Ladies and gentlemen, it's a pleasure to welcome you here. I'm happy to share my presentation, which will sum up the results of PZU in Q3 2023. Let me give a warm welcome to those who have come here personally. I'm very happy to see you. I hope that the audience will only get bigger in the future. Now let's get to the point of my speech. I have divided this presentation into four sections, which is the main achievements, business development, financial results, the updated strategy, and where we are. To conclude, a few questions from the audience, if you have any. Now, the main achievements. We can say that Q3 witnessed a high dynamics of sales, solid results, a return on equity exceeds strategic ambitions, and this is a good opening and conclusion for Q3.
But I'll also explain to you why and what's behind these extraordinary results. Well, what has influenced it? In this Q, there has been a very high insurance services result, over PLN 1 billion. With good property insurance profitability and also a high recurring death rate. After a high death rate period of... Because of COVID, we had a higher life margin, and also individually continued insurance. High result in the investment portfolio. Compared to Q3 last year, this was a rate of return over 26% and a high contribution of banks to the group's result. Q3 last year was difficult for the banking sector. A lot of write-offs, the mortgage memorandum and a high BFG burden, and this all had an effect on the result. Also, our results were impacted by this.
This time we have PLN 500 million contribution from the banking sector. Especially speaking about the interest income. This has contributed on the quarterly net income, which amounts to over PLN 400 million, and the value has doubled compared to last year, where the corrected ROE 22%, compared to 13.6% last year. There's very good news, namely, I mean that these good results has been achieved with a high dynamic of revenue. The insurance revenue is a new measurement way that describes the revenue of insurance groups. So the net insurance revenue has gone up by PLN 600 million year-over-year and amounts to a very high figure, PLN 6.92 billion. Property insurance has contributed that in the first place, both on the side of insurance in Poland.
So overall, the growth, the sales rate witnessed by PZU, LINK4, and TFI. Also, the revenue of our foreign companies has grown significantly over 15% year-over-year. Especially if you look at the Ukrainian market, so this is a good result. Now, life insurance. Now, starting from this year on, we've been speaking about life insurance in different terms. So because of that, the increase is not as big, slightly over 2%. There is a strong growth in the health segment, over 20% year-over-year. A very promising result. It's a very promising result from the point of view of the strategic goal, which is PLN 1.7 billion. Also, there has been a dynamic growth in the assets under management. Let me mention three pillars of this growth here.
First of all, higher net sales amounting to PLN 2.24 billion, plus inflows to the employer's pension scheme, and also the changing market situation, which also applied to the same period last year. This has influenced this increase 56% compared to last year. Now, the situation of the PZU sales, net revenue on insurance. So the main driver is property insurance here, both in Poland and in foreign companies. Now, speaking about the pillars of growth, they are similar in different markets. Mainly it's motor insurance in Poland. MOD was a leading driver here, the same as in previous quarters. This insurance was growing, first of all, because of the change in value. The value of cars has gone up over the last months. But this has stopped now.
Now the market has become normalized, and now what we are seeing is something typical to the car market, namely, the loss of value over time, so a very normal behavior. This happens after 18 months of growth in these terms. Still, MOD, the quantities of policies have gone up as well. Here, the saturation of the base, higher accessible, a higher sales of new cars, so better accessibility of the leasing market, and also a very dynamic rate of growth in terms of imported private cars. All these have amounted to significant increase in this segment. There's one more thing worth mentioning here, and I mean, non-motor insurance and the high rate of growth. Here, a growth of over 17%, mainly in corporate insurance, but also mass insurance strongly contributed to this result.
Also, farming, MSP, SMEs, and real estate insurance. Here, in this group of insurance, there is something that has been consistent over the last few quarters, namely a growing saturation of these insurance groups in our property insurance portfolio. Now, Life. As I said, a smaller increase. This is because of the new way in which we talk and think about long-term insurance, and life insurance is a long-term one. On the side of insurance, we show premiums in the first place, allocated for the expected growing costs, loss, benefits, administrative costs, distribution. Adjusted increase by a lower contractual margin release, which is lower year-over-year, especially given that we expect a higher utilization of the health risks because of the health debt. This is something we have already talked about many times.
This is very typical for this market, especially since there was the pandemic for over two years, and it was harder to get an appointment or access medical services. Now, this has picked up, and the health services are... Costs are growing. There is an inflation rate, which is quite higher in the health services than the usual CPI. Therefore, the contribution of the CSM is going down, this contractual margin, the contractual service margin. High security of the operations at the end of the first half year. There is a classical delay here in the results in the capital situation. So solvency, 227% over the strategic goal, and also a lot above the reference group.
