In 2013, the net value of claims and benefits, as well as the increase in the PZU Group’s provisions amounted to PLN 11,161.2 m. Additional provisions of PLN 1,032.8 m were established in 2012 because of the decline in the technical rates and consequently the value of claims including a change in provisions was 8.7% lower. The following factors also contributed to the decline in the net value of claims and benefits:

• a low level of damage related to the negative effects of overwintering, a lack of frost and floods in the summer in agricultural insurance, whereas in the years 2011-2012, a high level of claims was recorded in this respect which led to negative returns on this product;
• the lack of need to establish additional provisions for claims in financial insurance with regard to contract guarantees;
• the maintenance of a low loss ratio in motor insurance due to improved road conditions and lower traffic intensity (low loss frequency);
• a lower increase in technical provisions for unit-linked products as a result of deteriorating investment activity results, which, with a simultaneous drop in investment income, had no impact on the PZU Group’s results;
• a lower increase in the technical provisions in continued protection insurance as a result of modifying the product, which affected the amount of technical provisions established upon the insured’s transfer to the individually continued phase;
• optimization of the claims handling processes.

On the other hand, the following contributed to the increase in the net value of claims and benefits:

• a lower rate of conversions of long-term contracts to renewable annual contracts in type P group insurance (the effect of conversion in 2013 translated into a release of PLN 127.1 m of provisions, i.e. PLN 79.9 m less than in 2012);
• an increase in life insurance provisions for individual investment products in the bancassurance channel as a result of high sales of new insurance.