Release Date: August 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue on sales and insurance increased by 10% to over PLN14.3 billion.
- Profitability remains strong with a return on equity beyond 17%.
- Dividend payout is set to be 4.34%, which is competitive compared to peers.
- Strong capital position with a solvency ratio of almost 240% on a stand-alone basis.
- Dynamic growth in non-motor insurance, particularly in the corporate segment.
Negative Points
- Weather conditions negatively impacted crop and non-life insurance results.
- Motor insurance segment faced challenges, with a 1/3 impact from market trends.
- Higher operating costs due to inflation and increased salaries.
- Negative impact from weather events estimated at over PLN200 million.
- Lower profitability in the banking segment compared to Q2 last year.
Q & A Highlights
Q: At which stage are you considering the role of banks in your strategy? You mentioned synergies, can you elaborate?
A: The ultimate direction will be published in the strategy. We've spent the last few months discussing internally and with shareholders. The strategy will optimize shareholder value while keeping our assets strong. We are guided by economic and business-related factors. (Artur Olech, CEO)
Q: Can you explain the performance of group insurance, given the lower debt incidents?
A: The profit you see is important for dividends, but life insurance companies are evaluated on portfolio value and new business generation. We are conservative in our assumptions, and deviations are usually positive. The ability to rebuild the portfolio is essential for maintaining dividends. (Jaroslaw Mastalerz, President of the Management Board of PZU Życie SA)
Q: Will the figures for TPL turn around in the next quarter?
A: The market shows a positive trend. We hope the market is aware of the situation and will act rationally. The effects of current pricing won't be seen until the end of the year due to the nature of yearly premiums. (Artur Olech, CEO)
Q: Can you tell us more about the flexibility of pricing motor insurance policies?
A: The environment is highly competitive. We target specific customer segments willing to pay more for convenience. We must be cautious with price increases and anticipate market conditions. (Artur Olech, CEO)
Q: Will the strategy be published in Q4?
A: Yes, we are working on it diligently. We want to ensure it is a reliable document drafted by skilled people. We are in an advanced stage and will publish it as soon as possible. (Artur Olech, CEO)
Q: Can we expect the margin for group insurance and individually continued insurance to remain above 20% long-term?
A: Yes, the margin is embedded in our models. Significant deviations would be needed to change it, but our assumptions are conservative. (Jaroslaw Mastalerz, President of the Management Board of PZU Życie SA)
Q: What's the repricing potential for the life insurance portfolio?
A: Repricing depends on the insurance type. For sold insurance, we focus on voluntary indexation. Health contracts are repriced annually, reflecting market developments. (Jaroslaw Mastalerz, President of the Management Board of PZU Życie SA)
Q: What percentage of the real estate portfolio are offices?
A: Most of the portfolio is logistics (60-65%), with the remainder split between commerce and offices. (Tomasz Kulik, Group CFO)
Q: Have you reviewed salaries in the first half of 2024?
A: Yes, we allocated funds for bonuses to employees who contributed positively to results. (Jaroslaw Mastalerz, President of the Management Board of PZU Życie SA)
Q: What's your appetite for acquisitions in Poland and outside?
A: We are open to opportunities and will participate in them. We focus on models that don't negatively affect dividends and contribute to cash flow soon. (Artur Olech, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