So a strong equity position, a safe, diversified portfolio with little volatility, because this is what we want. We want a lot of predictability with a proper level of risk, which translate into what you are seeing today. Also, ability to monetize these extraordinary
... profits. This allows us to continue an attractive dividend policy, which has been supported by a high level of result at the level of the holding company, PZU S.A. A dynamic rate of growth. As always, we've been trying to achieve it in a sustainable way. We've been taking broad measures to promote healthy lifestyle and environmental behaviors, environmentally friendly behaviors. We've been growing in a consistent manner when it comes to the value supplied to our customers as part of the TUW. To us, it's not only a distribution channel, this is our competitive edge. And this can't be carried out outside of the PZU. This is a very special part of our activity, but this is also our services provided as part of the LabPoint.
Our colleagues are there to show companies that want to take out an insurance policy with us how they can affect or minimize the risk themselves, which on one hand makes their premium more attractive, but on the other hand this leads to certain kickbacks, which are available to our customers if there are no claims.
What about our achievements in Q3, and how they have been shaped versus the entire market landscape, so business development? Here, just let me remind you that we compare ourselves to the market based on the recent data available after two quarters of this year. We will talk about how this market has been developed in Q2 and how what is the position of PZU at this background.
Of course, we start from non-life insurance, which in the second quarter they are losing the high dynamics from the beginning of this year, but they continue on their growth path, both for motor and non-motor segments, with slightly different dynamics. Of course, it will not come as a surprise if I say that on the side of motor insurance, the flywheel is third-party liability with a change of premium at the level of +15%, which has taken place both in terms of change of the premium and number of policyholders and cars insured. When it comes to TPL, dynamics are slightly lower, 3.7%, and they reflect, to a vast extent, average prices with a slight increase in terms of exposure.
Continued growth in non-motor insurance, plus over 59%. The quantitative effect, the property insurance, Chapter Eight and Chapter Thirteen, almost 19% growth with 13% dynamics. And at this background, at the end of the second quarter. We had a high share of written premium at the level of 31.6%, which is an analogical to our share after half of a year in 2022. Just let me remind you that we have recorded a great performance, especially in Q4 last year, that will be presented later on in the context of insurance revenues in non-life, in property insurance, mainly. So we assume that assume a similar path in Q4 this year.
So this is the market landscape and our sales share in sales at the level of 31.6% and over 34.4%. So what is going on in the market, especially in this motor part, which you frequently ask for Q2, so the last market data available, they have confirmed growth at the level of 3.7 in Q3, which is based on pure data, which do not cover entire market, but they represent a kind of proxy, so we can observe a continuation of a positive price trend from the second and from the first quarter. However, at a slightly lower dynamics in Q3, achieving only 2%.
What makes us happy, it is the situation, which is going on at the background of a lower loss rate, which has dropped in Q3 by 4%. And what we've observed, it is a boost of the market in terms of the number of car accidents in September, a significant growth, which stems, maybe you confirm that with your experience with the way how you commute from home to work. Of course, you can have your subjective feeling, but we can see that the traffic is back on the streets, and we can experience a new trend and the beginning of a new trend. When it comes to the PZU Group and property insurance and life insurance, we are entering into Q3, and unfortunately, the story is as it is.
So taking into account the market condition, we are continuing on a growth path, which we entered in half of this year. So we are recording our sales in terms of written growth premium at the level of 10%. We can see some boost in non-motor part, which I've already discussed. It is especially significant because if we change the structure of portfolio from the perspective of customer the product mix, we are less cyclical than other parts of the market, and we have lower than average share of motor products in our total product mix, which allows us to act in a less cyclical and more predictable work and to deliver on our strategy.
When it comes to growth, the company in this area, which is non-motor, 22% year-on-year, which is significantly higher than our competitors in Q3, at a lower dynamics in motor insurance, of course, slightly above 3%. And of course, it is supported by higher sales when it comes to MOD, here, 7% the dynamic, and with a flat year-on-year sales when it comes to MOD, the volume, the TPL, I'm sorry, and here, volume higher than price increase. When it comes to property insurance, we focus on prevention and sustainable growth, sustainable development goals. When it comes to new products, especially for crops, it is possible to increase your own share and to. We already covered some and transferred the handling of some products, the MyPZU online service.
So entering smoothly in the realm of life insurance, we're going back to Q2. The life insurance market in Poland is in its upswing, but it's developing in a different way for periodic premium and single premium. For periodic premium, the major contributor to this dynamic, if I may say so, there were some add-ons, accident and illness insurance, over PLN 155 million of additional premium, and 8.6% year-on-year growth dynamics, with the baseline at the level of and change versus the previous year on of the order of 4.4%, which gave us PLN 23 million. What we can eighty-two millions, I'm sorry. When it comes to life insurance, we can see premiums and rates going up as they need to reflect higher costs of insurers.
