PZU Group’s income

Premiums

In 2021, the PZU Group collected gross premiums of PLN 25,080 million, i.e. 5.1% more (PLN 1,214 million) than in 2020. The change in gross written premium (net of inter-segment premiums) was affected primarily by:

• increase by PLN 695 million (+6.8% y/y, up to PLN 10,895 million) in sales in the mass client segment in Poland – especially in the ADD and other insurance, mainly accident insurance as a result of the development of the sales of insurances offered in cooperation with the Group's banks to mortgage loans and cash loans; natural catastrophe insurance and other property insurance, predominantly crop insurance, as a result of a higher than last year pool of state budget subsidies, as well as in MOD insurance as a result of an increased volume of insurances and higher average price of MOD policies;
• increase in the written premium in the corporate client segment by PLN 237 million (+8.0%, to PLN 3,199 million), including insurance against fire and other damage to property, as a result of renewal of a long-term high-ticket contract, and increased premium written from a contract with a fuel and energy client;
• increase by PLN 221 million (+11.1% y/y, up to PLN 2,206 million) of sales of the foreign companies, mainly in property, MOD and health insurance in the Baltic States;
• increase by PLN 38 million (+2.2% y/y, up to PLN 1,750 million) of the written premium in the individual life insurance segment, driven mainly by growing sales of protection products offered in collaboration with banks and the persisting upward trend in premium written in equity and term protection products offered in own channels;
• increase by PLN 23 million (+0.3% y/y, up to PLN 7,030 million) of sales of group and individually continued insurance, in particular health insurance in group or continued form, and active up-selling of other insurance riders in individually continued products.

Structure of gross written premium in the PZU Group (%)

Insurance segments (PLN million), local GAAP

Net revenues from commissions and fees

In 2021, net revenues from commissions and fees amounted to PLN 3,544 million, and were by PLN 378 million, i.e. 11.9%, higher than in the previous year.

The revenues included primarily:

• net revenues from commissions and fees in the banking business of PLN 2,911 million, up PLN 389 million, or 15.4%, as compared to last year; included mainly: brokers’ commissions, revenues and expenses related to the services linked to bank accounts and payment and credit cards, as well as fees charged for intermediation in insurance sales;
• revenue form pension insurance of PLN 154 million, up PLN 24 million, or 18.5% as compared to the previous year; the increase was applicable to the income on the reserve account, as well as lower income from management fees;
• revenues and fees received from funds and mutual fund management companies of PLN 474 million, down PLN 35 million, or 6.9%, as compared to 2020.

In 2021, net investment result, including interest expenses but excluding Bank Pekao and Alior Bank, was lower than in the previous year, due to the poorer performance of the variable coupon debt portfolios resulting from prepayments on high profitability exposures as well as decline in the EUR/PLN exchange rate (as compared to growth in the previous year), and poorer results from investment activity on the portfolio of assets held to cover investment products. Investment results on the portfolio of assets held to cover the investment products alone do not affect the PZU Group’s overall net result, because it is offset by the movement in net insurance claims and benefits.

The impact of the aforementioned drivers was partly offset by:

• increased valuation of shares in a logistics company following its IPO;
• high result on the real property portfolio, due to increase in the valuation of the certificates of PZU FIZ Aktywów Niepublicznych Sektora Nieruchomości [PZU Closed-End Mutual Fund of Non-Public Assets of the Real Property Sector 2];
• high result of the Private Equity portfolio thanks to better environment on the technological market, which is the primary investment destination for portfolio funds;
• higher result of the Polish treasury bonds (AC) portfolio, due to a higher balance of assets.

In 2021, the balance of other operating income and expenses was negative and stood at PLN 2,315 million, compared to the also negative balance of PLN 3,990 million in 2020. This was caused by the following factors:

• non-recurring effects in the corresponding period of last year: impairment loss on goodwill arising from the acquisition of Alior Bank – in the amount of PLN 746 million, and Bank Pekao – in the amount of PLN 555 million, as well as the impairment loss on assets arising from the acquisition of Alior Bank (i.e. trademark and relations with clients) in the amount of PLN 161 million;
• lower BFG fees – which decreased from PLN 541 million in 2020 to PLN 396 million in 2021, as a result of a lower contribution to the resolution fund;
• higher charge of the levy on financial institutions, which in the case of the PZU Group (insurance and banking activity considered jointly) increased from PLN 1,203 million in 2020 to PLN 1,290 million in 2021, due to higher charges on the bancassurance activity resulting from the higher balance of taxable assets (the rate of the bank levy has not changed);
• decrease by PLN 45 million of the costs of amortization of intangible assets purchased in company acquisition transactions;
• reversal of the provision for the fine imposed on PZU by the President of the Office of Competition and Consumer Protection (UOKiK) on 30 December 2011, in the amount of PLN 57 million.