Insurance

The Bank of Lithuania has stated that in the of 2022 the gross written premium in non-life insurance amounted to EUR 894 million, up 24.1% in relation to the corresponding period in 2021.

Motor insurance remains the most significant insurance class on the market (representing 54.9% of all gross premiums written in non-life insurance). Market growth occurred mostly in motor TPL insurance, which constitutes almost one-third of the whole non-life insurance market (31.9%). Within motor insurance, gross written premium on TPL insurance grew by 21.7% y/y, whereas sales of MOD – by 22.0% y/y. Significant market growth was also observed in property and health insurance (24.5% y/y and 38.5% y/y, respectively).

As at the end of December 2022, there were 11 companies operating in the non-life insurance sector, including 7 branches of insurance companies registered in other EU member states. The combined market share of the top four players in the nonlife insurance market totaled 82.3%.

The PZU Group has been present in Lithuania since 2002. As of November 2014, it has been conducting its activity on the nonlife insurance market as Lietuvos Draudimas, which, as of May 2015, is also the owner of the PZU branch in Estonia.

Lietuvos Draudimas is the leader of the non-life insurance market in Lithuania. Its 2022 market share was 29.9%. Lietuvos Draudimas posted an increase in gross written premium by 24.8% y/y to EUR 267 million. The biggest growth was achieved in motor TPL insurance (up EUR 18 million), MOD motor insurance (up EUR 14 million), and property insurance (up EUR 13 million).

Gross premiums written by Lithuanian life insurance companies in 2022 amounted to EUR 340 million, up 6.4% relative to 2021. Sales of regular-premium insurance increased by 7.8% y/y, mainly due to higher volumes of new sales. Sales of single-premium insurance products decreased by 11.8% y/y (i.e. by EUR 2.5 million).

In the life insurance structure, unit-linked insurance represented the largest share at 69.6% of the portfolio value. Traditional life insurance accounted for 10.4% of written premium.

New sales increased by 9.1%. The growth rate with respect to new sales was adversely affected by the war in Ukraine. Unit-linked products remain the core product on the market, making up 81.2% of new sales. Traditional life insurance accounted for just 0.6% of new sales.

As at the end of 2022, eight companies operated on the Lithuanian life insurance market. The said market is highly concentrated – in 2022, the share held by the three largest life insurance companies in total gross written premium was 62.5%.

Swedbank was the largest life insurance company in Lithuania in terms of total gross written premium, with a 22.0% market share. The next players are Compensa (21.8% market share) and Aviva (18.8% market share).

PZU Group’s life insurance operations in Lithuania are conducted through UAB PZU Lietuva Gyvybës Draudimas (PZU Lithuania Life). The gross written premium posted by PZU Lithuania Life was EUR 22 million, up 7.4% from 2021. This corresponds to a market share of 6.5%.

On the Latvian non-life insurance market, as at the end of 2022, gross written premium was EUR 493million. This is EUR 91 million (i.e., 22.7%) more than in the corresponding period of the previous year.

The biggest growth was achieved in motor TPL insurance (up EUR 29 million, i.e., 36.3%), and MOD insurance (up EUR 22 million, i.e., 24.5%). Significant growth was also observed in health insurance and property insurance – EUR 20 million (+25.7% y/y) and EUR 13 million (+13.2% y/y), respectively

Motor insurance is the most important insurance class. TPL and MOD insurance accounted for 22.0% and 23.1%, respectively, of the entire non-life insurance market in terms of gross written premium. Health insurance (19.5% of the premium) and property insurance (22.6% of gross written premium) also had an important position in the product mix.

As at the end of 2022, there were 10 insurance companies operating on the Latvian non-life insurance market; the top five insurers held 80.0% of the market.

In June 2014, the PZU Group was joined in Latvia by AAS Balta, which in May 2015 took over the PZU Lithuania branch operating in the Latvian market since 2012.

AAS BALTA is the largest insurer in terms of premiums written in Latvia. At the end of 2022, the share of AAS BALTA in the non-life insurance marketwas 29.3%.

In 2022, the gross premium written by AAS Balta reached EUR 145 million, up 24.6% (EUR 29 million) relative to 2021. Greatest growth was observed in motor insurance and health insurance.

In 2022, gross written premium in non-life insurance amounted to EUR 471 million, up 18% in relation to the corresponding period of 2021.

The market growth was mostly attributable to MOD insurance with respect to which a 21.1% y/y increase was posted (i.e., up EUR 27 million), and TPL insurance (+19.7% y/y, i.e., up EUR 17 million), resulting from the growing prices driven by inflation. Dynamic growth was also enjoyed in health insurance (up EUR 5 million, i.e., +76.5% y/y) and property insurance (up EUR 19 million, i.e., + 16.8 % y/y).

The sales structure of non-life insurance did not change significantly in 2022: it was dominated by motor insurance, which accounted for 54.5% of gross written premium, with property insurance accounting for 28.4% of gross written premium.

As at the end of December 2022, there were 13 companies operating in the non-life insurance sector (including five branches of foreign insurance companies) among which the top four held a combined market share of 67.3%.

Since May 2015, the PZU Group’s operations in Estonia have been conducted by the Lietuvos Draudimas branch, established through the merger of a branch of PZU’s Lithuanian subsidiary and the Estonia branch, which had operated under the Codan brand.

The PZU Group’s share in the Estonian non-life insurance market reached 15.1% in 2022, and the accumulated gross written premium was EUR 71 million, up 22.3% (i.e., EUR 13 million) relative to 2021.

Greatest growth was observed in motor TPL and MOD insurance, as well as property insurance.

In the end of June 2021, supervision over the insurance market in Ukraine was taken over by the National Bank of Ukraine (NBU). NBU made supervision more efficient by monitoring compliance with applicable regulations and applying appropriate measures against the violators.

