Powszechny Zaklad Ubezpiecze? Spólka Akcyjna : Management Boards report on the activity of the PZU Group (Q2 2023)

Half-year Report

2023

Management Board's report on the activity of the PZU Group in 1H 2023

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Table of Contents
CEO Letter to Shareholders	8
PZU Group's profile	18
1.1. Potential	20
1.2. Brand	20
1.3. Mission, vision, values	22
1.4. Value creation	24
1.5. Milestones in PZU Group's history	28
External environment	30
2.1. Main trends in the Polish economy	32
2.2. External environment in the Baltic countries and Ukraine	33
2.3. Situation in the financial markets	35
2.4. Factors that may affect the conditions of operations and the PZU Group's activities in the second half of 2023...	36
Activity of the PZU Group	44
3.1. Business model	46
3.2. Insurance	47
3.2.1. Description of the insurance markets on which PZU Group companies operate	47
3.2.2. Activity and product offering of PZU Group's insurance companies	52
3.2.3. Factors, including threats and risks, that may affect insurance business in H2 2023	58
3.3. Medical care	60
3.3.1. Situation on the health market	60
3.3.2. Activity and product offering	60
3.3.3. Factors, including threats and risks, that may affect the operations of the health area in H2 2023	65
3.4. Investments	65
3.4.1. Investment and pension fund market	65
3.4.2. Activity and product offering	66
3.4.3. Factors, including threats and risks, which may affect the operations of investment funds, Employee Capital
Schemes and pension funds in 2023	68
3.5. Banking	68
3.5.1. Situation on the banking market in Poland	68
3.5.2. Activity and product offering	69
3.5.3. Factors, including threats and risks, that may affect banking business in H2 2023	73
3.6 Other areas	73

INSURANCE | HEALTH | INVESTMENTS | BANKING

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PZU Group Strategy in 2021-2024	78
4.1. PZU Group Strategy in 2021-2024	80
4.2. Opportunities and challenges 2021+	81
4.3. Strategic objectives	82
4.4. Strategy operationalization, selected achievements in H1 2023	86
4.5. Indicators	91
Investment income	94
5.1. Major factors having an impact on the financial results	96
5.2. PZU Group's income	99
5.3. Insurance service expenses of the PZU Group	101
5.4. Insurance finance income and expenses of the PZU Group	101
5.5. Operating expenses of banks	102
5.6. Drivers and atypical events affecting the results	102
5.7. Structure of PZU Group's assets and liabilities	102
5.8. Contribution made by the market segments to the consolidated result	104
Risk management	120
6.1. Objective of risk management	122
6.2. Risk management system	122
6.3. Risk appetite	124
6.4. Risk management process	124
6.5. PZU Group's risk profile	125
6.6. Reinsurance operations	135
6.7. Capital management	136
PZU Group on the capital and debt markets	138
7.1. Significant factors affecting PZU share price	140
7.2. Significant factors for Pekao and Alior Bank share prices	142
7.3. Debt financing of PZU, Bank Pekao and Alior Bank	143
7.4. Dividend	145
7.5. Rating of PZU, Bank Pekao and Alior Bank	146
7.6. Calendar of PZU Group's reports published in 2023	150
7.7. Contact details for investors	150

Half-yearReport 2023 Management Board's report on the activity of the PZU Group in H1 2023

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Corporate governance statement	152
8.1. Audit firm auditing the financial statements	154
8.2. Shareholders and issuer's securities	155
Other information	158
Appendix 162
Appendix 1: Glossary of terms	164
Appendix 2: Alternative Performance Measures	168

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Legend of iconographics used in the report:

insurance

health

investment

banking

innovation

Half-yearReport 2023 Management Board's report on the activity of the PZU Group in H1 2023

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