Powszechny Zaklad Ubezpieczen SA (PZU) Earnings Call Transcript & Summary

Welcome. Today, we will be discussing the results of PZU in 2025 and with a special focus on Q4. Bogdan Benczak, CEO of PZU S.A. and Tomasz Kulik, member of the Management Board of PZU. [indiscernible] CFO of the group, will take the floor.

Good morning, ladies and gentlemen. Welcome. This conference will be dedicated to a very exceptional year. 2025 was an extraordinary year for the group. We had to face many challenges, but thanks to hard work and teamwork, we were able to achieve record high results and we are going to discuss this today. almost PLN 31 billion of premium, PLN 1.5 billion more than 2024 with the profit of PLN 6.7 billion and solvency of around 234%. And last year, we paid out PLN 4.47 dividend with a high dividend yield, and these are record high results for the group. So dynamic income growth. Over 25%, PLN 6.699 billion. This is what we achieved. And out of this, PLN 4.5 billion accounts for insurance and PLN 2.2 billion comes from our banking activity. ROE stands at over 20%. And this is largely thanks to a high result on insurance, PLN 4.8 billion and good results of the investment portfolio, PLN 2.7 billion with a contractual margin of over 27% and a combined ratio at the level of 86.2%. And these are very good results. We have broken the record here. And let me give the floor now to Tomasz, CFO.

So the main takeaway of this chart is the following. The distribution of the result of this year is a bit -- might be a bit different from what you were expecting. And I'm referring to how the group generated results in 2024. So now let me highlight a couple of differences here. The differences concern 2024, 2025 and different quarters. So, we all remember that last year, the previous year, there was the flooding and this led to a lot of claims related to flooding. And in Q4, usually in Q4, usually, when speaking about the death rate and life insurance-related parameters, we analyzed them and this usually serves us to make estimates for the next year. And last year, we had to be quite conservative when it comes to the revenue. And this is largely because we are expecting a completely different behavior of the life insurance segment because I'm referring now to the death rate. But actually, how the death rate unfolded didn't meet our expectations, and we benefited largely from the situation here. And the assumptions changed in Q4. And this year, we are meeting a month earlier than last year. And this affects some processes, which usually appeared in Q3 and were moved to Q4. And at points, this might lead to a situation where it might be a bit harder to understand how to compare different quarters in 2025 and 2024. So my message here is the following. The average result is PLN 1.6 billion, and this is significantly more than in 2024. We are an insurance and banking group. And the insurance leg has very strong foundations and have a look at the profitability and the combined ratio, it stands at 86%. And in Q4, it was similar. This means that we have a very strong position, speaking about the strategy for 2026 and 2027. The business is solid. The investment portfolio's performance is sound. There were some tactical moves in Q4 related to portfolio to freeze -- to keep this very good profitability for longer, but we'll discuss this later on. And the P&L is solid on equity profitability is over 20%. So this means that we should be optimistic about the dividend.