Since March 2022, NBU has been regulating the activities of parties to non-banking financial services during martial law, and among other things amended the terms of enforcement (postponed deadlines). In relation to Russia’s aggression in Ukraine, NBU specified the manner in which a series of normative and legal acts should be implemented to relieve market players of that burden, and also implemented a series of restrictions to minimize new risks arising due to the war. NBU temporarily made it impossible to perform foreign currency cross-border transfers, and this disturbed the process of providing reinsurance services and caused some players to withdraw from the Ukrainian market. This meant having to look for alternative solutions and reduce activity in some business lines and selected sales channels, such as international insurance.

After the first three quarters of 2022, the Ukrainian insurance market, measured by gross written premium, shrunk by 24.9% up to UAH 28.6 billion.

The premium accumulated in non-life insurance was UAH 25.1 billion, signifying 25.9% fall compared to the corresponding period in 2021.

The negative rate in most types of insurance is related to the outbreak of hostilities within the Ukrainian territory. In 2022, the economic activity of retail and corporate clients alike significantly worsened. The poorer economic situation faced by the society is an effect of growing unemployment and, as a consequence, of the closing or limiting the business of certain entrepreneurs. Due to the war, many clients have left abroad or are within temporarily occupied territories, which is why a large number of them decided not to extend their insurance cover.

In 2022, the Green Card insurance had a significant impact on non-life insurance sales, it being the only one to enjoy a growth rate because of people who were leaving abroad and taking out those policies en masse (+1.1% y/y, up UAH 1.5 billion).

As at the end of September 2022, insurance companies offering life insurance collected a gross written premium of UAH 3.5 billion, signifying a 16.9% decline compared to the corresponding period of the previous year.

The Ukrainian insurance market is highly fragmented. As at the end of September 2022, there were 139 insurance companies operating in the country, 126 of which offered non-life insurance. Despite the large number of insurers, the top 10 nonlife insurers generated 56.1% of gross written premium.

On the Ukrainian market, the PZU Group operates the insurance business via two companies: PrJSC IC PZU Ukraine (PZU Ukraine) in non-life insurance, and PrJSC IC PZU Ukraine Life (PZU Ukraine Life) in life insurance. In addition, LLC SOS Services Ukraine offers assistance services.

In 2022, gross written premium collected by PZU Ukraine amounted to UAH 1,287 million, or 26.3% less than in the previous year. Sales decline was recorded in all business lines, with the most significant ones in property, accident and motor insurance. In 2022, gross written premium collected by PZU Ukraine Life was UAH 398 million, down 37.4% from 2021.

During three quarters of 2022, PZU Ukraine attracted 3.7% of the gross written premium on the Ukrainian non-life insurance sector, and its market share went down by 0.1 p.p. versus Q3 2021. This ranked the company ninth on the non-life insurance market. PZU Ukraine Life ranked fifth in the life insurance market with a 8.4% market share (down 0.2 p.p. relative to the previous year)*.

* Insurance TOP, Ukrainian Insurance Quarterly, #7(83)2022

• updated the scope of PZU AUTO Assistance, a unique benefit within the Super variant. The benefit involves verifying the technical condition of the vehicle before it was purchased, in the event that the vehicle of the Insured is damaged in an accident and they decide to buy another vehicle. Additionally, the Super Truck variant now features the service of towing a trailer or semi-trailer where the towing vehicle is involved in an accident, malfunctions, or is stolen;
• extended the scope of PZU Auto by adding a PZU Auto Tyres insurance within simple products, which had so far been offered separately;
• consolidated the rules of valuing partial and total claims in line with the MOD insurance variant opted for at the time the contract was concluded. The costs of repair served to determine whether the car was totaled will be calculated based on the option selected by the client when they chose either the ‘optimum’, ‘maintenance service’ or ‘partnership’ variant. The change, agreed upon with the Insurance Ombudsman, aims at minimizing the risk that the client wrongly interprets the terms of insurance;
• extended the scope of insurance cover at PZU Wojażer, by superseding the clause that had been applicable so far and adding benefits related to the COVID-19 epidemic. The benefit includes the reimbursement of full board costs by the organization and the costs required for the client to return to their country of residence (if the insured is unable to use their connection planned originally), reimbursement of package tour costs if the insured is unable to take part (due to them or their trip partner suddenly coming down with COVID-19 or being quarantined or isolated);
• introduced a new product, PZU Bezpieczne Lokum, for housing associations and co-operatives addressed to clients within the housing sector defined at the stage of offering, e.g., residents of a given housing association. The product covers private property insurance against all risks, which involves insurance cover against many events which may occur within an apartment (events excluded notwithstanding). Furthermore, the cover may include home assistance services, private third-party liability insurance, and lawyer services within legal assistance;
• amended the GTCI of the PZU Edukacja ADD, which includes:
  • adding, among other things, the post-COVID PIMS-TS syndrome to the list of serious illnesses,
  • introducing an additional benefit for accidents during school trips,
  • raising the service limit within assistance, among other things, to PLN 2,000 for a psychologist and PLN 1,200 for private lessons;
• went through the integration with the system of the Central Register of Vehicles and Drivers (CEPiK), thanks to which PZU may download and automatically process details concerning registered vehicles, their owners, and drivers, without writing them down from the registration document; this translates to a considerably shorter client journey and maintained competitiveness of PZU’s offering;
• made available a new template for the border insurance policy – single-page, without a reverse, no copy required, printable by client;
• upgraded the offering concerning insurance of poultry against risk of salmonella under terms and conditions different from those offered within GTCI PZU Zwierzęta – poultry, based on the Regulation of the Minister of Agricultural and Rural Development of 31 March 2022. The Regulation governs premium subsidies for farmers up to 70% of the premium payable by the farmer if the insurance contract states that the payment of amounts claimed shall occur if the value of damage arising exceeds 20% of the average annual production of animals insured from the last three or five years (expressed in PLN). The offer covers:
  • limited risk of salmonella cover for claims with >20% deductible,
  • additional risk of salmonella cover for claims with <20% deductible;
  • additional risks, covering, i.a., risks of disrupted electricity supplies or ventilation device operations.

