Q2 2026 Powszechny Zaklad Ubezpieczen Spolka Akcyjna Earnings Call
Speaker #1: Dzień dobry państwu.
Speaker #2: Good morning, ladies and gentlemen. Welcome to this conference, where we'll discuss the results of PZU Group for the second quarter of 2026 and the first half of 2026.
Speaker #2: The presentation will be delivered by Mr. Ben Chung, CEO, as well as Maji Fedona, who is responsible for the risk and finance area. CEO Mr. Ben Chung, without further ado, I pass the floor to you.
Speaker #2: Welcome to this press conference after the first six months of 2026. Ladies and gentlemen, we have looked into the results of the PZU Group following the first six months of our operations this year, and I must tell you, we are proud of them.
Speaker #2: In our rush to tell you why, and the past six months have proven really demanding, and this demanding character was very much due to the geopolitical environment, which had a lot to say as regards the situation on the financial markets. But also, it was due to what happened under the Polish market.
Speaker #2: We had new tax regulations, we had new regulations on ECG, and regulations concerning the tax rates, plus the very character of the transportation system settlement in Poland.
Speaker #2: This notwithstanding, we have proven we are really resilient. Our ecosystem at PZU Group has been resilient, and thanks to that we have been able to manage and to have sales secured at 15.7 billion Polish zlotys—almost half a billion more year on year.
Speaker #2: We obtained PLN 3 billion net AROE exceeding the level of 17%. And parallel to that, we secured a very sound financial standing of PZU—that is, our capital position was at 230%, and PZU SA at 233%.
Speaker #2: Moreover, we took a decision to pay out a dividend equivalent to 4.8 zlotys. Historically speaking, this has been one of the highest dividend levels ever at PZU Group.
Speaker #2: This means we catered to the commitments we had once presented before our shareholders and all stakeholders. In May this year, S&P has made our credit rating stable at A minus with a positive outlook, importantly.
Speaker #2: SAP has highlighted that, as a group, we remain stable capital-wise, and we are very flexible in terms of the growing capital requirements, which are linked to the changing solvency that will enter into force as of January 2027.
Speaker #2: Our solvency too is at 230%. It is a bit conservative, but at the same time, it's to be considered a very effective credit investment portfolio.
Speaker #2: This is an added factor, and yet another factor is our reinsurance program. What are the sources of the growth in question, and the results we obtained in the first six months of 2026?
Speaker #2: For the details, we will hear from Maji Fedona. We will go through each and every segment of our operations. Now, we'd like to stress that our major growth pillars have been group insurance revenue as well as individually continued insurance revenue.
Speaker #2: There is one factor that I particularly enjoy, and that is we have been following up on the growth in our individually protected insurance revenue. Furthermore, we have secured a 30% growth over the last six months in assets of external clients.
Speaker #2: This is very positive information, because in all these factors we have undertaken very effective actions, and they have brought about some tangible results.
Speaker #2: And let me now refer to some of your comments. We have prepared some information on PZU Zdrowie, where we have grown at a double-digit rate.
Speaker #2: Well, you may recall that when I joined the Board, I kept stressing that investments should remain central to our operations at PZU Group. So, let me draw your attention to that.
Speaker #2: And happily, after six months, we have secured almost 40% growth in the assets of external clients, which are managed by the PZU Group TFI—that is, TFI PZU, PKO TFE, TFI, and Alur TFI, respectively.
Speaker #2: Now, moving on to PZU Zdrowie. Have a look—we have managed revenue growth here. At the same time, we have concentrated on making our own press as comprehensive as possible.
Speaker #2: And linked to our life insurance scheme. Parallel to that, we have developed our offer in terms of the PZU Zdrowie services pillar. Here, we focus on two elements.
Speaker #2: Number one, expansion of our own medical facilities. The number of facilities increased to 133. Yesterday, we had a new entry—a 134th facility located this time in Bydgoszcz.
Speaker #2: Furthermore, we have followed up on our acquisitions in Poland, and, adding to that, we are minded to expand our offer both at PZU Group and at our capital group.
Speaker #2: One example being the acquisition of Babka Medica plus BoraMed, another company. And we really want to make the best of the potential those two companies present; they are especially good at women's health.
Speaker #2: Well, healthcare. As regards CM Gamma, here we are happy we have obtained some Polish expert orthopedists. Thanks to that, we can guarantee to our customers some of the most sophisticated treatment options in the area of orthopedics.
Speaker #2: Our network is well developed. But if there are any white spots, we intensely search for facilities that we could possibly acquire—one example being CM Osteotex.