And as Tomek has mentioned, we closed the year faster 2025. So, in 2025, we scaled up our activity, and we expanded our complementary offer and the growth in non-motor was double digit. We are very happy about it. The very good trend in life and protection insurance continues here. The growth is also double digit. And we are happy with the changes in the health pillar where the growth is around 14% like-for-like. Also, the number of external customers in our three TFIs has gone up as well. Our credit rating is A- with a positive outlook. And the solvency ratio is very high as well. It's over 200%. After three quarters, solvency stands at 234%. This means that we have all that it takes to be very optimistic about the dividend for 2025, as Tomek has already mentioned. You know that according to our strategy in 2027, the dividend will stand at over PLN 4, PLN 4.05. So we are in a very good position to think about a very attractive dividend here. And now our investment portfolio. As Tomasz has mentioned, a very good results when it comes to the deposits, 71% of our portfolio amounts -- accounts for sovereign bonds, and we have very good reinsurance protection as well. Q4 and 2025 now. We were setting priorities for our strategy in Q4, and we think that there are great opportunities for the PZU Group to -- because of the improvement of the economic situation of Poland. Poland is now among the 20 largest economies and the purchasing power is growing. We would like to seize this opportunity and offer the best possible products to our customers so that we can make the most of this positive economic cycle in Poland. But at the same time, we would like to drive the growth of the GDP, and we would like to offer insurance services, but also financing for investment projects that will contribute to the development of the Polish economy. But we know that there are challenges on the market. So I'm referring to MTPL here. We know that the market is soft, so to speak, and there are more and more competitors. Also, we need to prepare for the changes in the distribution market. The role of intermediaries is growing, but the group has a very strong chain network of own agents. And these are our special forces we would like to make the most of and we would like to expand. But at the same time, we need to keep an open mind. So we are considering other options to remain competitive in this aspect. At the same time, as we know, interest rates have been going down. So, as a result, we need to take this into consideration in our deposits-related activities. And also any changes in the interest rates will have an effect on our banking activities. We have prepared different activities and set KPIs to prepare the group for 2026 and the challenges. As I've said, we are very happy with the record high results in 2025. But as an organization, we are getting ready for the challenges of 2026. And we will tell you about the initiatives we are going to support in a moment, but we have identified our weak points, and we have prepared a list of measures to be taken to become an unquestionable leader of the market again. Let us begin with mass insurance. In that sector, we focus on modernizing our sales. We have planned, and we are currently implementing a new front-end system. In this system, we want to unify our approach, make it more consistent, which will make it easier for our agents to work, and it will also be easier to start working with intermediaries. We also want to change, optimize our tariffs and our underwriting. We have reorganized our organization in a way that will strengthen the data scientists team. We also decided to develop our machine learning models, and we have laid the groundwork for technical change by moving to a cloud. We also have a number of AI tools implemented in our underwriting procedures. I'm very happy with how some of our products have changed. For instance, the PZU Dom. It has been revised, remodeled and our clients were quite enthusiastic about its new version. So this is a good case in point illustrating that we are able to develop and grow our products and the changes are very welcome. We intend to continue to develop our product portfolio, in particular, in motor insurance. We have also introduced a new claims handling system, which is more efficient than the previous one. Tomasz Tarkowski is the person in charge. We hope that we will see the first benefits of this new procedure and the new system in 2027. Over the last two years, we have made a large progress in that area, but there is still a lot to do, and we can further improve our effectiveness. Life insurance. I'm very pleased with the riders that we have added to individual insurance policies. Tomek will tell you more about it. We're pleased with the results, and we'll continue in that vein. We have also changed our group insurance pillar including life insurance, we also want to offer new integrated insurance products. For instance, PZU travel assistance in cooperation with the LOT Polish national airline. We have also decided to introduce a stand-alone insurance in bancassurance. This is our response to low interest rates. Basically in response to low interest rates, we want to transform our bancassurance offer and to move from interest-based approach to commissions. We also have launched a project together with Pekao Bank. And this is the way we want to proceed in the future, like to have more of similar joint ventures. We are moving towards digital channels of communication with our partners and customers and brokers. We are introducing a number of AI-based automated solutions in our foreign companies. PZU in the Baltic states has been growing very well. Its combined ratio is comparable to our Polish branch. So, in short, our results in the Baltic states are very good. A few words about Ukraine. Actually, I would like to share a few thoughts with you. Last week, I went to Kyiv. I met with our colleagues there. And I must admit that I'm very impressed with their resilience. They're operating in very difficult conditions. I'm also sure that the profit they generated in 2025 in Ukraine constitute a good basis for business growth even despite the difficult situation in which they are in. We are also growing our foreign inward reinsurance. We have -- our team has already signed a few contracts in this area. We also want to sign MGAs with chosen partners. And those partners are present on the markets in our part of Europe. In 2025, we have improved the operations of our health pillar. We have invested into it. We've been growing organically. So this means that we have opened a number of greenfield facilities, and we continue to plan further investments. In 2026, we want to open new greenfield facilities and to carry out acquisitions. We also want to improve operations of our facilities. In particular, we want to make as much communication, make sure that as much communication as possible is in digital form. because this will make the health pillar of our activity more effective. We want to seize the opportunity that the current financial ecosystem gives us. As I have said, Poland has joined the G20. The purchasing power of our clients is growing. This means that we need to optimize our investments and deposits. Also, I believe that we need to seize the opportunities that the Polish growing GDP is presenting us with. We want to participate in innovate.pl program, but not only. On the 17th of March, we will offer our first ETF fund. We'll also offer other investment products such as FIZ private debt and its joint undertaking with Pekao Bank. Our main focus is organic growth as well as optimizing and finding innovative applications for artificial intelligence. Currently, PZU operates over 30 solutions based on artificial intelligence. And we're not resting on our laurels. We want to benefit from synergies that we have with PZU Ready for Startups program. This means that we are implementing some business ideas that have received positive reviews. We're also -- we have also introduced an AI assistant for our employees. And last year, this tool generated 1.7 million prompts. In 2026, we want to deploy a new IT strategy. A significant weakness that was diagnosed after three quarters of 2025 is technological debt. It was -- that this weakness was diagnosed by the Board. That's why we decided to transform our IT framework to make better use of data and digital solutions. Whatever is possible, we want to use cloud-based solutions, artificial intelligence and so-called low-code-based solution. Our goal is to shorten the time-to-market to reduce our costs to improve the efficiency of our IT systems. Yet security is our top priority. That's why all our systems, especially the critical systems will be covered by the digital resilience mechanisms developed under our strategy. In a moment, I will give the floor to Tomasz, who will tell you a bit more about the fourth quarter of 2025, which was also quite unique. As Tomasz said, we have drastically accelerated the process of closing the accounts for 2025. And without further ado, Tomasz, I'm giving you the floor.

