Graduated from the Law and Administration Faculty of the Maria Curie-Skłodowska University in Lublin and completed a postgraduate course in Organization and Management. From 2002 to 2005, she was a Member of the Puławy County Board. From 2005 to 2015, she was a member of the Sejm of the Republic of Poland (of the 5th, 6th and 7th terms). She worked in the Committees on the European Union, Internal Affairs, Special Committee for changes in legal codes, where she acted as the deputy chairwoman of the Committee for two terms of office. She was also member of the National Council of the Judiciary of Poland, Chairwoman of the Supervisory Board of the ZUS Social Insurance Institution. In 2007, she was the Secretary of the State on labor and social policy at the Prime Minister’s Office. In 2015-2017, she served as Head of the Chancellery of the President of the Republic of Poland.
President of the PZU Życie Management Board since 26 April 2017/ PZU Group Director since 15 February 2016 Graduated in Economics from the Warsaw School of Economics (SGH) and completed MBA studies at the London Business School. Gained extensive experience working for Polish and foreign financial institutions. In 20032007, he worked as Project Manager at the World Bank in charge of the preparation and coordination of loan programs aimed at implementing policies intended to improve energy efficiency in countries of Central and Eastern Europe. From 2009 to 2016, he was associated with The Boston Consulting Group where he was responsible for the provision of insurance and banking advisory services related to motor insurance claims handling, business strategy development and sales activation. He also participated as an expert in several bank merger deals.
PZU Życie Management Board Member / PZU Group Director since 25 March 2016
PZU Życie Management Board Member / PZU Group Director since 15 March 2017
Graduate of Polish philology at the University of Warsaw. Associated with the PZU Group since 2016. As a director, she supervised prevention and sponsoring activities at PZU and PZU Życie SA. In 2010-2016, she coordinated and managed publishing and film production projects. In 2008-2010, she served as deputy director and director of Channel 1 of Telewizja Polska SA. Earlier, in 2007, she headed TVP1’s News program. For many years, a journalist working for Tygodnik Solidarność, Wprost and Radio Free Europe. During martial law in Poland, she was associated with the underground publishing house “Wola”.
PZU Życie Management Board Member / PZU Group Director since 19 August 2016
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 cases related to commercial company law, copyright law, administrative law and criminal 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.
In 2018, the PZU Group companies subject to consolidation did not grant any loans or similar benefits to members of their management boards, higher level managers or members of their supervisory boards.
Group Directors There is a common management model in PZU and PZU Życie. The rules governing the establishment of which and the appointment to and dismissal from which are laid down in the Organizational Rules and Regulations of these companies. According to this model, the persons discharging the functions of Management Board members at PZU Życie are at the same time employed as directors of the PZU Group at PZU and are in charge of the same business structures and areas at PZU and PZU Życie SA.
Compensation and other short-term employee benefits paid by PZU (PLN thous.)
Łukasz Świerżewski nd. - 27 1 ) including non-competition compensation of PLN 600 thousand 2) including non-competition compensation of PLN 276 thousand 3) bonus for the Sponsoring Director function discharged from 1 January to 14 March 2017 4) compensation for the period of discharging the PZU Group Director’s function until 12 April 2017
Sławomir Niemierka nd. nd. 539 107 1) remuneration for the function of Pekao Supervisory Board Member discharged from 1 January to 20 June 2018 2) remuneration for the function of Alior Supervisory Board Member discharged from 1 January to 14 June 2017 3) including non-competition compensation of PLN 149 thousand (PZU Życie) 4) bonus for the Sponsoring Director function discharged from 1 January to 14 March 2017
Total estimated value of non-cash benefits granted by PZU and PZU’s subsidiaries 1 January – 31 December 2018 1 January – 31 December 2017
As regards qualifications and requirements for those occupying positions in management and supervisory bodies in PZU, the Company in particular takes into account the criteria defined in the provisions of the Commercial Company Code of 11 September 2015 the Insurance and Reinsurance Activity Act of 11 September 2000 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. Members of the management board and supervisory board of the new term of office are selected in compliance with the principles of equal access of women and men 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.
Monika is a student of journalism at the Cardinal Stefan Wyszyński University. She is our intern in the Corporate Communication Department. For the first 1.5 months she dealt with internal communication, among other things taking part in prepating the PZU World quarterly. Currently, she is familiarizing herself with the ins and outs of social media in the external communication and PR section. Privately, she loves classic rock music (oldies) and is passionate about films and open-air cinema.
“From the very beginning I’ve been surrounded by positive people. Each task has been explained well and there hasn’t been a moment when I wasn’t able to cope. I recommend this program to everyone”
Truthfulness and accuracy of the presented financial statements To the best knowledge of the PZU Management Board, the PZU Group and Issuer’s annual consolidated financial statements and comparative data have been prepared in line with the prevailing accounting principles, and honestly, accurately and clearly reflect the PZU Group’s and the Issuer’s assets and financial position as well as their financial result, and that the Management Board’s report on the PZU Group’s activity shows a true picture of the PZU Group’s and the Issuer’s development, results and position, including a description of the major threats and risks.
Information about significant agreements executed between shareholders The PZU Management Board does not have any information about agreements executed until the date of this Report on the activity of the PZU Group and PZU among shareholders as a result of which changes may transpire in the future in the percentages of shares held by its shareholders to date.
Information about significant executed agreements In 2018 no significant contracts were executed in respect of the Issuer’s operations.
