INSURANCE MARKET IN POLAND 2008–2010,
CEE INSURANCE SERIES
Sample version /Selection of slides from the original report/
by Intelace Research
June 2008
Version: 2008/07

GROWTH OF THE INSURANCE MARKET IN POLAND HAS BEEN
DRIVEN MOSTLY BY LIFE BUSINESS CAGR*
Evolution of gross premium written (GPW) and GPW/GDP penetration, 2003-2007 IN LOCAL
CURRENCY
Life GPW Total GPW
in PLN billion In PLN billion
23.0 15.3 43.8
25.5 37.6
21.1
12.7 15.3 31.0
11.2 27.6
24.8
Insurance Market in Poland 2008-2010
+
E
2003 2004 2005 2006 2007
PL
GDP
penetration (%) 1.32 1.38 1.56 1.99 2.19
M
2003 2004 2005 2006 2007
SA
Non-life GPW
In PLN billion 2.94 2.99 3.15 3.54 3.76
7.7
GDP penetration (%)
15.7 16.5 18.3
13.6 14.9
Life / Non-life GPW ratio (%) 139
128
98
2003 2004 2005 2006 2007
82 85
GDP
penetration (%) 1.62 1.61 1.59 1.55 1.57 2003 2004 2005 2006 2007
Slight growth of In 2005 life
penetration in premium exceeded 1
2007 non-life premium
* Compound Annual Growth Rate
Source: KNF, Intelace Research Intelace Research

POLAND HAS THE LARGEST NON-LIFE INSURANCE MARKET IN CEE14*
CEE14* non-life insurance markets - Size vs. growth matrix, 2005-2007 NON-LIFE
High growth Very high growth INSURANCE
Annual premium per capita, 2007, in EUR
700
Slovenia
650 Total 2007
1.28 premium
Maturing
600
x.x (in billion
EUR)
550
500
E
Insurance Market in Poland 2008-2010
PL
450
Czech
400
Republic
M
350 SA
300 Croatia
2.93
Developing
250
Hungary Poland
Estonia Latvia
200 0.90
0.24 0.38
150 1.58 0.85 5.05 Lithuania Romania
Serbia 0.36
100
Slovakia 0.60 0.49 Albania 1.58
50
BiH 0.13 0.04
0
0% 10% Bulgaria 20% 30% 40%
Average annual premium growth (in EUR), 2005-2007, percent
2
* Major 14 CEE countries. Russia, Ukraine, Belarus and Macedonia not included
Source: National supervision authorities, IMF, Intelace Research Intelace Research

PZU IS STILL DOMINATING ON NON-LIFE MARKET
NON-LIFE
INSURANCE
Top 10 non-life insurers in Poland, as of 2007
Share by NL
Rank Company GPW, in EUR million GPW, % Majority Shareholder
PZU 2201 43.6 Eureko (33%), Treasury (55%)
1
Warta 510 10.1 KBC
2
Ergo
409 8.1 Ergo International
3 Hestia
Insurance Market in Poland 2008-2010
Allianz 380 7.5 Allianz
4
E
5 HDI Asekuracja 236 4.7 HDI Gerling / Talanx
PL
M
6 Interrisk 169 3.3 Vienna Insurance Group
7 Compensa 136
SA 2.7 Vienna Insurance Group
8 Generali 111 2.2 Generali HV
9 Uniqua 111 2.2 UNIQA IBV
10 PTU 108 2.1 Local subjects : Ciech (45%)
Wiener Städtische (99,9%)
Total TOP 10 = 4371 86.6
3
Source: KNF, press, Intelace Research Intelace Research

