PZU plans large increases in all key markets for the group, counts on an increase in the gross premium, revenues from the health segment and assets under management. The net profit in 2024 is to increase to PLN 3.4 billion with the growing contribution of banks, and the dividend is to go to at least 50 percent. profit – informed PZU in the group’s strategy for 2021-2024
In its strategy, PZU plans to increase its net profit to PLN 3.4 billion in 2024 from PLN 1.9 billion in 2020 and assumes an increase in ROE to 17.4%. from 10.9 percent
“Within four years, we will significantly increase profit and return on equity while maintaining a high solvency ratio and annual dividend payment to shareholders. We intend to do this by achieving growth in each of the key markets in which we operate,” said PZU CEO Beata Kozłowska-Chyła .
“We will ensure an increase in the premium written from insurance activities. By 2024, we will make a real qualitative revolution in the private medical care sector in Poland” – she added.
She informed that the PZU group wanted to benefit from the synergy effects and sales development between the PZU group entities.
“We will especially use the potential of banks. We will make even greater use of innovative technologies and the vast knowledge about customer needs that we obtain through various forms of contact with them” – said Kozłowska-Chyła.
The gross premium will increase to PLN 26 billion
According to the plans, PZU’s gross written premium is to increase in 2024 to PLN 26 billion from PLN 24 billion (by 9.9%).
The group’s activities are to be supported by Link4. The gross written premium of this insurer is to increase by 22.5 percent by 2024. up to PLN 1.3 billion.
In PZU’s opinion, the use of two insurance brands with complementary distribution channels and product offer will allow reaching a greater number of new customers and increasing the level of maintenance of the existing ones.
The gross written premium of Link4 Towarzystwo Ubezpieczeń Wzajemnych Polskie Zakład Ubezpieczeń Wzajemnych (TUW PZUW) is to increase to PLN 1 billion from PLN 600 million. The group wants to maintain its leading position in the mutual insurance market.
PZU said that taking into account the significantly increased medical and financial security needs of Poles due to the pandemic, the group plans a dynamic development in the private healthcare and investment markets.
PZU Zdrowie’s revenues are to increase to PLN 1.7 billion from PLN 0.9 billion (by 80%). PZU’s priority will be the integration and development of the network of outpatient facilities.
“We will increase revenues in PZU Zdrowie facilities, thanks to an increase in the share of PZU Zdrowie patients in insurance and subscriptions, and by applying for new contracts with the National Health Fund,” wrote the strategy.
PZU plans to prepare a special offer for seniors. It will include, among others, insurance that meets their expectations regarding the scope and channels of sales and service, medical services with particular emphasis on remote care at home and sanatorium treatment, as well as a package of services supporting seniors in everyday life and activities.
The group also wants to create the so-called an integrated ecosystem of non-wage employee benefits, which is to be attractive both for corporate and individual clients. It will include, among others insurance and health packages, PZU Sport cards and sports and leisure subscriptions, loans from PZU Cash, future extended with mortgage products and a system of purchase discounts at partners.
For a dividend of at least 50 percent. profit
In its dividend and capital policy until 2024, PZU assumes that 50-100 percent will be allocated to dividends every year. consolidated net profit attributable to owners of the parent.
PZU assumes that every year no less than 50 percent. profit will be distributed as part of the annual dividend. The remaining part will be paid out as part of the annual dividend or will increase the retained earnings (reserve capital) in the event of significant expenditure related to the implementation of the assumptions of the PZU group’s strategy, in particular as part of mergers and acquisitions.
The dividend policy assumes that no more than 20 percent. can increase the earnings retained for organic growth and innovation and the pursuit of growth initiatives.
PZU assumes that the solvency ratios will not be lower than 200%. for the PZU group, PZU and PZU Życie. PZU reserves, however, that there is a possibility of temporary deviations of the actual capital adequacy ratio above or below the target level.
The leverage ratio is to be at a level not higher than 25 percent by 2024.
“We will ensure that the surplus of own funds of the financial conglomerate over the capital adequacy requirements is maintained,” wrote the strategy.
During the term of the strategy, PZU does not plan to issue any shares.
The strategy states that the PZU group aims to maximize the rate of return on capital for the shareholders of the parent company, in particular while maintaining the level of security and maintaining capital resources for strategic development through organic growth and acquisitions.
Banks’ contribution to the Group’s results will increase
PZU assumes that it will significantly improve the net result with an increase in the contributions of Bank Pekao and Alior Bank.
