In 2022, the “Potential and Growth” Strategy 2021-2024 was in effect. In the medium term, the assumptions made referred to customer needs, personalization and flexibility of the offer, and embedding these requirements in specially created ecosystems, which were divided into 4 main areas of ambition.
PZU Group Strategy in 2021-2024 sets out 4 main areas of ambition, in which the directions were set for strategic measures.
Area I – Stable dividend and growing gross written premium and revenue
Maintaining growth in key business areas
Insurance
kept the leading position and increased gross
written premiums to PLN 26 billion, i.e., by 10%.
Health
the fastest-growing company on the health care market; PZU Zdrowie increased its revenues to PLN 1.7 billion, i.e., by 80%
Investments
increased assets under management to PLN 60 billion, i.e., by 82%.
Banks
Alior Bank and Bank Pekao increased their contribution to the Group’s financial results to PLN 0.8 billion, i.e. by nearly 650%
Maintaining cost discipline
The PZU Group plans to maintain its cost effectiveness in the post-pandemic period by applying cost discipline, investing in digitization and digitalization, and by changing its work model to remote or hybrid working. The goal is to reduce the administrative expense ratio by 0.1 p.p. in 2024.
Delivering high business profitability
Maintaining and improving high profitability of business is an important part of the Group Strategy. Despite the negative effect of the COVID-19 pandemic, the PZU Group plans to increase its return on equity (ROE) to 17.4% by 2024. This goal will be achieved as a result of a safe and sound business model predicated on business diversification, further streamlining of business, product and distribution processes.
Maintaining an attractive dividend policy
The PZU Group intends to generate above-average profits, which it plans to pay out annually in the form of a dividend. It will amount from 50% to 100% of the consolidated annual profits.
Area 2 – Leveraging the PZU Group’s potential
Effective using of databases and knowledge of clients
The PZU Group plans to use knowledge about its clients even more effectively. It will enable the Group to develop a top-quality offering responding to real client needs. By harnessing the potential of databases, it will be possible to personalize the offering, as well as provide coordinated care of relationship managers at each stage of the process and acquire new clients. The Group’s strategic activities assume: harmonizing access to information sources and channels, rolling out analytical tools for machine learning and artificial intelligence, and incorporating them in our business processes.
Development of business collaboration with banks and strategic partners
Together with Bank Pekao and Alior Bank, the PZU Group wants to achieve cumulative gross written premium of about PLN 3 billion, by reaching the banks’ clients with a comprehensive and unique offer of combined insurance and banking products. It plans to broaden the PZU Cash offer, strengthen the insurance position on the energy market and develop cooperation with Strategic partners operating on the e-commerce market.
Using of all distribution channels
Through an omnichannel approach, the PZU Group will be able to reach clients through various distribution channels suited to their needs and preferences. Clients will receive access to a broad range of modern products, including life and non-life insurance as well as health, investment and banking products customized to their evolving needs at every stage of their life.
New approach to health care in Poland
The PZU Group plans to emphasize building health awareness and preventing diseases. The offering will include top quality personalized medical care services. By achieving these goals while keeping the business profitable, the Group will grow faster than the market and earn the leading position on the private health care market.
Introduction of a modern claims and benefits handling process using new technologies to automate and accelerate processes and reduce costs.
Utilizing artificial intelligence makes it possible to control and audit in full losses in which the payment will be accepted automatically.
This system processes unstructured documents into a digital format, then it finds the data on the basis of a learned AI model.
This solution enhances the quality of insurance documentation at the stage of its collection thereby reducing the cost of verification.
On the basis of a client’s location data the robot will find the road assistance unit that is the closest and may fill the order the fastest. It checks its availability and transmits information regarding the client’s location.
The model supports the process of preparing photos to put post-accident vehicles up for auction, thereby reducing the work done on manually handling photos.
Utilizing artificial intelligence in the process of segregating PZU’s incoming e-mail correspondence will increase the speed and efficiency of service and reduce costs.
Area 3 – Innovative financial group
The PZU Group plans to leverage the latest technologies in
all areas of its activities:
- digitalization and streamlining of processes – we continue to implement solutions for clients that are simple, intuitive and universal;
- use of AI, Big Data and advanced analytics – implementation of new technologies should lead to improved operating efficiency and profitability of business, among others through automation and streamlining of decision-making processes;
- mobility and omnichannel approach – utilization of new digital distributions channels to supplement the traditional ones; development of service ecosystems based on modern digital platforms;
- cloud computing – support for technological transformation, including greater efficiency of the infrastructure;
- cybersecurity – protection of our IT networks; introduction of tools for estimating cybersecurity risk in the financial sector.
Area 4 – Sustainable growth
The PZU Group will build its success based on contemporary business models, which include elements of sustainability. It will become an active participant in safe and responsible transition processes. The sales offering will be extended to include green products. Support for social initiatives is also planned, to be aimed at, among others, environmental protection as well as promotion of safety and a sustainable lifestyle. It will be PZU Group’s priority to always act transparently, relying on clearly defined ESG criteria.
Long-term assumptions – made in defining ambitions
The PZU Group’s strategic ambitions until 2024 were based on predictions of both global and local social and economic changes. The most important of them are the new trends after the COVID-19 pandemic, climate change, and changing demographics.
As a result of the COVID-19 pandemic, digitization and the use of advanced technologies have greatly accelerated and new trends have emerged that will shape client preferences and needs in the future. The PZU Group sees these changes as an opportunity to grow faster and strengthen its competitive edge. As data analysis tools, machine learning, artificial intelligence, chatbots, virtual assistants, data mining are developed and the possibilities of integrating sales channels (omnichannel approach) emerge, the PZU Group will be able to strengthen its relationships with clients by offering personalized products in the most accessible way possible.
Climate and environmental issues are also becoming increasingly important in business operations. Climate change, on the one hand, will intensify chance events, namely the occurrence or absence of catastrophic events, such as floods, droughts, heat waves, torrential rains, hail, cyclones or whirlwinds. This will have a direct impact on the amount of claims paid out by PZU, the cost of reinsurance protection, or the level of capital requirements. On the other hand, growing climate awareness opens up opportunities for the PZU Group to develop its product offering in new areas of the insurance and investment business.
The trends related to demographic changes are also important. As the population continues to decline, coupled with the simultaneous aging of the population, the demand for health care and long-term care to senior citizens increases. The PZU Group wants to respond to these challenges by introducing products and services that will genuinely enhance the well-being of people aged 60+.
At the same time, due to the armed conflict in Ukraine and the consequences in the economic and social sphere, there are further challenges and potential risks and among them, for example: rising inflation translating into a decrease in insurance profitability, and indirectly into a decrease in sales by weakening the condition of households and businesses. Simultaneously, the expected increase in TPL prices is not taking place, which could affect sales plans. An increase in interest rates, in turn, results in higher bank profitability, but also in a decline in interest in loans, which could make it difficult for banks to achieve their contribution targets in the long term. Clearly, hostilities translate into the conduct of business of Ukrainian companies belonging to the PZU Group, and therefore the risk of losing business and not achieving the assumed market position.