Baltic States

Because of the change in accounting policies in the PZU Group involving the discontinuation of the materiality principle, as of 1 January 2013, the company offering life insurance started to be included in the consolidation. Therefore, the data for this segment for 2013 includes the data of two companies, while the data for 2012 only has the data of the non-life company which had been subject to consolidation until this time.

The PZU Group earned an operating profit of PLN 0.9 m in the Baltic States in 2013, compared with PLN 2.2 m in the prior year.

This result arose from the following factors:

  • an increase in gross written premium. It amounted to PLN 262.3 m, and included PLN 31.8 m of the life insurance company, which had not been consolidated in 2012. For comparison purposes, in 2012, the written premium in the segment amounted to PLN 195.7 m. In non-life insurance, premiums increased mainly as a result of increased sales of property insurance (increase of 28.7%), motor own damage (increase of 15.5%) and TPL motor insurance (increase of 8.1%). In life insurance, the largest sales increase was recorded in traditional life insurance, which increased by 61.2% compared with the previous year and in unit-linked insurance (an increase of 5.3% year-on-year);
  • a decline in the result on investing activities;
    In 2013, investment income amounted to PLN 6.5 m and was 34.2% lower than in the previous year, mainly as a result of unfavorable conditions on the capital markets.
  • an increase in net claims and benefits. They amounted to PLN 139.1 m, including claims and benefits relating to the life insurance company, which was not consolidated in 2012, of PLN 20.4 m. The non-life insurance company recorded a relatively low increase in claims and benefits. The company disbursed PLN 118.7 m on claims and benefits, which was 6.3% more than in the previous year.
    The loss ratio also improved (from 65.0% to 60.7%). In life insurance, the amount of claims and benefits was 32.4% higher than in the previous year because of the increase in technical provisions (the technical rate was reduced from 2.6 to 1.9);
  • an increase in acquisition expenses. The respective expenses of the segment amounted to PLN 67.1 m, including PLN 10.5 m of acquisition expenses incurred by the life insurance company. The increase in acquisition expenses resulted mainly from an increase in sales of insurance;
  • an increase in administrative expenses. These expenses amounted to PLN 26.5 m and included the administrative expenses of the life insurance company of PLN 2.8 m. Costs related to the development of branches on the Latvian and Estonian markets contributed to the increase in these expenses. 

Operating profit of the Baltics segment (in PLN million)


Source: PZU data.