7.7 Simplifications in the segment note

Some simplifications in the segment note have been made, acceptable under IFRS 8. Justification of the simplifications:

  • withdrawal from presentation of information about allocation of all assets and liabilities to individual segments. The reason: management reporting does not include such documents. The key information analyzed by the Management Board of PZU is the profit or loss of given segments, on which basis management decisions, including decisions about allocation of resources are made. Analysis of assets and liabilities allocated to the segments is limited to the monitoring of compliance with the regulatory requirements related to capital adequacy ratios and having assets covering technical provisions exceed the sum of those provisions (analysis by individual insurance companies instead of product groups);
  • presentation of the net profit or loss on an investment with a single amount expressed as a difference between realized and unrealized revenue and expensed from investments – resulting from an internal assessment of the profit or loss of the segments on the basis of the total measure of the profit or loss on investments;
  • revenue and expenses other than realized and unrealized investment revenue and expenses not allocated to the "investments" segment – resulting from the method of analysis of data regarding that segment and from impracticality of such allocation;

Profit and loss account for the period from 1 January 2015to 30 December 2015 Corporate insurance (non-life) Mass insurance(non-life) Group and individually continued insurance (life) Individual insurance (life) Investments Pension insurance Ukraine Baltic Countries Investment contracts Other operations The sum of operating segments
  PAS PAS PAS PAS PAS PAS IFRS IFRS PAS PAS  
Gross premium written externally 1,765,031 7,309,028 6,688,657 1,234,260 - - 168,184 1,193,884 141,088 - 18,500,132
Gross premium written between segments 59,422 217,739 - - - - - - - - 277,161
Gross written insurance premium 1,824,453 7,526,767 6,688,657 1,234,260 - - 168,184 1,193,884 141,088 - 18,777,293
Reinsurers’ share in gross written premium (261,065) (218,688) 553 (22) - - (67,822) (41,354) - - (588,398)
Net written premium 1,563,388 7,308,079 6,689,210 1,234,238 - - 100,362 1,152,530 141,088 - 18,188,895
Reinsurer’s share in the unearned premium reserve and gross unexpired risk reserve 46,049 113,771 - - - - 17,509 3,624 - - 180,953
Net earned premium 1,476,022 6,791,252 6,691,210 1,234,634 - - 102,150 1,109,535 141,063 - 17,545,866
                       
Investment income, including: 121,403 518,130 '601,663 250,382 2,287,073 6,949 41,270 21,782 16,064 175,239 4,039,955
Net result on investments (external activity) 121,403 518,130 601,663 250,382 506,166 6,949 41,270 21,782 16,064 175,239 2,259,048
Net result on investments (inter-segment activity) - - - - 1,780,907 - - - - - 1,780,907
                       
Other net technical income 48,950 166,452 997 74 - - - - 4 - 216,477
Revenues on core business of non-insurance entities - - - - - 118,521 - - - 591,876 710,397
Other operating income (not applicable to insurance entities) - - - - - 908 - - - 21,091 21,999
                       
Gross claims paid (951,558) (4,459,100) (4,714,810) (843,613) - - -87,081 (695,815) (698,693) - (12,450,670)
Movement in the gross claims reserve (267,738) (69,651) (35,413) (6,581) - - 757 (13,128) 4,235 - (387,519)
Reinsurers’ share in claims paid 41,393 52,231 123 - - - 13,124 16,765 - - 123,636
Reinsurer's share in the movement in reserves 308,352 32,425 - - - - (85) 5,243 - - 345,935
Net insurance claims (869,551) (4,444,095) (4,750,100) (850,194) - - (73,285) (686,935) (694,458) - (12,368,618)
Movement in other net technical reserves, life insurance reserves where the policyholder bears the investment risk, loss ratio (risk) equalization reserves (10,040) (26,916) 31,624 (240,832) - - - - 558,454 - 312,290
Net premiums and rebates for insureds including the movement in reserves (6'059) (1,132) (266) (209) - - - - 5 - (7,661)
Other net technical income (50,672) (288,948) (66,685) (5,844) - - - - (654) - (412,803)
Interest expenses             (255) (1,833)   -65,502 (67,590)
Acquisition cost (287,687) (1,394,293) (356,308) (122,731) - (2,947) (46,617) (252,779) (9,993) - (2,473,355)
Administrative costs (127,383) (665,744) (577,220) (59,670) - (39,865) (21,154) (146,422) (9,345) - (1,646,803)
Reinsurance commissions and profit-sharing 16,627 (3,058) (222) - - - - - - - 13,347
Expenses of the core business of non-insurance entities - - - - - - - - - (590,660) (590,660)
Other operating expenses (not applicable to insurance entities) - - - - - (2,087) - - - (22,978) (25,065)
Result on insurance / Operating profit (loss) 311,610 651,648 1,574,693 205,610 2,287,073 81,479 2,109 43,348 1,140 109,066 5,267,776
segment_reporting_1_pzu2015.xlsx

