Powszechny Zaklad Ubezpieczen S.A.

Good afternoon. Welcome to the first conference dedicated to the discussion on the financial results for Q1 2026 and we are going to have this meeting moderated by CEO Bogdan Bento as well as my Chief Editor-in-Chief Mr Bento, cover to you. Good afternoon, welcome to the financial results conference following quarter 1, 2026 of PZU Group. It is my pleasure that I'm going to co-moderate this conference for the first time together with Margie Ferdinand, responsible for finance and risk and PZU Group. Welcome. Let us begin, shall we? First quarter 2026, Visio Group, well, we consider it a very solid opening of the country. As far as the market situation goes, with respect to our organisation, well, it has been less favourable as it was a year before. What are the factors behind? Firstly, volatility on international markets. Secondly, the fact that this year's winter season was indeed very wintery, unlike what we had in the past years. However, we are proud of the fact that we have generated record sales equivalent to 7.8 billion PLN, the highest result ever after the first quarter. Simultaneously, we managed to have 1.4 billion in terms of net profit. This comes as the aftermath of a very conscious risk management and a very diversified risk handling scheme. Margie will elaborate on various factors that had a lot to do with this result following Q1. But this Q1 has been concluded with a very stable position. Solvency to ratio 239%. Yesterday the supervisory board recommended to pay on the dividend in the height of Vosloty's 80 gr per share dividend yield equivalent to around 7.6% on May 12 there have been 16 years since our debut on the Warsaw Stock Exchange in that period of time we paid and almost 37 billion zlotys in dividend you can see the graph attached total return obtained by the VZU Group for the dividend our recommended dividend is equivalent to PLN 4.8 record date shall be September 17th the current year and the payment date likewise October 8th 2026. Let me take this opportunity to stress some credit rating is stable equivalent to a minus with a positive outlook backed by or as a result of solvency to ratio at almost 240% And you know best what our investment portfolio is composed of. That is almost 80% in sovereign bonds. By the same token, we are very effective in terms of reinsurance protection. This year, in the beginning, we strived to consistently improve our market standing. We informed you about the fact that we had signed the acquisition agreement for the Ukrainian insurance operator and we did it MetLife. We did it because it was possible in the first place, in the second place. Ukraine is a market that we have recognised very well. We've got both the people and financial resources. and our expertise comes to that as well. That was another factor behind. Moreover, we took advantage of all the instruments available in Poland to mitigate the various geopolitical risks that might be associated with said takeover. So whenever possible, the physio group is is very apt in enhancing our market standing. In parliament, we consolidated our assets with LINC4 in order to fully implement the multi-brand strategy and again to be able to mitigate various risks which are associated with the fact that we are indeed two separate entities. In parallel, we want to profit as much as we can from the potential of a link for a brand. But again, the moving question is very much about simplification and very much about greater efficiency. For the acquisitions plans, In terms of MetLife Ukraine we would like to conclude the regulatory proceedings by the end of this year and for the link for legal merger it is to be brought to fruition in Q1 2027. Our growth, what is it based on? It is based on in the first place the scale and second of all the value which varies from our customers. In 2026 we grow specifically in the area of non-motor insurance as regards to the life insurance sector. I'm proud to see we've been consistent in growing in the life insurance part of our business. At the same time, the health pillar is a very important contributor, as well as our TFI. TFI are also very handy in getting the portfolios of external clients. Let us not disregard the fact that various technologies come to our benefit. Mojapesito platform has gathered around 6 million users. If we were to compare Q1 against the results obtained in the previous two years, What is striking? Well, for the results of Q1 2026 against all the odds, all the negative factors, all the unfavorable regulatory surroundings, it is evident that the fact that we are diversified in our operations, thanks to this, we managed to guarantee very solid results. The greatest fact there in question, revenues from Insurance, that is 1,254,010. Investment portfolio, 655 million. Operating margin accounts for 25.3%. And life insurance combined ratio standing at 86.8%. given the current economic cycle and given the fact that in Q1 we obtained a greater frequency of claims resulting from those weather conditions especially in the winter time with all this in mind we are very happy to have seen we have in fact delivered this kind of result for our