Contribution of segments to the consolidated result

• corporate insurance (non-life insurance) – a broad scope of property, TPL and motor insurance products customized to a client’s needs, entailing individual underwriting, offered by PZU, and TUW PZUW;
• mass insurance (non-life insurance) – property, accident, TPL and motor insurance products offered to individual clients and entities in the small and medium enterprise sector by PZU and LINK4;
• group and individually continued protective insurance (life insurance) – group insurance products offered by PZU Życie to groups of employees and other formal groups (e.g. trade unions), under which persons with a legal relationship with the policyholder (e.g. employer, trade union) accede to the insurance product granted and individually continued insurance products under which the policyholder acquires the right to individual continuation during the group phase;
• individual protection insurance (life insurance) – insurance offered by PZU Życie to individual clients under which the insurance contract applies to a specific insured and this insured is subject to individual underwriting;
• life investment insurance – unit-linked insurance with significant insurance risk (investment agreements that are not investment contracts;
• investments – the segment includes investments of free funds, i.e. the surplus of the investment portfolio over the level allocated to pay insurance liabilities of PZU and PZU Życie and the operating result of TFI PZU;
• pension insurance – the segment includes income and expenses of PZU OFE pension funds;
• banking – a broad range of banking products offered to corporate and retail clients by Bank Pekao and Alior Bank;
• Baltic Countries – non-life insurance and life insurance products provided in the territories of Lithuania, Latvia and Estonia;
• Ukraine – non-life insurance and life insurance products provided in the territory of Ukraine;
• investment contracts – include PZU Życie products that do not transfer material insurance risk and do not satisfy the definition of insurance contract; these are some of the products with a guaranteed rate of return and in unit-linked form;
• other – consolidated companies that are not classified in any of the enumerated segments.

• an increase in insurance contract revenue compared to 2024 by PLN 483 million, i.e.: +10.3% y/y (+ PLN 328 million y/y after reinsurance premium allocation). Within revenues, there was an increase in the amortization of liabilities (LRC) as a consequence of higher sales dynamics, both in non-motor and motor insurance. In motor insurance, the increase resulted from higher average premiums and strong sales in the current year, particularly in lease insurance (an increase of 8.3% y/y in new passenger car registrations in 2025). The increase in LRC amortization in non-motor insurance (+ PLN 140 million y/y after reinsurance premium allocation) resulted from the earning of premiums from 2024, including a contract with a client in the energy generation sector and high sales in 2025, mainly in the strategic customer area. Higher y/y premiums allocated to recovery of insurance acquisition (+PLN +52 million; +8.2%) are the result of portfolio growth and a change in the product mix;
• lower net insurance service expenses by PLN 5 million y/y (-0.2% y/y) which together with an increase in the net insurance contract revenue by 10,7% y/y resulted in the profitability measured by the combined ratio (COR) by 8.3 percentage points, to 76.7%. A decrease in the net insurance service expenses is a product of:
  • higher y/y claims and benefits of the current year (+ PLN 114 million y/y) resulting from deterioration in non-motor and motor insurance, mainly MOD – the impact of claims inflation, higher frequency of claims in motor insurance and high unit value claims (fire and mining),
  • higher costs, both for amortization of acquisition and for administrative expenses attributable to insurance operations. The increase in administrative expenses is mainly the result of higher personnel costs (the impact of salary increases), IT costs due to the development of the IT area, and the building of competence in the area of systems maintenance;
  • release of a higher y/y net excess of prior years’ claims reserves over the current value of payouts;
• an increase of PLN 19 million (+5.2% y/y) in investment income over the last year is the result of the purchase to the portfolio of Polish government bonds measured at fair value through other comprehensive income with high market yield;
• insurance finance income or expenses (after reinsurance allocation) changed (increase of PLN 26 million y/y) and amounted to – PLN 102 million. The increase in expenses is the result of changes in the exchange rate and the timing of foreign currency reinsurance settlements.