We can observe an increase related to add-ons, especially these, with the level of costs, costs exceeding the level of inflation in Poland. So I mean, all additional services related to medical services, hospital treatment, and so on. When it comes to a single premium insurance, the growth dynamic for entire market is 16%, but we know that it's 15% of entire market. An increase in the written premium in this group, when it comes to group one insurance, PLN 318 million plus 71.7% year-on-year. PZU Group, with its offer within, endowment, it has made, a significant step here with, at the same time, a little bit lower, rates, and, a bit- a slight decline in unit-linked, sales.
The single premium insurance market participation went up to 26%. Last year, in the underlying period, it was slightly above 12% of our market share in this concrete market segment. When it comes to our share and participation of regular premium in the market, it was at the level of 42.2%. Talking about PZU Życie. PZU Życie, as I said, the major driver behind this results, this were costs shaped by the dynamics of price increases and the characteristic feature for such mature portfolio as the ones we handle at PZU Życie, it is a slightly lower dynamics of main portfolio measured with the premium in the segment of group and individually continued insurance. The premium went up by 3.5%, and for all these reasons I mentioned before.
On the side of individual insurance at the same level as last year, but I'd like to draw your attention to the fact that despite the fact that there is no nominal growth, the sales structure has been modified. We can see more protection insurance sold by our own channel and in the banking channel, and at the same time lower sales of a single premium product. This quasi-saving and investment product, which is distributed within our network and in the banking channel, and this endowment product, which is still very popular among our customers, but a slightly lower interest than last year. In terms of our new product initiatives, the main process improvements we have implemented in order to increase the participation, and we have changed and increased the minimum premiums for capital and protection insurance.
For the health pillar, what is really important is the fact that we are growing in scale, and at the end of Q3, the number of contracts amounted to 3.4 million. That means a growth by almost 8% year-over-year. In terms of revenues in PLN, they have gone up by almost 20%. The 25%, that was the sum of subscriptions and our medical centers. And of course, this increase comes from the scale on the one hand, and on the other, it results from high inflation in this very particular segment. Inflation, which in part is being amortized by us, but unfortunately, we need to record it in the -- and reflect it in the cost of our service.
What is really symptomatic here is that our customers, they, think high of the quality of our services, which is reflected in high satisfaction survey results. Despite the fact that the prices are increasing, we are observing that customers are highly flexible and reacting positively to this in high inflation trend. So after a long period of flat prices and high availability, today, all these translates into lower than expected and slightly and very high retention period and low churn. So that's a positive segment. From the perspective of assets under management, I think I shared some important information by now.
Bancassurance, assurance banking. Przede wszystkim, to co wymaga wspomnienia, to zmiana struktury produktowej. Mówiliśmy o tym bankowym SPE i o tym, jak jego sprzedaż zmieniła się na przestrzeni ostatnich 12 miesięcy. Natomiast to, co cieszy, to to, że wzrasta udział produktów ochronnych, rosną przychody z tytułu ubezpieczeń majątkowych i widzimy wzrost zainteresowania. Powolny, ale wzrost zainteresowania produktami o charakterze inwestycyjnym czy też połączonymi z ubezpieczeniowymi funduszami kapitałowymi. Staramy się dostosowywać naszą ofertę do oczekiwań rynku, jednocześnie pracując nad dostosowaniem produktów do rekomendacji, zaktualizowanej, znowelizowanej rekomendacji U. Co to wszystko, o czym mówiliśmy z punktu widzenia naszej działalności? Po stronie sprzedaży, po stronie przychodów w różnych segmentach. Co to znaczy i jak przełożyło się na nasze wyniki i poszczególne linie naszego rachunku wyników?
Zaczynając od przychodów z ubezpieczeń, tutaj wzrost rok do roku o ponad PLN 600 milionów. Tak jak wspomnieliśmy, tym podstawowym źródłem wzrostu były ubezpieczenia majątkowe. Jeżeli chodzi o tę część polską, to PLN 367 milionów wzrostu. I to właśnie ta ważna informacja. To dzieje się i te wzrosty prawie 10-procentowe są realizowane właśnie dzięki bardzo dużym dynamikom sprzedaży obserwowanym zarówno w pierwszej połowie tego roku, trzecim kwartale, jak i czwartym kwartale zeszłego roku. Bo tak jak Państwo pamiętacie, w tym nowym standardzie ta zmieniona wartość, ta nowa wartość, która opisuje przychody z ubezpieczeń, jest bardziej podobna do składki zarobionej, a w związku z tym bierze pod uwagę.