Thank you. As usual, we will begin with non-motor and non-life insurance. Let us begin with the written premium and revenue. Q4 was a 2-speeds quarter. The growth was at 2% year-on-year. We have observed good dynamics in non-motor insurance. The corporate segment rose -- went up by 5.9%, including construction insurance and property insurance. Now motor insurance adjusted for Q4 2024. The market is quite saturated. There is an interesting ratio of MOD to MTPL. Interestingly, the business of property insurance is based on two pillars, the motor insurance and non-motor insurance. I mentioned this because this allows us to forecast better to have higher profitability and to be less dependent on underwriting cycles that we have been observing mostly in non-motor insurance. In life insurance, we're doing more of the same. And I think it's a good idea. In mass and individual insurance, we have a group of new clients and a group of returning customers. I think that the health pillar is the most attractive part of this business. We have a strong competitive advantage with it over our competitors. Our offer is indexated. We are offering new riders, and this allows us to keep the growth between 2% and 3%, and 2.5% to be more exact. In individual insurance, just like with non-life insurance, we have two main tendencies. The first one is stable growth in regular business, 24% year-on-year. And this happens in the context of interest rates going down. This means that the return on deposits is lower and the deposits are the guarantees of our products. So the sales of life and endowment seriously went down, especially in the banking sector. On the other hand, what we are witnessing right now is a shift from a single premium product to a regular premium product. This does not affect the rate of growth of the number of clients, but it does affect the written premium value. Here, the value of a single transaction actually is important. So, in health, the growth is double digit, both for medical clinics and other facilities. Own facilities have witnessed a significant growth and so have the partner facilities. This helps us manage the traffic of customers the right way, and we can keep the costs of medical procedures under control this way. Because we have control over the value chain that customers use. So we can control the cost, but at the same time, we can take care of the customer experience. Costs matter. So we are happy to see the fact that the number of online appointments is growing up. Actually, the number of appointments being booked online, the main channel website used for that purpose is called mojePZU, myPZU. And also the share of services provided at our own and partners' facilities is also going up. There is one thing that this chart is missing though, but it's still an important thing to highlight. I have to say that this line of business has undergone a huge transformation over the last 12 months. And this line of business is about insurance, health medicine, labor medicine. And the profitability rate here is almost 13%. And there's a huge progress here. The contribution has gone up. So we are speaking about an interesting and very profitable chunk of our group. Now assets under management in Q4, the trends from the previous quarters continued. And PZU is #1 in nonbanking and #3 in the full chart. Our share is almost 10% and ECS assets account for almost [ PLN 10 million ] with an increase year-to-year of over 50%. Now bancassurance, as I've already mentioned, on the one hand, we are changing the model and shifting to a regular premium and I'm referring here to this distribution channel. So there are some risks here. The face value decrease and the free credit sanction. So these are the aspects here to be taken into account, but it doesn't translate into a decrease in the number of customers. So our huge effort in Q4 was effective, and you can see this in the results. Now the gross insurance revenue, here, the growth rate is a bit lower than Q4 2024. And this is largely because of what's going on in non-life insurance. And this is very visible in the first half of the year. Now if you split it into different lines of business, well, different things are happening in different lines of business. But please bear in mind that the corporate business is growing significantly, almost 15% of growth year-on-year in insurance revenue. Now mass insurance, non-motor, 6.6%, as we have already discussed, but there is a drop in motor insurance. The adjustment year-to-year is over 6%. Now life and individual business, again, you have double-digit results individually continued and with a slight adjustment year-on-year because of the high base largely. And this is related to the factors that I spoke about at the beginning, and I will come back to later on. Our reinsurance program remains largely the same. Therefore, net revenue is stable. The cost of insurance services has gone up by 4%. The level of claims and benefits remains more or less at