We play fair - “we have the suitable qualifications and tools to discharge our obligations in respect of our clients. That enables us to give them accurate and comprehensible information regarding our offer and products. Let’s do our best for this knowledge not to mislead anyone. We articulate transparent and unambiguous model contracts and advertising materials. Contacts with clients are based on trust.
Let’s remember that when doing our professional duties we are always acting on behalf of the PZU Group. If a client loses trust in us, then further cooperation may be called into question. We are obligated to treat all clients equally. Service should not be denied to anyone, nor should the provision of information or explanations. We approach aftersales service with an equal amount of professionalism.”
At PZU we believe that every client deserves to receive serious and - above all - HONEST information. We treat our marketing communication as one form of the company’s conversation with clients. Like every honest interlocutor, we do not overpromise, we do not speak of unrealistic things, but only about the best scenarios. We present risks in a realistic and accurate manner and we deliver on our obligations.
Product liability in the PZU Group assumes an exceptional form: the priority in every offer and every product in the Group companies is client safety understood in a broad sense. Our corporate value embodied by “we play fair” is not an empty slogan. Rather, it is translated into the daily practice of thousands of people who work in this Group.
Every single Group product and service is meticulously checked by experts before it can be proposed to clients. Lawers and employees of the compliance department ensure that no clause in any agreement violates client interests, and that the entirety is compliant with current case law regarding consumer rights.
Several Group companies, including all its international companies, there are procedures in force on how to disclose information to clients concerning factors that may influence their decision to enter into, or enroll in, and insurance agreement. In addition, internal regulations have been implemented in TUW PZUW, including rules pertaining to the product management system, the procedure for creating, modifying and retracting products, the procedure for monitoring products and the rules for managing defects.
The company’s methods and policy on shaping its culture of ethics in client and business relations. In 2018 new regulations were introduced on the subject of “responsible products”. How does the PZU Group cultivate measures to prevent misselling? Expectation from the dialogue session
Description of the following issues that were lacking in the 2017 report: misselling, product development. Expectation from the dialogue session
Comment made during a dialogue session
After bringing a product to market, the Group employs procedures to prevent misselling, or offering such a product in a misleading manner, or offering a product that is not aligned to a client’s capabilities or needs. Employees and agents are obligated to perform a Client Needs Analysis, or hold a conversation to assess accurately the utility of the product PZU is offering to a client. All employees and agents examine client needs in four fundamental areas: Life Safety, Asset Safety, Investments and Pensions. If the analysis shows that a product is not aligned to the needs of a given client, the client is advised of that fact and jointly with the advisor he or she may look for an alternative solution.
Before making a decision on utilizing PZU’s insurance services, clients also have at their disposal product sheets that render an objective presentation of the most important information regarding a given product. As a result, clients can made more considered decisions and purchase insurance cover that best corresponds to their requirements.
The clauses of the Insurance Distribution Act (Journal of Laws of 2018, Item 2210) implemented in 2018 also provide for the transparency of the Group’s insurance products. This act is the outcome of implementing the clauses of the EU Insurance Distribution Directive in the Polish legal order. During preparations to phase it in, the PZU Group companies refreshened the process of offering and entering into insurance contracts and the various clauses of the general terms and conditions of insurance were aligned to the regulations related to handling complaints. Guidelines and implementation materials were conveyed to the distributors of PZU’s insurance products, salespersons were also trained on new duties ensuing from the IDD Directive.
In 2018 PZU and PZU Życie did not observe any failure to comply with regulations or codes concerning the labeling of products and services or marketing communication.
Responsible and understandable communication
PZU’s Best Practices define what specific activities are in compliance with the Company’s key value of “We play fair”. They require that information about the offering must be conveyed in a reliable and comprehensible manner with special attention paid to ensure that understatements are not misleading. Such information must also present the actual benefits but also reliably describe any existing risks that accompany the offering.
The company’s goal is to present its offer to clients in a simple and understandable manner. Since December 2012 the PZU Group has pursued efforts to convert communication into simple language. The PZU Simple Language project started in April 2018.
Alignment to the PRIIP Regulation, i.e. Regulation (EU) No. 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products.
