The PZU Group’s Capital and Dividend Policy for 2021–2024 was in force in 2024 and was based on the following assumptions.

Capital and Dividend Policy

In keeping with the Policy, PZU Group endeavors to:

  1. manage capital effectively by optimizing the usage of capital from the Group’s perspective;
  2. maximize the rate of return on equity for the parent company’s shareholders, in particular by maintaining the level of security and retaining capital resources for strategic growth objectives through organic growth and acquisitions;
  3. ensure sufficient financial means to cover the Group’s liabilities to its clients.

The capital management policy rests on the following principles:

  1. manage the PZU Group’s capital including excess capital) at the level of PZU;
  2. sustain target solvency ratios at the level of 200% for the PZU Group, PZU SA and PZU Życie SA (according to Solvency II);
  3. maintain the PZU Group’s financial leverage ratio at a level no higher than 25%;
  4. ensure funds for growth and acquisitions;
  5. maintain the financial conglomerate’s surplus own funds above the pertinent requirements for solvency;
  6. PZU will not issue any new shares for the duration of this Policy.

Under the policy, certain temporary deviations in the actual solvency ratio above or below the target level may occasionally occur.

The PZU and PZU Group’s dividend policy rests on the following principles:

  1. The PZU Group endeavors to manage capital effectively and maximize the rate of return on equity for the parent company’s shareholders, in particular by maintaining the level of security and retaining capital resources for strategic growth objectives through acquisitions;
  2. the dividend amount proposed by the parent company’s Management Board which PZU pays for the respective financial year is determined on the basis of the PZU Group’s consolidated financial result attributable to equity holders of the parent company, where:
    1. not more than 20% will increase retained earnings (supplementary capital) for purposes of organic development and innovations, and implementation of development initiatives,
    2. no less than 50% is subject to payment as an annual dividend;
    3. the remaining part will be paid in the form of annual dividend or will increase retained earnings (supplementary capital) if significant expenditures are incurred in connection with execution of the PZU Group Strategy, including in particular, mergers and acquisitions; with the reservation that:
  3. according to the Management Board’s plans and risk and solvency self-assessment of the parent company, the own funds of the parent company and the PZU Group following the declaration of payment or payment of a dividend will remain at a level that will ensure fulfilment of the conditions specified in the Capital Policy of the PZU Group and PZU (items 2 to 5);
  4. when determining the dividend the regulatory authority’s recommendations concerning dividends will be taken into consideration.

Update of the Capital and Dividend Policy for 2025-2027

On December 2, 2024, the PZU Management Board adopted the Capital and Dividend Policy for 2025–2027. Compared to the previous Policy, the Solvency II target ratio is amended for the PZU Group and set at 180% (it is unamended for PZU SA and PZU Życie) – as of the date the Solvency II amendments come into force. Until then, target solvency ratios of 200% for the PZU Group, 200% for PZU SA and 200% for PZU Życie SA will be maintained, so they will remain at the levels set out in the Capital and Dividend Policy that expired in 2024.

Disbursement of dividends

October 8, 2024 – payment of more than PLN 3.7 billion in dividends, or PLN 4.34 per share.

A detailed sequence of key related events is presented below.

The recommendation of the Polish Financial Supervision Authority (KNF) for dividend payment in 2024

The KNF’s recommendation on the dividend policy of insurance and reinsurance companies allowed insurance companies to:

  1. pay out a dividend of up to 100% of the profit generated in 2022 (including dividends paid to date from 2022 profit);
  2. pay out a dividend of up to 100% of the profit generated in 2023, provided that the criteria set by KNF have been fulfilled.

These criteria include a Supervisory Review and Evaluation Process (SREP) (i.e. risk assessment) and the coverage of a specific capital requirement on a standalone (unconsolidated) basis. Moreover, a company intending to disburse a dividend must not have experienced a situation involving a shortage of own funds to cover the capital requirement in any quarter and must not be covered by a short-term financial plan or remedial plan.

KNF also pointed out that, when deciding on the level of dividends, the undertakings should take into account their additional capital needs within the period of 12 months from the approval date of the 2023 financial statements, which may result, among others, from changes in the market and legal environment, in particular from the high degree of uncertainty about the macroeconomic perspective regarding, among others, inflation, interest rates, currency exchange rates, energy resources or effects brought about by the currently ongoing armed conflicts.

