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- strategy (insurance, health, investments, finances);
- sustainable development (sales, employees, social responsibility, natural environment and ethics).
PRACTICES
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Operating model
GRIs
- About the report
- Results
- Comment on the financial results for 2020
- Major factors contributing to the consolidated financial result
- PZU Group’s income
- PZU Group’s claims paid and technical provisions
- PZU Group’s acquisition and administrative expenses
- Drivers and atypical events affecting the results
- PZU Group’s asset and liability structure
- Contribution made by the market segments to the consolidated result
- Issuer’s financial results – PZU (PAS)
- Impact of the COVID-19 pandemic on the PZU Group’s results
- Business strategy (2017-2020)
- CSR strategy(2017-2020)
- Supplementary information and notes
- 1. Introduction
- 2. Composition of PZU Group
- 3. Shareholder structure
- 4. Composition of the Management Board, Supervisory Board and PZU Group Directors
- 5. Key accounting policies, key estimates and judgments
- 5.1 Impact of the COVID-19 pandemic on the estimates and assumptions
- 5.2 Changes in accounting policies and estimates, errors from previous years
- 5.3 Amendments to the applied IFRS
- 5.4 Explanation of differences between the 2019 annual consolidated financial statements and these consolidated financial statements
- 5.5 Consolidation principles
- 5.6 Measurement of transactions and balances denominated in foreign currencies and FX rates used
- 5.7 Purchase method
- 5.8 Classification of insurance contracts in accordance with IFRS 4
- 6. Segment reporting
- 7. Risk management
- 8. Equity management
- 9. Fair value
- 10. Gross written premium
- 11. Fee and commission income
- 12. Interest income calculated using the effective interest rate
- 13. Other net investment income
- 14. Result on derecognition of financial instruments and investments
- 15. Movement in allowances for expected credit losses and impairment losses on financial instruments
- 16. Net movement in fair value of assets and liabilities measured at fair value
- 17. Other operating income
- 18. Claims and movement in technical provisions
- 19. Fee and commission expense
- 20. Interest expenses
- 21. Acquisition costs
- 22. Administrative expenses
- 23. Employee expenses
- 24. Other operating expenses
- 25. Income tax
- 26. Earnings per share
- 27. Goodwill
- 28. Intangible assets
- 29. Other assets
- 30. Deferred acquisition cost
- 31. Property, plant and equipment
- 32. Investment property
- 33. Entities carried by the equity method
- 34. Loan receivables from clients
- 35. Financial derivatives
- 36. Investment financial assets
- 37. Receivables
- 38. Impairment of financial assets
- 39.Cash and cash equivalents
- 40. Equity attributable to equity holders of the parent
- 41. Technical provisions
- 42. Subordinated liabilities
- 43. Liabilities on the issue of own debt securities
- 44. Liabilities to banks
- 45. Liabilities to clients under deposits
- 46. Other liabilities
- 47. Provisions
- 48. Deferred income tax
- 49. Assets and liabilities held for sale
- 50. Lease
- 51. Assets securing receivables, liabilities and contingent liabilities
- 52. Contingent assets and liabilities
- 53. Offsetting financial assets and financial liabilities
- 54. Notes to the consolidated cash flow statement
- 55. Disputes
- 56. Transactions with related entities
- 57. Headcount
- 58. Other information
- Financial data (2019-2020)
- Financial data (2016-2020) Focus on: Results - check the highlights of the year!
- Comment on the financial results for 2020
- Market and business
- External environment
- Business model
- Structure of the Group
- Operating model
- Brand management
- Insurance
- Non-life insurance (PZU, LINK4 and TUW PZUW)
- Life insurance (PZU Życie)
- Insurance (international operations)
- Investments
- Investments (PZU TFI)
- Investments (PTE PZU)
- Health
- Health (health companies)
- Banking and strategic partnerships
- Banking (Bank Pekao, Alior Bank)
- Other operating areas
Focus on: Market and business - check the highlights of the year!
- Capitals (IIRC)
- Strategy and outlook 2021+
- Risk and ethics
- Objective of risk management
- Risk management system
- Risk appetite
- Risk management process
- PZU Group's risk profile
- ESG risks
- Risk vulnerability
- Reinsurance operations
- Capital management
- Ethical foundations of doing business
- Preventing corruption and conflicts of interest
- Whistleblowing System
- Transaction security
- Tax transparency
- Cooperation with suppliers Focus on: Risk and ethics - check the highlights of the year!
