On 14 June 2019, S&P Global Ratings raised PZU’s rating outlook from stable to positive (this rating was affirmed most recently on 8 October 2019). PZU’s financial strength and credit rating remained at A-. The S&P analysts decided that the PZU Group has demonstrated its capacity to generate good financial results, both historically and in comparison to its competitors. They also emphasized the improving risk management practices resulting in greater capital resilience and high capital management discipline. The agency’s report also refers to PZU’s excellent position on the insurance, banking and asset management market, which will allow it to use this advantage in order to continue generating good financial results, strengthening the fundamentals and improving its position in the entire sector.
When justifying the affirmation of the rating, S&P pointed to, among other things, diversified economy, qualified employees, manageable levels of public and private debt and membership in the European Union. The agency also noted the good fiscal position of the state budget in 2018. As one of the reasons for the low budget deficit, it pointed to the high growth of tax
Credit rating (long-term in foreign currency) A- /Stable/ 12 October 2018 BBB+
Credit rating (short-term in local currency) A-1 12 October 2018 A-2 13 April 2018
Credit rating (short-term in foreign currency) A-2 13 April 2018 A-2 13 April 2018
Financial strength rating A- /Positive/ 14 June 2019 A- /Stable/ 31 October 2017
Credit rating A- /Positive/ 14 June 2019 A- /Stable/ 31 October 2017
Bank Pekao’s financial creditworthiness ratings Bank Pekao cooperates with three leading rating agencies: Fitch Ratings, S&P Global Ratings and Moody’s Investors Service. In the case of the first two agencies, the ratings are prepared upon the Bank’s commission based on contracts. The Bank however has signed no agreement with Moody’s
Investors Service and the rating process is conducted on the basis of publicly available information and review meetings.
Source: S&P Global Ratings to the agency, the ratio of debt of the general government sector to GDP in 2019-2022 will be kept below 50%.7
S&P Global Ratings (counterparty rating in the event of forced restructuring) Bank Pekao Poland
On 16 January 2019 S&P Global Ratings assigned Alior Bank a Long-Term Issuer Credit Rating of ‘BB’ with a stable outlook and a Short-Term Issuer Credit Rating of ‘B’.
Outlook Stable Stable 8.9 Calendar of PZU’s major corporate events in 2020
In this section: 1. Application of corporate governance rules 2. System of control applied during the preparation of the financial statements 3. Audit firm auditing the financial statements 4. Share capital and shareholders of PZU, stock held by members of its governing bodies 5. Rules for amending the Company’s Articles of Association 6. Shareholder Meeting and shareholder rights 7. Supervisory Board and Management Board - composition, powers, method of operation 8. Compensation of the members of governing bodies 9. Diversity policy applied to the Issuer’s administrative, managing and supervising bodies
We appreciate that the leader’s role is to set the highest standards for the entire industry. We discharge this function not only by observing a number of codes but also by working continuously on their improvement. We believe that this is how we can make sagacious changes to contribute to the world that surrounds us.
PZU applies the corporate governance rules laid down by law, in particular the Commercial Company Code and the Insurance and Reinsurance Activity Act, the regulations governing the operation of the capital market and the rules set forth in the documents described below.
PZU applies the Corporate Governance Rules for Regulated Institutions published on 22 July 2014 by the Polish Financial Supervision Authority (“KNF”). This a collection of rules that define the internal and external relations of regulated institutions, including their relations with shareholders and customers, their organization, the functioning of internal oversight and key internal systems and functions as well as the governing bodies and the rules for their cooperation. This document is available on KNF’s website: ( knf.gov.pl/dla_rynku/regulacje_i_praktyka/zasady_ladu_ korporacyjnego) and on PZU’s website.
Since the day when its shares were admitted to trading on a regulated market, PZU has followed the corporate governance rules laid down in the Best Practices of WSE Listed Companies 2016 adopted by the Supervisory Board of the Warsaw Stock Exchange on 13 October 2015. The best practices of public companies constitute a collection of corporate governance rules and rules of conduct that affect how public companies interact with their market environment. The best practices are available on the Warsaw Stock Exchange’s website: (www.gpw.pl/dobre-praktyki) and on PZU’s website.
The set of principles expressed in the Best Insurance Practices adopted on 8 June 2009 by the General Assembly of the Polish Chamber of Insurance (“PIU”) informs how PZU conducts its business operations and shapes relations with its stakeholders. This document defines the rules of corporate social responsibility in terms of how insurance undertakings interact with customers, insurance intermediaries, the regulatory authority and the Financial Ombudsman, the media and in public securities trading. By applying the Best Insurance Practices insurance undertakings conduct regular efforts to develop insurance awareness in the public at large.