Speaker #2: This particular facility covers one specific white spot that we had had in the past. And that is precisely the line we are minded to pursue in the future as well.
Speaker #2: The overarching goal is to make access to leading specialists easier, and the same holds true for making access to some advanced treatment options.
Speaker #2: We want the offer for our customers to be as comprehensive and holistic as possible. The first six months of 2026 have been marked by the constant expansion of our product offer.
Speaker #2: Examples include PZU OrtoPlan, in addition to group life insurance programs. It makes it possible to cover the costs of planned orthopedic surgeries connected to the ramifications of accidents.
Speaker #2: And this is how we want to make our offer more and more comprehensive. Now, non-life insurance segments. We have supplemented our offer directed at SMEs, expert network for our insurances: personal accident and business interruption (BI) insurance.
Speaker #2: This is a segment that has started to play an ever more prominent role in our economy, and that's why we want our customers to have access to modern solutions provided by the PZU Group.
Speaker #2: We also coordinate the insurance scheme, which is addressed at the nuclear sector, and my colleagues are very active in this domain, preparing the offer for our partners.
Speaker #2: Let me get back briefly to the investment pillar. Now, we manage as many as 139 million assets at ETF PZU. And let me tell you this.
Speaker #2: We are especially proud of the fact that almost 60 million of these assets are connected to long-term saving schemes. They are both pension products as well as the PPK scheme.
Speaker #2: There is yet another success, where mentioning at TFE PZU, they have received a level of more than 130 million, and that's the fact that makes us all very happy. I trust it marks a new beginning on the path that we want to pursue.
Speaker #2: There are some new listings of other TFFs. And let me take this opportunity to tell you that we are all sellers at PZU.
Speaker #2: We are all salespeople, and that's why we'd like to encourage you to take advantage of one particular discount on our TFEs and purchase them under very favorable conditions.
Speaker #2: The discount will last until the end of the year. So, we have discussed pure business, but there is also a whole range of other strategic projects that we have pursued, and they are meant to boost our effectiveness.
Speaker #2: And especially, we concentrate on boosting our effectiveness in terms of technological debt that we incurred in the past. We are very much minded towards an AI strategy, and these steps are intended to make us AI-ready.
Speaker #2: The last conference was about our technological platform. Now we are speaking about forthcoming projects or platforms that will be attached to very particular segments of our operations.
Speaker #2: The goal is to boost quality as well as effectiveness in terms of process management. We want our employees to be able to focus solely on customer experience and on making our products and services as good as possible.
Speaker #1: Jak skalujemy.
Speaker #3: So how do we scale up AI at PZU? We have already implemented over 30 AI-enabled solutions, and we have over 30 new initiatives under development.
Speaker #3: We focus on those domains on the on the following domains underwriting and products in the business section we are about to open a a project that will implement a new operating model for a business sales.
Speaker #3: And in that model, we want to use AI-enabled solutions. In sales and marketing, we intend to use various AI-based components that would increase the quality and efficiency of customer service.
Speaker #3: In terms of claims handling, we will soon announce the implementation phase of a new system for claims handling. This system will be AI-ready. Please note that in claims handling, the PZU Group handles about 10,500 claims, and we are paying out about 35 million Polish zlotys daily.
Speaker #3: Therefore in this specific area we see a great potential for improvement for improvement of our efficiency. Lastly customer service and organizational support. This is another domain in which we want to introduce AI enabled solutions.
Speaker #3: The plan is, of course, to implement new solutions, but I can already share with you some examples of what we have managed to achieve thus far.
Speaker #3: Last year at PESATU Group, the number of codes generated using artificial intelligence was zero. Today, the number of code lines that is generated using AI tools amounts to 30% of all code written in our company.
Speaker #3: So, we have made a large step forward, but we're very well aware that there is a long way to go. We have been consistently implementing our strategy to become a regional insurance leader.
Speaker #3: We are finalizing the acquisition of MetLife Ukraine. Currently, we are in the process of obtaining the approval of an antitrust authority, and we hope to close this deal at the beginning of next year.
Speaker #3: We also want to simplify the PZU structure in Poland. As part of that, we are moving forward with implementing the merger plan with LINK4.
Speaker #3: We hope that the merger will take place in January, and we hope that we will be able to effectively put to use the multi-brand strategy. Following the year together with KUKA KUKE, we have launched a new product, and this product offers insurance coverage for extraordinary risks related to military activity in Ukraine.
Speaker #3: So now I'll just give you a brief reminder of our position in Poland and abroad. We are the leader of the Polish market and also in Lithuania.
