PZU Group (PZU) is a leader on the insurance market and one of the largest financial institutions in Poland. It is also one of the top insurance groups in Central and Eastern Europe. The main advantages of the Group concern the strong competitive position, high level of equity and high effectiveness of business activity.
PZU Group offers the largest selectionof insurance products on the Polish market (nearly 200 insurance products) and constantly enhances the scope of provided services. The activity of PZU group encompasses the comprehensive insurance-financial service. The Group entities provide services in the area of non-life insurance, personal and life insurance, investments funds and open pension fund.
The PZU Group’s objectives are to maintainits leadership in the Polish insurance market and to enhance returns on equity for its shareholders. The Management Board also intends to diversify its sources of income by analyzing new business opportunities in Poland and opportunities related to international expansion. PZU intends to pursue these objectives by focusing on the following strategies.
Maintaining and increasing the PZU Group’sshare in the market by focusing on the profitability of the basic operations. The PZU Group positions its product portfolio, distribution channels and principles of risk assessment and acceptance to capitalize on attractive growth prospects in its key markets. The PZU Group approaches distinct segments of the Polish insurance market differently depending upon its market share and profitability forindividual products.
– With respect to segments in which the PZU Group has a high market share and a satisfactory profitability level, such as group life insurance, continued individual insurance, individual motor insurance, and agricultural insurance, the PZU Group intends to develop its range of products in order to maintain its leading position and the profitability of its products.
Asregards individual motor insurance, the aim of the PZU Group is to halt the loss of market share and maintain profitability by applying an active pricing policy aimed at retaining key group clients in selected categories of products, introducing new incentive programs for agents and developing an attractive product for car dealers. The PZU Pomoc roadside assistance service is an important element ofthis strategy. It allows the PZU Group to offer an outstanding level of service, and, as a result, maintain a product advantage in the market and the loyalty of key client groups. PZU Pomoc is also a platform which facilitates the soliciting of new clients despite growing competition. In selected market segments, such as agricultural insurance (in which the PZU Group has almost an 80% market share)and third party liability insurance of selected professional groups, the PZU Group’s aim is to maintain its position as a leader, as well as its high level of profitability. The PZU Group has undertaken several initiatives with the aim of maintaining its market share in products earmarked for SMEs who are a group of clients with potential for rapid growth for both group life insurance and propertyand casualty insurance.
– With respect to the corporate motor insurance segment, in which the PZU Group incurred a loss of approximately PLN 424 million in 2009, the goal is to restore profitability by 2012. In order to achieve this goal, the PZU Group intends to implement a more restrictive pricing policy (in 2009, the average motor insurance product prices for corporate clients increased byapproximately 20%) and apply proper risk evaluation and acceptance policies. The PZU Group has already implemented an incentive scheme for employees, promoting the 5 profitability of the segment. By focusing on restoring the segment’s profitability, the PZU Group accepts that it may lose market share. However, the PZU Group believes that the adopted strategy will ensure higher returns for the...