ETHICAL AND SOLIDARITY-BASED MANAGEMENT

For the second year in a row we have been certified with the EThSI (Ethical and Solidarity Based Insurance) mark, a distinction of ethical and solidarity quality granted by the Ethical Finance Observatory (FETS).

It is awarded to all insurance companies, insurance brokers and managers that promote transparency in the insurance market, the development of ethical insurance and provide users with tools to choose the product that best suits their values.

Seguros Lagun Aro is incorporated by Seguros Lagun Aro S.A., Seguros Lagun Aro Vida S.A. and Seguros Lagun Aro 2003 AIE.

Seguros Lagun Aro, with headquarters in Bilbao, is composed of the Board of Directors, Management Board and Functional Areas under the General Management.

After a period of reflection that began with an assessment of the level of compliance with the Strategic Plan 2016 - 2019 and a diagnosis of the internal and external situation, throughout 2019 we have carried out the strategic reflection, culminating in the preparation of a Strategic Plan for the years 2020-2022.

This is the first Strategic Plan carried out from an integral perspective in the LABORAL Kutxa Group with the participation of Seguros Lagun Aro.

At present, the main business risks are related to:

• The effect of climate change on the accident rate of multi-risk areas.
• Slow down in new car registrations due to the uncertainty of diesel and new traffic conditions in large cities.
• Cost control.

The relationship and commitment to our main Stakeholders is guided by the following lines of action:

• CUSTOMERS: In order to continue developing products and services that allow us to have a complete offer, we have launched an ambitious market research project with potential and current customers.
• SALES CHANNELS: we continue to work hand in hand with LABORAL Kutxa and our Brokers.
• OUR PEOPLE: We strive to contribute to the development of the people that make up our organisation, by providing a work environment that also favours quality and reconciliation of personal and professional life.
• BUSINESS PROVIDERS: we prioritise collaboration with small and medium-sized local companies, maintaining respectful and transparent relationships.

SOCIETY

• Collaboration with Mondragón University (MU).
• Collaboration with the Basque Center for Applied Mathematics (BCAM).
• Joining the INNOVABIDE Network.
• Participation in the educational programme promoted by UNESPA: 'Risk and me'
• Participation in UP! First insurance bootcamp organized by INESE.
• Participation in the Ethical Finance Barometer.
• Corporate Social Responsibility Report

PEOPLE IN THE COMPANY

• Annual meeting.
• Elkarte eguna: LABORAL Kutxa's 60th anniversary.
• LAGUN BERRI. Systematic monthly meetings between managers and their teams
• LaguNet (Intranet).
• Equality Newsletter, inclusive communication surveys, gender discrimination and conflict management procedure, harassment and violence at work.
• Meetings with the Works Council

TRANSPARENCY IN MANAGEMENT AND GOOD GOVERNANCE

Good corporate governance has become a great asset for Seguros Lagun Aro. In 2019 Seguros Lagun Aro implemented a transparency model in the company's management, driven by good governance practices, based above all on the transparency of information to the market, through the publication of the Solvency and Financial Condition Report (SFCR) on our website.

Seguros Lagun Aro is in line with the principles and ethical values of LABORAL Kutxa. At Seguros Lagun Aro, ethics is applied in the company's daily practice, as we consider it to be a key element within the organisation to safeguard the structure of good governance within our company, also applied to the following areas:

• People in the Company
• Customers

VOLUNTARY ADHERENCE TO SECTORAL SELF-REGULATORY GUIDELINES:

Committed to business excellence and best corporate practices, Seguros Lagun Aro has adhered to the following self-regulation guidelines promoted by UNESPA, whose recommendations we follow:

• Guide to good corporate governance practices
• Internal control best practice guide
• Guide to good marketing practice
• Good practice guide for complaint resolution

Likewise, the company adheres to the Code of Good Practices for Claims Management promoted by ADECOSE.

INTERNAL CONTROL

The company's internal control system consists of integrated administrative and accounting processes and procedures as well as their corresponding reporting mechanisms established at the various relevant levels of the company. The internal control system has an independent compliance verification function.

In addition to the control activities carried out in each of the processes, the risk and internal audit area promotes the implementation of controls in those risks where their absence has been detected, as well as the improvement of those that have been detected to be ineffective. The Internal Audit function performs this task through the execution of the annual audit plan approved by the Audit Committee.