Speaker #3: We're number one as far as non-life insurance goes, and we rank sixth in terms of life insurance in Latvia. We are also number one in non-life insurance in Estonia.
Speaker #3: We rank fourth for non-life insurance in Ukraine. We rank ninth for non-life insurance, and we rank fourth for life insurance. And as I've said before, the closure of the MetLife merger is in the pipeline. Once it's finalized, we will become a leader in the Ukrainian market.
Speaker #3: After Q1 2026, our market shares are as follows: 28.5% in non-life insurance, and in life insurance, we had over 40% as far as regular premiums go.
Speaker #3: My colleague Will is about to give you some more detailed numbers, but before I give him the floor I would like to highlight our corporate social responsibility initiatives.
Speaker #3: You can scan this QR code to access the website where you can find more information about PZU's social engagement over the last few decades.
Speaker #3: And now I just want to highlight a few initiatives that we implemented in the last six months. Forty-seven thousand children were trained with our support on how to stay safe when close to water.
Speaker #3: We have trained 1,800 people in life-saving skills. We have provided 4,000 safety helmets for cyclists. Also, in cooperation with voluntary firefighters, we sponsored over 3,000 smoke detectors in 2026.
Speaker #3: We also support voluntary mountaineer rescuers, as well as voluntary firefighters and voluntary lifeguards in Poland. Additionally, we support the police and other uniformed services.
Speaker #3: In our country, corporate social responsibility is something that has been present in our group's DNA. I also believe that this is something that makes us stand out against the competition, who also can create similar initiatives and open funds that would be dedicated to corporate social responsibility.
Speaker #3: That’s all from me. Now, I’ll give the floor to Maciej, who will provide you with some hard financial data. Thank you for your attention.
Speaker #3: Ladies and gentlemen, it's a great pleasure for me to present such outstanding results yet again. The CEO has already said that the total net profit in the first half of this year was slightly above 3 billion Polish zlotys.
Speaker #3: This is a very good result. We are pleased with it. And we like to break down our results into individual quarters, although I must admit that it's not always a good idea to compare quarters one to one, because there are certain weather events or other events that generate variability and differences among individual quarters.
Speaker #3: However, one thing is clear from this data. The PZU group, thanks to diversification and having a very broad offer for customers and selling products across many channels, is very resilient and is able to generate very satisfying results. In the first half of 2026, the insurance service result is the strongest component in our results.
Speaker #3: It amounted to nearly PLN 2.3 billion. Our operating margin in life insurance, which is the key business indicator for us, amounted to 27.2%.
Speaker #3: And in the second quarter, actually, it was 29.1%, so it was even higher. We have managed to achieve such good results for the first half of this year.
Speaker #3: Despite minor headwinds and a slightly worse result in life insurance than in the previous year, in non-life insurance, the combined ratio is at 87.9%, so it's the same as last year.
Speaker #3: And in the second quarter, actually, we managed to achieve a combined ratio at 89%. This is a very good result, especially taking into account that it's the fourth consecutive quarter when the combined ratio is below 90%.
Speaker #3: Again, the last quarters and last year were not easy; there were numerous challenges. This only demonstrates that our company, thanks to a diversified portfolio and multi-channel sales, stays very resilient, and we can compensate for losses in one part of our activity—or potential losses—with good results in another sector of our activity.
Speaker #3: Also, the results that I'm presenting now show that actually we are quite reliable, and our results are predictable. Now, the main portfolio, the results and investment portfolio, was at 1 billion 400 million Polish zlotys.
Speaker #3: So it's very similar to the results that we published last year. And again, given the general volatility of the markets in 2026, this is a very good result.
Speaker #3: Interest rates are lower this year than last year. Therefore, the results and investment portfolio are very good, given that piece of information. There are differences among individual quarters, but that's attributable to those trends and one-off events that I mentioned.
Speaker #3: For instance, last time we did mention the impact of currency exchange rates on our portfolios. Well, I have prepared a separate slide dedicated to that, so I will discuss it in a moment.
Speaker #3: But let us now focus on our core activity. I always say that CFOs are very happy when revenue grows faster than costs, and that's the case. I always say that the CEO is also happy when this happens.
Speaker #3: So we have had a stable growth quarter on quarter and year on year. How did we achieve this? Well we had very good rentability sorry profitability and back then also mentioned the our our business strategy.
Speaker #3: We keep adjusting our offer to the needs of our customers in both group and individual insurance. We managed to keep the margin above 25%.
Speaker #3: It's been the case for some time already, and this is good news. On top of that, we have been developing individual protection insurance, and that's quite important.
