Realization of key projects and initiatives in 2016

in 2016, the Group achieved the following objectives in specific Business Fields:

Activities realized in 2016

Key areas Summary of activities and achievements in 2016
  1. PZU strengthened its leading position on the non-life insurance market. According to PFSA data for the third quarter of 2016, PZU’s market share (direct business) was 33.0% (an increase by 1.6 p.p. year-on-year).
  2. The share of LINK4 in non-life insurance market amounted to 2.2% at the end of the third quarter of 2016 (an increase by 0.3 p.p. year-on-year).
  3. PZU retained its top position in life insurance with periodical premium after the third quarter of 2016 with a 45% market share (up from last year’s 43.9%). Following the third quarter of 2016, PZU Życie had a 33.7% share in the entire life insurance market (an increase by 4.5 p.p. year-on-year).
  4. Strengthen the market position in Lithuania and Latvia. Market share in Lithuanian nonlife insurance market was 29.5% (decrease of 1.6 p.p. comparing to previous year), while the share in the Latvian market grew by 2.0 p.p. at the end of third quarter of 2016 and amounted to 27.2%. The market share in life Lithuanian market amounted to 4.8% (increase by 0.4 p.p.). The share of PZU Group in the Estonian non-life market amounted to 14.5% in 2016 and recorded growth by 0.6 p.p. The Ukrainian non-life company recorded after the third quarter of 2016 an increase in the market share (3.7%) by 1.0 p.p. compared to the same period of previous year, while the life company registered a decline in the market share (8.5% vs 8.6% y/y).
  5. Continuation of implementation associated with the introduction of a new policy system (project Everest) which should improve PZU’s flexibility and competitiveness. In April 2016, another version of the system was implemented, which included making further products available (inter alia: general agreements, Cargo, D&O) and introducing changes to existing functionalities and products. Moreover, other external distribution channels were implemented, including the multiagents and bancassurance channel, the implementation of own corporate sales channel was completed, and the portal “” with the online sales functionality was launched. Sales carried out via off-line channels was transferred in the last quarter of 2016 to the Everest platform (among others: motor and non-life leasing, central dealers, and financial insurance).
  6. Active presence on the insurance market since 29 February 2016, when it started its insurance business by concluding its first insurance contract, and the further dynamic development, confirmed a market share of 0.5% in the first year of operation.
  7. The analytic tool for pricing was implemented, which will be used for increasing the effectiveness of communication tariffs.
  8. The agreements on research and development cooperation were signed with the Warsaw University of Technology as part of the “Scientific Council”.
  9. Implementation of IT solutions improving life customers service efficiency.
  10. Completion of the process of implementation of innovative PZU Branches – well-visible and common for the entire Group. There are altogether 190 Branches functioning within this new model.
  11. Completion of work aiming to consolidate and improve the visualization standard of Exclusive Agent offices. From the start of the project, 1143 offices in the new standard were opened.
  12. The development of a product providing continuous technological protection has begun, accompanied by insurance protection from the effects of cyber-attacks.
  1. TFI PZU ranked second in the market in terms of the value of managed net assets. At the end of 2016, the value of AuM TFI PZU amounted to PLN 22 billion, which constituted 8.6 % of the assets obtained by domestic investment funds.
  2. Growth of the volume of the managed assets of external clients from PLN 6.8 billion at the end of 2015 to PLN 7.0 billion at the end of 2016. At the end of 2016, the share of assets of external TFI PZU clients in TFI market assets (with exception of non-public assets) was 4.8% (4.6% at the end of 2015).
  3. TFI PZU was the leader in the segment of employee pension programs among domestic investment funds. At the end of 2016, TFI PZU managed assets with value of almost PLN 4.0 billion (EPP – Employee Pension Plan, GPE – Group pension Plans, PPO – Employee Saving Program, ZPI – Corporate Investment Program) – AuM growth by 17.2% compared with the end of 2015.
  4. The value of net assets of OFE PZU Złota Jesień at the end of 2016 amounted to PLN 20.0 billion.
  5. The net profit of PTE PZU at the end of 2016 amounted to PLN 60.3 million.
  6. The Witelo fund was also established in cooperation with business partners. The fund will invest assets in the top venture capital funds in order to promote Poland as a place for investments and implementation of innovative projects.
  7. Preparation of a new investment strategy including strategic allocation of assets, organization and processes linked to the management of the investment portfolio of PZU Group.
  8. Works related to the implementation of business initiatives aimed at developing cooperation between Alior Bank and PZU.
  1. At the end of 2016, the revenues of PZU Zdrowie amounted to PLN 363.8 million, which means a 40.2% increase year-on-year.
  2. The gross written premium from group health insurance rose by 38.4% compared with 2015.
  3. Three medical entities (CM Cordis, Polmedic and Artimed NZOZ) were acquired by PZU Zdrowie.
  4. The works on the implementation of the tool for the cooperation with medical establishments.
  5. Implementation of tools for management of the network of medical establishments, both PZU Zdrowie’s own establishments and ones which cooperate with it, as well as tools for management of client traffic on the medical hotline.
  6. Works have begun on providing medical hotline consultants with a way of communicating on-line in the scope of arranging medical benefits with a distributed network of medical establishments
  1. The acquisition of the third tranche of Alior Bank shares was settled. As a result of this transaction, PZU Group has the controlling package, i.e. 29.45%.
  2. The declaration of backing from PZU in relation to the conclusion and implementation of the Sale of Shares and Division Agreement by Alior Bank, a subsidiary of PZU. The agreement concerned the acquisition of independent area of activity of Bank BPH. The assets of the merged banks (Alior Bank and Bank BPH) will reach the value of PLN 61 billion.
  3. The agreement concerning the purchase of 32.8% of shares of Bank Pekao S.A by PZU Group and the Polish Development Fund (PFR) was signed.Under the agreement, PZU Group will purchase approx. 20% of the shares, while PFR (Polski Fundusz Rozwoju S.A.) will acquire 12.8% shares of the bank.
  4. The contribution of the banking segment to the operating result of PZU Group amounted to PLN 691 million at the end of 2016.

