CFO Letter

The PZU Group caters to the needs of 22 million clients in five countries in Europe offering insurance, banking, investment and health products. Its gross written premium in 2019 hit a record-breaking level of PLN 24 billion with net profit of PLN 3.2 billion. These figures, even without a point of reference, show the enormous magnitude of the PZU Group’s operations as it continues to develop and experience never ending change.

The Group’s balance sheet has significantly grown since 2016. At the end of 2016 the Group’s total assets stood at PLN 125 billion while a year later they had surged to PLN 317 billion. At the end of Q1 2020 assets totaled PLN 357 billion. In this period PZU significantly extended its presence in the banking segment and posted rapid growth in the health segment. The PZU Group evolved into a fairly intricate financial organism which, coupled with constantly changing accounting standards, makes analyzing our financial performance an ever greater challenge. Additionally, new requirements and regulations are being introduced, and non-financial reporting plays an increasing role, which adds a new dimension to this analysis.

We attach great importance to accurate financial and non-financial disclosures, going beyond compulsory reporting requirements. We do that because it serves a number of important roles. First, as is obvious, it ensures legal compliance. Second, through sound, consistent and transparent presentation of financial information it enhances the company’s market valuation. It contributes to greater comprehension of the Group’s standing and growth prospects among capital market participants, thereby reducing equity price volatility. Third, it exerts a positive impact on our scores in the growing number of ESG ratings.

We seek to utilize every opportunity to familiarize financial market participants and people embarking on their careers with what the Group is. We publish extensive materials for investors and participate in numerous conferences attended by institutional and retail investors. Additionally, early this year we became a Target Company in the CFA Challenge competition to present the PZU Group to students of financial faculties in Poland and the Baltic States and obtain feedback in the form of their research reports.

We are now presenting our online report, which we consider to be an equally important element of our communication because it creates an opportunity to simplify complex subject matter. In the course of preparing the 2019 report we were keen on ensuring that users have the feeling that they are looking at the whole picture of a given issue. It has been structured in such a way that when a given area is selected, subsequent related topics are shown in a comprehensible and intuitive manner. By employing interactive navigation and an integrated approach we have added more functionalities to enable users to shift intuitively between operating and financial and non-financial data, GRI indicators and strategic objectives.

I cordially encourage you to review the PZU Group’s 2019 online report.

Tomasz Kulik

CFO