Speaker #3: Important. The growth dynamic there is at 26–27%. So the importance of this offer has been growing in our portfolio, in particular given the fact that the margins on this type of insurance are higher than in group insurance.
Speaker #3: So, the structure of our portfolio is conducive to growth and growing margin. And often, during meetings with investors, we explain why we have growth in individual protection insurance.
Speaker #3: And during those meetings, we always stress the fact that the product and the offer are being constantly developed and adapted to the needs of our individual customers.
Speaker #3: That's one thing. And the second important aspect of it is making the best use of the skills of our sales force. As a result, they are able to target the right customers. So basically, our sales force has great potential, and we are making effective use of it.
Speaker #3: And this is already, I believe, a long-term trend that we can boast.
Speaker #2: Margin—and this makes up the complex margin at 29.2%. Right. Let me now jump on to discuss non-life insurance, and then life insurance.
Speaker #2: And afterwards, we'll discuss the written premium, which is slightly different from the revenue stream from life insurance. This is what merits one commentary after the first quarter.
Speaker #2: We said that the motor insurance environment has been demanding, especially when it comes to MOD insurance. This is visible in our results for Q2, especially when it comes to COR in motor insurance.
Speaker #2: And we are trying our utmost to change it because we had the negative result for one quarter. But as we go and read the figures, let me draw your attention to how high the revenue is for insurance, because this might be slightly misleading.
Speaker #2: You may recall last year we took a decision to shift some of the products in certain segments of our clients from the mass category toward a more individualized, customized underwriting process.
Speaker #2: And corporate field, and that is why we have a switch of written premium in between the said segments. Therefore, the revenue dynamic in the mass segment might look worse had we not taken that decision. Yet the decision in question was more than sound from the characteristics of the business process.
Speaker #2: And the same holds true for the pace of development in corporate insurance. It would have been slower had it not been for the decision that we took.
Speaker #2: So this effect is to be blamed for the negative result we obtained in the motor segment. It would have stayed negative, still it would have been significantly better than the result that we see now.
Speaker #2: And there is one more comment I wanted to share. This is something that we already said on the occasion of discussing our first quarter.
Speaker #2: Profitability in motor insurance is at a very satisfactory level. And this is mainly owing to the case handling staff and the case handling process, where we kept improving a lot.
Speaker #2: Especially when it comes to the expected value and the expenses overall in the area of case handling. We concentrate on the scale of improvement and streamlining, which is especially seen in motor TPL.
Speaker #2: COR stays at 95%. Why is it so high? And it is in the corporate area. Below 90%, it was not to be seen in MOD, and that's why there was no compensating effect.
Speaker #2: For the very consequences of the price pressure on that market. Well, that's one side of the coin. The flip side of the coin is some other positives that we have spotted already.
Speaker #2: Well, the draft voices on the market saying that there is a dichotomy between the medium claim and medium premium is not something good for middle players. We've been on top of all these things, and we hope for the trend to reverse in the coming months.
Speaker #2: Now, life insurance. As said, we rejoice a lot in the fact that the margin in subsequent segments is very good. By the same token, we have been very happy about the dynamics.
Speaker #2: In this segment, which had historically not been as robust in our portfolio, the margin is better and the pace of development is better.
Speaker #2: 5.2% of the premium dynamic in group as well as individual continued insurance is something that we need to pay attention to. Look at the demographic trends.
Speaker #2: There are less and less people in Poland—that's something that's set to stay and will for sure produce its ramifications also on our portfolio. Nevertheless, we have managed to grow at a pace of more than 5%.
Speaker #2: Now let us jump on to slide number 29, I'm sorry. So far, we've been talking about some metrics and values in line with IFRS. Insurance revenue is not something to be equivalent to the written gross premium in the domestic market.
Speaker #2: And let me now focus on the non-life insurance part. Have a look: in quarter two, the pace of our growth has improved significantly—6%. Twenty-six percent: in the second quarter of 2026, when compared to the second quarter of 2025, we have grown significantly in all the segments in question.
Speaker #2: So there is a rebound after the previous quarter. Where we were circulating around zero, now the results—let's discuss this harbinger of what is to be expected of insurance revenue.
Speaker #2: In the future. And now let us move on to the investment results. In quarter two, we saw very nice profitability in that portfolio, equivalent to 5.3%.
Speaker #2: Some part of it is due to the changing nature of the financial markets, and another part of it is due to the facts—not only the facts that we see quarter to quarter.
Speaker #2: One factor is the way you price the properties you've got, which may be either below or above the zero level, and this time it was in green.