account for the period from 1 January 2014to 30 December 2014 Corporate insurance (non-life) Mass insurance(non-life) Group and individually continued insurance (life) Individual insurance (life) Investments Pension insurance Ukraine Baltic Countries Investment contracts Other operations The sum of operating segments
  PAS PAS PAS PAS PAS PAS IFRS IFRS PAS PAS  
Gross premium written externally 1,807,349 6,559,511 6,539,082 1,268,637 - - 173,562 536,498 374,467 - 17,259,106
Gross premium written between segments 23,794 9,973 - - - - - - - - 33,767
Gross written insurance premium 1,831,143 6,569,484 6,539,082 1,268,637 - - 173,562 536,498 374,467 - 17,292,873
Reinsurers’ share in gross written premium (226,610) (62,606) (4,272) (122) - - (32,988) (27,698) - - (354,296)
Net written premium 1,604,533 6,506,878 6,534,810 1,268,515 - - 140,574 508,800 374,467 - 16,938,577
                      -
Movement in the unearned premium reserve and gross unexpired risk reserve (201,832) 37,816 2,242 (1,088) - - (13,076) (31,528) 14 - (207,452)
Reinsurer’s share in the unearned premium reserve and gross unexpired risk reserve 59,559 18,311 - - - - 8,423 (278) - - 86,015
Net earned premium 1,462,260 6,563,005 6,537,052 1,267,427 - - 135,921 476,994 374,481 - 16,817,140
                      -
Investment income, including: 136,456 562,821 713,254 326,696 2,823,234 11,639 41,058 14,617 43,550 167,678 4,841,003
Net result on investments (external activity) 136,456 562,821 713,254 326,696 578,923 11,639 41,058 14,617 43,550 167,678 2,596,692
Net result on investments (inter-segment activity) - - - - 2,244,311 - - - - - 2,244,311
                      -
Other net technical income 37,215 106,596 1,103 48 - - - - 5 - 144,967
Revenues on core business of non-insurance entities - - - - - 270,565 - - - 443,144 713,709
Other operating income (not applicable to insurance entities) - - - - - 711 - - - 5,916 6,627
                      -
Gross claims paid (774,846) (3,728,363) (4,513,462) (658,202) - - (103,247) (312,758) (1,389,147) - (11,480,025)
Movement in the gross claims reserve (315,611) (693,683) 14,017 19,413 - - (1,786) (21,625) (2,571) - (1,001,846
Reinsurers’ share in claims paid 28,166 34,380 85 - - - 7,208 26,293 - - 96,132
Reinsurer's share in the movement in reserves 98,323 24,254 - - - - 3,477 (4,126) - - 121,928
Net insurance claims (963,968) (4,363,412) (4,499,360) (638,789) - - (94,348) (312,216) (1,391,718) - (12,263,811)
Movement in other net technical reserves, life insurance reserves where the policyholder bears the investment risk, loss ratio (risk) equalization reserves 2,427 (9,526) (70,328) (611,119) - - - - 1,015,526 - 326,980
Net premiums and rebates for insureds including the movement in reserves (2,325) - (638) - - - - - (38) - (3,001)
Other net technical income (39,759) (220,142) (21,227) (1,689) - - - - (494) - (283,311)
Interest expenses             (22) (766)   (82,944) (83,732)
Acquisition cost (306,347) (1,238,906) (356,627) (126,442) - (6,349) (52,126 (115,445) (16,466) - (2,218,708)
Administrative costs (125,050) (617,450) (542,974) (53,381) - (72,838) (28,130) (80,239) (9,716) - (1,529,778)
Reinsurance commissions and profit-sharing 16,192 (26,506) 1,570 - - - - - - - (8,744)
Expenses of the core business of non-insurance entities - - - - - - - - - (415,875) (415,875)
Other operating expenses (not applicable to insurance entities) - - - - - -244 - - - (25,625) (25,869)
Result on insurance / Operating profit (loss) 217,101 756,480 1,761,825 162,751 2,823,234 203,484 2,353 -17,055 15,130 92,294 6,017,597
         
