Responsible sales

“The basis of responsible sales in the PZU Group is not only the constant improvement of our services enabling us to always be one step ahead of our competitors but, above all, our focus on listening to the needs, ambitions and dreams of our clients. Owing to the improving and expanding qualifications of our team members, we work for the benefit of our clients, guided by the principle of providing them with products they actually need the most today. Due to our information policy, insurance products no longer have to resemble black magic by being unintelligible to an ordinary person – our rules and regulations and our contracts are based on clear and simple forms prepared with a view to avoiding confusion or misleading our clients.”

Paweł Menkiewicz, Managing Director for Sales

PZU Group’s Policies [UoR]

Product liability in the PZU Group assumes an exceptional form: the priority in every offer and every product in the Group companies is client safety understood in a broad sense. Our corporate value embodied by “We play fair” is not an empty slogan. Rather, it is translated into the daily practice of thousands of people who work in this Group.

Policies for the fair design and sale of financial products and services

Every single Group product and service is meticulously checked by experts before it can be proposed to clients. Lawyers and employees of the compliance department ensure that no clause in any agreement violates client interests, and that the entirety is compliant with current case law regarding consumer rights.

Several Group companies, including all its international companies, there are procedures in force on how to disclose information to clients concerning factors that may influence their decision to enter into, or enroll in, and insurance agreement. In addition, internal regulations have been implemented in TUW PZUW, including rules pertaining to the product management system, the procedure for creating, modifying and retracting products, the procedure for monitoring products and the rules for managing defects.

After bringing a product to market, the Group employs procedures to prevent misselling, or offering such a product in a misleading manner, or offering a product that is not aligned to a client’s capabilities or needs. Employees and agents are obligated to perform a client needs analysis, or hold a conversation to assess accurately the utility of the product PZU is offering to a client. All employees and agents examine client needs in four fundamental areas: safety – life, safety – non-life, investments and pensions. If the analysis shows that a product is not aligned to the needs of a given client, the client is advised of that fact and jointly with the advisor he or she may look for an alternative solution.

Before making a decision on utilizing PZU’s insurance services, clients also have at their disposal product sheets that render an objective presentation of the most important information regarding a given product. As a result, clients can made more considered decisions and purchase insurance cover that best corresponds to their requirements.

The transparency of the Group’s insurance products is also ensured by the provisions of the Insurance Distribution Act of 15 December 2017 which entered into force in 2018. The Act is the effect of implementation into the Polish legal order of Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution (Insurance Distribution Directive). During preparations to phase it in, the PZU Group companies refreshed the process of offering and entering into insurance contracts and the various clauses of the general terms and conditions of insurance were aligned to the regulations related to handling complaints. Guidelines and implementation materials were conveyed to the distributors of PZU’s insurance products, salespersons were also trained on new duties ensuing from the IDD Directive.

In 2018 and 2019, PZU and PZU Życie did not observe any failure to comply with regulations or codes concerning the labeling of products and services or marketing communication.

Responsible and understandable communication

The PZU Group’s Best Practices define what specific activities are in compliance with the Company’s key value of “We play fair”. They require that information about the offering must be conveyed in a reliable and comprehensible manner with special attention paid to ensure that understatements are not misleading. Such information must also present the actual benefits but also reliably describe any existing risks that accompany the offering.

In the PZU Group, our objective is to use a simple and unambiguous language. Since December 2012, we have been taking steps to simplify communication. In April 2018, the “Simply put, period” project was launched, which ended in March 2019. It generated the following tangible benefits:

• the Client Account service received its first certificate for using simple Polish;
• we simplified all letters used in our debt collection process – a positive outcome confirmed by AB tests with clients (better understanding) and reduced call center traffic (by approx. 10% on average);
• the zgłoszenie.pzu.pl service received its first certificate for using simple Polish;
• more than 400 employees underwent training in effective communication.

The project’s successes prompted us to continue to operate in a more structured manner. On 1 April 2019, the Management Board appointed the Simple Language Team for the whole PZU Group, operating outside the structure of the Group’s departments and divisions.

Activities of the Simple Language Team:

• in May 2019, a declaration in support of simple language was signed at the Ministry of Investment and Development. To date, 28 institutions have subscribed to the idea and committed to promotion of effective communication among their staff;
• in October 2019, a tool was rolled out to enable PZU employees to verify the comprehensibility of their texts, operating in the form of a website and a plugin in Outlook. It is used by approx. 3,000 employees monthly;
• implementation of a new simple policy for (four) life insurance products;
• preparation of a training course on communication standards at PZU in an attractive form of a digital handbook. During the first month after its launch alone, more than 2,000 employees took part in this training;
• adoption of the “Effective communication management policy” as an officially binding act of internal law (Resolution of the PZU and PZU Życie Management Boards).

