TABLE OF CONTENTS 0.0 EXECUTIVE SUMMARY INTRODUCTION... 3 What is this report about?... 3

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1 TABLE OF CONTENTS 0.0 EXECUTIVE SUMMARY INTRODUCTION... 3 What is this report about?... 3 Distribution partnerships with banks and other lending institutions constitute the focus of this report... 3 Rationale... 3 Bancassurance is by far the most important distribution channel for life insurance in Poland... 3 Methodology... 4 Survey of banks and other lending institutions... 4 Market data... 4 Definitions... 5 Investment-related life insurance... 5 Retirement savings... 5 Risk life insurance... 5 Critical illness insurance... 5 Income protection insurance... 5 Accident insurance... 6 Health / hospital cash plans... 6 Medical expenses insurance... 6 Personal motor insurance... 6 Household insurance... 6 Creditor insurance... 7 Mortgages, consumer finance and credit cards... 7 Weighted provider share of partnerships... 7 Operating models... 8 Abbreviations and exchange rates... 8 PartnerBASE and market data annexe... 9 Finaccord MARKET BACKGROUND Banks and other lending institutions covered Introduction to the banking sector Seven of the top ten banking institutions by retail customers are owned by foreign parents The Polish government has significantly decreased its stake in PKO Bank Polski The banking market stands out as the largest and most rapidly growing in Central and Eastern Europe and has been characterised by significant merger and acquisition activity in recent years INVESTMENT-RELATED LIFE INSURANCE AND RETIREMENT SAVINGS Insurance market size and growth The market for investment-related life decreased in real terms between 2009 and The Polish government has introduced significant changes to the retirement system causing a fair amount of controversy Distribution share of banks The bank distribution channel accounted for over 50% of total life insurance premiums in Bancassurance provision rates, operating models and partnerships Investment-related life insurance Investment-related life policies are available from the majority of larger banking institutions Allianz is the leading provider by weighted share of partnerships FINACCORD (01/2014) I

2 ... and ING Życie the most prominent captive Five banks make use of more than one provider for investment-related life insurance Bank Zachodni WBK s joint venture with Aviva was established in At least one distribution relationship is determined by an international bancassurance alliance Retirement savings The retirement savings products offered by banks usually take the form of either OFEs or IKEs Poland s largest bank has established a joint venture in this domain mbank collaborates with four product providers for retirement savings Performance of key bancassurance underwriters Captive and joint venture underwriters control around 12% of the total life insurance market with their presence having weakened following the sale of Europa and Warta to non-bank owners PROTECTION-RELATED LIFE INSURANCE Insurance market size and growth Protection-related life insurance declined by 4.9% per annum in real terms between 2009 and Distribution share of banks Bancassurance provision rates, operating models and partnerships Risk life insurance Risk life insurance is promoted by a minority of banking institutions surveyed with ING Życie ranked first by weighted share of partnerships Critical illness insurance Only three banking institutions in Poland distribute stand-alone critical illness cover Income protection insurance Income protection insurance is rarely marketed by banking organisations in Poland Performance of key bancassurance underwriters ACCIDENT AND HEALTH INSURANCE Insurance market size and growth Health insurance premiums grew at a nominal compound annual rate of 15.4% between 2009 and Distribution share of banks The distribution share of Polish banks in non-life insurance is relatively modest albeit the total non-life bancassurance market is likely to be worth in the region of EUR 350 million Bancassurance provision rates, operating models and partnerships Accident insurance Accident insurance is offered quite commonly by banks and other lending institutions in Poland with Generali having carved out a strong position in this bancassurance sector Three captive underwriters are active in this market banking institutions have no apparent arrangement for selling accident insurance Medical expenses insurance Medical expenses cover is promoted less frequently by Polish banks and a broker is ranked first by weighted share of partnerships TUW SKOK and Cardif are the only two captive underwriters in this segment Health / hospital cash plans Comparatively few bancassurance initiatives are identifiable in this field Performance of key bancassurance underwriters Bank-owned underwriters play a small but growing role in the total non-life insurance market in Poland PERSONAL MOTOR AND HOUSEHOLD INSURANCE Insurance market size and growth Personal motor insurance gross written premiums declined in real terms between 2009 and Distribution share of banks Within non-life insurance, property insurance is one of the most important products distributed by banks Bancassurance provision rates, operating models and partnerships Personal motor insurance FINACCORD (01/2014) II

