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Operating model


Insurance (international operations)

PZU AR 2020 > Market and business > Business model > Insurance (international operations)
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Lithuanian market

According to the Bank of Lithuania, in 2020 gross written premium collected by non-life insurance companies totaled EUR 664 million, representing a decrease by 1.6% compared to the previous year.

This was attributable mainly to motor insurance that has a dominant market share (59.7%). Reduced traffic on the roads as a result of the restrictions introduced in connection with the COVID-19 pandemic and the increasing competition between insurers brought down TPL premium rates by 7.3% and MOD rates by 1.9%.

Real property insurance was resistant to the crisis. The premium written growth in this group remained at 8.0%. The health insurance sales, which dynamically increased in 2019, slowed down by 1.2% from the beginning of 2020.

As of the end of December 2020, there were 11 companies operating in the non-life insurance sector, including 7 branches of insurance companies seated in other EU member states. The number of companies dropped in comparison to last year after the Compensa and Seesam merger in July 2020.

Lietuvos Draudimas continues to be the largest insurance company in terms of total gross written premium in non-life insurance – the company’s market share at the end of 2020 stood at 29.6%. The shares of top four players in the non-life insurance market totaled 69.6%.

Gross premiums accumulated by Lithuanian life insurance companies in 2020 were EUR 291 million, up 7.5% relative to 2019. The increase was generated by regular premiums, increasing by 7.7%, and single premiums growing by 4.9%.

In the life insurance structure, unit-linked insurance represented the largest share at 65.1% of the portfolio value. Traditional life insurance accounted for 14.2% of written premium.

The value of new business dropped by 20.4%, which resulted from the restrictions imposed due to the pandemic. Premiums from the sale of new unit-linked products dropped 25.3%, and from the sale of new endowment products by 38.7%. Only premiums from the sale of life products increased – by 8.3%.

The Lithuanian life insurance market is highly concentrated. As at the end of December 2020, 8 companies operated in this sector but the share held by the 4 largest life insurance companies in total gross written premium was 78.1%.

Swedbank is the largest life insurance company in Lithuania in terms of total gross written premiums with a 23.3% market share. The next players are Aviva (19.2% market share) and Compensa (18.7% market share).

Latvian market

At the end of 2020 the Latvian non-life insurance market recorded a gross written premium of EUR 380 million, down 4.6% (EUR 18 million) relative to the previous year1.

The biggest drop in sales was recorded in motor TPL insurance (by EUR 14 million) and MOD (by EUR 6 million), which was related to the travel restrictions during the COVID-19 pandemic. The pandemic also resulted in a significant decline in the sale of travel insurance (by EUR 6 million). Health insurance, in turn, recorded an increase in sales by EUR 3 million.

The motor insurance business had the largest share in the non-life insurance market measured by gross written premium. Motor TPL insurance accounted for 23.7% of the market while motor own damage accounted for 23.0%. Also property insurance (21.3% market share) and health insurance (18.4% market share) had an important position in the product mix.

At the end of 2020, 10 insurance companies operated on the Latvian non-life insurance market; the top 4 insurers held 68.8% of the market.

1 The data published in 2019 took into account also the deductions associated with mandatory fees on account of motor TPL insurance. After their restatement, the sales growth rate is estimated at -5.5% y/y

Estonian market

In 2020, non-life insurance companies operating in Estonia recorded a decrease in gross written premium by 3.7%, recording sales in the amount of EUR 383 million. 32.0% of this amount, i.e. EUR 123 million, was collected by branches of foreign insurers operating in Estonia.

The travel restrictions introduced in connection with the COVID-19 pandemic affected the non-life insurance market. Sales of travel insurance dropped by EUR 7 million (36.9%) relative to 2019, and motor TPL insurance by EUR 12 million (12.1%), which was additionally attributable to the price pressure and the resulting reduction of insurance rates in this market segment.

The structure of non-life insurance in 2020 was dominated by motor insurance, with 57.2% market share (including MOD motor insurance accounting for 31.1%). 29.1% of the gross written premium in the market, in turn, was collected on property insurance.

At the end of 2020, 13 companies operated in the non-life insurance sector (including 6 branches of foreign insurance companies) among which the top 4 held a combined market share of 70.4%. In 2020 Seesam closed its operations following a merger with Vienna Insurance Group.

Activity of PZU companies in the Baltic States


As of November 2014, the PZU Group has been operating in the Lithuanian non-life insurance market as Lietuvos Draudimas, which, as of May 2015, is also the owner of the PZU branch in Estonia.

Lietuvos Draudimas is the leader of the non-life insurance market in Lithuania. Its market share at the end of 2020 was 29.6%. Compared to 2019, the company recorded a 3.4% decrease in gross written premium, reaching the sales of EUR 197 million. The biggest drop (by EUR 12 million, i.e. 9.0%), caused by the restrictions introduced as a result of the COVID-19 pandemic, was recorded in the motor insurance business.

PZU Group’s life insurance operations in Lithuania are conducted through UAB PZU Lietuva Gyvybës Draudimas (PZU Lithuania Life). The collected gross written premium was EUR 19 million, which means an increase by 8.5% compared to 2019. The share of PZU Lithuania Life in the life insurance market in 2020 was 6.4% and did not change from 2019.