 “Effective communication management policy” is a document that defines the principles of communication with clients and within the organization along with the methods of their implementation and monitoring.

The purpose of this policy is, in particular, to ensure:

• consistency of communication between channels, processes or products;
• conscious management of interactions with clients;
• building positive client relations;
• improved client experience;
• building and maintaining language competences among employees.

Internal requirements concerning the labeling of products and services and information regarding them

All of the PZU Group products belonging to the four major product categories (life insurance, non-life insurance, health and investment products) satisfy the statutory requirements:

• within the scope of general policy conditions: the PZU Group directly applies the Insurance and Reinsurance Activity Act. Additionally, the product development procedures refer to a clause on the mandatory preparation of general terms and conditions of insurance;
• with respect to KID (Key Information Document) the PZU Group directly applies the PRIIP regulation¹ and the product development procedure;
• with respect to the Insurance Product Information Document (IPID), the PZU Group directly applies the clauses of the Insurance Distribution Act as well as the principles regarding the product management system and the product development procedure.

Responsible network of salespersons

The PZU Group has created the geographically most extensive financial services sales network in Poland. PZU has the largest sales and service network of all Polish insurers, consisting of 410 branches with convenient access, 10 thousand tied agents, 3,2 thousand multi-agencies and 1,1 thousand insurance brokers. The company’s branches and agents are available not only in large cities but also in smaller communities and in villages strewn across Poland.

The sales network is also supplemented by electronic distribution channels (such as LINK4) and the potential inherent in the branch networks of Bank Pekao and Alior Bank. At the end of December 2019, Bank Pekao had 805 proprietary branches and 1,648 ATMs, while Alior had 820 branches, including 197 traditional branches, 7 private banking branches, 8 regional business centers and 608 partner centers. In addition, in health the PZU Group cooperates with more than 2,200 partner centers in 620 towns and cities in Poland and is steadily rolling out its own network currently consisting of 130 medical centers. 

The widespread accessibility of the Group’s products and services is also of social significance, on top of its economic significance. PZU’s efforts and presence not just in the largest cities reduce the marginalization and exclusion of many groups. Thanks to PZU the residents of small urban communities and villages have facilitated access to the most modern and safe financial services. Thanks to implementing the Group’s new strategy, it can provide clients, regardless of their place of residence, the optimum selection of services helping to safeguard their life, health, assets, savings and finances.

PZU agent network structure

2019 was a year in which another step was taken in the program to standardize the offices of tied agents. The Agent 3.0 program was created allowing PZU to open even more professional agent offices across the nation. This program anticipates three levels featuring different forms of support provided by PZU. They are fitted as needed and possible to agents in small and large communities. Through this program PZU would like to make it easier for its partners to get started in business and give them the greatest possible support and development.

1,520 “Agent 1.0, 2.0 and 3.0” outlets were in operation across Poland at the end of 2019.

PZU is constantly developing its universal agent network, i.e. agents who have life and non-life products in their offer (OMS, type P and My Business). The tied agent channel currently consists of 5,540 agents offering life and non-life products². The purpose is to align the offering, processes and model of cooperation with tied agents even better. All these changes aim to build a combined network of salespersons who will be able to propose to their clients the broadest possible array of products offered by the PZU Group. The change which took force as of April 2019 also entails the tied agents channel operating as a combined life and non-life network. The purpose of these solutions is to align the sales structure to the PZU Group’s expectations better to be able to manage more effectively the development of life insurance sales in the tied agents channel. A new position called the Agent Portfolio Development Coordinator was established in this project – this person is responsible for supporting the development of life product sales areas. Directors of external channels, who along with the Agent Portfolio Development Coordinator will jointly provide support to sales managers and tied agents, are also slated to support sales and underwriting. 

The purpose of the project is also to review existing life insurance sales processes and models and customize them to the requirements of tied agents. Under this project a life insurance sales and service model will be devised by the Tied Sales Department and the Agency Sales Department (training, CC support, documentation settlement process).

All the actions pursued under the Delta Project purport to reach PZU’s current clients with the PZU Group’s broadest product offer.

The agency agreement governs the fees of PZU agents. The principles are clear and transparent and ensue from the results of their work and engagement. The following make up their compensation:

• commission specified in the agency agreement depending on the agent’s segment;
• bonus for performing the sales contract (quarterly);
• bonuses and awards earned in sales contests and campaigns.