The PZU Group wants for its clients to invest and insure themselves in a responsible manner - to make deliberate decisions with a grasp of the risk and costs related to the products they purchase. That is why the company fully meets the European PRIIP Regulation and conveys important information from the buyer’s viewpoint in an understandable fashion. The Key Information Document (KID) accompanies all products for which this is required according to the regulation, chiefly insurance-based investment products and endowment insurance policies. This is a standardized information sheet giving clients the ability to compare with ease products offered by different insurance undertakings. This sheet is mandatorily forwarded to clients when presenting an offer. It can be found on the product pages of the pzu.pl portal.
Its assumptions are as follows:
- changing the form of communication with clients in keeping with the rules for simple Polish,
- aligning the content of services to the simple Polish standard and obtaining a simple Polish certificate,
- devising and implementing internal and external communication standards in keeping with the rules for using simple and understandable language.
The necessity of modifying the language of communication is dictated by evolving client expectations. Research shows that 61% of all clients are inclined to recommend a company on account of the simplicity of communication and the experience provided, while 64% are willing to pay more for the product being offered if the company approaches them succinctly, simply and comprehensibly. The new type of client is related to the development of new technology.
Approximately 300 PZU Group employees were trained on the principles of simple Polish. Webinars (online seminars) were also conducted with language experts and linguists. A conference was also held for employees that was devoted to simplifying language.
The language used, company letters and internet portals have changed in PZU. The Client Account Service has received a simple Polish certificate. We are striving for more services to obtain certification. Giving clients an understandable message has cut the burden placed on PZU’s information line by approximately 10%.
Simple Language at the 28th Economic Forum in Krynica!
For the first time in the history of the Economic Forum, the attention of all the parties involved was focused on effective communication. During the 28th Economic Forum in 2018 PZU organized a discussion panel entitled Communication of the Future (without a Future) - language in the times of bots and memes. Dorota Macieja, Management Board member of PZU Życie hosted the event. She is proliferating a culture of simple language and effective communication in the organization. Experts from various areas participated in this discussion: a linguist, an image and communication expert and a specialist on bots. The culminating point of the discussion was a conversation with a bot.
All of the PZU Group products belonging to the 4 major product categories (life insurance, non-life insurance, health and investment products) satisfy the statutory requirements, i.e.:
- within the scope of general policy conditions: the PZU Group directly applies the Insurance and Reinsurance Activity Act. Additionally, the product development procedures refer to a clause on the mandatory preparation of general terms and conditions of insurance,
- with respect to KID (Key Information Document) the PZU Group directly applies the PRIIP regulation6 and the product development procedure,
- with respect to the Insurance Product Information Document (IPID) the PZU Group directly applies the clauses of the Insurance Distribution Act as well as the Principles regarding the product management system and the product development procedure.
The deaf and hard of hearing can also count on professional service in sign language in PZU. PZU is the only insurance company in Poland that since 2018 enables these people to handle their affairs by using a three-party video connection including the client, a sign language interpreter and a company employee. PZU received a prestigious award under the Efma-Accenture Innovation in Insurance Awards 2018 in the Customer Experience & Engagement category for the implementation of this project.
More information concerning service for people with disabilities may be found in the section Doing business ethically – Diversity and respecting human rights
Responsible network of salespersons
Structure of the insurance agent network - % employed, % external.
Training system (also pertaining to ethics and responsible sales) and control exercised by PZU (among others in respect of responsible sales)
Does the agent motivation system rely not just on financial KPIs but also on non-financial KPIs? What is taken into account?
Did any irregularities on the part of the agents transpire in 2018? If so, then how many? What did they concern? How were they addressed? Please comment
Comment made during a dialogue session
The PZU Group has created the geographically most extensive financial services sales network in Poland. Among all the Polish insurers PZU offers its clients the largest sales and service network. It has 411 branches with convenient access across the country, 9.1 thousand tied agents and agencies and 1 thousand insurance brokers. The company’s branches and agents are available not only in large cities but also in smaller communities and in villages strewn across Poland.