the same value with a slight change, although the portfolio exposure is larger. And here, importantly, the claims ratio has improved in non-life insurance. So previous years claims in the power industry sector have been solved, and this has had a positive effect. We have had stable profitability in MTPL, but MOD has slower margins now. The claims and benefits have gone up in the life and health part. Administrative costs have gone up in Q4. And this is mainly because of the fact that salaries went up. First of all, there is the salary review each year, and we have to compare ourselves to the market. So salaries have gone up. And there were also one-off payments related to some collective disputes, which have been resolved. Higher distribution costs, 3.2%, a bit higher than the insurance revenue. This growth is due to the fact that non-motor insurance has had a larger share in sales. And here, the cost of distribution in general is higher. So actually, this is good. This means more products with higher predictability and profitability. Now the loss -- the net loss component, which is amortization and other aspects. Here, these two items have had a negative effect and the overall influence amounts to around PLN 50 million. And last year, the situation was the other way around, where the loss component was offset. By the creation of new write-offs in this part of the portfolio where the sum of cost is higher than the written premium or to be more precise, the insurance revenue. So the result in insurance is PLN 1.6 billion. And let me highlight that the loss ratio is low with the loss component is at the level of last year and the difference is less than 1% point. The non-life business is highly profitable. The depreciation is 120 points, but this is still a very sound profitability. Let me highlight this. And this is much more than we promised in our strategy. The margins in life insurance are over 20%. But we know that we can't use Q4 2024 as a benchmark here, and we all know why. Now Q4 ends with almost PLN 1.5 billion, PLN 1.74 billion and on equity, 17.6%. And now let's deep dive into each segment. So a couple of things I haven't said so far. Now I've already told you about the revenues, so I'm not going to repeat myself. Now the costs have gone up by 6.6%. And what has happened here? So the current claims liabilities have gone up. And there is a higher cost of motor and life claims. And I'm referring here to the non-motor and life claims, and I'm referring to PZU DOM and PZU Firma. So this was partially set off by the positive evolution of the provisions from previous years, and this proves our conservative provisions policy and prudency, which usually has a delayed effect. So there is a higher loss component mainly in MTPL. So this -- the effect of these two elements on Q4 amounts to PLN 57 million. This was caused by a loss component in agriculture insurance. The operating result went down to PLN 415 million. Please bear in mind, though, that the profitability of this segment is above our strategic assumptions. The combined ratio on the whole segment in Q4 was at 89.7%, 96.1% in motor products and below 80% in non-motor. And this is very good news. Let me briefly present to you the market situation and how the market may influence PZU's results in the coming quarters and years. In 2024, we had a number of negative trends. We had a 7% loss on TPL. The market started to show positive results in Q1 2025, and that was actually surprising. The price dynamics was at 7.6% in TPL in MOD at 3.5%, and we ended at levels below zero for both TPL and MOD. Currently, TPL is at minus 0.5% and MOD at minus 3.9%. What does it mean? If the number of claims goes up, we will experience pressure to deliver results. An important piece of information, and please do not jump to conclusions. So this important piece of information is that even though MOD has been in the -- has been showing negative trend for three consecutive quarters, it has been quite profitable. At the end of Q3, its profitability was at 8%, which is a lot. TPL also delivered good results in Q4 despite the negative general trends. So, on the whole, even though the circumstances in which we operate are not ideal, it does not mean that the profitability of our portfolio or the profitability of our colleagues will go down. So the Polish Financial Supervision Authority started to apply sanctions for certain price-related decisions taken by our competitors. So as the Financial Supervision Authority has decided to intervene, we'll continue to observe this situation, and we hope that it's a part of a systemic intervention and change that will overturn the trend. Non-life insurance, corporate insurance segment, the cost, the expenses in Q4 2025 were closely connected to a large number of claims. We have made very cautious forecast regarding Q4 in careful estimates. We were actually so careful that in the end, the amount of claims paid out in that period was a rather pleasant surprise. This translated into a substantial increase of the operating results and improved profitability in all dimensions. in motor insurance, non-motor insurance of the corporate insurance segment. Life insurance group and individually continued insurance. 