CUSTOMER PRIVACY

Regarding the protection of our customers' data, we have all the necessary resources to guarantee compliance with the law in this area.

Proximity, peace of mind, security and the value of accompanying the customer at a critical time, when they have a problem, are our fundamental purpose.

The fact that the product acquired is good, is a given. The key factor is not in the 'what', but in the 'how'. How the incident is managed and the various contacts generated with the insured party throughout the life cycle are what make the difference.

We move in a world of perceptions, on which the emotions and the memory that the brand generates in the mind of the consumer depend, and therefore, their link to the company.

Thus, with the aim of improving the Customer Experience throughout the claim management process, in 2019 we launched an ambitious analysis and diagnosis project in the areas of Cars, Home and Commerce, where, beyond reviewing our processes, deadlines or agents involved, we have focussed on the customer experience in order to find answers to various questions.

In 2019, 88% of our Car customers and 71% of Household customers who suffered an incident in their vehicle or home were satisfied or very satisfied, rating the handling of their claims with a 7 or above.

88 %

Satisfied or very
satisfied customers.

71 %

Satisfied or very
satisfied customers.

Source: Continuous study of customer satisfaction after the closure of the claim. Quor. 2019.

CUSTOMER
PROTECTION

The company has a Customer Care Service, separate from its commercial and operational services, which attends and resolves its customers' complaints and claims.

The activity of this Service has decreased once again by 3.5%, as a result of the different actions implemented in the Company to improve the service provided to customers.

The results of this Service are:

DIGITAL TRANSFORMATION

We seek to improve the digital customer experience by making our developments simple and easy to use.

OPTIMAL HOME ON

With only two pieces of information, square metres and postcode, the customer obtains an online quote for their home insurance. The policy is signed electronically, the contract is automatically archived and the customer receives all the documentation by email.

VIDEO VERIFICATION

75% of vehicle verifications prior to the contract are now performed via video verification, reducing costs, speeding up the contracting process and avoiding CO2 emissions into the atmosphere by reducing the number of trips made by the verifiers.

SURVEYING IN STREAMING

Throughout 2019 we have expanded this service, implementing it throughout our Trusted Workshops Network. This is tailor-made surveying, as the customers choose when it is carried out. In addition, reducing the journeys of the surveying team significantly minimizes the impact on the environment.

RPA

We are developing different RPAs (robotic process automations) to perform mechanical and repetitive tasks, thus freeing people for those jobs that bring more value to the company.

Throughout this year we have implemented 4 processes in the following areas that involve 500 hours/year of manual tasks:

• Investments.
• Registration of death.
• Documentary management in the provision of multi-risk.

ELECTRIC PERSONAL MOBILITY VEHICLES: our home insurance includes new coverage to cover civil responsibility derived from this type of vehicle.

+LIFE: 100% designed to be enjoyed in life, improving and guaranteeing the quality of life of our customers since it extends, improves and makes more flexible the coverage and contingencies linked to survival such as permanent disability in any of its degrees and serious illness. Our life products include highvalue services for our customers such as the online Family and Living Will, all procedures related to death, second medical diagnosis in case of serious illness, Daily Life Assistance in case of illness or accident, Rehabilitation Program to help with integration, adaptation and mobility...

ACKNOWLEDGING
OUR BROKERS

TRAINING DAY FOR THE MEMBERS OF OUR SPECIAL CLUB

The members of the SPECIAL CLUB received two days of training in July and October. On the 10th and 11th July, the consultant Eloy Paez offered a highly dynamic conference on Planning and Optimization of time.

On 29 October, Javier Sierra, consultant specializing in the insurance sector, gave a training course on how to provide commercial value in all positions of the brokerage, all of which was very much appreciated by our brokers.

EQUALITY BETWEEN
MEN AND WOMEN

Seguros Lagun Aro developed and approved its 2nd Plan for Equality between Men and Women in 2017. The plan is structured along 7 lines of work and 12 goals to be achieved in the period 2017-2020.

Highlights in 2019:

• An internal competition was held to create a logo and a slogan.
• The databases and reports have been reviewed and adapted for their sample disaggregated by gender.
• Moving towards overcoming horizontal segregation, throughout this year the selection processes carried out have resulted in the integration of a woman in a highly masculine field such as supplier management and the integration of a man in a highly feminine field such as administration.
• In the 4 promotion processes implemented, 4 women have been promoted.

TRAINING

Throughout the year, 97.5% of the staff has been trained with 3,737 hours of training, making 20.3 hours of training per person.

