Organization, infrastructure and human resources 71 5.1 Sales and service channels 72 5.2 Human resources management 76
The Group’s innovative products establish new market standards. In 2015, PZU launched sign language services at its branches. In 2014, PZU was the first entity on the market to introduce direct claims handling. PZU’s services include the option of taking advantage of the innovative fleet of 300 replacement cars. In its promotion of ecological claims handling solutions, PZU offers bicycles to own instead of replacement cars. The Link4 offer was expanded by solutions calculating the insurance premium based on actual driver behavior in traffic to promote safe and ecological driving.
– total written premium gathered on these markets in 2015 constituted 7.4% of the Group’s gross written premium.
Health – developing the health insurance and health care services segment from 2014, PZU is cooperating with 1,580 health care centers (hospitals, clinics, counseling centers).
The key shareholder of PZU is still the Ministry of the State
Life insurance market share of 29.1%, including year-on-year growth of 1 p.p. in regular premiums to 43.9% (after three quarters of 2015).
*PZU share calculated with consideration of active reinsurance of PZU towards Link4
Strengthening of the insurance position in Central and Eastern Europe resulting from the acquisition of the following entities in the previous year: Lietuvos Draudimas (Lithuania), Balta (Latvia) and Codan Forsikring branch (Estonia).
VI place in the Employer of the Year ranking organized by AIESEC.
PLN 46.08 billion. In December, the original budget was amended to increase the deficit planned for 2015 to
Federal Reserve would decide on the potential interest rates increase in the USA, which eventually did not take place in
January 2016. A vacatio legis principle is applied to some provisions (e.g. provisions on contracts on third party’s account which come into force on 1 April 2016; until that day, provisions on insurance with insurance capital fund will also apply; a provision allowing insurers to acquire voluntary pension funds directly or via agents will come into effect on 1 August 2016.) The Act has following objectives: • to introduce a new solvency scheme applicable to insurance and reinsurance companies, similar to the regulations on capital requirements for banks (adaptation of EU
The factors that affect domestic demand, i.e. key driver of GDP growth in the face of external threats, are likely to remain favorable. In the second half of 2015, enterprises intensified their recruitment efforts, even though at the end of the year it could have resulted from the plan to apply social security contributions to mandate contracts in early 2016. Real households income is on a solid, stable increase.
Rate of unemployment in % (end of the year) 9.0 9.8 11.4 13.4 13.4
NBP base rate in % (end of the year) 1.50 1.50 2.00 2.50 4.25
over the first three quarters of the past 5 years. The non-life insurance market in three quarters of 2015 increased by a total of PLN 471.5 million (+2.4%). The growth of sales of accident and illness insurance (by PLN 257.9 million, +17.6%
Group subordinates, including the ones newly acquired in the Baltic states and Link4; • PZU collected PLN 2,167.7 million from motor own damage insurance premiums, which was 7.5% more than in the previous year. This represented 24.5% of the overall portfolio, i.e. its share remained at a similar level to that of the previous year.
Q3, 2015 share of PZU Group in the technical result of the market after Q3,2015 average claims handling period in PZU
In 2015, the decision was made to discontinue sales of insurance offered to the corporate clients. Taking into consideration a much greater experience in quoting and the amount of regulatory capital, the insurance for corporate clients will be offered by the PZU Brand.
Poland measured by the gross written premium amounted to PLN 20.8 billion, which means that it has declined by an annual average of 2.2% over the past 5 years. The premium collected during three quarters of 2015 was simultaneously lower by 1.8% than in the corresponding period of the previous year, which is a continued decline after a series of increases, which ended in 2012.
Source: PFSA (www.knf.gov.pl). Quarterly Bulletin. Insurance Market 3/2012, PZU Życie data
In 2015, PZU Życie settled claims and benefits at the amount of PLN 6,294.8 million, which was 3.6% less than in the previous year.
The condition and results of the investment fund market will primarily depend on: • operations of central banks; • economic climate on capital markets (including the prices of raw materials); • attractiveness of traditional bank deposits and profitability of instruments.
