Warsaw, 20 March 2024
Management Board of Powszechny Zakład Ubezpieczeń Spółka Akcyjna
Motion
to the PZU SA Ordinary Shareholder Meeting
regarding:
the approval of the Management Board's report on the activity of the PZU Group and PZU SA for the financial year ended 31 December 2023 and the report on non-financial information of the PZU Group and PZU SA for 2023.
Content of the motion:
We request that the PZU SA Ordinary Shareholder Meeting approve the Management Board's report on the activity of the PZU Group and PZU SA for the financial year ended 31 December 2023 and the report on non-financial information of the PZU Group and PZU SA for 2023.
Reasons:
The subject of the Ordinary Shareholder Meeting should be the consideration and approval of the Management Board's report on the Company's operations and the Management Board's report on the Group's operations. In addition, the Management Board's report on the Company's activity and the Management Board's report on the activity of the Group are subject to approval by the Ordinary Shareholder Meeting no later than within 6 months of the balance sheet date (pursuant to Article 395 § 1 and § 2(1) of the Commercial Company Code, in conjunction with Article 55(2a) et seq. of the Accounting Act of 29 September 1994 and § 10(1) and § 18(1) of the Articles of Association of PZU SA).
In the case of the annual report and the consolidated annual report, the reports of the management board or the managing person on the issuer's activities and on the activities of the group may be prepared in the form of a single document (in accordance with Article 55(2a) of the Accounting Act and § 71(8) of the Regulation of the Minister of Finance of 29 March 2018 on current and periodic information provided by securities issuers and on conditions under which information required by the legislation of a non-Member State).
An entity that does not prepare a statement on non-financial information as part of the management report on operations shall prepare a separate statement on non-financial information (in accordance with Article 49b(9) of the Accounting Act). The same regulation applies to the group report in this regard (according to Article 55(2c) of the Accounting Act).
The PZU SA Management Board by Resolution No. UZ/63/2024 of 20 March 2024 approved, and the Supervisory Board of PZU SA by Resolution No. URN/51/2024 of 20 March 2024 positively evaluated the Management Board's report on the activity of the PZU Group and PZU SA for the financial year ended 31 December 2023 and the report on non-financial information of the PZU Group and PZU SA for 2023, and recommended its approval to the PZU SA Ordinary Shareholder Meeting.
The motion is presented by:
/Maciej Rapkiewicz/ | /Tomasz Kulik/ |
Attachment:
- draft resolution of the PZU SA Shareholding Meeting on the approval of the Management Board's report on the activity of the PZU Group and PZU SA for the financial year ended 31 December 2023 and the report on non-financial information of the PZU Group and PZU SA for 2023.
Draft
Re: Item 12 of the Agenda
RESOLUTION NO. ..../2024
ADOPTED BY THE ORDINARY SHAREHOLDER MEETING
OF POWSZECHNY ZAKŁAD UBEZPIECZEŃ SPÓŁKA AKCYJNA
ON 18 JUNE 2024
regarding the approval of the Management Board's report on the activity of the PZU Group and PZU SA for the financial year ended 31 December 2023 and the report on non-financial information of the PZU Group and PZU SA for 2023
Pursuant to Article 395 § 2(1) of the Commercial Company Code, in conjunction with Article 55(2a) et seq. of the Accounting Act of 29 September 1994 and § 18(1) of the Articles of Association of PZU SA, the PZU SA Ordinary Shareholder Meeting hereby resolves as follows:
§ 1
The PZU SA Ordinary Shareholder Meeting approves the Management Board's report on the activity of the PZU Group and PZU SA for the financial year ended 31 December 2023 and the report on non-financial information of the PZU Group and PZU SA for 2023.
§ 2
The Resolution comes into force when adopted.
