Non-Financial Report 2022

About this report

This report was prepared in accordance with the Austrian Sustainability and Diversity Improvement Act (Directive 2014/95/EU) and covers those sustainability concerns that also reflect our material sustainability topics.

The concepts described in this report correspond to the content of the 2022 Sustainability Report, which was prepared in accordance with the Global Reporting Initiative (GRI) standards. The report will be published together with the Group Report on 13 April 2023. This non-financial report, which forms part of our 2022 Group Report, covers the 2022 financial year and, thus, the period running from 1 January 2022 to 31 December 2022. Where appropriate to do so, we compare our progress with the targets communicated the previous year and give an insight into our targets for next year.

UNIQA Insurance Group AG decided to prepare the non-­ financial statement as a separate non-financial report (option in accordance with Section 267a(6) and Section 243b(6) of the Austrian Commercial Code) and summarise the non-­financial report for UNIQA Insurance Group AG and the consolidated non-financial report for the Group. The basis of consolidation is disclosed under "Other disclosures" within the explanatory notes to the 2022 consolidated financial statements.

Since UNIQA Insurance Group AG (headquartered in Vienna) does not directly operate the insurance business either domestically or abroad, measures to address environmental, social and employee concerns along with observing human rights, anti-corruption and bribery issues are drawn up at Group level and subsequently implemented in the operating Group companies. Accordingly, as regards the separate financial statements, no other modified or restricted concept is being ­pursued in any other way.

As in previous years, PwC Wirtschaftsprüfung GmbH Wirt­ schaftsprüfungsgesellschaft was commissioned to undertake the limited assurance audit in 2022. Further details on the audit outcomes can be found in the auditor's opinion for the non-financial reporting. References to sources outside of the Group Report are made exclusively to the 2022 ­Sustainability Report, which is also subject to a limited assurance audit.

Company description

The UNIQA Group is one of the leading insurance groups in its two core markets of Austria and Central and EasteEurope (CEE). We offer our customers property and casualty insurance as well as life and health insurance products. As a financial services provider, our aim is to consider sustainability-­related risks and take opportunities arising from ESG trends (ESG - Environment, Social, Governance). The next section illustrates our management approach. Further information on our business model can be found in the "Strategy" section of the Group Report.

Sustainability strategy and ESG integration

We carefully address those conditions that we consider conducive to a better life. To do this, we enter into dialogue with stakeholders, experts and the public, share our own ­approaches and play an active role. Sustainability is therefore a key part of how we act. Thanks to our clear position on this matter, we can encourage understanding and support from all our stakeholders, namely employees, customers, ­investors and the public.

Our sustainability strategy is designed to be holistic. It ties our economic ambitions to a clear environmental and social commitment to protecting the environment and social re- sponsibility.

Materiality concept

UNIQA's success is built on the fact that we understand how the world is changing and how we need to be able to respond to this. Our last sustainability analysis took place in 2021 and identified those ESG issues deemed by our stakeholders and our business to be the most important. We also ­conducted a new stakeholder identification process, including the associated weighting. We defined four stakeholder groups who are directly affected by our business activities, namely customers, employees, investors and the public.

The materiality analysis forms the basis for our sustainability approach, sustainability strategy and our reporting. The four most important material topics from a stakeholder perspective in 2021 were cyberrisk, digital service and customer focus, advice and prevention for natural disasters as well as training and education of employees.

The five most important topics from UNIQA's perspective were the health and safety of employees, data security and processing, training and education, commitment to the environment as well as diversity and equal opportunity.

More in-depth information on the process and the results from the materiality analysis can be found in the 2022 Sustainability Report (section 2).

Sustainability strategy

Our sustainability strategy was approved in October 2020 and is based on five pillars in addition to our "People and culture" base:

• ESG investment policy
• ESG product policy
• Sustainable operational management
• Transparent reporting
• Stakeholder management

Our fundamental objective in 2022 was to put this sustainability strategy into operation and embed it within the company by using milestone schedules. Our operational focus is on pillars 1 to 3, supported by transparent reporting (pil- lar 4) and stakeholder engagement (pillar 5). There is also particular focus on our climate strategy, which we pursue in ­accordance with recognised regulations (SBTi - Science Based Targets Initiative) and as part of the memberships we have joined (NZAOA, GFA).

