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PZU Group

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List of GRIs

8. Equity management

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On 25 March 2021 the PZU Supervisory Board adopted a resolution to approve the PZU Group’s Capital and Dividend Policy for 2021-2024 (“Policy”).

In accordance with the Policy, the PZU Group endeavors to do the following:

  • manage capital effectively by optimizing the usage of capital from the PZU Group’s perspective;
  • maximize the rate of return on equity for the parent company’s shareholders, in particular by maintaining the level of security and retaining capital resources for strategic growth objectives through organic growth and acquisitions;
  • ensure sufficient financial means to cover the PZU Group’s liabilities to its clients. 

The capital management policy rests on the following principles:

  • manage the PZU Group’s capital (including excess capital) at the level of PZU;
  • sustain target solvency ratios at the level of 200% for the PZU Group, PZU and PZU Życie (according to Solvency II);
  • maintain the PZU Group’s financial leverage ratio at a level no higher than 25%;
  • ensure funds for growth and acquisitions;
  • maintain the financial conglomerate’s surplus own funds above the pertinent requirements for solvency;
  • PZU will not issue any new shares for the duration of this Policy.

It is assumed that certain temporary deviations in the actual solvency ratio above or below the target level may occasionally occur.

The PZU and PZU Group’s dividend policy rests on the following principles:

  • The PZU Group endeavors to manage capital effectively and maximize the rate of return on equity for PZU’s shareholders, in particular by maintaining the level of security and retaining capital resources for strategic growth objectives through acquisitions;
  • the dividend amount proposed by the PZU Management Board paid for the financial year is determined on the basis of the PZU Group’s consolidated financial result attributable to equity holders of the parent company, where:
    • no more than 20% will be earmarked as retained earnings (supplementary capital) for goals associated with organic growth and innovations as well as execution of growth initiatives;
    • no less than 50% is subject to payment as an annual dividend;
    • the remaining part will be paid in the form of annual dividend or will increase retained earnings (supplementary capital) if significant expenditures are incurred in connection with execution of the PZU Group Strategy, including in particular, mergers and acquisitions;

subject to the items below:

    • according to the PZU Management Board’s plans and risk and solvency self-assessment of the parent company, the own funds of the parent company and the PZU Group following the declaration of payment or payment of a dividend will remain at a level that will ensure fulfillment of the conditions specified in the capital policy;
    • when determining the dividend the regulatory authority’s recommendations concerning dividends will be taken into consideration.

External capital requirements

According to the Insurance Activity Act, the calculation of the capital requirement is based on market, actuarial (insurance), counterparty insolvency, catastrophic and operational risks. Assets, liabilities and as a consequence own funds covering the capital requirement are measured at fair value. The capital requirement is calculated in accordance with the standard formula at the level of the entire PZU Group.

Pursuant to Article 412 sec. 1 of the Insurance Activity Act, the PZU Group is obligated to prepare and disclose an annual solvency and financial condition report at the group level drafted in accordance with the principles of Solvency II. The 2020 report published on 12 May 2021 is available online at For the 2021 report, the publication deadline is no later than 20 weeks after the year end, that is until 20 May 2022. Pursuant to Article 290 sec. 1 of the Insurance Activity Act, a solvency and financial condition report of an insurance undertaking is audited by an audit firm.

Irrespective of the foregoing, some PZU Group companies are required to comply with their own capital requirements imposed by the relevant legal regulations.

The PZU Group’s solvency ratio as at 31 December 2020 published in the PZU Group’s 2020 solvency and financial condition report was 236%. In 2021 the solvency ratio (standalone and consolidated alike) reported to KNF and not subject to verification by an audit firm as at the end of each quarter stayed above the level of 200%. As at the date of signing the consolidated financial statements, the calculation of the solvency ratio as at 31 December 2021 has not yet been available.

The maintained levels of solvency ratio comply with those assumed in the capital policy of the PZU Group.