It's similar to the earned premium as it takes into account not the nominal, but how the premium spans in time. Therefore, consistency and growths that are achieved quarter to quarter are very important, more important than an important significant growth, but only a one-off. Also, a huge increase in our foreign operations, over PLN 100 million growth compared to Q3 last year. In life insurance, as I've already mentioned, the dynamics is slightly lower here. On the one hand, this is because there is a growing premium to cover growing expenses. At the same time, there is a slightly lower release of the contractual service margin. Here is the change quarter to quarter of about PLN 11 million. So lower this time in the context of the higher take-up of medical services, so because of the medical debt.
Now, net revenue on insurance. So after reinsurance cost, the rate of growth has been a bit lower, 8.7%. This reflects the fact that the costs of reinsurance have been growing, and also there is a growing portfolio of non-motor corporate contracts, which, as a rule, have a much deeper reinsurance in proportion, but also in terms of the excess. So we can see a huge growth here of the reinsurance costs, both in terms of the scale. This derives from the scale of the portfolio, but also there is a growing cost expense because of the losses of the reinsurance companies, and so there has been an attempt to pass this on to the customers. We've been trying to optimize the reinsurance costs.
We've changed some layers, we have withdrawn from such some layers, which we have considered a quasi-capital instrument in the context of all the increases. So we've been trying to optimize our reinsurance coverage. And I'm telling you this because you might also see it in the growing SCR, which is also a consequence of these changes in catastrophic reinsurance. I'm just explaining this to you because you might have questions about our results compared to Q3. And this is because of the growing reinsurance cost. Because of that, we are trying to give up what, in the current circumstances, is not essential. Now, claims and benefits. A few things here. First of all, a growth brought about by the growth of the portfolio. This is quite obvious.
On the other hand, we have a slump in profitability of the mass TPL product. In corporate non-motor insurance, we have come back to normalized margins. In Q3 last year, there were extraordinary profits here on a few single contracts, and they translated into the combined ratio of 52.7%. This is what it looked like in Q3 last year in this segment. Of course, this is not representative. So here we are coming back to the levels of the previous 80%. And this has translated into the growth in claims and benefits. Also, in this quarter, we have recognized the positive development of the reserves from-...
previous years, especially in the corporate and non-life segment, in a few contracts with deep reinsurance, which to a certain extent confirms our quality and prudent approach to the valuation of contracts. Administrative costs, no surprise here, especially given that salaries are growing, and we've been trying to adapt our salaries model to the changing market circumstances. Higher premiums, IT costs, maintenance, both IT development and maintenance. Here, the costs are growing. Also, the external contracts are growing with our technological partners, which have been indexed gradually, with growing real estate because of the indexed rent and the cost of utilities. The sales growth is achieved increasingly in third-party channels, so multi-channel brokers and dealers are becoming increasingly important. They have higher distribution costs.
Also, because of the growing share in the product structure in the corporate non-motor segment, which has a higher distribution cost. Also here, year-to-year, the acquisition cost of insurance has gone up. Now, amortization and the loss component, there is a slight increase year-to-year, especially on the life side of life insurance, which is because of what happened last year. Last year, the expected death rate was improved and it's expected to affect on Q3. Here, what you can see is a normalized value. Last year, there was a one-off drop, so here in nominal value, there is a growth of about PLN 40 million, so this is why it looks this way. On the other hand, we have an improving quality of the life portfolio, especially in foreign operations.
In Poland, year-to-year, it's at a similar level. Financial income, net financial income now, so it's our investment strategies and results, and also assets that are to secure our insurance liabilities. It's also related to increasing the liabilities because of the changing of the money and time as to discount the insurance flows. Here, we can see a 10% growth year-to-year and also quarter-to-quarter. This means a higher profitability of insurance portfolio, which translates into higher operating results reported by different insurance segments. That's why, as a sum of the mentioned changes, the operating profit of the non-banking sector is growing compared to last year by almost 10%. And quarter-to-quarter, in Q3, there was a smaller claim ratio in life... In non-life, rather.
And here, there is a growth now, and this is the main component of the change between Q2 and Q3. So we can speak about certain seasonality in terms of the claim ratio in non-life. Increase, an important increase in the banking contribution, we have already discussed that, and this all translates into a solid result of PLN 1.045 billion, with a return on equity of over 22%. Let's go through different segments of our operations now. To me, it gets a bit complicated, so I will have to put on my glasses. Now, non-life. Year-to-year growth, 10%, mainly in MOD, and secondly, non-motor with a flat market in terms of the TPL on the 3% growth.
