The pandemic, war, global inflation, disjointed supply chains, more cybernetic threats, overloaded health care systems, natural disasters caused by climate change and energy transition. In challenging times, changes take place more quickly and it is easier to diverge from beaten paths and roll out new solutions. We have to utilise the opportunity presented by clients’ growing security needs to ramp up the insurance penetration rate in Poland, which continues to be low when compared to Western European markets.
The End-Game Is to Offer a Solution, not a Product
The focus should not be on products, but on overall solutions to meet client needs in a community defined by totally new challenges coupled with the rising market impact exerted by highly digital, consumer aware and demanding generations Y and Z. It is natural for them to expect insurers to provide capabilities and experiences similar to what they are used to receiving in e-commerce, for instance. That means creating platforms to integrate multiple financial products, ranging from insurance to banking, investment and medical products as well as extensive assistance bundles. These bundles can span highly diverse services such as assistance in household repairs, delivering medicines, organising international medical consultations, support in selecting sporting activities, home-based childcare, legal assistance or expert assistance to check the quality of merchandise a client intends to buy. This process is picking up speed in the Polish insurance industry. The PZU Group has approximately 22 million clients. Through its insurance, health, banking, investment and pension products and services it serves as many as 80% of the households in Poland, which gives it the natural position of pioneering and spearheading change. In executing our strategy in 2021-2024, we have made significant inroads in building comprehensive ecosystems responding to specific sets of needs: employers, drivers, senior citizens and people interested in safeguarding their health.
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This paradigm shift will precipitate a number of transformations in the insurance sector, globally and in Poland alike. Cohesive products and services that are truly of utility to their target audience should form this ecosystem in one single convenient venue. For that reason, one important trend will be more precise customisation of offers to a specific client – of a given age, in a given life circumstance, with precisely defined interests and daily habits. The enormous quantity of data we obtain from many sources and at different stages of client relations, and increasingly sophisticated analytical tools make this plausible. Hyper-personalisation of the purchase and service experience also means giving clients the freedom to choose their own basket of products and services from the overall ecosystem and how they want to pay for it. For example, PZU was the first insurer on the Polish market to introduce a subscription payment enabling clients to pay their premiums for multiple property insurance policies in the form of a single monthly payment by way of a web transfer, card payment or BLIK payment.
Insurers are more and more frequently transcending the traditional industry framework. This is the result, among others, of enriching their ecosystems with offers from their external partners and vice versa. Cooperation in distribution or embedding insurance in the services of other entities is another growing trend. Today, the PZU Group cooperates with a dozen or so banks and more than 20 strategic partners, among others, e-commerce platforms, energy suppliers and air carriers. This opens up additional sales channels for us when it comes to our current life, non-life and health products, but it also gives us a chance to exploit business opportunities in totally new areas such as in the offer created specifically for lessors and lessees of properties through a fintech platform that brings them together or for the users of Poland’s largest service offering tickets to attend sporting and cultural events.

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Prevention First
It is a truism to say that it is better to prevent losses than to remedy them, but today technology provides support for achieving this tenet in practice to a degree never before possible in history. For that reason, insurers will attach ever greater importance to prevention and prophylactics. Monitoring client needs and behaviour in real time and analysing them deeply offers the ability to create more and more effective predictive systems that benefit from telematics, artificial intelligence and machine learning to generate warnings of threats and risky behaviour while supporting clients in decisions enabling them to reduce their risk considerably. This knowledge will concurrently make it possible to customise conditions and pricing terms to a greater extent, fostering favourable attitudes from the vantage point of prophylactics in security, health and finance. Importantly, following the experience gained in recent years, clients may be more inclined to share their data with insurers in exchange for various benefits, but above all to afford themselves, their families, their assets or their businesses the security that is so valuable today.
The PRO Risk prevention programme offered to large businesses insured with PZU may serve as a prime example of this approach. Our engineers, in cooperation with clients, diagnose the prospective risks and gaps in manufacturing, warehousing and logistics processes, select the proper tools for monitoring by tapping into the internet of things, among others, and then track and analyse the feedback on an ongoing basis and propose solutions to enhance security. In this manner we have been watching over nearly 70 large businesses to help them avoid large-scale losses over the last two years (and in three instances preventing losses that could have totalled millions of euro) and maintain the continuity of their operations. Another example is PZU’s app iFleet for the comprehensive management of corporate fleets. One of its key functions is analysing the structure and causes of losses in a given fleet and automatically articulating recommendations pertaining to suitable preventive measures for fleet managers.
We currently perceive enormous opportunities in health and cybersecurity, as they are generating some of the gravest modern challenges. Our Cyber Report for small and medium companies is an innovative service that has received many awards. It is a simple service for a business to use to audit its website. It provides more than detailed information concerning potential threats, the probability of falling prey to a hacker’s attack or reputational risk assessment, but also a set of recommendations which, if implemented, will enhance cybernetic security.
Technological (r)evolution
COVID-19, health restrictions, the switch made by employers to hybrid work (e.g. in 2021, 6 out of 10 employees in PZU and PZU Life worked remotely), the rapid development of many commercial and public online services – all this became a catalyst for digitalisation in the Polish insurance sector on a scale similar to the one previously experienced in the banking industry.
