Good morning, ladies and gentlemen. Today, we'll discuss the results of PZU, the first half of the year and the Q2 of 2024 . The chair will be Artur Olech, CEO of PZU S.A., Jarosław Mastalerz, CEO of PZU Życie, and Tomasz Kulik, CFO of the PZU Group. Good morning, ladies and gentlemen. Welcome to this meeting, which is held on regular basis. Now, the Q2 is already over, so we will show you the results, and also we will discuss the results for the whole time of six months. This is the second meeting with this makeup of the leadership, and this is already after the procedure with the regulator. We are a bit stressed, of course, but hopefully we will be able to live up to the challenge. To begin with, let me mention the most important figures.
These are the most important figures considering the results. Revenues on sales, on insurance, this is over PLN 14.3 billion, which is an increase of about 10%, so PLN 1.3 billion over the results from last year. Profitability is also very good, PLN 2.4 billion. This clearly shows that the return on equity is way beyond 17%. Banks have contributed largely to this result because they have benefited from higher interest rates, but also from the fact that operating activity has increased. Their performance has increased, and the banks have already published their results. The capital position is strong. It's almost 230%. But if you take, this is the group, but if you take the standalone position, this is almost 240%.
This concerns the dividend, and as you know, this is way better than our peers. In their case, it's about 200, around 200%, so this group has a very strong capital standing. Now, the dividend, which we will pay in the upcoming weeks, PLN 4.34. The yield is 9%, which also means that our performance is quite good compared to our peers. Now, let's discuss the results and the makeup of the performance. So there are some good points, some challenges as well. I have already mentioned the banks. So the result is slightly lower than last year, and this is mainly because of the non-insurance activity and because of what happened in Q2.
So the weather conditions, which mainly had an impact on crop insurance and also non-life insurance, because in 2023, in the same period of time, they didn't have that much impact, these events. Also, motor insurance has affected this situation, but mainly, as I've already said, this is because of the weather conditions and the motor insurance pillar amounts to about 1/3 of the impact. And there is a market trend, which is now visible about the motor insurance. This is not yet reflected in the results because it usually takes time, so it won't appear here until the end of the year, I think. But if you take this out, the result would be very similar to last year.
We have a very good result, an investment portfolio, PLN 1.23 billion, which compares to PLN 1.21 billion last year, and a high operating margin, which is 22.1%. It's better than last year. The combined ratio here is visible. You can see it on the slide, it's 92.5%. But as you can see, over 2 percentage points are due to the weather events, as I've said, and also the situation in the motor insurance pillar. There are also things you have probably realized, which happened after our Q1 presentation, that the strong standing of the company has been reassured, and this can be seen in our rating that it's now positive. This also has happened in Q2, so please bear that in mind.
And the solvency ratio is one of the highest among our European peers, because as I've already told you, the average is around 213% or slightly over 210%. So the group is doing very good in this aspect. We have a good, very good capital position and a good financial position. Now, a few words about what we have already achieved in this quarter. This is a very sound result, and the sales have gone up, so this is largely due to non-motor insurance, whose meaning has been growing, mainly in the corporate segment. Here we are doing better than the market, and the margin is very good, especially in life insurance. Jarosław will discuss this later.
And also there is a dynamic growth rate in health insurance, although we are far from our ambitions yet, and this is what we consider as an aspect to work on and with potential to grow. But the figures are positive, and we think that we will be able to strengthen our position and catch up with other companies which are slightly ahead of us in these terms. Now, strengthening management skills, we have gone through many changes. As we know, we have replaced many employees.
Some people have come back in a spectacular way after a longer break, so I'm very happy and also happy with the news that was released yesterday, that Mr. Tomasz Tarkowski has won the competition because he has very strong skills and know-how about, claim handling, which is, which accounts for 70% of the balance sheet and, value generation and our core line of business. He had a strong background in PZU before, but then he, got a lot of experience outside of the group. He comes back now. He used to sit on the management, so it's very good news both for the market, but also for this organization. We are able to attract the best talents. Another hot issue is a new operational model we are working on, and we are just about to start implementing it. I think that next month already, we'll, start first pilot, projects.
We will be implementing business units, so we will rearrange certain lines of business. We will reorganize customers, products, and processes to speed up the decision-making process so that people internally also have more control over the margin and the P&L. So this is what we are planning to do. And we are planning to implement the model till the end of the year. This will be a revolution of the processes in terms of the approach, the mindset. This is what we would like to do. Another important thing, which is selecting people to be posted to banks, and we oversee two banks, which are important for the group, but also for the Polish economy and the Polish banking sector. It's been a lot of hard work, but we have managed.