The sales network is also supplemented by electronic distribution channels (such as LINK4) and the potential inherent in the branch networks of Bank Pekao and Alior Bank. At the end of December 2018 Pekao had 825 proprietary branches while Alior had 202 proprietary branches, 8 Private Banking branches, 8 Regional Business Centers and 643 partner centers (franchise). In addition, in health the PZU Group cooperates with more than 2,100 partner centers in 500 towns and cities in Poland and is steadily rolling out its own network consisting of more than 60 medical centers.
The widespread accessibility of the Group’s products and services is also of social significance, on top of its economic significance. PZU’s efforts and presence not just in the largest cities reduce the marginalization and exclusion of many groups. Thanks to PZU the residents of small urban communities and villages have facilitated access to the most modern and safe financial services. Thanks to implementing the Group’s new strategy, it can provide clients, regardless of their place of residence, the optimum selection of services helping to safeguard their life, health, assets, savings and finances.
PZU agent network structure
2018 is a year in which another step has been taken in the program to standardize the offices of tied agents. The Agent 3.0 program was created allowing PZU to open even more professional agent offices across the nation. This program anticipates three levels featuring different forms of support provided by PZU. They are fitted as needed and possible to agents in small and large communities. Through this program PZU would like to make it easier for its partners to get started in business and give them the greatest possible support and development.
1,473 “Agent 1.0, 2.0 and 3.0 outlets” were in operation across Poland at the end of 2018.
Tied agents received marketing support in the form of coherent, uniform and professional websites and Google business cards. PZU has addressed the expectations of its agents and is supporting them in effectively advancing their image in the Internet.
PZU is constantly developing its universal agent network, i.e. agents who have life and non-life products in their offer (OMS, type P and My Business). The tied agent channel currently consists of 2,250 agents offering life and non-life products7. The purpose of the Delta project is to align the offer, processes and model of cooperation with tied agents even better. All these changes aim to build a combined network of salespersons who will be able to propose to their clients the broadest possible array of products offered by the PZU Group. The change slated to take force as of April 2019 also entails the Tied Agents channel operating as a combined life and non-life network. The purpose of these solutions is to align the sales structure to the PZU Group’s expectations better to be able to manage more effectively the development of life insurance sales in the tied agents channel. A new position called the Agent Portfolio Development Coordinator will be established in this project – this person will be responsible for supporting the Sales Areas to develop life product sales. Directors of External Channels (BSA) who with KRPA will jointly provide support to sales managers and tied agents are also dedicated to support sales and underwriting.
The purpose of the project is also to review existing life insurance sales processes and models and customize them to the requirements of tied agents. Under this project a life insurance sales and service model will be devised by BSW and BSA (training, CC support, documentation settlement process).
All the actions pursued under the Delta Project purport to reach PZU’s current clients with the PZU Group’s broadest product offer.
“I would eagerly learn how the system for reporting breaches operates. Can a client report irregularities on the part of agents if they occur? To whom and how?” Quotation from the dialogue session”
Comment made during a dialogue session
Grievances and complaints related to the work of agents are accepted by PZU in any form. Clients decide on their own whether they want to use a traditional letter, e-mail, form on PZU’s website or by phone with an employee or directly in a company outlet. No notification is examined by the unit or person to whom it directly pertains. The Complaints Handling Section specially appointed in the corporation’s structures deals with them. The employees of this section field each notification as quickly as possible. In standard cases clients wait for a response for no more than 30 days. That timeframe does not exceed 60 months in cases that are particularly complicated.
If it finds that an agent has breached his or her duties, PZU may curtail the scope of the power-of-attorney extended to enter into insurance contracts, or terminate the agreement. In the event of serious breaches the Security Department is the appropriate unit to react.
This procedure has been regulated in the Principles for accepting, recording, examining and reporting the grievances submitted by clients.
168 grievances were submitted to PZU in 2018 against agents. 35 of them were recognized and 22 were recognized in part. These grievances pertained to giving incorrect information, improper employee conduct and the organization of an agent’s work. 48 grievances were submitted to PZU Życie. 7 of them were recognized and 8 were recognized in part. The grievances pertained above all to the lack of contact with the client.
The Agency Agreement governs the fees of PZU agents. The principles are clear and transparent and ensue from the results of their work and engagement. The following make up their compensation:
- commission specified in the agency agreement depending on the agent’s segment,
- bonus for performing the sales contract (quarterly),
- bonuses and awards earned in sales contests and campaigns.
