Powszechny Zaklad Ubezpiecze? Spólka Akcyjna : Non financial report ot the PZU Group and PZU SA 2023

2023

Annual Report

Report on non-financial information of the PZU Group and PZU SA for 2023

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Description	Business model	ESG Strategy	Key indicators	Taxonomy	Management and	Social	Employee	Environmental	Human rights	Counteracting
policies	corruption

Table of contents

To go to the desired page, click on the corresponding item in the table.

Table of contents
1.	Approach to reporting	5
2.	PZU Group and PZU characteristics	6
3.	Business model and value creation	11
	3.1. Value chain	11
	3.2. Stakeholder map	13
	3.3. Value creation	14
4.	ESG Strategy	16
	4.1. ESG ambitions for 2030-2050	19
5.	Key non-financial performance indicators	21
6.	Taxonomy - disclosure under Article 8 of Regulation (EU) 2020/8521	24
	6.1. Insurance and reinsurance activities	24
	6.2. Investment activity	29
7.	ESG risk management	48
	7.1. Responsibility related to ESG	48
	7.2. Key ESG risks	49
	7.3. Policies and procedures on non-financial issues	50
8.	Social issues	51
	8.1. Responsible sales	52
	8.2. Customer dialog and improvement process	56
	8.3. Preventing exclusion	58
	8.4. Sports and physical activity	60
	8.5. Health prevention	62
	8.6. Prevention	64
	8.7. Cultural patronage	66
	8.8. Charity	67
Annual Report 2023	PZU SA for 2023
		Report on non-financial information of the PZU Group and

9. Employee issues	69
9.1. Employment structure	70
9.2. Work environment	77
9.3. Organizational culture	79
9.4. Diversity in relations with employees	82
9.5. Engagement surveys, dialog and trade unions	86
9.6. Remuneration and benefits	88
9.7. Training and development	90
9.8. Knowledge and experience sharing	94
9.9. Safety	95
10. Environmental issues	96
10.1. Business of the PZU Group in the face of climate change	96
10.2. Product offering - prevention and adaptation	101
10.3. Direct impact exerted by the PZU Group on the environment	110
10.4.	Energy consumption	115
10.5.	Carbon footprint	119
11. Respect for human rights	124
12. Counteracting corruption	126

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Description	Business model	ESG Strategy	Key indicators	Taxonomy	Management and	Social	Employee	Environmental	Human rights	Counteracting
policies	corruption

1. Approach to reporting

PZU published the Management Board's report on the activity of the PZU Group and PZU for 2023, which is also an integrated report. The report presents the PZU Group's activities by integrating financial and business results along with environmental, social, and corporate governance issues. The non-financial information presented in this report is to help readers understand better the results in respect of ESG strategy execution and cultivate long-term relations with key stakeholders.

For the purpose of the non-financial information statement referred to in Article 49b and Article 55(2c) of the Accounting Act, PZU prepared this Report on non-financial information of the PZU Group and PZU SA for 2023, including non-financial information in line with the requirements of the Act.

The data presented in the report are for the period from 1 January 2023 to 31 December 2023.

Contact information for the report:

Investor Relations Team

e-mail: [e-mail]

The calculations of the carbon footprint in the climate area were made in accordance with the international GHG Protocol Corporate Accounting and Reporting Standard. This report also contains information regarding taxonomic disclosures according to the Commission Delegated Regulation (EU) 2021/2139 supplementing Regulation 2020/852 of the European Parliament and of the Council (EU). The facts concerning the PZU Group's carbon footprint in 2022 and 2023 have been checked by an independent external company doing business as Veritas Polska Sp. z o.o.

The report covers the consolidated non-financial data of the PZU Group and its parent company PZU, in accordance with the organization structure included in the Consolidated Financial Statements for the year ended 31 December 2023.

The data from PZU Życie, the Alior Bank Group, the Bank Pekao Group, LINK4, foreign entities (AAS Balta, AB Lietuvos Draudimas and PrJSC IC PZU Ukraine) and other consolidated companies in the Group are presented as information pertaining to the PZU Group. Moreover, Alior Bank and Bank Pekao have also published separate Group-level disclosures concerning their non-financial data.