The cost of insurance services has been growing at a smaller rate, which translates into the increase in the operating results. 8.6%, this is the dynamics. Let me mention one thing here: the insurance services result has been growing at a higher rate, over 13%. There is an adjustment that is about revenue generated by the assets to cover the reserves, whose contribution was quite lower compared to-
... Last year, but this in this segment, it covered financial costs with quite an important excess. Now, corporate insurance. You can see the growing reinsurance costs. Compared to last year, the growth has been of over PLN 100 million, with growing insurance revenue, whose dynamic of growth is almost 22%, mainly in non-motor. The cost of insurance has been growing as well, mainly because of the growth in claims. This NOI normalizes the extraordinary profit from Q3 last year. You can see here in this chart, to the right, the rentability of the non-motor segment. This is at a level of 52.7, which is completely unachievable over the long term. 83, this is the normalized value this year, and this is one of the factors responsible for the increase in the claim ratio in this area.
I would like to highlight here the improved rentability, profitability of the motor segment and also non-motor. Here, the normalization with a solid parameter of combined ratio for the whole portfolio, 82.4%.
For life insurance, individually continued and group, slight increase in this quarter, which results from three important factors. First and foremost, different mortality rate expectations. We have already discussed this parameter. The situation is improving. I will say a few words more. And because of this improvement, this improvement has been consumed by our expectations towards utilization of medical riders, which more and more are affecting the utilization measured as the quantity of medical procedure per 100 insurance policies.
So here we can see that this ratio has been deteriorating as well as costs year-on-year, because the costs are spiking due to the inflation in this segment. That is translated, on the one hand, on changes of the necessary premium needed to cover claims, but also something we said before, so a lower level of freed amortization, this CSM margin, due to the lower performance in this respect. So we observed this year it was a slightly higher level of lapses, which is an interim situation, which is characteristic for every period of slowdown and from the macroeconomic perspective, from the perspective of consumption, especially in the first part of this year. The consumption is recovering, but still the market consensus shows that this parameter for entire year will be rather negative, with its negative, so negative impact of individual consumption.
On the side of the cost of insurance services, we have recorded some upswing, but slightly lower, which affects the margin in the segment. These are not the levels that we got accustomed to in the pre-pandemic period. However, today, our greatest question is how long are we going to benefit from this interim situation, this recovery, re-related to lower, lower mortality rate? Now let me jump into the next slide that presents the situation in details, and then I will go back. As you can see in the picture, once again, after Q2 and Q1, we can see the death rate, death...
Number of deaths, which we compared to Q3 in 2018, so both versus the previous year, over 9% and versus the baseline in 2019, we are beneficiaries of a lower death incidence, which is affecting the behavior and claim rates for protection products and only protection risk in this part of group individually continued insurance. On the other hand, there are some negative, there is some negative impact of health products that drives this factor, this ratio up 1.5 percentage point and other risks, especially the risks related to giving birth or benefit due to giving birth and some chronic injuries. So that all makes up for this interim situation. I think it's going to be interim.
Maybe we will still see some effects thereof next year, because if we take into account the mortality split into age groups, there is no significant change versus the situation before the pandemic. So it's not any significant impact, and the behaviors among the population, they do not affect this parameter. And now let's go back to the previous slide. Not so easy. Individual protection insurance. For individual protection insurance, increasing revenue by 17%, we can see that the costs are slightly higher, with at a slightly higher dynamics.
They are increasing both because of change of the product structure, product mix between Q3 and underlying period last year, but also higher benefits and claims and their costs versus what we were dealing with last year, with a little bit higher situation or higher as a result related to the loss component, which is higher. 10% drop for operating result, but this is quite a stable performance in absolute values at a comparable level as in the previous year, with a change of net financial costs by PLN 6 million versus 2022. What's going on with our contractual margin, with our CSM? We can see for individual continued and group insurance and for individual protection insurance. So as for margin and the present quarter, we were working on the balance.
We have analyzed the balance for the end of Q2, and we can see some additional impact due to some additional riders which were signed. So this proposal includes quite a material adjustment, as it accounts for a shift of assumptions resulted from liabilities, which result from the negative impact, mainly due to an increase in the level of utilization of health benefits, which affects, and this adjustment recognized at the level of PLN 115 million, which has been adjusted by the interest. And so the total margin is PLN 27 million, and that causes that the closing balance on the side of group and individual continued is at a level slightly lower than the opening balance for Q3. On the side of individual protection insurance, the situation is slightly different, so a new component, PLN 45 million.
That's a positive variance, resulting from riders, translating into PLN 45 million plus interest cause if read in a given quarter, that gives us a higher value than the closing balance of the previous quarter. To wrap up the yield segment by segment, the most important information here is that for property insurance, which are sold in Poland, we can see high yield and they have slightly deteriorated by... But due to the fact that our portfolio is expanding, the contribution of this segment to the cost, to the consolidated result is positive. That's good news. Just let me draw your attention to the fact that our yield level are at highly attractive levels. Life insurance, here we can see higher yield for group insurance, and we are observing some changes for individual insurance.