We have succeeded in bringing very experienced people to these organizations. They have a lot of seniority, and they are very experienced managers with a lot of expertise, with a very strong track record in digitization. I mean, both banks here, and this has been very well received by the markets. I mean, the people who we have hired. Because Jarek w Aliorze was a very important person in this process because he's in charge of the supervisory board of the bank. This is very important for building relations and creating the right ecosystem of collaboration with the banks. We are now working on the strategy very hard. It will certainly include the operational model, the collaboration of the banks. All of these will be reflected in our strategy.
The decisions about which way we want to head will be included in the strategy, and we are now at a very advanced stage of drafting the strategy. We would like to strengthen the core business. We have already realized that there are certain market trends which are not yet visible in the results. I mean, the motor insurance trends. We will try to make the most of the trends, especially if you think about our market share and the pricing. And also, importantly, all the synergies in the group. Cost synergies, and I mean insurance mostly here, but also some business aspects. Collaboration, bancassurance, assurbanking , collaboration models.
We have a new setting now, and I think that this going to be a good incentive to make even more of this relation in the upcoming years. So before I finish, let me tell you a few words about non-life. Non-motor, rather. So you can see the gross written premium. There is a growth of almost 15%, especially if you focus on non-motor. We are way better than the market is doing, 20%. We think that this is 1.6 times better than our peers. Last year we had high inflation, and prices were flat, so this was a difficult situation. But sales effectiveness is something which is totally on us. It's not on the market.
So we can see that in motor insurance, MTPL over 10%, this is an increase in price, but in MOD, so what has gone up is both the premium, but also the number of riders, which means that we're able to sell additional non-obligatory riders to our customers, which is also, I think, very important. I will give the floor to Jarosław now.
Yes, thank you. Thank you for coming, ladies and gentlemen, and thank you for giving me the floor. PZU Życie is a stable part of our business, so on the one hand, we can't see any spectacular growth as we might see it in bank assurance, for example, or other areas, or health, for example. However, looking at our market standing, every percentage matters, and I am convinced that growth in a situation where your position is strong already, especially the group insurance, is a success already because there are many players in the world as big as us, and they have a problem defending their position because the competition is very strong.
Since 2022 , we've been growing again after many years in which, to say it simply, the premium was rather stagnant. So this is due to a good result in selling health insurance and group insurance. These were the two main drivers of our growth in this period, and we do believe that this growth is not just momentary after the year 2023 . The year 2024 has shown that we can continue on the growth trajectory, especially with our new product. So PZU Życie premiums according to the Polish standards, and also if you look at the IFRS report, it will be different because then the short term and one-off, it will look different.
But this is the format we report in, and this ensures comparability between us and the competitors. And the fluctuation is mainly due to one-off investment projects. Our position is relatively stable. We continue growing in protection products, in periodic investment products. Our strategy for individual insurance is, has been, traditionally conservative, and the most important driver was the fact that we are prepared to sacrifice some growth if we see that we can't deliver value to our customer. Because it's always been the belief of PZU, and it was reaffirmed many years that in this segment it is transparency and the value for the customer that matters most. So in some segments, and I'm not saying that others don't offer transparent products, but our position is that we want to remain very, very conservative.
Our new strategy will be communicated soon, so please, be patient, we will release it soon. We do have some ideas how we can grow in the life insurance segment, but bearing in mind, how I see this sector, we are dividend-based, not growth, focused. And in this segment, we won't see dividends very soon, but we have to grow as an organization in order to ensure dividends in the future, in the long term. If we were a dividend-focused company, we would be able to ensure in the high term, but in the short term, but not necessarily long-term perspective. Oh, the president gave me the remote. I didn't realize. Yes, PZU Zdrowie. Well, here we report based on KPIs to show you which factors contribute to our growth.
Of course, you can see revenue expressed in million zloty in group insurance. This is a major contributor, and the main driver there is the health insurance premium. Almost PLN 1 billion is the current amount of the revenue. We are growing at a fast rate. We are getting closer to the market leader. Of course, there is still a gap to be covered. Not sure how big the gap is. I'm talking about Lux Med, obviously, but their reports are published relatively late in the year, so we can only compare our position to those companies that offer the results in timely manner. But looking at the trends, we are closing that gap between us and the market leader.
