Powszechny Zaklad Ubezpieczen Spolka Akcyjna · GPW:PZU
Powszechny Zaklad Ubezpieczen Spolka Akcyjna — Powszechny Zakład Ubezpieczeń SA (PZU) — Investor Day (August 2016)
35 slides from Powszechny Zaklad Ubezpieczen Spolka Akcyjna's investor day presentation, Aug 23, 2016
Slide 1: PZU Group's Strategy for 2016-2020
PZU 2020 Strategy Profitability, Growth, Innovation PZU Group’s Strategy for 2016-2020 Warsaw, 23 August 2016
Slide 2: Introduction
Introduction This document forms the outcome of reviewing PZU Strategy 3.0 from January to June 2016. The PZU Group's Strategy presented in this document calls for a fundamental alteration in the Group’s profile from a pure dividend company into a combined dividend and growth company pursuing ambiti
Slide 3: Agenda
Agenda PZU Group’s mission Strategic objectives Implementation methods and tools Strategy implementation metrics 3
Slide 4: We are PZU! We Provide Peace of Mind and a Sense of Safety
We are PZU! We Provide Peace of Mind and a Sense of Safety
Slide 5: PZU Group's mission
PZU Group’s mission We exist to provide our Customers peace of mind and a sense of safety. Customers can always rely on us Our excellent knowledge of our Customers enables us to meet their needs and reasonable expectations while our large scale and high efficiency enable us to deliver them with the
Slide 6: Our values
Our values We are fair • Our offering is transparent and satisfies Customers’ genuine expectations • We are transparent in interactions with our employees We are effective Client • We offer efficient and friendly service and competitive prices • We control our costs and streamline our processes We a
Slide 7: PZU Group's responsible method of business management
PZU Group’s responsible method of business management The Company’s value growth should be aligned to the interests of the environment and rely on sustainable and responsible resource utilization Customer needs are our Reliable business partner priority Responsible employer Social commitment ETHICS
Slide 8: The PZU Group is socially involved and supports in various aspects of life
The PZU Group is socially involved and supports in various aspects of life Healthy and active lifestyle Road traffic safety, rescue services Patronage of national heritage Local activities in field structures Financial and insurance education 8
Slide 9: The PZU Group's strategy is Customer-oriented
The PZU Group’s strategy is Customer-oriented We accompany our Customers throughout their path of life • We provide our Customers with peace of mind and a sense of safety by protecting their health, life and property and growing their savings • We draw on our more than 200 years of experience, knowl
Slide 10: We want to develop the PZU Group while thinking about our Customers
We want to develop the PZU Group while thinking about our Customers Insurance – our core business • Insurance will continue to be the PZU Group’s principal and most important business pillar • In insurance the PZU Group’s fundamental objective is to concentrate on high profitability coupled with gro
Slide 11: Strategic objectives: profitability, growth and innovation
We will pursue our strategic objectives while emphasizing profitability, growth and innovation Profitability • Thanks to the magnitude and effectiveness of our insurance activity we will retain a high level of profitability • Reduction of fixed costs in insurance activity in Poland (PZU and PZU Życi
Slide 12: By 2020 the PZU Group will implement a digital Customer service operating model
By 2020 the PZU Group will implement a digital Customer service operating model The digital operating model will enable the PZU Group to shape relations with Clients and the Customer experience effectively • Digitization of Customer-related processes (paperless Customer service) • 360° Customer view
Slide 13: Increasing the average number of products per Client
We will utilize our existing Customer base better by increasing the average number of products per Client The PZU Group’s revenue growth will be attained by growing the number of products per Retail Customer (to 1.64 in 2020 from 1.49 in 2015) • To the largest extent, the growth in the number of pro
Slide 14: Retail Customer segment: managing profitability and developing sales channels
In the Retail Customer segment we are focusing on managing profitability and developing sales channels Nearly 16 million Customers trust the PZU Group. Every day we are becoming a better Company for them by looking for innovative solutions aligned to their needs • Achieving permanent profitability i
Slide 15: Enhancing portfolio profitability through better price to risk alignment
Better price to risk alignment by enhancing accessibility and quality of Customer data and process-related streamlining Enhancing portfolio profitability by getting to know Customer needs Profitability better and following a flexible pricing policy slightly highly negative positive positive • Using
Slide 16: Using Link4's complementary offering and know-how to generate synergy effects
Using Link4’s complementary offering and know-how to generate synergy effects with the PZU Group Coordinated management of the PZU and Link4 offering in the various distribution channels • Cooperation of PZU and Link4’s distribution areas to capture synergy effects • Utilization of Link4’s offering
Slide 17: New own brands to use hidden potential in market niches
New own brands will enable the PZU Group to better use the hidden potential in market niches The PZU Group will create new insurance brands in Poland to enhance its competitive position in selected Customer groups • Link4 as a platform for the low cost launch of new brands • Focusing on market niche
Slide 18: Growing significance in the Corporate Customer segment
The PZU Group’s proactive measures and growing significance in the Corporate Customer segment (non-life insurance) PZU Group’s rapid growth in various lines of business in the Corporate Customer segment • Implementing systemic solutions facilitating optimum management of the Corporate Customer portf
Slide 19: Strong position in regular premium life insurance
