At this point, I would like to thank our employees for their efforts in building value for PZU. I would like to thank the Supervisory Board for their effective cooperation and support in transforming PZU into a modern and operationally effective organization focused on satisfying customer needs.
Group (PZU Group) is one of the largest financial institutions in Poland and in Central and Eastern
Gross written premium of PLN 8,274m zlotys, namely 2.1% less than in 2012, as a result of a decline in written premium of motor insurance.
Launch of a new product onto the market, PZU Peace of Mind Portfolio.
However, salaries increased in real terms by 2.5%, compared with 0.1% in 2012, because of the low level of inflation. It can be assessed that real gross disposable income of households also increased, after they declined slightly in 2012. In view of the low interest rates in 2013, current household deposits increased strongly with a decline in term deposits, which also favoured consumption.
Pension Fund (OFE) capital on the Polish stock exchange, in the light of the amendments introduced by the government, could have had an adverse effect on the stock market.
May 2012. The objective of this work is, among other things, to implement the provisions of the Solvency II
2.6 Macroeconomic factors, which can affect the operations of the Polish insurance sector and the PZU Group’s activities in 2014
The risk factor for the fiscal policy and, consequently, for the whole economy is the decision on the matter of compliance of the changes in the pension system with the Constitution. As a result of these changes, all treasury bonds held by Open-ended Pension Funds were transferred to the Social Insurance Institution on 4 February 2014. This enabled their redemption and, consequently, the reduction in the state’s public debt by approximately PLN 130bn. If the Constitutional Tribunal rules that these changes are inconsistent with the
PZU FIZ AN BIS 2, by acquiring the additional shares in stock exchange transactions. The
Company. The Company was deleted from the register on 11 May 2013.
PZU Home), for insurance contracts which are to be registered in the new IT system respectively from the fourth quarter of 2013 and the first quarter of 2014;  the activation of a new application
These changes were dictated by the high level of claims in 2011–2012;  withdrawal of a product differentiating the premium by gender – individual insurance for daily hospital benefits, in accordance with the guidelines of the European Commission on the
 banking protection insurance - the focus was on maintaining the insurance portfolio and work related to the planned implementation of insurance for consumer finance and mortgage banking customers.
The objective of these changes was to maintain the attractiveness of the product, including retaining a 100% guarantee of a return of the invested capital in the event of adverse changes in market conditions.
Insurance], which enjoyed a great deal of interest from customers. High sales were also recorded of the
In 2013, in accordance with Polish GAAP, PZU collected gross written premiums of PLN 8,843.0m, which was 5.1% more than in the previous year. The vast majority of the Company’s premium was from insurance paid regularly. It represented 78.6% of the gross written premiums (as opposed to 73.2% in the previous year). It primarily included written premiums from group insurance and individually continued insurance, from which approximately 12 million Poles benefited.
In 2013, PZU Życie settled claims and benefits at the amount of PLN 6,255.9m, which was 21.1% less than in the previous year.
was the third largest pension fund, both in terms of the number of members, as well as in terms of net asset value:  The Fund had 2,229.8k members, i.e. 13.6% of all participants of open-ended pension funds belonged to it. Meanwhile, in 2013, since it was one of the largest funds, it did not take part in the draw for new members.
more than in the previous year. Having experience with pension products on the capital market, the highly qualified management staff, as well as a consolidated and stable market position, PTE PZU has appropriate conditions for providing customers with attractive conditions for saving for retirement. In 2013, the value of a settlement unit in OFE PZU increased by 9.2%.
 The active sales of closed-ended funds and conducting issues of certificates.
Eleven companies were operating in the non-life insurance sector at the end of the third quarter of 2013
In the Baltic States, the PZU Group conducts its insurance business through two companies registered in
(13.3% in 2012). However, PZU Lithuania Life’s share of the life insurance market was 4.2% (compared with
 1,217,197 shares through stock exchange transactions with a clearance date of 31 October
Tower Inwestycje’s activities currently include the investment of free funds. In 2013, the Company took up activities of accounting and HR/salary support for companies in the PZU Group (PZU AM, PZU TFI)
In striving to maintain its position of the largest insurance company in Central and Eastern Europe, the
2. A new PZU Group Equity and Dividend Policy for the years 2013-2015 was adopted, which main objective is to reduce the cost of capital by optimizing the balance sheet structure through the conversion of equity to cheaper debt capital, while maintaining a high level of security and development funding.
4. PZU was the titular sponsor of the 35th Warsaw Marathon, which was voted the best public sports event of 2013 in the 79th poll organized by the Przegląd Sportowy daily newspaper.
2. Strengthening direct relations with the insured as a result of the Klub PZU Pomoc w Życiu
2. Active upselling of products related to health and medicine insurance to group customers.
event, the model of an equal workload of individual claims handling units has been implemented.
system will be an online tool for the sales person and the support employee, will allow easy changes to be made to the product offering and will support PZU in dealings with customers through various servicing channels. The integration of the new system with other applications, namely claims handling, data warehouse, internal management and document flow, will create the conditions for fully exploiting the capabilities of the new solution.
The total costs of restructuring recognized in the provisions for restructuring expenses in 2013 were
Work at the PZU Group is related to stability of employment and, simultaneously, to substantial development opportunities within the Company.
 A Strongly helpful Agents campaign. Its objective was to inform customers that the agents are trustworthy and can be relied upon.
 An Even the best will do anything to work for
N e t in v e st m e n t re su lt
A d m in is tr a ti v e e xp e n se s
PLN 1,109.8m less than in the prior year, among other tings.