shareholders. Let us move on, we will continue on building up our care and strategy, especially with regard to distribution. Importantly, the Ordo Nova programme is centred to ensure ever more efficient operations of our Atayda agents. For the handling of planes, we are well centred to have a new system The operational implementation should start in age 2, 2026 and in age 1, 2027 we will see the first outcomes. Currently we keep improving our actions in this area. Here we have accommodated a number of actions that will make us more agile, claims handling wise. Innovate PO is another of action programs that we've committed to, plus we sell our EFI app whenever possible. Monopositive platform. Well, this platform should be a strategic way of communications with our customers. R2Q1, the platform in question, has serviced to send us the six billion points. The health pillar has seen a further extension of our in-house medical network, at the same time we've been following very closely the overall situation on the market and likewise we are planning on to expand our partnership network. Of the NOVA program, well, ladies and gentlemen, I have said on numerous occasions that our touch agents are indeed our competitive age against our rivals and now we are trying to do our best to take advantage of it as much as we can and that is precisely why we have decided to roll out a number of technological solutions such that will help us better handle the needs of our customers. I have stressed a lot, our goal is to eliminate our debt and to this end we have introduced a number of technological solutions. We go and integrate a link for, to this end, multi-brand strategy is in place. Changes in claims handling processes improving efficiency. That's another chapter of importance we have managed to shorten the average time of claims settlements. Claims ratio has also gone down. Likewise, we want to increase the share of resolution claims settlements. In a comment part, Maciej will tell you more how these factors get translated into the change in the so-called triangles, something very important for the reserve pile-up. In the mid-PL, it's an under-focus area. By the same token, we have prepared the first published tokens, now listed on WC. Our plan is to implement other similar products. I always reiterate, everyone at PZU is a salesman. Therefore, let me draw your attention to point 5. Earlier in the talk this year, we have had a special promotional campaign. So please consider buying this product, which is a very solid one indeed. PZU ETS. Let us now compare where we are in our journey of strategy implementation at the beginning of 2026. Well, we have had a solid record breaking result after Q1, 7.8 billion PMN, 1.4 billion in terms of net profit, and these two figures are notably something that very much is in sync with our strategy. For the dividend, we have recommended a 4.8 per share. This year we managed to achieve the ratio as set in our strategy for this year. And the strategy was this composer with you. The dividend level was no smaller than 4.4 p.m. So much from me, ladies and gentlemen. Now I would like to take over to

Good afternoon, my name is Maciej Fadyna and it's my great pleasure to present to you the group's result for Q1 2026. It's actually my preview and I'm glad that this debut takes place in mid-May. Actually, today we are celebrating 16 years from our IPO, and it overlaps with my debut today in front of you. I would like to start by elaborating on the dividends. Yesterday, we have recommended allocating 4.8 Polish zlotys per share as dividend, and an additional comment on my part is that our recommendation is very much future-oriented. because it takes into account the planned acquisition in Ukraine, but we need to obtain all relevant authorizations. In 2027, we are expecting a change in regulations regarding capital buffers for our sector, and this is important in the context of our group's solvency. Therefore, we have recommended the dividend at 4.8 published lot is because it gives us a very comfortable situation and we can rest assured that our group will continue to keep a high solvency ratio and a coherent dividend policy. So we have future-proofed our dividends, in short, for the year 2026 and 2027. Now moving on to Q1. We had a well-balanced operational activity, solid parameters, such as the combined ratio and the margin in life insurance. These were the main contributors to the results. for the shareholders of the parent entity from other than banking activity at the level of over 900 million Polish zlotys. And if we include the banking leg of our activity, we can report 1,300,000 62 million published lotties. I will not talk at length about it, about what affected and influenced it. There were changes in the VBOR, which had to affect our group's results. Also, we had to handle additional tax on the banking sector, but well, these are all factors that you're familiar with, so I will not elaborate on it, but I would like to focus on the factors that have influenced our insurance activity. So year on year, we have grown by 2.3%, and it's the best result. in our group when it comes to quarterly results. If