The training is aimed at all professional groups and focuses on skills development, technical updating, and languages.

HEALTHY
COMPANY

Continuing with the health promotion project "At Seguros Lagun Aro we take care of our own" and with the following goals:

• To strengthen the knowledge of healthy habits.
• To strengthen the "contagion" effect through group initiatives.
• To initiate people in disciplines that help to manage emotions.

The following activities have been carried out:

TRAINING DAYS

• Healthy live
• Mindfulness
• Menopause
• Look after your heart

WORKSHOPS

• Active Break
• At the Supermarket
• Packed lunch

SENDING DOSSIERS

• "YOUR PERFECT MONTH" with ideas, recipes and menus for three types of profiles: people who live alone, families with children and people who do sports.

PERSONALIZED CONSULTATIONS

CHALLENGES

• Individual steps in a week
• Steps by department in 15 days

SOCIAL DIALOGUE

At Seguros Lagun Aro we maintain a good relationship with the Workers' Legal Representative (R.L.T.) with whom the Company's Statutory Agreement is negotiated.

2019 is the second year of the agreement signed for the years 2018-2021. This year we carried out a TELEWORK pilot programme in our company with very positive results in terms of reconciliation, reduction in commutes...

We share an environmental policy, procedures and management with LABORAL Kutxa, which holds ISO 14001 environmental certification.

Due to the nature of our business, its environmental impact is small.

Below we list the main actions carried out throughout the current year with the aim of reducing our consumption of resources:

• Our environmental management focuses on paper and toner consumption. The great effort made on this point since the end of 2017 has led to a reduction of more than 1 million prints and photocopies per year derived from our activity.

  The main actions carried out relate to digital archiving, the use of electronic means of communication with customers and monitoring the number of prints made by employees. Along these lines, 80% of the company's workstations already have double screens to avoid unnecessary printing.

Our commitment also extends to society in general.

SEGUROS LAGUN ARO PARTICIPATED IN UP!, THE FIRST SECTORIAL INSURANCE BOOTCAMP:

This was the first bootcamp organized by INESE to promote innovation and for which the prize was a trip to London to visit the main companies in the birthplace of insurance in Europe.

With a project to make insurance instagrammable, the team of young university students, led by Seguros Lagun Aro, won first prize.

SEGUROS LAGUN ARO, NEW MEMBER OF INNOVABIDE:

Innovabide is a network of 30 Basque companies for the improvement of Road Safety in the same. It was launched in 2017 by the Basque Government's Traffic Department. The main objectives of this network are to reduce road accidents, decrease the number of job-related victims (in intinere or in mission) and promote awareness of safe mobility.

WE TAKE THE REFLECTION ON HOW TO FACE RISK TO CLASSROOMS.

Over 4 weeks, eight volunteers from Lagun Aro participated in the programme "The risk and me" aimed at 3rd year secondary school students. The initiative was carried out between May and June and is promoted by UNESPA and coordinated by the Junior Achievement Foundation. The programme aims to make students aware of the risks they are exposed to in their daily lives and the attitudes and emotions they show towards risk.

The "Risk and Me" initiative is part of the We are Covered project, in which the Company participates, which has the goal of bringing insurance closer to people and raising awareness of the role played by our sector in society.

PURCHASE MANAGEMENT

Given the importance of adequate supply chain management within the framework of responsible action, we carry out purchasing management jointly with LABORAL Kutxa and we prioritise the acquisition of the majority of goods and services in the areas where we are present.

• Collaboration with STOP ACCIDENTES, a civic nonprofit organisation committed to road safety and the right to life.

  With the aim of raising society's awareness of risk behaviour and the road safety problems involved in mobility in urban areas, the travelling exhibition "Pedestrian, Cyclist, don't let them cross your life" has continued throughout 2019 in different places in the Basque Country.

• We collaborated in the mentoring programme of the GAZTENPRESA FOUNDATION, a LABORAL Kutxa initiative with the general goal of creating, developing and maintaining small businesses and micro-SMEs, identifying employment opportunities through selfemployment for people who are unemployed or at risk of becoming so. In 2019 the projects developed that get passed the viability phase have generated 405 enterprises, creating 787 jobs.
• We comply with LISMI by making an economic donation to GUREAK INKLUSIO FUNDAZIOA for the development of activities for the employability and creation of employment for people with disabilities.