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ECONOMIC AGENT

RESPONSIBLE INSURANCE

Fidelidade has pledged to achieve net-zero emissions by 2050 in its underwriting activities and is implementing a set of strategic measures to support this goal. As part of its ongoing efforts to strengthen climate-related risk management, Fidelidade has developed georeferencing for a significant share of its property risk locations, enabling the analysis of detailed physical risk maps for its property insurance portfolio. Following underwriting, the portfolio is assessed to determine the insurer’s exposure to these risks, and work is underway to progressively integrate this information into underwriting and policy-issuance.

These measures complement initiatives already in place, such as Fidelidade Drive, which uses telematics to monitor and reward safer and more sustainable driving behaviours. Fidelidade has also participated in sector-level studies, including an APS study on flood risk under different climate scenarios, and is actively working to define sector-specific underwriting requirements and exclusions, assessing potential impacts on existing clients and developing mitigation strategies.

Planned initiatives further include engagement with high-emission clients to encourage the adoption of emission-reduction targets, a shift in the portfolio towards lower-emission clients, selective growth favouring customers with below-average carbon intensity, and strategic adjustments in the composition of the commercial lines portfolio.

Climate Change Adaptation  

> UNDERWRITING POLICY

As part of the governance system requirements, insurance companies must define and implement documented policies, approved by the Board of Directors and reviewed at least annually, relating to risk management, including underwriting risk. Beyond the legal and regulatory requirements, Fidelidade is also committed to embedding ESG factors across its processes and activities as part of its broader ambition to strengthen its sustainability practices, positioning itself progressively at the forefront of sustainability in the areas in which it operates. In this context, Fidelidade is committed to further developing sustainable products and services and to strengthening customer awareness on sustainability issues over time, in line with its Sustainability Policy. While this work is ongoing, Fidelidade already offers services such as Fidelidade Drive and Multicare Vitality, which encourage behaviours aligned with the United Nations’ Sustainable Development Goals (SDGs).

As a result, Fidelidade has its Underwriting Policy, which is a core element of the insurance business and a fundamental part of the Governance System, covering both Fidelidade – Companhia de Seguros, S.A., and the other insurance companies in Portugal within the Fidelidade Group.

RISK CLASSIFICATION

Risk classification under the Policy considers traditional variables such as risk knowledge and technical risk and is currently developing the integration of environmental impacts and other ESG factors as quantifiable elements for evaluating the sustainability of the business, for the insurance lines where this is applicable.

The Policy framework is implemented through a risk management process based on two main approaches:

  • ESG risk assessments, which are currently under development and applied in a project-based context, with high-risk ESG cases being referred to the Underwriting Acceptance and Monitoring Committee (UAMC); and

  • Ongoing monitoring of the Underwriting Policy by the UAMC.

Roles and responsibilities of those engaged in the underwriting process are clearly defined within the Policy, which is approved by the Executive Committee.

  • Business Divisions: manage and assess the risks associated with the underwriting of Fidelidade’s products;

  • Underwriting Acceptance and Monitoring Committee (CAAPS): decides on the acceptance of risks that exceed the authority of the Business Divisions.

  • Information about the Policy and any changes to it are communicated to the employees affected by it, and, whenever deemed relevant, training is provided on the principles and practices underlying compliance with the Policy.

    The Underwriting Policy is a core document for Fidelidade's business operations and contains strategic and commercially sensitive information. For this reason, it is not disclosed in full, and only its key principles and general guidelines (presented in this website section) are publicly available.

ESG RISKS IN UNDERWRITING

Fidelidade’s ESG Risk Framework sets out broad environmental guidelines, with a particular focus on the Environmental pillar of the ESG framework. As it evolves, it will also include specific guidance on social/human rights and governance matters. This framework is aligned with Fidelidade’s sustainability commitments and focuses on seven high-impact sectors, for which specific principles are being developed and will be defined as the framework progresses:

Agriculture, forestry and food Mining Hydroelectric dams Nuclear non-proliferation
Coal-fired power plants Oil and gas Defence

Fidelidade considers that environmental component has, currently, a fully developed regulatory framework. Therefore, ESG references in its Underwriting Policy focus primarily on environmental aspects. To assess environmental risks within the existing portfolio and when evaluating new insurance applicants, Fidelidade is developing a structured set of technical criteria. These criteria will be based on a panel of evaluation questions aligned with Fidelidade’s sustainability commitments and adapted to the specific risk and business line. The variables considered include:

Environmental strategy Pollution prevention and control Biodiversity and animal testing Water Energy
Air emissions Waste management Local pollution Impact of products used and their disposal Transport

Based on the assessment of these variables, risks are classified according to their potential impact. In some cases, further information may be requested for reassessment, or the risk may be escalated to Fidelidade’s Underwriting Acceptance and Monitoring Committee for further review.

> ESG SCORING

Fidelidade is in an advanced stage of developing an ESG Scoring index for current and potential clients, through continuous monitoring of their ESG performance. This index will be integrated into underwriting, pricing, and portfolio management processes, so that automatic risk assessments and decisions made by underwriters are also weighted based on the ESG performance of the client or economic group.

The ESG score under development is structured into three main components, with environmental generally being the most relevant in this type of assessment and potentially covering some of the topics below, among others.

  • Environmental (E): Climate change, air, soil, and water pollution, unsustainable practices, protected species and sites;

  • Social (S): Child labour, human trafficking, worker health and safety rights;

  • Governance (G): Corruption and bribery, corporate governance, product quality and safety.

> INITIATIVES AND PARTNERSHIPS

Fidelidade strives to apply best practices across its underwriting strategy, guided by the recommendations of leading sustainable investment organizations. To this end, the company has made a series of commitments to further strengthen its approach to responsible insurance.