2024 was not a representative year for PZU. We agreed that keeping profitability at the level of 30% was untenable. If it was, we would have written a whole strategy on how to do it. We have two main messages concerning life insurance in 2024. So I want to talk about the cost of claims. Here as well, we were very careful in making our estimates. We were not sure what we could -- what kind of debt ratio we could expect still as in post-COVID years in 2024, we have been consuming CSM in an accelerated manner. Under normal circumstances, this would have been spread over a few years and depreciated over the entire cycle of the insurance. And when you compare the revenue and expenses with the previous years, you will realize that it's actually impossible to carry out a year-to-year analysis. Also in Q4, we have changed the actuarial forecasts and assumptions by -- we changed it by PLN 67 million. All other assumptions for this year remained regular. I just wanted to make this comment so that you can understand the mutual relationship of the two Q4s in question. Mortality. It might seem that the mortality rate has got back to normal. So we're at a level of 3.5% less than Q4 2024. We're approaching the statistics that we have known in the pre-pandemic period. So we might carefully assume that we can close the COVID chapter. Life insurance, individual protection insurance, the cost is basically the effect of the scale and the exposure of this portfolio. So the insurance revenue went up year-on-year by 23.8% and the expenses by 27.4%. Well, margin, we've got high margins, good level of sale, including selling additional products, indexation. All those factors allow us to gradually and systematically build value from one quarter to another. This is very clear in case of group and individually continued insurance, where the growth from one quarter to another was at 5% investment results. We did not have a great quarter, but still quite acceptable. Actually, our CEO has just said that it was -- helped me out, and he said that this was an exceptional or extraordinary quarter, just like the whole year 2025. We had good interest income regardless of what happens to interest rates. We had lower results from valuation and realization of debt instruments. We have decided to sell a few tranches at lower profitability because, well, we all know that the interest rates will continue to go down. So we decided to carry out this transaction. So what you see in the results are basically, it's a small adjustment of our exposure to corporate debt. There were some press articles about it. PZU is a part of a consortium with a number of banks, and we're involved in that transaction. Other than that, we have proceeded in line with our strategy. We also had a lower performance of equity instruments, in particular, given the exposure to stock in the medical sector. Other than that, we have benefited from the tendencies on the capital market. For instance, we had a good yield year-on-year on our real estate portfolio. We have also had positive -- we have benefited from positive exchange rate differences in real estate valuations. So we see -- and this was connected to the fluctuation of exchange rate between Polish zloty and euro. Solvency. Our solvency ratio shows that our good results are not only on paper, but they can be monetized. So we have good results in our own funds on investments adjusted in line with our policy and the dividend are expected at the level of 80% of the group's profit. And the second half of the year, we experienced an increased risk in banks and higher requirements and solvency. So we're closing the year with the solvency ratio at 234%. Strategy 2025-2027. Gross insurance revenue. Given the current figures, we know that we need to speed up if we want to deliver on our ambitious KPIs. We said it when we published our strategy. We want to set the bar for ourselves quite high. This means that we need to speed up with delivering on our KPIs and the strategies that the CEO has mentioned in the first part of the presentation will help us to do so. We are still not flying on all engines. We believe that the active reinsurance will soon help us out build our exposure and that will help us to benefit from this large reinsurance capacity in our balance sheet. Net profit last quarter and last year, again, was extraordinary. And we have been stressing this many times. We have reported a profit year-on-year of 25%. And let me stress that ROE from nonbanking is over 20%. And the earnings per share nonbanking is at the level, which is above our targets, [ 5.23 ] with the insurance business being highly profitable with a solid growth of the health pillar and asset management. But now over to the CEO to wrap up.