• the implementation of the PZU iFlota prevention program. The program supports risk management in fleets, using innovative software. PZU iFlota has three main modules: fleet management, insurance management, and safety management. Firstly, PZU iFlota is a classical fleet management system, offering a register of vehicles, drivers, and various costs, and allowing the handling of such matters as fuel cards or maintenance service. Secondly, there is insurance management. The system gives access to data on TPL and MOD policies and damage, as well as enables reporting and monitoring claims at app level. The third and most important element is prevention aimed at improving the safety of the fleet, thanks to, among other things, the access to e-learning sessions, knowledge databases, and suggestions of prevention activities adequate to the risks observed at a given client;
• the popularization and further development of the Risk PRO program, among other things through the expansion of PZU LAB Enterprise Safety Tools using smart detectors monitoring safety on an ongoing basis, e.g., monitoring the opening or closing of fire doors, registering temperature, pressure, vibration and smoke, integrated with CCTV cameras;
• the extension of PZU Auto’s offering with a new MOD insurance cover for owners of electric cars which involves damage to chargers, including wallboxes, as well as charging cables or batteries

• introducing amendments to periodic guarantee contract applications and insurance guarantee contract-of-mandate forms, adapting them to the clients’ needs as well as to the current geopolitical situations with regard to valuation with higher transaction risk;
• updating GTCI in GAP financial loss insurance for clients of Alior Leasing and Pekao Leasing;
• continuing the cooperation with the banks in mortgage loan repayment insurance, both with PZU Group companies and external banks.

• making the Auto Assistance offer more appealing by increasing towing service limits in assistance events in all insurance variants (by 300 km) and offering a replacement car to be rented within the framework of Auto Assistance Plus;
• introducing changes to the Podróże (travel insurance) offering, in particular:
  • simplifying the claims and benefits handling process by withdrawing provisions on determining permanent bodily injury based on a medical opinion and an assessment of medical records or just the report interview;
  • harmonizing the provisions (in line with motor ADD insurance) concerning the determination of bodily injury as percentage and valuing benefits for the death of an insured person,
  • adding a list of documents necessary to receive payment under ADD insurance for physical injury and death to the GTCI;
• simplifying the DOM (HOUSE) insurance offer, which includes presenting GTCI in a plain language, as well as introducing new structure and scopes, i.a., introducing a single TPL scope in private insurance instead of the two variants for property and private life that had been offered so far separately;
• introducing the Ochrona Zniżki (Discount Protection) clause to motor TPL and package insurance – applicable for first claims under TPL or MOD (event under which amounts claimed were paid or are payable), regardless of the amount claimed.

• an innovative solution for groups of hospitals, so-called ubezpieczenie parasolowe (umbrella insurance), which ensures additional insurance cover after the guarantee sum under mandatory insurance is exhausted. Hospitals within a TUW PZUW mutual benefit society may take out an insurance rider for all of them at a price relatively lower than in the case where each hospital would have to buy the policy separately;
• third-party liability insurance for managers of medical entities;
• travel insurance for church institutions;
• „Polisa na biznes” – business risk insurance for franchisees. It is a market-first assistance product for small enterprises whose financial safety is key in making the decision to launch a business;
• „Siła wiatru„(„Power of the Wind”) for wind farms and „Moc Słońca” („Power of the Sun”) for photovoltaic installations. These policies are comprehensive property insurance against all risks, including against damage and loss of profit, as well as liability insurance associated with the operation of wind turbines and photovoltaic panels.

• introducing in July 2022 a new group life insurance with riders titled PZU Na Życie Plus (PNŻ Plus), which combines a comprehensive approach to the needs of employees, employers and their families. The insurance covers life, health, and access to medical services. PNŻ Plus is offered for new entities employing at least 30 people. Furthermore, the product allows the client to individually extend the basic cover with additional packages, and therefore to better adjust the cover to their individual needs;
• updating GTCI for pension insurance due to the position of the Polish Financial Supervision Authority on presenting payments in unit-linked life insurance contracts. The amendment concerned IKE PZU Życie insurance and the continued Pogodna Jesień insurance;
• developing a new medical treatment insurance for illnesses. The new insurance, being an extension to the offering concerning the Individual Continuation of group insurance gives clients financial cover in the event of their hospital stay due to key civilization diseases;
• refreshing the group health and life insurance offering titled Medical Cover S, which includes updating provisions on complaints in relation to the entry into force of the Electronic Service Act, and changing documents for clients to facilitate amendments to policies, including amendments concerning premiums.

• implementing changes within certain riders for life insurance, including:
  • increasing the maximum age for the insured person’s entry and at the end of the cover, allowing selected riders to be offered to older people who had so far been unable to enjoy cover within selected riders;
  • modifying the provisions concerning complaints due to the amended provisions of the Electronic Service Act.
• introducing a new short-term (two or three years) endowment insurance product titled PZU Bezpieczny Zysk with a guaranteed payment of certain sums after the contract expires regardless of the situation on financial markets. This combines life cover and higher capital. In the event of a termination, the sum paid in the first year is equal to the premium paid, and in the event of the death of the insured, the sum insured will be received by indicated persons without the testament proceedings or inheritance and donations tax;
• Within individual pension insurance the most important question was to adjust the products in the current offer (individual unit-linked life insurance IKE PZU Życie and individual continuation of group pension insurance Pogodna Jesień) in line with the requirements of the position of the Polish Financial Supervision Authority on presenting fees in unit-linked life insurance contracts.

Lietuvos Draudimas is the largest and the most experienced insurer, the leader of the Lithuanian insurance market and the largest insurance company in the Baltic States. One in three residents of Lithuania choose insurance in Lietuvos Draudimas. In 2022, in addition to the current activity in nonlife insurance, Lietuvos Draudimas continued to focus on pursuing sustainable development activities and expanding further its product offering, while adapting it to the changing circumstances and expectations of its clients.