Application of Corporate Governance Rules to regulated institutions The PZU Management Board and Supervisory Board have declared their readiness to apply the Rules to the broadest possible extent while giving consideration to the rule of proportionality and the rule “comply or explain” stemming from their wording. These declarations were confirmed by the PZU Management Board and Supervisory Board in their respective resolutions.
– the waiving of this rule is due to the unfinished process of the Company’s privatization by the State Treasury; • the rule laid down in § 12 section 1 reading as follows: “Shareholders are responsible for recapitalizing without delay a regulated institution in a situation in which it is necessary to maintain the regulated institution’s equity at the level required by the legal regulations or oversight regulations as well as when the security of the regulated institution so requires.” – the waiving of this rule is due to the unfinished process of the Company’s privatization by the State Treasury; • the rule laid down in § 28 section 4 reading as follows: “The decision-making body assesses whether the implemented compensation policy fosters the regulated institution’s development and operating security.” – the waiving of this rule is due to the overly broad scope of the subject matter of the compensation policy subject to assessment by the decision-making body. The compensation policy in respect of persons who discharge key functions but are not members of the supervising body or the managing body should be subject to assessment by such persons’ employer or principal, i.e. the Company represented by the Management Board and supervised by the Supervisory Board.
Furthermore, the following rules are not applicable to PZU: • the rule laid down in § 11 section 3 reading as follows: “In the event that the decision-making body makes a decision concerning a transaction with a related party, all shareholders should have access to all information required to assess the conditions on which it is implemented and its impact on a regulated institution’s standing.” – in PZU, the Shareholder Meeting does not make decisions on transactions with related parties; • the rule laid down in § 49 section 4 reading as follows: “In a regulated institution in which there is no audit or compliance cell, the rights ensuing from sections 1-3 are vested in the persons responsible for performing these functions.” – audit and compliance cells operate in PZU; • the rule laid down in § 52 section 2 reading as follows: “In a regulated institution in which there is no audit or compliance cell or no cell responsible for this area has been designated, the information referred to in section 1 shall be conveyed by the persons responsible for performing these functions.” – audit and compliance cells operate in PZU;
The scope of information on the site and access thereto are monitored on an ongoing basis. In the event of detecting any technical problems posing an impediment to documents, efforts are promptly taken to reinstate the website’s full functionality.
Group employees should conduct themselves the Best Insurance Practices laying down the principles according to which insurance sector companies as institutions of social trust should conduct themselves
The process of consolidated financial reporting is governed by a number of internal regulations. They govern the principles of accounting policy adopted by the PZU Group and accounting standards. Moreover, they are subject to detailed schedules including the key activities and control points with assigned liability for timely and correct completion.
Audit Committee The PZU Supervisory Board appoints the audit committee composed of at least three Supervisory Board Members. The majority of audit committee members, including the Chairperson, satisfy the independence criteria defined in the Statutory Auditor Act and at least one member has knowledge and skills in accounting or audit of financial statements in accordance with the requirements provided for in the Statutory Auditor Act, which is the key legal act applicable to the operation of the audit committee. Moreover, PZU analyzes Best practices for public interest entities pertaining to the appointment, composition and operation of the audit committee as published by the Office of the Polish Financial Supervision Authority on 24 December 2019.
The scope of the concluded agreement encompasses the following in particular: • auditing PZU’s annual standalone financial statements and the PZU Group’s annual consolidated financial statements; • reviewing PZU’s interim standalone financial statements and the PZU Group’s interim consolidated financial statements.
Main assumptions underlying the policy for selecting the audit firm The following are among the main assumptions underlying PZU’s policy for selecting the audit firm: • ensuring that the process of selecting the audit firm is done correctly and determining the responsibility and the duties of the participants in this process; • analyzing when selecting the audit firm the recommendations given by the audit committee; • giving consideration to the rule of rotating the audit firm and the key statutory auditor in the embraced time horizon.
Corporate governance 9.4 Share capital and shareholders of PZU, stock held by members of its governing bodies
The State Treasury holds 295,217,300 shares representing 34.19% of PZU’s share capital giving the right to 295,217,300 votes at the Shareholder Meeting.
