Commitment policy and agreements with asset managers

European Directive 2017/828 (on the encouragement of long-term shareholder engagement- SHRD II), and implementing legislation in Italy (Legislative Decree 49/2019 amending Legislative Decree 58/98) establish that Insurance Undertakings, also in their capacity as entities establishing pension funds, notify the public of any adoption of a policy describing the procedures supplementing the engagement of shareholders in listed companies having their registered office in a member state in their investment strategy.

At present, with reference to equity investments, the Company opted for the following:

• it did not adopt an engagement policy based on the remaining shares held directly compared to volumes managed and equity assets in the portfolio, and therefore it did not carry out activities covered by the policy concerning a) the monitoring of investees as regards significant matters, such as strategy, financial and non-financial results, risks, capital structure, social and environmental impact and corporate governance, b) engagement with investees, through the exercise of voting rights and other rights related to shares, c) cooperation with other shareholders or in communication with the Company’s stakeholders, including the management of current and potential conflicts of interest;

• for the remainder of the portfolio, it stipulated specific management mandates with the following delegated managers:

o Eurizon Capital Real Asset SGR. S.p.A.
o Eurizon Capital SGR S.p.A.
o Fideuram Intesa Sanpaolo Private Banking S.p.A.

that, to adopt the engagement policy with reference to the exercise of voting rights for equity investments, it disclosed information on the vote, indicated in documents available at:

Eurizon Capital SGR S.p.A. and Eurizon Capital Real Asset SGR S.p.A.

Fideuram Intesa Sanpaolo Private Banking S.p.A.

The management mandates govern, among others, the following aspects:

• the procedures adopted by the Company to provide incentives for the delegated manager to align the strategy and investment decisions with the profile and duration of liabilities of managed volumes; in particular, the same results are achieved through identifying different types of benchmark and portfolio diversification. The Company continually monitors the alignment of the portfolio duration with that of liabilities (the duration mismatch), by adopting suitable safeguards to monitor compliance with limits and the investment choices adopted by the delegated manager;
• the procedures adopted by the delegated manager, in performing the mandate, comply with the guidelines established by the Company with reference to the characteristics of each portfolio. To monitor financial results, time intervals are adopted, consistent with the medium/long term time horizon of the strategic asset allocation.

As regards assessments of non-financial variables, with particular reference to guidelines to include ESG factors in investment strategies, the Company monitors the engagement and voting activities of the delegated managers;

• the procedures adopted by the Company to put in place specific organisational oversight suitable for guaranteeing the monitoring of the delegated manager’s activities, also in the long term. In particular, if investment limits are exceeded, recovery procedures defined with the delegated manager according to efficient procedures and times, are put in place. In this context, the Company checks the progress of results of activities carried out by the delegated manager, based on portfolio choices made, and an analysis of performance and market views;
• the duration of management mandates stipulated by the Company in relation to each delegated manager. The mandates with Eurizon Capital SGR S.p.A., Fideuram Intesa Sanpaolo Private Banking S.p.A. and Eurizon Capital Real Asset SGR S.p.A. for assets underlying insurance investment products are indefinite (with the Company having the right to early withdrawal); The mandates with Eurizon Capital SGR S.p.A. and Fideuram Intesa Sanpaolo Private Banking S.p.A. for assets underlying pension funds have an annual duration with automatic renewal.

The mandates do not establish specific turnover limits, considering the main characteristics of the products and investment management policies. In any case, the manager’s operations are monitored based on specific organisational safeguards.