- Corporate governance
- Application of corporate governance rules
- System of control in the process of preparing financial statements
- Audit firm auditing the financial statements
- PZU's share capital and its shareholders
- Rules for amending the Company's Articles of Association
- Shareholder Meeting and shareholder rights
- Supervisory Board and Management Board
- Compensation paid to members of supervisory and management bodies
- Diversity policy Focus on: Corporate governance - check the highlights of the year!
- Shares and bonds
- Equity and bond market
- PZU's share price
- Banking sector on the Warsaw Stock Exchange
- PZU's investor relations
- Analysts' recommendations regarding PZU's shares
- PZU Group's Capital and Dividend Policy
- Debt financing of PZU, Bank Pekao and Alior Bank
- Rating
- Calendar of PZU's major corporate events in 2021 Focus on: Shares and bonds - check the highlights of the year!
32. Investment property
32.1 Accounting policy
Investment property is held to earn rental income or obtain benefits from increases in value, or both. Investment property is not used in operating activities.
Investment property is initially recognized at purchase price or production cost, plus transaction costs. After initial recognition it is measured at fair value, in accordance with the rules described in section 9.1.6. Gains and losses resulting from the change of fair value of investment property are recognized in the consolidated profit and loss account under “Net movement in fair value of assets and liabilities measured at fair value” item in the period in which they occurred.
If owner-occupied property becomes investment property, depreciation is charged up to the date of reclassification and impairment losses, if any, are recognized and then:
- if the carrying amount determined as at that date is higher than the fair value, the difference is recognized in the consolidated profit and loss account under “Other operating expenses”.
- if the existing carrying amount is lower than the fair value then the difference is first recognized in the consolidated profit and loss account under “Other operating income” as a reversal of the impairment loss (up to the amount of the impairment loss previously recognized, whereby the amount recognized in the consolidated profit and loss account may not exceed the amount of the impairment loss that would have been determined after deducting the accumulated depreciation had no impairment loss been recognized), and the remaining part of the difference - in other comprehensive income under “Reclassification of real property from property, plant and equipment to investment property”.
On subsequent disposal of the investment property, revaluation reserve may be transferred to supplementary capital.
32.2 Estimates and assumptions
The COVID-19 pandemic has impact on the real estate market, bringing down the transaction volume and liquidity. Limited market activity was observed in all real estate market sectors. As at 31 December 2020 (valuation date of a major part of the PZU Group’s investment property portfolio), some real estate market sectors started to function normally, which was reflected in the valuation.
The impact of the factors having a significant impact on the investment property valuations is presented in section 9.2.1.2.
32.3 Quantitative data
| Movement in investment property | 1 January – 31 December 2020 | 1 January – 31 December 2019 |
| Net book value at the beginning of the period | 1,981 | 1,697 |
| Posting of right-of-use assets as at the time of application of IFRS 16 | - | 45 |
| Increases: | 538 | 215 |
| - purchase | 228 | 195 |
| - increase in right-of-use assets | 14 | - |
| - transfers from real estate for own use | - | 3 |
| - transfers from held for sale categories under IFRS 5 | 296 | 17 |
| Decreases | (260) | (30) |
| - sale and liquidation | (2) | (14) |
| - transfers to categories earmarked for sale according to IFRS 5 | (257) | (16) |
| - decrease of right-of-use assets | (1) | - |
| Gain (loss) on remeasurement to fair value | 234 | 54 |
| - recorded in financial result | 233 | 46 |
| - through other comprehensive income | 1 | 8 |
| Net carrying amount at the end of the period, including | 2,493 | 1,981 |
| - buildings and structures | 2,262 | 1,798 |
| - own land | 170 | 135 |
| - perpetual usufruct right to land and cooperative ownership right to premises | 61 | 48 |
The item “Perpetual usufruct of land” contains the right to use land for up to 99 years. This right may be traded.
The item “transfers from owner-occupied property” contains the value of properties at their carrying amounts (historical cost less accumulated depreciation and impairment losses) as at the date of transfer, which is the date of the change of use.
The fair value of investment property results from valuations by independent appraisers conducted mainly in 2020.
Investor Relations Team
e-mail: IR@pzu.pl
Magdalena Komaracka, IR Director, tel. +48 (22) 582 22 93
Piotr Wiśniewski, IR Manager, tel. +48 (22) 582 26 23
Aleksandra Jakima-Moskwa, tel. +48 (22) 582 26 17
Aleksandra Dachowska, tel. +48 (22) 582 43 92
Piotr Wąsiewicz, tel. +48 (22) 582 41 95