PRINCIPLES FOR SUSTAINABLE INSURANCE (PSI)

Fidelidade is a signatory to the Principles for Sustainable Insurance (PSI) promoted by the United Nations Environment Programme Finance Initiative (UNEP FI), committing to ESG considerations into its decision-making processes in underwriting activities.

FORUM FOR INSURANCE TRANSITION TO NET-ZERO (FIT)

Fidelidade is a founding member of the Forum for Insurance Transition to Net-Zero (FIT), reinforcing its ambition to support the transition towards a more sustainable economy through responsible insurance practices.

> RESPONSIBLE PRODUCT OFFERING

Fidelidade is committed to offering products in a responsible and transparent manner, ensuring these are fair, suitable, and aligned with the expectations and needs of customers. This approach, reflected in the Product Design and Approval of Products Policy, is evidence of the organisation’s dedication to ethical conduct, long-term value creation, and trust-building across all stages of the product lifecycle.

INITIATIVES AND PARTNERSHIPS

The following main principles guide the design and development of Fidelidade insurance products, ensuring they are aligned with clients needs, regulatory expectations, and the Fidelidade's strategic values.

Product suitability for the objectives, interests, characteristics, and needs of the target market

Product testing before bringing that product to the market or significantly adapting it

Inputs from Risk Management and Technical Analysis Departments

Product suitability for the risk profile of the policyholder or insured person

Product suitability for the respective distribution channel, including the provision of sales support information

Consider the principle of 'Value for Money', so that products offer fair value to the customer in its various aspects.

Incorporation of financial literacy principles into products and the insurer’s practices

Involvement of the Sustainability Department during product ideation/design phase to assess the potential inclusion or adjustment of coverages according to sustainability criteria

PRODUCT DESIGN AND APPROVAL OF PRODUCTS POLICY

Fidelidade's Policy for the Design and Approval of Products and the corresponding changes includes: .

  • A commitment to incorporate financial literacy principles into products and practices, including the disclosure of potential negative consequences in marketing materials.

  • A commitment to provide transparent, complete, and understandable information to the market, including the disclosure of all mandatory product information.

  • A commitment to target appropriate audiences, aligned with the Treatment Policy.

  • A commitment to the ongoing monitoring of marketed products to assess their social impact and associated risks.

The Policy for the Design and Approval of Products and the corresponding changes is a core document for Fidelidade's business operations and contains strategic and commercially sensitive information. For this reason, it is not disclosed in full, and only its key principles and general guidelines (presented in this website section) are publicly available.
 
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A form titled "Analysis of New Products or Changes to Existing Products" is available and must be completed whenever a new product is approved or a significant change is made to an existing product.

SUSTAINABILITY INTEGRATION IN PRODUCTS WITH ENVIRONMENTAL AND SOCIAL FEATURES, DURING THE DESIGN AND APPROVAL OF NEW PRODUCTS AND THE REVIEW OF EXISTING ONES

DESIGN AND APPROVAL OF NEW PRODUCTS

Involvement of the Sustainability, Legal and Compliance Departments during product ideation/design phase to assess the potential inclusion or adjustment of coverages according to sustainability criteria and applicable legislation and regulations.

LIFE PRODUCTS (financial)

Clear identification of sustainability characteristics and alignment with target market

NON-LIFE PRODUCTS

Impact analysis conducted by Business Units and the Sustainability Department

REVIEW OF EXISTING PRODUCTS

Continuous monitoring of the alignment of existing insurance products with sustainability characteristics, pursuant to applicable EU regulations.

DESIGN AND APPROVAL OF NEW PRODUCTS

Involvement of the Sustainability, Legal and Compliance Departments during product ideation/design phase to assess the potential inclusion or adjustment of coverages according to sustainability criteria and applicable legislation and regulations.

LIFE PRODUCTS (financial)

Clear identification of sustainability characteristics and alignment with target market

NON-LIFE PRODUCTS

Impact analysis conducted by Business Units and the Sustainability Department

REVIEW OF EXISTING PRODUCTS

Continuous monitoring of the alignment of existing insurance products with sustainability characteristics, pursuant to applicable EU regulations.

MORE ON PRODUCT DESIGN AND APPROVAL

At Fidelidade, the design and approval of new products is guided by its policy (Policy for the Design and Approval of Products) that ensures robust governance and alignment with customer needs. Through clearly defined mechanisms and guidelines, Fidelidade guarantees that its products are developed responsibly, with effective communication and training practices in place to mitigate risks and ensure clients are well-informed.

 
 
 

GOVERNANCE
AND OVERSIGHT

The Product Committee is responsible for the final approval of all new products or significant changes and ensures a structured and responsible approach to product development. By overseeing the entire product lifecycle — including social impact and risk assessment — the Committee plays a key role in aligning the company’s offering with strategic, ethical, and sustainability goals.

 
 
 

MARKETING
COMMITMENTS

Fidelidade’s approach to product marketing and communication is guided by a set of principles that ensure clarity and consistency. These practices reflect the company’s commitment to delivering value, building trust, and fostering meaningful engagement with its audiences.

Fidelidade’s key commitments regarding products' marketing are:

  • To ensure clear, complete, and transparent communication.
  • To disclose potential negative consequences.
  • To ensure appropriate audience targeting based on product complexity, risk profile, and sustainability factors.
 
 
 

TRAINING
AND DEVELOPMENT

Fidelidade invests in continuous training and development to ensure that all teams involved in product design and distribution have the knowledge and skills to deliver responsible and customer-focused solutions.

Training programmes cover product features, characteristics of the customers belonging to the target market, sustainability goals, and risk mitigation, helping to prevent mis-selling and promote ethical practices across all channels.

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