Responsible marketing communication

The PZU Group advertises its products and services in a responsible manner. The Code of Ethics in Advertising is in force in the company. It unambiguously orders for every marketing message to be deprived of discriminatory content, not to be misleading and not to take advantage of clients’ lack of experience or knowledge. The Group’s advertisements depict authentic and documented data, are clearly labeled and cannot give the impression of being neutral information. It is forbidden for PZU advertisements to challenge animal rights.

The Code of Ethics in Advertising regulates PZU’s sponsoring issues. The Group undertakes, among other things, not to sponsor events that exert an adverse impact on the natural environment or put in jeopardy historical or artistic facilities. A presentation of sponsoring-related information cannot violate best practices or religious convictions.

The Marketing Policy of the PZU Group defines the aims, standards and principles of conducting marketing activity in the Group. This Policy is aimed primarily at supporting the achievement of the objectives defined in the Group Strategy and ensuring coherence of marketing activities and the advertising message within the Group.

On top of the documents described above, PZU and PZU Życie are guided by the “Principles for giving opinions on marketing activities and activities in internal and corporate communication”.

A best practice is for the Compliance Department and the Legal Department to give an opinion on marketing activities. Experts check, among other things, whether a given message entails a risk of PZU and PZU Życie suffering a loss of their good name. The Legal Department’s opinions on marketing and communication activities are based on the principles set forth in separate internal regulations regarding the organization and provision of legal assistance in PZU and PZU Życie.

The Code of Ethics in Advertising was also implemented in Bank Pekao as well as in foreign companies in Ukraine and Lithuania. At LINK4, the compliance risk management policy is described in the document entitled “Compliance Policy in LINK4” as well as in the executive procedure regarding compliance risk management and the procedure for accepting marketing materials. In the other Group companies, including Pekao and Alior Bank, this area is regulated under the marketing activity policies of the various companies or the PZU Group’s marketing policy as adopted.

In 2019, the Regulation on the principles for creating marketing communication was prepared in connection with the decision of the Bank Pekao Management Board to adopt the “Corporate governance rules for regulated institutions” issued by the Polish Financial Supervision Authority (KNF). This regulation establishes, among others, basic requirements for the contents of marketing and advertising materials, taking into consideration the nature and specificity of the product in question, such as a consumer loan, a mortgage loan, a bank account (in particular a savings account, a current account or a term deposit account), an insurance product or an investment product.

Information regarding policies, events and claims paid in motor insurance is reported by the PZU Group – according to the binding law – to the Insurance Indemnity Fund. PZU’s ambition is to ensure the timeliness and completeness of the information provided. The Group is aware that it can derive the maximum business outcomes only thanks to the Insurance Indemnity Fund base, i.e. better prevent insurance fraud, as well as shorten the time to send out policies and pay claims. Caring for the high quality of the data transferred also translates into reducing expenditures on processes to adjust them, which in turn makes a positive contribution to greater process efficiency in sales and operations.

The PZU Group has undertaken the following activities to enhance the quality of the data transferred to the Insurance Indemnity Fund base:

• implementation of the EVEREST central policy system involving optimization of processes to source information online directly at the stage of an offer and enter into an insurance agreement;
• extension of regular processes to verify the quality of data in substantive units (insurance operations, claims handling) and implementation of test automation in this area.
• modernization of the Data Transfer System to the Insurance Indemnity Fund (STUFG system) in the data warehouse based on a new approach to data modeling, sharing and integrating data sources, as well as automating, optimizing and verifying data at the stage before they are forwarded to the Insurance Indemnity Fund base. The fundamental overhaul of the STUFG system aims, among other things, to shorten the time to dispatch policies in order to fulfill statutory requirements, improve data quality on account of verification in source systems and implement a system to clarify discrepancies;
• implementing regular monitoring of ratios of Insurance Indemnity Fund data quality at the level of managers, the Data Governance Committee and reporting to the PZU Supervisory Board;
• in accordance with Data Governance policies, elements of control and correction of data errors were improved in consideration of the roles of data owners/business owners of the systems and process participants.

The efforts of PZU’s employees were appreciated for the fourth time in a row by the Insurance Indemnity Fund. The PZU Group, TUW and Link4 are among the top players in the ninth ranking of data quality in the nationwide base of motor policies at the Insurance Indemnity Fund for 2019. PZU stayed at the top of the data quality ranking in the motor policy base with a result of 90.85% (up by 1.36% compared to the year before), TUW reached 88.24% and LINK4 attained 86.90% – versus an acceptable level of at least 80%.

¹ Regulation (EU) No. 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products.
² Agents offering life and non-life products.