In 2022, net profit attributable to the shareholders of the PZU Group’s parent company was PLN 3,374 million, compared to PLN 3,336 million in 2021 (up 1.1%). Net profit reached PLN 5,259 million, i.e. 3.2% less than in 2021, and profit before tax stood at PLN 7,605 million, compared to PLN 7,454 million the year before.
With the exclusion of non-recurring events1, the net result rose by 91.9% compared to last year.
Operating profit in 2022 was PLN 7,630 million, up PLN 2.2% compared to the result in 2021.
* Non-recurring events comprise: lower result connected with higher technical provisions for older versions of individually continued products, which consists in recognizing the expected effect of higher indexations; costs connected with Alior and Pekao Bank accessing the Bank Protection System; provision created by Bank Pekao for legal risk of foreign currency mortgage loans. impairment of financial assets and receivables in Ukrainian companies and last year’s higher result on investing activity owing to the IPO of a logistics company held in the portfolio of a mutual fund managed by TFI PZU.
- higher gross written premium, especially in non-motor insurance in the mass client segment and corporate client segment, MOD insurance and growth of sales in the Baltic companies;
- higher profitability in group and individually continued insurance, on account of the decreased claims ratio due to deaths of the insured and co-insured in the group protection portfolio and in continued insurance;
- higher profitability of the mass insurance segment driven mainly by the lower claims ratio of the MOD insurance;
- lower profitability in the corporate client segment due to higher claims ratio of non-motor insurance products;
- slightly lower result of individual insurance, despite a significant decline in sales of investment products;
- higher operating result connected with banking activity (net result drop), including interest income and commission income offset with non-recurring effects: costs related to the modification of agreements for PLN mortgage loans granted to consumers due to their suspension of loan repayments (the so-called credit vacations) creating an additional provision for legal risk of foreign currency mortgage loan at Bank Pekao, payment to the Commercial Bank Protection System. Net result drop driven by non-tax nature of the provision for legal risk of foreign currency mortgage loan;
- lower performance on investing activities excluding banking activities, also due to last year’s one-off effect of an increase in the valuation of the shares of a logistics company in connection with its IPO, partially offset increase in revenue from floating-rate instruments resulting from higher level of Polish interest rates, in particular in debt portfolios and on the financial market.
- increase in gross written premium by 6.5% to PLN 26,710 million. It primarily pertained to non-motor insurance, including the insurance against fire and other damage to property in the segment of corporate clients, resulting from signing several high-value agreements, which included renewal of the agreement with a fuel and energy client, and in the segment of the mass client – MOD insurance driven by a high number of insurances with the simultaneous increase in the average premium, natural catastrophe insurance and other property damage, primarily due to higher sale of subsidized crop insurance (as a result of the subsidy pool from the state budget greater than the year before), insurance of buildings and real property. The sales growth in the Baltic companies was related to property insurance, MOD insurance and health insurance. Having considered the reinsurers’ share in the movement in provision for premiums, the net earned premium was PLN 24,297 million, up 4.6%, than in 2021;
- 58.9% higher investment income, exclusive of interest expenses, and 14.0% higher income after factoring in the interest expenses** (increase from PLN 9,137 million to PLN 10,416 million). Growth pertained to investment income from banking activity. The higher result was related in particular to an increase in interest income for both banks as a result of a series of interest rate hikes. The above effect was partially offset by recognized costs related to the modification of agreements for PLN mortgage loans granted to consumers due to their suspension of loan repayments (the so-called credit vacations, in the amount of PLN 1,958 million at Pekao and PLN 502 million at Alior Bank, as well as legal risk allowances created for foreign currency mortgage loans by Pekao Bank (income on investing activity was thus charged with PLN 1,246 million). At the same time, a decline in investment income was posted in investment activity, net of banking activity***. They were lower than in 2021, mainly due to last year’s effect of an increase in the valuation of the logistics company’s shares as a result of its IPO, and a decrease in the results on investment activities on the asset portfolio covering investment products and lower results on Private Equity funds due to a downturn on the technological market. Lower investment results of the portfolio of assets held to cover the investment products alone do not affect the PZU Group’s overall net result, because they are offset by the movement in net insurance claims and benefits. The impact of the above factors was partially offset by a higher result of floating-rate instruments resulting from higher level of Polish interest rates, in particular in debt portfolios and on the financial market;