Draudimas. The 2015 market share of this company was 31.1%. BTA was second with a 13.3% market share and PZU
Lithuania and Gjensidige hold the combined 19.4% market share, which puts the Gjensidige Group in second place on the non-life insurance market.
The 2015 gross written premium recorded by Lithuanian life insurance companies amounted to EUR 236.0 million, 9.7%
higher than in the previous year. Regular (18.5%) and single premium (7.9%) products both presented positive dynamics.
EUR 195.7 million, up by roughly EUR 15 million from the corresponding period of the previous year.
In 2015, the non-life insurance companies and branches of foreign companies of this insurance sector operating in Estonia recorded a 6.7% growth of the gross written premium from the previous year and gathered the total premium in amount of EUR 278.8 million, EUR 62.0 million or 22.2% of which were acquired by the branches of foreign insurance companies operating in Estonia.
– the dominating entity on the market – which entered the
Due to the building of the health care center and health insurance networks, PZU Group was expanded by the following companies in 2015 and until the release of this report: • REZO-MEDICA (100% shares, from 23 April 2015) –
PZU Group has been in control from the acquisition of the second tranche. Consequentially, Alior Bank was subject to consolidation. A makeshift settlement of the acquisition was performed for the end of 2015 based on the data prepared for 31 December 2015. There were no considerable differences in the accounting data between 18 December 2015 (first day following the acquisition of control) and 31 December 2015. In 2015 only assets and liabilities of Alior Bank were consolidated.
At the end of 2015, the company held the leading position on the market of intermediation in the sale of damaged vehicles through an online auction platform.
Sp. z o.o. to PZU FIZAN BIS 2 and thus ended the restructuring of Armatura Kraków Group’s non-productive assets.
• Selling up of an ecosystem enabling effective management of client risk (from counseling to insurance products)
4. In 2015, PZU Foundation realized another edition of the campaign “Kochasz? Powiedz STOP Wariatom Drogowym” (If you love, say STOP to Reckless Drivers). Its main objective was to improve road safety by promoting responsible attitudes among drivers.
Customer Division, cooperated with 965 insurance brokers; • PZU employees – thousands of PZU employees sold insurance (primarily to corporate and group customers)
PZU’s customers can file claims or contact us: • via the Internet; • by telephone via the Contact Center; • in person at any branch of their choice; • in a garage belonging to the PZU Repair Network (in the case of motor claims); • in the PZU Pomoc mobile office; • in writing (sent by post, email or fax).
solution for its clients who suffered damage at insurance companies that are not parties to BLS.
Online platform. The clients are offered to sell the remaining parts at the highest purchase bid price by reliable entities cooperating with the platform administrator.
Moreover, in 2015 PZU commenced a large-scale introduction of simplified solutions in contacts with clients, e.g. by resigning from traditional letters and a wider use of telephone and electronic communication, but first and foremost by making the language of its correspondence simpler and userfriendly.
As an innovation-driven company, PZU provided its clients with an access to a mobile application which allows the insured to select the type of claim handling or accident insurance benefits at any given time. The service was addressed to the clients who often find it difficult to pick up the phone during working hours or need more time to think about the proposed claim payment. The tool allows the insured easily and conveniently participate in the decision-making process concerning the contribution payment, and speeds us the entire process by a quick contact with the Consultant.
The company is focusing on service improvement, therefore, it strongly appreciates customer feedback. Customer satisfaction surveys are conducted via the application. The customers’
employee development plan based on the analysis of target achievement and competence assessment.
Share of investment property declined as a part of portfolio achieved the expected investment horizon and was presented separately in the line “Assets held for sale”.
Group; • higher costs associated with the expansion of the Everest
Non-current assets – in the form of intangible assets, goodwill and property, plant and equipment – were recognized in the statement of financial position at PLN 4,199.4 million. They comprised 4.0% of total assets. Their balance increased by 59.1% in 2015 in comparison with 2014, mostly due to the commencement of consolidation of Alior Bank, including: • calculation of the goodwill in the amount of
• other - this encompasses consolidated entities not allocated to any of the segments above.