Thank you, Tomasz. As you can see, ladies and gentlemen, it has been an extraordinary year with extraordinary results. There have been many different initiatives, which are aimed at preparing PZU for the implementation of our strategy. As Tomasz has said on the revenue side, it's going to be a huge challenge for us, but we have identified all the challenges ahead of us, and we are prepared. We have all the KPIs setup, and we are implementing projects which are supposed to take us to our goals. So much for this part. Over to Magda. We have discussed our records. And now over to you to -- let's move on to the Q&A.

So let's start with questions from the floor.

Congratulations on your results for 2025. I have a couple of questions. What do you think about non-life insurance in Poland and the potential for growth in 2026, given all the things that the competitors are doing? And do you think it's likely for the revenue on insurance to speed up? And the next question is about Solvency II and the change in regime. When do you think your internal risk assessment model will be validated by the regulator? Do you think it's going to happen sooner in the first half of the year or towards the end of 2026?

Okay. So let me start with the second question. We think and we expect the model to be validated in 2027. Well, it depends. It also depends on the changes in the structure of the group because there is the project of reorganization of the group, which has been -- which is carried out together with Pekao. You know the term sheet has been signed, and you know that it all hinges on the legislative process. But internally, the company is getting ready for that for the split. But let me stress once again that according to the current strategy of the group, the new Solvency II rules will take effect in January 2027. The strategic assumptions related to strategy and the dividend policy will be delivered. We are certain about it because we think that reorganization is an opportunity for us to optimize the group, both organization and capital-wise. And speaking about the internal models, we are in touch with the regulator with the KNF. But we don't think it's achievable in 2026. Probably it's doable in 2027. but this to be confirmed by the KNF. Okay. So before we go back to the question about the results, I do have one more question, though. So, as I understand, you will enter 2027 and the structure of your group is still uncertain. But let's assume that nothing will change. And we already discussed the fact that the new Solvency II is already included in your targets. But could you provide us with guidance because about -- around a year ago, there was guidance that if the Solvency II is implemented without any changes at all, there will be a capital excess in the group around PLN 1.2 billion -- PLN 1.5 billion. Is this right? Well, it depends on how you calculate it and seriously. This is how I would like to answer this question. Where are we in terms of growth? So think about the outlook for this year and how it eventually evolves because no one expected this year to be so favorable in terms of the weather. So 2027 is very likely in terms of us reaching the KPIs from this strategy, and this is good news. Also today, we can say that if nothing special happens, and I'm speaking large-scale events here that would have an effect, a negative effect on our insurance profitability. I mean there are no signs of anything bad happening in the economy. So, in this environment, we are likely to deliver around 125% to 200% in 2026 in terms of solvency. And now speaking about our European peers, and we have really done our research here. Many European peers, large companies are speaking about 180%, 185%. So their targets are different from what we would expect. And also 2027, the debt from 2009 becomes mature, and this will be probably rolled out. And this is an instrument which you can also adjust a bit to your needs. But we don't know what the needs will be like. now because of the reorganization and the next steps to be taken. So, to conclude, let me tell you that. No matter what happens, this debate about solvency shouldn't have any effect on how PZU will meet its obligations related to the dividend because this is what you can bring it down to, I think. And now speaking about the market and, we also have our targets here. I think that the potential of the market is a growth rate of 6%. More in non-motor than in motor insurance. Motor insurance is quite uncertain today. Because as you can see in this chart, this is a very particular moment -- and the regulator has sent us a strong signal. And hopefully, this will be -- this message will be understood the right way. Some competitors were very aggressive last year. And in press releases today, they say that they don't want to sell insurance at any price. And we'll see whether this is actually true. Time will tell. But for us, it's an opportunity for the prices to grow. And this is already happening if you have a look at the renewal ratio. In 2025, the renewal rate was quite -- was poor because this was an extraordinary year. So we hope that this will be fixed. And I think that we are on the right track to get there. So this is an important driver. It only takes a slight adjustment. And we really know that our exclusive agents are very profitable. This business is very profitable. And also the inward reinsurance has reached an unprecedented scale. And this can be very meaningful for the P&L because our competitors can't scale up their business this way. And we do have it in our strategy, and we're going to do it abroad. So I hope that we will be able to grow faster year-on-year than the market. And according to our assumptions, the market should grow this year by 6%, 7%. This is one thing. So all the extraordinary things about 2025, the renewals, the -- our own agents who are a very effective channel of sale for us and a very important one. But we also have to focus on the intermediaries. So this is the second pillar of the market. This has changed a lot over the last years. We want to regain our position here because our policy was not stable or predictable and we had to face the consequences. And this is my goal and the goal of my management. We have a great competitive advantage, which is our own agents. But at the same time, we want to build a very effective system of external distribution through multi-agencies among other ways. So we are working on it, both on the technology because we are implementing the front-end system. But we are also building a team that will work together with our partners closely because they account for 50% of the market already. So we have to take that into account.

