Although average monthly remuneration in the national economy increased in nominal terms by 5.4%
(“PAS”) as at the end of September 2011 amounted to PLN 57,150 million, which indicates an increase of 85.5% (+PLN 2,987 million) compared with the three quarters of the prior year.
Premiums in non-life insurance for the 3rd quarter of 2011 increased by 11.3% to PLN 25,301 million compared with the three quarters of the previous year. The market increase was mainly the effect of an increase in motor insurance (there were many increases on the market in the period from the 2 nd quarter of 2010 to the 1 st quarter of 2011, which resulted in an increase in average premium in 2011).
The technical result of PZU Życie constitutes the majority of the results earned by all life insurance companies. It should be emphasized that despite the drop in technical result, in 2011 PZU Życie‟s technical profit margin on written premium still exceeds the margin earned by all the other companies offering life insurance by more than threefold (20.6% vs. 6.0%).
When these amendments come into force, it will lead to increased interest of the market in so-called policy-linked investments” offered by life insurers, which for PZU Życie means an option to increase the sales potential for this type of insurance through the bancassurance channel and its network of own outlets.
Warsaw N/A N/A N/A N/A N/A Property and other personal (non-life) insurance
State Treasury was the sole shareholder on the basis of art. 97 of the Act on insurance activities of 28 July 1990 (Journal of Laws No. 11 of 2010, item 66 as amended (“Insurance Act”).
insurance – Other property and personal insurance, in accordance with the categories specified in the
Transfer of Centrum Obsługi Ubezpieczeń in Warsaw and part of Telecentrum from PZU Życie to PZU CO
Income on investing activities for the 12 months ended 31 December 2011 and 31 December 2010 amounted to PLN 1,593.8 million and PLN 2,777.8 million respectively (including investment contracts, i.e. contracts which do not include significant risk insured).
A drop in net claims and benefits (of PLN 162.9 million, i.e. 1.6%) was noted exclusively in the non-life segment. In the life insurance segment the following had an impact on the increase in net claims and benefits paid and on the change in technical reserves amounted to PLN 115.3 million (2.5%) in 2011:  an increase in benefits paid of 6.6%;
In 2011 operating profit amounted to PLN 2,956.7 million and was 4.3% lower than in the prior year, which resulted mainly from the lower results on investing activity (- 42.6%). The drop was largely offset by an increase in net premium earned of 4.8% and a drop in net insurance claims and benefits of
Table 20: Impact of the consolidation of the Armatura Group on the consolidated results of the PZU
Value of consolidated net assets of the Armatura Group as at 1 January 2011 250 472
Share of the PZU Group in consolidated net assets of the Armatura Group as at 1 January 2011 (64.6250%)
16,823 thousand, which leads to a capital deficit of UAH 622 thousand as at that date).
* including dividend from PZU Życie of PLN 1,987,282 thousand in 2011 and PLN 3,120,000 thousand in 2010 respectively
PLN 295.7 million respectively. The 38.3 million (12.9%) change results mainly from:  an increase in commission paid in respect of protective group insurance as a result of an increase in the portfolio and a growing share of premium underwritten through the brokerage channel, where the growth trend in the share of premium underwritten through this channel in the total gross written premium slowed significantly compared with prior years;  an increase in commission in protective insurance distributed through the bancassurance channel due to the payment of their share in profits;  an increase in commission in the savings and investment product with a protection element and regular premium “Plan na Życie” – the commission is prepaid.
 In 2011 two new products were added to the offer: o performance bond for removing and adjusting negative effects on the environment and environmental damage (the so-called environmental performance bond); o an insurance guarantee for the user contract in respect of accounts with deferred payments
The organization of PZU‟s sales network is aimed at guaranteeing maintenance of high sales effectiveness while simultaneously ensuring high quality services. This is achieved by organizing sales in two dimensions:  division by distribution channels;  client segmentation.
As at 31 December 2011, PZU offered products in the following distribution channels:  exclusive agents – PZU‟s own agent network: o office agents (347; sales-supporting agents in PZU‟s own outlets); o agents operating locally exclusively on a mobile basis (5,686); o Group Agencies (6; pilot program – agents managing stationary outlets);  multiagencies – agents cooperating with several insurance companies (2,215);  insurance brokers (ca. 800);  bancassurance – sales via banks and other partners for whom insurance sales are an auxiliary activity;  direct – telephone and Internet sales;  PZU employees – sales in own outlets (470 people).
The general insurance terms and conditions are provided on the PZU website (www.pzu.pl) and in particular PZU outlets. In accordance with the Act on insurance activities, general insurance terms and conditions should be provided to the insurant before the insurance contract is concluded.