While the prospects for digital channel sales development are the subject of heated discussion elsewhere in the world, our market is dominated by discussions surrounding distribution through intermediaries. Poles clearly prefer contact with agents in the insurance industry, and that is something that will not change materially. Here we can speak of evolution with respect to intermediaries – remote tools are gaining ground, but as support for their work instead of as a way to replace them. Over the last two years, the number of myPZU users, our flagship self-service platform, has grown from 1 million to nearly 3 million, but a significant share of online policy purchases represent the final stage of a process launched by clients in contact with agents.
However, a revolution is taking place in the background. Thanks to artificial intelligence and robotic process automation (RPA), insurers are streamlining their internal operations and reducing costs, enabling them to direct the energy of their employees to more creative tasks. Clients benefit from this by receiving more efficient services. At PZU, we have used AI-backed tools to handle more than 450,000 motor claims worth nearly 900 million euro. The app, relying state-of-the-art solutions, uses pictures of the car sent by the client and a description of the damage to price the claim and present a preliminary cost estimate for repairs in only several minutes. The average number of operations processed in the course of a year by our robots shot up in 2021 by nearly 60% to 11 million. They handled the payment of 42% of childbirth benefits and 8% of hospitalisation benefits.
Every year, we earmark extensive funds to project-related activities. We have devised a template for cooperation with innovative companies in insurtech and healthtech based on the Innovation Lab and the PZU Ready for Startups programme. Over the past five years, we have analysed thousands of startup ideas from Poland and around the world (more than 1,000 in 2021 alone), with the cumulative financial benefits accrued by PZU on the final implementation of dozens of the best business ideas surpassing the 20 million euro watermark. Today PZU is one of the most technologically sophisticated insurers in Europe. This is and shall remain a critical competitive advantage building component. In the future, it may well become a condition of staying in the game, especially in terms of autonomous vehicles, mass usage of drones and robots in the service industry, or parallel lives of our avatars in the metaverse – and the related novel insurance risks and security needs which cannot be handled without sufficient technological agility.
Sustainability
The growing importance of ESG issues is a global megatrend that is also shaping the financial market. Supporting a sustainable economy that is environmentally responsible and contributes to mitigating unfavourable climate change is especially important to insurers. Clients take out insurance from PZU to protect assets worth approximately EUR 445 billion against losses caused by natural disasters. It is portentous that the Polish Chamber of Insurance’s report entitled “Poles’ Risk Map” identifies “climate warming” and “hurricanes” as belonging to the top 10 fears of residents of our country in 2021.
The PZU Group is responding to these challenges by implementing its ESG strategy in 2021-2024 entitled “Sustainability”. This means embedding ESG criteria into practically every sphere of our business and involving employees at all levels. In the “Environmental” area, we want to reduce our carbon footprint to an even greater degree and achieve climate neutrality (we have reduced CO2 emissions versus 2019 by 26.2%). We want to incentivise suppliers and corporate clients to take similar actions by taking advantage of our experience, advisory services and ESG evaluation system. We want to support the energy transition of the Polish economy actively in our role as an investor and supplier of products and services that advance that goal. In a year we have invested over EUR 90 million to underwrite the construction of onshore wind farms and we have invested another EUR 70 million in ESG bonds. We have marketed unique insurance on the Polish market for RES installations and the benefits derived from the production of green energy by their owners, individual and corporate alike. We have extended our offer of special purpose funds in which people can invest on our inPZU platform to include an equity fund consisting of the leading global companies in the renewable energy sector.
We offer a friendly and open work environment (a high percentage of women among our employees, including in managerial positions, and the exceptionally low gender pay gap of 4%, which is unheard of, make PZU Group a leader, not only in the insurance industry). We are permanently shifting to a hybrid model, moving our headquarters to the most ecological and ergonomic office building in Warsaw, and supporting these changes with a new well-being programme addressed to our employees. We also support other employers in building sound and effective relations with their employees, among others, by offering corporate clients a platform of attractive employee benefits.
We approach social responsibility in a similarly comprehensive manner with a focus on the needs of beneficiaries. This has been part of the PZU brand’s DNA for nearly 100 years. A prime example is how PZU has operated in the face of the fight against COVID-19. Through our involvement in providing assistance to services fighting the pandemic, the organisation of mobile vaccination and diagnostic points, the operation of medical call centres and the donation of equipment and funds to hospitals and health centres to fight COVID-19, we provided assistance worth more than EUR 6,5 million.
The newest example of this innovative approach can be seen in our unprecedented campaign for refugees from Ukraine who have travelled to Poland in vehicles registered in their home country, without having purchased the obligatory insurance they needed to have abroad. Over 8 weeks in March and April of this year, PZU issued more than 54,000 30-day motor TPL insurance policies for cars belonging to Ukrainian refugees while covering the cost of premiums to the tune of over EUR 1,5 million.
To put it succinctly, for insurers to do what they are called upon to do more effectively – protecting the lives, health, families, assets and businesses of their clients, create an effective financial blood circulation system for the economy and be involved socially – there are many changes to be made. And we are on the path to achieving it.
Over the last twelve months, PZU Group has invested more than 160 million euro to support the Polish economy’s climate and energy transition