Approach to management
Due to its structure, extent and line of business, the PZU Group was identified by the Polish Financial Supervision Authority (KNF) as a financial conglomerate, in which PZU is the leading entity. Since February 2019 the PZU Group has also been subject to supplementary supervision exercised by KNF.
In addition to internal and sector regulations, pertaining to the business profile of individual Group companies, the main legal act regulating conglomerates is the Act of 15 April 2005 on supplementary oversight over credit institutions and insurance undertakings, reinsurance undertakings and investment firms comprising a financial conglomerate.
For a conglomerate to operate efficiently, the PZU Group adopted the allocation of responsibilities and the methods for discharging the duties (the relevant PZU units are responsible for coordinating the implementation of these duties within the PZU Group). The procedures of cooperation and information exchange between PZU Group companies are regulated by Agreements signed with respective PZU Group entities.
Of particular importance for the insurance segment is the cooperation between PZU and PZU Życie. These companies have corresponding management models, within which they work closely together, especially in the areas of strategic and risk management, as well as operational support.
The management and supervision processes over other PZU Group companies exercised from the parent company level are supported by internal formal solutions that are complementary to regulatory requirements and, at times, are designed to fill in legislative loopholes. For instance, they take the form of cooperation agreements and area-specific policies and procedures issued on their basis. Within the framework of this cooperation, organizational structures also exist, and their task is to develop and implement uniform solutions across the PZU Group.
Corporate governance over subsidiaries
Since 2010, the PZU Group’s practice in terms of its corporate governance model and collaboration among its various entities has been for representatives of PZU and PZU Życie to sit on the supervisory boards of the Group’s companies. This solution ensures a uniform approach to governance standards in the key areas of the PZU Group’s functioning.
- President of the PZU Management Board Artur Olech was the President of the Bank Pekao Supervisory Board;
- Member of the PZU Management Board Bartosz Grześ owia was also the Deputy President of the Bank Pekao Supervisory Board and President of the TUW PZUW Supervisory Board;
- Member of the PZU Management Board Jan Zimowicz was Deputy President of the Alior Bank Supervisory Board;
- Member of the PZU Management Board Elżbieta Häuser-Schöneich was Deputy President of the LINK4 TU Supervisory Board;
- Member of the PZU and PZU Życie Management Boards Tomasz Kulik was Deputy President of the PZU TFI Supervisory Board;
- Member of the PZU Życie Management Board arosław Mastalerz was President of the PTE PZU Supervisory Board;
- Member of the PZU Życie Management Board Paweł Wajda was also President of the Alior Bank Supervisory Board, President of the PZU Zdrowie Supervisory Board, Member of the Supervisory Boards of the PrJSC IC PZU Ukraine with its registered office in Kiev, Ukraine, and IC PZU Ukraine Life Insurance with its registered office in Kiev, Ukraine.
- Member of the PZU Życie Management Board Sławomir Bili was President of the PZU Pomoc Supervisory Board, seconded by the Supervisory Board to be acting Member of the Management Board.
- Member of the PZU Management Board Andrzej Klesyk, directing the work of the Board pending approval of the Polish Financial Supervision Authority, was President of the PZU Życie Supervisory Board, President of Bank Pekao Supervisory Board, President of the PZU Zdrowie Supervisory Board;
- Member of the PZU Management Board Bartosz Grześ owia was also the Deputy President of the Bank Pekao Supervisory Board and President of the TUW PZUW Supervisory Board;
- Member of the PZU Management Board Jan Zimowicz was Deputy President of the Alior Bank Supervisory Board;
- Member of the PZU Management Board Elżbieta Häuser-Schöneich was Deputy President of the LINK4 TU Supervisory Board;
- Member of the PZU and PZU Życie Management Boards Tomasz Kulik was President of the PZU TFI Supervisory Board, Member of the Alior Bank Supervisory Board, Member of the PZU Zdrowie Supervisory Board.
Agreement on Cooperation
A cooperation agreement has been in place (since March 21, 2017) for the purposes of efficient cooperation between units of the PZU parent company and PZU Group subsidiaries.