In 2023, no significant changes occurred in PZU Group's structure. Details in this regard are presented in the Chapter "PZU Group Strategy".

The data published in the report span the year subject to reporting and the comparative period, i.e. the preceding year. To present the carbon footprint in accordance with the international GHG Protocol Corporate Accounting and Reporting Standard, 2018 has been treated as the base year.

In 2023, no significant adjustments to the information were made.

In line with the approach stemming from the principle of significance, the various pieces of non-financial information have been presented to the extent necessary to evaluate the development, performance and standing of the PZU Group. Relatively less space has been devoted to smaller entities whose impact on the overall depiction of the PZU Group is minor or simply marginal.

Annual Report 2023	PZU SA for 2023	INSURANCE | HEALTH | INVESTMENT | BANKING
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	Report on non-financial information of the PZU Group and

Description	Business model	ESG Strategy	Key indicators	Taxonomy	Management and	Social	Employee	Environmental	Human rights	Counteracting
policies	corruption

2. PZU Group and PZU characteristics

For more than 220 years, PZU has been growing its business, gaining experience and using its potential to protect what is most valuable - the life and well-being of its clients, their families, assets and companies. Every day, the Group develops to grow be able to provide the most personalized, comprehensive and flexible offer to its clients. The priority for the PZU Group and the measure of its success is to generate benefits for its shareholders and clients in a sustainable and responsible manner.

#1

the largest insurance and banking group in Central and Eastern Europe2

22 million

Clients

The Powszechny Zakład Ubezpieczeń Group is the largest financial group in Poland and Central and Eastern Europe. PZU heads up the group with its traditions dating back to 1803 when the first insurance company was established on Polish soil. PZU is a public company. The stock of PZU has been listed on the Warsaw Stock Exchange (WSE) since 2010. Since its stock exchange debut PZU has been part of WIG20, an index of the Warsaw Stock Exchange's largest companies. It is one of the most highly valued companies and heavily traded stocks on the Polish stock exchange. Since 2019, the shares of PZU have been also part of the WIG ESG (sustainability) index.

The main shareholder of PZU is the State Treasury, holding 34.19% of shares. Other PZU shares are held by investors from all across the world.

The PZU Group's consolidated assets total PLN 468 billion.

Poland is the PZU Group's core market measured by its magnitude and client numbers. Nevertheless, the Group's subsidiaries play an important role on the markets in Lithuania, Latvia, Estonia and Ukraine.

Insurance is the core business of the PZU Group. The PZU Group is the leader of the insurance market in Poland, with shares measured by gross premiums written in the non-life insurance segment and the life insurance segment of 32.1% and 40.1%, respectively (data for three quarters of 2023).

PZU companies also offer investment, pension, and banking products as well as medical services. They render assistance services to retail clients and businesses through strategic partnerships.

PZU is the most recognizable brand in Poland. Aided brand awareness is at the level of 99%1.

1. Continuous brand monitoring, CAWI, nat-rep18-65, data for January-December 2023; percentage of respondents in the target group declaring familiarity with the brand by indicating it in a list of different brands
2. By assets
3. At the end of 2023

99%

the most recognizable brand in Poland1

PLN 40.8 billion

stock market capitalization3

Annual Report 2023	PZU SA for 2023	INSURANCE | HEALTH | INVESTMENT | BANKING
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	Report on non-financial information of the PZU Group and

Description	Business model	ESG Strategy	Key indicators	Taxonomy	Management and	Social	Employee	Environmental	Human rights	Counteracting
policies	corruption

PZU Group

POLAND

LITHUANIA

LATVIA

ESTONIA

Market position of PZU Group companies

KEY:

Non-life insurance

Life insurance

Market position in terms of assets under management

Market position in terms of assets

Market position in terms of medical revenues

UKRAINE

PZU Headquarters

Warsaw

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	Report on non-financial information of the PZU Group and

Description	Business model	ESG Strategy	Key indicators	Taxonomy	Management and	Social	Employee	Environmental	Human rights	Counteracting
policies	corruption

Key PZU Group business areas

INSURANCE

For many years the PZU Group has provided insurance cover in all of the most important areas of private, public and business life, thereby safeguarding its clients' lives, assets and health.

