Acquisition cost and administrative expenses

In 2016, acquisition costs grew by PLN 237 million compared with the same period of the previous year and reached PLN 2,613 million.

The increase concerned mainly direct acquisition costs and was the result of higher sales in the mass and corporate client segment.

In 2016, the Group’s administrative expenses were at the level of PLN 2,843 million, which was 71.5% higher than the PLN 1 658 million in the previous year. The increase was mainly a result of the launch of the consolidation of Alior Bank, due to which PZU Group’s expenses grew by PLN 1,199 million. Simultaneously, there was a recorded positive effect from the previous year in the insurance activity segments in Poland in relation to maintaining strict cost discipline – a drop in administrative expenses by PLN 26 million in reference to costs of property, marketing partially compensated with the change in presentation of remuneration for administrative activities in bancassurance contracts in the amount of approximately PLN 78 million yoy (earlier included in the acquisition costs). In the Baltic states and Ukraine drop by PLN 34 million, mainly due to the disinvestment of PZU Lithuania in H2 2015.