Acquisition expenses and administrative expenses

In 2015, acquisition expenses were PLN 2,376.3 million, up 10.7% compared to 2014.

The main reasons for the increase were the following:

  • higher direct acquisition costs in the mass client segment (resulting mainly from changes to commission rates in the half of 2014) and indirect acquisition costs in the mass client segment, specifically employee costs;
  • commencement of consolidation of the insurance companies acquired in 2014.

Simultaneously, the declined acquisition costs resulted from the higher level of costs deferred in time.

In 2015, the Group’s administrative expenses were at the level of PLN 1,657.9 million, which was 8.5% higher than in the previous year. The following factors had an impact on their level:

  • inclusion of the administrative expenses incurred by the newly acquired insurance companies in the results of PZU Group;
  • higher costs associated with the expansion of the Everest Platform (policy system for non-life insurance) and other strategic projects aimed to improve customer service by tied agents and develop distribution channels, especially remote channels.

Simultaneously, there was a recorded positive effect from the previous year in the segment of pension insurance due to the higher costs in 2014 associated with the additional payment to the Guarantee Fund (statutory rise of required funds in 2014 from 0.1% to 0.3% of OPF net asset value (“NAV”).