• an increase in revenue from insurance contracts compared to 2024 by PLN 549 million, i.e.: +4.2% y/y (+ PLN 552 million y/y after reinsurance premium allocation). The increase resulted from higher amortization of net liability for remaining coverage (LRC) as a consequence of higher sales dynamics, both in non-motor and motor insurance. The increase in non-motor insurance is a mainly higher level of LRC amortization as a consequence of developing PZU DOM home insurance, which is linked to the new release of the offer (broad coverage as standard), and PZU Firma insurance offered to small and mediumsized enterprises (thanks to better matching of the offer to risk). In motor insurance, both MTPL and MOD – Auto Casco revenue growth was driven by high premium growth in the second half of 2024 and the first half of 2025 (average premium growth responding to rising claims costs) with a deceleration in the second half of 2025. The higher level of insurance contract revenue is also triggered by a higher y/y level of premiums allocated to recovery of insurance acquisition cash flows (+2.0% y/y) as a consequence of growing sales and a simultaneous increase in commission costs – higher share in the portfolio of voluntary insurance by higher commission rates, and change in the mix of sales channels;
• a lower level of net insurance service expenses by PLN 246 million y/y (-2.0 % y/y) which together with an increase in the net insurance contract revenue by 4,3% y/y resulted in the profitability measured by the combined ratio (COR) decreasing by 5.7 percentage point. A decrease in the net insurance service expenses is a product of:
  • a decrease of PLN 145 million y/y in current year claims liabilities, mainly in non-motor insurance – in 2024 there was an above-normal number of mass claims caused by weather events (in particular, in Q3 2024 there was flooding in southwestern this Poland with a negative impact of more than PLN 225 million on the result). The lower level of claims year in motor insurance is the result of the lower cost of claims in MTPL with deterioration in MOD;
  • higher acquisition costs (+PLN 58 million y/y) mainly as a result of developing the insurance portfolio and an increase in the share of noncommercial insurance in the portfolio, and higher y/y administrative expenses attributable to insurance operations (+PLN 19 million y/y);
  • recognition of a loss component, mainly in the MTPL insurance portfolio (including on the inward reinsurance portfolio with PZU Group companies) as a consequence of high claims inflation, though in an amount that does not exceed the amortization from the opening balance sheet. The total excess of depreciation over the creation of the loss component amounted to PLN 87 million (y/y change of + PLN 143 million);
  • release of a higher by PLN 35 million y/y net excess of prior years’ claims reserves over the current projected value of payouts;
• an increase of PLN 28 million (3.7% y/y) in investment income over the prior year is the result of the purchase to the portfolio of Polish government bonds measured at fair value through other comprehensive income with high market yield;
• insurance finance income or expenses (including reinsurance) were – PLN 326 million, which means an increase in expenses by PLN 2 million y/y.

• higher by PLN 81 million insurance contract revenues as a result of:
  • a lower level of premiums required to cover expected claims and benefits (- PLN 97 million y/y), due to assumed lower utilization in health insurance (in the corresponding period of 2024, the assumed realization of a post-covid increase in the frequency of benefits) and a better adjustment of mortality assumptions for the individual continuation portfolio with a shrinking portfolio; an increase in revenues to cover rising acquisition costs (+6.4% y/y) mainly due to portfolio growth and an increasing share of intermediary compensation;
  • higher contractual service margin release in 2025 (+ PLN 167 million y/y) in all insurance groups, including on the individually continued insurance portfolio (+ PLN 94 million y/y);
• an increase in net insurance service expenses by PLN 154 million y/y (2.5% y/y), which together with an increase in the net insurance contract revenue by 1,0% y/y resulted in the profitability measured by the ratio of insurance service result to insurance contract revenue decreasing by 1.1 percentage points. An increase in the insurance service expenses is a product of:
  • higher indemnities and benefits with the development of the loss reserve from previous years as a result of the continued high utilization of benefits from health insurance and the higher cost of claims in other group insurance (inter alia, impact of portfolio development);
  • changes in the value of the loss component with a positive impact on the result of + PLN 14 million (- PLN 20 million y/y), including the deceleration of the component creation in group protective and health insurance (the impact of the premium retariffication process with a still high level of benefit utilization);
  • higher administrative expenses (+ PLN 2 million y/y) as a consequence of higher salary costs, advertising, and IT costs due to the development of the IT area;
• a decrease of PLN 6 million (-0.7% y/y) in the result on investments compared to last year was due in particular to the negative impact of the valuation of shares in the medical segment offset by a higher result from debt portfolios against the purchase of instruments at favorable yields in the market;
• insurance finance income and expenses, which were – PLN 519 million, translating into an decrease in expenses by PLN 3 million y/y triggered, among other things, by interest rate increases.

