Chairman of the Supervisory Board Statement

Dear Stakeholders,

The global coronavirus pandemic meant that 2020 required for business to demonstrate exceptionally effective management and efficient adjustment to new market conditions. The PZU Group utilized this time to grow dynamically while simultaneously maintaining a high level of safety in its business. It ended the year of the pandemic among the groups reporting the highest solvency ratios in the world. It discharged other obligations in addition to its business objectives. It accomplished an important social goal by getting involved in the fight against the COVID-19 pandemic.

The PZU Group’s financial results place it among the most profitable financial institutions in Poland. Its high asset utilization and solvency ratios place it among the best in the world. The American rating agency, namely S&P Global Ratings recognized in Q2 2020 that the PZU Group would maintain its leading business position in Poland, strong capital position and stable results on insurance activity whereby it would be capable of surviving any further potential deterioration in the business environment. This was reflected by affirming PZU’s financial rating of A- and its outlook as stable.

Thus the PZU Group is strengthening its position despite the exceptionally demanding market situation precipitated by the pandemic and several interest rate cuts. Poland’s GDP slumped 2.8% in 2020 while back in Q1 when the country was just beginning to prep for the onslaught of the coronavirus it had climbed 1.9% versus the previous year. The isolation that protected Poles’ health while simultaneously restricting their mobility led to a 3% decline in household consumption at the end of 2020 accompanied by the concurrent 3.4% increase in the consumer price index. Registered unemployment in Poland according to the data published by the Central Statistics Office remained at the low level of 6.2% at the end of 2020, though it was up 0.4% from the level seen in early Q2 when Poland embarked on its battle against the pandemic.

The economic effects of the pandemic were markedly attenuated by governmental support programs. Then allowed businesses to preserve their operational continuity and keep employment at a constant level. The PZU Group, in particular its constituent banks played an enormous role in the transfer of government aid to businesses. That was why pessimistic scenarios did not materialize that had anticipated unemployment skyrocketing into a double digits.

On top of risk the pandemic also brought a new perspective. The restrictions placed on the operations of many industries, the shift companies made towards remote work and the lower mobility of consumers decisely accelerated digital transformation and the deployment of advanced technologies in products and services in the insurance and banking sector. Digitization will therefore be crucial for the PZU Group’s further development. In the longer run the pandemic may also enhance the need to take out insurance against the consequences of events that are difficult to predict. The health segment stands out in terms of its huge growth potential and fast pace of growth. Telemedicine has gained a particular amount of popularity with such progress in digitization in health protection. It makes it possible to give a remote diagnosis and thus without having to engage in personal contact with a physician.

The PZU Group is adjusting its products and services to clients’ evolving needs. During the pandemic they require above average support. In 2020 the PZU Group also focused on charitable assistance given to the health service and patients grappling with COVID-19. In total, the companies belonging to the PZU Group donated more than PLN 25 million for that noble goal. This was a great act of solidarity. We have gained absolute certainty that as a Group we are capable of combining forces to help weaker people. I am genuinely proud of the PZU Group’s employees who personally got involved in charitable campaigns to mitigate the effects of this disease as it spread. They proved that together they are capable not only of building the company’s strong business position but also of uniting efforts to help the most needy. I am enormously grateful for that.

More challenges reflected in the new business strategy in 2021- 2024 already await the PZU Group. One of its priorities will be to conduct its business in accordance with environmental, social and governance standards. I am confident that the PZU Group will play a crucial role in sustainable development efforts.

I wish the management teams of the companies belonging to the PZU Group and all of the employees good luck in pursuing the ambitious targets and generating above-average rates of return for shareholders.

Respectfully,

Maciej Łopiński

PZU Supervisory Board Chairman