Acquisition costs and administrative expenses

In 2013, acquisition expenses amounted to PLN 2,015.9 m and increased by 0.8% compared with 2012. This increase was mainly the result of:

  • the rapid increase in sales of investment products through the bancassurance channel, specifically of the unit-linked product characterized by high acquisition expenses;
  • an increase in the share of the more expensive distribution channels in sales of insurance cover to the mass-market customer and changes in commission rates for selected product groups;
  • the start of consolidation of life insurance companies in Lithuania and Ukraine – acquisition expenses of the consolidated companies amounted to PLN 30.7 m in 2013.

At the same time, a decline in acquisition expenses was recorded in the corporate segment (lower commissions paid as a result of negative sales growth) and a decline in indirect acquisition expenses (such as personnel costs).

In 2013, the Group’s administration expenses were at a level of PLN 1,406.5 m, which was 2.3% lower than in the prior year. The following factors had an impact on their level:

  • PLN 19.1 m lower personnel costs, as a result of employment restructuring and reorganization;
  • a decline in advertising expenses compared with 2012, when a large-scale corporate campaign was conducted;
  • an increase in project costs related to the implementation of a new product system, the Everest Platform (implementation of the first part of the pilot program in November 2013).