Speaker #2: So we are happy about that. But look at the profitability of our main portfolio. Our result was 700 million Polish zlotys, and that's the major contribution to our overall profitability.
Speaker #2: Our interest rate revenues have been very stable. That's the effect of the stability in our investment strategy, which sees—or has seen—no revolutions whatsoever.
Speaker #2: The financial markets remain volatile. In that environment, we try to train every senior to secure our profitability—not only in the short term, but also over a longer time horizon.
Speaker #2: And that's something that is also due to the fact that the markets remain quite volatile. You may ask us a question.
Speaker #2: We've got such a nature of revenues, so maybe there is some gap to the fair value. Well, everything is to be seen in the valuation of payoffs, and you will have a chance to look at that on the forthcoming slides.
Speaker #2: Treasury debt, 70%. Debt instruments, 73%. In the first quarter, we registered the valuations, and the valuations showed a drop. It correlated with the uncertainty as a knock-on effect of the impression Gulf crisis. The second quarter was way more satisfactory.
Speaker #2: Here, because the interest rates were lower for the capital instruments, we gained as well on our investment equity funds. There is an important component which is related to both cybersecurity and artificial intelligence.
Speaker #2: These are two domains that produce a lot of money in Q2. On average, on average, the return on our main portfolio exceeds or has exceeded 5%.
Speaker #2: That's something that we can be very happy about. Anyway, there is no guarantee it will stay the same. Still, this is an important benchmark and may present a very nice contribution in this segment of our operations.
Speaker #2: Now, let me jump to the slide on solvency. From now on, we'll outline both the official solvency results in accordance with the current regulations.
Speaker #2: Additionally, we will provide you with a simplified calculation that will show you how our daily solvency would look had we taken advantage of the change in solvency rules.
Speaker #2: And the requirements of the changing banking sector. So the official solvency towards the end of March was at 230%. So, overall, a very satisfactory result.
Speaker #2: Counter to the fact that March presented a very substantial uncertainty on financial markets, debt instruments ballooned and it had its impact on the valuation of our portfolio.
Speaker #2: So, it's been taken into account and still did not make our results worse. They could have been even better if it hadn't been for making the solvency calculations merger.
Speaker #2: Let me comment on that. We've got our assets in the insurance world. In the case that we expect these assets will be distributed to our shareholders, then we will need to make these assets smaller.
Speaker #2: And here we come to our own funds. The situation is slightly different in the banking sector. This is more of an accounting metric. And that's why own funds are fed not by own result, but with some delay after some decisions have already been taken.
Speaker #2: Once the profits eventually stay within the bank—if we consolidate the assets, and bear in mind we are an important shareholder in two banks.
Speaker #2: There is a collision of two worlds. On the one hand, for the time being, we have not seen the emergence of the funds from the banks that will get to us after the dividend is paid off.
Speaker #2: And on the other hand, we take into consideration the whole group's results and some funds which are attributable to the result made by the banks.
Speaker #2: It's something very painful in the first quarter every year, because for that period of five quarters, banks are not taken into consideration in that calculation.
Speaker #2: Later on, the situation is different because the decisions in question have been made at the general assembly of the group. So, we misstate the current year data.
Speaker #2: So, there are no negative impacts on the banks or the insurance firm, but when we try to merge those two parts, some negative consequences might be felt.
Speaker #2: This notwithstanding, our results are really good. So, let us now look at how Solvency II regulations change and what kind of ramifications it will produce.
Speaker #1: If we applied Solvency II Directive at the end of 2025, our solvency, instead of 239%, would amount to 206%. We are not making any predictions regarding our solvency in 2027, because this depends on our balance sheet and also on the regulations that are in force on that date.
Speaker #1: For instance, in September this year, the bank buffer will go up by 0.1%. We also have our subordinated debt that matures in the second half of 2027.
Speaker #1: This will all have an impact on our situation, dividends included, so all these factors will affect our final solvency. On this slide, we present numbers that we would be reporting had we adopted the new regulations already today.
Speaker #1: My conclusion from these figures is as follows. Regardless of the scenario that we use to analyze the situation of, as a two group, in the next year, it is clear that our potential to keep our dividend policy unchanged is very high.
Speaker #1: It's very likely, because the group solvency will stay over 200% after the new regulations come into force and in a volatile environment. And we have already reported that our benchmarks are 190% until Solvency II enters into force and 182% after Solvency II enters into force.
Speaker #1: And we managed to achieve it. Moreover, these benchmarks are much higher than recommended by the financial authority. So these figures show that we're on the right track and that our business operations and dividends are safe.