A major part of our revenue in health comes from subscriptions, but also one-off services, so it also confirms the quality offered by our organization. Not only do they handle losses covered by the insurance packages we offer, but there are also customers prepared to go to these medical centers privately and pay for the consultations. The number of telemedicine services after the COVID-related peak has been decreasing. What we've been expecting was a continuous growth because it seemed that everyone has gotten used to telemedicine. However, it seems that as a society, we still need some time to absorb and to adapt to this innovative solution that replaces personal visit to a doctor's office, but the number of online visit has been growing.
Our service channels, they foster this development without necessity to visit medical centers personally or even contact the hotline. Now, written premium from bancassurance. So we are especially proud about two things here. The first one is a clear growth in non-life insurance. Of course, we depend on loan volumes sold by our partner banks, both of them, because the insurance offered by them is an embedded insurance. So our success is in a way derived from the success of the banks and their credit or their loan activities. Despite certain anxiety in connection with changing regulations, we haven't seen any decrease in the revenue and the premiums. The premiums have been actually growing. Also very proud as regards investment insurance and life insurance. This is the light blue part.
These are standalone products, and they show that we are successful in convincing employees of, customer care employees or employees of the centers, that this is a valuable product and that, it's good to offer it to the customers because, it's important. After significant, crises in the last decade, TFI has grown stronger. However, it hasn't yet gained a strong position in regular savings. But the market is rebuilding. Maybe it's not as clear as, in individual insurance, but it, it's more visible in the banking channel. A significant growth of PLN 94 million in, premiums, more than in the previous quarter. In year-on-year, we can also see about PLN 1 million more this year. Assets under management, at PZU Group companies.
As you can see, we've reported a strong growth of PTE TFI as well, with 33.5%. So this part of Pekao is growing very nicely. And if we combine it and look at overall result, PZU and TFI, PZU has now become the second biggest player competing with the PKO BP. We are also very proud about Alior Bank. It hasn't been a big operation, but it's been working very nicely. It's filled a niche and it's generated a satisfactory result. A new product initiatives at PZU and PZU Życie. I will talk very briefly about those covered by the PZU Życie, and then I will hand over to the president.
We have good new initiatives, PZU Perspektywa na Przyszłość and life insurance initiative.
It's a constant initiative aimed at improving transparency and convenience for the customer interested in individual insurance. As regards group insurance, we keep looking at enhancing the onboarding process. The product we are offering is the so-called P product, so the employee pays. So not only do we have to convince the company, the corporation, but also its employees, and then, when they stop working in that company, we have to convince them to continue. So it's quite complicated compared to those programs where the premiums are paid by the employer only. Thank you. Tomasz, would you like to continue?
Yes. As regards non-life products, in this quarter, the cargo platform, a platform for corporate customers, has been developed.
For a long time now, we have been trying to involve customers in the sales and service and loss handling process. The same applies to this platform. Independent insurance of transport, property insurance policies is one example. Also, a simplified risk assessment process. The platform is available 24/7. If you are interested, please have a look at the website at mojafirma.pzu.pl. As regards the mass segment, the initiative is called PZU Gospodarstwo Rolne Plus. It's voluntary insurance for agricultural business, buildings, as an addition to the mandatory insurance. In addition, we insure against the failure of technical equipment and power generators, and we offer additional compensation for damages caused by gross negligence.
What we've been talking more and more about is the fact that in our core processes, we start to include some AI-based components so that we can work even faster, even more efficiently. What's important to note is the fact that thanks to AI support, our pricing processes for insurance that have been developed with the support of AI are even better adjusted in terms of the risk profile and price, which further improves our competitive edge. You know, ladies and gentlemen, how important it is to reflect the risk through the price parameters. We are not working on a prototype scale, but it's a large-scale operation. The PLN 9 billion in value, this is the worth of losses that was processed using AI support.
Similarly to corporate clients, also in this case, we try to involve our customers in our processes so that they can have a sense of agency. It's important for customers. We see it on a daily basis. Not only do they become more loyal to the company, but they are also more satisfied with the processes. If the customer feels they can handle their loss independently, their level of satisfaction grows. On the other hand, we are still active within startup acceleration, business acceleration processes, using external third-party technology and our scale of operations together. Through acceleration, we can further build our competitive advantage, both in terms of cost reduction and increase of revenues.
Before Tomasz moves on to continue to discuss financial data and before we give you the opportunity to ask questions, there is something I would like to add. In the second quarter, we continued a number of projects that started earlier, but I think it only shows how much knowledge and which great solutions have been developed internally by the company. I'm talking about products and encouraging customers to buy insurance, but also AI support that increases the speed of our operations, and we can already see positive effects of these projects. What you haven't seen, because you couldn't see it yet, is what we are planning to do in Q3.