In 2013, the balance of other net operating income and expenses was negative and amounted to PLN 214.5m compared with the also negative balance for 2012 of
PLN 127.1m of provisions, i.e. PLN 79.9m less than in 2012);  an increase in life insurance provisions for individual investment products in the bancassurance channel as a result of high sales of new insurance.
At the end of 2013, the main component of the PZU
PLN 6.4m, under the guarantee facility which is available from 7 October 2013 to 6 October 2014.
PLN 49.3m, mainly as a result of an additional prevention fund write-off.
After accounting for the one-off effects related to the drop in technical rates in 2012 and the lower effect of conversion of long-term contracts into renewable contracts in type P group insurance in the segment’s results, the segment’s operating profit amounted to
Income from the investment segment comprises investments of the PZU Group’s own funds, understood as the surplus of investments over technical provisions in the leading PZU Group insurance companies (PZU
led to an increase of PLN 2.3m in the fees collected by the Social Insurance Institution
and active cooperation with brokers and banks, which are characterized by higher commission charges.
The PZU Group earned an operating profit of PLN 0.9m in the Baltic States in 2013, compared with PLN 2.2m in the prior year.
The following had an impact on the results of the segment in 2013:  A drop in gross written premium. This amounted to PLN 1,098.0m, i.e. was 41.0%
(the effect of the strategy consisting of withdrawing from this type of policy). At the same time, the written premium on the
The improving combined ratio was also a result of the absence of major catastrophic events (such as floods, inundations and snow damage).
Management Board 1st line of defence 2nd line of defence 3rd line of defence
In the event of any circumstances which cause adverse changes in insurance liabilities or a financial loss arising from variations in the occurrence, frequency or scale of insured events or variations in the payment of settled claims and benefits, the PZU Group takes steps to:  modify the tariffs;  modify the scope of the PZU Group’s liability in the individual specific products;  introduce new exemptions to the general terms of insurance;  modify the underwriting principles;  develop co-insurance programmes;  develop reinsurance programmes;  withdraw a product from sales.
Concentration risk measurement for a single entity is calculated as the product of the following two values:  the amount of exposure to this entity over the excessive concentration level;  the concentration risk ratio set for every internal rating.
Compliance risk is monitored mainly through:  the analysis of quarterly reports received from the managers of the organizational units;  the review of the regulatory requirements;  participation in legislative work on amending the generally applicable regulations;  participation in the activities of professional organizations;  coordination of external control processes;  coordination of reporting requirements arising from the stock exchange regulations and the law;  review of the Compliance Department’s recommendations.
 PZU won the title of Capital Market Hero in the second edition of this survey held by
approved the Capital Structure and Dividend Policy for the PZU Group for 2013-2015, which on the same date was approved by the Supervisory Board with the wording prepared by the Management Board.
Financial Supervision Authority does not approve classification of the subordinated debt to own funds, the dividend from capital surplus will not be paid and the interim dividend (paid on 19 November 2013) will constitute a portion of thedividend calculated based on the consolidated net profit for 2013.
Caring for social education and promotion of science, in 2013 PZU supported organization of the Scientific Picnic by Polish Radio, Centrum Nauki Kopernik and Centrum
Code of Good Insurance Practices adopted on 8 June 2009 by the General Meeting of the Polish Chamber of
Activities within the consolidated financial reporting are coordinated through the organizational structure of the Finance Division in the PZU and PZU Życie Head
General Shareholders’ Meeting is deemed valid regardless of the number of attending shareholders or number of represented shares.
Member has to present a written statement that all independence criteria provided for in the By-laws have been met and inform the Company when the criteria are no longer met. In addition, the By-laws give the State
The criteria of an Independent Member of the Supervisory Board were met by Dariusz Daniluk and
The composition of the Supervisory Board did not change in 2013.
Cabinet. Currently, he is Member of the Supervisory Board of PZU.
In 1980s., he contributed to the underground political publications and published commentaries in The Wall Street Journal. Since 1988, he has cooperated with the editorial team of the quarterly Przegląd Polityczny. He also publishes articles and comments on economic matters in
In 1984 graduated from the present Warsaw School of Economics and in 1992 from University of Illinois at Urbana - Champaign, USA, M.A.
Master of Business Administration University of Illinois at Urbana-Champaign co-organized with University of Warsaw (M.A. in Management and Marketing). Participated in a number of domestic and foreign seminars and courses on banking, finance and capital markets. In 1991 obtained a security broker license (in 1992, won WSE President Award for the best broker) and in 2004 obtained a license for candidates for supervisory board members in State Treasury companies.
Board as well and taking decision to stop such suspension which are adopted in a secret ballot.
Board. Moreover, the Audit Committee may apply to the Supervisory Board for commissioning specific controls in the Company to be exercised by an internal or external entity.
Compensation Committee as at 1 January 2013:  Zbigniew Ćwiąkalski – Chairman
Andrzej Klesyk has been the Chairman of the Management Board of PZU SA since December 2007.
Dariusz Krzewina – Chairman of the Management Board of PZU Życie, Member of the Management Board in PZU
and post-graduate studies in insurance at Warsaw School of Economics. He has worked in the insurance industry for many years. From September 1993 to August 1998 he was employed in PZU
Manager. From October 2008 to March 2009 he held the function of the Director – Financial Division
Chamber. From July to 31 December 20913 he was a Member of the Management Board in PZU in charge of the Corporate Client Division, reinsurance and bancassurance.
Tobiasz Bury graduated from Warsaw School of Economics, Kellogg School of Management w USA and
The Management Board exercises all management rights which have not been reserved by the provisions of law or provisions of the By-laws for the General
(individually or jointly) and would be concluded on nonarm ’s length basis.
Adjusting the rate of PZU Życie calculated according to IFRS to the PAS level (390.1)