(RB 20/2023) – Motion of the PZU Management Board regarding the distribution of the profit generated in 2023 and the amount transferred from the supplementary capital created from the profit generated in 2022

In connection with the aforementioned recommendation of the KNF, the PZU SA Management Board recommended distribution of the profit generated in 2023 (and the amount transferred from the supplementary capital created from the profit generated in 2022). The proposed dividend amount was over PLN 3.7 billion, i.e. PLN 4.34 per share. The Supervisory Board favorably evaluated the motion of the Management Board on May 20, 2024 (RB 21/2024).

(RB 27/2023) – Ordinary Shareholder Meeting’s resolution on the distribution of PZU’s net profit

The Ordinary Shareholder Meeting of PZU adopted a resolution on distribution of PZU’s net profit, in which it decided to distribute the profit generated in 2023 increased by the amount transferred from the supplementary capital created from the profit generated in 2022. The amount of over PLN 3.7 billion was designated for the dividend payment. The dividend record date was set for September 17, 2024 and the dividend payout date was set for October 8, 2024.

KNF’s stance on the Dividend Policy in 2025

On December 10, 2024, KNF adopted a position on the dividend policy of insurance companies, reinsurance companies, and insurance-and-reinsurance companies in 2024.

The Commission permitted a dividend to be paid out only by the companies that meet all of the following criteria for distributions from the 2023 and 2024 profits:

  1. They have received a good or satisfactory SREP risk score for 2023;
  2. In the various quarters of 2024 they reported no shortage of own funds to cover the capital requirement (defined as the maximum of the minimum capital requirement (MCR) and the solvency capital requirement (SCR));
  3. In 2024 they were not covered by a short-term financial plan or the remedial plan;
  4. As at December 31, 2024, the level of own funds, without deducting the expected dividends, was at the level of at least 175% of the capital requirements for insurance companies, reinsurance companies, insurance-and-reinsurance companies operating in section I and at least 150% of the capital requirements for insurance companies, reinsurance companies, insurance-and-reinsurance companies operating in section II.

The undertakings satisfying the above criteria may pay a dividend in the maximum amount of 100% of the profit generated in 2023 (this including dividends already paid out from the 2023 profit) and 100% of the profit generated in 2024, however the coverage of capital requirements (after deducting the expected dividends from own funds) as at December 31, 2024, and for the quarter in which the dividend was paid, will be at the level of at least 175% for undertakings operating in section I and at least 150% for undertakings operating in section II.

When deciding on the level of dividends, the undertakings satisfying the above criteria should take into account their additional capital needs within the period of 12 months from the approval date of the 2024 financial statements.

PZU profit and dividend 2020 2021 2022 2023 2024
Consolidated profit attributable to the parent company (PLN million) 1,912 3,336 3,781 5,780 5,342
PZU’s unconsolidated profit PLN million) 1,919 2,028 1,637 3,983 3,877
Dividend paid for the year (PLN million) 3,022 1,675 2,072 3,748 ***
Dividend per share for the year (PLN) 3.50 1.94 2.40 4.34 ***
Dividend per share according to the year in which the right was established (PLN) ** 3.50 1.94 2.40 4.34
(a) Change in share price y/y (19.2)% 9.2% 0.2% 33.5% (3.0)%
(b) Annual dividend ratio (%)* ** 10.8% 5.5% 6.8% 9.2%
(a+b) TSR Total Shareholders Return (19.2)% 20.1% 5.7% 40.2% 6.2%
* ratio calculated as dividend (according to the year in which the right was established) compared to share price as at the end of the previous reporting year
** In 2020, the Ordinary Shareholder Meeting of PZU did not allocate profit to pay out the dividend (following the recommendation of the KNF of 26 March 2020); in 2021, the OSM of PZU resolved on the distribution of the profit generated in 2020 increased by the amount transferred from the supplementary capital created from net profit generated in the ear ending on 31 December 2019
*** up to the date of preparing this report on the activities of the PZU Group, the PZU Management Board has not adopted a resolution concerning the proposed distribution of profit for 2024
Source: PZU date

*Up to the date of preparing this report on the activities of the PZU Group, the PZU Management Board has not adopted a resolution concerning the proposed distribution of profit for 2024. A report containing audited information on PZU’s solvency ratios and financial standing on a standalone basis will be published Q2 2025.

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