Accession to the Green Finance Alliance (GFA)

UNIQA has been a member of the Green Finance Alliance (GFA) since April 2022. This is an initiative implemented by the Ministry for Climate Action for forward-thinking financial companies. Members of the Green Finance Alliance play a leading role in protecting the climate and demonstrate how protecting the climate and sustainable management are compatible. Their specific ambitions include, among others, clear exclusion criteria and phased exit strategies for investments and insurance business related to coal, oil and gas- based value chains. The specific pursuit of the 1.5 degrees Celsius target set under the Paris Agreement is also aligned with established rules for determining the initial carbon footprint (PCAF) and identifying and pursuing science-based CO2 reduction­ targets and interim targets (SBTi). In order to put this into practice, we set up corresponding projects in the area of investments and operational management at the end of 2022. With regard to the property insurance business, corresponding regulations on (indirect) insurance-related emissions were published for the first time in 2022, with internal project planning also undertaken for this purpose.

ESG integration

Our key body for sustainability agendas is the Group ESG Committee, which was formed in 2021. It consists of members of the Management Board of UNIQA Insurance Group AG and heads of key departments, meets on a quarterly basis and provides the Management Board with recommendations to help them make decisions on ESG matters. The Committee is responsible for integrating and enhancing ESG factors in insurance, investment and asset management activities, along with the strategic definition and continuous development of ESG-related ambitions for the entire UNIQA Group. Its tasks also include drafting and introducing appropriate guidelines.

Other responsibilities include supervising the implementation of the Group-wide climate strategy and environmental management, as well as supporting the implementation of strategic initiatives and projects in the subsidiaries.

The Sustainability Management team is part of the Sustain- ability, Ethics and Public Affairs division, which was newly created in early 2020. It is responsible for operationally managing the integration of ESG factors into the UNIQA Group's core business segments. Proposals regarding ESG integration within the company are drawn up and discussed in ESG working groups, which bring together ESG specialists and/ or representatives of various operational units and depart- ments.

Sustainability risks

With a strong risk and sustainability culture, UNIQA has set the stage to ensure our business can be successful and profitable in the long term. In accordance with the latest amendment to the delegated act of the Solvency II Directive (2009/138/EC), sustainability risks must be taken into ­account in the risk management system. This Directive entered into force on 2 August 2022. Our objective is to develop an appropriate and consistent approach to considering sustainability risks, apply this approach at all times and ensure it is updated regularly. Accordingly, we analyse climate-­ related risks and opportunities as part of our risk management (when conducting our internal assessment of the risk and financial situation). The main climate-related risks relevant to UNIQA are those arising from increasing levels of extreme weather, which raise the loss ratio but also amplify the default risk.

The results of the sustainability risk identification and assessment­ process are intended to help support management decisions as part of UNIQA's product design or investment strategy.

The implementation of sustainability risks in UNIQA's risk management processes was a key priority last year. Over the past twelve months, risk management focused heavily on identifying sustainability risks. As a result, one of the main topics we dealt with in 2022 was measuring long-term climate scenarios and how they will develop. Given the magnitude and complexity of risk profiles among Group subsidi- aries, UNIQA differentiated between quantitative and qualitative approaches when measuring these climate risks. We also focused on the integration of sustainability risks in our investment reporting across the Company and monitoring this work. The issue of sustainability was also incorporated into our outsourcing risk management processes. The objective of the risk management approach is to identify potential risks at an early stage so as to be able to react to them in a timely fashion. Sustainability risks are not currently dealt with as a separate risk category. Instead, they are taken into account within ten existing risk categories1).

To combat climate risks appropriately, we set up the Nat- Cat Competence Centre (NCCC) back in 2013. It deals with all kinds of issues related to natural disasters at a Group ­level and is currently heavily focused on climate change. The NCCC is responsible for assessing the Group's risk expo- sure, any changes over time, accumulations, annual expected

losses,­ scenario analyses such as realistic scenarios, extreme event scenarios or climate change scenarios when subject to different temperatures and the minimum level of reinsurance cover that the Group requires in the event of major natural disasters. Our assessment work uses the very latest modelling techniques based on stochastic models that cover hundreds of thousands of hail, storm, flood and earthquake events and are constantly updated. In addition, two-thirds of our models include historic individual losses incurred by our Company. Therefore they represent the risk perspective of UNIQA as opposed to that of the market. The results ­obtained from these stochastic NatCat models provide the basis for our Group-wide risk management for natural disas- ters. The models are also used to calculate stress scenarios every year in order to test the robustness of our underwriting and reinsurance cover. The threat arising from the models can be visualised in maps that are fed into the Corporate Business Navigator (CBN), a risk review and assessment tool that is used by Group underwriters and risk engineers.