Aside from business-as-usual activities and the improvement of existing products, the main activities including:

• updating the www.ld.lt website, continuing the efforts on improving the client journey at www.ld.lt with a view to making it faster and more convenient. The main purpose of the update and optimization of LD’s external website is to increase sales via electronic channels (from www.ld.lt to e-commerce sites). The website update works are based on global trends and experience of experts who are taking into account the business needs of LD. In 2022, solutions concerning core insurance products (motor TPL and MOD insurance) were changed, and hypothesis put forward were tested, paying attention to information layout. The optimization of www.ld.lt is an ongoing process with works still underway (searching for other solutions to improve and reach better results);
• updating, on an ongoing basis, the GoLD Platform (sales system) – introducing further insurance product, i.a., regarding corporate assets;
• improving in SavasLD (on-line claims reporting system) the client journey in health insurance claims handling, digitizing the approval of trade agreements;
• implementing within SavasLD a B2C Health insurance product which gave private clients an opportunity to take out health insurance online directly. Health insurance was and still is LD’s priority product both in 2022 and in 2023. It is a highly significant element of the company’s strategy, and the company systematically works on the improvement and correction of client experience.

In 2022, the company began a new stage of its operations, presented at a special event titled “The new beginning For Those Who Love Life.” Since 31 January 2022, PZU Lithuania Life offers a new product (“For Those Who Love Life”) with the broadest life cover on the market. The goal is to provide clients with consistent, comprehensive daily support and make sure that anyone can create custom whole life insurance suited to their needs and capacity.

A new version of the PZUlife sales system, dedicated to new contracts, was implemented, and the system will continue to be developed as a new assistance tool for agents for better recognition of a client’s needs. It also allows remote identification for adults and children.

In November 2022, a new functionality was introduced in the PZUlife sales system, and so, “For Those Who Love Life” is also offered to business clients where the policyholder is a legal entity. This way, individual “For Those Who Love Life” offers can be used as a motivation tool for employees, promoting their loyalty and contributing to the process of building an image of an employer who bears corporate social responsibility.

Self-service in SavasLD was continually improved; users can now log-in to self-service using a SmartID and mobile signature (which had so far been possible in three banks).

Broad assortment of products, excellent customer service and well-thought out investments in brand promotion activities allowed Balta to maintain its leading position on the Latvian non-life insurance market in terms of sales volume and significantly strengthen brand awareness and reputation.

In 2022, Balta focused on ensuring better customer service and exploiting digital opportunities.

It launched an application and an Internet solution allowing contact with road assistance, with an option to track service arrival.

An AI-based digital solution enabling clients to take pictures of insured cars was also implemented. At the same time, the solution allows verification to ensure adequate quality and provides reliable data on the date and hour the photo is taken.

Balta consistently expands its products and channels in which client payments are automatically charged from credit cards, this makes it considerably more convenient for clients.

In 2022, due to the current economic situation, PZU Estonia was regularly amending its tariffs: at least twice a month in motor insurance in the light of the extraordinarily high inflation.

March 2022 saw a new MOD insurance package for cars older than 8 years introduced in the e-shop. This offer will also be available in the regional sales channel.

At the end of December 2022, the Estonia branch finalized a contract with Luminor Bank responsible for distributing private property insurance.

It developed and tested SEB Bank’s e-shop (SEB Bank e-shop). SEB Bank e-shop connects to the SEB Internet bank, thanks to which an SEB client enters PZU Estonia’s e-shop via the SEB Internet bank and sees only the SEB insurance products.

In June 2022, the Estonia branch established insurancerelated cooperation with AS Veho, the main Mercedens Benz dealer in Estonia.

The company’s main distribution channels are its partners, SEB Bank and the Internet. In order to improve its operating efficiency, synergies and cross-selling in all direct distribution channels, at the end of 2021, the company launched the project of building its Own Sales Network. Sales were launched in the second half of 2022, and as at the end of the year, there were 5 branches in 5 different cities: Tallin, Tartu, Pärnu, Jõgeva and Kuressaare.

In 2022, PZU Ukraine carried out a project and conducted analysis and studies to tidy up its product portfolio. A number of changes were made in the product range, with the key ones being:

• updating property insurance contract forms to the conditions of war (new reservations added);
• suspending the sales of several products concerning property insurance, liability, and financial risk;
• analyzing and amending terms of insurance (i.a., no option to insure objects on temporarily occupied territories or territories where war is actively waged);
• a new ADD insurance product was developed, covering passive war risks; Terms of Reference for its implementation were prepared on the EWA partner’s platform;
• introducing electronic Green Card insurance sales.

Due to the martial law and moratorium of the National Bank of Ukraine (NBU) prohibiting foreign currency cross-border payments, Gen Re refused to participate in covering Ukrainian risks under the mandatory reinsurance treaty for special (construction and agricultural) machines. Since September, reinsurance cover is provided by Polish Re and PZU. Because of NBU’s ban on cross-border payments, within Agro Stop Loss reinsurance, Swiss Re refused to continue cooperation in this respect.

Sales in partner channels using API – sales of policies via online insurance aggregators – continued to be developed in 2022.

In October 2022, the Internet shop introduced a new Standard+ insurance program allowing electronic travel insurance contracts to be concluded with people who are abroad during the conclusion of the contract. In Q3 2022, thanks to the new program, the volume of premiums on these contracts grew by 57%.

In 2022, addressing the needs of its customers and aiming to improve customer service, PZU Ukraine held additional training sessions on customer service standards. It also launched a process of concluding contracts with customers who were staying abroad, using the mobile Object Control app.

In practice, international businesses suspended their insurance business in Ukraine. Clients have become excluded from international programs, and offered local cover.

Due to the outbreak of the war in Ukraine, new sales were suspended on 1 March 2022. PZU Ukraine Life focused on handling the existing portfolio of insurance contracts and maintaining the claims handling process.

In May 2022, PZU Życie resumed its cooperation in insuring borrowers with two strategic partners – IdeaBank and KredoBank – in some loan programs (cash loans, cards). Then, in July, it resumed new sales in the agency and brokerage channels with insurance contracts featuring additional limits on risk and sums insured. Products may be sold solely in the oblasts where the war is not waged directly – West and Central Ukraine (so-called green zone).