In 2018 nearly 3,000 agents took part in the training courses organized by PZU, including 1,850 people in the Academy for Adepts in which, on top of sales issues, ethical aspects occupy an important position in connection with the sales of financial products.
In 2018 PZU also delivered 267 internet training courses (more than 2,750 participants) related to KNF’s regulations.
Responsible marketing communication
The PZU Group advertises its products and services in a responsible manner. The Code of Ethics in Advertising is in force in the company. It unambiguously orders for every marketing message to be deprived of discriminatory content, not to be misleading and not to take advantage of clients’ lack of experience or knowledge. The Group’s advertisements depict solely authentic and documented data, are clearly labeled and cannot give the impression of being neutral information. It is forbidden for PZU advertisements to challenge animal rights.
The Code of Ethics in Advertising regulates PZU’s sponsoring issues. The Group undertakes, among other things, not to sponsor events that exert an adverse impact on the natural environment or put in jeopardy historical or artistic facilities. A presentation of sponsoring-related information cannot violate best practices or religious convictions.
On top of the Code of Ethics in Advertising PZU and PZU Życie are guided by the Principles for giving opinions on marketing activities and activities in internal and corporate communication.
A best practice is for the Compliance Department and the Legal Department to give an opinion on marketing activities. Experts check, among other things, whether a given message entails a risk of PZU and PZU Życie suffering a loss of their good name.
The Code of Ethics in Advertising was also implemented in Bank Pekao, as well as in several foreign companies in Ukraine and Lithuania. Marketing activities are pursued in PZU Zdrowie and its subsidiaries in coordination with the Marketing Department and no separate policies were implemented in this respect. At Link4, the compliance risk management policy in Link4, the executive procedure concerning compliance risk management and the policy on the distribution of insurance by Link4 refer to the topic of giving opinions on marketing activities. In the other Group companies, including the Pekao Group and Alior Bank, this area is regulated under the marketing activity policies of the various companies or the PZU Group’s Marketing Policy as adopted.
“Taking into consideration the contributions to the Insurance Indemnity Fund base and usages thereof for business purposes”
Comment made during a dialogue session
Information regarding policies, events and claims paid in motor insurance is reported by the PZU Group – according to the binding law – to the Insurance Indemnity Fund. PZU’s ambition is to ensure the completeness and timeliness of the information provided. The Group is aware that it can derive the maximum business outcomes only thanks to the Insurance Indemnity Fund base, i.e. better prevent insurance fraud, as well as shorten the time to send out policies and pay claims. Caring for the high quality of the data transferred also translates into reducing expenditures on processes to adjust them, which in turn makes a positive contribution to greater process efficiency in sales and operations.
The PZU Group has undertaken the following activities to enhance the quality of the data transferred to the Insurance Indemnity Fund base:
- The implementation of the EVEREST central policy system involving optimization of processes to source information online directly at the stage of an offer and enter into an insurance agreement.
- Implementing regular processes to verify the quality of data in substantive units (operations, claims handling) and implementing improvements in this area.
- Modernizing the Data Transfer System to the Insurance Indemnity Fund (STUFG system) in the data warehouse based on a new approach to data modeling, sharing and integrating data sources, as well as automating, optimizing and verifying data at the stage before they are forwarded to the Insurance Indemnity Fund base. The fundamental overhaul of the STUFG system aims, among other things, to shorten the time to dispatch policies, events and payments to fulfill statutory requirements, improve data quality on account of verification in source systems and implement a system to clarify discrepancies.
- Implementing regular monitoring of ratios of Insurance Indemnity Fund data quality at the level of managers, the Data Governance Committee and reporting to the PZU Supervisory Board.
The efforts of PZU’s employees were appreciated for the third time in a row by the Insurance Indemnity Fund. PZU, TUW and Link4 are among the top players in the eighth ranking of data quality in the nationwide base of motor policies at the Insurance Indemnity Fund for 2018. PZU stayed at the top of the data quality ranking in the motor policy base with a result of 89.5%, versus an acceptable level of at least 80%.
5 Simplicity, badanie z 2017 roku
6 Regulation (EU) No. 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products.
7 Agents having life and non-life products in their offer.