Environmental matters

This section describes the influence of environmental matters on our business activities along with the impacts of our business activities on the environment. It explains the concepts and measures in place as well as specific targets and impacts.

The following topics in particular are of material importance in terms of environmental matters: commitment to climate action, commitment to European climate targets, and advice on and prevention of natural disasters. We are tackling these challenges by supporting the transition to a low-carbon economy via our capital investments and our insurance products. It is also our aim to structure our own operational management in an exemplary fashion, taking into account our environmental and social targets.

UNIQA climate strategy

We took our first major step towards implementing our own climate strategy in early 2019, when we approved UNIQA's decarbonisation policy to phase out coal in our investments and underwriting. To pursue more general climate targets, we acceded to the Net-Zero Asset Owner Alliance (NZAOA) in 2021 and the Green Finance Alliance in 2022, committing ourselves to more binding targets.

The key objectives in UNIQA's climate strategy are as fol- lows:

• Pursuit of climate target trajectory in line with the 1.5
  degrees­ Celsius target set under the Paris Agreement in investments and underwriting, and operational ecology in compliance with both EU climate change mitigation and cli- mate change adaption targets
• Climate neutrality within our business model by 2040 in Austria, and by 2050 throughout the entire Group
• Pursuit of and compliance with science-based interim tar- gets for 2025, 2030 and 2035 based on climate target tra- jectory in line with the 1.5 degrees Celsius target set under the Paris Agreement
• Increase in sustainable investments to more than €2 billion by 2025
• Containment of any negative impact on other EU environ- mental targets
• Compliance with minimum social standards

Environmental matters in investment

UNIQA is committed to managing capital investments respon­ sibly and sustainably.

We believe that a sustainable investment strategy can bring about financial success in the long term and is a positive addition to the traditional investment objectives of returns, security and liquidity. In 2022, we achieved some key ESG milestones in ESG KPIs, coal-related activities, fossil fuel

energy­ policy, sustainable investments, development of ­climate pathway and ESG engagement.

Our overriding defined aim is to improve the ESG quality of our assets on an ongoing basis. The integration of sustainability data from our specialist data provider, ISS ESG (Insti- tutional Shareholder Services), allows us to conduct detailed sustainability analyses of our investments. These analyses are based on fundamental research and a holistic approach pursued by ISS ESG.

The main focus in 2022 was on climate data, such as CO2e emissions for companies as represented in our bonds and shares, as well as on countries whose government bonds we hold.

The indicator we use to evaluate CO2e emissions is carbon emission intensity. This measures emissions per "output" and indicates emissions per unit of revenue for companies and emissions per unit of gross domestic product for coun- tries. Our aim is to continuously improve these key figures. In 2022, we reduced our carbon emission intensity for the UNIQA Group's entire investments by approximately 3 per cent compared to the previous year. This reduction was achieved across our investments in both companies and government bonds.

With regard to corporate bonds and shares, our overarching objective is a 15 per cent reduction in our CO2e emission intensity by the end of 2024 relative to 2021. We have set this objective as part of our membership of the Net-Zero Asset Owner Alliance.

Another key figure is the carbon risk rating, which provides an overall assessment of a company or country for any climate-­related matters. Here, too, during the course of 2022 we achieved an improvement in the overall investment ­activities of the UNIQA Group, with a 7 per cent improvement year-on-year.

This was largely due to the companies we have invested in having improved their own management of climate-related risks.

Coal-free balance sheet assets

Back in 2019, the UNIQA Group excluded from its investments any issuers whose coal-related activities made up more than 30 per cent of their turnover. We stepped up this ­obligation in 2022 by reducing the limit from 30 per cent to 10 per cent (see UNIQA Group Decarbonization Statement). In the meantime, the integration of our AXA acquisitions in Poland, Czechia and Slovakia increased UNIQA's coal expo- sure. We corrected this exposure during the course of 2022, ensuring that the Group's investments are now coal-free again.