HEALTH

Striving to satisfy the clients' needs better and more fully the PZU Group intensively grows the health insurance segment along with associated medical care services.

PZU (non-life insurance, including motor, residential and buildings,		The health business deals with the following activities: (i) sales of health products
	in the form of insurance and sales of non-insurance products (occupational
agricultural and third party liability insurance) and PZU Życie (life
	medicine, medical subscriptions,
insurance) are the leaders on Poland's insurance market. Since
	partnerships and prevention programs); (ii) construction and development of medical
2014, following the acquisition of LINK4, the Group has offered
	infrastructure in Poland to give clients the best accessibility to the health care services
insurance under two brands:
	rendered.
the most recognizable PZU brand, with its 220-year tradition, and the much younger LINK4 brand,
associated with direct sales channels. In 2015 the third brand, TUW PZUW, or Towarzystwo Ubezpieczeń		The PZU Zdrowie network includes nearly 130 of its own, more than 2,300 partner branches
Wzajemnych Polski Zakład Ubezpieczeń Wzajemnych, a mutual insurer, was founded to sell and handle		and 888 samples-taking points. Its advantages include quick appointments,
insurance products for companies in various industries, focusing on cooperation with large corporates,	CLIENT	respecting referrals for tests from physicians from outside the PZU Zdrowie network,
The PZU Group is also the leader in the insurance market in the Baltic States (Lithuania, Latvia,	tests.
medical entities (hospitals and clinics) as well as for church institutions and local government units.		remote medical consultations which make it possible, in addition to obtaining
		medical advice or discussing test results, to receive a prescription or referral to
Estonia). It also conducts insurance activity in Ukraine.		The offer is supplemented by prevention services.
Poland is the Group's core market, where it generates 89.9% of its revenue (measured by gross		BANKING
insurance revenue). The insurance activity in the Baltic States and in Ukraine generates 10.1% of its
revenue.		The PZU Group's banking business comprises two groups of companies: Bank Pekao
		(a member since 2017) and Alior Bank (a member since 2015).

INVESTMENTS

The PZU Group is one of the largest asset managers on the Polish market. It is also the market leader in employee pension schemes.

It offers a broad range of investment products: open-ended and closed-ended investment fund and pension products, such as open-ended pension funds, individual retirement accounts (IRA), individual retirement security accounts with the PZU Voluntary Pension Fund, employee pension schemes (EPS), or employee capital schemes (ECS). TFI PZU also invests the PZU Group's own funds.

The PZU Group has three mutual fund management companies: PZU TFI, Pekao TFI and Alior TFI. It also has Powszechne Towarzystwo Emerytalne PZU managing the PZU Złota Jesień Open-end Pension Fund and the PZU Voluntary Pension Fund.

Bank Pekao, established in 1929, is a universal commercial bank offering a full range of banking services provided to individual and institutional clients. It is one of the largest financial institutions in Central and Eastern Europe, and the second largest bank in Poland.

Alior Bank is a universal deposit and credit bank. It was established in 2008 as a start-up. It combines the principles of traditional banking with innovative solutions, thanks to which it systematically strengthens its market position and sets out trends for the development of the Polish banking sector.

Tightening cooperation with banks has opened up enormous growth opportunities for the PZU Group, especially in terms of integrating and focusing its services on clients at every stage of their personal and professional development. Cooperation with the banking segment forms an additional plane for PZU to build lasting client relations. PZU Group's business within its banking model involves bancassurance and assurbanking.