They are behaving in a similar manner than in the previous year. But what is really important here is that in its entirety, so life insurance on the Polish side there contribute more year-on-year. The change is at the level of approximately 5% when it comes to higher profit generated in this segment. Some positive shifts in the Baltic States from the point of view of values, they cause that non-life insurance services, and this quarter at the level above PLN 1 billion. When it comes to investment result and entire portfolio from the perspective of its structure, it remains flat, and the structure of this portfolio remains unchanged. Over time, we are going up, of course, for insurance flows, which are in this portfolio, so they're increasing. It's PLN 45.5 million and increase is 6%.
Still a very safe structure with debt instruments 3%-83% and treasury insurance 65%, profitability at the level of 6% for entire portfolio and quite a high share of interest. In portfolio, PLN 566 million and significantly higher contribution of the equity part, private equity mostly, and some dividend instruments that caused that year-on-year, this portfolio generated over PLN 100 million more. And successful growths on the side of property investments, they allow to end this quarter at a very high level. The main portfolio, PLN 737 million, over 26% more versus the previous year. When it comes to our solvency, this is something that attracts our attention, our SCR and our attempts to optimize the cost of and to generate it profit.
So this drop at expanding position of own equity, which is adjusted pro rata by such an artificial position. We assume that it's an artificial position because it is slightly unpredictable when it comes to the point in time it occurs. To wrap up the strategy, I think that that's the perfect moment for a Q&A session. Where are we from the point of view of our strategic objectives? We're on a good path for insurance revenues, health pillar revenue at a decent level. Just let me point out that achievement of all these objectives, especially our gross insurance revenue, I think that it's still within our reach. However, it's a highly ambitious goal, meaning that we need to grow at 10% year-on-year, which is a real challenge, especially for a group like PZU.
So for sure, you are reading the same comments, and people are quite skeptical about the idea. When it comes to the contribution from the banking sector, we have said a lot about it, higher after three quarters than the projection made at the end of last year, but we know that it's dependent on the macroeconomic landscape and the situation that we are going to observe unfolding in the coming quarters. So PLN 4.3, this is our net profit. Some people perceive this result as a result of our rather cautionary approach, and I fully agree that that's the value that should be achieved and that should be exceeded even.
And we wish that to all of us and to our shareholders, because such profits reflect this is, this is a reflection of high yield and correlated own equity, and here, at in the second dimension of over 6% versus the value of the strategic value, which we was projected at the end of last year.
Thank you. Now, the presentation is over. If you have any questions, I will be happy to take them. So we'll take questions from the room first.
Andrzej Powierża, Bank Handlowy Brokerage Office. Two questions, one as usual, the second one will be quite unusual. The first one will be about the dividend.
... What can we expect, what can we expect in terms of the recommendations? Sorry, a technical glitch. This will help answer your question. I just show you the right, chapter. Go ahead. So the first question is about what can be expected about the dividend. The second question, rather unusual, about the foreign operations, because the, I think that the income from the Baltic countries has gone down in this quarter. Is there anything concerning over there that will be long-lasting, or is it a one-off?
Okay, so I will, I will start with the second question. I don't think it's unusual at all. It's very usual because it's about insurance in one of our markets. So you mean that the growth rate is going down? This is how we should put it, I think. And let me answer this.
Let's take, have a look at the three markets altogether: Lithuania, Latvia, and Estonia, and let's leave Ukrainian aside for a while. We know that, as of today, this is not a representative market. It doesn't follow the same trends and processes. So let's focus on these three. Lithuania, Latvia, and Estonia, about a year and a half ago, started achieving huge growth because of the motor insurance. If you look at how their revenue evolved last year, in every of these three markets, solo, the rate was of over 20%, both in TPL and MOD. So the markets, after a short stagnation, picked up quite easily and entered a new underwriting cycle with this level of increases, which didn't happen on the Polish market. We know that very well.
We've witnessed five years of prices going down in realistic terms. Together, the average price is about PLN 560. And this is similar to pre-pandemic levels. And if you take into account all the changes or in the meantime, this is quite unusual. We know why. This was offset by the frequency of claims, but in the Baltics, the situation was quite different. They entered this phase much earlier, so quarter after quarter, last year and this year, this is something that has been slowing down now, but that's why they have been delivering a two-digit growth rate. And if you allow me, I'll have a look at the details in this specific quarter.
