Business Model and Strategy

Business Model

Grupo Peña Verde’s business model can be looked at from two different standpoints that complement each other:

Holistic Perspective

Grupo Peña Verde is a vertically integrated company dedicated to integrated risk management, with a strategic focus on sustainability.

Investment Portfolio

Grupo Peña Verde can be conceived as an investment portfolio that allocates its capital to the most profitable businesses, through the pursuit of an optimal risk-return as part of 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 contribute to the creation of economies of scale. Under this approach, the key task of the Insurance and Reinsurance Divisions is to capture the float.

Annual Evaluation of Strategy Execution

In order to determine the impact on the management of our strategy at the executive level, Grupo Peña Verde designed the Strategy Achievement indicator, which quantifies the following two components:

Rating of the portfolio of initiatives:

The projects executed by the Group are rated using a project diagnostic form, which evaluates on a scale of 1 to 5 the main elements of project management: progress, budget, change management, and risks. The final rating is calculated by averaging all initiatives carried out during the year.

Achievement of strategic objectives:

Corresponds to the assessment of compliance with the key indicators defined in the strategic objectives on a scale of 0% to 150%, with five performance ranks: Outstanding = 150%, High = 125%, Target = 100%, Acceptable = 80%, and Unacceptable = 0%. The rating of the strategic objectives is calculated by averaging the achievement of the key indicators evaluated.

The Strategy Achievement indicator is calculated as a weighted average of the previous values, on a scale from 0% to 100%, where “0%” is the minimum level of fulfillment of the objective and “100%” is the maximum level of fulfillment.

2021 Evaluation Results

Note: The 2020 evaluation result was 85.1%, however, it included an additional calculation component, which was strategy communication. Therefore, this value is not comparable to 2021 result.

In line with the Company’s growth and business plan, below are a series of specific objectives for the Insurance and Reinsurance Divisions.