ENVIRONMENTAL, SOCIAL

AND GOVERNANCE

ESG REPORT
FY2020
 ICICI Prudential Life Insurance Company Limited
ESG report

ICICI Prudential Life Insurance Company believes in ensuring its long term sustainability
through adoption of sustainability principles across business activities. The sustainability
framework is built on the three pillars of: Environmental – leaving the planet a better place for
our next generation, Social – giving back to society and Governance – transparency in
functioning. As a Company, we are in the fortunate position of being in the business of life
insurance which is a unique financial planning tool that provides families with a
financial safety-net by enabling them to achieve their long term financial goals and
protection of their families in the event of specific exigencies. Life insurance is a key social
need in India in the context of the current social security framework for our citizens. Our
endeavour is to ensure that every Indian family has adequate financial protection whilst taking
into account our wider responsibilities to the society and the environment.

The past two years have seen a significant transformation of our business model and more
specifically on our articulation of strategy as well as our aspiration of value creation for our
shareholders. As our business model is intertwined with the sustainability objectives, we have
now holistically documented our objectives and approach on the aspects of the ESG
framework i.e. Environmental, Social and Governance. Our ESG framework is based on our
Company’s vision which is to build an enduring institution that serves the protection and
long term saving needs of customers with sensitivity. Our Executive Committee comprising
the senior leaders of the Company oversee the integration of ESG within the organizational
framework and undertakes initiatives to balance the growth and profitability objectives whilst
serving the welfare of society and the preservation of the planet and thereby ensuring
sustainability.

Environmental
We are a financial services company and hence our focus on the environment is driven
primarily by what we consume and how we recycle. We operate through 517 offices including
1 Head office and 2 back offices. We try to minimise the environmental impact through various
measures which are grouped as under for the purpose of reporting.

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A. Reduction in energy consumption:

We have taken various steps to reduce the energy consumption within our physical premises
and business activities. Periodic maintenance is undertaken for major equipment including
Air Conditioners (AC) which contributes to ~80% of the electricity consumption. We are
installing Variable Refrigerant Flow (VRF) AC systems progressively, as and when the
need for replacement or new system arises at our offices. As of now we have installed VRF
AC systems to meet 20% of our requirement. We have also installed energy efficient ACs
(3/5 star rated) across our offices. 84% of our air conditioning requirement is met through
3 star rated ACs and the rest with 5 star rated ACs. We now equip our new branches with
efficient electricity consumption appliances, using latest technologies on light sensors as well
as LED devices. 54% of branch lighting and 47% of our backlit signage have been changed
from conventional to LED lighting at branches across the country. We have improved air
quality in 31% of our total office area by using live plants within our office premises.
On the GHG (Green House Gas) emission, the emission intensity is insignificant as our
Company is a financial services entity. Further, our thrust on digitisation to smoothen the
entire life cycle ranging from prospecting to sales to customer service has helped to mitigate
the residual impact of the GHG emission.

B. Waste management and reduction

Waste reduction and management has been one of the focus area to improve our operational
efficiency as well as minimise the impact on the environment. The waste generated through
our operations can be broadly classified as dry waste (primarily paper waste), e-waste and
wet waste (primarily from the cafeteria). Since the Company is a financial services entity, there
is no hazardous waste being generated. Similarly, our raw material procurement is very
limited in scope and it is largely confined to paper and electronic equipment. We believe in
reduce, reuse, recycle and manage solid waste efficiently. Reduction of paper consumption
has been a key strategic thrust.

B.1. Digitisation
We provide end to end digital solutions within each aspect of our business such as
contacting the customer through digital mode, sending them pre sales and policy documents
online and empowering them with self-help service modules. We provide 24/7 customer
service through a Chatbot named LiGo and collect 74.1% of renewal premium
through online modes. Through digitisation, we have not only logged 94.1% of our new
business cases digitally but also settled 99.6% of eligible claims in just one day. 87% of service
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ESG Report FY2020

requests were completed through self-help modules. Our Chatbot LiGo has responded to
customer queries with 91% accuracy. With Artificial Intelligence, we have been able to
increase our productivity by reducing the time taken for business activities, including
underwriting a proposal.

To give a further fillip, we operate digital delivery channels such as our website and
those of web aggregators. Through the initiative of Insta-insure, we offer instant policy
issuance without the need for a customer to go anywhere. These digital solutions not only
reduce solid waste through avoidance of documentation process but also reduces carbon
emission by avoiding travel requirements.

B.2. Waste Reduction:

Other than our core business operations, we aim to reduce waste generation and more
specifically the usage of paper through,
 Managed print services avoiding unnecessary prints as well as encouraging
employees to go paperless
 Centralized call logging facility for office stationery for tracking and reducing
consumption
 Encouraging our Shareholders to provide email ids thereby sending Annual
Report and other communication digitally. Out of 342,191 shareholders as on March
31, 2020, 84% have registered their email id for digital communication.

Another big focus area for us has been replacement of disposable cups as they had high
usage and wastage and were difficult to recycle. We have been encouraging employees to
bring their own cups, or use our reusable mugs and glasses. We have also stopped single
use plastic water bottles across our offices and replaced them with reusable water jar and
glasses. We have replaced plastic garbage bags with bio-degradable bags and plastic
dustbins with steel dustbins. For office signage, we are in a pilot project phase to replace
plastic material with fabric material. At our cafeterias, which are available at our largest
offices in Mumbai, we use reusable plates. We have also installed video conferencing
facility in 94 locations reducing the need for travel leading to reduction in carbon emission.