We want to be market leader, not only in terms of market share, but we want to set standards on the market, and we want to make sure that the market operates at high quality, so we have joined a UFG database, fraud database, so we have a major part of the market, 30%, so we don't share data with others, but the market doesn't share data with us. Now, knowing that we can work well with data, and we are sure we can, we wanna change it. We made a decision and decided to introduce standards that are obvious in the banking sector, and we want to share that data because it has nothing to do with competition. It's important. I think we have a lot to contribute to the market.
Not only will others benefit from our data, but also will we, and we believe that in this way, the overall quality of the market and our business will grow. So that's one, the number one. Number two is a lot of internal innovation, startup, startup companies, we have projects with. Startup companies tend to be more agile on the market, so we cooperate with them. We will try to do it more bravely in the future. We already have some solutions that we will launch within our ecosystem in those areas, where it can prove useful with those clients, where it makes sense. Of course, you have to be reasonable about it, but we will be introducing such solutions. We will also use our capital standing in the West, but I know it's a different topic.
But we believe that thanks to our strong standings, these initiatives will have a better chance of functioning well. Of course, it will be beneficial for the situation of those startup companies. With our capital support, they will be able to scale up the innovative solutions. So this is a change we are going to see. I'm only signaling it. You will receive more details when we present our strategy, but it's important to know that we have joined the UFG anti-fraud database. This is a very recent development.
Thank you very much. Now, let's summarize the results briefly, and then we'll discuss every segment in detail. Good news. So as we have already said, the growth rate of the revenue has gone up. I mean, not written premium, but gross revenue on insurance. So this is a new standard, and there is a year to year growth of around 10%, which is thanks to the very good beginning of this year and also a good growth rate at the end of last year. Property insurance is worth noting here, a double-digit growth and over 10% and even more in the corporate segment. Here you have over 70% of growth year to year. Individual protection insurance, almost 14%, so a bit slower here, but group and individually continue the large scale, 6%.
It all translates into a double-digit growth of the gross revenue on insurance. Property insurance, non-life insurance, is increasing its contribution and its revenue, and here we have to share the risk with reinsurance companies. Therefore, the reinsurance costs are growing. As a consequence, the gross revenue after reinsurance is also growing, but not at the same rate. At the same time, we have a growing portfolio with reinsurance, but also at the same time, there is a growth in actual costs of reinsurance. Now, the costs of insurance, so let me mention two main elements here in Q2. First, claims in the mass and corporate segment of non-motor insurance. You'll certainly remember April and June. There were quite a lot of mass events, such as weather, downpours, hails or storms, strong winds.
So because of that, in Q2, we have over PLN 200 million of additional costs, claims and benefits paid out in these two segments. So this is the non-motor segment. Now, motor insurance. As we know, there are challenges we have to face. In Q2, the results are similar to Q1. The results are not getting worse anymore, but if you look at the claim ratio, especially in mass products and TPL, the claim ratio has gone down 2 percentage points compared to Q1. Now, acquisition and administration costs. Usually in this time of the year, they have a lower growth rate, so as a rule, their share in the combined ratio is lower, so they do have a positive contribution to the margin in both segments, both the mass and corporate segments.
Unfortunately, because of the nature of the standards and because of the higher claims and benefits, we have had to recognize the additional loss component, whose increase year to year is of about PLN 150 million, and this concerns both motor and non-motor. Now, net financial income, so the allocation, performance, and others. This concerns portfolios that are to secure our insurance liabilities. Q2 ends with the result of PLN 714 million, which is slightly worse than Q1. Because of the reasons I've already discussed, this is worse than Q2 last year. Last year, the performance was quite good in non-motor, especially. This year has been subject to a greater pressure. Now let's look at the bank segment and its contribution.
This year, the banking segment is under strong pressure because of the mortgage memorandum, and the result here is almost 1 billion, which is similar than Q1, but slightly less. I've already discussed the reasons, so it's slightly worse than the Q2 last year. Now, let's talk about each segment. First, the mass segment. We have witnessed huge growth here, especially in non-motor, with a huge contribution of the sales of PZU housing products. This is a new refreshed solution because it promotes additional riders and covers. They are quoted in a degressive model, which, in a nutshell, encourages customers to take out a full and comprehensive insurance. Also, if you take the contribution of PZU Firma and SMEs, this gave us a 16% growth year to year.
There's also a strong position in MOD, a double-digit growth rate, 12%. Now, TPL has been flat and the growth is largely thanks to price. There's been a sound growth in revenues, but also in costs of insurance as well, as we have already told you, because there is a slower release of the excess of claim reserves from last year, but also we have higher liabilities for incurred losses, both in motor and non-motor insurance. In non-motor, we have had the weather events, and this has been estimated to be worth about PLN 200 million now in this segment. The share of costs is going down, so this is good news. I mean, distribution and administration costs, and this is a good sign, especially if you take into account the inflation rate.