Speaker #1: In the previous meeting, we have already signaled that we have a few measures that we can take if we need, if the situation worsens. And what we can do is we can change the risk level in our investment portfolio.
Speaker #1: We can modify our reinsurance policy, and as I've said, we are having an ongoing conversation with the financial authority regarding the actuarial risk of our insurance products.
Speaker #1: And these are all three independent areas of our involvement. And then it all boils down to one important piece of information: our state as it is.
Speaker #1: It's not threatened in any way. Also, the SA two board has some instruments and measures it can take, like reorganizing the group. But for now, there is no need to do it inside.
Speaker #1: That's all from us, and we're open to taking questions. Are there any questions in the room? Good afternoon. I represent City Handlove Bank, and I have two questions.
Speaker #1: Regarding your presentation, the first question is on non-life insurance and CASCO motor insurance. In particular, the data regarding written premium shows that there are some payment issues in the CASCO sector. How do you explain this?
Speaker #1: Well, first of all, we have a very good market penetration rate. In our case, that ratio is very high—definitely above average, especially compared to TPL.
Speaker #1: The price effect in motor own damage has its explanation. Cars are becoming less expensive, so this translates into a reduced sum insured. So the premium might actually go down because of the lower value of vehicles.
Speaker #1: So that's one part of the explanation. Another part of the explanation is that our market share in the CASCO segment is much higher than in TPL.
Speaker #1: Therefore, our sensitivity regarding market phenomena is different in the CASCO segment than it is in third party liability insurance. For this reason, the price pressure in the CASCO segment affects the gross written premium, while in TPL the price sensitivity is less pronounced and our portfolio is growing faster.
Speaker #1: I'd like to underline that in both TPL and MOD, we report growth in the number of customers and growth in the premium rate.
Speaker #1: We are trying to optimize the selection of customer groups in both segments. We're also trying to find possibilities for increasing the premium wherever it's possible.
Speaker #1: Recently, we have heard some positive news from the market. But there are also new competitors entering the published market, which means that we will have to create our policy with the competition in mind.
Speaker #1: And we'll continue to do so because this is a foundation of our group's activity. We offer a broad range of products for a broad range of customer groups.
Speaker #1: We sell them across many channels, so we are not aiming at increasing our market share at any cost. Our aim is to cater to the needs of Polish citizens and offer quality products.
Speaker #1: Thank you very much. My second question regards life insurance. Congratulations on the growth of the gross written premium, especially in individual insurance. Can you give me more information regarding the structure of the premium?
Speaker #1: How does it break down into protection and investment? I remember that in previous presentations you were giving us more details. Let me answer this way.
Speaker #1: We are very proud of our growth, and this growth concerns mainly individual protection insurance. So the growth does not originate from selling investment products, or products that are qualified under the Polish regulations as one-off written premium.
Speaker #1: The numbers that we give are based on IFRS 17 applied to individual protection. Life insurance products always include some investment component, but it does not affect the growth of the premium that we present.
Speaker #1: What we are proud of is the growth of individual protection coverage offered to individual customers. This result does not stem from any one improvement to the product, but from stable growth and adapting our offer so that it responds best to our customers’ needs.
Speaker #1: This was not something that was our area of specialty, but this has changed, and we are growing intensely. If there are no more questions in the room, I will read out the questions that we received online.
Speaker #1: So, Trigun brokering house. Martin Marcinowski, can you give us a brief comment regarding the competition? You've said that PZU has been growing in certain segments.
Speaker #1: Unfortunately, the interpreters did not receive that question, and it was read out very quickly. So, Maciej has given you the answer regarding the motor sector, and the changes in the motor sector are caused by reclassification of the products that we carried out within PZU.
Speaker #1: But you need to pay special attention to the type of contracts that we have with corporate clients in motor insurance. Usually, those contracts are entered into for a period of one year, and the price is fixed for one year.
Speaker #1: Now, regarding non-motor insurance, I will reiterate what Maciej said—namely, to give you the sources of our group's resilience. We offer, as much as he has said, many products, and we take advantage of that.
Speaker #1: So we are successfully selling non-motor insurance to mass customers—non-life insurance, that is. And in the corporate segment in non-life insurance, well, what happened there was that the market cycle has changed.
Speaker #1: So the prices in non-life insurance in the corporate segment have been falling. Sorry, not non-life, non-motor. The speaker corrects himself. Maciej, do you have anything to add?
Speaker #1: Well, not all product lines are growing at the same pace. In some segments, we report double-digit growth. In SMEs, the growth is, well, not in double digits, but we're growing at a pace closer to 10% than 5%.