we examine those figures net we'll see that the value in the reinsurance contracts is lower this year than in the previous year and that's why we have an improved dynamics in net figures. If we analyze the profitability I would like to tell you that we have 86.8. This is our combined ratio and this is a very good result in non-life insurance. You are probably aware that this level of results is unachievable for our competitors while we actually deliver it consistently. What has contributed to those results? First of all, winter. That was, that has already been mentioned by Bogdan. It was a good season for us. We're all aware that winter this year was not unusual but very different than winters that we had in previous years. So the weather conditions did affect our results, but only slightly. And we might analyze individual business lines that were affected by the severe low temperatures. And I'd like also to mention that this affected not only Poland, but also the Baltic states. So agricultural insurance. We had a number of claims from farmers due to frost. Also, in the non-life insurance, we had an increased number of claims due to damaged buildings and damaged farming equipment, as well as heating installations. Basically, these damages entailed more costs this year than in the previous year. Now, motor insurance, this is always interesting. They were also affected by the weather. However, the MOD and the MTPL were affected to a different degree, but to comment upon it, I would have to give you a broader perspective. So, in MTPL, in Q1, we have noted a lower frequency of claims than in the previous year, which is good news. We have also started to note significant income that is generated by a speeding up of our claim handling because we have a growing number of claims that end in settlements. We have also shortened the average time from reporting a claim to inspection. And the combined positive effect of a lower number of claims in MTPL and improved claims handling process allowed us to compensate for the distance between the average written premium and the growth in the number of claims. And this is good news. That's why the combined ratio in MPPL was so good, and the same goes to mass insurance, 93% combined ratio. And also in corporate insurance, this actually effect was way less noted. The winter weather has caused an increase in the number of claims in MOD. However, from the beginning of last year, we have noticed a negative dynamics of the written premium in MOD. And the effects are quite visible, namely a reduced margin also in our portfolio. To counter that, we invested a lot in our procedures Also procedures regarding establishment via month of the premium, because we are well aware that a customer who wants a comprehensive coverage, so MOD and any other insurance policies, motor policies, and also other types of insurance, such as long life insurance or travel insurance, often those clients are small and medium enterprises and these are actually our target clients so we want to make sure that we attract them and that we offer them a good value for money in the short run and in the long run so this was one of the factors that have affected our profitability in MOD. We have also recognized the loss component, which actually should deserve a separate comment, especially when we analyze the results year on year. This year, we had to pay up 63 million Polish zlotys and in the previous year, we actually earned 64 Polish zlotys, so the difference is to our benefit and you can find the figures in our reports. And regardless of the effects of the weather conditions, the motor insurance in mass and corporate sector alike is quite good. 86% on non-motor and mass insurance, and above 50% in corporate insurance, so we're quite proud of this result. especially that non-life insurance, property insurance are our growth engines. Sometimes we even report two-digit growth in those areas. We have a double-digit growth in those areas. What it goes up is the premium, the absolute numbers, also the amounts and individual policies. which is good for our image and also good for what we can offer to our clients. Because nothing damages insurers image more than a sense that the insured sum was inadequate after a loss is reported. Let us move on to life insurance now, which contributed positively to our results in terms of growth of income by 7.6% year-on-year, and the margin was also quite high at 25.3%. And last year, we have celebrated exceeding the number of half a million of policies. So this product line is growing significantly. It generates substantial margin. So it is something we can be proud of. Also, in group and individually continued insurance, we can also report solid growth. which goes against the negative demographic trends that we are observing in Poland. So the results show that our group can effectively develop and sell insurance policies and to adapt our products to our clients' needs that do change also because of the demographic situation. So this is the basis for our solid growth and margin which is at 21.7%. Another reason for us to be happy was the drop in number of deaths and lower payments due to deaths.

