PZU Annual Report 2013

Dear Investors,

On behalf of the Management Boards of the PZU Group companies, I hereby present the annual report for 2013.

The PZU Group has had another successful year. We have made numerous changes in a short time and are continuing to build a new quality of organization based on the Company’s long-term strategy. These changes have reinforced the firm’s high market position in the insurance industry in Central and Eastern Europe and have enabled new markets and business areas to be opened. The PZU Group’s objective is to continue its profitable growth and maintain its leading position on the Polish insurance services market with consistency.

At the end of 2013, we initiated the pilot program of the Everest platform – one of the world’s most modern IT policy support systems. This is key evidence of the evolution of the PZU Group’s operating model from an organization operating in accordance with product lines to a customer-oriented organization. This is almost certainly the most important change we managed to implement this year and it will have an impact on the Company’s operations and competitive position for many years.

Customer orientation and high operational effectiveness will help maintain the leadership position – the PZU Group will remain the largest and most profitable insurance company in Central and Eastern Europe.

PZU is also developing its foreign offices. We started to sell insurance products in Latvia and Estonia in 2012. The profitability of PZU’s foreign business is increasingly improving and, from year to year, is becoming an increasingly important line item in our balance sheet.

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Dear Investors,

2013 was yet another year in a row which ended with PZU generating the best financial result since the IPO, and maintaining the highest rating awarded to Polish corporates. Despite the difficult external situation and significant economic downturn, the Company has reinforced its market position and has successfully continued to implement its strategy.

In the economy, the beginning of 2013 continued the negative trend from 2011. The deceleration in the pace of individual consumption growth and declininginvestments, both in Poland and abroad, wereaccompanied by a further exacerbation of the credit crunch in the euro zone. The adverse impact exerted by these external factors was noticeable in many segments of the insurance business; it particularly severely affected the mass market insurance segment, including motor insurance, as well as the corporate insurance segment.

Even so, in such difficult conditions, the PZU Group managed to improve its financial results for another consecutive year. Improved results were primarily driven by higher gross written premiums, fewerclaims in agriculture and higher profitability of certain products. Paradoxically, we managed to improve profitability in the financial insurance segment because of last year’s collapse of the construction market and the resulting changes in the risk discipline was also important. It is also worth emphasizing PZU’s steadily improving profitability on eastern markets over the past few years.

PZU has maintained a high rating. Standard & Poor’s confirmed PZU’s and PZU Życie’s financial strength at the “A” level with a stable outlook for both companies, which is a confirmation of PZU’s very strong capital position and an expression of market confidence in the strategy pursued by the Company.

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