Our Operation

GRI 2-2 and 2-6

Insurance
Division







Through General de Seguros we offer coverage in life, personal accident, civil liability, fire, earthquake, and other catastrophic risks, agricultural and animal, maritime and transportation, automobile and miscellaneous. For this purpose, General de Seguros has an extensive network of 2,550 insurance sales agents, who are independent people whose remuneration (commissions, prizes, and incentives) is based on the fulfillment of their sales objectives. In addition, part of the sales process is carried out through brokers.

Additionally, through General de Salud, a subsidiary of General de Seguros, we provide health and medical expense coverage, which is complemented by the CCSS (Centro de Contacto de Servicios de Salud) by providing medical orientation via telephone to policyholders, generating direct savings in health services, greater operational efficiency in health services, and high user satisfaction and confidence in the service.

TRADEMARKS OF GENERAL DE SEGUROS



During 2022, by virtue of its 50th anniversary and its transformation process, General de Seguros evolved from a “detect and repair” to a “predict and prevent” stance, with the objective of being a close partner of customers as of now in the risk reduction process.

- The brand concept of General de Seguros evolves to NOW IS EVERYTHING (“AHORA ES TODO”) with a new logo -











Reinsurance
Division







Reaseguradora Patria is an insurance institution authorized by the Comision Nacional de Seguros y Fianzas to carry out different reinsurance and counter-guarantee activities, which it negotiates, directly or through reinsurance intermediaries, with domestic and foreign insurance and reinsurance institutions.





TRADEMARKS OF
REASEGURADORA PATRIA



Other
Services






In parallel to risk management (Peña Verde, S.A.B.’s main focus), the Company also carries out the acquisition of shares or equity interests in all types of companies (domestic or foreign), as well as the provision of all types of services, on its own behalf or on behalf of third parties, including administrative, accounting, advisory, commercial, financial and operational services.




Our
Customers






Taking total written premiums as a reference, none of the clients of General de Seguros and Reaseguradora Patria represent more than 5%, due to the high dispersion in the sale of products in the insurance sector and the diversification policies of Grupo Peña Verde in the reinsurance area.



Geographical
Footprint






By the end of 2022, Grupo Peña Verde’s international presence includes Mexico, Chile, the United Kingdom, and the United States.

Risk
Management






Grupo Peña Verde has a Comprehensive Risk Management System within its Corporate Governance, whose objective is to maintain the dynamism required to proactively identify emerging risks that could affect the operation, due to its participation in the Insurance and Reinsurance businesses. This system contemplates the objectives, policies, and procedures for comprehensive risk management consistent with Grupo Peña Verde’s business plans, as well as the processes and procedures necessary to continuously monitor, manage, measure, control, mitigate and report the external and internal risks to which, individually and in the aggregate, the Group may be exposed.

To carry out this important task, the Risk Committees of each one of the Group’s companies meet on a monthly basis to report on the status of risks to Management and the Board of Directors, who will define the action lines to be taken in this regard. In addition, it is essential to maintain optimal communication with:

  1. Risk holders (underwriting, investments, operations, among others);
  2. The areas responsible for detecting, mitigating, or preventing incidents (administration, reinsurance, systems, among others); and
  3. Authorities (regulatory, academic, or expert) who can provide new approaches to existing risks or detect new ones.

We have identified the various risks to which the Group as a whole and its subsidiaries are exposed; however, it is considered highly unlikely that all of them will occur simultaneously (given the correlation between them). Therefore, Grupo Peña Verde catalogues these risks based on their potential impact, as shown below:









In addition, to maintain a solid risk management, the Board of Directors of each Company has defined an exposure limit for the following risks:

It is extremely important to point out that there are emerging risks with a high level of uncertainty that could generate losses that cannot be quantified with precision; therefore, they could risk the Company’s solvency and/or the fulfillment of its business plan in case of materialization. For this reason, Grupo Peña Verde implements all necessary measures to reduce, as much as possible, any potential impact.

In this context, being aware of emerging risks, such as climate change, the Company has worked hard to adopt the best environmental and social practices, to become a reference in the areas of Human Rights, Labor Standards, Environment and Anti-Corruption; that is why, since October

2020, the Group has been part of the main corporate sustainability initiative at a global level: the United Nations Global Compact.

In addition, during 2022 Grupo Peña implemented a new methodology for measuring and quantifying its operational risks, adhering to a standard risk taxonomy that complies with risk management based on ISO 31000; with this, the Company expects to consolidate the visibility and monitoring of indicators that help mitigate and manage the operational risks of the institutions that are part of the Group.


Internal
Control






During 2022, as a result of the transformation that Grupo Peña Verde is undergoing, new ways of obtaining competitive advantages and making processes more efficient were explored. In addition, in response to the Audit Committee’s request to consolidate the Internal Control area, contributing to the consolidation of Corporate Governance and the Internal Control System, the Corporate Internal Control Department was created to:

  • Improve the Company’s processes through the establishment of controls and alignment with business risks, and,
  • Establish formal monitoring mechanisms for the correction of irregularities in the operation of the Internal Control System, as well as the homologation of COSO & COBIT 5 methodologies at Group level.