Chairman
of the PZU SA Ordinary Shareholder Meeting
Annual Report 2023
Management Board's report on the activity of the PZU Group and PZU SA for the accounting year ended 31 December 2023
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About PZU Group | Business model | External | Strategy and perspective | Risks and opportunities | Performance | Corporate governance (G) | Environment (E) | Society (S) | Other information |
environment | and dividend | ||||||||
Table of Contents
To go to the required page, click on the corresponding item in the index.
Letter from the CEO to Shareholders | 8 |
Letter from the Chairman of the Supervisory Board | 10 |
1. About the PZU Group | 23 |
1.1. Group characteristics | 24 |
1.1.1. Products and services | 24 |
1.1.2. Brand | 26 |
1.1.3. Mission, vision, values | 27 |
1.1.4. Milestones of PZU Group's growth | 29 |
1.1.5. PZU Group's structure | 30 |
1.2. Selected awards and distinctions | 32 |
2. Business model | 34 |
2.1. Capital and value creation | 35 |
2.2. Value chain | 43 |
2.3. Suppliers (upstream) | 45 |
2.4. Operating activities | 48 |
2.4.1. Insurance | 48 |
2.4.2. Health care | 53 |
2.4.3. Investments | 54 |
2.4.4. Banking | 56 |
2.4.5. Other areas | 58 |
2.5. Sales and distribution | 60 |
2.5.1. Insurance products | 60 |
2.5.2. Health products | 64 |
2.5.3. Investment products | 65 |
2.5.4. Banking products | 66 |
2.6. Clients (downstream) | 68 |
2.7. Dialog with stakeholders | 69 |
3. External environment | 78 |
3.1. The most important economic trends in Poland and abroad | 79 |
3.1.1. Situation in the world economy | 79 |
3.1.2. Trends in the Polish economy | 79 |
3.1.3. External environment in the Baltic Countries and Ukraine | 81 |
3.2. Polish and Baltic Countries insurance sector compared to Europe | 83 |
3.2.1. Description of the insurance markets on which PZU Group companies operate | 84 |
3.3. Polish health care sector compared to Europe | 89 |
3.3.1. The health care market in Poland | 90 |
3.4. Polish banking sector compared to Europe | 91 |
3.4.1. Situation on the banking market in Poland | 93 |
3.5. Financial markets in Poland and around the world | 94 |
3.5.1. Global and local equity and bond markets | 94 |
3.5.2. Polish investment and pension fund market | 96 |
3.5.3. Main factors affecting PZU share prices | 97 |
3.5.4. Bank Pekao and Alior Bank share prices | 100 |
3.6. Regulations pertaining to the insurance market and the financial markets in Poland | 101 |
3.7. Factors that may affect PZU Group's operations and results in 2024 and in the medium term | 104 |
3.7.1. Macroeconomic and geopolitical factors | 104 |
3.7.2. Legal and regulatory factors | 105 |
3.7.3. Market factors specific to the sectors in which the PZU Group operates | 107 |
4. Strategy and perspective | 110 |
4.1. Strategic ambitions by 2024 | 111 |
4.2. Implementation of the strategy in 2023 | 115 |
4.3. ESG ambitions for 2030-2050 | 126 |
4.4. Strategic Perspective | 128 |
5. Risks and opportunities | 130 |
5.1. PZU Group's risk profile | 131 |
Annual Report 2023 | Management Board's report on the activity of the PZU Group and PZU SA | 4 | INSURANCE | HEALTH | INVESTMENTS | BANKING |
for the accounting year ended 31 December 2023 |
About PZU Group | Business model | External | Strategy and perspective | Risks and opportunities | Performance | Corporate governance (G) | Environment (E) | Society (S) | Other information |
environment | and dividend | ||||||||
5.2. Risk management | 140 |
5.3. Risk sensitivity | 143 |
5.4. ESG risks | 146 |
5.4.1. Key ESG risks | 146 |
5.4.2. ESG risk management - policies | 147 |
5.5. ESG opportunities | 149 |
6. Performance and dividend | 152 |
6.1. Key factors affecting the financial | |
results achieved | 153 |
6.2. PZU Group's income and costs | 156 |
6.3. PZU Group's asset and liability structure | 159 |