The PZU Group’s strong position on the market for regular premium life insurance Retain market share and high profitability • Actively manage profitability in the life insurance Customer portfolio, maintain a high level of profitability in the group and individually continued insurance portfolio • R
Slide 20: PZU will reduce its annual insurance activity expenses by PLN 400 m
PZU will reduce its annual insurance activity expenses by PLN 400 m Administrative expense ratio to net earned premium in PZU and PZU Życie (%) Cost cutting as the key to compete effectively on the insurance market (taking advantage of PZU’s scale) 8.8% • Cut fixed costs by 20% compared to the base
Slide 21: Opportunistic approach to International expansion
Opportunistic approach to International expansion The PZU Group will look for opportunities to create added value by acquiring insurance companies • Within the framework of International expansion insurance companies are the key targets • The strategic objective in the countries in which the PZU Gro
Slide 22: PZU Investments will be a leading asset manager in CEE
PZU Investments will be a leading asset manager in CEE Third party assets under management (PLN bn) PZU Investments will manage assets worth nearly PLN 100 bn. Assets of third party Customers under management worth at least PLN 50 bn 50 • Grow the contribution from the third party asset management b
Slide 23: We will provide our Customers a full range of health care services
We will provide our Customers a full range of health care services PZU Zdrowie as the leader of private health care insurance and the supplier of coordinated medical care • Create a comprehensive offering of health insurance including subscription plans and fee for service arrangements • Put in plac
Slide 24: Growing PZU Zdrowie's revenues to PLN 1 bn in 2020
Growth PZU Zdrowie’s revenues to PLN 1 bn in revenues in 2020 Revenues (PLN m) PZU Zdrowie with revenues at the level of PLN 1 bn in 2020 will significantly strengthen its market position 1,000 • Develop its offering based on the PZU Group’s key advantages: base of 16 million Customers, strong sales
Slide 25: Banking project to generate additional shareholder value
Implementation of the banking project will make it possible to generate additional shareholder value Assumptions underpinning the bank project pursued by PZU • The banking sector in Poland represents an attractive investment because of its long-term growth prospects and the low level of consolidatio
Slide 26: Construction of a banking group in the top five banks in Poland
Construction of a banking group in the top five banks in Poland Assets held by PZU Group’s banking pillar (PLN bn) The PZU Group will build a large-sized and highly profitable banking group 140 • Considering the opportunity to generate profit in the banking sector, the PZU Group’s objective is to bu
Slide 27: Capital policy focused on Group stability
Capital policy focused on Group stability, a portion of net profit will be allocated to pursue ambitious growth plans Assumptions underpinning the capital and dividend policy • Maintain a Solvency II solvency ratio for the PZU Group at a level no lower than 200% • Issue subordinated debt (an option
Slide 28: Integrated risk management system
Minimize threats by employing an integrated risk management system The mission for the integrated risk management system is to support the execution of the PZU Group’s Strategy • Protect the sustainable growth of the PZU Group’s value • Co-manage the level of financial, operational and regulatory se
Slide 29: Investment activity based on active asset allocation
PZU Group’s investment activity based on actively managing strategic and tactical allocation by asset classes Disciplined management of strategic and tactical asset allocation enabling optimization of profitability in investment activity for the assumed risk appetite Rate of return • Management by a
Slide 30: Create one of the most innovative insurance groups in Europe
Create one of the most innovative insurance groups in Europe Implementing innovative solutions as an accelerator for following the main strategic directions: growth and profitability • Implementing innovative products • Using Big Data files in the process of quoting, selling and providing customer s
Slide 31: The PZU Group supports the Polish economy's innovation
The PZU Group supports the Polish economy’s innovation The PZU Group will actively support the formation of an ecosystem facilitating the development of Polish entrepreneurship and innovation • Support Polish entrepreneurs and scientists through the PZU Group’s own initiatives or cooperation with ot
Slide 32: Key Performance Indicators of the Strategy for 2016-2020
Key Performance Indicators of the Strategy for 2016-2020 ROE1 2015 2020 18% 18% NON-LIFE LIFE INVESTMENTS HEALTH BANKING INSURANCE INSURANCE BUSINESS SIZE Number of Customers Assets of third party PZU Group's Revenues (PLN m) Assets (PLN bn) in PZU Życie (million) Customers under market share2 manag
Slide 33: Definitions of Key Performance Indicators (1/3)
Definitions of Key Performance Indicators (1/3) Business Size The PZU Group’s market share in non-life insurance - non-life market share in Poland calculated as the combined market share held by PZU, Link4 and PZUW TUW based on the data published by the Polish FSA. Calculated on the basis of gross w
Slide 34: Definitions of Key Performance Indicators (2/3)
Definitions of Key Performance Indicators (2/3) Business Profitability ROE attributable to the parent company - return on equity (ROE) attributable to the parent company calculated as the ratio of net profit according to IFRS attributable to the parent company in a given calendar year to the average
Slide 35: Definitions of Key Performance Indicators (3/3)
Definitions of Key Performance Indicators (3/3) Business Profitability, Group Objectives BUSINESS PROFITABILITY Reduction of fixed costs - the difference between the level of fixed costs in PZU and PZU Życie in 2018 and the level of costs in 2015 (the base to be reduced). This does not incorporate t
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