- the lower level of claims and benefits paid, which amounted to PLN 15,542 million, i.e. 1.2% less than in 2021. The drop mostly pertained to life insurance as a result of a decrease in technical provisions in unit-linked life insurance, both as an effect of lower sales of these products both in own channels and in the banking channel (lower inflow of new investment premiums) and lower results as well as lower results on investment activity in comparison to the results generated last year, and decreased claims ratio due to deaths of the insured and co-insured in the group protection portfolio and in continued insurance;
- higher by 9.3% acquisition expenses – up from PLN 3,572 million in 2021 to PLN 3,903 million. This increase was mainly due to the shift in the mix of products and sales channels, including a higher share of the multiagency channel in the mass insurance segment;
- increase of administrative expenses by 11.0% to PLN 7,575 million, from PLN 6,826 million in 2021. Administrative expenses in the banking activity segment (exclusive of adjustments on account of the valuation of assets and liabilities to fair value) increased by PLN 562 million, and in the insurance business segments in Poland they increased by PLN 153 million, which resulted from, among others, increasing personnels costs brought about by wage pressure, intensification of sponsoring activity, increase in the real estate maintenance expenses, and purchase of equipment and furniture when moving to the new headquarters;
- movement in the negative balance of other operating income and expenses – to PLN 3,750 million, compared with PLN 2,315 million in 2021. This resulted mainly from the non-recurring effects at banks – payment of PLN 696 million in connection with the accession of Alior Bank and Pekao to the Bank Protection System, the contribution to the Borrower Support Fund in the amount of PLN 231 million. At the same time, the burden related to the levy on financial institutions increased in total from PLN 1,290 million in 2021 to PLN 1,452 million in 2022 (the outcome of growth of the value of assets subject to the levy, and not the rate of the levy).
** including: interest income calculated using the effective interest rate, other net investment income, result on derecognition of financial instruments and investments, movement in allowances for expected credit losses and impairment losses on financial instruments, net movement in fair value of assets and liabilities measured at fair value, and interest expenses
***Banking activity: data of Pekao and Alior Bank
* exclusive of interest expenses
| Basic amounts of the consolidated profit and loss account | 1 January –31 December 2018 | 1 January –31 December 2018 | 1 January –31 December 2020 | 1 January –31 December 2021 | 1 January –31 December 2022 |
|---|---|---|---|---|---|
| PLN million | PLN million | PLN million | PLN million | PLN million | |
| Gross written premiums | 23,470 | 24,191 | 23,866 | 25,080 | 26,710 |
| Net earned premiums | 22,350 | 23,090 | 23,024 | 23,232 | 24,297 |
| Net revenues from commissions and fees | 3,355 | 3,279 | 3,166 | 3,544 | 3,687 |
| Net investment result* | 9,931 | 11,298 | 8,486 | 9,555 | 15,183 |
| Net insurance claims and benefits | -14,563 | -15,695 | -15,580 | -15,731 | -15,542 |
| Acquisition expenses | -3,130 | -3,363 | -3,317 | -3,572 | -3,903 |
| Administrative expenses | -6,609 | -6,606 | -6,597 | -6,826 | -7,575 |
| Interest expenses | -2,046 | -2,129 | -1,134 | -418 | -4,767 |
| Other operating income and expenses | -2,201 | -2,790 | -3,990 | -2,315 | -3,750 |
| Operating profit (loss) | 7,087 | 7,084 | 4,058 | 7,469 | 7,630 |
| Share of the net profit (loss) of entities measured by the equity method | -1 | -4 | – | -15 | -25 |
| Profit (loss) before tax | 7,086 | 7,080 | 4,058 | 7,454 | 7,605 |
| Income tax | -1,718 | -1,895 | -1,528 | -2,020 | -2,346 |
| Net profit (loss) | 5,368 | 5,185 | 2,530 | 5,434 | 5,259 |
| Net profit (loss) attributable to the equity holders of the parent company | 3,213 | 3,295 | 1,912 | 3,336 | 3,374 |
* Including: interest income calculated using the effective interest rate, other net investment income, result on derecognition of financial instruments and investments, movement in allowances for expected credit losses and impairment losses on financial instruments and net movement in fair value of assets and liabilities measured at fair value