Powszechny Zaklad Ubezpieczen Spolka Akcyjna · GPW:PZU
Powszechny Zaklad Ubezpieczen Spolka Akcyjna — Powszechny Zakład Ubezpieczeń SA (PZU) — FY2023 Earnings Presentation
52 slides from Powszechny Zaklad Ubezpieczen Spolka Akcyjna's earnings presentation, Mar 21, 2024
Slide 1: PZU Group's financial results in 2023 and 4Q23
PZU Group’s financial results in 2023 and 4Q23 Warsaw, 21 March 2024
Slide 2: Table of contents
Table of contents Main achievements of the PZU Group 3 Business development 10 Financial results 26 PZU Group Strategy 2021–2024 37 Appendices 42
Slide 3: Main achievements of PZU Group
Main ements of ZU Group
Slide 4: 2023 results above strategic ambitions
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices 2023 results above strategic ambitions 2023 Revenues PLN 26.9 bn (+8.6% y/y) insurance revenue 2023 Profitability PLN 5.8 bn (+52.5% y/y) net profit1 3Q23 Capital position 230% (n.c.) Solvency II ratio 2023 Dividend PL
Slide 5: Rapidly growing revenue and premiums
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices Rapidly growing revenue and premiums 2023 2023 2023 Net sales of TFI PZU Insurance revenue Health Pillar revenue investment funds PLN 16.1 bn (+11.4% y/y) PLN 1.6 bn (+25.9% y/y) PLN 3.0 bn non-life insurance Poland in
Slide 6: Record net profit
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices Record net profit 2023 2023 Net profit (PLN m} aROE3 5,766 22.0% +5.7 p.p. 1,981 16.3% 3,781 +241.6% 580 3,201 3,785 +18.2% 2022 2023 2023 2022 2023 2023 Insurance Banks PLN 4.0 bn PLN 2,539 m 85.3% 21.9% Insurance ser
Slide 7: High level of security of operations
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices High level of security of operations The Solvency II ratio for the PZU Group compared to the average for European insurers (%) S&P Global Ratings at A- with a stable 271% 270% outlook confirmed by the agency on 1 230%
Slide 8: Growing dividend potential
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices Growing dividend potential Dividend paid per share (PLN) PZU’s standalone result (in PLN m) 3,983 2.40 1 1.94 +23.7% 2,028 1,637 2022 2023 2022 2021 2022 2023 2023 Dividend of PLN 2.40 per share1, translates into a Inc
Slide 9: Meeting strategic goals to strengthen long-term customer relations
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices We are consistently meeting strategic goals to strengthen long-term relations with customers One of the goals of the PZU Group's Strategy for 2021–2024 is to strengthen long-term relations with customers and ensure a h
Slide 10: Business development
2. Business development
Slide 11: Trends in the non-life insurance market in Poland
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices Trends in the non-life insurance market in Poland Motor insurance market dynamics1, y/y • High, but declining compared to 2Q23, motor insurance market dynamics in 3Q23 (gross written premium +6.4% y/y). As in the previ
Slide 12: Motor insurance market in Poland – average price and claims frequency
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices Motor insurance market in Poland – change in average price and frequency of claims Change in the average market price of MTPL and MOD insurance1 30 27.0 MTPL MOD 25 20.3 20 15.5 15 11.4 12.5 9.1 10 5.8 4.5 5 2.1 -1.6 3
Slide 13: Motor insurance market in Poland – profitability
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices Motor insurance market in Poland – profitability Profitability of MTPL and MOD market, ytd %1 10.5 9.3 9.4 • Q1-Q3 2023 saw the first technical loss on an MTPL since 2016 7.4 7.8 6.8 The MTPL result has been gradually
Slide 14: PZU Group – non-life insurance in Poland
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices PZU Group – non-life insurance in Poland PZU Group gross written premiums1 in 4Q 2023 value (PLN bn) and dynamics y/y PZU's dynamics y/y vs. competition3 +12.5% • Second consecutive quarter of PZU Group premium growth
Slide 15: Product and service initiatives: non-life insurance
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices PZU – Product and service initiatives: non-life insurance Changes in PZU Auto (PZU Car) package 4Q 23 ▪ PZU Auto Opony (PZU Car Tires) – addition of a “Super +” option with a new tire purchase limit of up to PLN 2,500
Slide 16: Product initiatives: non-motor insurance for corporate customers
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices PZU – Product and service initiatives: non-motor insurance for corporate customers New product: environmental liability insurance Voluntary insurance for manufacturers of heavy industry, chemical industry, energy and g
Slide 17: Life insurance market in Poland
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices Life insurance market in Poland Insurance market with periodic premiums dynamics1, y/y • Periodic premium insurance market (85% of the market) grew in 3Q with a Periodic growth rate of 5.8% y/y – biggest impact by valu
Slide 18: PZU Życie – life insurance
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices PZU Życie – life insurance PZU Życie gross written premiums from group insurance and IC (PLN m) Group and individually continued insurance +4% • Development of health insurance portfolio, as a consequence of acquiring