B.3. E-waste management

Being a financial services entity, there is limited scope for using recycled material as
processed inputs. Nonetheless, the company is constantly seeking out opportunities to
recycle waste. E-waste such as computers, printers, switches, scanners have been the main
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e-waste generated. To reduce the wastage, we have donated 100 laptops/ desktops this
year and disposed more than 5,000 office equipment through a government certified
vendor.

B.4. Wet-waste reduction:

We are focused on reducing wet waste by creating awareness amongst employees on food
wastage. At our head office and back office cafeterias, we display the daily quantum of
food being wasted and the number of people who could have been fed with the food that
was wasted. At our head office we have a system to convert wet waste into manure.

C. Water management:
Being a financial service entity, water usage is limited to domestic purposes. Yet, we take
appropriate precautions to conserve the resource. Sensor-based urinals are provided in all
new offices and water less urinals are installed at many branches. Also, our two largest
offices are equipped with sensor-based taps. Our head office has a Sewage treatment
plant.

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ESG Report FY2020

Social
Our vision is to build an enduring institution that serves the protection and long term saving
needs of customers with sensitivity. This vision is supported by our commitment to five
core values i.e. Customer first, Humility, Passion, Integrity and Boundaryless. Each of our
business activities including product development, distribution strategy, service framework
and investment management, revolves around the primacy of the customer. As a business,
we offer Life and Health insurance along with pension products. The business is unique in
nature that it provides a financial safety-net to families by enabling them to achieve long term
financial goals and protection of their families in times of exigencies. In a country like ours
with minimal social security systems, we consider ourselves fortunate to be in a business that
serves the long term protection and financial security needs of society. Our endeavour is to
ensure that every Indian family has adequate financial protection. Our suite of comprehensive
and responsible products serve the life stage based protection and savings needs of
customers. All our products are approved by the Insurance Regulatory and Development
Authority of India. Our business success is ascribed to all our stakeholders, which includes
our customers, employees, shareholders, business partners, regulators and the community
at large.

A. Customer centricity
We work towards aligning our business interests with the interests of our customers, thus
creating value and building long term viable relationships. The Company tries to enhance the
quality of the customer experience by providing products and services suited to the needs of
the customer. Our products are designed to suit the different lifestage requirements
of a cross-section of customers. Our multi-channel distribution architecture
enables customers to choose their preferred mode of purchasing products. Our
presence across channels ensures that we are able to cater to the varied needs of
customers across all touch-points. Our device agnostic digital platform allows
customers 24x7 access to their policies, to register claims online, to initiate and conclude
service requests (self-service) etc. As part of our endeavour to be future-ready and to cater to
the millennial customer, we are the first life insurer in India to officially offer WhatsApp as a
customer service channel. Our AI-powered Chatbot LiGo is equipped to provide
accurate responses and to learn with every customer interaction. We are committed to
investing in technology, which we see as a key business enabler, to deliver superior
products and service to our customers. We follow an integrated investment management
approach in which we follow the three pillars of safety, stability and returns. We generate and
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ESG Report FY2020

deliver consistent and risk-adjusted returns to our customers through a systematic and
structured investment process.

We also offer micro-insurance products such as Sarv Jana Suraksha, a protection product,
Anmol Bachat, a savings oriented product, Shubh Raksha Credit and Life, a group micro
insurance protection product thereby catering to the rural and social sector obligations of the
Company. We partner with ICICI Bank in promoting PMJJBY (Pradhan Mantri Jeevan Jyoti
Beema Yojana) a social security initiative aimed at making insurance services available to the
weaker section and low income groups. As of March 2020, more than 3.9 million lives are
covered under the rural/social sector obligation and PMJJBY scheme.

Our determined efforts to ensure customer delight have been rewarded with customer loyalty
which reflects in our 13th month persistency and self-help service usage which are
85.3% and 87% respectively.

While in general the business efforts are carried out with customer centricity in mind, even
during natural calamities or pandemics such as recent COVID-19 outbreak, we have taken
various measures to ensure our customers experience an uninterrupted service. Through our
digital enablers we have been able to assist our customers 24 X 7 without their having to visit
our branches in person. We reached out to our customers through various platforms like SMS,
e-mail, website, application, social media, WhatsApp and IVR calls and informed them
regarding the digital avenues available for servicing of insurance policies including
submission of a claim. Periodically, we have not only communicated with our customers on
market volatility during this period but also on hygiene etiquettes, including travel advisories
and precautionary measures to be adopted against the spread of the virus.