I represent the Citi Handlowy Bank. I have two questions. So you said many times that last year was extraordinary. This one was also quite extraordinary because we had quite an impressive winter. So, I wonder if this anomaly, weather anomaly can affect the results of PZU in Q1.

I'd like to remind you that this winter started in the previous year. Yes, it was an extraordinary winter. It started in December. And it's important, not because of the snow, but because the snow kept falling and was falling at the end of December, and there were not that many claims. So we did what PZU is best at. We made -- we behaved carefully. And we decided to wait and see if after Q1, we'll have a surge in the number of claims and that part of those claims for losses suffered in December will be filed in January. This is something we took into account, and we prepared ourselves. Therefore, I think that the market in general will report worse results for January. Of course, I cannot guarantee anything because we're talking about the insurance market and the entire insurance market is based on uncertainty on certain future events. So what we did at our end is that we adopted a responsible long-term approach. So we're not about muscle flexing or proving something to somebody only to suffer the consequences of it and the roller coaster in a quarter that would follow. Therefore, we have approached the results of the extraordinary 2025 year with a lot of -- with a pinch of salt. We are a market leader, and therefore, we need to behave responsibly. So I echo Tomasz's position. This is the time of the year when we need to be careful and take responsible decisions. During the last meeting, there was a question about the Baltic states. So let me explain that the winter in Poland is different than in the Baltic states. One thing is the situation on the roads. In Estonia, actually, this winter also has been extraordinary because the so-called ice highways have been opened and namely the cars are driving on ice on the sea among individual islands. So we'll see what the final results for Q1 from the Baltic states are going to be. The conditions there were tougher than in Poland. And we'll see how it is going to be reflected in our portfolio. But this is something that we'll discuss when the results for the Q1 will become known.

I have one more question. The internal restructuring of PZU and creating a holding is a complex endeavor. So how much time will you need to adapt to the new legal regulations that are about to be adopted, the one that will allow you to do the restructuring. Please, can you explain what do you mean when you talk about restructuring?

Well, yes, I'm talking about the whole procedure from A to Z, the process of creating the holding. No, actually, it just step one, sorry, not the one where the bank is involved. We're talking about a period that spans over two or three quarters from the moment of getting the green light. So what we can do is that we can prepare ourselves, but without the new act entering into force, we have our hands tied. This means that we cannot take decisions, certain decisions that might be misinterpreted before the legal provisions take effect. They might be, for instance, perceived as acting to the detriment of the company. So we can -- what we can do is to prepare, to carry out stock taking of all the agreements that have to be transferred to the new entity. We can analyze our systems, et cetera, but what we cannot do is we cannot start to negotiate with large partners, technological partners. Otherwise, it might be interpreted as acting in bad faith.

Are there any other questions in the room? I can't see any. So, maybe let us move to the questions from the Internet. Trigon Brokering House is asking for some explanations regarding the position of the competitors in non-motor sector.