According to this notification, as a result of selling PZU shares in transactions on the Warsaw Stock Exchange settled on 18 July 2019, Nationale-Nederlanden OFE reduced its equity stake in PZU to below 5% of the votes at PZU’s shareholder meeting. At the same time, as a result of the same transaction, the funds managed by Nationale-Nederlanden Powszechne Towarzystwo Emerytalne S.A.: Nationale-Nederlanden Otwarty Fundusz Emerytalny and Nationale-Nederlanden Dobrowolny Fundusz
Emerytalny, reduced their total stake in PZU to a level below 5% of the votes at PZU’s shareholder meeting.
In 2013-2019, PZU did not have any employee stock programs in place.
Shares or rights to shares held by members of management or supervisory bodies and PZU Group Directors As at the date of publication of this Activity Report, only Tomasz Kulik, Member of the PZU Management Board held PZU shares numbering 2,847, which the Company reported in current report 23/2018. No changes transpired from the date of conveying the 2018 consolidated financial statements (i.e. 13 March 2019) with respect to members of the Management Board and Supervisory Board or Group Directors holding PZU shares or rights to shares.
The Shareholder Meeting is PZU’s highest corporate body. The method of operation and the rights of the Shareholder Meeting are regulated by the Commercial Company Code and PZU’s Articles of Association.
The PZU Ordinary Shareholder Meeting adopted its Rules and Regulations under Resolution No. 31/2018 of 28 June 2018.
The powers of the Shareholder Meeting, in addition to those specified in the Commercial Company Code or the Articles of Association, include the adoption of resolutions concerning the following: • examination and approval of the Management Board’s report on the Company’s activity and the Management Board’s report on the activity of the PZU Group and the Company’s financial statements and consolidated financial statements of the PZU Group for the previous financial year and granting a discharge to individual members of the Company’s corporate bodies on the performance of their duties; • review of the Management Board’s report on representation expenditures and expenditures for legal, marketing, public relations and public communication services and management consulting services; • distribution of profits or coverage of losses; State Treasury 34%
• subscription or acquisition of shares in another company, with the value exceeding: ◦ PLN 100 million or ◦ 10% of total assets within the meaning of the Accounting
• disposal of shares in another company, with the value exceeding: ◦ PLN 100 million or ◦ 10% of total assets within the meaning of the Accounting
The Supervisory Board convenes: • an Ordinary Shareholder Meeting if the Management Board fails to convene an Ordinary Shareholder Meeting by the prescribed deadline; • an Extraordinary Shareholder Meeting if it deems that to be necessary; • an Extraordinary Shareholder Meeting if the Management Board fails to convene an Extraordinary Shareholder Meeting in response to a motion submitted by an eligible shareholder, eligible shareholders or the Supervisory Board within fourteen days after the motion is filed.
Shareholder Meetings are held in Warsaw and convened by placing an announcement on PZU’s website in accordance with the method for providing current information specified in the Act on Public Offerings, Conditions Governing the Introduction of Financial Instruments to Organized Trading and Public Companies of 19 July 2005 in the form of current reports. Such announcement should be made not later than twentysix days before the date of the Shareholder Meeting. The announcement and materials presented to shareholders are available on the date of convening the Shareholder Meeting on PZU’s corporate website in the “Investors relations” section under the “Shareholder Meeting” tab.
Resolutions are passed in an open ballot. A secret ballot is ordered in elections or on motions to dismiss members of the Issuer’s corporate bodies or liquidators, in matters concerning their personal liability to the Company as well as in other personal matters or, excluding cases when voting by open ballot ensues from a statute, at the request of at least one of the shareholders attending or represented at the Shareholder Meeting.
One PZU share gives the right to a single vote, subject to restrictions on exercising the voting rights described in the Articles of Association. A shareholder may vote differently from each of the shares held by it.
Corporate governance be deemed to be non-existent. The restriction on voting rights does not apply to the following: • shareholders who on the date of adopting a Shareholder
Meeting resolution implementing this limitation were entitled to shares representing more than 10% of the total number of votes in existence in the Company; • shareholders acting with the shareholders specified in item 1 pursuant to executed agreements pertaining to jointly exercising the voting rights attached to shares.
As at 1 January 2019, the following persons sat on the PZU Supervisory Board: • Maciej Łopiński - Supervisory Board Chairman; • Paweł Górecki - Supervisory Board Deputy Chairman; • Alojzy Nowak - Supervisory Board Secretary; • Marcin Chludziński - Supervisory Board Member; • Agata Górnicka - Supervisory Board Member; • Robert Jastrzębski - Supervisory Board Member; • Katarzyna Lewandowska - Supervisory Board Member; • Robert Śnitko - Supervisory Board Member; • Maciej Zaborowski - Supervisory Board Member.