Support factors Summary of activities and achievements in 2016
Effective handling and
operations, flexible IT
  1. 82% of PZU Group’s clients are satisfied with claims and benefits handling (satisfaction survey on a sample of 4.3 thousand clients conducted in the fourth quarter of 2016).
  2. Work was conducted on the implementation of the Fraud Detection System for motor insurance.
  3. Implementation of a new human resources and salaries system, including self-service portal for the employees, was completed – the first step towards standardization and improvement of HR processes in the whole company.
  4. Implementation of an application for self-handling of claims by clients.
  5. Commencement of works on modernization of the infrastructure of data warehouses.
  6. Implementation of works related to transforming PZU from a product-centered organization into a company organized in accordance with client segmentation.
  7. Commencement of works on a self-service portal including all products of PZU Group.
  8. Continuation of process related to the sale of real estate which is unnecessary from the point of view of the statutory activities of PZU and PZU Życie.
Socially responsible
  1. PZU continued to follow the action lines adopted for social activities – safety, health and active lifestyle, the national heritage.
  2. PZU Group’s involvement in running initiatives is the key way to promote active lifestyles and health prevention among Poles. PZU served as the strategic partner of, among others, the PZU Warsaw Marathon, PZU Warsaw Half-Marathon, PZU Gdynia Half-Marathon and the PZU Cracovia Royal Half-Marathon. All running events sponsored by PZU were accompanied by a “Podziel się kilometrem” (“Share Your Kilometer”) charity action, which encourages Poles to help others through their own physical activity.
  3. PZU is a patron of culture – it is involved in the preservation of Polish cultural heritage, supporting the Royal Castle in Warsaw, Royal Łazienki Museum, Warsaw Uprising Museum, National Museum in Kraków, National Museum in Warsaw, National Theatre and Grand Theatre—National Opera.
  4. A new prevention agreement was signed with rescue service, GOPR. The agreement will remain in force until 2019. The funds transferred by PZU will be used to purchase among others new quads and expedition backpacks for all rescue teams in southern Poland
Culture of cost effectiveness
  1. The decrease in administrative costs of of insurance segments in Poland amounted at the end of 2016 to PLN 26 million, that is, -1.8% year-on-year.
  2. Improvement of the administrative cost index for insurance segments in Poland by 0.7 p.p., at the end of 2016, the index amounted to 8.1 %
  3. Improvement of the administrative cost index in foreign companies by 2.9 p.p., at the end of 2016. The index amounted to 11.0%
Capital and investment
policy, and integrated
risk management
  1. The payment of the dividend in the amount of PLN 1.80 billion, i.e. PLN 2.08 per share.
  2. Confirmation of the Capital and Dividend Policy of PZU Group for the years 2016–2020, in accordance with which the annual dividend payout ratio will amount to not less than 50% of net profit.
  3. The S&P Global Ratings rating of PZU and PZU Życie remains at the level of A-, which is one note higher than the rating of the country.
  4. Effective and adequate adaptation of risk management system and compliance to the changing organizational structure of PZU Group and legislative environment.

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