Higher premiums, improved profitability, reduction of fixed costs consequently, higher than 32% of earnings – the conclusions of published on 25th August 2011 the Group’s financial results Capital PZU SA. PZU Group’s financial results in the first half of 2011 were shaped primarily by:

• Growth in premiums written in the PZU Group business segment PZU Insurance Group;

• Improvement in profitability in the segment of property and casualty insurance, mainly in products and property;
• Reduction of administrative costs carried out by restrukturyzacyjnemu program and a program to reduce fixed costs;
• Lower income from investment activities (despite the very good result in Q2 2011) due to worse than a year the net result of the last of the investment, especially portfolio debt securities;
• Consolidation of the Group cover fittings.

The net financial result of PZU Group for the first half of 2011 amounted to 1552.4 mln zł, then, was higher by 32.7% from the net result of the first half previous year. At the end of the first half of 2011 years ROE, calculated as the ratio urocznionego net profit to average equity in the first half 2011, 24.8% and rose by 4.1 p.p. compared to the end of half of the previous year. “The first half of 2011 for the PZU Group was very successful. Growth premiums written, to further improve profitability and decrease costs administration, resulting from the continuation of the processes restructuring, are facts that are sure to delight investors. It is worth noting that the return on equity amounted to nearly 25%. Customers PZU also have reason to be pleased – we continue to develop products PZU Help modernize our branch network, introduce new products. “- said Andrew Klesyk, CEO of PZU SA.

Contributions Gross premiums written for the first half of 2011 amounted to 7673.3 million zł (7291.9 zł million a year earlier). An increase of 381.4 mln zł (5.2%) was higher due to a footnote in the life insurance segment coaches and in the life insurance segment. The increase in gross written premium of 276.0 mln zł (6.8%) in the segment property and casualty insurance resulted from higher sales insurance, in particular customer segment mass. In addition to motor insurance premiums increase as compared with previous year also occurred in non-life insurance, especially all underwriting residential buildings. The increase in gross written premium in life insurance segment (about 3.3%) resulted in a comparable level of development of group insurance (Year on year growth of 3.3%) and individual (growth year on year 3.2%). In group insurance has been an increase in insured and an increase in average contributions. The insurance individually continued premium growth was achieved mainly thanks dosprzedaży additional insurance. In other individual insurance premiums increased due to high Sales of investment products – product savings and investment with a protective element of the contribution regular “Plan for Life”, sold structured products both through its own network as well as in the bancassurance channel and the IRA.

This increase was partially offset by the expiration of the portfolio life insurance and endowment included in the 90′s. Investing activities PZU Group recorded a 14.5% lower revenues from investment. The reason was mostly lower scores on the implementation of investment, particularly in the portfolio of debt securities securities. In addition, interest income decreased due to including to reduce the average size of the portfolio of debt securities securities, deposits and transactions conditional on Treasury securities (reduced in April 2010 to settlement of claims incurred in connection the payment of dividends). Compensation and benefits PZU Group recorded a decline in net claims of 102.6 million zł (2%). This decrease resulted primarily from the lack of damage caused snow and floods in the life insurance segment. This was partially offset by an increase in benefit payments a decline in reserves in 2011 compared to growth in 2010 year in the life insurance segment. Costs In the first half of 2011 there was a decrease administrative costs by 134.5 mln zł (-17.5%). It was largely the consequence of actions restructuring carried out in PZU and PZU Zycie, carried PZU Group’s activities optimizers costs, mainly in the areas of IT, administration and property and the lack of project costs in the IPO The first half of 2011 (project costs related to the first half of 2010). Acquisition costs in the first half of 2011 increased by 56.5 million zł (6.3%) in the level of the first half of 2010. The increase resulted mainly from the higher sales and changes in the structure of distribution channels (up channel share of commission, at the expense of bezprowizyjnych). Earnings Operating profit in the first half of 2011 amounted to Zł 1902.4 million, up by 402.3 mln zł (26.8%) compared to corresponding period of previous year. For a good result was influenced increase in premiums earned in stable costs and damages decrease in administrative costs. The increase in profit from operations operating directly translated into an increase in net profit 382.6 mln zł (32.7%). Rating PZU and PZU Zycie have long-term credit rating and the rating financial strength, given by Standard & Poor’s Ratings Services on 16 July 2009, at A with a stable credit rating outlook. On 22 July 2011, the agency confirmed above rating and outlook. This is the highest possible rating for Polish companies. Restructuring 29 December 2009 the Management Boards of PZU and PZU Zycie announced a plan to implement restructuring program for 2010-2012.

The restructuring process is related to employment including of centralization of functions previously scattered in several centers located in large Polish cities and increasing specialization of employees, and covers the following areas: operations, finance, claims and benefits, and the network of the PZU Group. Given the scale of the planned redundancies, on 11 May 2011 Boards PZU and PZU Zycie announced their intention to carry out further redundancies group. On this day it was estimated that the change will be subject to 3316 people, What reductions, ie, a decrease in employment in PZU and PZU Zycie in 2011 were established at the level of 1212 people. In the period of 3 months from 1 April to 30 June 2011 the process changes in PZU and PZU Zycie was covered by 347 persons, of which 248 employees were given documents that address the employment contract.