Maciej Łopiński Supervisory Board Chairman since 9 January 2018 (on the Supervisory Board since 8 January 2018)
Graduated from the Faculty of Law, Administration and Economics of the University of Wrocław. He received the degree of Doctor of Law. He was a legal advisor trainee and a court trainee and has been entered in the legal advisor registry. He attended numerous training courses and workshops in law of evidence, civil and penal law and management of public entities. He has authored several dozen peer-reviewed papers on the subject of law published by Polish and international journals. Member of supervisory boards of several capital companies. Currently the Vice-President of the KDPW S.A. Management Board.
Management Board since June 2018. He graduated from the Social Policy Institute at Warsaw University. Completed MBA
From January 2016 to June 2018 he served as President of the Agencja Rozwoju
Professor ordinary at the University of Warsaw, a graduate of the Department of Foreign
USA and completed studies in banking, finance and capital markets at the University of Exeter in the United Kingdom; international economic at the Freie Universitat in Berlin and in
Eurolot. Authored more than 300 publications in Poland and abroad. Visiting professor at numerous universities internationally. In
December 2018, along with 22 prominent economists from around the world, including 4 Nobel Prize winners, he became a member of the Academic Council of the Institute for
School of Economics. Member of the Presidium of the “Poland 2000
Economic Society. In 1996-1998 she was a member of the Supervisory
A graduate of the Faculty of Psychology and Pedagogy of Warsaw University.
journals. A former member of the supervisory boards of Bank Handlowy
Chairman of the Business Award Jury of the President of the Republic of Poland,
Board who have been dismissed, resigned or cannot perform their functions for other reasons; • accepting instructions on how the Company’s representatives should vote at Shareholder Meetings of PZU Życie in matters on increasing or decreasing the share capital, issuing bonds, selling or leasing PZU Życie’s enterprise or establishing a usufruct right on the enterprise, dividing PZU Życie, merging PZU Życie with another company, liquidating or dissolving PZU Życie; • selecting the audit firm to carry out the mandatory audit of the financial statements, including the annual financial statements of the Company and the annual consolidated financial statements of the PZU Group and the solvency and financial condition report of the Company and the solvency and financial condition report of the PZU Group, and reviews of the financial statements in accordance with the obligations following from the prevailing laws; • deciding on the consolidated text of the revised Articles of Association,
The Supervisory Board elects from among its members the Chairperson and Deputy Chairperson and may also elect the Secretary from among its members.
Members of the Management Board, PZU’s employees relevant to the issue under consideration selected by the Management Board and other persons invited by the Supervisory Board may take part in the meetings of the Supervisory Board without the right to vote. In specific cases, the Supervisory Board may also invite members of the management board or supervisory board of other PZU Group member companies. Moreover, members of the Supervisory Board, with the consent of the Supervisory Board, may select no more than one advisor authorized to take part in the meetings of the Supervisory Board devoted to reports and financial statements and give their advice, provided that such a person adheres to the rules of confidentiality and signs a confidentiality undertaking.
The Articles of Association provide for the appointment of an audit committee by the Supervisory Board. The audit committee shall include at least three members. Pursuant to the Act of 21 June 2017 on Statutory Auditors, Audit Firms and Public Supervision, at least one member of the audit committee appointed by the Supervisory Board should hold qualifications in accounting or auditing financial statements. Furthermore, the majority of the audit committee members, including its chairman, should meet the statutory independence criteria (independent member) concerning, without limitation, professional or family ties, especially to managers or supervisors of PZU or PZU Group entities. The detailed tasks and for appointing members of the audit committee and its operation are specified in a resolution of the Supervisory Board which takes into account the relevant competencies and experience of candidates in respect of the matters entrusted to this committee.
In accordance with the rules and regulations of the audit committee adopted by a resolution of the Supervisory Board, the audit committee is an advisory and consultative body to the Supervisory Board and is appointed to improve the effective supervision of the correctness of financial reporting and the effectiveness of internal control, including internal audit and risk management, exercised by the Supervisory Board. In addition, the audit committee may request the Supervisory Board to request specific control activities in the Company, whereby the requested activities may be performed by an internal unit or external entity.