Q4 2022 also saw the return of new insurance contracts in the corporate sales channel (“Social Cover”, “Assistance”, “Classic”).

In effect, around 2,600 new insurance contracts in the agency and brokerage channels were concluded in the second half of 2022, along with over 121,000 insurance contracts within bank cooperation programs; several new corporate clients were also acquired.

The customer service at Life Contact Center underwent significant changes in 2022. Whereas in 2021, incoming calls constituted 50% of all client contacts, this was down to 33% in 2022. In turn, most reports were received via e-mail and Chatbot Life (54% in 2022 compared to 33% in 2021). At the same time, clients are eager to avail themselves of Contact Center’s support, as evidenced by the considerable increase in total reports received thereby in 2022. In 2022, the total number of reports via e-mail and Chatbot Life more than doubled compared to 2021, which underlines the significance of having electronic means of communication with the clients, especially during the martial law in Ukraine.

Clients interested in buying insurance remotely can contact PZU via a dedicated number: 600 600 601. On the other hand, clients with active contracts are taken care of by specialists who take care of the continuity in insurance cover, which allows to keep in touch with the client.

Thanks to modern technologies, including the integration of automation and robotics into the phone service process, the risks of spam or phishing are minimized. In 2023, an effort was launched with partner Hiya to identify the hotline number with the PZU logo. In 2022, the possibility for clients to call back a PZU consultant was introduced. In 2023, text messages announcing a call from PZU and informing of an unsuccessful attempt to contact the customer were also launched.

The hotline’s product offerings in 2021 focused on vehicle, housing, travel and personal accident insurance risks. In 2022, the portfolio of products offered by telephone sales expanded to include crop insurance, among other things. This was accompanied by technological changes in the purchasing process, focused on client satisfaction. The breakthrough was the implementation of the property inspection function via the Video Inspector application. This solution meets the needs of clients interested in quickly purchasing insurance that requires vetting by a PZU employee, especially MOD insurance or unusual real property, such as a vacation home. At the same time, it safeguards the interests of PZU and prevents the risk of extortionate claims. The sales hotline is also piloting the sale of selected insurance from offerings of PZU Życie starting in 2022.

In 2022, PZU made it possible for Ukrainian customers to purchase a border liability insurance policy over the phone. For this purpose, a team of Ukrainian-speaking consultants has been established, and the already existing team dedicated to the English-speaking client has been strengthened.

Remote insurance distribution contributes to the omnichannel strategy. The client can talk to a consultant at their convenience about any insurance, including insurance previously concluded with an agent or in a branch. The development is supported by innovative AI-based tools such as Comadso (an interactive GTCI comparison engine) and Nexidia (AI that supports listening to recorded calls).

Premiums written by PZU in remote channels increased by 29.2% y/y to PLN 180.1 million in 2022. The number of clients using this form of purchase is also growing steadily. As recently as 2021, it was 229,000. In 2022, the number increased by 33% – to 303,500.

The launch of the mojePZU [myPZU] portal in 2018 was a way of fundamentally modifying client interactions. This is a one-of-a-kind dashboard enabling clients to check their insurance cover at any time, manage their medical coverage and appointments as well as their investments. Through the mojePZU portal, PZU Group clients may:

• purchase a policy;
• receive an insurance offer from an Agent;
• view their policies and report changes;
• make an appointment with a physician;
• collect a referral for examination or an e-prescription;
• check their medical records;
• invest their savings;
• report a claim and check its current status.

Modern self-service offers a single location to access PZU Group’s products and services and helps in the handling of numerous matters without the need to visit a branch or contact a hotline. It is accessible from any location and at any time on personal computers and through the mobile app. At the end of 2022, the mojePZU portal was used by more than 3.3 million users.

The dashboard is still developed and enhanced with further functionalities and services, among others, in sales and renewals of insurance products (including payments), as well as claims and benefits handling in health and investment. MojePZU also features Klub PZU Pomocni, a loyalty program thanks to which clients have access to discount codes and additional benefits.

Distribution of insurance via the banking channel is an important element of the PZU Group’s business model. Cooperation with the banking segment forms an additional plane for PZU to build lasting client relations at every stage of their personal and professional development.

PZU’s activity is based mainly on the area of bancassurance and assurbanking in cooperation with banks from the PZU Group: Alior Bank (in PZU Group since 2015) and Bank Pekao (in PZU Group since 2017), as well as in distribution of bancassurance insurance products through banks outside the Group.

The overriding objective of the cooperation is to reach the largest number of clients using multiple distribution channels and provide insurance cover to bank clients. In the PZU Group Strategy for 2021–2024, the cooperation with banks and other non-financial partners is one of the Group’s priorities. By actively cooperating with Bank Pekao and Alior Bank, PZU continues the implementation of a comprehensive offering using the banks’ distribution networks. This cooperation has allowed PZU to steadily expand the offering and scale of its sales of insurance products linked to bank products, including insurance coverage for cash and mortgage loans. Over the term of the strategy, the Group plans to generate roughly PLN 3 billion in cumulative gross written premium on insurance and banking collaboration with Bank Pekao and Alior Bank.

Bancassurance

Within bancassurance, cooperation with Bank Pekao and Alior Bank covers the sales of the following products:

• with Bank Pekao:
  • insurance on mortgage loans, cash loans, personal bank accounts (RORs) and credit cards
  • investment products
  • travel insurance
  • motor insurance
• with Alior Bank:
  • non-life and life insurance for cash and mortgage borrowers
  • travel insurance
  • ADD insurance with health package

Since January 2022, PZU Życie offers, within the sales at Bank Pekao and Alior Bank, new unit-linked products adapted to the product intervention requirements of the Polish Financial Supervision Authority. The new design of the products reduced costs to clients.