B. Employee diversity and engagement

Our commitment to employees is based on the three pillars of our employee value proposition
or our Cornerstones namely, Fairness and Meritocracy, providing a Supportive environment
and Learning and Growth. We cater to the priorities of different employee segments such as
millennials, mid-career employees, late-career employees, and women employees through
various policies, practices and initiatives across employee segments. Our Company is a
gender neutral, equal opportunity employer and there is zero tolerance for any discrimination
based on gender, religion, caste or class. Gender is not a consideration in compensation
fitment and all reward actions are as per the Company policy. We have a strong and dedicated
workforce from a diverse background, education & experience. At March 31, 2020, we had
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14,630 employees. This includes 3,748 women employees comprising about 26% of the
total workforce. To support women colleagues for their life stage needs and to build a more
inclusive workplace, we provide twenty six weeks of paid maternity leave (even
before it was made mandatory under the Maternity Benefit (Amendment) Act,
2017), three months of paid adoption leave, special maternity leave for recovery
from miscarriage / illness related to maternity / tubectomy, fertility treatment
leave, sabbatical and part time employment options and also special workshops and
seminars on a variety of themes. The Company allows managers to accept requests for “work
from home” on a need basis. We have also formulated policies that cover needs of employees
such as Additional sick leave, Transfer & Relocation, Education Assistance, Employee’s
Children’s Education Scholarship, Employee’s Children’s Sports Sponsorship, and
Employee’s Children with Special Needs. The company is also facilitating Voluntary Health
Cover for parents (and parents-in-law) for employees whose parents are not covered in
the Group Health Insurance (GHI) policy. We have formulated various policies to ensure
employee safety and to enable employees to Work-From-Home during the COVID-19
pandemic like Mobile Reimbursement on actuals, Local Conveyance on actuals, Data charges
reimbursement, suspension of co-pay on delayed hospitalisation reimbursement under the
Group Health Insurance policy and paid Leave during treatment for any employees diagnosed
COVID-19 positive, apart from enhancing base limits for employees under the Group Health
Insurance and Group Term Insurance policies.

We offer our employees a long term career proposition. We support them by giving them
opportunities to learn and grow and a work environment which is supportive, fair and
meritocratic. Talent development is a key employee value proposition and we aim to facilitate
capability building through classroom/on the-job training, virtual learning, job rotation, job
enrichment, and other opportunities for career progression. We support team work and a
healthy work environment through various recreation activities conducted throughout the
year during festivals, annual team offsite, team celebrations which contribute to creating a
culture of camaraderie amongst employees and helps in building employee morale. We
believe in creating leaders for tomorrow through structured programs like Leadership
Mentoring Programs which are conducted to build perspective on various leadership
themes using experiential learning techniques. The Company has both leadership depth and
breadth, with 85% of the senior management team having served the Company for
more than 10 years and with 94% of the senior management having done at least
3 job rotations during their tenure with us.

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We follow all statutory employment laws and have put in place a grievance redressal process
to address employee concerns and grievances, which are addressed in a time bound manner
as per the Company's Code of Conduct and Employee Service Rules. We also conduct Voice
of Employee (VOE) surveys and Town Halls at regular intervals to solicit employee feedback
and use these opportunities to deepen and enhance the employee value proposition.

Considering the current situation of COVID-19 outbreak, we have triggered our business
continuity plan with employee safety as paramount. As Insurance is an essential service, we
have kept some offices operational with minimal requisite staff and limited timing. Even with
this, more than 99% of our employees, including those from sales and operations, are working
from home. Accesses to required applications to manage day to day operations have been
provided through Virtual Private Network (VPN) along with essential information technology
support. Even after this, if for any reason, any employee is required to visit any of our offices,
it is only after necessary approvals and in compliance with existing protocols on social
distancing and sanitation.

C. Promoting responsible behaviour

The Company is committed to adopting the highest business, governance, ethical and legal
standards in the conduct of its operations. We promote responsible behaviour amongst our
employees through various measures and initiatives. The Company has a Code of Conduct
which defines the professional and ethical standards that employees & Directors need to
adhere to in compliance with all applicable laws, regulations and internal policies. All
employees confirm that they have read and understood the Code of Conduct annually
which includes aspects related to information and cyber security, whistle blowing
practices and anti-bribery/ corruption. All new employees are also required to confirm
that they have read and understood the Code after joining. The Company regularly conducts
awareness campaigns to familiarise employees with the various policies to ensure adherence
to the highest standards of ethical behaviour.

To administer and ensure compliance to the Code and applicable laws and regulations, the
Company has defined Employee Service Rules (ESR) that apply to all employees and
Whole-time Directors. The objective of the ESR is to define the terms and conditions of
appointment and service, the rules of conduct that employees need to adhere to at the
workplace and to lay down the procedure of grievance redressal and disciplinary action in the
event of a breach of the Code or any of the Company’s policies, statutory laws or regulations
as maybe applicable.
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ESG Report FY2020

The Company has a grievance redressal process for employees to ensure that all
grievances are suitably investigated and action is taken as per due process stipulated in the
ESR with the principle of natural justice being adhered to. The redressal process outlines the
method by which employees may register their grievances, the role of the Governance team,
the classification of grievances, the process of enquiry, disciplinary action, appeal mechanism
and reporting.

The Company also has a Grievance Redressal policy for the customers which has
been approved by the Board. The policy aims to ensure that all customers are treated
fairly at all times and all queries, requests and complaints raised by the customers are dealt
with courtesy, accuracy and are resolved in time. In line with regulations, we have Grievance
Redressal Officer (GRO), and the GRO details along with a brief about the channels for raising
any concern and grievance resolution process is published on the Company's website.

Our privacy policy is available on our website and is in accordance with Information
technology (Reasonable security practices and procedures and sensitive personal data or
information) Rules, 2011. The policy provides our commitment to privacy by taking
reasonable steps to protect the confidentiality of the Personal Information provided and
protect it from unauthorised access or unauthorised alteration, disclosure or destruction. We
have controls in place to ensure data is obtained through lawful and transparent means and
is also collected and processed only for the stated purpose. We also undertake employee
awareness programs covering the aspects related to data privacy such as Do's and Don’ts
in the areas of privacy & confidentiality, workplace responsibilities, password and email
security, information and cyber security. Employee onboarding and induction process
includes information and cyber security aspects.

As part of our Internal Audit framework we conduct audits across systems and processes. We
also seek external agencies help for any specific and technical audits. As part of our IT
Governance, system audits and vulnerability assessments are being conducted periodically.
We have requisite frameworks and processes in place to investigate incidents and take
corrective actions through our Information and cyber security policy and Fraud risk
management policy.

