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.

In 2013, the Ukraine segment earned an operating profit of PLN 15.7 m, compared with PLN 10.4 m in the prior year.

Operating profit of the Ukraine segment (in PLN million)


Source: PZU data.

The significant improvement in the segment’s results was the effect of:

  • an increase in the gross written premium. It amounted to PLN 203.6 m, i.e. it increased by 43.2%. In 2013, it comprised PLN 46.6 m of premiums of the life insurance company, which had not been subject to consolidation in 2012;
  • an increase in income from investing activities. This segment earned PLN 24.4 m in this respect, which is 37.4% more than in 2012. The increase in returns on liquid financial instruments (deposits, bonds) and an increase in liquid assets had a positive impact on this income;
  • a significant increase in claims and benefits. The segment recognized PLN 80.9 m, i.e. 50.2% more claims and benefits than in the prior year. In 2012, this segment only included the amount of non-life claims. In 2013, the non-life company disbursed PLN 56.6 m claims, i.e. 5.1% more than in the prior year.
    An improvement in the loss ratio was noted (from 52.3% to 45.1%), which was a result of reducing the sales of popular medical insurance which was exposed to a high loss ratio, and balancing the portfolio with a high-yield non-life insurance portfolio. The amount of claims in the life insurance company was PLN 24.2 m, i.e. it increased by 33.5% compared with the prior year. At the same time, the operating profit margin improved (from 5.3% to 11.2%);
  • an increase in acquisition expenses. They amounted to PLN 62.4 m compared with PLN 28.0 m in the prior year. In 2013, they comprised PLN 20.3 m of the life insurance company’s acquisition expenses. Their level was the result of high costs of “new business” and active cooperation with brokers and banks, which are characterized by higher commission charges;
  • an increase in administrative expenses. They amounted to PLN 35.9 m, and included administrative expenses of the consolidated life insurance company of PLN 6.1 m. For comparison purposes, in 2012, the administrative expenses of the segment amounted to PLN 28.5 m.