Since August 2022 Bank Pekao and Alior Bank sell a new SPE (single-premium endowment) product of PZU Życie which exploits the market potential related to high interest rates. It involves endowment insurance with a guaranteed rate of return for the client. The contract may be concluded for 2 or 3 years, and the premium is paid as a one-off premium. The product was implemented for distribution at Alior Bank and Bank Pekao. Works are being conducted to launch sales at further distributors.

In Q4 2022, PZU Życie extended its offering with individual life insurance for those who took out a housing or mortgage loan from Bank Pekao. PZU Życie solutions may be used by both those who want to take out a loan or mortgage, as well as those who are already repaying it. Insurance is purchased for 4 years, and the premium is paid monthly. Bank clients may extend cover for another 4 years after the insurance period. In the event of death, PZU Życie may repay the housing loan in full or in part at Bank Pekao, and any excess benefit payable will be paid to persons additionally insured, e.g., the close relatives of the insured. What is important, in this situation, persons additionally insured receive excess benefits without testament proceedings or inheritance and donations tax.

Since November 2022, Bank Pekao has been offering PZU motor insurance. Bank clients who are car owners, depending on their needs, may at any branch of the bank in Poland purchase a TPL insurance and selected voluntary insurance products: MOD, ADD, Windshields, PZU AUTO Assistance, PZU Health Assistance. PZU has prepared an offer for drivers with an option to adjust cover to individual need. Since November 2022, Bank Pekao has been offering LINK4 motor insurance as well. An advisor may present the insurance offers of both insurers. Offers are compared within one process, leading to the selection of predefined packages or offer personalization.

In 2022, PZU also established strategic cooperation with Bank Ochrony Środowiska. The first product added to the bank’s offer was insurance for photovoltaic installations and other RES devices linked with the bank’s flagship environmentally-friendly loans

Assurbanking

PZU is one of the largest external partners of Bank Pekao in the sales of personal bank accounts (RORs) via the bank’s Pekao360 app. Cooperation in 2022 involved:

• continuing end-to-end sales in the remote channel with two available banking products: Konto Przekorzystne and Konto Przekorzystne Biznes;
• introducing a new offer and raising the bonus from PLN 200 to PLN 300 under the joint campaign “Auto z Kontem”, within which a client receives a 10% TPL discount;
• growing sales of Konto Przekorzystne onto subsequent Partner Branches and launching a pilot group of Regular Branches;
• launching sales of a new product – Konto Przekorzystne Biznes – and growing the sales of Konto Przekorzystne with PZU Życie products at PZU branches;
• continuing the pilot sales of two banking products within the Tied Agent network – Konto Przekorzystne within the “Auto z Kontem” special offer and cash loan (for implementation in 2023).

Since 2019, together with Alior Bank, PZU has been developing the Cash Portal, an innovative loan platform with a unique product offering for employees. In 2022, the portal was made available to further groups of clients, including new corporates, reaching a total of 900 thousand retail clients who can access the Cash platform. Furthermore, Bank Pekao’s products were added to the portfolio of products offered, i.e., Kredyt Hipoteczny and Konto Przekorzystne. Thanks to the cooperation with PZU Zdrowie, companies which gave their employees access to the platform are able to give them a discount on medical packages as well. PZU Cash, together with PZU Zdrowie and Alior Bank, have prepared a special offering of an instalment loan for dentist services and financing of orthopedics services at Gamma clinics. PZU Cash is also proud to have created its first own product. The MiniCash cash loan acts like an advance on the monthly income, and allows employees to cover smaller, unexpected expenses.

The Cash project is a good example of synergy and leveraging the strengths of the two companies in the PZU Group, implementation of an innovative business model and the following of market trends – in this case the trends pertaining to financial well-being. The Cash Portal also follows the development of remote channels, making it possible to use financial products 100% online (economy digitization).

The PZU Group strives to create an ecosystem in which the overriding objective is to manage client relations skillfully by offering clients solutions in all venues accessible to them. This contributes to intensifying activities in strategic partnerships with companies operating on the Polish market, among others, telecommunication operators, power utilities, retail chains and airlines, regarding joint offering of non-life and life insurance to the clients of such institutions.

Within the framework of its strategic partnerships, PZU offers a number of insurance contracts to the business partners’ clients, including:

• electronic equipment insurance and phone insurance;
• assistance insurance guaranteeing services of professionals, e.g. electrician, plumber and consumer electronics/ appliances servicing staff, who provide help in the case of a failure in the household;
• insurance of photovoltaic installations;
• travel insurance.

In 2022, PZU cooperated with several strategic partners. Those are leaders in their respective industries and they have client bases offering the possibility of extending the PZU’s offering with additional innovative products geared towards those clients. For example, PZU cooperates with power sector companies to offer assistance services – assistance of an electrician, a plumber, or health assistant. PZU’s insurance offering is also present on the e-commerce market through cooperation with PLL LOT and iSpot.

In 2022, PZU expanded its insurance offer by launching sales of insurance at eBilet.pl. The website’s users may purchase tickets for cultural events with insurance. PZU provides cover in the case that the client cannot take part in the event for which they purchased a ticket/pass due to important and unexpected random circumstances. Events which entitle the insured to receive amounts claimed include unfortunate accidents to ticketholders or close relatives, sudden illness, loss of the ticket as a result of theft or childbirth before the planned event.

In the second half of 2022, PZU also implemented device insurance for clients who buying equipment at morele.net. The cover includes computer equipment and household devices with respect to malfunction after the warranty period expires, damage, destruction, flooding, devastation, loss as a result of theft or burglary.

PZU develops new methods for determining the extent of the loss to expedite the calculation of the amount claimed. In non-life insurance, on top of conducting a vehicle inspection through a Mobile Motor Expert in a venue chosen by a client or in a Repair Network workshop, the quantum of the loss may be determined under:

• simplified service procedure (without conducting a vehicle inspection);
• self-service (calculation of the amount of the loss on your own);
• video inspection (via the app to determine the amount claimable) – solution which functioned until mid-2022.