The contribution of these banks to the PZU group’s net result was assumed in 2024 at PLN 0.8 billion, while in 2020 it amounted to PLN 0.1 billion. In 2019, the contribution was PLN 0.5 billion.
“In 2020, the contribution of the PZU Group’s banks to the PZU Group’s net financial result decreased, which was caused by the decline in profitability in the banking segment related to the Covid-19 pandemic, changes in the regulatory environment, historically low interest rates which translated into a lower net interest income, and also write-offs for the impairment of bank assets “- it was written in the presentation.
PZU assumes that it will obtain approx. PLN 3 billion of accumulated written premium from insurance and banking cooperation with Bank Pekao and Alior Bank in 2021-2024, which means approx. 200%. increase compared to 2017-2020.
For Pekao and Alior Bank clients, PZU plans to expand its insurance offer and prepare comprehensive service packages complementing banking products.
PZU plans to strengthen its insurance position on the energy market and expand the PZU Cash offer.
Assets under management will increase to PLN 60 billion
In its strategy, PZU announced that it wants to increase assets under management (assets of external clients under the management of TFI PZU, Pekao TFI and Alior TFI) by 81.8 percent. up to PLN 60 billion in 2024 compared to PLN 33 billion at the end of 2020
In its strategy, PZU assumes a significant development of regular investment products (PPE / PPK) and passive products. He also wants to expand the offer of investment funds with ESG funds.
PZU hopes that, thanks to product and distribution synergies between TFI PZU and the group’s banks, it will be possible to reduce costs.
“We do not rule out acquisitions of entities on the investment fund market that are attractive from the perspective of the PZU group, as well as organizational, sales and cost synergies within the PZU group,” it was written.
PZU wants to maintain cost effectiveness
PZU’s administrative expenses ratio is expected to drop to 7 percent during the new strategy’s validity period. from 7.1%
“Despite the expected decline in revenue growth in 2020-2021, mainly caused by the Covid-19 pandemic, we will maintain cost effectiveness during the implementation of the strategy,” wrote the strategy.
“We will achieve this thanks to cost discipline and investments in digitization of processes and digitization, as well as changing the working model to remote and hybrid” – added.
PZU wants to spend around PLN 100 million every year on investments, including into digitization.
“We want to spend about PLN 100 million annually on investments in the development and digitization of the PZU group, better data management, more efficient sales and maintenance processes with one central CRM,” said Tomasz Kulik, member of the PZU management board and group financial director.
PZU does not rule out acquisitions in the region
PZU announced in its strategy that it focuses on organic growth in the Baltic States, but is monitoring the market in the region in terms of acquisition targets.
When selecting the objectives of the acquisition, PZU will be guided by whether a given entity operates in one of the key markets for the group, i.e. insurance, banking, asset management, health and related markets, whether it operates in Central and Eastern Europe, or belongs to the Top 3 in a given market. country or has the potential to achieve such a position within a few years and, finally, whether it gives the prospect of achieving profitability at a satisfactory level after the acquisition.
PZU’s goal is to maintain 8 percent. the share of gross premium written from foreign markets in the total, increasing premium written by the PZU group.
PZU assumes organic growth at least at the rate of growth of a given foreign market.
“We will achieve our strategic goal: in property insurance in the Baltic countries by maintaining the leading position and entering TOP3 in Estonia, maintaining a stable position of TOP10 on the Ukrainian market, and in life insurance by entering TOP3 in Lithuania and Ukraine” – it was written in the presentation.
Involvement in green investments will increase by PLN 500 million
PZU’s strategy for 2021-2024 assumes an increase in the current involvement in investments supporting the climate and energy transformation, including wind farms, by PLN 500 million.
PZU announces that it will support the energy transformation of the Polish economy.
“By 2024, we will develop a portfolio development strategy in low-carbon and sustainable industries by 2050. We invest in climate-friendly products and sectors, we will systematically increase the share of sustainable and green investments and funds in our portfolio” – wrote in the presentation.
PZU also wants to carry out an ESG assessment of 55 percent by 2024. the largest corporate insurance clients from sectors sensitive to ESG risk.
“By 2024, we plan to expand and expand our insurance offer supporting decarbonization and the process of changing the energy mix” – it was written.
PZU wants to become climate neutral by 2024. In the longer term, by 2030, it wants to reduce its own carbon footprint even more, and by 2040 it wants suppliers and other partners to become climate-neutral, and by 2050 also insurance and investment customers (PAP Biznes).
seb / pr / gor /
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