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The PZU Group is focused on providing the highest quality services and products. The PZU Group has transparent communication policies and commitments are kept. A key aspect of any offering is to ensure the full safety of clients. Aiming to minimize the occurrence of the risk of misselling – i.e., the risk associated with dishonestly informing clients about the PZU Group’s offers by offering clients to purchase products that do not meet their needs or are offered in a manner inappropriate to their nature – the PZU Group has implemented policies to ensure the fair design and sale of financial products and services. One of the procedures used is the Rules for the Product Management System in PZU and PZU Życie. In addition, according to the Act on Insurance Distribution, an analysis of the client needs is conducted before offering an insurance contract, based on which the client’s needs are determined and products are recommended. Control mechanisms for this process were also implemented, including mystery shopping and sales observations.
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Product design
Policies for the fair design and sale of financial products and services
The PZU Group wants for its clients to insure themselves, invest and use financial services in a responsible manner – to make deliberate decisions with a grasp of the nature and mechanisms of the products they purchase.
All of the Group’s services and products are carefully vetted by experts, including relevant legal and compliance units, for compliance with regulations and requirements to protect clients’ interests and current case law on consumer rights before they are offered to clients.
The Group conducts its insurance product business in accordance with legal and supervisory requirements, in particular the provisions of the Act of 15 December 2017 on insurance distribution, as amended, which implemented into the Polish legal order the Directives of the European Parliament and of the Council (EU) 2016/97 of 20 January 2016 on insurance distribution (IDD) and the EU Commission Delegated Regulation 2017/2358 supplementing the IDD with regard to product oversight and governance requirements for insurance undertakings and insurance distributors.
The above is further complemented by the requirements of the regulatory authority applicable in PZU, in particular the Recommendations of the Polish Financial Supervision Authority concerning the product management system.
- Commission Implementing Regulation (EU) 2017/1469 of 11 August 2017 laying down a standardized presentation format for the insurance product information document – the so-called IPID (Insurance Product Information Document),
- Commission Delegated Regulation (EU) 2017/653 of 8 March 2017 laying down regulatory technical standards with regard to the presentation, content, review and revision of key information documents and the conditions for fulfilling the requirement to provide such documents. Consequently, the Key Information Document (KID) accompanies all products for which this is required according to the regulation, chiefly insurance-based investment products and life and endowment insurance policies.
As a result, clients are provided with information that is important to them in an understandable and synthetic format, which enables them to both understand and compare the products offered on the market. The documents are provided as part of the sales process and can also be found on the product websites of PZU Group companies (pzu.pl, link4.pl).
ESG issues in product design
Changes in ESG came into effect in 2022 under the Commission Delegated Regulation (EU) 2021/1257 of 21 April 2021 amending Delegated Regulations (EU) 2017/2358 and (EU) 2017/2359 as regards the integration of sustainability factors, risks and preferences into the product oversight and governance requirements for insurance undertakings and insurance distributors and into the rules on conduct of business and investment advice for insurance-based investment products. Under this Regulation, PZU and PZU Życie need to consider sustainable development conditions when creating a new product or materially modifying existing ones. Moreover, required changes were introduced to PZU Życie investment products in terms of client preference surveys on sustainable development.
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Violations of principles of fair competition
Market competition fosters entrepreneurship and productivity, and benefits entrepreneurs and consumers by providing lower prices, better quality products, more choice, innovation and broader economic development. Competition works best when each market competitor makes its economic decisions independently. PZU and PZU Życie make every effort to ensure that market activities conducted are in compliance with the competition laws of Poland and the European Union. The legal basis for assessing the compliance of business behavior with competition law standards is provided by, among others, the Competition Protection Act of February 16, 2007, the Treaty on the Functioning of the European Union and their implementing acts.
Internal regulations have been implemented at PZU and PZU Życie, regulating rules of conduct regarding the Companies’ compliance with competition law.