• higher insurance revenues (+ PLN 126 million y/y) resulting from:
  • higher y/y release of the contractual service margin, including in bancassurance (+ PLN 30 million y/y; among other things, impact of higher y/y sales of mortgage insurance in the year preceding the report year) and Type J and term insurance;
  • an increase in premiums allocated to recovery of insurance acquisition cash flows, expected costs, as well as expected claims and benefits, by a total of PLN 66 million y/y as a consequence of developing the insurance portfolio;
  • a decrease in other revenues by PLN 20 million y/y – there was a lower-than-expected level of cancellations of bancassurance contracts in 2024;
• an increase in net insurance service expenses by PLN 71 million y/y (+18.8% y/y), which together with an increase in the net insurance contract revenue by 16,9% y/y resulted in the profitability measured by the ratio of insurance service result to insurance contract revenue decreasing by 0.8 percentage points. An increase in the net insurance service expenses is mainly the result of:
  • higher administrative expenses as a result of higher personnel and IT expenses;
  • changes in the loss component with a – 7 million y/y impact on the result being the cumulative effect of the creation of a new loss component and amortization of the loss component for active cohorts from prior periods (mainly in J insurance) higher than in 2024 with a – PLN 2 million y/y impact on the change result;
• the level of investment income was higher than in the previous year (by PLN 8 million, or +6.7% y/y) as a result of the increase in the level of assets to cover liabilities;
• insurance finance income or expenses (net of reinsurance) were PLN -115 million, which means an increase in expenses by PLN 8 million y/y.

• an increase in fee and commission income by PLN 25 million to PLN 209 million in 2025, with this change resulting, in particular, from a PLN 28 million y/y increase in management fees following increasing level of assets under management;
• an increase in the PZU Group’s non-insurance operating expenses by PLN 28 million to PLN 66 million in 2025, mainly due to a higher level of the surcharge on the Guarantee Fund of the National Depository for Securities by PLN 23 million y/y.

• higher y/y claims and benefits liabilities due to the increase in the value of the portfolio;
• release of a higher y/y net excess of prior years’ claims reserves over the current projected value of payouts;
• change of a loss component with an effect on the insurance service result – PLN 15 million y/y as a product of the recognition of a new loss component higher by PLN 10 million as compared to last year, and of changes in assumptions for active cohorts from the preceding years having an effect on the profit in the amount of – PLN 5 million y/y;
• an increase of 1.8% y/y in administrative expenses, mainly due to higher personnel and IT costs. The segment’s ratio of administrative expenses calculated to net insurance revenues increased by 0.6 p.p. to 10.2%;
• PLN 43 million higher amortization of acquisition cash flow. The acquisition expanse ratio was 18.5%, recording a 0.3 p.p. y/y increase.

• higher y/y claims and benefits liabilities;
• release of a lower y/y net excess of prior years’ claims reserves over the current projected value of payouts;
• change of a loss component with an effect on the change of the insurance service result PLN +18 million y/y as a product of the recognition of a new loss component in an amount higher by PLN 22 million and of changes in assumptions for active cohorts from the preceding years having an effect on the profit in the amount of – PLN 4 million y/y;
• a 3.9% y/y increase in administrative expenses (in functional currency, an increase of UAH 68 million, or 12.9% y/y), mainly due to higher salary costs and IT costs. At the same time, the segment’s ratio of administrative expenses calculated to net insurance revenues increased by 1.7 p.p. as compared to the previous year and stood at 19.6%;
• a PLN 2 million, or 2.9%, higher y/y amortization of insurance acquisition cash flows (in functional currency, up UAH 86 million, or 12.2% y/y). The acquisition expense ratio dropped by 2.6 p.p. to 26.7%.

Selected Alternative Performance Measures (APM) within the meaning of European Securities and Markets Authority Guidelines (ESMA) no. 2015/1415 are presented below.

The profitability and operational efficiency indicators presented herein, constituting standard measures applied generally in financial analysis, provide, in the opinion of the Management Board, significant additional information about the PZU Group’s financial performance. Their usefulness was analyzed in terms of information, delivered to the investors, regarding the Group’s financial standing and financial performance.

To facilitate the analysis of PZU Group’s profitability, such indicators were selected that best describe this profitability in the opinion of the Management Board.

Return on equity (ROE), adjusted return on equity (aROE) and return on assets (ROA) indicate the extent to which the Company is able to generate profit using its resources, i.e. equity or assets, and return on equity from core business (ROE from core business) indicates the ability to generate profit from core business i.e. excluding the banking sector.