The following factors primarily had a key impact on this segment result in 2015: • 0.9% growth of the net earned premium despite the slight decrease in the gross written premium by 0.4% compared with 2014. Lower sales were recorded mainly in the TPL
After excluding the one-off effect related to the conversion of long-term contracts into renewable contracts type P from the segment’s result, the segment’s 2015 operating profit amounted to PLN 1,499.3 million, compared with
PZU Group generated an operating profit of PLN 43.3 million in the Baltic states in 2015 compared with an operating loss of PLN 17.1 million in the previous year. The result arose from the following factors: • increase in gross written premium. It amounted to
The change of the segment result was caused by: • increase in the gross written premium. The premium amounted to UAH 976.7 million and increased by 48.4% in comparison with the previous year. The sales of the Green
UAH 270.7 million compared with UAH 197.7 million in the prior year. Their level was the result of an increase in the written premium from motor and travel insurance, which are subject to higher commission charges; • increase in administrative expenses. They amounted to
In 2015, the return on equity of the dominating entity (PZU)
The organizational structure of the risk management system, which is consistent within PZU Group and in individual insurance companies within PZU Group, includes four competence levels.
The process of risk identification starts with the idea of creating an insurance product and it lasts until the related liabilities expire. Underwriting risk identification is carried out, e.g. by means of: • analysis of general insurance terms and conditions in respect of the accepted risk and compliance with generally applicable provisions of law; • monitoring of existing products; • analysis of the policies relating to underwriting, tariffs, provisions and reinsurance, as well as the claims and benefits handling process.
Furthermore, in order to reduce the underwriting risk associated with the ongoing activities the following actions, in particular, are undertaken: • definition of the scopes of liability and exclusions in the general terms of insurance; • reinsurance activities; • adequate pricing policy; • application of appropriate methodology of provisions calculation; • appropriate underwriting process; • appropriate claims handling process; • sales decisions and plans; • prevention.
Reinsurance cover in PZU Group secures the insurance activity, reducing the consequences of the occurrence of catastrophic events which could adversely affect the financial standing of insurance companies. This objective was realized through mandatory reinsurance contracts supplemented with facultative reinsurance.
PZU on capital and debt market 8.1 Share and bond market
* Share prices from 12 May 2010 (PZU’s IPO on WSE). Source: Reuters
PZU shares were first traded on the Warsaw Stock Exchange on 12 May 2010. Since its IPO, the company has been included in the WIG20, WIG, WIG30, WIG-Poland, and WIGdiv indexes. Since 2012, PZU shares have been also included in the sustainable development indexes, RESPECT and CEERIUS
PZU on capital and debt market assimilated and together with eurobonds at the value of PLN
We create the value of PZU through active communication with capital market participants. We build trust and take care of good relations.
organized also a live streaming of the meeting held on 28
Dynamics of PZU’s share prices in relation to selected stock exchange indexes * Quotation as of 12 May 2010 (PZU’s IPO at WSE). ** Dividend per share after the exchange of all the shares in a 1:10 ratio. Source: Reuters..
PZU and PZU Życie are regularly rated by Standard & Poor’s
PZU Group’s operations and strategy take into consideration social and environmental issues, as well as ethics. PZU Group does its best to ensure that the actions and initiatives it engages to bring positive results also in the social aspects in all the areas where the company may have an influence on the external environment in a manner that is not strictly related to business. As a mature, responsible company, the
Universe − an index of Vienna Stock Exchange for socially responsible Central and Eastern European companies).
By implementing the new IT system, PZU Group is providing the sales team with knowledge allowing for better and faster understanding of the clients’ needs in order to prepare comprehensive offers. More information is available in SALES
A committed employee of PZU is a person who thinks about the goals of their actions, their consequences for the company and its clients, and ways to cooperate with others in order to build an even more successful business. The results of recent surveys on commitment among PZU Group’s employees have shown that 91% of them are satisfied with their jobs. From the start of the surveys, the employee satisfaction and commitment have been successively rising. In the survey the employees graded their working conditions, procedural transparency, and relations with superiors. To ensure that the process is transparent, the survey results were announced to all employees. Based on the results, the employees and their supervisors came up with numerous ideas on how to turn PZU
Drogowym” [If You Love, Say No to Road Rage]. Its main objective is to improve road safety by promoting responsible attitudes among drivers. The campaign’s symbol is a blue heart, which, gifted by a dear person, is placed in a visible spot in the car to remind drivers to drive safely. The hearts, which are the symbols of the campaign, were distributed in all offices and branches of
Poland – in the category of most desired employers; • in 2015, PZU Group’s insurers operating in Lithuania and
8. General Shareholders’ Meeting, Supervisory Board, and Management Board 9. Remuneration of the members of the Group’s bodies
Shareholders’ Meeting, and therefore the appropriate application of the above rule. Moreover, in our view, rules concerning participation in Shareholders’ Meetings applicable in PZU allow for exercising rights from shares and protect interests of all shareholders.