Under the tax group agreement, PZU is the parent company representing the tax group. Pursuant to art. 25 section 1 of the CIT Act, the Tax Group performs settlements with the Tax Office on a monthly basis. PZU makes advance payments to the Tax Office for the CIT tax due from PZU’s overall Tax Group, while the member companies transfer the amount they owe in advance payments to PZU’s specified bank account.
According to the agreement, the new tax group does not include TFI PZU or Ardea Alba in liquidation, which previously belonged to the tax group established for the period of 2015 to 2017.
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 2018 Bank Pekao held 7 447 PZU shares. As at 31 December 2018 consolidated funds held 268 thousand PZU shares. PZU did not hold any treasury shares as at 31 December 2018.
Credits and loans extended and taken out Under their investment activity in 2018 PZU SA, PZU Życie SA and the funds managed by TFI PZU SA executed transactions to extend debt financing in the form of loans and bonds.
Companies in the PZU Group extend loans to one another. The following loans were extended in 2018 to the issuer’s related entities: • Loan agreement entered into by and between PZU Zdrowie
Granted and received guarantees and sureties In 2018, neither PZU nor its subsidiaries granted any sureties for a loan or borrowing or gave guarantees to any single entity or any subsidiary of such an entity if the total amount of outstanding sureties or guarantees would be significant, except for the first guarantee securing loan repayment by a subsidiary with a guarantee sum of PLN 495 million after conversion.
Information regarding the off-balance sheet items as at the end of 2018 is set forth in CHAPTER 6.6 ASSET AND LIABILITY STRUCTURE.
Business seasonality or cyclicity 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.
The Issuer’s stable rating outlook confirms that PZU has a strong business position, has a high level of equity, and is well-poised to achieve its intentions when it comes to investments.
Disputes In 2018 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 2018.
Basic amounts of the consolidated profit and loss account (PLN million) 2018 2017 2016 2015 2014
Share in net profit (loss) of entities measured using the equity method (1) 16 (3) 4 (2)
Basic and diluted weighted average number of ordinary shares* 863,347,220 863,519,608 863,510,930 863,523,000 863,519,490
Data from consolidated statement of financial position for 2016 restated - as at 1 January 2017
Unearned premium and unexpired risk reserve 8,525 8,008 7,076 5,856 5,250
Agricultural insurance claims higher than the average of the last 3 years - - (237) - -
Result of the sale of PZU Lithuania - - - 165 1.
8. Cost/Income ratio - banking operations 42.3% 48.0% 44.4% - -
Reinsurance commission and share in profits 39 27 21 16 16
Acquisition costs ratio (including reinsurance commission)* 18.8% 19.9% 20.7% 18.4% 19.8%
Acquisition costs ratio (including reinsurance commission)* 18.6% 18.4% 20.0% 20.6% 19.3%
Insurance claims and change in other technical provisions net (4,931) (5,142) (4,686) (4,718) (4,570)
Data from the profit and loss account – individual insurance (PLN million) 2018 2017 2016 2015 2014
Net revenue from commissions and fees 2,380 1,583 351 - -
Data from the profit and loss account – pension segment (PLN million) 2018 2017 2016 2015 2014
EPS (Earnings Per Share) – market multiple specifying earnings per share
Solvency II – a solvency system for European insurance undertakings taking the risk profile into account. These requirements have been in force since 1 January 2016 spread – the difference between the purchase and sale price of a given financial instrument risk-free rate – rate of return on financial instruments with zero risk. In PZU the risk-free rate is based on the yield curves for treasuries and it is the basis for determining transfer prices in settlements between operating segments sum insured – amount in cash for which an insured object is insured. In non-life insurance the sum insured ordinarily constitutes the upper limit of the insurer’s liability
ICP – Insurance Capital Fund, a separate asset fund constituting a provision created from insurance premiums, invested in the manner specified in the insurance contract, a component of life insurance with an insurance capital fund (ICP), also referred to as an investment policy
These Financial Statements contain forward-looking statements concerning the strategic operations. Such forward-looking statements are exposed to both known and unknown types of risks, involve uncertainties and are subject to other significant factors which may cause that the actual results, operations, or achievements of PZU Group considerably differ from future results, operations, or achievements expressed or implied in the forwards-looking statements. The statements are based on a number of assumptions concerning the current and future business strategy of PZU Group and the external environment in which the Group will operate in the future. PZU expressly waives any and all obligations or commitments concerning distribution of any updates or adjustments to any of the assumptions contained in these Management Board’s report on the activity of the PZU Group and PZU, which shall aim to reflect the changes in PZU expectations or changes in events, conditions, or circumstances on which a given assumption has been made, unless provisions of the law provided otherwise. PZU stipulates that the forwardlooking statements do not constitute a guarantee as to the future results, and the company’s actual financial standing, business strategy, management plans and objectives concerning the future operations may considerably differ from those presented or implied in such statements contained in these Management Board’s report on the activity of the PZU Group and PZU. Moreover, even if the PZU Group’s financial standing, business strategy, management plans and objectives concerning the future operations comply with the forward-looking statements contained in these Management Board’s report on the activity of the PZU Group and PZU, such results or events may not be treated as a guideline as to the results or events in the subsequent periods. PZU does not undertake to publish any updates, changes, or adjustments to information, data or statements contained in these Management Board’s report on the activity of the PZU Group and PZU if the strategic operations or plans of