Capital management

PZU Group aims to effectively manage the capital and maximize the rate of return for the shareholders of the parent company, especially alongside with ensuring a steady safety level and maintaining capital funds for strategic development through acquisitions.

On 3 October 2016, the Supervisory Board of PZU adopted a resolution regarding the confirmation of the Capital Structure and Dividend Policy of PZU Group for the years 2016–2020. The introduction of the Policy results from the implementation of Directive 2009/138/EC of the European Parliament and the Council dated 25 November 2009 on the taking-up and pursuit of the business of insurance and reinsurance (Solvency II), as amended, the Act on Insurance and Reinsurance dated 11 September 2015, and the expiry of “The Capital Structure and Dividend Policy of PZU Group for the years 2013–2015” updated in May 2014.

The capital management policy bases on the following rules:

  • PZU Group’s capital management (including surplus capital) at the level of PZU as a dominant entity;
  • maintaining target solvency ratios at the level of 200% for PZU Group, PZU, and PZU Życie SA (according to Solvency II);
  • maintaining PZU Group’s leverage ratio at a level no higher than 0.35;
  • providing funds for development and acquisitions in the upcoming years;
  • no share issues by PZU in the period of the Policy being in effect.

Solvency ratio Q3 2016 2015
Solvency II    
PZU Group * 252.6% 276.1%
PZU * 266.3% 284.4%
PZU Życie * 458.8% 477.3%
CRR – Alior Bank    
Total solvency ratio 13.7%** 12.5%
Tier 1 11.3%** 9.7%

* non audited data
** at the end of 2016

As at the end of the third quarter of 2016, the solvency ratio (calculated according to the Solvency II standard formula) amounted to 252.6% 1. Ratios as high as these place PZU Group among insurance groups that have top capital strength.

In Alior Bank, solvency ratio and Tier 1 ratio have been calculated on the basis of the Regulation (EU) No 575/2013 of the European Parliament and of the Council dated 26 June 2013 on prudential requirements for credit institutions and investment firms (CRR Regulation), as well as particular risks identified upon internal capital adequacy assessment process (ICAAP).

1 Data non-audited.

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