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Non-life insurance (PZU, LINK4 and TUW PZUW)

Annual Report 2018 > BUSINESS > Business operations > Non-life insurance (PZU, LINK4 and TUW PZUW)
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Market situation

Measured by gross written premium in the first three quarters of 2018, the non-life insurance market in Poland grew by a total of PLN 2,038 million (+7.3%) versus the corresponding period of the previous year.

The sales growth in insurance against fire and other damage to property (up PLN 546 million, +11.1%, of which indirect activity grew by PLN 148 million), motor own damage insurance (up PLN 496 million, +8.8%) and motor TPL insurance (up PLN 385 million, + 3.3%), chiefly due to the considerable rise in the average premium (the consequence of phasing in price hikes starting in 2016) and the higher level of premium coming from indirect activity (motor TPL indirect insurance up PLN 36 million year on year) made the largest contribution to the higher level of the gross written premium.

In addition, markedly higher sales of accident and sickness insurance (up PLN 263 million, 15.0%), general TPL insurance (up PLN 174 million, +11.6%) and assistance (up PLN 143 million, +20.0%) made a positive contribution to the overall non-life insurance market’s growth. A decline in premium was observable only in insurance for various financial risks (down PLN 51 million, -7.7%) as an outcome of the evolving conditions on the financial insurance market and in legal protection insurance (down PLN 2 million, -2.4%).

In the first three quarters of 2018, the overall non-life insurance market generated a net result of PLN 3,749 million, signifying incremental growth of PLN 739 million in comparison with the corresponding period of 2017. Excluding the dividend from PZU Życie, net profit of the non-life insurance market increased PLN 911 million (57.7%).

In the first 3 quarters of 2018, the technical result of the non-life insurance market rose PLN 860 million to PLN 2,367 million. The growth in the technical result in insurance against fire and other damage to property of PLN 415 million (effect of considerable sales growth accompanied by a simultaneous decline in claims and benefits paid) and motor own damage insurance of PLN 279 million and in motor TPL insurance of PLN 226 million made the largest contribution to this change.

The increase in the technical result in motor insurance chiefly ensues from the higher earned premium (up PLN 1,936 million, +14.5%) following the price hikes made in recent years that outpaced the growth in claims paid (up PLN 1,068 million, +10.9%) despite incorporating the additional provision estimate to cover the claims for pain and suffering caused by the vegetative state.

Gross written premium of non-life insurance undertakings in Poland (in PLN million)

* including growth in written premium in the AXA Group by PLN 835 million, partly as a result of the transfer, in October 2016, of the business of Liberty Seguros Compania de Seguros y Reaseguros S.A. Poland Branch and the insurance portfolio of Avanssur S.A. Poland Branch to AXA Ubezpieczenia TUiR S.A.
Source: KNF ( Quarterly Bulletin. Rynek ubezpieczeń [Insurance market] 3/2018, Rynek ubezpieczeń 3/2017, Rynek ubezpieczeń 3/2016, Rynek ubezpieczeń 3/2015, Rynek ubezpieczeń 3/2014

Non-life insurance undertakings – percentage of gross written premium in the first three quarters of 2018 (in %)

* PZU Group – PZU, Link4, TUW PZUW
** PZU Group’s market share in non-life insurance on direct business at the end of Q3 2018.

Groups: Allianz – Allianz, Euler Hermes; Ergo Hestia – Ergo Hestia, Talanx – Warta, Europa, VIG – Compensa, Inter-Risk, Generali - Generali, Concordia
Source: KNF’s Quarterly Bulletin. Rynek ubezpieczeń [Insurance Market] 3/2018

Non-life insurance market - gross written premium vs. technical result (in PLN million).

Gross written premium vs. technical result 1 January - 30 September 2018 1 January - 30 September 2017
PZU* Market Market w/o PZU PZU* Market Market w/o PZU
Gross written premium 10,735 29,893 19,157 10,264 27,854 17,590
Technical result 1,306 2,367 1,061 853 1,507 654

* it contains LINK4 and TUW PZUW
Source: KNF ( Quarterly Bulletin. Rynek ubezpieczeń 3/2018, Rynek ubezpieczeń 3/2017, PZU’s data



In the first three quarters of 2018, the technical result declined y/y chiefly in general TPL insurance (down PLN 116 million, of which PLN 103 million was on direct activity) and credit and guarantee insurance (down PLN 5 million including PLN 3 million for direct activity).

