PZU business, down by 49% in 1H/2010; profit shrinks to EUR 300 million

Poland's largest insurer, PZU (Powszechny Zaklad Ubezpieczen) said that consolidated net profit fell by 49% in the first half of the year due to a weaker investment result and flood-related claims. PZU posted consolidated net profit of EUR 300 million, down from EUR 580 million a year earlier.
For the full year, the insurer's net profit will be at least EUR 250 million (PLN 1 billion) lower than last year's figure of EUR 950 million, the company's CEO, Andrzej KLESYK stated.

However, he expects a significant improvement in the company's performance in the second half of the year. "Provided, of course, there won't be any major disasters," KLESYK said.
In the first six-months of the year PZU's gross written premium fell by 1.2% to EUR 1,9 billion, due to lower premiums in its non-life insurance business, which was only partly offset by higher premiums in life insurance.

Also, net income from investment activity fell by 16% to EUR 320 million, due to changes in the value of equities and bonds held in the insurer's portfolio.
In addition, PZU's own capital shrank by half in the first six months to EUR 2.87 billion from EUR 5.67 billion, after the company paid over EUR 3.2 billion this year earlier as dividend within the settlement between the two major shareholders that ended a decade-old conflict over the ownership of PZU.

PZU debuted on the Warsaw Stock Exchange this year in May after Poland's treasury (majority owner with a 45.2% share) ended the conflict with the insurer's Dutch shareholder, EUREKO (13% stake).