3 24 banks and other lending institutions have an arrangement for selling personal motor insurance Blue Finance has established a total of seven distribution agreements in this field Captive underwriters play only a minor role in this bancassurance sector Household insurance The provision rate for household insurance is higher than that for personal motor insurance Europa holds several valuable bancassurance partnerships in this field Once again, the online aggregation platform of Blue Finance is utilised by a number of banking entities A large number of underwriting entities compete for household insurance partnerships with banks Performance of key bancassurance underwriters CREDITOR INSURANCE Consumer lending market size and growth Mortgage lending Polish home loans grew at a nominal compound annual rate of 11.6% between 2009 and Non-mortgage lending The value of total non-mortgage consumer lending fallen back slightly in recent years Credit and other pay later cards The number of credit cards in circulation has declined rapidly in recent years for two main reasons Creditor insurance provision rates, operating models and partnerships Creditor insurance linked to mortgages A wide range of operating models is used to source mortgage-related creditor insurance in Poland The distribution partnerships of Europa make it the most prominent provider in this sector with PZU and ERGO Hestia ranked second and third respectively Six captive underwriters are active in this market Creditor insurance linked to consumer finance Virtually all providers of consumer finance offer a related creditor insurance policy ERGO Hestia, Europa and Cardif are likely to be market leaders in this arena although there are more than 30 underwriters active in it overall Creditor insurance linked to credit cards Credit card payment protection insurance is commonly marketed by card issuers in Poland ERGO Hestia again claims the highest weighted share of partnerships in this field with most other partnerships replicating those already observed for consumer finance Creditor insurance risk coverage In all segments, well over a half of policies analysed also cover temporary incapacity and unemployment Creditor insurance market size, growth and forecast The market is growing, especially in the mortgage and point-of-sale automotive finance segments although credit card payment protection insurance is likely to be stagnant FINACCORD (01/2014) III

4 LIST OF GRAPHICS / TABLES 0.0 EXECUTIVE SUMMARY... 1 Overview of bancassurance provision rates for different types of insurance in Poland, INTRODUCTION... 3 Banks and other lending institutions in Poland contacted by Finaccord, segmented by type MARKET BACKGROUND INVESTMENT-RELATED LIFE INSURANCE AND RETIREMENT SAVINGS Gross written premiums for investment-related life insurance and retirement savings in Poland, 2009 to Gross written premiums for investment-related life insurance and retirement savings in Poland, 2009 to 2013 (table) Distribution share of banks in total life insurance and segmentation of life insurance distributed by banks between investment-related policies, policies linked to banking products and policies not linked to banking products in Poland, 2009 to Bancassurance provision of investment-related life insurance in Poland, 2014: provision rate, operating models and weighted provider share of partnerships Bancassurance provision of retirement savings in Poland, 2014: provision rate, operating models and weighted provider share of partnerships Market share in total life insurance of key bancassurance underwriters in Poland, 2008 to PROTECTION-RELATED LIFE INSURANCE Gross written premiums for protection-related life insurance in Poland, 2009 to Gross written premiums for protection-related life insurance in Poland, 2009 to 2013 (table) Bancassurance provision of risk life insurance in Poland, 2014: provision rate, operating models and weighted provider share of partnerships Bancassurance provision of critical illness insurance in Poland, 2014: provision rate, operating models and weighted provider share of partnerships Bancassurance provision of income protection insurance in Poland, 2014: provision rate, operating models and weighted provider share of partnerships ACCIDENT AND HEALTH INSURANCE Gross written premiums for accident and health insurance in Poland, 2009 to Gross written premiums for accident and health insurance in Poland, 2009 to 2013 (table) Distribution share of banks in total non-life insurance and accident and health insurance in Poland, 2009 to Bancassurance provision of accident insurance in Poland, 2014: provision rate, operating models and weighted provider share of partnerships Bancassurance provision of medical expenses insurance in Poland, 2014: provision rate, operating models and weighted provider share of partnerships Bancassurance provision of health / hospital cash plans in Poland, 2014: provision rate, operating models and weighted provider share of partnerships Market share in total non-life insurance of key bancassurance underwriters in Poland, 2008 to PERSONAL MOTOR AND HOUSEHOLD INSURANCE Gross written premiums for personal motor and household insurance in Poland, 2009 to Gross written premiums for personal motor and household insurance in Poland, 2009 to 2013 (data) Distribution share of banks in total non-life insurance and total property insurance in Poland, 2009 to Bancassurance provision of personal motor insurance in Poland, 2014: provision rate, operating models and weighted provider share of partnerships FINACCORD (01/2014) IV

5 Bancassurance provision of household insurance in Poland, 2014: provision rate, operating models and weighted provider share of partnerships CREDITOR INSURANCE Residential mortgage lending balances outstanding in Poland (absolute and per capita), 2009 to Consumer non-mortgage lending balances outstanding in Poland (absolute and per capita), 2009 to Credit and other pay later cards issued and per capita in Poland, 2009 to Key data points for the consumer lending market in Poland, 2009 to Provision of creditor insurance linked to mortgages in Poland, 2014: provision rate, operating models and weighted provider share of partnerships Provision of creditor insurance linked to consumer finance in Poland, 2014: provision rate, operating models and weighted provider share of partnerships Provision of creditor insurance linked to credit cards in Poland, 2014: provision rate, operating models and weighted provider share of partnerships Risk coverage of creditor insurance policies in Poland, segmented by type of underlying product, Creditor insurance gross written premiums in Poland, segmented by policy type, 2009, 2013 and Creditor insurance gross written premiums in Poland, segmented by cover type, 2009, 2013 and Creditor insurance gross written premiums in Poland, segmented by policy and cover type, 2009, 2013 and FINACCORD (01/2014) V