The audit committee composition was extended to 5 people on 27 May 2019 while establishing the following composition: • Alojzy Nowak – Przewodniczący Komitetu; • Marcin Chludziński – Członek Komitetu; • Krzysztof Opolski – Członek Komitetu; • Robert Śnitko – Członek Komitetu; • Maciej Zaborowski – Członek Komitetu.
The committee is dissolved once five members of the Supervisory Board are elected by group voting, following which its powers are taken over by the whole Supervisory Board.
In connection with the appointment of the PZU Supervisory Board for its new term of office, the composition of the nomination and compensation committee was established as of 27 May 2019 as follows: • Robert Jastrzębski – Committee Chairman; • Agata Górnicka – Committee Member; • Paweł Górecki – Committee Member; • Tomasz Kuczur – Committee Member; • Maciej Łopiński – Committee Member; • Alojzy Nowak – Committee Member.
The following people served on the strategy committee as at 1 January 2019: • Alojzy Nowak – Committee Chairman; • Marcin Chludziński – Committee Member; • Agata Górnicka – Committee Member; • Robert Jastrzębski – Committee Member; • Robert Śnitko – Committee Member; • Maciej Zaborowski – Committee Member.
The results generated by the PZU Group and various business divisions were regularly discussed and evaluated at Supervisory Board meetings in 2019 versus the financial plan. The Supervisory Board also discussed and accepted other legally-required detailed reports on various areas of the Company’s business, including, among others, regular reports on risk, compliance, audit and IT security. On top of that, the
Supervisory Board monitored the execution of the PZU Group Strategy for 2017-2020 on an ongoing basis.
Management Board Members, including the President of the Management Board, are appointed and dismissed by the Supervisory Board. Such appointment takes place following a recruitment procedure designed to verify and evaluate qualifications of the candidates and to select the best candidate, for a shared term of office of three consecutive full financial years. The President of the Management Board of the new term of office appointed before the current term elapses has the right to submit a motion to the Supervisory Board requesting appointment of the remaining Management Board members of the new term of office before the current term elapses.
A Management Board Member must fulfill all of the following conditions: • holds a graduate degree or a graduate degree received abroad and recognized in the Republic of Poland pursuant to separate regulations; • has at least 5-year employment period based on an employment agreement, appointment, selection, nomination, cooperative employment agreement or provision of services on the basis of another contract or conducting business activity on one’s own account; • has at least 3 years of experience on managerial or independent positions or arising from conducting business activity on one’s own account; • in addition to the above requirements, meets other requirements arising from separate regulations, in particular is not in breach of any restrictions or prohibitions for holding an executive position in commercial companies.
As of 1 January 2019 the Management Board composition was as follows: • Paweł Surówka – President of the Management Board; • Roger Hodgkiss – Management Board Member; • Tomasz Kulik – Management Board Member; • Maciej Rapkiewicz – Management Board Member; • Małgorzata Sadurska – Management Board Member.
On 27 March 2019 the PZU Supervisory Board adopted a resolution to appoint Paweł Surówka to the PZU Management Board for the new term of office and entrusted him with discharging the function of CEO of PZU.
As at the date of conveying this periodic report, the PZU Management Board consisted of the following persons: • Paweł Surówka – President of the Management Board; • Tomasz Kulik – Management Board Member; • Maciej Rapkiewicz – Management Board Member; • Małgorzata Sadurska – Management Board Member; • Marcin Eckert – Management Board Member; • Adam Brzozowski – Management Board Member; • Elżbieta Häuser-Schöneich – Management Board Member.
The current term of office of the PZU Management Board spans three full consecutive financial years from 2020 to 2022. The mandates of the Management Board members will expire no later than on the date of the Shareholder Meeting approving the financial statements for the most recent full financial year of the discharge of their functions.
Management Board’s powers and operating rules The Management Board exercises any and all rights related to managing PZU which are not otherwise reserved by law or the provisions of the Articles of Association to the Shareholder Meeting or the Supervisory Board. Two Management Board members acting jointly or one Management Board member acting jointly with a commercial proxy are authorized to represent the Company. The Management Board adopts its rules and regulations, which are approved by the Supervisory Board. The Rules and Regulations of the Management Board were adopted by the Management Board on 2 October 2012, amended by a Management Board resolution on 8 April 2013 and on 10 May 2018 and approved by a resolution of the Supervisory Board on 15 May 2018.
The Rules and Regulations of the Management Board define: • the scope of the Management Board’s powers and activities that require approval or confirmation by the Supervisory Board; • powers of the President of the Management Board and other Management Board members; • principles and organization of the Management Board’s activities, including its meetings and decision making procedures; • rights and obligations of Management Board members upon dismissal.