Return on equity (ROE) is a measure of profitability. It permits an assessment of the degree to which the company multiplies the funds entrusted to it by the owners (investors). This is a ratio of the generated profit to the held equity, i.e. financial resources at the Group’s disposal for an indefinite term which were contributed to the enterprise by its owners. In the case of the PZU Group, the value of net profit and equity differ considerably depending on whether they are provided excluding or including the profit/equity of minority shareholders. In this respect, both return on equity (ROE) – attributable to equity holders of the parent, and return on equity (ROE) – consolidated, without excluding profit and equity attributable to non-controlling shareholders, are presented. In addition, the PZU Group presents an adjusted return on equity (aROE), calculated on an equity basis excluding accumulated other comprehensive income relating to insurance and reinsurance financial income and expenses (being a cumulative effect of changes in discount rates for valuation of insurance liabilities on the PZU Group’s capital), which provides greater stability to the indicator.

Return on assets (ROA) reflects their capability of generating profit. This indicator specifies the amount of net profit attributable to a unit of financing sources engaged in company’s assets.

The return on equity and assets indicators belong to the most frequently applied indicators in the analysis of profitability of companies and groups regardless of the sector in which they operate.

Return on equity attributable to equity holders of the parent company of PZU Group for 2025 was 19.8% and the aROE ratio was 20.7%. The ratios were higher by 2.6 p.p. and 2.7 p.p., respectively, than those obtained in the previous year, as a result of an increase in the insurance service result, particularly in the mass and corporate non-life insurance segments, as a result of higher insurance revenues in both non-motor and motor insurance, while the net insurance service expenses declined, particularly in the mass property insurance segment. The values of the ratios were also positively influenced by higher investment results achieved both on non-banking activities and in the banking segment (higher interest income).

Return on equity from core business (ROE from core business) for 2025 reached 21.0%, increasing by 4.7 p.p. compared to 2024, driven by improved profitability in insurance operations – particularly in the mass non-life insurance segment – and a higher result from investment activity (excluding banks), mainly due to better performance of debt portfolios and increased income from equity instrument portfolios. Return on assets (ROA) of the PZU Group for 2025 was 2.7%, i.e. 0.2 p.p. higher than in 2024. Contributing to this were higher insurance service result, particularly in the mass and corporate non-life insurance segments as well as in the banking segment (growth in interest and commission income partially offset by higher operating expenses).

To facilitate the analysis of PZU Group’s performance, such indicators were selected that best describe performance in the case of insurance companies and those pursuing banking activity in the opinion of the Management Board. Some indicators refer the costs of pursuit of insurance activity to revenue, hence reflect which portion of the revenue was allocated to costs and which portion – to margin. For the banking activity, the Cost/Income (C/I) ratio was selected as the relation which best reflects the performance of this area of the activity in the opinion of the Management Board. All indicators are widely applied by other companies from the corresponding sectors and by investors and serve an analysis of efficiency and profitability of these companies.

One of the fundamental measures of operational efficiency and performance of an insurance company is COR (Combined Ratio) calculated, due to its specific nature, for the non-life insurance sector (Section II). This is the ratio of insurance service expenses, including amounts recoverable from reinsurers to the net income on insurance activities; a decrease in the value of this indicator signifies an improvement in efficiency.

The combined ratio (for non-life insurance) of the PZU Group’s has been maintained at a level ensuring high profitability of business.

It stood at 86.3% in 2025, down 5.6 p.p. compared to 2024, mainly as a result of better profitability in both the mass and corporate insurance segments (a 5.7 p.p. and 8.3 p.p. decrease in the COR combined ratio, respectively) as a result of higher insurance revenue in both non-motor and motor insurance, while net insurance service costs declined in the mass non-life insurance segment in particular.

Another important indicator is the life insurance profit margin – the profitability of life insurance segments calculated as the ratio of operating profit/loss to net insurance revenues. The ratio reached 27.5% in 2025, and its increase of 0.4 p.p. compared to 2024 was due in particular to a higher operating result in the investment insurance segment as through a change in assumptions regarding partial redemptions and costs in the IKE product translating into a decrease in the loss component with an impact on the segment result of + PLN 43 million.

As regards banking activities, efficiency is measured by the cost/income ratio, i.e., the quotient of the PZU Group’s non-insurance operating expenses excluding tax on other financial institutions and total operating income, which includes: interest income calculated using the effective interest rate and equalized, other net investment income, result on discontinued recognition of financial instruments and investments not measured at fair value through profit or loss, net change in fair value of assets and liabilities measured at fair value, interest expenses, and result on commissions and fees and other operating income and expenses. In 2025, the cost to income ratio in the PZU Group’s banking business reached 35.2%, and was higher than in 2024 by 0.9 p.p. This was due to the rate of growth in costs surpassing that in income. The increase in costs was driven in particular by rising costs of third-party services and an increase in BFG costs due to the reinstatement of contributions to the banks’ guarantee fund.