Let us have a listen to investment results. Profitability at 4.8%, which is the outcome of a very stable structure. Investment portfolio at 87% in the entire major investment portfolio. This is what we are looking at. That is without the banking business debt instruments. 73% government debt. Last year we took a number of actions to stabilise the profitability situation from the debt instruments. So, you can see, regardless of somewhat smaller levels of interest rates, especially in January and February, March stood out in these terms. Against that our results here are very favourable. There might be some deviations in the actual pricing and implementation of papers but for the CADR instruments there might be some further deviations. At times we get questions how does it relate to stock exchange ratios, bear in mind there is a difference. We've got very single exposures which are decantled from what is going on in the stock exchange. The fact is that last year we performed really solidly here, this year less so. As we come into the final week, there is a smaller level of revenues from the property investment portfolio. Why did it happen? It happened because of the element of securing the cash flows, currency flows in properties specifically. So swap is what we take advantage of. The points here were higher than last year in tier 1. The swap points were significantly lower year on year. And this is the contributor that has affected our results here. the end table there might be some negative values anyway the large part of the amount which gets reported in the table is of temporary nature the fact how we handle the table in months or quarters other than the end points of quarters and half years there is a reversed trend So negative value of 50 is of temporary nature will no longer be seen in the quarters to come. Now for the motor insurance market in Poland. Let us look ahead shall we. The curve up shows us the price pressure and it got maintained or even strengthened its influence in Q1. But after the closure of Q1, there have been some other winds blowing. Number one, in the shape of some signs showing us the market has grown more sensible how to price the risks in MTFL and MOD, which is good news for the entire market. Counter to that, there are new entrants on our market. and that is why we are getting the impression that the factoring question is below price and that factor is important for the competitiveness of the offerings especially in the external channels but against that we've got our own channels our internal channels thanks to which we can sell irrespective of that particular volatility. Life insurance market in Poland we've been performing pretty stable here and we've got a dominant market share for the fixed time periodic premiums. For the single premiums dynamics we are even stronger Anyway, we need to bear in mind that this market is very volatile, therefore we would try to focus on the first parameter here in reported. And now let us move on to the discussion on the health segment. Insurance has already been elaborated on by Bulkner and SelectB and has focused on cost efficiency as well as operational efficiency. We approached a new digital offering to medical insurance and medical services at Mojaveza tool. It is an important factor which made it happen that we already have 40% of digital appointments and it is something very effective for our clients as well as very effective cost-wise for our group. And the number of remote appointments has now almost achieved the level of 100%. So there is very little room for improvement here. we strike a certain equilibrium that is on the one hand we've got our in-house medical units we keep extending work by takeovers or greenfield investments and these will further improve the parameters as its under management has already been mentioned. Anyway, we welcome the fact that the CSO has been number one for our contracts with TFI, not just on banking TFI, but the entire sector. It has happened thanks to the fact that our long-term products, pension products specifically, take up a very important share and it plays out very well against market volatilities. So against these trends we see a constant flow of revenues for our group. And finally, we have reached the last slide for that part. Solvency reinvestment rate at 239%. This is good news. Also, with the future outlook, last year we managed to have 4 billion of own funds, 4.5 capital expenditures increased by 200 million, and these increase is broken down in the following way half of it is due to the fact that we extended the non-life insurance product portfolios including the disaster risk 25% that is to be attached to market risk The portfolio increased by 10%. The same dynamics is in the capital risk and the other part is to be attached to capital conditions of the banking sector, capital requirements. These are all official numbers reported for 2025. and we would like to start our next communication with you by showing a hypothetical reimbursement rate should we approach differently the solvency to rate especially with regard to what we consider the banking requirements to be clear following the regulatory change the dividend payment capacity of our group will be more than good. So much for me. Thank you. Thank you very much indeed for the presentation. I encourage you to ask questions. Maybe let us take first questions from the room. Are there any? I see the handle of the brokerage house. Let us begin with what you ended at, that is the dividend payout and the capital position of the PZU