The following entities in the PZU Group operate on the non-life insurance market in Poland: the Group’s parent company, i.e. PZU and LINK4 and TUW PZUW.

To respond to client expectations in recent years, the PZU Group has extended its offering for retail and corporate clients (the latter by forming a mutual insurer), thereby sustaining its high market share.

In the first three quarters of 2018, the PZU Group had a 35.9% share in the non-life insurance market, compared to 36.8% in the corresponding period of 2017 (34.8% and 35.8% on direct activity, respectively), thereby recording a slight dip while simultaneously retaining the portfolio’s high profitability.

In the first three quarters of 2018 the PZU Group’s technical result (PZU together with Link4 and TUW PZUW) stated as a percentage of the overall market’s technical result was 55.2% (the PZU Group’s technical result was PLN 1,306 million while the overall market’s technical result was PLN 2,367 million).

The total value of the investments made by non-life insurance undertakings at the end of Q3 2018 (net of the investments made by subordinated entities) was PLN 58,749 million, up 9.7% compared to the end of 2017.

The non-life insurance undertakings in total estimated their net technical provisions at PLN 52,110 million, signifying 6.9% growth compared to the end of 2017.

PZU’s activity

As the PZU Group’s parent company, PZU offers an extensive array of non-life insurance products, including motor insurance, property insurance, casualty insurance, agricultural insurance and third party liability insurance. At yearend 2018, motor insurance was the most important group of products offered by PZU, both in terms of the number of insurance agreements and its premium stated as a percentage of total gross written premium.

Against the background of evolving market conditions, in 2018 PZU matched its offering to clients’ new interests and needs by rolling out new products and innovative solutions.

In mass insurance, PZU did the following:

  • it added more health insurance products to the offer under PZU Plan na Zdrowie [PZU’s Plan for Health] forming a flexible medical care proposal offered to private individuals (also to those engaged in running businesses), companies and institutions. Depending on the option selected clients receive on top of the underlying insurance a package of health benefits enabling them to customize the scope of medical care to their own needs. This proposal stands out among the ones available on the market as it provides extensive support if health problems arise following an accident – Plan na Zdrowie and W Ciężkiej Chorobie (Critical Illness), W Leczeniu Nowotworu (Cancer Treatment) and in the course of everyday care – W Trosce o Ciebie (Caring for You);
  • it launched the sales of the Pewnie na Rower (Feeling Secure on My Bicycle) insurance product in the web that was designed to afford the most extensive protection to cyclists. For the first time ever clients have the possibility of taking out insurance for the cycling season. In practice that means that the cover lasts for 7 months regardless of when they submit their proposal. Clients can insure a new bicycle or a used bicycle not older than four years. The insurance is based on bicycle accident insurance. One can add a rider in the form of a cyclist’s TPL policy, a bicycle own damage policy, i.e. cover in the event of theft or damage and baggage insurance. The insurance protects the person named in the policy meaning the bicycle user and owner alike, while the TPL and accident insurance cover is effective regardless of whether the bicycle is owned or the insured is using a rented bicycle;
  • it implemented “fast-track sales” for the PZU Dom [PZU Home] product. This new front-end makes it possible simultaneously to prepare at lightning speed an offer aligned to a client’s profile with three different options that have various types of cover. This system is similar to Direct insurance in terms of its simplicity and intuitiveness;
  • it rolled out a product solution in PZU Auto AC making it possible to use in full the possibilities offered as a result of the Green Parts project. The clauses of the General Terms and Conditions of Insurance obligate the insured to enable PZU to pick up parts from the workshop eligible for replacement to recycle them and reduce the costs of damages. In that manner PZU takes social responsibility for co-creation, and hence, for recycling roughly 4 million parts per annum. The utilization of these salvaged parts is carried out in accordance with the Act on Waste and regulations in this area. In every instance PZU asks clients whether they would like for the salvaged parts after vehicle repair (damaged parts) to be utilized by PZU’s partners;
  • devised a new plan for the product PZU AUTO Assistance – PZU GO. PZU GO is an innovative product using telematic technology, thereby confirming PZU’s focus on developing innovative solutions as it cares for the life and health of its clients. If a road accident is identified using the mobile application connected to the sensor mounted in the vehicle, PZU attempts to help or rescue life by establishing contact with the insured or the Rescue Notification Center. PZU GO (will be) is an extension of its motor insurance offer making it more attractive by adding PZU assistance even without having to be in contact with the insured.