MOTOBANK IS A GOOD EXAMPLE OF INNOVATIVE AND COST-
EFFECTIVE DISTRIBUTION CONCEPT
Overview
Motobank – Stand design
• MotoBank is an insurance multi-agency offering mostly car
insurance bundled with basic advisory
„Cheapest • The concept relies on direct comparison of multiple insurer’s
insurance or offers according to the specific client situation. Client gets the
money back” most favorable offer .
• Project started with one branch in 2004 in Warsaw, expanded
in 2005 by few other stands and in 2006/2007 by 3 new cities
E
Channels
Insurance Market in Poland 2008-2010
PL
• Sales stands located in high traffic places -shopping malls:
12 stands in 4 major cities: Warsaw (7), Katowice (2),
M
Poznań (1) and Kraków (2) - as of May 2008
• Announced plans of rollout to other major cities
SA
• Sales staff (2-3 prople per stand)
Are you paying • Call center opened in 2007
to much on your TPL or
Casco insurance?
Products
• TPL, Casco and Travel insurance from 12 insurers
• Special discount packages: motor+home/accident
Other features
• Convenient payment with credit card
• Optional payment in installments
• „Low-price guarantee”
4
Source: Motobank, Intelace Research Intelace Research

NON-LIFE INSURANCE PLAYERS - PZU
CAGR**
Background Products Results
• PZU is the largest, traditional local insurer • PZU offers ~80 various products in the Gross Premium Written
in Poland with extremely high brand non-life retail business. Products offered EUR billion
awareness (91%) cover all 18 non-life insurance classes 6.4
• Its previously dominant position is slowly • Car insurance (MTPL+Casco) is 2.20
1.83 1.98 1.99
eroding with market share falling below dominating within non-life business with
44% in 2007 <60% share in the total GPW
2004 2005 2006 2007
History Market
50.3 48.9 46.6 43.6
share*
Insurance Market in Poland 2008-2010
• 1991 State-owned insurer PZU
converted to public joint-stock company (percent)
Channels: Quick market share loss
• 1999 Partial privatization of PZU holding Net profit
E
– 30% share in the mother company • Insurance is distributed through own
EUR million
PZU SA has been sold to Eureko and network of 350 non-life PZU branches 6.1
PL
Big Bank Gdanski • Non-life policies are sold through: ~7000
agents, ~1700 multi-agencies, ~750 450 486 394
• 2003 Claims handling centralization 330
• 2004 Launch of repair-shops network brokers, ~1800 used and new car
M
• 2005 New strategy for the whole PZU dealers and a group of banks including:
group, further claims h. centralization PKO, Millennium, BOŚ
2004 2005 2006 2007
SA
• 2008 Development of direct sales model
for selected products Return on Average Equity (ROAE)
Customers Percent
Shareholders (share in %)
(share in %) • PZU is traditionally serving mass market Falling ROAE - A result of
excessive equity and
clients in retail business (mostly motor slowing profits
Other
and property) and all segments in
13 18.0 18.0 15.4
corporate business 9.4
Eureko 32 55 Treasury • Total number of clients in the whole PZU
Group (life+nonlife) exceeds 15 million
2004 2005 2006 2007
* Non-life insurance share by gross premium written 5
** Compound Annual Growth Rate
Source: Company, Press, Intelace Research Intelace Research

REPORT - TABLE OF CONTENT (1/3)
Slide 1: Executive summary
1. Macroeconomic overview
Slide 2: Poland - General overview
Slide 3: Key macroeconomic indicators, 2000-2007
Slide 4: Foreign trade statistics, C/A, FD,I 2000-2007
Slide 5: Warsaw Stock Exchange - Turnover, Market cap and indexes, 2000-2007
Slide 6: Unemployment and wages, 2000-2007
Slide 7: Disposable income in households and distribution, 2000-2007, (2004)
Slide 8: Consumer confidence index evolution, 2005-Feb. 2008
Insurance Market in Poland 2008-2010
Slide 9: Yield curves, 2001-2007
Slide 10: Banking assets evolution, 2000-2007
Slide 11: Top 12 foreign investors in banking sector and their subsidiaries 2007
2. Insurance market
Slide 12: Insurance Markets in CEE – Size vs. growth matrix, 2005-2007
Slide 13: Insurance premium per capita & premium/GDP penetration – International comparison, 2007
Slide 14: Insurance gross premium (life/non-life) in Poland evolution (in LCU), 2003-2007
Slide 15: Insurance gross premium (life/non-life) in Poland evolution (in EUR), 2003-2007
Slide 16: Number of insurance companies, share of foreign funds in core capital, 2000-2005
Slide 17: Top 12 insurance groups in Poland by total premium written, 2007
Slide 18: Insurance market concentration and Herfindahl-Hirschman Index (life/non-life), 2005/2007
Slide 19: Number of agents and personnel, 2005-2007
Slide 20: Insurance regulatory overview, 2007
Slide 21: Recent major regulatory initiatives (1/2) Solvency II, “Religa Tax”
Slide 22: Recent major regulatory initiatives (1/2) Private health Insurance, Mandatory crop insurance
Slide 23: Solvency margin and coverage with own funds. 2006-2007
6
Intelace Research