Our Whistle Blower policy is committed to adopt the highest business, governance, ethical
and legal standards. The policy covers all employees, including directors of the Company.
The policy encourages employees to report any breach of any law, statute or regulation within

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the Company. The Policy provides a secure mechanism for employees to raise concerns (with
an option to remain anonymous), which are appropriately and independently investigated,
addressed and reported to the Audit Committee of the Board. The policy also ensures
appropriate protection to the individuals raising the concerns. The policy complies with the
vigil mechanism as envisaged by the Companies Act, 2013 and the rules framed thereunder.
Details of this policy are proactively communicated to employees at regular intervals through
emails.

We have a Framework for managing Conflict of Interest that clarifies the principles and
the measures to manage potential conflicts of interest at the individual and the organisation
level, to conduct its activities in an ethical and transparent manner.

We have a Policy against Sexual Harassment at Workplace and we create awareness

amongst our employees periodically. We believe in providing a safe working environment at
the workplace. We have also complied with provisions mentioned in The Sexual Harassment
of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 including the one
relating to the constitution of Internal Complaints Committee.

We also have policy on Anti-Bribery & Anti-Corruption (ABC) and Operational Guidelines
for Acceptance of Gifts, Entertainment & Sponsored Travel. Our Code of Conduct restricts any
employee from making any payment to or for anyone for the purpose of obtaining or retaining
business or for obtaining any favorable action, including to any Government agency or its
representatives. While the ABC policy aspects are covered in employee induction, classroom
training is conducted for sensitive departments.

We also promote physical safety through regular communications on road safety, healthy
lifestyle including awareness on epidemic diseases, fire safety norms, and also conduct
periodic fire drills at our offices.

D. Providing long term capital

For sustainable development in the country, there is an immediate need for substantial
investment in critical sectors including infrastructure and housing. The Indian insurance
industry plays a key role in channelizing the household savings to provide long term
capital needed for infrastructure and housing, as also investing significantly in
Government bonds. As of March 31, 2020, our company has invested ~51% of its assets

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under management in the industries related to infrastructure/ housing sector and Government
bonds (` 300 billion and ` 481 billion respectively).

E. Inclusive Growth
Our vision is to build an enduring institution that serves the protection and long
term saving needs of customers with sensitivity. In line with this vision, our objective
is to proactively support meaningful socio-economic development in India and enable a larger
number of people to participate in and benefit from India’s economic progress. Our
Corporate Social Responsibility (CSR) policy is our commitment to provide resources
and support activities focused on enhancing economic and social development. Some of our
key focus areas for inclusive growth include Skill development and sustainable
livelihood, Health and education.

We generally contribute 75% of our CSR budget to ICICI foundation for Inclusive Growth (ICICI
Foundation) which is involved in CSR activities for the ICICI group and the balance is deployed
to directly undertake various initiatives to serve the underserved.

Key programs with ICICI Foundation include:

 Skill development for the organised market via ICICI Academy for Skills
(Academy)
The Academy offers, industry relevant and job oriented vocational training in 12 technical
and office skills. In FY2020, the Academy trained more than 25,000 youth. The Academy
has 27 fully operational centres and has tied up with over 1,300 industry partners to
provide employment opportunities to the trained youth. All the trainees have secured
employment on completion of their training. Cumulatively, over 145,400 youth have been
trained under this initiative.

 Skill development in rural markets via Rural Livelihood (RL)

Under this program, vocational training is provided based on the needs of the local
economy and the aspiration of the villagers. In FY2020, over 76,400 villagers were trained
under the RL. Around 1,000 villages across the country have been covered till date. ICICI
Foundation facilitates market linkage for the trainees, so that they can find a market for
their produce on a sustainable basis. Cumulatively, over 275,200 villagers have been
covered under this initiative.

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ESG Report FY2020

The Foundation also undertakes various community connect initiatives for creating awareness
amongst the target population on various socially relevant topics. In the light of the COVID-19
virus, ICICI Foundation has supported Government hospitals and public servants through
provision of ventilators and other consumables like sanitizers and masks. This support will be
further extended into FY2021 depending on the prevailing circumstances.

Some of the direct initiatives are as follows:

 Education and Skilling and sustainable livelihood:
 Skilling and securing sustainable livelihoods of local communities in
Himalayan rangelands
We have partnered with World Wide Fund for Nature (WWF)-India and Nature
Conservation Foundation (NCF) to support skilling and sustainable livelihood of the
local communities living in the Himalayan regions as well as manage the ecological
balance of the region. With WWF India, in Tsokar Leh in Ladakh, communities have
been trained on setting up homestays to host tourists. In FY2020, 4 households for
homestays have been trained and set up of another 16 homestays is in progress.
Further a production facility is being set up in Tsokar to produce pashmina shawls and
train the women on its production. Approximately, 90 women have been trained and
additional 160 women will be trained in the coming year.
Through program ‘Shen’ with NCF, the Company provides alternate livelihood
opportunities to local women in Spiti rangelands through handicraft training. Of the
plan to train 80 women on handicraft production, 104 women have been trained for
the same in the second year of the program, with market linkages facilitated for
economizing the produce.

