Strategy PZU3.0: By 2020 the PZU Group will win the leading position in all key business areas: insurance, investments and private medical care

Strong position in insurance, strengthening of the investments area and comprehensive healthcare offering – these are the main tasks that the PZU Group adopted in Strategy PZU 3.0 for 2015-2020.

– Over the past few years we have laid robust foundations for further growth of PZU. Improvement of operating efficiency, high level of customer service, cost efficiency, refreshment of the image, acquisitions in the Baltic markets and implementation of a dual brand strategy have perfectly prepared us for entering a new dimension of business. PZU 3.0 will develop the aforementioned areas. By 2020 the PZU Group will achieve the leading position in key business sectors – says Andrzej Klesyk, and adds: – PZU 3.0 also means that we will follow three underlying values – efficiency, innovation and fair play.

Thanks to the previous strategy we have managed to maintain a high share in the insurance market and increase PZU Group’s international importance. Adding brand refreshment, implementation of the modern Everest policy system, revitalization of the branch network and introduction of break-through services: direct claims handling and proprietary fleet of replacement cars, one can see a picture of PZU that is consistent with the current perception among clients and investors – a company with continuously improving image and increasing market value.

Insurance

PZU intends to remain the unquestionable leader, setting standards for the market. This will be possible, among other things, thanks to the best in Poland claims handling, clear and transparent products and innovative solutions employing new technologies. It will be key to develop an ecosystem building loyalty and enhancing client involvement. The main drivers will be the two brands – PZU and LINK4. The Group envisages their development based on a strategy of complementary brands targeting clients with different profiles and needs. This will be combined with keeping the organizational independence and flexibility of LINK4.

A noticeable offensive will take place in the corporate client segment. The impact of the efforts in this area will be enhanced, among other things, by implementation of systemic solutions improving sales efficiency, risk management consulting and the highest level of the quality of customer and broker service.

These efforts will enable the PZU Group to grow its market share, by 2020, above 35 percent in the non-life insurance segment and over 43 percent in the life insurance segment.

Investments

In the area of investments, the PZU Group intends primarily to grow the share of PZU’s external client assets in the assets of the Polish TFI market. The objective is to reach at least 11.5 percent by 2020.

This will be supported, among other things, by launch of sales in foreign markets, launch of direct sales and offering of products with above-average investment results. The PZU Group will earmark at least PLN 200 million for this area. The expected dynamic increase of assets under management will translate into increase of the Group’s net result.

Health

The third pillar in the PZU 3.0 strategy is health and development of a comprehensive offering comprising the entire chain of healthcare services – prevention, outpatient care, hospital care, rehabilitation and long-term care.

Over the next 6 years the PZU Group intends to become the leader of private medical care, with a network of proprietary facilities, partner network complementing the proprietary network, and integrated medical documentation system (including an on-line patient account). By 2020, the insurer will earmark at least PLN 800 million for this purpose, including PLN 450 million for acquisitions only.

The PZU Management Board forecasts that as a result of execution of the strategy, PZU Health, the company responsible for this area, will increase revenues to at least PLN 650 million by the end of 2020.

International expansion

On all markets where the PZU Group already has a footprint, the latest strategy assumes that the Group will win the position among top three companies measured by gross written premium.

The leading position in the regional insurance market will be maintained, however, thanks to expansion in foreign markets. This will be possible thanks to identification of attractive acquisition targets and efficient management of foreign operations.

In 2020 these actions are expected to bring the share of premiums from PZU Group’s foreign operations to more than 8 percent (increase by at least 5.2 p.p.)

Full digitalization

Attainment of all of the aforementioned objectives will be supported by full implementation of the digital operating model by 2020. It will provide a 360° picture comprising the entire history of relations and contact with the client, flexible customization of the offering to meet customer needs, multi-channel sales and customer service, full digitalization of client processes and process management with strong support from systems defining the roles of process participants.

Strategy effectiveness measures

Apart from the aforementioned measures, in 2020 the PZU Group intends to record an increase of the number of products per retail client to 1.68 (from 1.45), increase of the employee involvement ratio to at least 65 percent (from the existing 48 percent) and maintain high business efficiency (ROE and operating margin in group and individual business at 20 percent). Additionally, the PZU Group assumes that PZU SA will have the combined ratio at least 3 p.p. lower than competitors.