Medical services (Health)

Market situation

The health market is a business area that is dynamically developing and prospective. The current trends are as follows:

• continuation of the double digit pace of growth in the private health insurance market (according to PMR¹: CAGR of approx. 13% for supplementary health insurance in 2019-2024, while for subscriptions CAGR was approx. 11%);
• development of telemedicine and service opportunities through remote channels;
• greater need to provide care to senior citizens;
• increasing awareness of prevention and periodic examinations.

In accordance with PMR data ¹: at the end of 2018, private health care offered under fee-for-service products was worth PLN 18.9 billion (up 10.5% y/y). In turn, the value of medical subscriptions was PLN 4.5 billion (up 13.6%), while the value of private health insurance climbed to nearly PLN 1.0 billion (up 17.3% y/y).

Operations in the Health area

PZU’s operations in the Health Area include:

• sale of health products in the form of insurance (life and health insurance and non-life health insurance) and non-insurance products (occupational medicine, medical subscriptions, partnerships and prevention programs);
• development of medical infrastructure (medical centers and patient service solutions) in Poland to ensure the best accessibility of services and the achievement of revenue targets.

In the Health Area the company offers a broad range of health products adapted to the segment and clients’ needs:

In 2019, the PZU Group’s offering in the Health Area changed as follows:

• launch of pilot sales of PZU Z Myślą o Życiu i Zdrowiu (PZU Thinking about Life and Health) product (May 2019) directed to companies employing up to 4 people. Each option of the offer may be additionally extended by private medical care. The insurance ranges have been prepared to address different needs, depending on the client’s stage in life;
• commencement of pilot sales of 2 new ranges of the two new ranges of the Opieka Medyczna S (Health Care S) health insurance for corporate clients (June 2019) – the first range is profiled to enable a detailed checkup of the health condition of the thyroid gland, liver, heart, arteries and kidneys. The second range enables tests profiled for malignant neoplasms occurring most frequently in women and men. The most notable benefits include: analysis of results of marketing surveys: prevention of the illnesses that clients fear the most, benefits requested most frequently by sales in non-standard offerings, increase of market advantages – by adding medical services and keeping prices at attractive levels;
• as part of the PZU Ochrona i Zdrowie (PZU Cover and Health) product, since July 2019 the option has been implemented of selling standalone proposals consisting of only the protection part (PZU Życie under Cover) or the health part (PZU Zdrowie under Cover). This insurance is dedicated to small and medium-size enterprises employing at least 3 staff. Spouses, life partners or adult children of the primary insured (employee) may also benefit from this proposal.
  PZU Życie pod Ochroną (PZU Life Coverage) provides support for the insured’s family in the event of the insured’s death as well as a cash benefit and medical services, including in the event of an accident or a critical illness. Each employee may also individually extend the cover to include financial support in the event of a child’s health problems, co-funding of prescription drugs and additional financial support in the event of an accident in everyday life.
  PZU Zdrowie pod Ochroną (PZU Health Coverage) offers, among other benefits, access to doctors and tests in over 570 cities and towns across Poland. Each employee may individually extend the cover to include co-funding of prescription drugs and medical care for family members.The newly introduced possibility of selling standalone products enables the agent to tailor the offering to the needs of the specific insured;
• in November 2019, the option was added to the PZU Ochrona i Zdrowie (PZU Cover and Health) product that makes it possible to offer the owner, in addition to the higher medical care variant, the option of creating the whole variant adjusted to his or her specific needs – the condition for saving such an offer is a premium of at least PLN 150. The insurance cover of the higher variant developed for the owner may also include his or her relatives.Moreover, as part of product improvements, the following elements were added to the offering:
• “Certificate” document handed out to the policyholder by the agent immediately after the policyholder has signed the application for the execution of the insurance agreement. The document contains the bank account details and the date of payment of the first premium as well as instructions on how to benefit from the insurance cover from its first day of validity;
• welcome pack – a set of materials that the agent may send by e-mail to the policyholder after he or she has signed the application.The set includes documents facilitating the policyholder’s becoming familiarized with the insurance in detail and providing the policyholder with additional information, specifically templates for completing the declaration by the insured, a detailed list of medical services available under the selected cover, an explanation, written in plain language, of the statements collected on the declarations, a leaflet informing the policyholder how to set up a MojePZU account, a guide on insurance services for companies (accounting, tax and legal issues, insurance-related services, reporting of insurable events, filing of complaints).