 Holistic development of underprivileged children

The Company supports underprivileged/orphan/abandoned children living in child
care homes on interventions of education, skilling, vocational training, food & nutrition,
and health & hygiene, to provide a nurturing environment for their overall
development. The Company has partnered with SOS Children’s Villages of India (SOS
India) and Catalysts for Social Action (CSA) to provide support on the holistic
development of children. With SOS India, we support around 26 children living in two
children homes located in Raipur and Vishakhapatnam and with CSA support has been
extended to 129 children living in 3 child care homes of Madhya Pradesh. One of the
key components of the program with CSA is to provide support for the ‘Aftercare’

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initiative for children aged 18 and above, which aims to help them to get integrated
into the society through support on higher education, skilling and life skills.

 Supporting education through scholarship

The Company provides educational scholarships to 5 underprivileged students to
support them on their education. Of the 5 children, 3 students are pursuing school
education at Plenum School, Himachal Pradesh and the other 2 students are pursuing
their doctorate program in ‘Conservation Science’ through NCF.

 Personal Safety Program’ for children

To reduce the instances of child abuse and ensure child safety, the Company supports
Arpan for its ‘Personal Safety Program’. The program’s objective is to empower and
educate school children on the relevant knowledge, skills and attitude to prevent abuse
as well as seek adequate support proactively. Over 280 children have been trained in
FY2020 on the personal safety program.

 Healthcare:
 Cancer Care Support
As part of the Cancer care programme, we have partnered with Tata Memorial Hospital
(TMH), Mumbai and Tata Medical Centre (TMC), Kolkata, to support medical treatment
of underprivileged children diagnosed with the ailment. Over 340 patients have been
supported through the program.

 Medical treatment of underprivileged infants, children and youth

With Shrimad Rajchandra Sarvamangal Trust and Ekam Foundation (Mumbai), the
Company provides support on medical surgery, treatment for critically ill infants,
children. With Ekam, the program has been enhanced to support vocational equipment
for the differently abled youth. Cumulatively, 44 children/youth have been supported
through the program

 Environmental sustainability and ecological balance

In FY2019, the Company initiated a program with WWF-India to prevent retaliatory killing
of predators by supporting the underprivileged villagers financially for their loss of cattle.
The financial support extended aims to soften the blow of losing a critical livelihood
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option. The program is implemented across WWF-India’s priority tiger landscapes in India,
namely, Brahmaputra landscape (Assam), Western Ghats Nilgiris landscape (Tamil Nadu,
Kerala, and Karnataka) and Terai Arc landscape (Uttarakhand, Uttar Pradesh and Bihar).
The program has extended support to over 900 villagers in FY2020.

 Consumer Awareness and Education

The Company CSR initiative “Listen to your body” has been propagating the cause of
preventive measures to fight critical illnesses. The initiative encourages one to pay
attention to the little signs the body gives before a critical illness. This year the Company
launched a pan-India poll: Mission Healthy India. It focused on the customer
perception that a fit-looking body is a healthy body from within too. It also checked if
customers were watchful of their body’s signs and were financially prepared to deal with
a critical illness. More than 18,000 respondents participated in this online poll. The poll
results confirmed the customer perception. This necessitated the need to communicate
that a fit-looking body does not necessarily mean that the body is fit from within too. Hence
it is imperative to pay attention to the signs of the body. This message was disseminated
through a multimedia campaign including digital, press and radio. The campaign reached
over 51 million customers. 3,900 registrations for discounted health check–ups were
received. To know more, visit www.listentoyourbody.in

The significance of having an electronic Insurance Account (eIA) was also promoted.

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Governance
We are building upon our organization’s foundation over these nineteen years by continually
enhancing the structures, processes and controls in place that support and promote
accountability, transparency and ethical behaviour. We remain steadfast in our commitment
to create and reinforce a strong and healthy culture in which all employees feel respected and
empowered to do what is right for our customers, communities and shareholders. Our Board
of Directors and senior management take their responsibilities very seriously to set the tone
at the top and to provide effective leadership and rigorous oversight. We recognise ethics and
governance to be of paramount importance. Through the policies, processes and practices,
we have built a strong governance framework. We strongly believe that success and
sustainable growth of any organization depends on good governance.

The Company featured for the second consecutive year among the top three of the 50
companies that got listed between 2015 and 2017, based on its scores on corporate
governance. The award was based on the scorecard on corporate governance, developed
jointly by International Finance Corporation (IFC), BSE Limited and Institutional Investor
Advisory Services (IiAS).

A. Governance structure
A sound corporate governance mechanism is critical to retain and enhance stakeholders’
trust. The Company’s corporate governance philosophy is based on an effective
independent Board and the separation of the Board’s supervisory role from the
executive management. The Board primarily concentrates on the direction, control and
governance of the Company, through various policies and processes. With this perspective
in mind it has shaped the level of risk adoption, standards of business conduct and ethical
behaviour for the company.

A.1. Board composition and Independent Directors

The Company’s Board is constituted in compliance with the Companies Act, 2013 (CA2013),
in accordance with relevant Securities and Exchange Board of India (SEBI) Regulations and
Insurance Regulatory and Development Authority of India (IRDAI) Corporate Governance
Guidelines, 2016. Additionally, the IRDAI has prescribed for assessing certain parameters for
‘fit and proper’, which the directors confirm to – at the time of appointment to serve as director
and annually in order to continue serving as a director. The IRDAI and SEBI also expect the
Board to prescribe the particular expertise or skills they expect the directors to possess and

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that the same is required to be disclosed in the annual report of the Company. We are also
required to submit detailed information about the directors, on their appointment, to the
IRDAI.