segment_reporting_2_pzu2015.xlsx

Reconciliation of the totals of segments and consolidated data 1 January - 31 December 2015 1 January - 31 December 2014
  Net earned premium Segment result Net earned premium Segment result
Segment total 17,545,866 5,267,776 16,817,140 6,017,597
Presentation of investment contracts (141,063) - (374,481) -
Equity instruments measurement - 103,795 - 55,972
Property valuation - (31,708) - (29,821)
Equalization provision and prevention fund - 25,193 - (61,260)
The Company's Social Benefits Fund charges and actuarial expenses - (17,284) - (11,968)
Consolidation adjustments (19,932) (2,408,387) 1) (13,289) (2,277,302)
Consolidated data 17,384,871 2,939,385 16,429,370 3,693,218

1) Consolidation adjustments result mostly from dividends paid between given segments and from different accounting standards that are applied to reporting given reporting segments (PAS and IFRS) and consolidated data (IFRS).

segment_reporting_3_pzu2015.xlsx

Geographical segmentation 2015 Poland Baltic states Ukraine Non-allocated (consolidation eliminations and other) Consolidated value
Gross written premiums – external 16,998,069 1,193,884 168,184 (1,093) 18,359,044
Gross written premiums – cross-segment 64,692 - - (64,692) -
Revenue from commissions and fees 242,799 - - - 242,799
Net investment income 1,512,351 16,861 42,475 (419) 1,571,268
Net result on realization and impairment losses on investments (390,839) 4,310 (2,193) 165,483 (223,239)
Net change in the fair value of assets and liabilities measured at fair value 389,649 611 988 - 391,248
           
Non-current assets other than financial 1) 2,387,834 302,298 3,229 (405) 2,692,956
Change in deferred tax assets 345,674 - 1,145 2,370 349,189
Assets 104,738,120 1,825,890 217,201 (1,352,202) 105,429,009

1) Concerns intangible assets and property, plant and equipment.

segment_reporting_4_pzu2015.xlsx

Geographical segmentation 2014 Poland Baltic states Ukraine Non-allocated
(consolidation eliminations and other) 		Consolidated value
Gross written premiums – external 16,174,579 536,498 173,562 - 16,884,639
Gross written premiums – cross-segment 26,815 - - (26,815) -
Revenue from commissions and fees 350,764 - - - 350,764
Net investment income 1,654,726 10,241 39,682 - 1,704,649
Net result on realization and impairment losses on investments 426,016 1,402 (271) - 427,147
Net change in the fair value of assets and liabilities measured at fair value 510,482 2,974 1,655 - 515,111
           
Non-current assets other than financial 1) 1,706,430 160,650 3,887 (666) 1,870,301
Change in deferred tax assets 20,556 5,383 1,018 - 26,957
Assets 67,788,204 1,185,229 224,704 (1,625,376) 67,572,761

1) Concerns intangible assets and property, plant and equipment.

segment_reporting_5_pzu2015.xlsx