Slide 19: PZU Życie – Product initiatives: life insurance
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices PZU Życie – Product initiatives: life insurance PZU Life and Health Package new individual protection life insurance, with defined scopes and levels of coverage with premiums within a given package: • Flexible coverage
Slide 20: Development of the scale of operations of the health pillar
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices Development of the scale of operations of the health pillar Revenue (PLN m) Number of contracts at the end of the period (m) +25.9% +6.1% • High revenue growth (mainly in terms of outpatient contracts and additions to
Slide 21: Developing an Ecosystem for Health
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices We are changing the healthcare market and developing an Ecosystem for Health In 2023, in addition to User Experience improvements of the portal and application, we have introduced new functionalities. Using myPZU, you
Slide 22: Assets under management
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices Assets under management Assets of external clients of TFIs and PTE PZU1 Assets of external clients of TFI banks of the PZU (PLN bn) Group (PLN bn) • TFI PZU +34% – Increase in assets under management of external 54.8 c
Slide 23: Dynamic development of the investment pillar
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices Dynamic development of the investment pillar High annual rates of return of funds and high rankings in Analiz.pl's comparison groups • 53.1% inPZU Akcje Sektora Informatycznego – best in the group of foreign equity fun
Slide 24: Product offerings in bancassurance and assurbanking
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices Product offerings in the areas of bancassurance and assurbanking ... Gross written premium raised in cooperation with Bank Environment: Pekao and Alior Bank (PLN m) • Sales affected by changing macroeconomic situation
Slide 25: Adapted to the current market situation
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices ... adapted to the current market situation SPE products – Pewny Profit at Bank Pekao, Bezpieczne Jutro at Alior Bank and Stabilne Jutro at VeloBank PZU Group products are present in all major product lines of Group ba
Slide 26: Financial results
3. Financial results
Slide 27: PZU Group results under IFRS 17
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices PZU Group results under IFRS 17* m PLN 22Q4 23Q4 Change y/y PZU GROUP EXCL. ALIOR BANK AND BANK PEKAO 1 Gross insurance revenue 6,389 6,909 8.1% 1. PZU Group, excluding Bank Pekao and Net insurance revenue 6,087 6,509
Slide 28: Non-life insurance under IFRS 17 – mass insurance segment
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices Non-life insurance under IFRS 17 – mass insurance segment Insurance revenue (PLN m) Net insurance service expenses (PLN m) Operating result (PLN m) +8.8% +7.4% +9.5% 3,045 2,633 482 2,800 2,452 440 106 1,112 New Loss C
Slide 29: Non-life insurance under IFRS 17 – corporate insurance segment
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices Non-life insurance under IFRS 17 – corporate insurance segment Insurance revenue (PLN m) Net insurance service expenses (PLN m) Operating result (PLN m) +17.3% -25.1% 1 086 817 926 161 30 Loss component creation 612 TP
Slide 30: Life insurance under IFRS 17 – group and individually continued
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices Life insurance under IFRS 17 – group and individually continued insurance Insurance revenue (PLN m) Insurance service expenses (PLN m) Operating result (PLN m) +1.0% +7.2% 25.9% 21.8% 1,860 1,878 1,565 1,460 481 287 30
Slide 31: Life insurance under IFRS 17 – individual protection insurance
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices Life insurance under IFRS 17 – individual protection insurance Insurance revenue (PLN m) Insurance service expenses (PLN m) Operating result (PLN m) +6.0% +1.2% -9.1% 166 84 89 168 88 80 70 31 3 65 14 4 5 43 23 26 78 8
Slide 32: Life insurance in Poland under IFRS 17 – evolution of CSM
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices Life insurance in Poland under IFRS 17 – evolution of contractual service margin Group and individually continued insurance – CSM (PLN m) Individual protection insurance – CSM (PLN m) 87 13 45 (308) 15 223 7,301 (65) 7
Slide 33: Profitability by operating activities segments under IFRS 17
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices Profitability by operating activities segments under IFRS 17 Insurance segments Insurance revenue Result* Combined ratio / Margin m PLN, IFRS17 4Q22 4Q23 Change y/y 4Q22 4Q23 Change y/y 4Q22 4Q23 Total non-life insuran
Slide 34: Pandemic vs. claims ratio in group insurance in 4Q23
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices Pandemic vs. claims ratio in group insurance and IC segments in 4Q23 Number of deaths per quarter in Poland from 2019 to 2023 (in thousands)1 • Number of deaths in Poland in 4Q23 slightly lower than a year ago while an