The Board currently comprises five independent Directors, three non-executive Directors, two
of whom are nominated by ICICI Bank Limited and one by Prudential Corporation Holdings
Limited, the Managing Director & CEO and the Deputy Managing Director. Except the
Managing Director & CEO and the Deputy Managing Director, all other Directors including the
Chairman of the Board are non-executive Directors. The Chairman of the Company is an
Independent Director.

The Company recognises that a diverse Board with different thoughts, perspectives,
knowledge, skill, industry experience, age and gender will ensure that the Company retains
its competitive advantage. The Board Nomination & Remuneration Committee recommends
the appointment of Director(s) to the Board of the Company based on the board approved
policy on board diversity and criteria for appointment of Directors. The experience
and expertise along with the qualifications of our independent Directors have been briefly
articulated in the Annexure to this document. There is an appropriate mix of executive, non-
executive and independent Directors. None of the Directors are related to any other Director
or employee of the Company. The Board functions either as a full Board or through various
Committees constituted to oversee specific areas.

Independent Directors are those Directors who have affirmatively determined that they have
no material relationship with the Company. All directors disclose to the Company and confirm
annually about the entities where they are directors/partners or interested, list of all his
entities/firms where the Directors or his/her relatives are directors/partners or are interested.
Each director is required to notify the Board of any change in circumstances or transactions
which could conflict their interests or that may question his or her independence.

A.2. Board Independence

The Board is responsible for corporate strategy and other responsibilities as laid down under
the Companies Act, 2013, SEBI Regulations and by IRDAI under the Corporate Governance
guidelines. The Managing Director & CEO and the Deputy Managing Director oversee
implementation of the strategy, achievement of the business plan and day-to-day operations.
Each person serving as a director must devote the time and attention necessary to fulfill the
obligations of a director. Key obligations include appropriate attendance at the meetings and
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appropriate review of preparatory material. Directors are also expected to attend the annual
general meeting of the Company.

In carrying out their duties, the Board has delegated some of its responsibilities to various
Committees for effective operations. The Board Committees, generally comprises a
majority of independent/non-executive Directors and are currently chaired by
independent Directors. There is a detailed and transparent information flow from the senior
management, through well documented agenda notes and appropriate systems, to the
Committees of the Board or the Board, to effectively monitor the operations of the Company.
The company has various Board committees for smooth functioning of the organization which
are Audit committee, Risk Management committee, Stakeholders’ Relationship committee,
Investment committee, Nomination and Remuneration committee, Corporate Social
Responsibility committee, Customer service and Policyholders’ Protection committee,
Strategy committee and With Profits committee.

A.3. Board evaluation

The Company has in place an evaluation framework for evaluation of the Directors,
Chairman, the Board and its Committees. The performance of the Board is assessed on
select parameters relating to roles, responsibilities and obligations of the Board and
functioning of the Committees including assessing the quality, quantity and timeliness of the
flow of information between the management and the Board that is necessary for the Board
to effectively and reasonably perform their duties.
The evaluation criteria for the Directors is based on their participation and contribution to and
understanding of the areas which are relevant to them in their capacity as members of the
Board. The evaluation criteria for the Chairperson of the Board, besides the general criteria
adopted for assessment of all Directors, focuses incrementally on leadership abilities,
effective management of meetings and preservation of interest of stakeholders. The
evaluation criteria for the Committees is based on effective discharge of its terms of reference
and its contribution to the functioning of the Board. The Chairman of the Board Nomination &
Remuneration Committee anchors the assessment of performance and the Board self-
evaluation discussion.

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ESG Report FY2020

B. Compensation Policy and Practices

B.1. Compensation Structure
The Company has a Board approved Policy on Compensation & Benefits for the
Managing Director & CEO, Other Whole-time Directors, non-executive Directors, Key
Management Person (KMP), Senior Management Personnel (SMP) and other employees
(“Compensation Policy”), which is available on the website of the Company.

The compensation structure is designed to meet the Company’s objective of attracting,

rewarding and retaining talent; and comprises a holistic composition of fixed pay (including
allowances), variable pay, non-cash benefits, post-retirement benefits and employee stock
options.

The extent of variable pay for individual employees is linked to individual performance for
sales frontline employees and to individual and organisation performance for non-sales
frontline employees and employees in the management cadre.

Non-cash benefits are provided to employees to supplement rewards and meet the non-
financial and other requirements.

Employees retiring from the services of the Company are eligible for retirement benefits as
identified in the Compensation Policy.

The Company’s employee stock option scheme is designed to encourage institution building
among employees, which enhances employee motivation, enables employees to participate
in the long term growth and financial success of the Company and acts as a retention
mechanism.

B.2. Compensation Governance

The Company follows prudent compensation practices under the guidance of the Board and
the Board Nominations & Remuneration Committee (BNRC). The Company’s approach to
review of performance and compensation is based on the ethos of meritocracy and fairness
within the framework of prudent risk management.

The BNRC reviews and recommends to the Board the compensation of whole-time directors,
which is aligned to both financial and non-financial indicators of performance,
including risk management parameters such as persistency, expenses of management,

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ESG Report FY2020

solvency, etc., and parameters with customer focus such as claim settlement and grievance
redressal and in compliance with IRDAI regulations. The deferred part of the variable pay
(performance bonus) for whole-time Directors is subject to malus, under which, the Company
will prevent vesting of all or part of the variable pay in the event of an enquiry determining
gross negligence or integrity breach. Additionally, the whole-time Directors are also subject
to claw back arrangements, pursuant to which the Director concurs to return, in case asked
for, the previously paid variable pay to the Company in the event of an enquiry determining
gross negligence or integrity breach, taking into account relevant regulatory stipulations. Acts
of gross negligence and integrity breach are covered under the purview of the Company’s
Compensation Policy, whereas errors of judgment are not construed to be breaches.

