Sustainable Cathay : What if We Could

When facing the risks and opportunities brought by extreme climate conditions, an aging population, and the rise of FinTech, I encourage our employees to bear in mind the spirit of "What if We Could," and I hope that everyone will open their minds and think outside the box: "If we could do something different, what would we do? If we are willing to change the status quo and challenge ourselves, what would the future be like?" Cathay FHC fully supports the concept of sustainability from the top down starting with our Board of Directors. We have a strong sense of responsibility that drives us to contribute to society and the environment. We strive to utilize our core competencies in financial services to benefit all our stakeholders.


Exerting Every Effort to Make Progress in Both EPS and CS

Cathay FHC completed the election of our 7th Board of Directors in 2019. In order to increase the diversity and independence of our board, we added a woman as an independent director and increased the total number of independent directors to four. Our business performance set a new record and our total assets surpassed NT$10 trillion; our net profit of NT$63.81 billion was a record high. We were selected as a constituent stock of the DJSI World Index for the second consecutive year and the DJSI Emerging Markets Index for the fifth consecutive year, and were rated by the CDP at the leadership level (A-), the highest among financial institutions in Taiwan.

We upgraded our organization structure to generate greater synergy from the group's promotion of sustainability. Specifically, Cathay FHC established a dedicated Corporate Sustainability (CS) Office directly reporting to the President of Cathay FHC, and each of our subsidiaries have dedicated departments promoting sustainability. We believe this further strengthens cross-subsidiary communication and integration of sustainability-related affairs.


Creating a Win-Win Situation for the Environment and Economy for the Next Generation

Cathay FHC has taken the lead when facing climate change. Our Chief Risk Officer leads the Task Force on Climate-Related Financial Disclosures (TCFD) in incorporating climate risk in the group's risk management. Our Chief Investment Officer leads the development of responsible investments. Cathay Life is the first in the industry to verify the carbon footprint of listed equity assets, corporate bonds, and non-corporate bonds, so as to manage the climate risk of investment portfolios. Furthermore, the group is actively participating in international climate change engagement actions, and is the only financial institution in Taiwan to participate in the CDP's Non-Disclosure Campaign (NDC) for three consecutive years. So far the NDC has successfully made 16 Taiwan enterprises disclose their carbon emissions. As a result, in 2019 Taiwan ranked 9th worldwide in terms of its NDC engagement success rate. We have organized a Climate Change Forum for three consecutive years, and co-organized the AIGCC with the Taiwan Stock Exchange Corporation in 2019, which was attended by over half of the companies in the FTSE TWSE Taiwan 50 Index.

Cathay FHC's subsidiaries lead the industry in investing in the low carbon economy under the leadership of the President of Cathay FHC. Cathay United Bank is the first bank in Taiwan to provide solar power station financing and offshore wind power financing, and also served as the arranger of the syndicated loan for the largest offshore wind farm in the Asia-Pacific in 2019. Cathay United Bank also announced that it will stop providing loans to all coal-fired power plants. Cathay Life is actively promoting mobile insurance services and utilization by customers has reached 96%. All of Cathay Life’s products have obtained carbon footprint certification and have a carbon footprint of 3.37 Kg CO2e, the best in Taiwan's life insurance industry. Cathay Life is the first insurance company in Taiwan to obtain the carbon reduction label. Cathay Century Insurance also established rules on carbon footprint product categories for the property insurance industry in 2019, and became the first property insurance company to obtain the Environmental Protection Administration's carbon label.


Thoughtful Services Make Life Better

Corporations gain greater social influence as they grow larger. Cathay Life was the first in the industry to offer small amount whole life insurance in response to the aging population, allowing the elderly or people with a limited budget to also have insurance coverage. As of the end of 2019, Cathay Life provided approximately 200,000 policyholders with basic economic security, the highest number in the industry. Furthermore, we hope that everyone can stay healthy in their old age, and so in 2018 we developed the "Cathay Walker" platform to encourage policyholders to get into the habit of walking 7,500 steps every day by providing incentives for reaching weekly and monthly goals. We believe this habit will lower the occurrence of illness among policyholders. The number of steps walked by participants by the end of 2019 was enough to walk to the moon and back 142.6 times. After the financial crisis, countries around the world became more concerned about financial consumer protection and looked to rebuild the confidence of consumers in the financial service industry. Cathay Life was the first in the industry to establish a Treating Customers Fairly Promotional Committee, and Cathay United Bank established a Consumer Dispute Review Committee. In the first Financial Industry Treating Customers Fairly Evaluation announced by the Financial Supervisory Commission in 2019, Cathay Life and Cathay United Bank both won first place, and Cathay FHC became the only financial holdings company to have two subsidiaries win first place.


Embracing Digital Transformation Towards the Future

We actively embrace the changes arising from the digital era and have become more agile in every aspect. Cathay FHC established the Digital, Data & Technology Center (DDT) in 2016 to drive the group's digital transformation. In 2019, we used our "reward point donation function" on our My Rewards platform to work with Teach For Taiwan (TFT) in crowdfunding to support education in rural areas. Furthermore, we integrated the resources of Cathay Life and hospitals, and worked together with the US-based insurance company Clover Health in developing a chronic illness risk prediction model. We launched the "Cathay At Your Side Health Project" on this basis, using AI and big data analytics to screen policyholders with chronic illnesses and high health risks, and work together with healthcare institutions to actively assist policy holders in managing their health. As a result, we seek to transform the role of insurance companies and become a partner in protecting the health of our policyholders.

Cathay FHC will soon be celebrating its 60th anniversary. It is at this crucial time that we use the spirit of "What if We Could" to bring sustainability into our daily operations and to make breakthroughs. We hope to become a company that allows employees to fully utilize their talents, is trusted by customers, provides investors with long-term returns, and is respected by society.



Hong-Tu Tsai



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