Most of the changes in the corporate insurance segment called for enhancing the effectiveness of collaboration with intermediaries and making the dedicated offer for car fleet clients and leasing companies more attractive. The most important activities related to the product offering were as follows:

  • popularizing the insurance against cyber risks launched in the last quarter of last year. This insurance offers protection against the adverse effects of hacking attacks, including by taking actions aimed at destroying the attack and restoring the company’s normal operations. This offering is targeted especially at those clients who are at risk of data leakage or operational paralysis caused by a cyber-attack.
  • extending the offer for car fleet clients to include three innovative solutions underpinning Polish fleet companies at home and abroad:
    • International Legal Support addressed to fleet clients rendering services across Europe (transport companies) as well as all other businesses whose drivers travel abroad. Having this legal assistance service available in countries in Europe, an insured who participates in an accident or a collision gets immediate legal support through the hotline in the language of the country where he or she is located;
    • Advisory Service under which the appointed team of PZU experts supports clients in mitigating insurance risk by reducing the frequency and average claim value, thereby eliminating down time for vehicles caused by claim events and obtaining a stable and predictable amount of insurance premium in subsequent years;
    • Telematic service for users or holders of light fleets. Under its insurance cover PZU offers clients a free of charge car fleet audit and an assessment of the telematic solution it has in respect of its influence on insurance risk, giving recommendations on modifications to support driver safety. The outcome of the audit will form the basis for underwriting the fleet and the foundation for calculating the insurance premium. 

In financial insurance, PZU was unswerving in its support for the Polish economy by providing insurance guarantees and securing the performance of contracts in such key areas as the power sector, the shipbuilding industry, the construction industry and the science and innovation sector. At the same time, to respond to client expectations in financial insurance, PZU in collaboration with TFI PZU launched a new product combining investments in mutual funds with financial loss insurance to give clients an indemnity in the event of softer investment performance to cover the loss they sustain. This program targets private individuals and companies that are planning to combine their first investment in mutual funds units in the PZU SEJF+ participation units with insurance to cover any possible financial loss.

PZU cooperated with 9 banks and 10 strategic partners in 2018. PZU’s business partners are leaders in their industries and they have client bases with enormous potential offering an opportunity to extend the offering to include more innovative products. PZU established cooperation with the PZU Group’s member banks, namely Alior Bank and Pekao, launching the roll-out of a comprehensive offering via its distribution network. Cooperation with Pekao and Alior Bank enables PZU to offer its clients a full array of financial and insurance services at each stage of their lives. In strategic partnerships, cooperation applied mostly to companies operating in the telecom and power sectors through which insurance for electronic equipment and assistance services were offered, e.g. the assistance of an electrician or a plumber. PZU launched cooperation with Allegro and PLL LOT to offer insurance on the e-commerce market.

LINK4’s operations

LINK4 entered the Polish insurance market 15 years ago as the first company offering products by phone; it still continues to be one of the leaders on the direct insurance market. It is extending its cooperation with multi-agencies, banks and strategic partners. The Company offers an extensive array of non-life insurance products, including motor insurance, property insurance, casualty insurance and third party liability insurance.

The Company places its core emphasis on developing innovative technologies to be rolled out in client service processes and internal processes with an eye to optimize them and enhance their efficiency.

The most important activities associated with modifying its product offering in 2018 were as follows:

  • launching a line of products unlike any other on the Polish market dedicated to current and future parents. In the new LINK4 Mama offer, current and future parents alike can choose from two types of packages they can utilize in full or they can adapt them to their own needs. The LINK4 Mama brand received the award for being the Discovery of the Year in 2018 from the Consumer Laurels project commission. The firm has also elected to embrace a novel method of promulgating its new brand by undertaking cooperation with leading Polish bloggers running parenting portals. In the LINK4 Mama package clients can take accident insurance for Moms and TPL in their private lives that applies to losses caused to third parties by moms or their children. If they elect to take out one or both of these products at the same time, clients can enrich their insurance bundle with a medical package for mom. Under this bundle Link4 will organize and cover half the costs of visits to physicians in various specialties, legal assistance and a Rapid Assistance Package with an unlimited 24/7 concierge. The other package called LINK4 Dziecko (Child) can be construed anyway a client likes, by picking any number of products from the offer, i.e. accident insurance Child, a medical package for children and Rapid Assistance Package.
  • extending the offer to clients holding a motor policy with LINK4 to include the following products:
    • Wracaj do Zdrowia (Return to Health) offered to clients who hold an motor insurance policy in Link4. Under this insurance clients have access to specialist physicians, ambulatory rehabilitation, selected tests and procedures and specialist diagnostics offered in more than 2 thousand PZU Zdrowie medical centers in more than 500 cities located across the country,
    • Post-theft Assistance offered to clients holding a motor TPL insurance policy or bundle. Under this insurance a client obtains compensation for the items in the stolen vehicle and reimbursement of the costs related to vehicle theft. In addition, clients obtain hotline support in proceedings following vehicle theft;
  • enriching the current product offer by aligning it to evolving client expectations (e.g. TPL in private life, extending the territorial range to include Europe, raising the sums insured in travel insurance – the possibility of insuring treatment costs up to PLN 800 thousand) and deploying unrivalled solutions on the market to make Link4 products more attractive (weather alerts for clients who hold apartment insurance and as of January 2019 also for clients who hold motor own damage or SmartCasco).