PZU supports dealing with the entire claims handling process with the use of a smartphone. Using a smartphone, the injured party may:

• report a claim;
• summon assistance on the roadside or from home;
• initiate the repair process in a Repair Network workshop;
• conduct a video inspection (until mid-2022) and determine the amount claimable.

PZU deals only with the final stage in the claims handling process, i.e., determining the amount claimed and disbursement.

PZU also allows self-service for property and ADD claims and benefits which allows the client to calculate the claims or benefits after reporting the damage. The client may accept or reject the proposed amount. In the case of ADD claims and benefits, the client personally marks the nature of their injuries on an intuitive human figure, which makes it possible to calculate the benefit amount.

In motor and property damage and in centers repairing devices damaged by a power surge, the client may also assess on their own the claim amount. This piece of information is then forwarded online to the Relationship Manager who executes the payment. This service allows clients to participate in the payout decision in a simple and convenient manner and reduces the waiting time for the disbursement of the benefit. Satisfaction surveys carried out among PZU clients reveal the fact that insured persons are of a very favorable opinion about this service. PZU companies in the Baltic States are rolling out similar improvements. Since 2019, automatic death benefit payments are made. The payments are approved in an automated process, which considerably speeds up the handling of those cases.

In addition, PZU introduced robotics elements at the stage of summarizing the claims report, sending out correspondence, making the claims decision and downloading police memos in order to speed up the payout of the amounts claimed. Robotics is used in specific claim types, e.g., motor claims, mass claims caused by weather phenomena, and handling of medical and life claims (deaths and births). Robotic solutions supporting the process of writing insurance cover for cases reported have been introduced. Additionally, in ADD claims, robotization has allowed verifying information concerning the client’s report of the claim in another company (in cases where the client has consented to the exchange of information between PZU and PZU Życie) This solution ensures consistent service for various ADD reports of the same incident.

The Repair Network repair shops apply an innovative technology using artificial intelligence algorithms which makes it possible to analyze the photographs documenting the damage. It can also determine the scope of the damage and classify the given part for repair or replacement. The algorithms can detect more irregularities more quickly and accurately, and confirm that all repairs are carried out in compliance with the procedures and standards adopted by PZU. In 2022, artificial intelligence analyzed over 120 thousand claims worth over PLN 1 billion.

In March 2022, PZU together with Tractable launched a Web app for Clients/Relationship Managers allowing the calculation of the amounts claimable based on photographs of the damage – AiLik 3. Photographs showing damaged vehicles are verified by AI-based algorithms. The tool has been developed with expert systems as its foundation. As a result, the user receives an automatically generated repair calculation which they may edit.

For non-motor claims, PZU launched the AiHome application in 2022. The application uses cutting-edge technology to support PZU employees in valuing household movable property, including in particular brown goods and white goods. This solution not only expedites the process of valuing the damaged household property, but also ensures that this process is uniform thanks to day-by-day price updates from leading vendors and provision of the same data to all Relationship Managers.

In 2022, PZU Mobile Experts received similar assistance. They got the Agro Lab tool which uses AI and space technology for quick and precise agricultural claims handling. The implementation of Agro Lab at the PZU Group reduced the time it took to analyze damage on site by around 50% and expedited the payment of amounts claimed by around 25%. The AI algorithms employed in the tool use satellite images of the area and particulars featured in the PZU database to specify the area damaged, and support the expert values in efficiently calculating the claims payable. PZU is one of the first insurers in the world to have developed a technology able to efficiently analyze damage caused by hurricanes, rain and winterkill using satellite images.

The year 2022 also saw several implementations in robotics. A new MOD SN Robot-based solution was introduced. This is a claims-handling robot for claims where the client is within PZU’s repair network at the stage of reporting. Within this process, the robot handles the claim from the very start, notifies the repair shop to present documents, sends a letter to the client, and most of all pays out an advance on amounts claimed, and later an additional payment once the invoice is sent. The robotization of the process allowed its significant acceleration – after the cost estimate or invoice is accepted, the robot immediately prepares and approves the decision. The robot’s work accounts for the life cycle of claims and situations in which they should arise in the process as a standard. For example, thanks to looping, the robot may return to a claim despite a business exception and consider it again. The year 2022 also saw the launch of Robot BLS TUS which dealt with the automation of DCH TUS claims handling process. Claims are handled substantively at another insurance company. PZU receives information about claims reported. It subsequently confirms the guarantee or insurance. After the decision is issued, PZU receives the decision to be uploaded into the system. Within the robotized process, manual tasks performed so far by the Claims Handling Manager have been transferred onto the robot.

Following automation in benefit-related processes (incl. the robotization of the decision issuing process in benefits for deaths, births and hospital treatment), 2022 saw continued RPA implementation efforts in claims and benefits handling. Subsequent robotized processes included automatic payments of benefits for the death of the insured person, as well as technical activities during the refusal process in cases without insurance cover or where no permanent bodily injury was established.

In 2022, Relationship Managers enjoyed robot assistance in identifying claims with subrogation potential. The objective of the process is to identify the claim as one with subrogation potential as early in the handling process as possible. The robot runs on a specially designed control file, in which, on the basis of experience and analysis of the past few years, the so-called keywords (words that qualify and exclude a claim from the subrogation process) have been identified, which prove or may prove that there is a potential for subrogation in the claim. The robot searches for the selected keywords in 3 places, having their source in SLS (claims handling system): description of circumstances, operator’s commentary and cause of damage. If the robot finds one of the keywords, it performs a series of actions in SLS:

• it flags the information status as ‘potential subrogation’ and ‘robot subrogation’ – securing control of the claim with a subrogation potential;
• it attaches to the supporting materials for the claim the socalled subrogation scenario, i.e., a form to be filled in, which is an instruction for the Relationship Manager as to what actions should be performed in the claim in order to secure subrogation claims;
• it adds instructions for the Relationship Manager to assess whether the damage selected by the robot has subrogation potential and to execute a subrogation scenario – for these actions, the Relationship Manager has 21 business days, but no longer than until the day the decision on the claim is issued.