Insurance contracts exceeding 25% of the total RTU and equity amount of PZU
In 2011 the product offer continued to be developed in the area of health insurance, concentrating on the area of group products directed at non-standard offers for corporate clients.
PZU Życie. Such functions include: sales management (for particular customer segments), loss adjustment, management of the distribution network, financial division and support. The geographical coordination is carried out through geographical structures of the companies (regional branches or appropriate structures of divisions/functional areas).
Moreover, subsidiaries such as: PZU CO, PZU Pomoc SA, TFI PZU, PZU AM provide services to PZU
among other things, an application for Internet reporting of the claims for English speaking clients was launched (an innovation on the Polish market);
9.10 Activities related to Corporate Social Responsibility in 2011 9.10.1 Business Ethics
In the area of “Education” the following action was taken:  a competition subsidy “Wzbogacanie oferty edukacyjnej na terenach wiejskich i w małych miastach” (Expanding the educational offer in rural areas and in small towns);  Partnership programs were introduced: o in cooperation with Fundacja Edukacyjna Przedsiębiorczości in Łódź – scholarships were founded for young people from rural areas and small towns; o two editions of historical workshops were co-financed organized by Fundacja Centrum im.
PZU and PZU Życie manage insurance risk by applying the following tools:  calculating and monitoring the adequacy of technical reserves;  tariff strategy and monitoring current estimates and assessing the adequacy of premium;  reinsurance.
Authority, PZU and PZU Życie carried out stress tests relating to the financial data reported as of 31
PLN 5,371.2 million (an increase of 66.3% compared with the end of 2010). The increase in the net asset value resulted from own investments of the PZU Group companies in units of TFI PZU funds and in investment certificates of dedicated closed investment funds, a positive balance of payments and cancellations of fund participants and an increase in the value of fund investments.
In accordance with the plans, in 2011 PZU AM began managing new investment portfolios (PZU FIZ
PZU Życie received its first group of Clients (employees of PZU and PZU Życie) – a total of 8,255 insured.
In 2011 and 2010 no employee stock ownership plans were implemented.
The above proceedings and litigation cases are typical and repetitive in nature, usually none of them separately has a significant impact on the PZU Group.
Management report on the activities of Powszechny Zakład Ubezpieczeń Spółka Akcyjna Capital Group in 2011 1 January 2012, PZU applies and will carry out the recommendations and principles of the amended best practices.
At the request of an entity authorized based on dematerialized shares of PZU submitted not earlier than after the announcement of the General Meeting being convened and not later than on the first working day after the date of registering participation in the General Meeting, the entity maintaining the securities account issues a named certificate of the right to participate in the General Meeting.
Entitlements and rights of the shareholders and the manner of their execution
Immediately after selecting the chairman of the General Meeting, an attendance list should be prepared containing the list of participants at the General Meeting, including the number of Company shares represented by each one of them and the number of votes attached to them. The attendance list should be signed by the chairman of the General Meeting and displayed during the meeting.
Meeting, the attendance list should be verified by a commission elected for this purpose, composed of
During the General Meeting, the Management Board is obliged to provide a shareholder at his request with information concerning the Company, if it is justified for the purpose of evaluating the issue covered by the agenda of the General Meeting. The Management Board shall refuse to provide information if it could cause damage to the Company, its related company or a subsidiary company or cooperative, in particular be revealing technical, trading or organizational secrets of the enterprise.
Board Members and the entire Management Board as well as making decisions on ceasing any such suspension;  granting approval for the transfer of a whole or part of the insurance portfolio;  accepting the Management Board‟s motions concerning the purchase, taking up or selling of shares in companies and concerning the Company‟s participation in other entities – the
In order to properly perform supervisory functions at the Company, the Supervisory Board may appoint permanent committees with an advisory and consultative role. On 30 June 2011, the Supervisory
PZU passed a resolution on amending the Statute of PZU and enacted all the amendments proposed by the shareholder.
The amendments to PZU‟s Statute concerned the following issues:  editorial changes concerning deleting from the Statute of PZU transitional provisions in the period of PZU‟s operations before and after entry to the regulated market in order to increase the transparency of the Statute of PZU by resigning from provisions which became redundant when the actual status described therein came true;  restricting the voting rights of the shareholders, including the adoption the principles for the accumulation and reduction of votes; The shareholders' voting rights have been restricted so that none of them at the General Meeting can have more than 10% of the total number of votes existing in PZU on the date of holding the