PZU forging ahead

The insurance giant closed the first quarter in good style. Investors could see record premium (5.8 billion PLN) and – in comparison with the previous year – doubled net profit. However, it was not the results that made competitors shake their heads in disbelief – the reason for which PZU is topping other insurance companies is the combined ratio, which measures profitability of particular business lines. For third party insurance policies sold by PZU, at the end of March it increased by little over 90 percent. The company managed to reach this result in just three months.

Answering the question how such a good result could be achieved in such a short time Roger Hodgkiss, Deputy President of PZU, claims it is not a result of accountancy tricks at all but several factors such as increased insurance policy prices. Yet, he stresses that they decided on price increases as one of the last insurers, and the increase was much smaller than that of their competitors. Despite that, thanks to big-scale operations, the actions guaranteed PZU satisfactory income. Price increases of, on average, 20% (while other insurance companies increased prices by 40-50 percent) attracted 800 thousand new clients to PZU.

At the same time, the insurer lowered the insurance policy sales costs and concentrated on own sales channels rather than sales though multi-agencies, because, as Hodgkiss claims, such solutions attract more profitable clients.

Currently, the only concern in the communications segment of PZU is comprehensive car insurance – although by the end of the previous year the product was profitable, in the first quarter of 2017 sales profit dropped rapidly. In response to the profitability drop, PZU decided to correct the prices of the dealer packages.

Business Implications for Poland

Economic and regulatory developments in Poland have broad implications for businesses operating in the country. Poland’s economy, the largest in Central and Eastern Europe, continues to attract international investors and entrepreneurs seeking EU market access, competitive costs, and a skilled workforce of over 17 million workers.

For foreign companies and entrepreneurs doing business in Poland, staying informed about economic trends, regulatory changes, and market dynamics is essential for strategic decision-making. Whether you are considering entering the Polish market, expanding existing operations, or optimizing your corporate structure, professional advisory support can help navigate the complexities of the Polish business environment.

Poland offers a comprehensive business infrastructure including special economic zones with tax incentives, a well-developed banking system, modern office space in major cities, and a legal framework aligned with EU standards. These factors, combined with Poland’s strategic geographic position between Western and Eastern Europe, make it an attractive hub for businesses targeting the broader European market.

If you are doing business in Poland or considering entering the Polish market, Zalewski Consulting can help. Learn more about our personal income tax advisory, or contact us for a free consultation.