Prices have been going up and so have the salaries. So as a result, the operational result has gone down. Now, another important element we would like to discuss the evolution of our core product in non-life, which is motor insurance, the price and claim frequency. As you can see, there is good news if you take MOD, but also MTPL, for a long time now, the price has been going up, and Q2, it's over 7%. Unfortunately, it's not correlated with claim inflation because the claim inflation rate is mainly because of the increase in claim frequency, although we are using hybrid solutions, which translates into the additional costs we have already told you about.
So the traffic is growing again, as we have realized, but also there is a strong correlation between the weather situation and frequency of claims, so that the worse the weather, the more claims there are. And the more changeable the weather, the more claims and insurance events take place. Maybe it's the same as in non-motor insurance. Maybe we should also quote the weather aspects which have an influence on the price. So the nature of this business is the following: if there is a trend, there is a certain delay before you notice it over time. But there are some elements that are slightly better than a few months ago, although not yet reflected in the results.
Now, in the corporate segment, we have had a very dynamic growth, over 17% on insurance revenue, largely non-motor and also. If you take the depreciation in the new standards, it gives you the result that you can see in the chart. MOD here, slightly worse, but 7%. And MTPL, as you can see, I mean, TPL, no growth here, so this is not a good time for growth rates in this segment. The same as in the mass insurance segment, the price of services have been growing. The growth rate of prices is higher than. But also costs are growing, which translates into a drop in the operating revenue. But certainly, I have to say that you can't compare between Q2 this year and last year.
Last year, in Q2, the combined ratio in the non-motor insurance was very, very low, less than 30%. This was because of a one-off event. We released a reserve without payment in a contract guarantee, which had an impact of over PLN 60 million, and this year there has been no such event, which clearly impacts the results but we have to say that what you are seeing today in non-motor is certainly more representative and more reliable in long term than what you saw last year. Now, group and individually continued insurance, you have 6% growth, but the share of the contractual managed release is going down, and also, if you take the revenue for SCR, especially health risks, these are the challenges so these are the challenges today in life insurance.
But also there has been a huge increase in terms of profitability, meaning the profitability of protection risks, especially the underlying risk, the basic risk, which is the death rate. The death rate is going down for the whole population, not only for the portfolio of this company. The costs here of insurance services are growing at a moderate rate, 2.3%, which has a bearing on the operating result and the contribution of this segment, which has gone up. This is our core product, and the margin is over 26% in Q2. Now, let me discuss the pandemic and the claims ratio.
As you can see, we are now in a very specific situation because this is a yet another quarter when the death rate is going down compared to the pre-COVID time, 2019.
This is important. It matters because it has an effect on our results here and now. It has an effect on our performance, but also on our approach to pricing. Because we clearly live longer now. So the levels are lower than last year, and the benchmark, which is 2019, which translates into the pricing of the product. But as I've already mentioned, healthcare products continue to be a challenge. The take-up rate is high, so it has a negative effect on the results in this segment, because the claim ratio has gone up by 1.2 percentage point. And the death risk had a positive effect, which has set off the negative aspects. So overall, it's 2.5 percentage point.
As regards individual protection insurance, well, first and foremost, we would like to draw your attention to a relatively strong increase in the release of CSM year-on-year by an increase of 15% as regards CSM. This is a direct effect of development of improved profitability in the banking channel and a growing increase of the premium for covering the cost of claim settlement and service. As regards trends in the group and corporate individual continue to, well, we've seen improved revenue and improved contribution of this segment to the consolidated result. Now, very important bit of information from life perspective.
Growing sales, additional sale to the existing portfolio translates into increase of the contractual service margin, both in the group and individually continued and individual protection insurance, which is very good news in the context of the scale of the phenomenon we are dealing with and the portfolio we are dealing with. We know that it is a very mature portfolio, especially on group insurance and individually continued insurance. Besides, we are working very hard on a sort of rejuvenation of this portfolio so that not only can we maintain keep it strong, but also rebuild the value that's reflected in the reports from the perspective of the growing CSM. So, investment results here some important information. Nothing is changing in terms of the portfolio structure. It remains very safe based on debt instrument.