group. I have two questions. One, the internal model rollout project, how does it fare now? Are there any other initiatives other than the group restructuring? It is something dependent on the legal affairs. But anyway, what can you do under the current situation to optimise the capital position out of the group? That was one. Two, getting to the topic of dividend. With respect to your strategic goals, the dividend now already goes beyond that threshold. What does it mean actually? Does it mean that the further you go, maintaining the dividend status of BZO, or maybe when it decreases under the strategic goal and under the level that was recommended for the current year, what will happen? Or maybe, given the fact that you consider yourself a dividend company, the dividend will never drop. Let me begin, because the topic of internal mortgage is very much in sync with my our position is a sum of many many items there are many factors to be taken into consideration thank you very much you have brought up a number of topics the internal model is amongst the most important ones a disclaimer right at the start shall we in order to be able to apply the internal model as we calculate the internal model in to be able to display the results outside we need to go through the entire process get the proper regulatory consent for the status of works from the internal standpoint we have already rolled it out it is operational we have calculations ready for many reporting periods therefore we can see both the scale and other factors there are different formulas that we can look at and this results in a better risk assessment anyway Bearing in mind we take proper care of the fund at our communication to the market is precise, we won't share the results of these calculations at the current stage. The insurance program selection is the field in question. Another topic is how we select a portfolio for further growth, where we should grow faster, where we should grow less. And this may affect pricing or how we rate the risks. So there are some profits that we have started taking advantage of. But in parallel there is a series of other tools that we can benefit from provided the restructuring does not go as wished for. Or if it is for some reporting reasons we are not yet ready for Q1 2027 and need to boot it up in time. rate insurance program should be our entry field for the capital market analysis. It is quite reasonable from the cost side. Additionally, we have identified a number of other leverages, one being the very structure of an investment portfolio. Ours is a safe one, extremely safe one. Should the other options come up we may still think how to reduce the risk profile so I'm now going over various campaigns various possible campaigns but the way we approach this topic now for the sake of our own risk assessment it is rather apparent We shouldn't plan for any extreme scenarios because the forecasts say our levels of payouts will rather be safe. Our end will stay safe. We will pay out the dividends abiding by our own dividend payout standards. We will adhere to the limits of the dividend payouts in the future.

And as far as the increase of dividend goes, I'm a newbie here, so I'm looking at the CEO to read from his face if I can comment on that. Okay, I see that I can. So we have no forecasts regarding the nominal value of the dividend. but our ambition is to keep the dividend at the amount that is not lower than the current one. Given the fact that the regulatory framework is allowed to change, we want to first and foremost make sure that our company delivers on its commitments. We do have a specific dividend policy and always when we take decisions on the recommendation for the dividend amount, we take into account the current situation in the company and the situation on the market. Basically, we want to be predictable as a group. Thank you. Are there any other questions in the room? I have two questions. One regards the dividend and more. The current operating goals were established, or targets, were established in December 2024. A lot has changed since then. So I'm curious if we should expect any changes to the operating targets, and if so, what are the possible areas that might be affected? This is the first question to the management board that I have. Well, yes, we do monitor on an ongoing basis implementation of our strategy as well as the market situation and market possibilities. We have found ourselves in a new situation and we have a new management board and we want to carry out a review of the current events, the past events and if necessary to revise some areas of our activity. Still the bottom line of our dividend policy is delivering on our commitment and this is not going to change. Thank you. My second question is as follows. Does the new management board see any potential for structural change in the group as far as the reinsurance policy goes or should we stick to the same old? So I'm asking you if there are any plans to take greater risks maybe or investing in that area. As you know, foreign expansion was one of the growth pillars of our strategy. And a part of this foreign expansion is reinsurance, active reinsurance. Q4 is the renewal period for the insurance business and in that period we have signed a number of new contracts. We are monitoring how this part of our business is developing. And we are not planning to revise anything in this area. One question from me. I wanted to ask you about the Baltic states. A worse insurance result was reported for that part of the world. Why? So, as