Included units – 29 entities of the PZU Group:
PZU, PZU Życie, TFI PZU, PZU Zdrowie, PZU Centrum Operacji, PZU Pomoc, TUW PZUW, PTE PZU, LINK4, Ogrodowa – Inwestycje, PZU LAB, Tower Inwestycje, PZU Cash, PZU Finanse, Armatura Kra ów, PZU Pro e t 01, Tulare Investments, Omicron BIS, Ipsilon, PrJSC IC PZU Ukraine with its registered office in Kiev, PrJSC IC PZU Ukraine Life Insurance with its registered office in Kiev, LLC SOS Services Ukraine with its registered office in Kiev, UAB PZU Lietuva Gyvybes Draudimas with its registered office in Vilnius, AB Lietuvos Draudimas with its registered office in Vilnius, PZU Finance AB in liquidation (publ) with its registered office in Stockholm, AAS BALTA with its registered office in Riga, PZU Corporate Member Ltd. with its registered office in London. Pols i Gaz TUW and Pols i Gaz TUW na Życie joined the agreement on 2 February 2024, so as of that date, 29 entities are parties to it.
Cooperation based on adopted policies in the areas of: procurement, risk management, IT management, internal audit, PZU Group’s strategy, pro ects, mar eting and PZU brand management, consulting and legal assistance, security management, human resources management, corporate communication, tax policy, corporate governance at PZU Group, actuarial services, accounting, planning and controlling, compliance, reinsurance, supervision over foreign companies, customer experience management, claims and benefits handling, sustainable business development (ESG), tariff-related actuarial services, analysis of insurance evolution and tariffs, development of sales technology, sales tools and non-motor underwriting of business insurance products. Under a resolution of the PZU Management Board of November 7, 2023, the Group cooperation was expanded to include: M&A, data management, products and real estate. In addition, the following Group Policies were updated in 2024 at PZU: Risk Concentration Management Policy at the level of the PZU Financial Conglomerate, Policy on Identifying and Reporting Transactions within the PZU Group, Policy on the Preparation and Submission of Periodic Reports at PZU SA, Human Rights Policy and Environmental Policy.
Corporate governance – banks (Bank Pekao, Alior Bank)
For the purpose of cooperating with banks, separate agreements were adopted to lay down the rules of cooperation and exchange of information, among others, on reporting duties and accounting, taxation and transfer pricing, planning and controlling, compliance and internal control, internal audit, risk, strategy, corporate governance, security and sustainable business development (ESG):
- Agreement on Cooperation and Exchange of Information of 28 September 2017 (amended: on April 2, 2020, July 3, 2020, March, 30 2023 and July 16, 2024) between PZU and Bank Pekao;
- Agreement on Cooperation and Exchange of Information of 19 June 2019 on September 25, 2020, April 3, 2023 and July 17, 2024) between PZU and Alior Bank.
Within the PZU organizational structure, in units responsible for business processes, the rules of the socalled Chinese walls apply. This serves to keep legally protected secrets of both banks and limit the possibility of exchanging sensitive information on business activity between banks in the PZU Group. What is also important, this ensures the separation of the flow of information obtained from PZU as the entity heading up the PZU Group, to procure compliance with the legal regulations pertaining to information subject to banking secrecy and other legally protected secrets.
Having regard for the different business nature of the banking entities and the insurance entities, and their sectoral regulations, the direct application in the banks of the risk management system functioning in the insurance companies was impossible. The challenge was to align the process so that the attainment of the PZU Group’s ob ectives in ris management would transpire while respecting the ban ing sector’s regulations, the independence of the entities within the understanding of the Commercial Company Code and equal access to information among all the shareholders of the banks. This alignment was crafted in full cooperation with both banks. Risk appetite and Recovery Plans in Bank Pekao and Alior Ban are consulted with the PZU Group’s parent company and the subject matter of opinions issued by the PZU Group Risk Committee. The aim is to ensure consistency between the activities carried out by the banks and the strategic plans and business objectives of the PZU Group as a whole and maintain an acceptable level of risk at the Group level. Thus agreed Risk Appetite and recovery plans are also approved by Supervisory Boards of banks.