Speaker #1: Crop protection in that segment—actually, we're not growing, and that segment has negatively affected our sales dynamics. We are reporting growth in tourism and travel insurance, and we want to grow more.
Speaker #1: And we have seen amazing growth in additional motor insurance. So that was in the mass insurance segment. And now, in the corporate insurance segment, if we examine the dynamics of the entire portfolio, we'll notice that the major role is played by large investments that translate into written gross premium.
Speaker #1: Gross written premium. And we're generally quite optimistic about the growth that we may expect this year and in the following years. It seems that there is a good mood among investors in Poland.
Speaker #1: Therefore, I believe that we need to examine the growth in the corporate sector over a larger time frame than individual quarters. And with large contracts, we observe an important role that is played by the global reinsurance market.
Speaker #1: So if the markets are more risk-ready and they value risk, they may estimate the risk value at a lower rate than it affects the gross written premium.
Speaker #1: Also, we must remember that market share is not our main goal. We just treat it as an indicator of our position, so we have a healthy attitude toward it.
Speaker #1: And we focus on our product groups on the margin. Yeah, this is our main area of focus.
Speaker #2: Let me pick up on that. Let me pick up on the solvency question, just to disperse any potential doubt. We haven't mentioned that next year we'll have the due date of our subordinated debt.
Speaker #2: And in this context we have already started working out various scenarios. To be able to answer the question do we really need refinancing? And if we do in fact need refinancing then what are the terms for that?
Speaker #2: In what currency should it be a single event or maybe a more comprehensive program? That's something that we have already started working on. That's in the pipeline.
Speaker #2: Looking at the market trends, the environment stands at a very good place for whether or not we can obtain financing. Should there be any news in that regard, we'll share it.
Speaker #2: Anyway, we wanted to point out that we are working on that. We are following up, and should there be any opportunity for us to take advantage, we will.
Speaker #2: To other outstanding questions regarding solvency and dividend, Marcin Marcinowski's question: What will be the positive effect on solvency after the internal models have been implemented?
Speaker #2: Ladies and gentlemen, this is a bit of news we mustn't share, not because we don't want to boast about it. The reason is there is an ongoing dialogue between ourselves and the regulator, but it hasn't been brought to fruition yet.
Speaker #2: And it would be highly appropriate, should we share this kind of information, to first confirm whether the figures are sound-checked and whether we may already treat it as something granted.
Speaker #2: So, when we can, we will get back to you with a relevant bit of information. The effect in question is substantial. This is something that we can confirm now, but we mustn't give you any figure details.
Speaker #2: Another question also related to the brokerage office: last year, we had growth in a single result. DBS can also grow year on year.
Speaker #2: Our DS CEO, can you have a say on that? This year, we have—or we will—pay a very high dividend. One.
Speaker #2: Two. We've had a track record with the dividend and its annual growth. We've had a very positive six months of 2026 already, but as was mentioned, we mustn't compare quarter on quarter.
Speaker #2: Anyway, the intent of the entire Board is this: The dividend should be paid every single year in a way that makes our shareholders happy.
Speaker #2: That's the stance of the company. We are mindful of the expectations of our shareholders, and it is our intent to pay a dividend to our shareholders should the conditions be favorable every year.
Speaker #2: There is one more outstanding question, a brute one about the market. What is your outlook for the sector in the longer horizon? Do you see more consolidation coming, or maybe new players coming to the field?
Speaker #2: Recently, we've had two scenarios played out on the market. There have been some consolidations on the market as well. However, recently we have seen many new players emerge, also in line with the MGA model—that is the one that will also make its prominence under the domestic market.
Speaker #2: Let me just pick up on that and say for the consolid for the market consolidation and insurance well many events have already happened. Slide 13 will tell you the story in that on life insurance sees 75% of the market in the hands of four groups these are not companies because one group may see or may accommodate more than one company.
Speaker #2: Well, my takeaway is that as far as the consolidation level goes, there is not much room left, as the market itself is very concentrated. On the life insurance side, the image will present itself in different terms.
Speaker #2: In the life insurance part, we would like to see more consolidation coming, because the measures are rather low in our market and the market itself does not grow at the pace we would wish to see.
Speaker #2: In Poland, this segment has not been an important part of the savings portfolio. Should there be any important events happening, we will definitely communicate them.
Speaker #2: Anyway, there are some major global players opening up their activities here. Also, in the spirit of MGA, we are more than mindful of the trends we are talking about.
Speaker #2: Three gone. Dom Maklewski Marcinowski, are you in the position to quantify a target savings that may be there thanks to the AI implementation? Well, we look at it in—well, this is a process that we pursue to fold.
