With over € 13 billion in premium written and a 41 % share within CEE15 countries, Poland has the largest insurance sector in the region. Despite recently stagnating premiums, insurers operating in Poland are expected to take advantage from the ongoing economic recovery already in 2015. Premiums are expected to rebound and increase at 4 to 5% p.a. through 2017.

1. INSURANCE MARKET IN POLAND, 2015–2017
CEE INSURANCE SERIES
by Inteliace Research
June 2015
Version: 2015/3
Selected pages from the original report

2. Inteliace Research
InsuranceMarketinPoland,2015-2017
SUMMARY
1
• With over € 13 billion in premium written and a 41 % share within CEE countries,
Poland has the largest insurance sector in the region.
• Despite recently stagnating premiums, insurers operating in Poland are expected to
take advantage from the ongoing economic recovery already in 2015.
• Premiums are expected to rebound and increase at 4 to 5% p.a. through 2017.
• The non-life insurance segment is likely to rebound in 2015 as insurers will both
increase sales of property insurance and slowly raise tariffs in car insurance. Also
the improving situation of enterprises is expected to drive demand for specialized
insurance products in the corporate sector including credit and liability insurance.
• At the same time, a better economic situation and improved sentiment in
households sector, resulting from lower unemployment and increasing real wages,
will boost the demand for unit-linked and plain risk life insurance.

3. Inteliace Research
InsuranceMarketinPoland,2015-2017
13.12
5.73
2.70
2.11
1.94
1.82
1.12
0.91
0.60
0.59
0.37
0.34
0.29 0.08
0
100
200
300
400
500
600
700
800
900
1,000
-9.0% -6.0% -3.0% 0.0% 3.0% 6.0% 9.0% 12.0% 15.0%
2
Czech Republic
Hungary
Slovenia
Bulgaria
Romania
Estonia
Latvia
BiH
Croatia
Albania
Serbia
Lithuania
MaturingDeveloping
Slovakia
CEE14* insurance markets - Size vs. growth matrix, 2012-2014
COMBINED
LIFE & NON-LIFE
x.x
Total 2014
premium
(in billion EUR)
Annualpremiumpercapita,
2014,inEUR
Average annual premium growth (in EUR terms), 2012-2014, percent
*Major 14 CEE countries. Russia, Ukraine, Belarus and FYR Macedonia not included
Source: National supervision authorities, IMF, Inteliace Research
Falling Growing
POLAND HAS THE LARGEST INSURANCE MARKET IN CEE14*
Poland

4. Inteliace Research
InsuranceMarketinPoland,2015-2017
PRESSURE ON CAR INSURANCE TARIFFS PERSISTS
3
424
438
451
471 480 482 483 478 472 464 454 447
434 423 418 413
369 373 382 391
406 409 409 407 401 395 386 379 372
834
869
913
958
1018
1050
1069
1083 1086 1086
1072
1040
1016
200
300
400
500
600
700
800
900
1000
1100
1200
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14
1,055
1,094
1,131
1,154 1,161 1,150 1,133 1,115 1,099 1,083 1,071 1,063 1,058 1,054 1,045 1,032
746
767
799
827
852 857
835 819 804 796 788 783 781
1,829
1,870
1,903
1,933 1,921 1,914 1,923
1,894
1,872
1,844
1,807
1,783
1,748
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14
-3
-2
TPL (Class 10), mandatory only Casco (Class 3)
* Premium collected within last four consecutive quarters divided by the average number of outstanding insurance policies in the same period.
Source: KNF, Inteliace Research
Average premium per policy* by class and by type of client, 1Q2011-4Q2014
in PLN
Corporate and
other clients
Average
Individual clients
Absolute growth
1Q10-4Q14 (%)
Absolute growth
1Q10-4Q14 (%)
Corporate and
other clients
Average
Individual clients
Data by segment
unavailable after
Q1 2015
Data by segment
unavailable after
Q1 2015

5. Inteliace Research
InsuranceMarketinPoland,2015-2017
38.9 37.5
45.1
49.8
53.9
35.2
32.4
32.4
30.3
28.7
3.1
3.1
3.3
3.7
3.9
2010 2011 2012 2013 2014
4
• Unit–linked life reserves
are increasing steadily,
driving the overall
technical reserves growth.
• As of 2014, unit-linked
reserves accounted for
~62% of all technical
reserves of life insurers, as
compared with 50% in
2010.
• Other life reserves keep
falling which could be
explained with expiration
of deposit-like , tax friendly
products, which used to be
very popular in the past.
UNIT-LINKED RESERVES DRIVE THE OVERALL LIFE RESERVES GROWTH
Technical reserves (gross) – Life insurance, 2010-2014
PLN billion
*Compound Annual Growth Rate
Source: KNF, Inteliace Research
80.8
Life
reserves
Unit-linked
life reserves
Other
+3
+6
-5
+8
CAGR*
2010-2014
LIFE
INSURANCE
77.2Total=
73.0
83.7
86.5