6.4. Contribution made by the market segments to the consolidated result | 161 |
6.5. PZU's standalone results | 169 |
6.6. Dividend | 172 |
6.6.1. Capital and Dividend Policy | 172 |
6.6.2. Disbursement of dividends | 172 |
6.6.3. KNF's stance on the dividend policy in 2024 | 173 |
6.7. Financial rating | 175 |
6.8. Analysts' predictions | 178 |
7. Corporate governace (G) | 180 |
Statement on the application of corporate governance rules | 181 |
7.1. Financial conglomerate | 182 |
7.1.1. Approach to managment | 182 |
7.1.2. Corporate governance over subsidiaries | 182 |
7.2. PZU's collection of corporate governace rules | 184 |
7.3. Application of corporate governance rules | 185 |
7.3.1. Application of corporate governance rules contained in Best Practices of WSE-Listed Companies | 185 |
7.3.2. Application of Corporate Governance Rules for Regulated Institutions | 190 |
7.3.3. Best Practices of the PZU Group | 196 |
7.4. Information policy and communications with investors | 198 |
7.4.1. Shareholders and the issuer's securities | 198 |
7.4.2. Investor Relations | 201 |
Annual Report 2023 for the accounting year ended 31 December 2023 | |
Management Board's report on the activity of the PZU Group and PZU SA |
7.5. Management Board and Supervisory Board | 205 |
7.5.1. Management Board | 205 |
7.5.2. Supervisory Board | 218 |
7.5.3. Diversity policy | 232 |
7.6. Internal systems and functions | 235 |
7.6.1. Risk management system | 235 |
7.6.2. Internal control system | 236 |
7.6.3. Financial statements control system | 238 |
7.6.4. Audit firm auditing the financial statements | 238 |
7.7. Shareholder Meeting and relations with shareholders | 240 |
7.7.1. Shareholder Meeting | 240 |
7.7.2. Rules for changing the Articles of Association | 242 |
7.7.3. Dividend | 243 |
7.8. Conflict of interest and transactions with related parties | 244 | |
7.8.1. Management of a conflict of interest | 244 | |
7.8.2. Transfer Pricing Documentation | 245 | |
7.9. Remunerations | 246 | |
7.9.1. Policy of compensation of supervisory and | ||
management bodies | 246 | |
Corporate culture and key business conduct policies | 250 | |
7.10. Corporate Culture | 251 | |
7.10.1. Values and Ethics in Business | 251 | |
7.10.2. Preventing Mobbing and Discrimination | 252 | |
7.10.4. Prevention and Detection of Corruptionand Bribery | 254 | |
7.10.5. Payment Practices | 257 | |
7.10.6. Tax policy | 257 | |
7.10.7. Investment Policy - TFI and PTE PZU | 259 | |
7.11. Minimum safeguards | 261 | |
7.12. Security System | 265 | |
7.12.1. Information security | 265 | |
7.12.2. Preventing crime | 269 | |
7.12.3. Preventing Money Laundering and Terrorism Financing | 270 | |
7.12.4. Business Continuity Management | 272 | |
7.12.5. Application of International Sanctions | 272 | |
5 | INSURANCE | | HEALTH | INVESTMENTS | BANKING |
About PZU Group | Business model | External | Strategy and perspective | Risks and opportunities | Performance | Corporate governance (G) | Environment (E) | Society (S) | Other information |
environment | and dividend | ||||||||
8. Environment (E) | 274 |
8.1. Business of the PZU Group in the face of climate change | 275 |
8.1.1. Global Challenges to Sustainable Development | 275 |
8.1.2. Analysis of climate change and risk identification | 277 |
8.1.3. ESG Strategy - approach to management in climate | 280 |
8.1.4. Product offering - prevention and adaptation | 280 |
8.2. Taxonomy - disclosure under Article 8 of Regulation (EU) 2020/8525 | 289 |
8.2.1. Insurance and reinsurance activities | 289 |
8.2.2. Investment activity | 294 |
8.3. PZU Group's climate impact | 313 |
8.3.1. Direct environmental impact | 313 |
8.3.2. Consumption of raw materials | 314 |
8.3.3. Energy consumption | 318 |
8.3.4. Carbon footprint | 322 |
9. Society (S) | 327 |
9.1. Employees | 328 |
9.1.1. Employees - approach to management | 328 |
9.1.2. Employment structure | 329 |