Annual Report 2023	PZU SA for 2023	INSURANCE | HEALTH | INVESTMENT | BANKING
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	Report on non-financial information of the PZU Group and

Description	Business model	ESG Strategy	Key indicators	Taxonomy	Management and	Social	Employee	Environmental	Human rights	Counteracting
policies	corruption

PZU Group's structure

Structure of the PZU Group as of 31 December 2023

• The following branches operate within PZU Zdrowie:

- CM FCM in Warsaw,

• Centrum Medyczne Medica sp. z o.o.
• Sanatorium Uzdrowiskowe "Krystynka"

sp. z o.o. with its registered office in Ciechocinek

• The Elvita Group consists of the following companies:

- Przedsiębiorstwo Świadczeń Zdrowotnych i Promocji

Zdrowia ELVITA - Jaworzno III sp. z o.o.

- Przedsiębiorstwo Usług Medycznych PROELMED sp. z

Structure of the PZU Group as of 31 December 2023

PZU

with its registered office in Warsaw, Poland

PZU Zdrowie	LINK4	PZU Życie
with its registered office in Warsaw, Poland	with its registered office in Warsaw, Poland PZU	with its registered office in Warsaw, Poland PZU 100%
PZU 80%	100.00%
PZU Życie 20%
	TUW PZUW	PTE PZU
Centrum Medyczne Medica	with its registered office in Warsaw, Poland PZU
with its registered office in Warsaw, Poland
with its headquarters in Płock, Poland	100.00%
	PZU Życie 100.00%
PZU Zdrowie 100.00%

TFI PZU

with its registered office in Warsaw, Poland PZU 100.00%

Arm Property

with its registered office in Kraków, Poland Investment funds managed by TFI PZU 100.00%

- CM Tarnów,

- CM Nasze Zdrowie in Warsaw,

- CM in Opole,

- CM Cordis in Poznań,

- CM in Warsaw,

- CM in Kraków,

	o.o., based in Łaziska Górne
•	The Tomma Group is composed of the following
	companies:
	- Tomma Diagnostyka Obrazowa S.A.
	- Bonus-Diagnosta sp. z o.o.
•	The Alior Bank Group includes, among others:

Centrum Medyczne Gamma

with its registered office in Warsaw, Poland PZU Zdrowie 100.00%

Elvita

with its registered office in Jaworzno, Poland PZU Zdrowie 100.00%

Starówka

with its registered office in Warsaw, Poland PZU Zdrowie 100.00%

PZU Pomoc

with its registered office in Warsaw, Poland PZU 100.00%

PZU Centrum Operacji

with its registered office in Warsaw, Poland PZU 100.00%

PZU Finanse

with its registered office in Warsaw, Poland PZU 100.00%

Tower Inwestycje

with its registered office in Warsaw, Poland PZU 27.4696%

PZU Życie 72.5304%

PZU Ukraine

with its registered office in Kiev, Ukraine PZU 90.99435%

PZU Ukraine Life 9.00168% PZU Życie 0.00397%

Bank Pekao

with its registered office in Warsaw, Poland PZU 20.0000%

Investment funds managed by TFI PZU 0.0168%

Pekao Financial Services

with its registered office in Warsaw, Poland Bank Pekao 66.4992% PZU 33.5008%

- CM in Poznań,

- CM in Wrocław,

- Alior Bank S.A.

- Alior Services sp. z o.o.

	PZU LAB
Tomma Diagnostyka Obrazowa	with its registered office in Warsaw, Poland PZU
with its registered office in Poznań, Poland PZU Zdrowie	100.00%
100.00%

LLC SOS Services Ukraine

with its registered office in Kiev, Ukraine PZU Ukraine 100.00%

Alior Bank

with its registered office in Warsaw, Poland PZU 31.9071% Investment funds managed by TFI PZU 0.0196%

- CM in Gdańsk,

- CM in Kielce,

- CM Warsaw Chmielna,

- Alior Leasing sp. z o.o. (which has:

- 90% stake in Alior Leasing Individual sp. z o.o. (created

on 29 august 2023)

