Health - factors that may affect the PZU Group in 2022

The main risk factors include:

• changes in fertility, mortality, and morbidity rates, as well as the health consequences of the fact that during the pandemic treatments for certain conditions (e.g., cardiovascular and oncology) were postponed, may affect the value of sales and the loss ratios (e.g. in subscription plans or in health insurance);
• changes in trends and behaviors displayed by clients, who will start searching for customized offerings – clients’ new expectations may bring about the need to change processes and systems, which in turn may affect the bottom-line results;
• uncertainty surrounding the evolution of the pandemic and potential limitations in the operation of medical facilities may significantly affect the performance of medical centers;
• an increase in unemployment and uncertainty on the labor market may reduce sales growth of new insurance and medical subscriptions for corporate employees;
• 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;
• the demand for specialized doctors exceeds the supply, which may slow down growth and affect margins;
• salary pressures exerted by doctors and other personnel serving patients in medical centers may directly affect financial performance in the health area;
• wage pressure combined with an increase in demand for medical services may result in limited ability of providing these services in selected medical centers – medical personnel may prefer/accept only facilities that meet higher employee compensation expectations;
• relatively high saturation of the market in larger cities and also staff shortages and lack of customer potential in smaller towns may reduce growth rates;
• potential modification of the valuation of outpatient specialist care services by the National Health Fund may cause significant changes in the financial results generated by medical centers;
• stronger and/or more aggressive policy geared at the development of the network of own facilities by competitors in the market may significantly affect the options available to patients or the competitive position of medical operators in the long term.