Drivers and atypical events affecting the results

The 2020 result of PZU Group was burdened with the nonrecurring impairment loss on goodwill following from the acquisition of Alior Bank and Bank Pekao. For Alior Bank, the impairment loss was PLN 746 million, and for Pekao – PLN 555 million. The result was also determined by a one-off impairment loss on assets arising from the acquisition of Alior Bank (i.e. trademark and relations with clients) in the amount of PLN 161 million.

The conversion costs of long-term policies into yearly renewable term agreements in type P group insurance treated as a non-recurring event decreased from PLN 14 million in 2019 to PLN 12 million in 2020.

In the case of continued and group insurance, the technical rate applied for the calculation of provisions in life insurance was reduced to 1.5% in June 2020. Previously, it was between 1.5% and 3%, depending on the date of execution or modification of the policy.

Moreover, the PZU Group updated the assumptions about the behavior of the portfolio in connection with the mortality of the insured and the probability of the insured having coinsureds to prevent the growing mismatch between it and the previously adopted assumptions. It also modified its method of calculating provisions for the group insurance portfolio by adopting an individual approach instead of the hypothetical portfolio structure.