Centrum Medyczne Nowa 5

with its registered office in Gorzów Wielkopolski, Poland

PZU Zdrowie 100.00%

Boramed Centrum Medyczne

PZU Cash

with its registered office in Warsaw, Poland PZU 100.00%

Omicron BIS

with its registered office in Warsaw, Poland PZU 100.00%

PZU Ukraine Life

with its registered office in Kiev, Poland PZU 53.4723%	Ruch
PZU Życie 0.0053%	with its registered office
PZU Ukraine 46.5224%	in Warsaw, Poland PZU
	14.50%
	PZU Życie 14.50%
	Alior Bank 6.00%

	- CM in Radom,
	- CM in Łódź,
	- CM in Częstochowa
•	The PZU Zdrowie Group includes: Medica Medical
	Center Group, Elvita Group, Tomma Group and Old
	Town, Nowa 5 Medical Center, Gamma Medical Center
	and Boramed Medical Center.
•	The Centrum Medyczne Medica Group consists of the
	following companies:

- 100% of shares in AL Finance sp. z o.o. (until 5 August

2021 - Serwis Ubezpieczeniowy sp. z o.o.), which

owns 10% of Alior Leasing Individual sp. z o.o.),

- Meritum Services ICB SA (On 8 December 2023,

Absource sp. z o.o. merged with Meritum Services ICB

SA. All assets of Absource sp. z o.o. were taken over by

Meritum Services ICB S.A.),

- Alior TFI SA,

with its registered office in Warsaw, Poland PZU Zdrowie 100.00%

Ipsilon

with its registered office in Warsaw, Poland PZU 100.00%

PZU Projekt 01

with its registered office in Warsaw, Poland PZU 100.00%

Ogrodowa Inwestycje

with its registered office in Warsaw, Poland PZU 100.00%

Grupa Armatura

with its registered office in Krakow, Poland PZU 100.00%

Tulare Investments

with its registered office in Warsaw, Poland PZU 100.00%

Lietuvos Draudimas

with its registered office in Vilnius, Lithuania PZU 100.00%

PZU Estonia

Lietuvos Draudimas Branch, with its registered office in Tallinn, Estonia

PZU Lithuania Life

with its registered office in Vilnius, Lithuania PZU 99.3379%

AAS BALTA

with its registered office in Riga, Latvia PZU 100.00%

PZU Corporate Member Limited

with its registered office in London, England PZU 100.00%

Sigma BIS

with its registered office in Warsaw, Poland PZU 34.00%

Ruch and Sigma BIS:

affiliates

Other tasks:

Consolidated subsidiaries

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	Report on non-financial information of the PZU Group and

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• • CORSHAM sp. z o.o.,
  • RBL_VC sp. z o.o.,
  • RBL_VC sp. z o.o. - ASI S.K.A.;
• The Bank Pekao Group is composed of, among others:
• • Bank Pekao SA,
  • Pekao Bank Hipoteczny SA,
  • Pekao Leasing sp. z o.o. (which owns 100% of PEUF sp. z o.o.),
  • Pekao Investment Banking SA,
  • Pekao Faktoring sp. z o.o.,
  • Centrum Kart SA, Pekao Financial Services sp. z o.o.,
  • Pekao Direct sp. z o.o. (until 16 January 2020 - Centrum Bankowości Bezpośredniej sp. z o.o.),
  • Pekao Investment Management SA (which owns 100% of Pekao TFI SA),
  • Krajowy Integrator Płatności SA (affiliate)
• The Lietuvos Draudimas Group includes:
• • UAB "B10 biurai",
  • UAB "B10 apartamentai"

The structure chart does not include investment funds or companies in liquidation or under bankruptcy.