6. Inteliace Research
InsuranceMarketinPoland,2015-2017
Products
Customers
Channels
• PZU offers ~80 various products in the non-
life retail business. Products offered cover
all 18 non-life insurance classes.
• Car insurance (MTPL+Casco) is dominating
within non-life business with >60% share in
the total GWP.
• „PZU Pomoc” – proprietary assistance
service company is rounding up the
traditional product offer.
• Own network: In total 414 branches.
• Exclusive agents: 9.1 k of which ~6 k in non-life.
• Multi-agents: 3k agents (all business lines).
• Brokers: 900 brokers
• Employees: 800 employees dedicated to sales -
mainly in the corporate segment.
• Bancassurance: cooperation with 10 banks and
6 strategic partners including telecoms and
airlines.
• Cooperation with ~ 1.4 thousand repair shops.
• PZU traditionally serves mass-market clients in
retail business (mostly car and property) and
all segments in corporate business.
• Total number of clients in the whole PZU
Group (life + nonlife) exceeds 16 million or
half of the whole adult population in Poland.
5
NON-LIFE INSURANCE PLAYERS - PZU
*Non-life insurance share by gross premium written
**Compound Annual Growth Rate
*** Pro forma calculation based on figures derived from PZU Group financial statements.
Source: Company, Press, Inteliace Research
• PZU is the largest traditional and local
incumbent insurer with extremely high brand
awareness (93%) in Poland .
• PZU’s previously dominant position in the
insurance market has been gradually eroding
over time but the process has slowed down in
2014.
History
Shareholders, 1Q 2015 (share in %)
Background
• 1991: State-owned insurer PZU converted to public
joint-stock company.
• 1999: Partial privatization of PZU holding – 30%
share in PZU SA sold to Eureko & Big Bank Gdański.
• 2003: Claims handling centralization.
• 2004: Launch of repair-shops network.
• 2009: Shareholder conflict resolved.
• 2010: IPO on the WSE.
• 2010/2011 Cost /employment restructuring.
• 2012 New Strategy: „PZU 2.0” adopted.
• 2012/2013 Entry into Latvia & Estonia.
• 2014 Acquisition of insurance businesses of RSA in
Baltics and in Poland (Link4).
• 2014 New service introduced- Direct claims
processing for own clients.
Results
Gross Premium Written
PLN billion
Market
share*
(percent)
Net profit
PLN million
Return on Average Equity (ROAE)
Percent
Reversed market share losses
in 2015
CAGR**
31.1 31.532.2
8.45 8.27 8.26
2012 2013 2014
1403 1263
577
2012 2013 2014
11.1 11.7
7.0
2012 2013 2014
NON-LIFE
INSURANCE
***
-36
***
-21
35
65
-1
Poland's Treasury
Other
Falling profitability in non-life
business

7. Inteliace Research
InsuranceMarketinPoland,2015-2017
NOTES ON METHODOLOGY
FX rates:
• For the purpose of conversion from local currency (PLN) into EUR for most values presented in this report,
including premium written, annual results, etc., average exchange rates have been used
• Exchange rates used in the report:
Estimates and Forecasts:
• In some cases, recent or verified data was not available. Therefore, necessary short-term estimates have been
calculated to fill the gaps. Estimates are always indicated with the letter “E”
• When preparing forecasts/estimates, we have built models using latest observed trends, available forecasts of
main economic indicators, seasonal changes observed in the past and other specific factors considered
important.
Multiple sources:
• In some cases, multiple sources of similar data exist. In this situation we always try to select the most appropriate
one in our view. The source is indicated in the footer area of each slide. Nevertheless, in specific cases, before
interpreting the data, it is recommended to get a good understanding on the methodology of data collection.
6
EUR / PLN 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Average 4.53 4.03 3.90 3.78 3.52 4.33 3.99 4.12 4.19 4.20 4.19
End of period 4.08 3.86 3.83 3.58 4.17 4.11 3.96 4.42 4.09 4.15 4.26

8. Inteliace Research
InsuranceMarketinPoland,2015-2017
About this report
This report has been prepared using Inteliace
Research proprietary research and publicly available
sources, including: financial reports, press
publications, industry magazines, directories,
financial databases and expert opinions.
Views presented in this report reflect solely the
independent and unbiased opinion of Inteliace
Research and authors.
All due care has been taken in the production of this
report. However, Inteliace Research does not accept
any responsibility or liability for any omissions or
inaccuracies of the information contained in this
publication.
This report is copyrighted. Any distribution, storage,
replication and usage is restricted to Inteliace
Research clients only. In case of any doubt please
contact us at: info@Inteliace.com
About Inteliace Research
Inteliace Research is an independent and privately
owned research firm based in the heart of Eastern
Europe in Warsaw / Poland.
Our company specializes in value-added research
services and tailored business intelligence solutions.
Through our customized research services we help our
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The lead researcher and founder of Inteliace Research
is Marcin Mazurek.
Our contact details:
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Foksal 17B / 31,
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Tel. +48 22 408 66 20, Tel. +48 502 512 178
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9. Inteliace Research
InsuranceMarketinPoland,2015-2017
Visit http://www.inteliace.com for more details
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7.4 8.3 9.1
2003 2004 2005
10.9
1.6
Assets
PLN billion
* Although Expander is distributing products from various banks, GE offer / for example mortgage/ is reported to be favoured
** Compound Annual Growth Rate
Source: Inteliace Analysis
CAGR**
Concept Description Results
1.6 1.7
Timeline
History & Background
Loans
PLN billion
Net Profit
PLN billion
Target Clients
Products
Channels
20.4 26.7 22.8ROE (%)
Market
share
(%)
6.6 7.6 8.6
2003 2004 2005
0.14
0.30 0.32
2003 2004 2005
14.2
51.2
• Affluent individualsand professionals
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funds level)
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• refinancingloan
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under the GEpard brand, being the main channel
for car loans sales
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consolidatedunder one roof: GE Capital bank
Shareholders
• Top notch risk management and collection
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• High margins
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Dobry Kredyt)
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As of March 2006
99
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