- cooperation between insurance companies and relations with other market players,
- abuse of dominant position and use of agreements restricting competition,
- application of prohibited contractual clauses,
- conduct communication and exchange of information, consistent with the principles of fair competition,
- reporting violations.
| The number of proceedings underway against the Group in the reporting year pertaining to violations of principles of fair competition | 2022 | 2023 |
| PZU Group, including: | 2 | 2 |
| PZU | 0 | 0 |
| PZU Życie | 0 | 0 |
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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:
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.
(Key Information Document) for investment insurance – the PZU Group directly applies the PRIIP regulation and the product development procedure.
Document (IPID), for non-life insurance – 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.
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Since 2018, no failures to comply with regulations or codes concerning the labeling of products and services or marketing communication have been reported in PZU and PZU Życie.
Regulations in subsidiaries
TUW PZUW regularly reviews its products to assess whether they benefit TUW PZUW’s insured and eligible clients. Every year, it analyzes in detail any comments on the service and transparency of insurance contracts. Cyclical reviews and ongoing monitoring of products are the basis for preparing an assessment of adequacy and introducing increasingly better solutions. In addition, an annual analysis of complaints is conducted in terms of the quality of the product and service, as well as the procedures used, and conclusions and recommendations are reported to the Society’s Board of Directors. Based on the reviews carried out, TUW PZUW develops and implements solutions for quality improvement on a regular and planned basis.
All foreign companies also have in place appropriate procedures in the area of product development and sales. Lietuvos Draudimas, operating in Lithuania, in addition to the procedure for launching new services, applies an insurance product policy that defines the processes and basis for the development and modification of insurance products that should ensure the company’s compliance with applicable laws and regulations. The Latvian company, AAS BALTA, has in place guidelines for communicating with clients, which are intended to define the general principles of communication with the company’s current and prospective clients. It also applies policies for identifying client needs and managing product changes and development. The companies in Ukraine implement corporate sales policies defining the business rules for providing insurance services to corporate clients, as well as direct sales policies describing the rules for organizing direct sales at all stages.
Banks operating within the PZU Group make sure that the products and services they offer are available to people who genuinely need them and for whom they can be of real value. In accordance with generally applicable laws and regulations, both at Bank Pekao and at Pekao Group companies offering financial products and services, there is a number of regulations defining the business standard, as well as establishing rules of conduct in order to protect clients’ interests, and to mitigate compliance and reputation risks connected with the sale of products and services to consumers.
At Bank Pekao, this area is comprehensively regulated by the Policy for the Process of Implementing New Products at Bank Pekao and the Principles for Creating Marketing Communications of Bank Polska Kasa Opieki Spółka Akcyjna. The standards of offering and sales are further defined in: the Rules of selling credit and payment products to consumers in Bank Polska Kasa Opieki Spółka Akcyjna and the Policy for the sale of investment products. The risk of misleading a customer about a product’s designation is managed ex ante through ongoing verification of product documentation and marketing materials by dedicated Second Line of Defense units, and in the case of investment products also ex post in the form of listening to investment calls, where the Bank identifies whether misselling or greenwashing has occurred. The process of providing opinions on marketing materials and business instructions is covered by the Bank’s Internal Control System.
Alior Bank applies the Policy of preventing dishonest sales to counteract the practice of misselling. The document lays down the rules that must be applied in the process of designing and distributing products. The product shelf has been limited, and the selected items from the offer may be distributed only through authorised channels (e.g. Private Banking) and by workforce holding appropriate knowledge and experience. The sales processes are subject to regular monitoring for the threat of misselling.
Advertising ethics
PZU and PZU Życie are governed by the Code of Advertising Ethics and the Principles of Opinion on Marketing Activities and Internal and Corporate Communication Activities, in order to prevent the risk of non-compliance with generally applicable laws and guidelines of state bodies, as well as reputational risk. The Marketing Department uses the practice of verification of planned marketing messages prior to their publication in terms of their transparency, authenticity and accuracy of information contained therein with other PZU entities. The marketing activities are particularly consulted with the Legal Department and the Compliance Department (for compliance risk, including compliance with the law – risk of misleading the consumer, use of messages infringing the addressees’ interests) and pertinent departments responsible for a given product (consistency of the message with the facts – risk of misleading consumers).