Performance bonus is payable to employees based on the performance of the Company and
individual performance. The decision relating to remuneration of the Managing Director &
CEO and other Whole-time Directors is reviewed & approved by the BNRC and the Board and
in compliance with IRDAI regulations.

C. Compliance framework
The Company is a registered life insurance company and regulated by the Insurance
Regulatory and Development Authority of India (IRDAI or Authority). The Authority has been
pivotal and guiding force behind the resilient and well developed insurance sector.
Further, the Company has formulated various internal policies/procedures and an employee
Code of Conduct, which govern the day-to-day activities to ensure compliance. The
compliance function disseminates the information regarding relevant laws, regulations and
circulars related to insurance and anti-money laundering to various functions. It also serves
as a reference point for seeking clarifications on applicable insurance laws, regulations and
circulars issued by the Regulator. The Compliance Policy, serves as the guiding force in
building the compliance culture within the organisation.

The Company has in place a policy on anti-money laundering and countering terrorist
financing (AML), through which it has put in place procedures to combat money laundering
and terrorist financing. Through this policy the Company identifies and monitors customer
transactions and makes necessary reporting to the Financial Intelligence Unit - India.

The compliance team also monitors the adequacy of the compliance framework across the
Company in conjunction with the Internal Audit function through an integrated risk based
audit plan. Key issues observed as part of this monitoring are reported to the Board Audit
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ESG Report FY2020

Committee, and implementation of recommendations is actively monitored. Additionally a

quarterly compliance certificate signed by the Managing Director & CEO, based on the
confirmations from respective functional heads, is placed before the Board Audit Committee
and the Board of directors. The heads of control functions like the Compliance and Internal
Audit, report to the Board Audit Committee.

D. Risk Management
We recognise that risk is an integral element of our business and managed acceptance of risk
is essential for the generation of shareholder value. We have a risk management structure
which consists of the Board, the Board Risk Management Committee (BRMC) and the
Executive Risk Committee (ERC) which is supported by appropriate sub-committees. The risks
faced by the Company are classified into market, credit, liquidity, insurance and operational
risks, which is managed through its Board Risk Policy covering aspects of financial risk
management encompassing the market risk, credit risk, liquidity risk and insurance risk and
operational risk management. In addition to the Board Risk Policy, we also have Board
approved Reinsurance Policy, Underwriting Policy, Outsourcing Policy, Fraud Risk
Management Policy, and Information & Cyber Security Policy. Apart from the above
mentioned risks, the Company also focuses on two important risk from the business point of
view which are reputation risk and customer risk. The Company reviews reputation risk
by monitoring communication pertaining to the company emanating in the formal
media/social media channels as well as monitors the engagement with key stakeholders like
customers, regulator, legal fora. Trustworthiness amongst customers is monitored through
various quantitative trends to ensure subjectivity does not creep in.

The BRMC reviews the asset liability management (ALM), to monitor all risks across the
various lines of business of the Company and establish appropriate systems to mitigate such
risks. The BRMC reviews the risk appetite and risk profile of the Company in addition to
overseeing the effective operation of the risk management system and advises the Board on
key risk issues. This includes monitoring and reviewing the aggregated view of the risk profile
of the Company in addition to the individual risk profiles, reporting to the Board details of the
risk exposures and the actions taken to manage the exposures, set the risk tolerance limits
and assess the cost and benefits associated with risk exposure, review compliance with the
regulatory guidelines on Insurance Fraud Monitoring Framework.

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ESG Report FY2020

Our policy on Outsourcing of our activities includes operating framework for the due-
diligence and vendor empanelment. We have constituted an Outsourcing Committee to
oversee the compliance to the policy and IRDAI regulations.

We have Business Continuity Management (BCM) framework to ensure resilience and

continuity of key products and services at minimum acceptable level to achieve business-as
usual presence in the market place and safety of human resources. The Company has been
accredited with ISO 22301:2012 certification for the business continuity
management systems.

Almost every country was impacted by the outbreak of COVID-19 pandemic. An

unprecedented situation when the BCM frameworks of all companies and disaster
management teams were put to test. During such times we took measures to ensure our
employees and customers are least impacted and we are able to serve or take care of them.
With the competent IT teams, apart from soliciting new business dependent on face to face
meetings, almost all our operations were managed from home. Digital service enablers such
as SMS, e-mail, website, application, social media WhatsApp and similar such avenues helped
us services our customer. Further, the Virtual Private Network (VPN) along with essential IT
support enabled all our employees to work from home. While the Company took these steps
to restore continuity of business, we also updated the Board regularly about the impact to the
Company on various parameters, including business, solvency, etc.

Our information and cyber security framework ensures that all information assets are
safeguarded by establishing comprehensive management processes throughout the
organisation and business information is protected adequately through appropriate controls
and proactive measures.

Our Privacy policy is available on our website and is in accordance with Information
technology (Reasonable security practices and procedures and sensitive personal data or
information) Rules, 2011. The policy provides our commitment to privacy by taking
reasonable steps to protect the confidentiality of the Personal Information provided and
protect it from unauthorised access or unauthorised alteration, disclosure or destruction. We
have controls in place to ensure data is obtained through lawful and transparent means and
is also collected and processed only for the stated purpose. We also undertake employee
awareness program covering the aspects related to data privacy such as Do's and Dont's in
the areas of privacy & confidentiality, workplace responsibilities, password and email security,

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ESG Report FY2020

information and cyber security. Employee onboarding and induction process includes
information and cyber security aspects.