• adoption of a report on representation expenditures and expenditures for legal, marketing, public relations and public communication services and management consulting services; • approval of a motion to distribute profit or cover loss; • determining premiums in compulsory and voluntary insurance and the general terms and conditions of voluntary insurance; • determination of the scope and size of outward reinsurance and the tasks for inward reinsurance; • adoption of an annual audit and control plan and a report on its implementation with conclusions; • determining the terms and conditions of investment, prevention and sponsoring activities; • granting sureties and guarantees excluding insurance operations and contracting or providing credit facilities or loans by the Company - excluding credit facilities and loans granted from the Company Social Benefits Fund; • appointment of a commercial proxy.
Resolutions of the Management Board are adopted only in the presence of the President of the Management Board or
PZU Management Board Member since 24 October 2019 ( PZU Group Director from 25 March 2016 to 23 October 2019 )/ PZU Życie Management Board Member since 25 March 2016 marketing, client relations, health insurance
Adam Brzozowski Member of the PZU Management Board since 25 May 2019 / PZU Group Director at PZU Życie since 25 May 2019
Marcin Eckert PZU Management Board Member since 28 March 2019 / PZU Życie Management Board Member since 1 May 2019 management and corporate oversight, administration, IT, innovations, insurance operations
PZU Management Board Member since 25 May 2019 / PZU Życie Management Board Member since 1 June 2019 retail sales, CRM, remote sales, digital services, development of mobile apps
Tomasz Kulik PZU Management Board Member since 14 October 2016 / Member of the PZU Życie Management Board since 19 October 2016 actuarial, finance and investments
Małgorzata Sadurska PZU Management Board Member since 13 June 2017 / PZU Życie Management Board Member since 19 June 2017
PZU Życie – bank protection products, investment products, sales of investment products
Roman Pałac CEO of PZU Życie since 26 April 2017 / PZU Group Director since 15 February 2016
PZU Życie – internal audit, compliance, reinsurance, corporate communication, sponsoring, strategy and projects, cooperation with the brokerage channel, agency sales, corporate sales, group, individual and health products, tariff actuarial services, product research
PZU and PZU Życie – claims and benefits handling, assistance, customer service, management of the PZU branch network
Dorota Macieja PZU Życie Management Board Member / PZU Group Director since 15 March 2017 prevention, CSR, customer communication, real estate a person designated to head the work of the Management Board during the President’s absence.
Resolutions of the Management Board are adopted by an absolute majority of votes; in the event of a voting tie, the President has the casting vote. The Management Board, with the CEO’s consent, may adopt resolutions in writing, or in electronic form (i.e. using means of remote communication and a qualified electronic signature). The Articles of Association also provide that meetings of the Management Board may be held using means of direct remote communication.
Presented below are the scopes of responsibility of the Management Board members in office in 2019:
Graduate of the Faculty of Law and Administration at the Nicolaus Copernicus University in Toruń. Graduate of the Leadership Academy for Poland. Associated with the PZU Group since 2017, where he previously was Managing Director on Corporate Matters. Since 2001 he has been practicing as a legal advisor. He specializes in commercial law, tax law, labor law. Prior to his employment in the PZU Group, he was a Senior Associate at Bird & Bird Szepietowski i wspólnicy (as leader of the Benefits & Compensation practice). Previously he was also associated with TGC Corporate Lawyers Warszawa (Director of the Tax Department), Mazars & Guerard Audyt (Director of the Law and Tax Department ) and Ernst & Young (Senior Manager).
PZU Management Board Member since 22 March 2016 / PZU Życie since 25 May 2016
He graduated from the Faculty of Law and Administration at the University of Łódź and completed post-graduate studies in business insurance, an MBA in finance and insurance and risk management. Associated with the PZU Group intermittently since 1998. From 2006 to 2009 he was a Management Board Member and then Vice-President of the TFI PZU Management Board. Since 2015 he has worked for TFI BGK S.A., serving as a Management Board Member. He was also the President of the ŁSSE S.A. Management Board. He sits on supervisory boards of PZU Group companies: Alior Bank, PTE PZU, LINK4. He served on supervisory boards of foreign companies owned by the PZU Group. He also sat on supervisory boards of companies not affiliated with PZU.
