9.1 Capital policy

The PZU Group’s Capital Policy in 2013–2015 is intended to increase Total Shareholder Return (TSR) and is based on the following rules:

  • managing the PZU Group’s capital (including surplus capital) at the PZU level;
  • maintaining the PZU Group’s shareholder funds net of subordinated debt at a level no lower than a 250% solvency margin for PZU Group and striving to maintain the PZU Group’s shareholder funds including subordinated debt at approximately a 400% solvency margin (as at the end of the financial year), to maintain the PZU Group’s financial security;
  • maintaining assets to cover the provisions in PZU and PZU Życie at a level no lower than 110%;
  • obtaining an optimal financing structure by replacing the capital surplus with subordinated debt up to an amount no higher than PLN 3 billion, not to exceed a 25% cap of shareholder funds to cover the solvency margin as referred to in article 148 of the Act on Insurance Activity;
  • retaining equity at a level corresponding to a AA rating according to Standard&Poor’s methodology;
  • providing funds for development and acquisitions in the upcoming years;
  • no equity issues by PZU in the upcoming years.