The PZU Group has steadily pursued its strategy and this has once again accrued outstanding earnings to our shareholders, the highest ones since PZU’s IPO. The composition of the PZU Group’s net result has been undergoing transformation for many years. 2013 net profit primarily consists of its result on its core insurance activity. This is a very good trend. We are all the more pleased as we attained this outcome in a challenging time for the economy, which affected the financial markets and the insurance sector.
The results confirm that the PZU Group has enhanced its operational excellence. Many factors contributed to such a robust net profit, in particular improved profitability in the mass and corporate segments as a result of lower claims frequency in motor business. We did not suffer any larger natural catastrophes, while we maintained a high level of profitability in the group and individually-continued insurance segment. Maintaining fixed cost discipline has been extremely meaningful as the outcome of the restructuring program we have implemented over the last several years.
We have held true to our strategy of generating total shareholder return. Net profit per share has grown steadily. At yearend 2013 the Earnings per Share (EPS) ratio was 38.16 PLN while in 2011 it was 27.14 PLN. Even though we operate in Central and Eastern Europe, the PZU brand enjoys global recognition. Our brand is known not just to investors hailing from Europe and the US, but also Japan and Australia. We are perceived as a stable company with an attractive dividend policy. We are unrivalled in terms of our dividend ratio in 2013. 11% is clearly much more than insurance companies operating in our region and the top European insurers and reinsurers offer. Since the IPO, an investment in PZU’s shares has earned investors 78.6%, including accumulative dividends paid per share of 109.04 PLN.
PZU’s capital and dividend policy for 2013-2015 as adopted in 2013 calls for optimizing the balance sheet structure by replacing some equity with less expensive subordinated debt. According to this policy, the dividend proposed by the Management Board will be determined on the basis of the PZU Group’s consolidated result and surplus capital. Under optimum circumstances shareholders may receive up to 1.3 billion PLN from surplus capital in 2015 and 2016.
You may find more information in the online version of our annual report. I hope that you will find this form of presentation appealing. Please enjoy it!