Sustainable Cathay Contributing to Community

More than half of all citizens in Taiwan are Cathay Financial Holding's customers. As a result, we believe that we bear a great responsibility and can exert a positive effect on society. It is on this basis that we adopted international sustainable finance frameworks such as the Principles for Sustainable Insurance (PSI), Equator Principles (EPs), and Principles for Responsible Investment (PRI) as management guidelines to thoroughly incorporate environmental, social and governance (ESG) criteria into our business operations. Furthermore, Cathay United Bank has made a commitment to comply with the Principles for Responsible Banking (PRB) and will continue to take strides towards achieving the highest standards.


Pursuing Value while Reinforcing Corporate Governance

Cathay FHC achieved strong business performance in 2018 with consolidated after-tax profit reaching NT$51.8 billion and Earnings Per Share of NT$3.95. We also gained recognition for our implementation of corporate sustainability initiatives and were selected as a constituent stock of DJSI Emerging Markets, becoming the first insurance company in Taiwan to be selected as a DJSI World constituent stock.

We continued to improve our corporate governance based on our core values of integrity, accountability, and innovation in 2018. Specific measures include establishing the group-level whistleblowing program, appointing Corporate Governance Officer, and establishing Regulations Governing Evaluation of Functional Committee. We were recognized for these corporate governance measures and ranked in the top 5% of the 4th Corporate Governance Evaluation conducted by the Taiwan Stock Exchange. We also gained the highest “Outstanding” certification in the Corporate Governance System Assessment CG6011 conducted by the Taiwan Corporate Governance Association.


Promoting Digital Innovation and a Data Driven Culture

Cathay Financial Holdings is actively promoting digital innovation, building a solid digital, data, and technology foundation, and creating an excellent customer-centric digital experience as we strive to become a leader in Asia’s FinTech ecosystem. We have created a data driven culture that focuses on improving customer experience, improving business performance, assisting with business decision-making, developing new products and business models, and effectively managing risks. In particular, we will continue to explore the latest technologies and algorithms for improving the Group’s overall performance.

Cathay Robo, which integrates the resources of Cathay Financial Holdings and its subsidiaries, was formally launched in 2018, providing customers with technology-based financial management services based on the concept of human-machine collaboration and helping customers achieve their financial goals. Cathay United Bank and Cathay Life Insurance launched the AI-enabled customer service chatbot “Alpha” in 2018 to provide faster and timelier responses to user questions using the latest technology. “Alpha” has achieved levels of satisfaction similar or higher than that of human customer service personnel. Furthermore, we used agile development methods to accelerate the development of our MyRewards app and improve the customer experience, including optimizing the login process and reclassifying products. The app has received positive feedback from customers and was further used to carry out a “bonus point donation” activity, which was held in collaboration with social enterprises and NGOs. Through this activity, customers can donate their credit card bonus points to a charity, thereby combining digital technology and human compassion.


Emphasizing Risk Management and Responding to Climate Change

Cathay Financial Holdings has included global emerging risks, such as financial technologies, extreme weather, and drastic changes in demographics, into its risk management. We review and establish responses to these risks on an annual basis. To combat climate change, in particular, we have developed green finance by incorporating the concepts of “investment,” “finance,” and “insurance” with “environmental protection and low-carbon.” We were also one of the first to adopt the Task Force on Climate-related Financial Disclosures (TCFD) framework to disclose the financial impact of climate change on the company as well as our future response strategies and goals.

We are an active participant in the Climate Change Initiative, and we exerted our influence by continuing to host the Cathay Financial Holdings Climate Change Forum in 2018. We invited the CDP, an internationally renowned climate change organization, and PwC to jointly discuss response measures to climate change with Taiwanese enterprises we have invested in, aiming to drive Taiwan's industries to keep pace with international benchmark enterprises.


Utilizing our Core Competencies to Lay the Groundwork for Citizens’ Happiness

Cathay Financial Holdings hopes to lay the groundwork for citizens’ happiness, and we are thus dedicated to utilizing our core competencies in finance and insurance to create a virtuous cycle. We began organizing the Weight Loss Contest when we found that "obesity" is a common health risk for our employees, and donated NT$100 for every 1 kg of weight lost by employees. The funds were used to construct solar panels, and the income from selling the electricity generated by the solar panels is donated to an NGO that provides services to the elderly. We also began accepting employee family members and policy holders into the contest in 2018 to engage even more stakeholders while contributing to environmental and social sustainability.

Cathay Life Insurance provided student group insurance in 2017 and 2018, offering students enrolled in high (vocational) school and under all around Taiwan with adequate insurance protection. Cathay Life Insurance also worked with the K-12 Education Administration in implementing the Sustainable Campus Project, which instills students with important concepts of sustainability while they are still in school. Cathay United Bank Cambodia began working with local payment service provider Ly Hour in 2018, helping local factory workers withdraw their salaries at offline locations of Ly Hour. Payroll accounts are used as a type of collateral to lower the threshold for local residents to apply for a credit loan, thus increasing the availability of financial services to local residents. This is an example of using FinTech to achieve inclusive finance.

Looking towards the future, Cathay Financial Holdings will continue to pursue the building of a better society with the vision of becoming a leading financial institution in the Asia-Pacific region, and will strive to achieve the mutual prosperity of enterprises, society, and the environment. We will create a win-win situation for all stakeholders and continue to become a force for social stability and improvement.


Chairman Hong-Tu Tsai


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