In an effort to develop the Health Area in 2019:

• PZU Zdrowie completed numerous acquisitions of medical entities and included them in its own network. This means that, at the end of 2019, its own network consisted of 130 centers:
• acquisition of FCM Zdrowie, one of the largest outpatient networks,
• takeover of the Alergo-med medical center in Tarnów,
• acquisition of Tomma Diagnostyka Obrazowa, the largest network in Poland in terms of the number of diagnostic laboratories;
• two new facilities were opened under the PZU Zdrowie brand – in Wrocław and Radom;
• PZU Zdrowie expanded its service provider network by including more cooperating centers, which means that at the end of 2019 PZU’s partner network already had approx. 2,200 centers;
• dental services were launched as a new business line in PZU Zdrowie’s own centers (Warsaw, Kraków, Poznań, Wrocław);
• a new hotline operation model was fine-tuned to service clients holding health products, including life insurance and non-life insurance with a health rider, online tools were developed to increase the percentage of cases handled during first contact. The hotline structures operate in PZU Zdrowie as the Medical Service Management Center (CZUM), which also allows for integrated management of client experience and improvement of the service quality, while also testing innovative solutions;
• an EDM system was rolled out in PZU Zdrowie’s own centers;
• a tool has been developed further for booking on-line appointments through a direct connection with the calendars of cooperating medical centers. At the end of 2019, PZU Zdrowie was connected to approx. 200 medical centers located across Poland and comprising the PZU Zdrowie network as well as to external partners;
• in September 2019, PZU Zdrowie became the first medical operator to launch the Virtual Clinic service enabling patients to undergo a full medical process without leaving home. The service enables the purchase of a telemedicine appointment with the selected specialist physician, the collection of recommendations and e-prescriptions and the placement of orders for medications to be collected later from a conveniently located pharmacy;
• PZU Zdrowie also put at the disposal of its clients the first telemedicine doctor’s office in which the patient has the option to undergo diagnostics using telemedicine equipment, followed by a video consultation with a physician;
• PZU Zdrowie participated in the PZU Group’s Safe Summer Vacation prevention campaign and carried out several dozen Health Zone prevention programs for employees in various companies across Poland.

PZU Zdrowie received a number of industry awards and distinctions:

• Employer/Provider of Health – a certificate awarded by the Ministry of Health to companies and institutions that demonstrate care for the health of their employees and effectively execute health promotion programs internally;

• Hippocrates of Health – several physicians from PZU Zdrowie facilities were awarded in the Hippocrates of Health contest organized by medical communities in each voivodeship (first place in the Cardiologist of the Year category, second place in the Gynecologist of the Year category);

• Leader of e-Health – PZU Zdrowie’s Artimed Medical Center in Kielce was granted a distinction in Dziennik Gazeta Prawna’s contest for promotion of the e-prescription system. PZU Zdrowie’s center in Kielce is a leader in terms of the number of e-prescriptions issued;

• 100% Polish Product – a contest organized by the weekly Do Rzeczy to honor companies that support the development of the Polish economy.

Factors, including threats and risks, that may affect the operations of the Health Area in 2020

• changes in the current mortality, fertility and morbidity levels, which may adversely affect the value of sales and cause a deterioration of the loss ratio (e.g. subscriptions or health insurance);
• changes in client trends and behaviors towards customization of the offering. Clients’ new expectations may bring about the need to change processes and systems, which in turn may affect the achieved bottom-line results;
• the entry into force of the Employee Capital Scheme Act is yet another benefit for employees, which may cause a deterioration in the interest in our health care offering due to budgetary constraints on the part of employers;
• continued pressure on the prices of group insurance products. The market for health services remains very competitive both in terms of prices and the range of available services;
• salary pressure exerted by doctors and other personnel serving patients in medical centers, which directly affects PZU’s financial performance in the Health area;
• potential modification of the National Health Fund’s contracting rules may cause significant changes in the financial results generated by medical centers.

¹ PMR Report entitled „Private Health Care Market in Poland 2019” dated July 2019