PZU Życie SA (PZU Życie) operates on the life insurance market within the PZU Group. The Company offers a wide range of life insurance products, including group and individual protection insurance, investment insurance and pension products.
PZU Życle gross written premium (in PLN million)
During 2013, PZU Życie collected 28.3% of the gross written premiums of the life insurance companies. In comparison, in 2012, the Company had a 25.6% share of the market. Simultaneously, PZU Życie continued to remain the decisive leader in the regularly paid premium segment. In 2013, it obtained 43.3% of such premiums of all insurance companies.
PZU Życie’s technical result constituted the majority of the result obtained by all life insurance companies. This is evidenced by the high profitability of the products offered. The margin in PZU Życie’s technical result on a written premium was almost four times higher than the margin obtained by all the other companies offering life insurance together (20.6% compared with 5.3%).
In 2013, PZU Życie adjusted its product offering to the increasingly greater customer requirements, the actions taken by the competition and the changing legal situation.
The changes in the offering of group insurance and individually continued insurance introduced in 2013 consisted of:
- Protection insurance. Changes were introduced into the general terms and conditions of insurance and marketing materials, in order to simplify the language, remove provisions which could give rise to doubts in interpretation and adapt them to the changing provisions of the law.
- Banking protection insurance. The focus was on maintaining the insurance portfolio and work related to the planned implementation of insurance for consumer finance and mortgage banking customers.
- Drug insurance. The offering was made more flexible through the introduction of the ability to create different variants with a variable sum insured and a variable amount of co-payment by the patient. Furthermore, a new PZU product range – Antybiotyk [Antibiotic] – was launched into the group drug insurance.
- Group health insurance offered on the basis of the fee-for-service settlement model (the medical service provider is PZU Pomoc). The range was extended to include a number of additional medical consultations and diagnostic examinations. Furthermore, additional options were introduced which are appropriate for sponsored products, such as family packages and the reimbursement of services provided outside the insurer’s own network. At the end of 2013, PZU Pomoc was working with 1,050 establishments (compared with 800 at the end of 2012).
Simultaneously, PZU Życie actively worked towards attracting new customers for group insurance. Because the number of employment establishments operating in the public sector placing orders for insurance services in the tender procedure is increasing, PZU Życie entered many – successfully completed – tenders for group insurance.
Because of the continuing uncertainty on financial markets, customers were still interested in traditional life insurance of a protective or protective and savings nature. Customers were primarily interested in the sale of classic insurance, such as PZU Ochrona Życia [PZU Life Protection] or PZU Twoja Ochrona [PZU Your Protection]. Simultaneously, the Company worked intensively on the adjustment of the current offering to the low yields on treasury bonds.
In 2013, PZU Życie offered an individual unit-linked life insurance product named Plan na Życie [Plan for Life]. However, because of the unfavorable press, the statements of the regulator and the discussion on the structure of these products, customers showed limited interest in this product.
An important element of PZU Życie’s investment portfolio was the structured Świat Zysków [World of Profits]. In order to adjust these products to customer expectations, the Company has products with varying investment strategies, enabling the diversification of portfolio risk. Because of the considerable decline in interest rates on deposits and bond yields, in 2013, PZU Życie decided to extend the period of liability in the product from 3 to 5 years. Furthermore, it changed its approach to the choice of instruments, on which the product is offered and, in June 2013, it launched the sale of Świat Zysków[World of Profits], which is based on an index investing in funds managed by TFI PZU. The objective of these changes was to maintain the attractiveness of the product, including retaining a 100% guarantee of a return of the invested capital in the event of adverse changes in market conditions. PZU Życie conducted 11 successive subscriptions for the Świat Zysków structured insurance in 2013. Because of the observed unfaltering customer interest in structured products, further issues of this product are planned.