This is the right moment in time for such a structure. It will best help us respond to the risks we are dealing with. It's a mix of all the relevant strategies and relevant assets. Profitability at the level of 4.6% in Q2. The interest rate income result is growing. Better result from valuation of debt instruments as well, and some improvements in terms of private equity and share strategy. This is what's been performing better year-on-year in Q2, especially as a result of technology-related funds. But what was pulling us down slightly were lower real estate portfolio results due to lower valuation mainly in the office segment. So it was a - PLN 72 million.
The other factor was negative impact of other items, such as swap points, for example, lower income from swap points on currency hedging instruments. In the Q2, in other items part, we showed a stronger effect of the reversal of foreign exchange temporary differences relating to valuation of real estate in the first quarter. Now, as for solvency, we continue seeing very high results, solvency results, but to year-end, 2023, we see growing capital consumption, especially the base capital index. This is mainly due to higher exposure to catastrophe risks and changes in the portfolio in order to adjust the exposure. We strengthen the non-motor part in the corporate segment.
Now, where are we six months, because before the end of the 2021 - 2024 strategy, where are we in individual KPIs? Gross insurance revenue, 51% of implementation, with 10, almost, 10% year-on-year growth. Health pillar, revenue, a revenue increase at the level of, at a level that exceeded 21%, with a high solvency level and with a net profit, despite the fact that there are almost 57%, which is, we've reached, already reached, almost 57% of the target. The strategy was published in a period that was quite changeable and with a high degree of certainty, and it affected our estimates back then. Today, it's different.
So it seems that until year-end, we will be able to show a positive development, and at the end of the year, we will be able to see that we fulfilled our obligation. As regards the contribution of the banking sector, it's also significantly higher than what we used to expect when writing the strategy. So the banking sector is now contributing stronger to the achievement of our KPIs. Assets under management already now above the already ambitious target level of 60 billion assets under management, with own equity profitability achieved, adjusted by the factors we have no influence on, for example, interest rates. Other rates that affect the valuation of insurance obligations, and then that's through OCI, level of 17.4 percentage points, and this is where I would like to pause and hand over to the President.
Ladies and gentlemen, in summary, before we give you a chance to ask questions, I would like to address several points. Firstly, the second quarter was significant in terms of the weather. In fact, the impact of weather was much stronger than the previous year. Probably this is why the performance was lower than in the comparable period last year. But in the areas where we have a strong influence, for example, sales, profitability of non-motor insurance, also looking at the cost factor, we've already seen signs of improvement. So this is something I would like to emphasize. Secondly, a certain problem of the market and of our core business, motor insurance. In this segment, we've seen a positive market trend.
Our performance in terms of more than 10% growth in motor TPL, this is something that can make us optimistic because it shows that against the market growth, which grew on average by 7% in premiums, our results are very good. It's also important to note that we are building a strong foundation for the next year. It's also part of our strategy. Certain personnel changes in the insurance segment, some collaboration in insurance, but also in banking, because banks do contribute strongly to our performance. The fact that we have attracted very strong and good managers to work in these areas means that we will be able to generate a very positive synergetic effect and a very positive result for the shareholders of PZU SA. Thank you very much.
Ladies and gentlemen, are there any questions? Are there any questions in the room?
My name is Kamil Stolarski, Santander Bank. I have three questions. So at which stage are you as regards considering the role of banks in PZU strategy? If I remember correctly, from last conference, you said that this model of cooperation between PZU and banks, it's a non-standard solution, and today you talk about synergies. Would you like to comment on that?
As I said, well, the ultimate direction of our development in this regard will be published in the strategy, so I can't answer it at this point. But the time we have spent together in the last 2-3 months gave us a chance to really talk to each other. First, internally, to look at the plans and ideas that were there. We've gathered some experience, some knowledge about the process, and we have really done our job.
In this regard, but we have also had dozens of meetings with different people, with our shareholders, with people who observe us on the market, and we listened. We listened to their opinions because, of course, our shareholders also have an opinion about that. So what we will present to you in the strategy will be the best solution that will lead to optimizing shareholder value for PZU S.A., while at the same time keeping the value of our assets strong. And I think this is, this is the main guideline that we will follow. So we will be guided by a purely economic, purely business related factors.
But I just want to add that our strategy will be about showing you the direction of our strategic decisions. The strategy itself also prepares a foundation for implementing our plans.
Many things have been happening in terms of our banking strategy, but in order to implement a strategy, you have to have the right people to do it. Without talking about strategy specifically, let me say that we've been working very hard on developing very competent and skilled personnel and managers. So it's not that we are just sitting and waiting for a strategy to appear and expect it to happen somewhere late in this year, and only then will we start working. No, we've been working on that issue already. What is still missing, perhaps, it's maybe a manner of communicating certain strategic decisions. Of course, some choices between strategy A or B have to be made.
