Qualitative disclosures

“Exposure”: in the case of a standalone indicator applicable to PZU – the entirety of the funds originating from insurance business. In a balance sheet sense, this is the sum total of investments save for investments in subordinated entities. The “look through” approach has been used, i.e. in the event of investments in investment funds the investments of the investment funds in which PZU holds participation units have been analyzed. The sum total of the investments for which the “look through” approach has been used is higher than the value of the participation units in these funds carried in the financial statements – the difference follows chiefly from the settlements of these investment funds.

“Exposure” (for the purposes of PZU’s consolidated indicator) incorporates the distinct nature of the activity and business conducted as part of the PZU Group. In particular, this is significant in insurance activity related to investing money for investment and banking purposes related to lending activity. The following approach has been adopted for the purposes of calculating the consolidated indicators:

• in the case of the PZU Group net of banking activity – “exposure” is understood to mean investment financial assets at their net carrying amount save for investments in life insurance where the policyholders bear the risk and own and investment properties;
• in the case of the PZU Group’s banking activity – “exposure” is understood to mean credit, lease, factoring receivables, corporate bonds and equity interests at their net carrying amount.

For both the standalone and consolidated non-banking activities ratio, the look through approach was applied to most of the exposures defined above, but this was not possible for approximately 4% of the exposures and 2% of assets for the standalone ratio and 4% of the exposures and 0,2% of assets for the consolidated ratio. These exposures have been classified in indicator 4.

Indicators pertaining to investment activity which constitute obligatory disclosures and are based on information (on the extent to which their activities are taxonomy-eligible) published by the companies or groups in market reports (from 2922).

Indicator 1a (KPI on revenue) – exposure to business activities eligible to participate in the system stated as a share of total assets was calculated as the sum of exposures to companies referred to in Articles 19a and 29a of the Directive 2013/34/ EU, meaning those which are subject to the obligation of publishing non-financial data, weighted by the proportion of their revenues from activities that qualify for the system to total revenues. The basis for the calculation were disclosures in non-financial reports of the companies.

Indicator 1b (KPI on investment revenue) – exposure to business activities eligible to participate in the system stated as a share of total assets was calculated as the sum of exposures to companies referred to in Articles 19a and 29a of the Directive 2013/34/EU, meaning those which are subject to the obligation of publishing non-financial data, weighted by the proportion of their revenues from activities that qualify for the system to total revenues. The basis for the calculation were disclosures in non-financial reports of the companies.

Indicator 2a (KPI on revenue) – exposure to business activities not eligible to participate in the system stated as a share of total assets, this is the difference between total exposure to companies referred to in Articles 19a and 29a of the Directive 2013/34/EU to total assets less value of indicator 1a.

Indicator 2b (KPI on investment revenue) – exposure to business activities not eligible to participate in the system stated as a share of total assets, this is the difference between total exposure to companies referred to in Articles 19a and 29a of the Directive 2013/34/EU to total assets less value of indicator 1b.

Indicator 3 is the percentage share of the exposure to central governments, central banks and supernational issuers in total assets.

The calculation of indicators 1 and 2 was conducted for the companies referred to in Articles 19a and 29a of Directive 2013/34/EU; exposures to companies not subject to nonfinancial reporting according to this directive were listed separately as indicator 4.

Indicator 4 is the percentage share of an exposure to businesses that are not subject to the obligation of publishing non-financial information according to Article 19a or 29a of Directive 2013/34/EU in total assets.

To determine the percentage of activity eligible for participation in the system and calculate the indicators in a manner providing complete information the PZU Group has reviewed all insurance products belonging to Class II to draw up a product classification and separate those that provide insurance cover in the event the climate risks enumerated in appendix A to attachment II of the Delegated Regulation occur. Those products that belong to one of eight lines of business enumerated in the Delegated Regulation and cited above and that cover at least one of the 28 risks enumerated in the appendix, considered to belong to the groups of constant or acute risks related to temperature, wind, water or earth are deemed to be products that are eligible to participate in the system. All risks products were also deemed to be eligible to participate in the system. Then, by using management systems information pertaining to the gross written premium by category was assigned.

A similar estimate was drafted for inward reinsurance premiums; those inward reinsurance premiums were deemed to be eligible to participate in the system that refer to products that would be deemed to be eligible to participate in the system.

To depict the picture of the PZU Group as fully as possible in accordance with the Taxonomy, the indicators were calculated in two approaches: the standalone approach for PZU and the consolidated approach for the entire PZU Group, i.e. for all PZU Group companies that do business in non-life insurance: PZU, LINK4, TUW PZUW, Lietuvos Draudimas, PZU Branch in Estonia, AAS Balta and PrJSC IC PZU Ukraine. In both cases gross written premium is understood to refer to direct and indirect business. The sum total of gross written premium for non-life insurance that is included in the denominator of both indicators complies with the values carried in the financial statements for 2021 (gross written premium for PZU) and the consolidated financial statements for 2021 (for the PZU Group).