If, on the other hand, the robot finds keywords contained in the control file that are flagged as excluding subrogation potential, then it abandons the above actions. The implemented process supporting the work of the Relationship Manager is to increase the number of selected subrogation claims and, what is equally important, improve the issue of proper protection of subrogation claims by obtaining documents and information necessary to effectively pursue subrogation claims at the stage of handling the claim.

In 2022, LINK4 also continued efforts related to the implementation of modern solutions, the application of which facilitates the existing processes and pursues the objective of a fast and effective claims handling process which is friendly and understandable for the client.

A new Internet Claims Status (ISS) application was introduced, thanks to which LINK4 clients have 24/7 access to information about their claims, and the ability to track the status of the case reported, as well as to attach and download documents. Furthermore, thanks to ISS, clients are able to contact their Claims Handling Manager, report their need for a replacement car, and look for a partner repair shop in a convenient location. In 2022, the application handled certain types of motor and property claims.

In 2022, LINK4 introduced a new application for handling ADD claims which significantly improves the time it takes to handle a claim. With this application, clients are able to independently present the injuries they have suffered and provide necessary information and medical records.

A new robot for handling housing claims has been launched as well, which is responsible for sending inspection orders to subcontractors. The robots functioning at LINK4 have reduced the work time, improved efficiency significantly and allow the company to implement additional solutions to increase customer satisfaction. Among others, they support: automatic registration of motor and casualty and property claims, update of the provision amount and entry of costs of inspections carried out by third party suppliers, verification of a vehicle’s claims ratio, collection of loss documentation, handling of memos from the Insurance Guarantee Fund, handling of medical opinions, verification of vehicles with MOD insurance, the process of sharing claims files, sending claims decisions; they prepare payouts in the Direct Claims Handling process, and collect the documentation of inspections from the platforms used by the company

In 2022, LINK4 continued efforts concerning the transformation of the claims handling process, aimed at implementing a new system and tools supporting process automation. Efforts involved implementing modern solutions facilitating the claims handling process, including an AIbased tool to analyze the scope of damage and prepare cost estimates from photographs.

In 2022, foreign insurance companies continued the improvement of claims handling processes.

At Lietuvos Draudimas, the claims handling process is centralized. The main changes in 2022 were related to the implementation of automatic payment of private client claims (motor and property) via the following website: www.savasld.lt. At the end of the year, about 75% of private client claims were automatically registered.

The development of the self-service portal www.savasld.lt has been helping to transform the claims handling process – directing clients to submit claims online, provide the necessary evidence (photos and documents), and even use remote inspections and assessment tools (especially for motor claims) to estimate and make automatic payments. All claim documents are stored in the Saperion filing system. This system provides clients with service history, damage documents, information on actions taken by liquidators, traffic history, suggested claim value and documents from relevant institutions.

In September 2022, the process was streamlined in the TIA system to automatically detect recoverability for motor third party liability insurance claims where the at-fault driver did not meet the policy conditions (regarding the driver’s age or experience – according to the categories specified in the driver’s license).

Private property claims are automatically registered with the TIA when submitted to the self-service portal. Online registration combined with TIA and Saperion allows more efficient handling of major incident claims (especially related to weather risks) and shortens the cycle of handling low-value claims, and optimizes the number of inspections.

ADD claims can be registered directly in the TIA application thanks to the implemented automatic registration via the following website: www.savasld.lt. The handling of travel insurance claims is outsourced in part to OPS Lithuania partner to provide round-the-clock assistance in the event of an accident abroad.

Health claims are handled through the EPS system, which connects health care providers (health institutions, pharmacies, etc.) to the TIA database. The EPS system allows clients to pay for services using a health insurance card. The network consists of more than 120 partners.

Motor claims are mainly registered automatically with TIA after they have been submitted to the self-service portal. Online registration connects to TIA, Saperion and Audatex. This allows clients to use the self-assessment tool on the selfservice portal: www.savasld.lt. The tool shortens the cycle of handling low-value claims. Some business clients also have the option to automatically register claims with TIA after submitting them to the self-service portal, but most motor claims are registered at www.ld.lt or through the Contact Center.

In mid-February 2022, repair partner Carglass was given the option to use the integrated payment tool. Once the windshield is replaced or repaired, the payment data (including the repair invoice and other necessary documents) is uploaded from the Carglass system and if all the established business rules in TIA are met – a semi-automatic payment is created. The implementation has significantly shortened the claims handling process.

Since April 2022, claim liquidators have been able to use a new functionality in TIA that allows automatic payment processing once the customer confirms that they agree with the calculated benefit amount on the self-service portal: www.savasld.lt. The implementation of this functionality has increased the efficiency of the process; when all the established business rules in TIA are met, there is no need to manually enter data to make the payment.

In 2022, Balta launched a pet insurance claims application. The app is used by more than 95% of customers.

In PZU Estonia, an automated invoice confirmation and payment process has been implemented to automate the claims handling process. The incoming invoice is automatically attached to the claim in question, and the system makes the payment.

The ability to register a claim through PZU’s self-service portal has also been launched, and the data is transferred directly to the claims handling system. Self-service registration of client claims ensures faster administration, which means that the claim amount is paid to the client much faster.

PZU Ukraina introduced a complete shift to remote customer service for claims in 2022, with no need to visit offices. The process of documenting and photographing damaged vehicles for simple motor TPL insurance and MOD insurance claims was simplified.

Each major property damage is reviewed by the Security Department for a causal link between the damage and war or hostilities in the area where the damage occurred.

The company PZU Ukraina Życie under martial law was forced to switch to accepting documents for payment in electronic form, as well as signing insurance contracts and letters to clients in the VCHASNO system. This required an overhaul of the claims handling process, but it was also a viable step toward the introduction of an electronic workflow in this customer service segment.

During the first months of the war, there was a significant drop in both the number of claims reported and the number of claims handled. Gradually, however, all claims for which a complete package of documents had been received were handled, and standard deadlines for claims handling were restored.