As at 31 December 2013, total assets of the PZU Group amounted to PLN 62,362.4 m and were 11.5% higher than as at the end of 2012.
The key components of the Group’s assets were investments (financial assets and investment property). In total, these assets amounted to PLN 56,163.5 m and were 10.2% higher than at the end of the prior year. They represented 90.1% of the Group’s total assets compared with 91.2% at the end of 2012. The increase in the value of investments was especially due to the inclusion of subordinated entities, including mutual funds, in the consolidation (the effect of discontinuation of applying the materiality criterion to determine the list of consolidated subsidiaries as of 1 January 2013) and positive cash flows from operating activities (higher written premiums and a lower level of claims paid).
Structure of PZU Group's assets (in %)
The PZU Group’s receivables, including receivables from insurance contracts, amounted to PLN 2,665.0 m, i.e. they represented 4.3% of total assets. In comparison, at the end of 2012, they amounted to PLN 1,835.8 m (3.3% of the Group’s assets), while their increase arose from the security sales transactions which had not been settled as at the balance sheet date.
Non-current assets – in the form of intangible assets, goodwill and property, plant and equipment – were disclosed in the balance sheet at PLN 1,244.5 m. They comprised 2.0% of total assets. In particular, in 2013 the balance of intangible assets increased by PLN 125.5 m due to the implementation of the new policy system in the non-life company.
As at 31 December 2013, the PZU Group’s cash and cash equivalents amounted to PLN 548.3 m (0.9% of total assets). A year earlier, they amounted to PLN 136.6 m.
Equity and liabilities
At the end of 2013, the main component of the PZU Group’s equity and liabilities was technical provisions. They amounted to PLN 37,324.4 m, which represented 59.9% of total assets. Their share in the balance sheet declined by 3.4 p.p. during the year.
Structure of PZU Group's liabilities and equity (in %)
Investment contracts amounted to PLN 2,121.0 m compared with PLN 2,299.1 m as at the end of 2012. This drop was a result of slightly lower sales of investment products, combined with the lower disbursements in endowment covers in the bancassurance channel.
In effect, their share in the structure of liabilities and equity dropped from 4.1% as at the end of 2012 to 3.4% as at the end of December 2013.
As at the end of 2013, equity amounted to PLN 13,127.8 m and was 8.0% lower than in the prior year. This was mainly due to a dividend payment. In 2013, PZU paid out PLN 4,291.7 m to shareholders in the form of a dividend.
The balance of other liabilities and provisions as at the end of 2013 amounted to PLN 9,789.2 m. The PLN 5,848.8 m increase arose mainly from sell-and-buy-back transactions concluded at the turn of the years.
Cash flow statement
The balance of cash and cash equivalents as at the end of 2013 increased by PLN 417.4 m compared with the prior year, mainly as a result of lower claims disbursements. Moreover, in 2013 buy-and-sell-back transactions and trading in debt instruments increased almost 1.5 times (as a result of the redemption of a large portion of the HTM portfolio).
Off-balance sheet items
Under a guarantee facility agreement dated 7 October 2013 concluded by and between PZU and Bank Millennium SA, the bank grants bank guarantees (both as tender deposits and performance bonds) to PZU in tenders for insurance services. The guarantee facility is PLN 15 m. It is open for one year and it may be every year renewed for another year.
72 guarantees were open, as at 31 December 2013, for a total amount of PLN 6.4 m, under the guarantee facility which is available from 7 October 2013 to 6 October 2014.
Under the guarantee facility agreement dated 7 October 2013 concluded by and between PZU Życie and Bank Millennium SA, the bank grants bank guarantees (as tender deposits, as well as performance bonds) to PZU Życie in tenders for insurance services. The guarantee facility is PLN 10 m. It is open for one year and it may be every year renewed for another year. 12 guarantees were open as at 31 December 2013, for a total amount of PLN 0.5 m, under the guarantee facility which is available from 7 October 2013 to 6 October 2014.
Loans and borrowings incurred and granted
As at the end of 2013, the balance of loans incurred by the PZU Group amounted to PLN 222.4 m, of which the Armatura Group incurred PLN 88.5 m and SPVs established for the mutual funds incurred: PH3 Sp. z o.o. SKA – PLN 62.7 m and PORTFEL PB2 Sp. z o.o. - PLN 76.1 m. As at the end of 2012, the balance of loans incurred by the Armatura Group amounted to PLN 76.5 m. All the loans and borrowings were granted at arm’s length.