Slide 35: Investment result
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices Investment result Change IFRS, m PLN 4Q22 4Q23 y/y Investment income less interest expenses 4,259 5,473 28.5% • Secure portfolio structure: debt instruments account for 80% of the portfolio, government debt Investment
Slide 36: High level of solvency of the Group
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices High level of solvency of the Group Solvency II ratio1, 30 September 2023 Increase in own funds in 3Q23 by PLN 0.6 bn 235% 240% 235% Main causes: 225% 230% 226% 230% 227% 230% 221% 222% • operating flows (PLN +0.6 bn)
Slide 37: PZU Group Strategy 2021–2024
4. Strategy
Slide 38: Strategic goals until 2024 and their implementation in 2023
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices Strategic goals until 2024 and their implementation in 2023 Gross insurance revenue1 (PLN m) PZU Group net profit2 (PLN m) aROE3 (%) 26,868 5,766 22.0 24,745 FY2024 +8.6% FY2024 FY2024 16.3 +5.7 p.p. 3,781 +52.5% >PLN
Slide 39: Implementation of the ESG Strategy 'Balanced Growth' 2021–2024
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices Implementation of the ESG Strategy of PZU and PZU Życie “Balanced Growth” 2021–2024 Key performance indicators of the ESG Strategy reported on an annual basis along with other non-financial data. As at 31 December 2023
Slide 40: Sustainable development
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices Sustainable development TFI PZU Academy An educational fairy tale created in cooperation Social campaign of TUW PZUW and PKP Intercity for between the PZU Foundation and the Zaczytani.org health promotion • TFI PZU Aca
Slide 41: Responsible employer and employee experience
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices As a responsible employer, we care about the best employees' experiences Comprehensive employee experience management (EX) The implementation of the Employee Experience Management approach is taking employee #engagemen
Slide 42: Appendices
5. Appendices
Slide 43: PZU Group results under IFRS 4
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices PZU Group results under IFRS 4 PZU Group, m PLN 4Q22 4Q23 Gross written premiums 7,668 8,269 Net earned premiums 6,376 6,686 Revenues from commissions and fees 866 1,008 Gross investment income 4,236 5,465 Net insuranc
Slide 44: PZU Group's results under IFRS 4 by business type
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices PZU Group's results under IFRS 4 by business type m PLN 4Q22 4Q23 Change y/y 1 PZU GROUP EXCL. ALIOR BANK AND BANK PEKAO Gross written premium 7,668 8,269 7.8% 1. PZU Group, excluding Bank Net earned premium 6,376 6,68
Slide 45: Profitability by operating activities segments under IFRS 4 / PAS
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices Profitability by operating activities segments under IFRS 4 / PAS Insurance segments Gross written premium Insurance result / Combined ratio / operating result Margin m PLN, local GAAP 4Q22 4Q23 change y/y 4Q22 4Q23 ch
Slide 46: PZU Group gross written premium
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices PZU Group gross written premium Insurance segments m PLN, local GAAP 4Q22 3Q23 4Q23 Change y/y Change q/q External gross written premium 7,668 6,935 8,269 7.8% 19.2% Total non-life insurance – Poland 4,640 3,907 5,223
Slide 47: Non-life insurance under IFRS 4
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices Non-life insurance under IFRS 4 Combined ratio (COR) from PZU Group motor insurance (%) 89 0 102 108 101 100 96 95 95 94 94 94 94 97 96 94 94 92 89 89 93 88 91 93 93 90 92 92 92 92 93 94 92 86 4Q16 4Q17 4Q18 4Q19 4Q20
Slide 48: Life insurance under IFRS 4
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices Life insurance under IFRS 4 Margin in group insurance and IC1 (%) Increase in mathematical provisions due to higher Update of indexation of sums insured assumptions for calculation of provisions 36.8 29.9 29.6 25.9 26.
Slide 49: Own funds
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices Own funds PZU Group data in Solvency II as of 30 September 2023 (PLN bn) Comparison of own funds and consolidated equity under IFRS -3.1% Own funds according to SII: -2.2 -1.6 7.1 -0.7 • contractual service margin as t
Slide 50: Solvency capital requirement (SCR)
1. Main achievements 2. Business development 3. Results 4. Strategy 5. Appendices Solvency capital requirement (SCR) PZU Group data in Solvency II as of 30 September 2023 (PLN bn) Basic solvency capital Solvency capital requirement (BSCR) requirement (SCR) Increase in solvency requirement in 3Q22 23
Slide 51: Legal disclaimers
Legal disclaimers This presentation has been prepared by PZU SA ("PZU") and is for informational purposes only. Its purpose is to present selected data on the PZU Group, including growth prospects. PZU does not undertake to publish any updates, changes, or adjustments to information, data or stateme
Slide 52: Thank you
Thank you Contact: Magdalena Komaracka, CFA mkomaracka@pzu.pl Piotr Wiśniewski pwisniewski@pzu.pl www.pzu.pl/ir
Powszechny Zakład Ubezpieczeń SA (PZU) — FY2023 Earnings Presentation on 6ix