5.1 Reportable segments

5.1.1 Key division criterion

IFRS 8 sets out requirements for disclosure of information about an entity‟s operating segments in their annual and interim financial statements. Operating segments are components of the entity for which separate financial information is available and that are regularly reviewed by the entity‟s chief operating decision maker (“CODM”, i.e. the Management Board of PZU) in order to allocate resources to the segment and assess its performance.

The key segmentation pattern of the PZU Group is based on the criterion of consolidated entities with the exception of the key companies in the PZU Group (PZU and PZU Życie) where additional segments based on the criteria such as client groups, product lines and types of activities can be distinguished.

PZU segments:

  • Corporate insurance (non-life insurance);
  • Retail client insurance (non-life insurance);
  • Investment activities – comprising investments using own funds.

PZU Życie segments:

  • Group insurance and individually continued insurance (life insurance);
  • Individual life insurance (life insurance);
  • Investment activities – including investments using own funds;
  • Investment contracts – described further in this chapter.

Due to the differences and operation in different regulatory environments, the internal financial reporting system used in the PZU Group, in accordance with the segmentation pattern of the PZU Group based on the criterion of consolidated entities and the usefulness for the users of financial statements, the additional following segments have been separated:

  • Pension insurance;
  • Ukraine (non-life and life insurance; in 2012 only non-life insurance);
  • Baltics - Lithuania, Latvia, Estonia - (non-life and life insurance; in 2012 only non-life insurance).

Operating segments may be aggregated into a single reportable segment if the qualitative and quantitative criteria described in IFRS 8.12-19 are met. In these financial statements separate operating segments have not been aggregated into reportable segments with the exception of the “Investments” segment which comprises investment activities using the PZU Group companies‟ own funds.

5.1.2 Geographical areas

The PZU Group applies additional geographical segmentation as follows:

  • Poland;
  • Baltics;
  • Ukraine.