between four and thirteen agenda items were discussed per meeting, with an average of eight items. Average attendance was 85.0% during the reporting year.

e. Specific work methods of the Finance and Risk Committee

The Finance and Risk Committee normally holds six regular meetings per year. The topics dis-cussed at committee meetings depend on current developments and corporate requirements.

In the reporting year, the committee reviewed derivative transactions, risk management in life and credit business, the company’s reserving policy for life and non-life business, the optimal approach to the insurance price cycle, treasury issues, climate change, the Group’s earthquake exposure, investment policy and the internal risk identification process. The committee also discusses the Chief Risk Officer’s latest written report at almost every meeting. This report outlines the Group’s position in terms of the main quantitative risk metrics.

Besides the committee members and the company secretary, selected individuals are invited to attend Finance and Risk Committee meetings in an advisory capacity. In 2007, the following people acted in an advisory role on the committee:

Peter Forstmoser, Chairman of the Board of Directors Jacques Aigrain, Chief Executive Officer

Ann F. Godbehere, Chief Financial Officer (until 28 February 2007) George Quinn, Chief Financial Officer (as of 1 March 2007) Christian Mumenthaler, Chief Risk Officer (until 31 December 2007) Stefan Lippe, Head of (Re)Insurance Products

Roger W. Ferguson, Head of Financial Services Products Benjamin Meuli, Chief Investment Officer

In 2007, there were six regular meetings of the Finance and Risk Committee. There were no extraordinary meetings and no resolutions by written agreement. On average, the meetings lasted 2.5 hours. Between four and eight agenda items were discussed per meeting, with an average of six items. Average attendance was 90.5% during the reporting year.

f. Specific work methods of the Governance Committee

The Governance Committee normally holds three regular meetings per year. The committee usually spends its first meeting of the year discussing developments in corporate governance and reviewing the Articles of Association, Corporate Bylaws and the Corporate Governance section of the Annual Report. The committee’s other meetings address the media and investor response to the annual results, the Group’s Guiding Principles, social commitment, approach to sustainability, the activities of Investor Relations and shareholder structure.

Besides the committee members and the company secretary, selected individuals are invited to attend Governance Committee meetings in an advisory capacity. In 2007, the following people exercised an advisory role on the committee:

Jacques Aigrain, Chief Executive Officer

Ann F. Godbehere, Chief Financial Officer (until 28 February 2007) George Quinn, Chief Financial Officer (as of 1 March 2007)

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Governance Corporate governance and compensation report

In 2007, there were four Governance Committee meetings. There were no extraordinary meet-ings and two resolutions by written agreement. On average, the meetmeet-ings lasted one hour.

Between two and seven agenda items were discussed per meeting, with an average of five items. Average attendance was 86.7% during the reporting year.

g. Meeting schedule in 2007

Board of Audit Compensation Finance and Risk Governance

Dates Directors Committee Committee Committee Committee

31 January 

The meetings of 11 May, 22 October, 16 November, 18 November and 28 December were extraordinary meetings.

The Board of Directors exercises the ultimate authority of the Group. It has delegated the responsibility for managing the Group’s operations to the Executive Committee (see section 4 below).

The Board of Directors, among others,

determines the risk tolerance level of the Group, monitors risk development and approves the business principles to be applied in reinsurance and financial services, including asset management;

defines the Group’s Guiding Principles, adopts the strategy of the Group and keeps itself informed of the strategies of the business and corporate functions, as well as of the divisions;

approves consolidated medium- and short-term Group business plans based on the Group’s strategic goals and the business plans of the business and corporate functions;

decides on high-level transactions in alternative investments, Admin Re®, debt issuances, credit facilities or similar instruments and capital market transactions;

reviews periodic core business status reports as well as reports on major business trans-actions and events; 3.6 Definition of areas of responsibility