Changes in the structure of the PZU Group in 2023

The following changes transpired in the structure of the PZU Group in 2023 up to the date of signing of the financial statements:

• 1 January 2023 marked the opening of AQ's liquidation;
• On 14 March 2023, the company UAB "B10 biurai" was registered. The shares were acquired by Lietuvos Draudimas;
• On 14 March 2023, the company UAB "B10 apartamentai" was registered. The shares were acquired by Lietuvos Draudimas;
• On 31 May 2023, PZU Zdrowie acquired a 100% stake in Boramed Centrum Medyczne, with its registered office in Warsaw;
• On 31 October 2023, PZU Zdrowie (the acquiring company) merged with Centrum Medyczne Św. Łukasza, with its registered office in Częstochowa (the acquired company);
• On 25 January 2024, a transaction was finalized for PZU to acquire 100% of the share capital of Polski Gaz Towarzystwo Ubezpieczeń Wzajemnych, based in Warsaw, from Orlen Spółka Akcyjna. As Polski Gaz Towarzystwo Ubezpieczeń Wzajemnych na Życie, based in Warsaw, is a 100% subsidiary of Polski Gaz Towarzystwo Ubezpieczeń Wzajemnych, the consequence of acquiring the latter entity is that Polski Gaz Towarzystwo Ubezpieczeń Wzajemnych na Życie will also enter the PZU Group.

Annual Report 2023	PZU SA for 2023	INSURANCE | HEALTH | INVESTMENT | BANKING
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	Report on non-financial information of the PZU Group and

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3. Business model and value creation

Operational processes, with insurance business as the key element, are at the core of the PZU Group's value creation model, generating over 60%1 of the Group operating result. The offering is supplemented by health, banking, investment and pension products. Equity management in the PZU Group is implemented in accordance with the PZU Group's strategy. This is why aspects related to the core business - insurance offered by PZU and PZU Życie - are of greatest importance.

I. Suppliers (upstream)

The PZU Group cooperates with suppliers from many industries, in such business areas as administration, real property and information technology.

The largest group of suppliers are business partners for IT, real property, utilities and energy purchases. The spectrum of supplies is wide, i.e., from comprehensive orders in the area of information technology and consulting to conventional goods and services.

Any company wishing to cooperate with PZU shall

Appropriate audit recommendations may be made if a supplier is found to commit serious violations or fails to comply with required standards of respecting human rights or the environment. Based on these standards, a mitigation plan for the risks as identified may be prepared, implemented and monitored.

II. Operating activities

PZU Group's processes involve employees, partners and platforms. The main areas of operations include: insurance, banking, investment, health.

3.1. Value chain

The value chain includes a number of processes, resources and relationships that enable the Group to conduct its business. The value chain also reflects and is closely linked to the life cycle of the Group's products, creating a comprehensive structure, which covers all stages: from product conception, through product handling, to the end of the life cycle, and in the case of insurance, the latter can still last for several years after the end of coverage.

Value moves along the chain, driven by collaboration, innovation and process improvement, and thus plays its role in the Group's growth, in strengthening its market position, and in building shareholder value. In model terms, the PZU Group's value chain consists of four elements: suppliers, operations, sales and clients.

familiarize itself with and accept the "Code of Conduct and CSR Best Practices for PZU Group's Suppliers" at the stage of submitting the Supplier Registration Form to be entered into the List of Qualified Suppliers. The Code is a collection of principles for the PZU Group and all its suppliers. Conducting business in accordance with these principles and promoting the Code's values constitute an important criterion for evaluating potential business partners. Moreover, when suppliers submit their offers, they must sign the declaration that they have familiarized themselves with and accepted the Code.

The Code defines requirements for suppliers in the areas of environment, society and corporate governance.

PZU and PZU Życie conduct periodic and ad hoc audits of suppliers. The ESG area has been mandatory as part of supplier audits since 2023.

The key processes related to the insurance area are as follows:

• market research, research into client needs and expectations;
• creation and development of products and services;
• sales and distribution;
• claims handling;
• handling of benefits and liabilities;
• service provision and management of client relations;
• operations (sales processing and settlement, contract servicing);
• data security;
• management of the Company's financial resources.

Supporting processes (insurance business):

SUPPLIERS

BUSINESS

SALE

CLIENTS

• human resource management;
• information management;

1) adjusted for PZU's shares in the Group banks

Annual Report 2023

Report on non-financial information of the PZU Group and PZU SA for 2023

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