REPORT - TABLE OF CONTENT (2/3)
3. Non-life insurance
Slide 24: Non-life insurance markets in CEE – Size vs. growth matrix, 2005-2007
Slide 25: Non-life premium per capita & premium/GDP penetration – International comparison, 2007
Slide 26: Non-life insurance gross and net premium evolution, 2003-2007
Slide 27: Top 10 non-life insurance players in Poland, 2007
Slide 28: Market shares of top non-life players, evolution 2004-2007
Slide 29: Number of policies & premium evolution by segment (retail vs. corp.), 2004-2007
Slide 30: Non-life premium and no. of policies by risk class, 2007
Slide 31: Sales channels of non-life insurance, direct sales, 2005-2007
Insurance Market in Poland 2008-2010
Slide 32: Direct players - Overview
Slide 33: Link4-Leader in direct sales in Poland , Profile (1/2)
Slide 34: Link4-Leader in direct sales in Poland , Website functionalities (2/2)
Slide 35: Liberty Direct – A “premium” direct player model
Slide 36: Alternative physical distribution concept - Motobank
Slide 37: Top Retailers – Will Insurance become another add-on service for their clients?
Slide 38: Non-life insurers results, Technical and profit account, 2007
Slide 39: Non-life insurance - profitability tree, 2004-2007
Slide 40: Non-life insurance - claims and expense ratio evolution, 2004-2007
Slide 41: Non-life insurance - combined ratio and its elements, 2004-2007
Slide 42: Motor insurance - premium and no. policies evolution, MTPL, Casco, 2004-2007
Slide 43: Motor insurance - Top players, MTPL, Casco, 2006-2007
Slide 44: Motor insurance - combined ratio and its elements, 2004-2007
Slide 45: Motor insurance – MTPL tariffs 2008 – mystery shopping (1/2)
Slide 46: Motor insurance – MTPL tariffs 2008 – mystery shopping (2/2)
Slide 47: Motor insurance – PZU Case: MTPL property claims evolution (2002-2007)
Slide 48: Motor insurance – PZU Case: MTPL personal claims evolution (2002-2007)
7
Intelace Research

REPORT - TABLE OF CONTENT (3/3)
4. Life insurance
Slide 49: Life insurance markets in CEE – Size vs. growth matrix, 2005-2007
Slide 50: Life premium per capita & premium/GDP penetration – International comparison, 2007
Slide 51: Life insurance gross and net premium evolution, 2003-2007
Slide 52: Top 10 life insurance players in Poland, 2007
Slide 53: Market shares of top life players, evolution 2004-2007
Slide 54: Life premium and no. of policies by risk class, 2007
Slide 55: Life premium and no. of policies by client segment and policy type, 2007
Slide 56: Life insurance technical reserves by type evolution, 20032007
Slide 57: Sales channels of life insurance, direct sales, 2005-2007
Slide 58: Life insurers results, Technical and profit account, 2007
Insurance Market in Poland 2008-2010
Slide 59: Life insurance - profitability tree, 2004-2007
5. Bancassurance
Slide 60: Premium written by bank channel (life/non-life), 2005-2007
Slide 61: Bancassurance example: Cooperation of PZU with banks
6. Top players profiles
Slide 62: Non-life Insurance: PZU, 2004-2007
Slide 63: Non-life Insurance: Warta, 2004-2007
Slide 64: Non-life Insurance: Ergo Hestia, 2004-2007
Slide 65: Life Insurance: PZU śycie, 2004-2007
Slide 66: Life Insurance: Commercial Union (Aviva), 2004-2007
Slide 67: Life Insurance: Aegon, 2004-2007
7. Forecast
Slide 68: Non-life Insurance premium forecast, 2008-2010
Slide 69: Life Insurance premium forecast, 2008-2010
Slide 70: Note on Methodology
. 8
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