PZU Management Board Member since 25 May 2019 / PZU Życie Management Board Member since 1 June 2019
She is a graduate in art history from the Catholic University in Lublin and of post-graduate studies in ValueBased Management at the Warsaw School of Economics. She is also a graduate of the General Management Programme at CEDEP/INSEAD and the Entrepreneurship and Innovation program at Stanford University. She has more than twenty years of experience in business development, management, sales and marketing gained in international institutions operating in the insurance, telecommunications and FMCG industries. Through most of her professional career, she was associated with the life and property insurance markets. She was one of the creators of the direct insurance market in Poland. In 2005-2007 associated with ING NationaleNederlanden. In 2008-2015 she worked for the Aviva Group as vice-president and a supervisory board member of one of the group companies. Prior to taking a position in the PZU Management Board she was a management board member with T-Mobile Polska.
PZU Życie SA Management Board Member since 20 February 2020 / CEO of PZU Życie since 26 April 2017 till 19 February 2020 and PZU Group Director since 15 February 2016
He graduated from the Economics Faculty at the Warsaw School of Economics. Also a Master of Business Administration (MBA) graduate from the London Business School. Has extensive experience working for Polish and foreign financial institutions. In 2003-2007 he worked as a Project Manager for the World Bank. From 2009 to 2016 associated with The Boston Consulting Group, where he worked for the largest financial sector companies in Poland and abroad. Served on the PZU Group Management Board since February 2016. Appointed to the position of the CEO of PZU Życie in April 2017.
Graduated from the Faculty of Law and Administration at the University of Warsaw. Advocate at the Bar Association in Warsaw. Practiced as an advocate specializing in civil law. He combines the knowledge of business with extensive experience resulting from his provision of legal assistance services, in particular in cases related to commercial company law, copyright law, administrative law and criminal business law. He also served as an advisor to the Extraordinary Committee of the Sejm for changes in legal codes. He has acquired experience in corporate governance serving as a member of supervisory bodies of commercial law companies.
PZU Życie Management Board Member and PZU Group Director since 15 March 2017
Moreover, the Management Services Provision Agreements entered into with Management Board members regulate their term of notice and issues related to refraining from engaging in competitive activity to the Company’s during their term of validity after their termination in consideration for damages. These contracts do not contain provisions contemplating damages in the event Management Board members resign or are dismissed from their position without a valid reason except for severance pay distributed after the fulfillment of contractual prerequisites which include dismissal or release on account of the issuer undergoing a merger by way of acquisition.
The following persons served as PZU Group directors in PZU in 2019: • Aleksandra Agatowska (until 23 October 2019); • Tomasz Karusewicz (until 30 April 2019); • Bartłomiej Litwińczuk; • Dorota Macieja; • Roman Pałac.
including bonuses and special awards: including part of variable compensation for 2017 and 2018
1) Including non-competition fee of PLN 383 thousand and severance pay of PLN 192 thousand. 2) Including non-competition fee of PLN 49 thousand and severance pay of PLN 77 thousand. 3) Bonus for the Sponsoring Director function discharged from 1 January to 14 March 2017.
Compensation and other short-term employee benefits paid by other PZU Group entities (PLN thous.)
9.9 Diversity policy applied to the Issuer’s administrative, managing and supervising bodies
Additionally, elements pertaining to the psychological working environment are part of regular occupational safety and health training offered to employees and managers alike.
Principles supporting diversity and equal treatment span all career stages in PZU, starting from the recruitment process to the duration of the employment relationship (employment terms, access to training and development-minded activities, opportunities to be promoted) to the termination of cooperation.
PZU confirmed its will to pursue a diversity policy by joining the signers of the Charter of Diversity in 2013.
As regards qualifications and requirements for those occupying positions in management and supervisory bodies, PZU in particular takes into account the criteria defined in the provisions of the Commercial Company Code of 15 September 2000, the Insurance and Reinsurance Activity Act of 11 September 2015 and the State Property Management Act of 16 December 2016. The criteria adopted by the legislator aim to ensure recruitment of people with the education and professional experience adequate to occupy management or supervisory positions in a company conducting insurance activity. Management Board and Supervisory Board members are selected for the new term of office in compliance with the principles of equal access of men and women to positions in the company’s statutory bodies. The current composition of the governing bodies also addresses the need of age diversification among PZU Management Board and Supervisory Board members.
Total estimated value of non-cash benefits granted by PZU and PZU’s subsidiaries 1 January – 31 December 2018 1 January – 31 December 2018
Roman Pałac 129 228 1) Including PLN 473 thousand for the Advanced Management Program at Harvard Business School.