far as the profitability in the Baltic states goes, well, the main factor there is the weather. So let us examine separately modern insurance and other types of insurance. So we have a number of corporate clients in the modern insurance section in the Baltic states. So this means that those clients have to carry out transport services regardless of the weather. They cannot afford suspending their activity. This means that this will always affect the motor insurance result and was one of the reasons why we had slightly worse results there in Q1 in motor insurance. And another factor that explains the slightly worse results was the fact that the weather had on property. To put it in simple terms, when I talked to my colleagues from the Baltic states, I actually, I remember there was also a question about the Baltic states during my first press conference. Anyhow. I spent a lot of time there and my colleagues from the Baltic states told me that just because of mild winters that we've been having, they forgot how destructive actually snow can be. This year, ice roads were opened in Estonia for the first time in 10 years. Actually, I wanted to ask about weather in the context of Q2. I'm curious if we can already make some forecasts regarding the results of Q2 and the context of ground frost that we had in Q2. And another question I would like to ask is about the rising fuel prices. Is it going to affect the number of claims, or the amount of claims, or maybe it won't? Actually, the question to both of your questions is yes. We haven't received a lot of claims regarding the ground frost, but we expect more of them coming in soon. It is too early to make any estimates regarding the impact of ground frost and our results. The loss adjustment process in agriculture is complex and it takes time. And what needs to be taken into account are also the effect of compensation of losses once the crops are ready to harvest. Also, the share of fruit trees insurance is not as high as it used to be, so our exposure to risk connected with ground frost is also slightly lower than it used to be. Still, it is an important part of our business, so I expect that we will see the effect of ground frost on our portfolio at some point. Regarding the fuel prices, their impact is not going to be that extensive because of the subsidies that were introduced and they softened the impact of high fuel prices on consumers. What we did notice, however, in April and May, we've noticed a smaller number of modern insurance claims and we believe that it's connected to different behavior patterns among those clients who only use MOD insurance and those who buy MOD and MPPL alike. Are there any further questions in the room? Okay, I can't see any, but if you have any questions, you can ask it later. And I have a question from PKO Securities. Can you give us more specific numbers regarding agricultural losses after the cold winter. That's the first question. The second question is, are you expecting an increase in claims in the upcoming quarters due to, for instance, drought? So I will address both questions. We estimate the impact of that severe weather in winter. Agricultural insurance at 40 million, published in Q1. It's too early to make any estimates regarding future quarters. What I can tell you is that few farmers buy out drought insurance and also drought is treated as a natural disaster. So we do not offer, on a mass scale, insurance against drought. And as far as I know, this form of product is not commonplace on the market at all because it would be very expensive, especially in Poland, because the soil conditions and the hydrological situation, yeah, would make those products very expensive for the customers. Actually, I would like to ask you about the reorganization of the PZQ group and PKOSA. So can you tell us more? Are those entities going to merge? So the short answer is the term sheet is still valid, you can find all the milestones there as well as events that would trigger the merger and among those events are changes in the regulatory framework. We have done our homework at PZU and if legislation changes we know what we need to do to carve out the insurance and holding parts of the activity so what are the possibilities that this piece of legislation will be voted in I'm not into estimating probabilities. So please release me from that question. I'm a legal counsel. One more question in the room. So if we are asking unusual questions, I'm going to ask a question about the health segment. given us numbers, you're talking about optimization, but if I'm not mistaken, I haven't seen the quantified results of that segment. Maybe I missed it. Maybe it was not on the slide. Actually, this was not on the slide. What I can tell you is that we are happy about the double digit margin in that business area. And we believe that there is a lot of room for improvement there. The top line is going up and the margin is going up as well. So we are on the same trajectory as we were last year in the health segment. There are no further questions. So I will just hand over to the CEO to close the conference. I would like to thank you once again for your attendance. As you have noticed, that he has reported solid results and this is a consequence of our approach so we invest into improving our effectiveness and we're operating model and our fundamentals and of course we do invest in promising areas and I would like to thank you and to congratulate you as well Thank you and we would like to invite you to the next conference and to our GSM. Thank you.