But increasing revenue and increasing the bank assets in the PZU Group is our strategic goal, as I'm sure you know, and this strategy, its implementation has already been underway. So it's not that we are waiting for the publication of a strategy. No, this work is already going on. It may seem to you that, we are maybe just recruiting managers on boards, but in my career, I've never before participated in a process, where actually a whole management boards were replaced and whole boards, were developed in terms of their skills. Because we want to avoid the situation that we publish a strategy, and then we ask, "Okay, who should do it?" Now, we want to prepare in advance. Of course, there are certain limitations.
However, as I said, we have built a strong foundation, and the kind of building that will be erected on that foundation, it's a matter of discussion that we will have in a few months' time. But we will be prepared. We won't start by just looking for a lot.
There are two more questions about. I just want to congratulate you to PLN 509 million in performance of PZU Życie. But you had a similar result in 2017, where the provisions had to be dissolved, as you said. But if you look at the death incidents lower by 2.5%, it translates probably into additional PLN 40 million that should be added to your performance. My question is, I do understand that some problems in the non-life segment, but why for a second quarter in a row? Because in the first quarter, its negative effect was smaller, but now this performance is similar. So can you explain what's behind the performance of group insurance?
Well, look at it from the perspective of IFRS, because the P&L, the profit you can see, which is very important when looking at with our group the investments and dividends. But bear in mind that companies that offer life insurance are valuated from the perspective of its portfolio value and ability to generate new business. But I was looking from the dividend perspective, so I'm mostly interested in profits.
But if we have the portfolio that we have, then the deviation on life in the next year may result from some false assumptions we have taken, even though we are quite conservative. Also, as regards death incidents, so we actually release higher profits than the amount that we could extrapolate based on the data. We can predict the profits for next year, because life insurance is like a financial instrument. We have a number of contracts signed, and they are expected to release a certain amount of profit. So if our assumptions regarding the death incidence was correct, we will make as much money as we expected. There may be some deviations, but the main parameters are not changing. We are monitoring them.
We and our shareholders have been monitoring them for decades, and if no pandemic or other catastrophic events appears, we can be quite certain about our predictions. So what we are looking at is about the shape of the portfolio. If we are cutting some part of it. Tomek, can you perhaps show it?
Okay, we have to go back in the presentation. Yes, I think this shows it very well. So here it's separate, not combined. But look at group insurance, and then the CSM is release PLN 308 million. So our plan was PLN 308 million, and then return to assumptions 41. So we were too conservative, too conservative by PLN 41 billion. So this is the level of accuracy I can offer you.
We are usually too conservative in our plan, so I cannot tell you how much profit we'll generate, how much dividend we will pay. In life companies, the most important part is to be able to rebuild what we've released. So to maintain the ability to pay the good, the expected dividends. So PLN 222 million and PLN 102 million. These figures are most important. If I don't maintain it, I will not able to keep it in the future. That's why most life insurance company. But I know because of our balance sheets, which are very complicated and there's overlapping areas, so we are hard for you to analyze. But basically, this is how it work. You look at the portfolio value, net value of the assets as a monetary asset. So, and if distributed.
Of course, we can say it's theory, but it's applied everywhere, including U.K., from the perspective of what we have in our life insurance company, the portfolio value. Of course, we don't know how high you value this component and. But it seems that the valuations. It's when you look at the ability to generate dividends, a company that doesn't grow, doesn't generate new business in 3-4 years' time, will keep generating the same dividends as one that's growing. So the ability for the portfolio to rebuild the portfolio, for the portfolio to recover is essential. This is my perspective.
And my last question, so we've seen losses in TPL for a second quarter in a row. Looking at the market, do you think you will turn around and your figures will be in the green in next quarter?
I'm not sure how the market is going to behave, but we can see that there is a positive trend there. If you have a look at the performance of the market, broadly speaking, and if you have a look at different situations and various companies or smaller companies, some of the events were more spectacular, some less, some struggle. What it tells us is that you have an aggressive price strategy, which has a huge impact on the market. It is a very short-term strategy. I think that the market, I hope, is aware of this situation, and this is a highly competitive environment. I think that this is a gradual trend.
I think that when customers realize that quality of service matters, and we, as a whole, insurance business, should pay more attention to quality and transparency. And I think that this will be reflected on the market because insurance prices in the country in Poland still have a lot to a long way to go if they want to catch up with the European levels of prices. And the situation here is the following: people drive the same cars as the European average, so there is a lot of room for maneuver here. But as I've said, the market is highly competitive. If you have a look at the prices today and what's going on today, this won't be reflected in the results until the end of the year.