TUW PZUW’s activity

2018 marks the third year of TUW PZUW’s active operations.

It offers its clients a flexible insurance program to optimize the costs and scope of cover.

Since 2016, it has been selling and handling insurance products targeted at clients from various industries, focusing predominantly on cooperation with large enterprises, medical centers (hospitals and clinics) and local government units. Such entities, within the framework of cooperation exercised under TUW’s model, are provided with the opportunity to dissipate their risks within the boundaries of mutual benefit societies adjusted to the specific nature of the pertinent group of entities and thereby reducing the costs of their insurance premiums. TUW has 246 members for whom 44 mutual benefit societies have been established.

In 2018, the primary emphasis was placed on constantly improving the product offering, expanding the team of professionals offering comprehensive insurance service to the mutual’s members and aligning its offering to its clients’ needs.

The most important activities associated with modifying its product offering in 2018 were as follows:

  • obtaining KNF’s consent to extend the business to include statutory class 2, giving the ability to extend PZUW’s offer to include another pillar, namely health insurance, including:
    • Occupational medicine - offered to employees working for companies that are members of TUW PZUW. Under this insurance clients obtain access to a wider package of tests including among others physician rulings, preventive health care for employees and assessments of the ability to work while considering the state of health and the threat posed at a given work position;
    • TUW PZUW Medical Care Group Insurance, a supplement to TUW PZUW’s main offering addressed to the employees of the Mutual’s Members. In the Medical Care package clients can utilize doctor consultations, outpatient procedures and laboratory and imaging diagnostics in more than 2.1 thousand PZU Zdrowie medical centers in more than 500 cities in Poland;
  • rolling out in the offer, as the first insurer in Poland, a product called Third Party Liability Insurance for the Members of the Governing Bodies of a Medical Treatment Entity. Extending this offer is part of the mutual’s expansion onto the market made up by medical entities, especially hospitals that are one of the major axes on TUW PZUW’s strategy for the upcoming years. This product addressed to TUW PZUW’s clients who already hold compulsory TPL insurance for a medical treatment entity protects the representatives of the management of medical treatment entities against the financial consequences of erroneous managerial decisions, omissions and procedural violations;
  • implementation of comprehensive cybernetic insurance offering protection against the adverse consequences of damages related to the operation of a computer network and computer network safety breaches, also as a result of cyber terrorism;
  • launching an insurance program for church-related institutions encompassing property and third party liability insurance under a dedicated mutual benefit society. 

Factors, including threats and risks that will affect the operations of the non-life insurance sector in 2019

Besides chance events (such as floods, droughts and spring ground frost), the following should be treated as the main factors that may affect the situation of the non-life insurance sector in 2019:

  • possible slowdown in economic growth in Poland. The poorer financial standing of companies may result in elevated credit risk, a higher loss ratio on the financial insurance portfolio and deceleration in the pace of gross written premium growth;
  • possible slowdown in the growth rate of gross written premium, mostly as a consequence of the motor insurance portfolio’s profitability generated in recent years, and thereby the return to an active pricing policy and competition to attract clients;
  • case law concerning the amounts of general damages paid in cash under the TPL insurance held by the owners of motor vehicles for suffering sustained to the closest family members of persons who have died (Article 446 of the Polish Civil Code);
  • increase in the prices of spare parts affecting claims handling expenses due to the depreciation of the Polish zloty against the euro;
  • changes in trends and client behavior toward customization of proposals and an electronic, swift and paperless method of purchasing and handling insurance, forcing insurance undertakings to adapt to these expectations rapidly;
  • emergence of more regulations or financial burdens on insurance undertakings.
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