Additionally, throughout 2022, the Group continued to devote significant efforts to strengthen internal control in all its companies, through the redesign of processes and the adoption of corporate policies and procedures; noting that by 2022 around 600 documents were updated, including policies and procedures, in order to promote the ongoing improvement in the efficiency of processes and their corresponding risk and control assessment.



GENERAL DE SEGUROS



In the case of General de Seguros, the core processes in which continued to make progress during 2022, in order to strengthen internal control, are:

  • Evaluation of the Internal Control of the processes of the Intermediaries of Alternative Channels, Claims, Collection, Payroll Deduction, Bonuses and Commissions. The reviews were carried out based on the COSO & COBIT 5 control framework, in addition to the compliance review based on the provisions established in the LISF, LFPDPPP, CUSF, among others.
  • Self-assessment of Controls to the processes of the Commercial Management - Traditional Channel, Finance and Actuarial Function. The Self-Assessment of Controls is a tool that has been adopted as a method to evaluate and determine the validity and effectiveness of the internal controls previously identified. In addition, the COSO evaluation was performed, which is a voluntary committee formed by representatives of 5 organizations to provide intellectual leadership in risk, internal control and fraud issues.
  • Follow-up on the progress in the implementation of the Remediation Plans, as a result of the evaluation of the Internal Control of the processes of the Business Strategy Department, the Alternate Channels Department, the Call Center Subdepartment, the Operations Subdepartment - Control Desk, the Transformation and Statistics area & the review of Branches (Merida, Hermosillo and Monterrey), the Call Center Subdepartment, Alternate Channels Intermediaries, Claims, Collection and Payroll Deduction.
  • Design and implementation of a work plan for the implementation of walkthroughs in the transversal processes provided by Grupo Peña Verde and that are provided to General de Seguros for fiscal year 2023, carrying out the identification of risks and controls.
  • We participated in the Company’s main initiatives during 2022, with the objective of identifying controls and validating their regulatory compliance, such as the implementation of the new Core system.

REASEGURADORA PATRIA


In the case of Reaseguradora Patria, the core processes in which continued to make progress during 2022, in order to strengthen internal control, are:

  • Evaluation of the Internal Control of the Technical Administration, Commissions and Finance processes (Accounting Closing, Generation of Financial Statements, Accounts Payable, Collections, Reconciliations, and the ABC of suppliers). The evaluations were carried out in accordance with the COSO & COBIT 5 control framework, in addition to the compliance assessment based on the provisions established in the LISF, LFPDPPP, CUSF, among others.
  • Follow-up on the implementation of the Remediation Plans progress, as a result of the Internal Control Evaluation of the Claims, Technical Administration and Commissions processes.

Regarding the follow-up of the implementation of preventive and corrective measures derived from the observations of the CNSF and the results of internal and external audits, as well as the evaluation of the internal control system itself, Grupo Peña Verde has put into practice the recommendations issued.





Business Model
and Strategy









BUSINESS MODEL


Our business model can be viewed from two different perspectives that complement each other, as shown below:

Holistic Perspective

It consists of analyzing the Group as a single company, which is vertically integrated and dedicated to comprehensive risk management, with sustainability as its strategic axis.


Investment Portfolio

From this perspective, Grupo Peña Verde is perceived as an investment portfolio whose capital is directed to the most profitable businesses, through the supervision of an optimal “riskreturn” ratio in risk management (Insurance or Reinsurance Division), compared to the return on investment or in complementary assets that are aligned with the applicable corporate governance and that encourage the generation of economies of scale. In this vision, the capture of the float is the key factor in the operations of the Insurance and Reinsurance Divisions.


ANNUAL EVALUATION OF
STRATEGY EXECUTION


In order to evaluate the impact on the management of our strategy at the executive level, we formulated the Strategy Achievement indicator, which quantitatively measures the two main elements that make up its monitoring:


Rating of the
portfolio of initiatives:

By means of a diagnostic form, the projects undertaken by the Group are rated on a scale of 1 to 5, where progress, budget, change management and risks are considered. The final rating corresponds to the average of all initiatives implemented during the period.

Achievement of
strategic objectives:

This corresponds to the assessment of compliance with the key indicators present in the strategic objectives on a scale of 0% to 150%, considering five performance ranks:

The rating of the strategic objectives is calculated by averaging the achievement of the key indicators evaluated.

Finally, the Strategy Achievement indicator is obtained by means of a weighted average composed of the qualifications reported in the previously mentioned elements. The evaluation scale ranks from 0% to 100%, where “0%” corresponds to the minimum level of compliance and “100%” represents the maximum value of compliance.



2022 EVALUATION
RESULT





Compared to the results obtained during 2021, we can remark a better management of the group’s portfolio and with this, a better rating of the portfolio.

2027 SPECIFIC OBJECTIVES -
INSURANCE DIVISION



REINSURANCE DIVISION
STRATEGIC PLAN FOR 2027



        Strategic guidelines
         to 2027

We seek to effectively manage growth by expanding the reinsurance practice within the Group. This will be achieved through geographic diversification and the addition of new specialty lines. At the same time, we are committed to staying faithful to underwriting rules and values, while developing more efficient analytical and risk management tools.






Strategic levers

  1. Profitable revenue growth
  2. Create a resilient company
  3. Ensure quality service in both sales and after-sales
  4. Exposure control and corporate governance
  5. Talent retention and attraction