So speaking about insurance revenue in this quarter, for the Baltics, the growth rate was over 17%, a growth by PLN 97 million, starting from the base of over 500 million last year, this time of year. So yes, the growth rate is going down, but it's still solid. Now, the second question, the dividend. Our policy hasn't changed in that respect. You probably know it very well. The policy on dividend says that, well, we are a company of this specific nature, where we generate value for our shareholders that is later on paid as quite an attractive dividend yield. So we should dedicate at least 50% of the profit generated for that, but no more than 80%. The whole surplus of over 80% goes...
While the rest, which is over 80%, goes for developing the scale, because the larger the portfolio, the larger equity you need on this regulated market. This is according to the standard formula. But works are ongoing in this respect. We are aiming at developing our own model of capital intensity. So maybe soon, we might arrive at a situation where we will be able to share some very good news with you in that respect. This is not the first attempt by PZU. We've had a dialogue with the regulator in the past. It's not only about developing a model, but it's also about developing a model that will be accepted by the regulator. We've tried a few times already. Not always successful, but this time, on the third go, we hope that it's three times lucky.
So getting back to the dividend policy. Well, from the point of view of the capital, of the equity, we meet all the criteria. But quality, and here we all know that meeting certain quality criteria is necessary to be able to consider certain levels. While we meet all the criteria, you know very well that there are two more variables missing here. First of all, something that used to be communicated on the market in the first half of December each year, namely, the recommendation of the regulator about the dividend, the result distribution every year. This is always sent to the banking, insurance, asset management sector, so we are also looking forward to this recommendation this year as well. It will be binding to us, obviously, it can't be otherwise.
So far, this recommendation has been the following: The regulator, after a few turbulences related to COVID, switched to the 50% model of the current year, and up to 100% of the non-divided result from the previous year. Will the recommendation be the same this year? Well, it's difficult to say, but we are all looking forward to it, and we were all looking forward to the news about the head of the authority. We know that the same person remains in office, so maybe this also answers this question as well. So if nothing changes here, but we don't know about it. But maybe as the chair of the National Supervision Authority, Financial Supervision Authority, hasn't changed.
So maybe if nothing changes here, there will be a very high result from this year, and everything that was not divided last year. Would we be able to manage this cost? Yes. Would we be able to recommend this approach to the supervisory body and shareholders' general meeting? Well, I'm not in a capacity to answer this question on behalf of the management board. Sorry for that. But I can only say that all the parameters necessary here are met. This is the only thing I can say. Are there any more questions from the room?
Marta Czajkowska-Bałdyga and Ipopema. Could you try and give us an outlook about the margins for the life and non-life segments in the next year? Any trends? Any visible trends and any factors that might have a positive or negative effect?
Well, usually we don't share such thoughts. I will do it in a indirect way. And I hope this answers the question. So there is the first set of parameters, if we want to seriously, seriously discuss what we want we are going to expect. So the first set of parameters, there needs to be a confirmation that we understand the markets in the same way. This means confirming certain assumptions at the macro level. So I can... What I can share with you is how we see this market and what we think about it. Also, in the context of submitting plans to the KNF for the next year, both for non-life and life. This is something very, very concerning today for many people in this company. Well, speaking about the macro level, there was a slowdown.
Last year, we closed at 5%. Today, we are speaking about 0.6-0.7... or maybe something different, but not very different from this level. Also, household consumption is having a very negative effect, because after Q2, it was on the negative side, very negative side. It picked up, but in general, on the market, there is a belief that this parameter will be negative year-on-year. So we are assuming that there will be an important pickup recovery in terms of individual consumption next year, and also that there will be quite a high level of investment in fixed assets. Naturally, this afterwards translates into a demand for insurance products.
So if there is an increase in individual consumption, we think that there will be a decreasing inflation rate, and the average inflation rate will be about 11-12%, we think. This will be at the end of this year, and next year, it will go down to single digits. Rather 5% than 10%. I think we are on the same page here.
And all that will be associated with by a nominal increase of remunerations in the entire economy. That will cause that the value of disposable income will go up adequately, and all that will translate into higher levels on life and non-life segments. But there will be different drivers behind these growths. I think that there will be some price adjustments for motor insurance, for TPL. So depending on the inflation and on the average claim ratio increase with lower frequency, maybe we have just entered the phase which starting to reshape the trend that we've been observing for so long. And if it, if it's so, motor insurance, especially including TPL, will be at zero plus level in terms of their yield.
Taking into account that we had to do with the situation where MOD products were benefiting from an increase of the value, and of the increase of the quantity of insured car, which has stopped at a slightly lower level than the increase of price of cars and claims inflation. The market, in this very segment, has recorded a slightly higher margin. So I think that this situation will be adjusted. And talking about this zero plus level, I hope it's going to be undertaken by TPL, and the level at for motor insurance will be at the level more or less from the previous year.