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Code of Ethics in Advertising
The PZU Group attaches a lot of importance to proper shaping of the brand image and the advertising message associated with the product offering. Consequently, it advertises its products and services responsibly, in accordance with the rules laid down in the PZU Code of Ethics in Advertising. The Code is a collection of additional standards, independent of the provisions of law and the guidelines of the Polish Financial Supervision Authority. All actions covered by the provisions of the Code should be compliant with the law and best practices, based on social responsibility, and consistent with the principles of fair competition.
The main rules in the Code:
- advertising does not contain discriminatory contents, respects human dignity and does not challenge animal rights;
- the message is not misleading and does not take advantage of the clients’ lack of knowledge;
- data presented in advertising are true and documented.
The Code also regulates the event sponsoring rules. It clearly stipulates that they may not infringe best practices, expose facilities of historical or artistic importance to harm, or exert negative impact on the natural environment.
- The Marketing Policy which defines the aims, standards and principles of conducting marketing activity in the PZU Group. It focuses on ensuring consistency of all marketing activity and the message, as well as compliance with the prevailing provisions of law, in particular with the regulations on protection of competition and consumers and fighting unfair competition, as well as the guidelines of public authorities;
- The Rules for giving opinions on marketing activities and activities in internal and corporate communication, which regulate the procedure for issuing opinions by the Compliance Department on marketing materials in terms of compliance risk.
Best practices of PZU and PZU Życie
Agent Ad Generator – online platform offering templates of advertising materials
In an attempt to ensure consistency and correctness of its marketing message, PZU actively supports agents by providing them with tools that effectively enhance their work environment. One such tool is the Agent Ad Generator. This application contains ad templates (e.g., flyers, banners, billboards, print ads, posts intended for social media, etc.) that can be filled in by the agents with their contact details. The standardized advertising templates that cover a wide range of products and offer multiple formats. As a result, we ensure:
- high quality of materials used by the agents;
- consistent communication;
- compliance with the law;
- optimization of the material development process;
- time-saving and new opportunities for our agents.
Best practices of PZU and PZU Życie
Tool to improve the experience of a visitor to the PZU website
The pzu.pl website is viewed an average of 20 million times a year. Clients want to find information quickly, therefore simple navigation and site readability are important. PZU implemented a solution that analyzes user behavior on the website and thus allows to implement changes to improve the visitor’s experience. The tool provides precise information on client behavior and helps optimize the product, sales and marketing content presented. The technology combines qualitative and quantitative data using neuromarketing and behavioral analysis. The solution also affects the site’s efficiency in the process of selling PZU products.
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Advertising ethics in subsidiaries
In accordance with the applicable internal regulations, marketing and advertising activities carried out by Bank Pekao and Pekao Group take into account the provisions of generally applicable laws and guidelines of the regulatory authorities, the principles of fair trading in the financial market, best practices and clients’ declarations of will concerning such activities. Moreover, they are carried out in compliance with the Bank’s communication strategy, in keeping with the visual identity and image, the adopted internal regulations and with respect to the clarity of communication. The key regulations in this area in terms of assessing compliance risk are referred to in the Policy for new product deployment and the Rules for creating marketing communication, which were prepared in connection with the decision of the Bank’s Management Board to adopt the Corporate Governance Rules for Regulated Institutions issued by the Financial Supervision Commission. Among other things, the regulations will take into account the basic requirements for the content of marketing and advertising materials, taking into account the nature and specificity of the product in question.
In Alior Bank, the advertising ethics issues are covered by the Code of Conduct in Alior Bank. In accordance with the Code, the bank’s communication is open and transparent with a view to strengthening its reliability and clients’ trust. All promotional and advertising activities are in compliance with applicable laws, impeccable in ethical terms and in accordance with best market practices. The bank informs about its products and services in a reliable, unambiguous and impartial manner, and the form of presentation is not misleading. The content and message are easily understandable for all audiences. In its message to its clients, the bank does not overstate the benefits in an effort to downplay the costs and risks associated with acquiring a particular product or service.
