Powszechny Zakład Ubezpieczeń (PZU) Q4 2023 earnings summary

Executive summary

• FY2023 gross insurance revenue was PLN 26,868m, up 8.6% YoY; net profit attributable to parent shareholders reached PLN 5,766m versus PLN 3,781m.

• Consolidated net profit was PLN 12,452m versus PLN 5,666m, and operating profit rose to PLN 16,067m from PLN 8,162m.

• Q4 parent-attributable net profit under IFRS 17 was PLN 1.63bn, up 35.5% YoY, including PLN 540m from Alior Bank and Bank Pekao.

• Adjusted ROE was 22.0%, up 5.7 p.p. YoY; the reported Solvency II ratio was 230% at 3Q23, using the prior interim methodology.

Financial highlights

• Insurance service result increased to PLN 4,019m from PLN 3,663m; insurance service expenses were PLN 22,746m versus PLN 21,145m.

• Q4 IFRS 17 operating profit excluding banks rose 22.8% YoY to PLN 1,212m; parent-attributable net result excluding banks increased 20.4% to PLN 1,091m.

• Effective-interest-rate income rose to PLN 27,579m from PLN 18,265m; expected-credit-loss and impairment charges fell to PLN 1,225m from PLN 3,193m.

• Total assets reached PLN 467,893m and total equity PLN 60,479m at year-end.

• Q4 IFRS 4 gross written premiums grew 7.8% YoY to PLN 8,269m; operating profit excluding banks rose 9.2% to PLN 1,320m.

Outlook and guidance

• FY2024 targets: gross insurance revenue above PLN 28bn, net profit PLN 4.3bn, adjusted ROE 15.5% and Health Pillar revenue PLN 1.7bn.

• Other FY2024 targets include PLN 1.0bn contribution from banks, Solvency II ratio of at least 200% and external-client assets under management of PLN 60bn.

• Capital policy targets Solvency II coverage of 200% for the group and key insurance entities, financial leverage no higher than 25%, and capital availability for growth and acquisitions.

• Expected release of insurance contractual service margin: PLN 1,227m in year one, PLN 2,122m in years 5–10 and PLN 2,420m beyond 10 years.