PZU Group, FY2019: best results since the its listing to the stock exchange

12 March 2020 — Daniela GHETU
PZU Group achieved in 2019 the best results in its history on the stock exchange, the Polish group reported citing as main coordinates of its success the highest net profit, the highest sales and the largest employee involvement.

Net profit amounted to PLN 3,295 million, sales - PLN 24.2 billion, and return on capital - 21.2%, almost twice the European average for insurance companies. At the same time, the employee involvement rate, according to the largest Kincentric Best Employers survey in Poland, reached 51%. According to the Group's president, Pawel SUROWKA, the main success driver was the commitment of PZU's employees which allowed the successful implementation of the "New PZU - more than insurance" strategy and lots of innovative projects. The level of commitment of PZU employees increased compared to 2018 by 11 percentage points. It exceeds by several points not only the average for insurance companies but also for all companies in Poland. As a result, the Group is spectacularly successful despite the difficult market situation: price pressure and regulatory burdens. This was confirmed by analysts at S&P Global Ratings, raising the PZU rating outlook from stable to positive in 2019.

2019 was the third year in a row in which the consolidated profit per shareholder of the parent company increased, going up by 14% while the dividend doubled, reaching PLN 2.80 per share.

In the fourth quarter of 2019, which was the best fourth quarter in the history of the PZU Group, net profit amounted to PLN 935 million, and return on equity - 23.7%. The sales growth dynamics in this quarter was the highest throughout the year. In the fourth quarter, the premium for individual life insurance increased by 37% year on year, and sales of non-motor insurance - by 30%.

For the non-life segment, PZU achieved a combined ratio (CoR) of 88.4% despite the difficult situation on the motor insurance market. Administrative costs ratio remained at a low level of 6.8%, supported by digitization, which resulted in the automation of customer service and reduction of back office costs.

On the life side, 2019 was a very good year also for PZU Zycie: GWP increased by 2.5%, while the Polish life insurance market recorded an overall negative dynamic. Consequently, the company's market share increased by 2.2pp, to 39.9%. One of the main drivers of this positive result was the improved cooperation with the banks.

The year 2019 was also a period of particularly intensive development of the PZU Group on the private health services market. PZU Zdrowie's revenues increased by 47% compared to the previous year. Thanks to the acquisitions, first of all Falck Medical Centers and the Tomma Group, the number of PZU Zdrowie's own facilities has doubled - to 130, including 35 clinics offering imaging diagnostics. PZU Zdrowie has also expanded its network of partner facilities, whose number at the end of 2019 reached 2,200.

The symbol of digitization of the PZU Group has become the MojePZU platform, which is the most developed electronic customer service system on the insurance and financial-health market. Individual customer accounts serviced through the inPZU platform have been integrated with it. It is also regularly improved and expanded, thanks to which institutional clients can also invest through inPZU.

The PZU Group is the largest financial institution in Central and Eastern Europe. The value of its consolidated assets exceeded PLN 343 billion in 2019. The Group serves 22 million customers in five countries.

Key achievements of the PZU Group in 2019:

  • Net profit of PLN 3,295 million, record-breaking in the PZU Group's stock market history, despite increasing price pressure and regulatory burdens
  • Record sales of insurance - premiums written at PLN 24.2 billion
  • Return on equity at 21.2 percent, almost double the European average for insurance companies
  • The Solvency II solvency ratio at 220%, i.e. one of the highest among European insurers
  • Very high profitability in the non-life segment in Poland - a combined ratio (COR) of 88.4 percent, better by 3.6 pp than the 2020 strategic target
  • Operating margin in group insurance and individually continued group insurance of 21.3%, i.e. above strategic assumptions
  • Investment result exceeding strategic ambitions - return on the main portfolio by 2.5 pp above RFR from the beginning of the year, while maintaining a safe portfolio structure
  • Administrative cost ratio at 6.8 percent - as planned for 2019
  • Raising PZU's rating outlook from stable to positive A- by S&P Global Ratings
  • Net profit per share increased by 14.0% and a two-fold increase in dividend compared to 2017 - to PLN 2.80 per share
  • Record premiums written from foreign operations - an increase of 11 percent year on year
  • An increase in the premium obtained in cooperation with banks belonging to the PZU Group by 160 percent. - up to PLN 0.89 billion and cost reduction thanks to cooperation with banks by PLN 123 million, exceeding the strategic goal of PLN 100 million planned for 2020
  • PZU Zdrowie's revenues increased by 47% Every year
  • Doubling the number of PZU Zdrowie's own branches - to 130
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