Well, the situation is different in non-motor and in corporate sectors. Actually, the competition has become fierce in Q4. The non-motor sector has its characteristics. The clients that are usually more loyal. We have more returning clients and more renewals. That's true, and I would like to add one remark to this. Please note that there is a very unique entity in our group. We are treating it as a unique distribution channel that has to have a given legal form under the existing provisions. This entity allows us to create incentives for our clients. And don't get me wrong, the incentives mean that we are offering a good coverage for a good price plus some advice on prevention. And some large entities are very interested in those incentives. So we kind of tell them how they can improve their procedures in a way that will make them less prone to major economic damage because they know that prevention is better than the cure. Like no, hardly anyone really is looking forward to payments for business interruption. They would rather not have their business interrupted at all. So those types of customers, they work closely with us, and they also benefit from the surplus that is generated in our results. So this is the competitive advantage that we have in the corporate sector that our competitors just don't have.

There's a question regarding investments also from Trigon. There was a drop in the investment result in insurance sector. And what is the run rate? What is the forecast regarding run rate for upcoming quarters?

This is a consequence of certain tactical decisions that concerned bonds, financial instruments, yields, et cetera. They had negative adjusted value and to make the best use of the circumstances in Q4, we decided to recognize. Those negative values, hoping that we will be able to report a higher return in future quarters. In 2025, the profitability of our portfolio was at 5.4%. And this the result was worse by PLN 300 million year-on-year. So I can say that this result was not representative. And we need to think that this portfolio has a potential of 5% or more and what has been reported for Q4 is just not representative.

There is a question regarding expenses without the insurance services. Why?

The expenses were so high. Well, we had a large increase of expenses in noninsurance business. But also, please note the revenue line, especially in the health pillar. If you analyze them together, then you'll see that there is some surplus. So this is how it is with our noninsurance operations. So mainly health, investment funds a bit. This is typical for the health pillar in winter. Just in Q4, we tend to go and see the doctor more often seasonality briefly. Now we're coming back to profitability and dividends.

Pekao Securities. The question is as follows. The CEO has mentioned attractive dividends. And can you give us some more information about it?

Are you interested in time lines or in values? Values, I guess. Tomasz, this was a nice attempt. Ladies and gentlemen, it's quite a complex process to issue the Management Board's recommendation on the dividend, and we have to wait a bit more for that. This also requires some consultations with other stakeholders. But as I've said, we can allow ourselves to be thinking about an attractive dividend, which I think is included in our 2027 strategy. And then I might have already said too much, Tomek, haven't we?

No.

And there is another question about the 190% to 200% solvency targeted for 2026.

If nothing bad happens. This is calculated already according to the new regime? Yes.

And the last question here from Trigon. The effect of the 2027 changes on the equities.

Well, I'm not going to say more than there is included in our strategy. The changes will be implemented. And given that there will be no other changes in parameters and the reorganization, the changes will not have a worse effect than more or less -- rather 30 points versus the benchmark. So if it was 240 before the change with the new setting, it's going to be 200 plus.

There is a question about a bank in Ukraine. Would we be interested in buying a bank over there? This is a question from Pekao Securities.

This is a contextual question. Well, we look into every investment opportunity. We are very opportunistic about it. And this is also covered in our strategy. And this is how we are going to proceed. But our strongest focus now is the banks we already have here in Poland.

Another question from Pekao Securities. What do you think about the proposal of one of the political parties for insurance companies to spend PLN 750 million each year to modernize the police force and the firefighters.

Now already insurance companies dedicate 10% for fire protection to upgrade the fire protection services, both the national service and the voluntary service. So this will be my answer. And the last comment from the same company is congratulations on bringing forward the announcement date of your results. Yes. And a big thank you goes to Tomek and his team for very hard -- extraordinary hard work. Yes, for an extraordinary. Yes. Thank you, Tomek, and thank you, everyone for the operations of the group, it has been a tremendous challenge, and we closed the year very, very fast. So, once again, I would like to thank all my colleagues who have contributed. I can only sign up to your words. And let me also thank all the people involved, all the auditors. Thank you.

Any more questions in the room? Thank you, and see you soon on the 14th of May. Thank you, and have a nice day.