PZU Q1 2025 presentation: Net profit surges 40%, ROE reaches 22.4%

Introduction & Executive Summary

Powszechny Zaklad Ubezpieczen SA (WSE:PZU (WA:PZU)) reported exceptional financial results for the first quarter of 2025, with net profit jumping 40.4% year-over-year to PLN 1.76 billion, according to the company’s presentation released on May 15, 2025. The Polish insurance giant achieved an annualized return on equity (aROE) of 22.4%, while maintaining a strong Solvency II ratio of 226%.

The company’s performance was driven by significant growth across all business segments, with insurance net profits increasing by 67.4% compared to Q1 2024. PZU also announced a dividend of PLN 4.47 per share for 2025, representing an attractive yield of approximately 8%.

"Our Q1 2025 results demonstrate the strength of our diversified business model and our ability to generate sustainable growth across all segments," said the company in its presentation materials.

As shown in the following overview of key financial metrics:

Quarterly Performance Highlights

PZU’s insurance service result reached PLN 1,251 million in Q1 2025, compared to PLN 787 million in the same period last year. The company’s combined ratio improved significantly to 82.5% from 90.1% in Q1 2024, indicating enhanced underwriting profitability. Operating margin also increased to 24.2% from 20.9% in the previous year.

The breakdown of net profit growth illustrates the strong performance of the insurance segment:

In the non-life insurance segment, the mass insurance category showed particularly strong results, with insurance revenue increasing from PLN 3,054 million to PLN 3,306 million. The operating result in this segment more than doubled from PLN 282 million to PLN 584 million year-over-year.

The corporate insurance segment also performed well, with insurance revenue growing from PLN 1,131 million to PLN 1,247 million, while the operating result increased from PLN 187 million to PLN 318 million.

Life insurance continued its positive trajectory, with group and individually continued insurance revenue rising from PLN 1,922 million to PLN 2,016 million, and operating result growing from PLN 343 million to PLN 428 million.

The company’s detailed financial results under IFRS 17 accounting standards show consistent growth across key metrics:

Diversified Growth Strategy

PZU has been successfully expanding its complementary offerings beyond traditional insurance products. The health pillar achieved 8.6% year-over-year revenue growth, increasing from PLN 469 million to PLN 509 million, with the number of contracts reaching 3.54 million.

The company’s asset management business showed impressive growth, with assets of external clients of TFI PZU increasing from PLN 56.9 billion to PLN 69.6 billion. PZU maintained its position as the leading non-bank TFI with a market share of 9.1%.

The following chart illustrates the growth in assets under management:

Cross-selling initiatives with PZU Group banks have been particularly successful, with gross written premium acquired through cooperation with Bank Pekao and Alior Bank (WA:ALRR) increasing by nearly 40% year-over-year, from PLN 303 million to PLN 415 million.

The company’s diversified growth across various business lines is evident in this overview:

Strategic Vision Through 2027

PZU outlined its strategic goals for 2025-2027, targeting gross insurance revenue of over PLN 36 billion and a net profit exceeding PLN 6.2 billion by 2027. The company aims to maintain a return on equity above 19%, earnings per share above PLN 5.1, and a combined ratio below 90%.

The strategic plan also emphasizes maintaining a strong capital position with a Solvency II ratio above 190% and a dividend per share of at least PLN 4.5.

As detailed in the company’s strategic goals presentation:

PZU is celebrating its 15th anniversary on the Warsaw Stock Exchange, highlighting that its total return has increased by 365% since its IPO in May 2010, significantly outperforming the WIG index, which grew by 147% during the same period.

Forward-Looking Statements

The company maintains a positive outlook for the Polish insurance market, noting accelerating growth in motor insurance (+12.6%) and continued expansion in non-motor segments. PZU’s strong capital position, with a Solvency II ratio of 226% and over 80% of investments in bonds, provides a solid foundation for future growth.

PZU’s focus on sustainable development includes initiatives in green energy, with the company mentioning offshore wind farm projects and cooperation between PZU Lab and Corab on sustainable solutions.

The company’s Q1 2025 results build on the momentum from 2024, when PZU reported strong revenue growth and initiated plans to transition to a holding company structure. This transformation, expected to be completed by December 2026, aims to improve governance and equity management while preserving a capital surplus of approximately €6.1 billion.

With its robust financial performance, diversified business model, and clear strategic vision, PZU appears well-positioned to maintain its market leadership and deliver value to shareholders through both growth and attractive dividends.

Full presentation:

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