PZU adopted a resolution regarding the wording of the consolidated amended By-laws of PZU. On 3 November 2015, the By-laws were recorded in the National Court Register.
Meeting, including restrictions with respect to exercising the voting rights described in the Company’s By-laws. The shareholder has the right to vote in a different manner under each share held.
Justice. From September 2006 to September 2007 he worked as an assistant of the Minister of
Squire Patton Boggs and general partner in its Polish office - Squire Patton Boggs Święcicki
He is an arbiter in the Arbitral Tribunal of the Insurance Ombudsman. In 2003, he co-created the Act amending the Code of Commercial Companies. As an expert appointed by the Minister of Justice, he provided parliamentary assistance concerning work on this amendment. He developed and opined a number of other acts, including the opinion given on the draft legislation for the Office of Analyses of the Parliament during the term of the Parliament dated 2005–2007.
Board. The regulations of the Supervisory Board stipulate that the Supervisory Board and the appointed committees may use the services of experts and advisory companies.
Compensation Committee adopted by a resolution of the Supervisory Board of 4 April 2013, it is an advisory and consultative body to the Supervisory Board and is to improve efficiency of the Board’s supervisory activities related to establishing the management structure, including organizational issues, remuneration system, remuneration principles and selection of properly qualified staff.
As at 31 December 2015, the composition of the Promotion and Compensation Committee had not changed.
Board’s supervisory activities related to consulting of all strategic documents presented by the Management Board (in particular, the Company development strategy) and presenting the Supervisory Board with recommendations on planned investments that materially impact the Company’s assets.
Andrzej Klesyk Chairman of the Management Board of PZU between 14 December 2007 and 8 December 2015 Governing PZU Group
HESTIA S.A. From April 2002, he was a Sales Director and from October 2002 to June 2004 he was the CEO and the Sales Director at SAMPO TUnŻ S.A. In August 2004, he was appointed the
Since 2011, he has been the CEO of Merrill Lynch Polska and Head of Investment Banking for Central and Eastern Europe in Bank of America Merrill Lynch. His responsibilities concern governing and managing the projects centered on mergers and acquisitions and financing in private and public markets. His advisory activities focused on asset management, investment policy and capital structure, i.a. in banking and insurance sector. Previously, between 2008 and 2011, he was the Alternate Executive Director – Member of the Board of Directors at the
She is a PH.D. of Laws and a lecturer at the Faculty of Law and Administration of the University of Warsaw, where she graduated. Between 1994 and 1997, she was a trainee legal advisor and entered the list of legal advisors of Regional Chamber of Legal Advisors in Warsaw. In 2015, the
Company „Uzdrowisko Konstancin” in Konstancin-Jeziorna. She was the Deputy Director of the
Legal and Licensing Department of the Pension Funds Supervisory Authority (UNFE). Between 2000 and 2007, she was a lecturer at the College of Public Administration in Ostrołęka. She also was the Deputy Dean of the Faculty of Administration at Public Administration University in
Supervisory Board; • competencies of the CEO and Members of the Management
Resolutions of the Management Board are adopted by an absolute majority of votes and in the event of a voting tie the CEO has the casting vote. The Management Board, upon consent of the CEO, may adopt resolutions in writing, on paper or in an e-form (i.e. using means of distant communication and a qualified electronic signature). The Bylaws also provide that the meetings of the Management Board may be held using means of direct distant communication.
inward reinsurance – reinsurance activity entailing a reinsurer or reinsurers accepting a portion of the insurance or groups of insurance yielded by the cedent.