This is how it works, because what we see today is the effect what we sold at the end of last year, plus the inflation rate, because claims are reported now and the premiums were sold last year. They are yearly premiums.
Let me follow up on the pricing and the motor insurance. We can see the claim ratio is at a similar level, but the cost of claims has gone up significantly. So can you tell us a bit more about the flexibility of pricing of motor insurance policies? Is there any issue here about increasing the prices? Is there any issue because of competitiveness? I remember that back in 2015 , the price increased quite a lot, and now the prices haven't gone up that much. So can you tell us why?
It's difficult to compare because 2015 was a total disaster, PLN 1 billion of losses in the red, so you had to pick up. It was unprecedented. Now we are in a completely different place when you think about the cost of claim handling, and there is a inflation rate, double-digit inflation rate in the costs of car repairs and spare parts, et cetera. Before, there was a lower frequency because of like a few reasons, so to answer your question, this is a highly competitive environment, and we have to address that when talking to our customers, and PZU is also in the process of consolidation with Link4 because this performance is a total sum of the two. This is our subsidiary.
This is a company that requires a lot of changes, and we are also targeting specific segments of customers. Customers that are young, so that we can give them a higher price, but what they are also looking for is convenience, for a few reasons, so this is a different price segment, and the risk adjustment is different here, the underwriting is different here. The pricing, the underwriting for this segment of customers is different, so I mean, we should target the segments which allow us to get higher premiums, and this group of clients is willing to pay more for convenience, so as I understand, the market is highly competitive, so you can't just be too aggressive in increasing the prices.
You have to be more cautious here. We have to watch and anticipate. But our point of view is that we have to be aware of the surrounding, the environment, and this is not only the individual customers I'm talking about, but also fleet customers, which is you give a quote, but also there, this is a B2B situation. So we keep reviewing the portfolio, and sometimes here we can be more aggressive. But if we speak about individual customers, this is day-to-day competition with other players on the market. But we try to make the most of the situation.
You've said that the strategy will be published in Q4. During the presentation of Q1 performance, you said that already, and is everything here going as planned? So maybe you will be able to tell us a bit more at the end of Q3.
No, let's stick what we have already told you. We walk our talk. This is going to be a standard here, but we can't tell you everything. We tell you what we are allowed to tell you. So we want to be professional. As I've said, we want to have professional management leadership here, and we have hired a few good managers and, you know, we have been able to choose from top managements, top managers here. In both banks, really, there were very good people with great expertise that were applying, but we just had to to choose some. We would be happy to hire all of them, but we weren't able to.
This is what we've been doing also here in the insurance companies. As I've said, working on the strategy, as I also already said, it's not about drafting a document. This is about analyzing very thoroughly many different aspects, and we've already asked about the banks. We have to inquire. It's hard work. Also, if you take motor insurance, we've been focusing on the priorities you all expect us to be focused on. Also, importantly, we need to choose the right people to work on this strategy because this needs to be a reliable document drafted by highly skilled people. This is also important, so we are now at an advanced stage. Works are ongoing, but of course, we will do it as soon as possible.
The end of the year is viable.
I'm sure, you can see that we really listen and read what you write, and we listen to the investors, not only in Poland. We listen not only to analysts, but also investors directly. PZU, and it's my personal opinion, but, I'd like to say that PZU is perceived as a dividend-focused, company. Maybe you don't see it directly, but, Artur said today that we introduced business units, and maybe you missed it. Today, we have an organization where board members are divided according to function. So, one member is in charge of IT, another one of sales, et cetera. And in the end, the profit or the dividend is the responsibility of CEOs. When business units are introduced, the main change is that managers are no longer assigned to individual functions.
Of course, these functions have to be managed as well, so you have to have IT, products, and sales, but the division will be different. It will be a conglomerate of several complex areas, and every board member responsible for one BU will be P&L responsibility for the P&L. Of course, the influence will grow. They will have influence on costs, et cetera, but they will be the people responsible for giving you the comfort of receiving dividends. So the board will also be responsible for delivering their part of EBIT and creating capacity for dividends. The same applies to our assets, including banks. So if we are dividend-based, then we expect that so will be our assets, that there will be no mix of different factors. If you expect dividends, this is what we expect as well.
State Treasury is also dividend-based or dividend-focused in terms of its structure, so we have to streamline our organization so that it is reflected in the structure, and we have to give clear guidance to all our management boards in which we have invested, and tell them that we expect from them a clear-