Cooperation with international public institutions Under Solvency II PZU has the possibility of consulting the European Insurance and Occupational Pensions Authority (EIOPA).
Related party transactions on terms other than on an arm’s length basis In 2019, neither PZU nor its subsidiaries executed any transaction with their related parties which were of material significance individually or collectively and were executed on non-arm’s length conditions.
Purchase of treasury shares in the financial year Within its trading activity Bank Pekao enters into transactions on PZU shares and futures. As at 31 December 2019 Bank Pekao held 9,030 PZU shares. As at 31 December 2019 consolidated funds held 191 thousand PZU shares. PZU did not hold any treasury shares as at 31 December 2019.
Seasonal or cyclical business PZU’s business is not seasonal or cyclical to an extent that would justify application of the suggestions set forth in the International Financial Reporting Standards.
Rules of preparation The Rules of preparing the annual consolidated financial statements have been described in the PZU Group’s consolidated financial statements.
Assessment of the management of financial resources, including the capacity to satisfy the assumed liabilities and specification of possible threats and actions taken or to be taken by the Issuer to counter these threats Assessment of the performance of investment-related intentions
The Issuer’s positive rating outlook confirms that PZU has a strong business position, has a high level of equity, and is wellpoised to achieve its intentions when it comes to investments.
Financial forecasts The PZU Group has not published any forecasts of its financial results.
Disputes In 2019 and up to the date of preparation of this report on the activity of the PZU Group and PZU, there were no pending proceedings before court, a body competent to hear arbitration proceedings or a public authority body concerning liabilities or receivables of PZU or a direct or indirect subsidiary thereof whose unit value would be material except for the issues described in the PZU Group’s consolidated financial statements and PZU’s financial statements for 2019.
Basic amounts of the consolidated profit and loss account (PLN million) 2015 2016 2017 2018 2019
Entities measured using the equity method 54 37 20 17 11
Unearned premium and unexpired risk reserve 5,856 7,076 8,008 8,525 8,885
Provisions for bonuses and discounts for the insured 2 5 14 7 9
Liabilities directly associated with assets qualified as held for sale - 33 3 49 29
Revaluation of reserves for claims for compensation for vegetative states - - - (148) -
Higher than the average of the last 3 years, the level of damage caused by atmospheric phenomena (storms)
Reinsurance commission and share in profits 16 21 27 39 43
Data from the profit and loss account – mass-market insurance (non-life insurance) (PLN million)
Acquisition costs ratio (including reinsurance commission)* 20.6% 20.0% 18.4% 18.6% 19.3%
* ratios calculated with gross premium written ** (excl. one-off events)
Data from the profit and loss account – investment contracts (PLN million) 2015 2016 2017 2018 2019
Data from the profit and loss account – Ukraine segment (PLN million) 2015 2016 2017 2018 2019 * ratios calculated with net premium earned
Exchange rate EUR/LTL in PLN 4.1848 4.3757 4.2447 4.2669 4.3018 * ratios calculated with net premium earned
P/E (Price to Earnings) – multiple specifying the ratio of the company’s market price (per share) to earnings per share
ECP – Employee Capital Plans defined by the provisions of the Act of 4 October 2018 on employee capital plans
CRR Regulation – Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms
Regulation on Current and Periodic Information – Finance Minister’s Regulation of 19 February 2009 on Current and Periodic Information Transmitted by Securities Issuers and the Conditions for Recognizing the Information Required by the Regulations of a Non-Member State as Equivalent (Journal of Laws of 2009, No. 33 Item 259, as amended)
Statutory Auditor Act – Act z 7 May 1999 roku on Statutory Auditors and their Self Regulation, Entities Authorized to Audit Financial Statements and Public Supervision (Dz. U. 2009 nr 77 poz. 649 z póżn zm.)
Cost/Income ratio (C/I; banking sector) – quotient of administrative expenses and the sum of operating income, excluding: the BFG charge, the levy on other financial institutions and the net result on realization and impairment losses on investments solvency ratio – statutory multiple (under Solvency II) specifying the level of capital security for the operations conducted by an insurer; by law this multiple should be higher than 100%
leverage ratio of PZU Group - quotient of the debt from long-term financial liabilities (excl. bank deposits, deposit certificates and credit received in connection with the preferential financing of loans) and the sum of: debt from longterm financial liabilities and PZU Group’s equity less: the value of intangible assets, deferred acquisition costs and deferred tax assets, which have been presented in consolidated financial statements of PZU Group.