I think that non-motor insurance, for all reasons I mentioned before, namely, quite high dynamics of investment, inflation, and assets subject to management, starting from buildings, homes, houses, apartments and equipment, and which is expanding also in scale. I think that non-motor insurance will increase at two-digit dynamics. That should translate into dynamics for property business, which will be slightly lower than this year. Assuming that this year we will generate two-digit growth, it will go down to a high one-digit value next year.
On such a market, we think that taking into account all other parameters unchanged, the profitability of motor insurance will be at a similar level, and when it comes to the profit pool in non-motor insurance, it should rise, but mostly due to the scale, not to the this technical yield generated on average exposure. So this is my outlook for property insurance. When it comes to other insurance, I can see potential for such high growth. I think we will still observe indexation of rates reflecting inflation. 2023 was the first such a year with such a strong inflation impulse, and we all know that it's so difficult to serve large portfolio over one year, so we will observe a continuation of the very same trend over next year as well.
At the same time, we assume that there will be no higher lapse level, that the disposable income will allow our policyholders to benefit from a broader scope of products, and at the same time, they will not be forced to resign from their coverage. For market rebound on unit-linked products market, I expect a continuation of this rebound also next year, but we know that depending on the distribution of all these insurance is not characterized by any significant excessive profitability. So leaving the scale aside, I think that this profitability will not build any strong market trend. So having on mind the cost of activity, I think that that could, it's possible that's going to be a year where we will do our best in order to keep the nominal yield at a similar level as this year.
I hope that that is a good response to your question. No questions from the room, so our online questions. Trigon Hi, what is the reason behind the drop in the motor insurance quarter-on-quarter? Is it due to price pressure or maybe a drop in volume? Both factors are related, in fact. Let me put it like this: for TPL, in Q3, we've maintained our position from the previous year in nominal values, and due to that fact, there were no increases, absolutely, for prices, and taking into account the availability, of course, was higher, and that built a scale. We might say that this price, effective price through exposure was slightly lower.
But at the same time, in Q3, there was a significant market impulse, a significant depreciation in MOD insurance, and we had to react to the situation adequately. That means that we had to respond in order to not to lose our customers for the benefit of our competitors. So this signal has weakened, and we went back to the previous situation. So that was a market test. So maybe the piece that you test how what will be our reaction? What will be our response? So we responded, and the market went back to normal, to the situation from before the situation. So that was something that happened in Q3, which affected the situation in motor Q3 on Q3 situation. Next question? I thought I'm able to check it. May I ask you for help?
I can see only a part of this question. I can guess the other part, and the second part is out of my scope completely.
Okay. Okay. Do you expect an acceleration in MTPL price going forward? We assume that if other parameters remain flat, we will see a gradual increase of prices that will be reflective of the situation on the inflation side, so both the cost and the inflation of claims. If it happens that the situation I mentioned and that we observed in September and which you might be aware of, and you are aware of it, commuting every day to work. If there is a change to the situation, that was our reality for the last two years, maybe that would become an impulse to some higher price increases in this segment.
However, for the time being, there is no such symptom. Next question, do you see the benefit of lower mortality to continue for the next few quarters? What does it mean for the group and individual continued margin for next year?
Tak.
Okay, yes. But it's not a permanent change. So the decreases, let me show this slide once again, which were, are slightly lower quarter-on-quarter, and which are slightly lower than the adequate representative period from before the pandemic. It's not something which is going to stay with us for a long time. I think that that's a post-COVID rebound, and I assume that for the next few quarters, we will still observe such a shift. Other parameters will remain unchanged. So if it happens that this new version of COVID is highly infectious and causes high illness incidents, so if there will be more flu, the flu incidence will be higher ending up in the fatal way, maybe we would go back to the mortality rate that we observed before.
But let me remind you that the portfolio and the population was subject to some changes over the last two years, so that's going to affect the situation. So, yes, but I think it's a bit too early to tell that this is the situation, which is sustainable from the point of view of, how it affects the group margins. The answer to this question is, yes, nothing gonna change in this situation. Our dividend and equity policy during this strategy update and translation into the new standards of IFRS 17, it will be upheld. It was upheld, so we still think that this is exactly the same manner of thinking about the PZU Group as we experienced before. So when it comes to our online questions, these were all questions. We've exhausted the list of questions, or maybe there are some updates, please let me know.
I think that I have refreshed, and there are no questions. Any additional questions from the room? If there are no questions, thank you very much for joining us for this conference. I had a great pleasure to moderate this session and to speak to you, especially all of you who have visited us in person here on site. So thank you very much for being with us, and I strongly encourage you to participate in next such meetings, and see you next time.