5.2 Identified impact areas

The financial sector is burdened by a number of regulatory requirements regarding the way it operates. In the key conclusions of the World Economic Forum’s Global Risks Report 2023*, natural disasters and extreme weather events are ranked second in the ranking of global risks (the short-term horizon of two years) and failure to mitigate climate change is ranked fourth. In the long-term horizon (10 years), environmental issues occupy the top four positions: failure to mitigate climate change, failure of climate-change adaptation, natural disasters and extreme weather events, biodiversity loss and ecosystem collapse. For our business, this means that the pressure from regulators, the market and customers to support a low-carbon economy will increase. The insurance industry impacts the market by providing the insurance without which companies would not receive funding from banks. As an organisation, we undertake numerous activities for the climate where we can.

Our activities in the insurance industry significantly influence the decisions and choices of market players. The essence of insurance is related to the fact that it gives households and businesses more freedom in their economic choices. As a result, they can develop their activity by undertaking different types of investments. This translates into job creation and generation of income throughout the economy. This is a broader, economic impact of the company on the environment, which occurs in the supply side of the economy and is visible over the long term. It is also relevant to the economy as a whole, especially during periods of increased uncertainty.

The insurance industry stabilises economic cycles. Insurance companies are long-term investors in the domestic economy and in Polish companies**. At the end of 2022, the ERGO Hestia Group was one of 24 life insurers operating in Poland and one of 29 non-life insurers***.

In 2022, Poles spent approximately PLN 72.4 billion on insurance, up 8% from the previous year. Gross premiums written by the ERGO Hestia Group amounted to PLN 8.2 billion in 2022. The non-life insurance company collected PLN 7.7 billion, 3.5% more than in 2021, while the life insurance company collected PLN 497.5 million, 12% more than in the previous year.

Insurance claims and benefits paid out to Poles in 2022 amounted to PLN 44.4 billion, which was 7.5% more than in the previous year. The ERGO Hestia Group paid out PLN 4.2 billion of insurance claims and benefits (PLN 3.931 million in STU ERGO Hestia SA and PLN 278 million in STU na Życie ERGO Hestia SA), i.e. nearly 10% of total insurance claims and benefits paid out to customers.

Insurers operating in Poland generated net profit of PLN 6.1 billion in 2022. In 2022, the ERGO Hestia Group generated net profit of PLN 296.5 million, of which PLN 262 million in the non-life company and PLN 33.5 million in the life company, which represented 5% of the profit generated by companies operating in the insurance market in 2022.