Individual insurance – life insurance

In 2013, the operating result of the individual life insurance segment amounted to PLN 139.9 m, i.e. it was 33.8% higher than in the prior year. The main factors affecting the level of the segment’s operating results were:

  • a substantial increase in the gross written premium – it amounted to PLN 1,329.9 m and was 22.0% higher than in the prior year. This was the result of high sales of investment products offered in cooperation with banks (Bank Millennium and Bank Handlowy w Warszawie), sales of the structured product Świat Zysków through the Group’s own sales channels, which was higher than that of the prior year, and the level of sales of the savings product with a protection component and regular premium Plan na Życie. The high sales of those products more than offset the discontinuation of the endowment insurance contracts concluded in the 1990s;
  • the drop in income from investing activities (i.e. income allocated and income from investment-type products). This amounted to PLN 305.0 m, i.e. was 12.1% lower than in the prior year;
  • the increase in net claims and benefits which amounted to PLN 626.6 m, i.e. they increased by 3.6% compared with 2012. This increase was due to higher disbursements on endowments in structured products (both through the Group’s own and through the bancassurance channel) and higher redemptions of unit-linked products in the bancassurance channel. Endowment disbursements from old policies underwritten in the 1990s were lower;
  • a material increase in other net technical provisions. These increased by PLN 712.4 m, which was PLN 118.3 m more than in 2012. The large increase in these provisions was related to high sales of investment insurance through the bancassurance channel.
    This increase was partly offset by a lower increase in provisions on unit-linked products through the traditional channel due to a lower result on investing activities and maintenance of assumptions concerning future claims payments in the annuity portfolio (these assumptions were changed in 2012, which, because of the change in technical provisions, had a negative impact on 2012 financial result; such effect does not appear in current financial year);
  • a significant increase in acquisition expenses. These amounted to PLN 109.5 m (a 20.6% increase compared with 2012). The rapid expansion of sales of investment products through the bancassurance channel, specifically of the unit-linked product characterized by high acquisition expenses, was the reason for this increase;
  • stabilization of administrative expenses. These amounted to PLN 53.2 m.

Operating profit of the individual insurance segment (in PLN million)


Source: PZU data.