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7.1.1. Key division criterion
Operating segments are components of the entity for which separate financial information is available and which are regularly reviewed by CODM (in practice, it is carried out by the Management Board of PZU) in order to allocate resources to the segment and assess its performance.
The key segmentation pattern of PZU Group is based on the criteria, such as type of activity, product lines, client groups, and regulatory environment. Characteristics of individual segments are presented in the below table.
| Segment | Accounting Standards | Segment description | Aggregation criteria |
|---|---|---|---|
| Corporate insurance (non-life insurance) | PAS | A wide range of non-life insurance products, third party and motor insurance products customized to meet customers' expectations, and with individual risk assessment, offered to large enterprises by PZU, Link4, TUW PZUW. | Aggregation has been made due to similarities between offered products, similar client groups for which they are offered, distribution channels, and functioning within the same regulatory environment. |
| Retail customer insurance (non-life insurance); | PAS | A wide range of non-life insurance products, accident insurance products, third party and motor insurance products offered to individual clients and entities in the SME sector by PZU, Link4, TUW PZUW. | As above. |
| Group insurance and individually continued insurance (life insurance); | PAS | Group insurance offered by PZU Życie to groups of employees and other formal groups (e.g. trade unions), intended for individuals who are in a legal relation with the insurer (e.g. employer, trade union) and individually continued insurance where the insurer has obtained the right to continue insurance individually under group insurance. The offer of PZU Życie comprises a wide range of group insurance coverage, investment insurance (other than investment contracts) and health insurance; | Lack of aggregation |
| Individual insurance (life insurance) | PAS | Insurance offered by PZU Życie to individual clients whereby an insurance contract covers a given policyholder who is subject to individual risk assessment. The offer of PZU Życie comprises a wide range of group insurance coverage, investment insurance (other than investment contracts) and health insurance; | Lack of aggregation |
| Investments | PAS | The segment comprises: investment activity conducted with PZU Group’s own funds defined as the surplus of investments over technical provisions in PZU, Link4 and PZU Życie, increased by the surplus of investment income exceeding the risk-free rate matching the value of technical provisions in insurance products, i.e. the surplus of income from investment activities over the income allocated to insurance segments according to transfer prices; income earned on other excess cash in PZU Group (including, in particular, consolidated investment funds). | |
| Banking activity | IFRS | A wide range of bank products offered by Alior Bank and to both individual and corporate clients. | Lack of aggregation |
| Pension insurance | PAS | Pension insurance, second pillar. | Lack of aggregation. |
| The Baltic states | IFRS | Life and non-life insurance products offered by Lietuvos Draudimas AB, including its branch in Estonia, AAS Balta, and UAB PZU Lietuva Gyvybes Draudimas. | Aggregation has been made due to similar products and services offered by the companies and similar regulatory environment of their activity. |
| Ukraine | IFRS | Life and non-life insurance products offered by PZU Ukraine and PZU Ukraine Life Insurance. | Aggregation has been made due to similar regulatory environment of activity. |
| Investment contracts | PAS | Products of PZU Życie which do not result in a transfer of significant insurance risk in accordance with IFRS 4 and are not insurance contracts (i.e. some of the products with a guaranteed rate of return and some unit-linked products). | Lack of aggregation |
| Other | PAS/IFRS | Other products and services, not classified to any of the above segments. |
7.1.2. Information concerning geographical areas
PZU Group applies additional geographical segmentation, based on which the following geographical areas have been distinguished:
- Poland;
- The Baltic states;
- Ukraine.