Speaker #2: Number one, and there is this technological part, but also we would like to expand on our activities based on modern solutions. Also, we'll look at the demography side, namely, thanks to automation, we can, so to say, respond to certain forecast challenges.
Speaker #2: To come, we must be ready. We must be ready in terms of our operations, to be able to provide as good as possible service and as efficient as possible service to our customers.
Speaker #2: Are there any other remaining questions in the room? Yes, there is one. Let me ask you another question on some strategic outlooks. Are you planning to review or update the strategy, especially with regard to the revenue stream, which may be evolving somewhat differently from what you had expected?
Speaker #2: Well, we keep focusing on the accomplishment of strategic targets. Indeed, we have revenues in check. We are perfectly mindful of what the assumptions have been as we were working on the strategy a few years back.
Speaker #2: Anyway, we have now worked towards the initiatives which are in the pipeline and are intended to pave the way for another strategy to emerge for the years following 2027.
Speaker #2: We foreground the strategy components, such as revenue streams, and how we fare vis-à-vis our shareholder commitments to dividend policies of importance. We want to cater to the dividend expectations, notwithstanding the business environment, and we want to make our group easier, more resilient, and ready to pay off the dividend as per our commitments.
Speaker #2: Just to relate to the revenue part of the question, as Marty said, look at what is going on in the modern insurance segment. Some time ago, we would have had other assumptions for the development of the market, but now we must be rather neutral towards how the market fares.
Speaker #2: We must be flexible in order to be able to respond. If there is something that goes counter to our expectations, we can make the best use of the robustness of the PCO group in order to be able to switch the focus a bit.
Speaker #2: Look, look at what or how we fare at our core. That’s the fourth quarter of the year, whereby our core is below the 90% level.
Speaker #2: Which means the system we've adopted has proven operational and has worked out. We must also act on scale. It goes beyond any question.
Speaker #2: The margin in the motor insurance is delivered on. Whenever possible, we try to take advantage of what is going on in other segments too.
Speaker #2: A quick reminder, ladies and gentlemen: some time ago, the Health segment required a lot of the Board's attention. Now, the situation is different.
Speaker #2: We have built up our competencies. We have built up the scale. We have invested in technologies. Why? Because this is, you know, a fast track towards growth, and we also keep on responding to the needs of our fellow citizens.
Speaker #2: Look at investments. We have developed our investment portfolio; there are new products that we've begun to offer, and they've proven successful. Just to tell you, we can respond ad hoc.
Speaker #2: In non-life insurance, we must work on effectiveness and the power of our tied agents. The tied agent channel, as well as the other channels, have already seen other initiatives to boost our effectiveness.
Speaker #2: Anyway, if our rivals win any prize, that's something unacceptable for us—number one. Number two, we must cater to our commitments, so that's basically the background.
Speaker #2: And we're still responsible, right? Because we mustn't allow for any single mistake. Marty said, we are following up on the market developments; if the model trends look the way they do, we try to compensate by working over advantages in other sectors.
Speaker #2: So we are mindful of that. We are mindful of the cycles. But there is another background that we must experiment on. We've gotten infrastructural investments, but bear in mind these are going to be only one-off, not something sustainable.
Speaker #2: That's something that we must invest ourselves in. Otherwise, we will miss the chance. And all the way along, we present the solid position of our group.
Speaker #2: Look at how our banks performed in the first six months of this year. The situation was very complicated, and the banks had plenty of challenges to respond to.
Speaker #2: They were as big as the ones that we saw in the insurance business. To wrap up our part on diversification, we are present in diversified segments, and our team can react, respond, and train every senior to take advantage.
Speaker #2: We've got loads of things to do to better our effectiveness, and the technological—that is something that we must pay back as soon as possible.
Speaker #1: The securities.
Speaker #3: A question from PKO Security: What would the solvency ratio be if we included the 2% buffer? Well, obviously, it would go down, but that change would not be significant.
Speaker #3: We'll present the results for Q3, and then you will see the effect of this 2% buffer, because it will already be in force. There are also other indicators that will improve our solvency.
Speaker #3: So you will see this for yourself. And we decided to present data today without speculating on what would be, had we adopted a given indicator or complied with the regulations that are about to enter into force in the future.
Speaker #3: So we presented the result and the results in the under the current currently binding regulations and in Q3 we will show the results that include the 2% buffer.
Speaker #3: CEO, we announced this at our earlier conference, and as we in this group always respect our—like, we stay true to our word—we'll show it to you in Q3.