9.1.3. Work environment | 336 |
9.1.4. Organizational culture | 338 |
9.1.5. Respect for human rights and diversity in relations with employees | 341 |
9.1.6. Engagement surveys, dialog and trade unions | 345 |
9.1.7. Remuneration and benefits | 347 |
9.1.8. Training and development | 349 |
9.1.9. Knowledge and experience sharing | 353 |
9.1.10. Safety | 354 |
9.2. Clients | 357 |
9.2.1. Respect for human rights in relations with clients | 358 |
9.2.2. Responsible sales | 358 |
9.2.3. Claims handling | 362 |
9.2.4. Customer dialog and improvement process | 368 |
9.2.5. Client satisfaction surveys | 370 |
9.2.6. Customer - preventing exclusion | 374 |
9.3. Communities | 377 |
9.3.1. Communities - approach to management | 377 |
9.3.2. Local communities | 379 |
9.3.3. Prevention | 383 |
9.3.4. Cultural patronage | 385 |
9.3.5. Charity | 386 |
10. Other information | 388 |
10.1. Reporting process | 389 |
10.2. Materiality assessment | 391 |
10.3. GRI content index | 392 |
10.4. ESRS content index | 396 |
10.5. Taking into consideration the guidelines pertaining to disclosure of climate information | 399 |
10.6. Verification Statement - Greenhouse Gas Emissions | 400 |
10.7. SFDR disclosure | 401 |
11. Other statements | 407 |
12. Appendices | 410 |
12.1. PZU Group's financial data | 411 |
12.2. Glossary of terms | 426 |
12.3. Alternative Performance Measures | 429 |
Annual Report 2023 | Management Board's report on the activity of the PZU Group and PZU SA | 6 | INSURANCE | HEALTH | INVESTMENTS | BANKING |
for the accounting year ended 31 December 2023 |
About PZU Group | Business model |
Integrated table of contents
External | Strategy and perspective | Risks and opportunities | Performance | Corporate governance (G) | Environment (E) | Society (S) | Other information |
environment | and dividend | ||||||
BUSINESS MODEL | /34 |
Others | CAPITALS: | |
/388 | Financial | /35 |
IndexGRI | Intellectual | /37 |
/390 | ||
Human | /40 | |
Materiality Assessment | |||
Social and relational | /40 | ||
/389 | |||
Infrastructural | /41 | ||
Taksonomy | |||
Natural | /41 | ||
/287 | |||
Annual Report 2023 for the accounting year ended 31 December 2023 | |||
Management Board's report on the activity of the PZU Group and PZU SA |
strategy and perspective /110
inwestments
/54
risks and opportunities
/130
insurance
/48
health
/53
PZU GROUP /23
7
performance
/152
banking
/56
policy
/147
Stakeholders /69
Climate | ||||||||||||||||
E and environment/274 | ||||||||||||||||
S | • | Employees | /328 | |||||||||||||
• | Clients | /357 | ||||||||||||||
• | Communities | /377 | ||||||||||||||
G | Statement | |||||||||||||||
on corporate | ||||||||||||||||
governance | /181 | |||||||||||||||
INSURANCE | HEALTH | INVESTMENTS | BANKING
About PZU Group | Business model | External | Strategy and perspective | Risks and opportunities | Performance | Corporate governance (G) | Environment (E) | Society (S) | Other information |
environment | and dividend | ||||||||
Anita Elżanowska
Member of the PZU Supervisory Board delegated to temporarily perform the function of the PZU CEO
Letter from the CEO to Shareholders
[GRI 2-22]
Together with the Management Boards of the Companies that make up the PZU Group, I am providing you with the Annual Report for 2023. This was a period in which we operated under conditions of gradual recovery from the pandemic crisis, but still under pressure from the consequences of the war in Ukraine. We also must not forget about long-term trends, such as climate change, demographics, labor market transformations and technological advances, which also bring great challenges. Polish entrepreneurs in this environment have demonstrated exceptional flexibility, adaptability and even expansion. This can be seen in the performance of our economy, especially against the economies of the EU countries that form the Eurozone.