As part of our Risk-based Internal Audit framework, the Internal Audit team, conducts audits
across systems and processes of the Company. If necessary, they also seek specialist external
agencies’ assistance for any specific or technical audits. As part of our IT governance
framework, system audits and vulnerability assessments are being conducted periodically.
We have requisite framework and processes in place to investigate incidents and take
corrective actions through our Information and cyber security policy and Fraud risk
management policy. On Data Request Management, we have defined responsibilities and
processes to evaluate and respond to law enforcement or Government agencies. The data
submission is done in accordance with the applicable rules and regulations.

E. Investment framework
We recognise our responsibility, as insurance companies to protect the interests of the
policyholders, which demands that we have in place good governance practices for sound
long term investment in addition to the robust risk management framework. Through the
board approved Investment Policy the Company has laid out an operational framework for
its investment. This policy and an operational framework, inter alia, encompass aspects
concerning liquidity for smooth operations, compliance with prudential regulatory norms on
investments, risk management or mitigation strategies to ensure commensurate yield on
investments and above all protection of policyholders’ funds.

In furtherance to the above as an investor in various securities and an entity whose securities
are listed the Company also has a Code of Conduct to regulate, monitor and report
trades in Securities by Designated Employees (Insider Trading Code), which
prescribed norms and restrictions in undertaking personal investment by select employees,
considering the Company invests its policyholders funds.

Additionally, as an insurance company, we are a significant institutional investor in listed

companies, securities of which are held by the Company primarily as custodians of our
policyholders. Therefore, we play an active role in the general meetings of investee
companies and engage with the managements of these investee companies at a greater level
to improve their governance, in accordance with our Stewardship Code, the compliance of
which along with the Stewardship Code itself, is available on our website.

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ESG Report FY2020

F. Ethics and Policies

We understand that our governance processes must ensure that the resources are utilised in
a manner that meets stakeholders' aspirations and societal expectations. There are policies
and frameworks in place for managing and monitoring the company’s risk management
framework as well as ethical conduct across all its engagement.
The Company’s Code of Conduct for all employees, including directors, aims at ensuring high
professional and ethical standards of conduct, integrity in all aspects of activities and
compliance with all applicable laws, regulations and internal policies. The Code of Conduct
covers various aspects, including,
 Requirements prescribed in the Company’s Board approved Framework for Managing
Conflict of Interest which also alludes to adherence of the Company’s Insider Trading
Code, which not only prescribes restrictions for persons investing the funds of the
policyholders, but also those select persons who could have unpublished and price
sensitive information about the Company, considering the Company’s shares are listed on
stock exchanges.
 Operational Guidelines for Acceptance of Gifts, Entertainment and Sponsored
travels.

Further, the Company endeavours to ensure a safe, secure and congenial work environment,
so that employees can deliver their best. We are an equal opportunity employer and through
all our policies, seek to ensure that no preferential or discriminatory treatment is meted out
to any employee. The Company’s Policy against Sexual Harassment at Workplace,
aims to provide protection against sexual harassment of women at the workplace and
articulates the procedure to be adopted for redressal of complaints.

We have a policy on Anti-Bribery & Anti-Corruption (ABC) and Operational Guidelines

for Acceptance of Gifts Entertainment & Sponsored travel. Our Code of Conduct
restricts any employee to make any payment to or for anyone for the purpose of obtaining or
retaining business or for obtaining any favorable action, including to any Government agency
or its representatives. While the ABC policy aspects are covered in employee induction,
classroom training is conducted for sensitive departments.

Our Whistle Blower policy is committed to adopt the highest business, governance, ethical
and legal standards. The policy covers all employees, including directors of the Company.
The policy encourages employees to report any breach of any law, statute or regulation within
the Company. The Policy provides a secure mechanism for employees to raise concerns (with
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ESG Report FY2020

an option to remain anonymous), which are appropriately and independently investigated,

addressed and reported to the Audit Committee of the Board. The policy also ensures
appropriate protection to the individuals raising the concerns. A summary of the
Whistleblower policy is also available on the website of the Company.

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ESG Report FY2020

Annexure

Profile of the Independent Directors on the Board of the Company:

Name of the Director Qualification Key particulars

Mr. M. S. B. E. (Mechanical) Former Chairman of Indian Oil
Ramachandran – Corporation Limited, Chennai
Chairman Petroleum Corporation Limited,
IBP Company Limited and
Bongaigaon Refineries &
Petrochemicals Limited.
Mr. Dilip Karnik B. Sc. and LLB Former Judge of High Court of
Bombay. Currently an advocate and
arbitrator.
Mr. R. K. Nair MSc, LLB, MBA Financial Former Executive Director at
Management, Diploma in Securities and Exchange Board of
Securities law India (SEBI) and former Member
(Finance and Investment) Insurance
Regulatory and Development
Authority of India (IRDAI).
Mr. Dileep Choksi B.Com, C.A., LLB, Cost Practices taxation since 41 years,
Accountant former Joint Managing
Partner, National Leader - Tax and
Financial Advisory Services of
Deloitte, India.
Ms. Vibha Paul Rishi MBA in Marketing, Leadership roles with PepsiCo for
Honors in Economics 17 years, one of the founding team
members of PepsiCo India, member
of international marketing team of
PepsiCo’s London; was also
associated with Tata Administrative
Service as of the core start-up team
of Titan Watches, etc.

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