From June 2014, the PZU Group was joined in Latvia by AAS Balta, which in May 2015 took over the PZU Lithuania branch operating in the Latvian market since 2012. 

In 2020 gross premium written by AAS Balta reached EUR 107 million, down 6.2% relative to 2019. Market share of AAS Balta in the non-life insurance market stood at 28.2%. The restrictions introduced in connection with the COVID-19 pandemic affected the sales of mainly motor insurance – gross written premium dropped by 7%.


Since May 2015 PZU Group operations in Estonia are conducted by a branch of Lietuvos Draudimas which was established as a result of merger of two entities: branch of the Lithuanian PZU company and the Estonian branch, which operated under the Codan brand.

The share in the Estonian non-life insurance market in 2020 was 14.7%, and the accumulated gross written premium was EUR 56 million, down 10.4% relative to 2019. The biggest drop in sales was recorded in motor insurance (by EUR 5 million, i.e. 12.2%), which was mainly the effect of the restrictions introduced in connection with the COVID-19 pandemic.

Activity of PZU in Ukraine 

As of the end of June 2020, the supervision over the insurance market in Ukraine was taken over by the National Bank of Ukraine. This change resulted in, among other things, final implementation of the regulations on the solvency levels required of insurance undertakings, which, in turn, led to termination of operations by some entities and the contraction of the financial and property insurance market. The Ukrainian insurance market after Q3 2020 posted a 18.7% decline in gross written premium to UAH 33 billion. The premium written for non-life insurance was UAH 29.4 billion, down 21.1% compared to the corresponding period of 2019. In addition to the reduction of the number of insurance companies, the lower sales were also attributable to the COVID-19 pandemic. As a result of the travel restrictions, significant sales declines were recorded in motor TPL and MOD insurance, green card and travel insurance. As at the end of September 2020, insurance companies offering life insurance collected gross written premium of UAH 3.6 billion, signifying 8.4% growth compared to the corresponding period of the previous year.

The Ukrainian insurance market is highly fragmented. As at the end of September 2020, 215 insurance companies operated in the country, 20 of which offered life insurance. Despite the number of insurers that continues to be large, the top 100 nonlife insurers generated 99% of gross written premium, while the top 10 life insurers generated 97% of written premium.

On the Ukrainian market, the PZU Group operates insurance business via two companies: PrJSC IC PZU Ukraine (PZU Ukraine) (a non-life insurance company), and PrJSC IC PZU Ukraine Life (PZU Ukraine Life) (a life insurance company). In addition, LLC SOS Services Ukraine offers assistance services.

In 2020, gross written premium collected by PZU Ukraine was UAH 1,486 million, 13.1% lower than in the previous year. The restrictions introduced in connection with the COVID-19 pandemic affected the sale of travel and TPL insurance, required, among others, during submission of Polish visa applications (a 47.1% decrease) and green card insurance (a 39.3% decrease). In 2020, gross written premium collected by PZU Ukraine Life, in turn, was UAH 538 million, up 2.8% from 2019.

During three quarters of 2020, PZU Ukraine obtained 3.8% (up by 0.3 percentage points compared to the first three quarters of 2019) of the gross written premium on the Ukrainian non-life insurance sector, which enabled the company to come seventh on the non-life insurance market. The fourth place in the life insurance market went to PZU Ukraine Life with a 11.0% market share (down 0.3 percentage points relative to the previous year)2.

2 Insurance TOP, Ukrainian insurance quarterly, #7(75)2020


Factors, including threats and risks, that may affect the insurance business of foreign companies in 2021

In addition to chance events, such as flood, drought and spring ground frosts, the following risks are possible: 

  • slowdown of economic growth in the Baltic States and Ukraine – the more challenging financial standing of companies may result in elevated credit risk, a higher loss ratio on the financial insurance portfolio and deceleration in the pace of gross written premium growth in both motor and property insurance; 
  • adverse trends related to the increase in the loss ratio may be expected to appear in the area of insurance guarantees, job loss insurance and low own contribution insurance for mortgage loans as a result of the prolonged COVID-19 pandemic; 
  • resumption of price pressure in motor insurance, i.e. competition for clients through an active pricing policy applied by competitors; 
  • reduced demand for voluntary insurance due to an increase in the rate of unemployment and a decline in employment as a result of the ongoing COVID-19 pandemic; 
  • case law concerning the amounts of general damages paid in cash for the suffering sustained (legislative amendments in Lithuania) under the TPL insurance held by the owners of motor vehicles to the closest family members of persons who have died;
  • changes in trends and behavior of client seeking customized proposals and an electronic, swift conclusion of agreements and handling insurance, forcing insurance companies to adapt to these new expectations rapidly; 
  • increase of insurance fraud as a result of the more difficult situation in numerous industries, increasing unemployment and lower employment rates; 
  • demographic changes and the aging society and the ensuing changes in the mortality and fertility levels; 
  • coming into force of new regulations or financial burdens on insurance companies.