Sales and profitability
Despite operating in a very challenging geopolitical and macroeconomic environment, the PZU Group achieved its strategic goals in 2023. Net profit attributable to shareholders of the Group's Parent Company, PZU SA, amounted to nearly PLN 5.8 billion, growing year-on-year by more than 50%. It also exceeded the 2024 strategy
target by 34%. The adjusted return on equity (aROE) was 22%, up 5.7 p.p. compared to 2022. The PZU Group also strongly increased sales. In 2023, gross insurance revenues amounted to PLN 26.9 billion, more than 2 billion higher than the previous year. The main driver of growth was non-life insurance, where revenues rose 11.4% year-on-year to PLN 16.1 billion. This was driven primarily by revenue growth in non-motor insurance and the MOD segment. Sales growth was accompanied by high profitability achieved in key business lines. The Combined Ratio (COR) for non-life insurance in Poland was 85.3% and the operating margin in group and individually continued life insurance was 21.9%.
In the structure of revenue growth, noteworthy is the growing role of mutual insurance, which, in the PZU Group, is the domain of TUW PZUW. In less than four years, the its membership has doubled, and there are now more than 600 members. In 2023, PZU also acquired Polski Gaz TUW and Polski Gaz TUW na Życie, and this will allow PZU to increase its premiums written in this area, and at the same time, the values of the funds accumulated by EPS (Employee Pension Schemes) participants and managed by the Group.
Investment performance and contribution of banks
An important component of the PZU Group's performance generated in 2023 was the profit earned on its investment portfolio, which rose to PLN 2.5 billion, up 12.1% year-on-year. This was mainly influenced by the level of interest rates, favorable from the point of view of the performance on interest-bearing instruments.
The performance on banking operations was another positive factor. The contribution of Pekao and Alior
banks to the PZU Group's profit attributable to the equity holders of the Parent Company was more than three times higher than in 2022, amounting to nearly PLN 2 billion (vs. PLN 580 million a year earlier).
Implementation of IFRS17 standard
An important development for the PZU Group in 2023 was changing the accounting standard, from IFRS4 to IFRS17. For external stakeholders, this was mainly visible in the structure and content of the reporting documents. Internally, however, the implementation of IFRS17 has meant many changes in analytical and planning areas. These changes coincided with dynamic changes in the macroeconomic environment, particularly in relation to inflation and the response of central banks. As
a consequence of these events, it was necessary to revise the PZU Group's strategy and set new or update some of the existing metrics.
Today, the PZU Group is already in the final year of implementing its Strategy for 2021-2024. As such, our priority will be to work on preparing new strategic goals and ambitions, the implementation of which will contribute to building the Group's value, taking into account the principles of sustainable development.
Sustainable development
The PZU Group has consistently strengthened its leadership position in key financial market segments, doing so in accordance with the principles of sustainable development. The Group incorporates environmental, social and governance factors in all aspects of its operations and treats these factors equally.
Annual Report 2023 | Management Board's report on the activity of the PZU Group and PZU SA | 8 | INSURANCE | HEALTH | INVESTMENTS | BANKING |
for the accounting year ended 31 December 2023 |
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PZU - Powszechny Zaklad Ubezpieczen SA published this content on 23 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 May 2024 16:51:01 UTC.