Plain language
The PZU Group makes sure to have honest relations with associates, clients and business partners that are based on trust. Thus, the foundations of effective communication of PZU are based in clear and understandable language. Leading simplifying communications, PZU does not only set language standards and change communication, but also educates and shares experiences.
At PZU, plain language is important both in internal and external communication. The plain language work model is based on people and strategy. Every employee is responsible for clear and friendly communication, which is determined in the “Effective communication management policy” approved by the Management Board. In line with this document, the Plain Language Department of PZU is the unit responsible for effective communication – it supports employees, coordinates processes for simplifying communication, educates, promotes plain language and reports on the state of language in the organization. The Policy is appended with the „Standards for Communication at the PZU”. This is not only a set of rules of simple language, but also specific solutions for correspondence standards – with the client and within the organization, traditional and electronic.
Training and education
Education plays an important role in the whole process of simplifying communication. Every PZU employee can participate in plain language trainings. Training takes different forms: onboarding, e-learning, training with external experts, workshops and consultations. During practice sessions, participants simplify complex content and announcements, which may be used later on in their areas.
In 2023, training on plain language and simplifying communication, including online meetings with external experts, was attended by
more than 3,800 people.
The Plain Language Office designs content, amends documents and communications for clients. The Office ensures that the content is linguistically correct and understandable and useful. The Office works with various business areas and teams. At the beginning of such cooperation, the Office learns about the specifics of the area, conducts a content audit, and then provides recommendations on language and information architecture. The Office then conducts training and workshops and supports content design and system implementation.
In 2023, one of the projects implemented was an empathetic writing project, in which the Plain Language Office conducted workshops with teams responding to customer complaints. The Office also continued to work with the business teams that are responsible for content on the sites. One of the flagship projects is myPZU. The content in myPZU is supposed to be simple, useful and understandable to the client, so the Office is one of the first testers of the content that later goes to clients.
Distinctions
The Plain Language Department simplifies texts in various areas, and their simple and understandable style is appreciated by experts. PZU is the only company to have as many as 5 “Plain Polish Certificates.” This is a distinction that has been awarded since 2017 by the Plain Polish Language Workshop of the University of Wrocław. The studio examines whether the texts are simple and understandable to the audience. The certified texts meet the requirements of the international plain language standard. To determine this, texts undergo a rigorous quantitative and qualitative evaluation.
Plain language – subsidiaries
Since 2017, LINK4 has been changing its communication with clients to make it simple and easy to understand. The plain language project involves both simplifying documents addressed to clients as well as training for employees regarding the principles of plain writing. All general terms and conditions of motor insurance and housing and travel insurance are written in plain language. LINK4 employees can use a short Plain Writing Guide created especially for them, which contains rules for writing in language that is accessible and understandable to every customer. LINK4 believes that insurance should be simple, and using clear and easy to understand language is a natural part of the process in communication with a client.
Bank Pekao constantly strives to make its language of daily communication friendly and fully understandable for all clients. The Bank is perpetuating plain language standards among its employees and developing their ability to speak and write clearly. The goal of these activities is to strengthen a culture of communication devoid of official distance, communication based on language that all clients can understand. In 2023, among other things, Bank Pekao introduced new simplified templates for rules and regulations and contracts, strengthened the team of plain language consultants working in the Bank’s business units, whose work has a significant impact on building a good customer experience, trained several hundred new employees in the basic principles of creating plain and correct texts, and held a series of training workshops for those who conduct correspondence with clients. Moreover, representatives of Bank Pekao actively participate in the work of the working group on simple communication at the Polish Bank Association.
Alior Bank, in 2023, continued its efforts in the area of simplifying communication. The plain language team focused on educating employees, implemented training in plain, friendly and effective communication. A group of 25 internal plain language ambassadors has been formed to educate, inspire and support their teams in their work on simplified communication. The plain language ambassadors have completed the relevant training courses and obtained Language Quality Mark certificates, which are awarded by the Polish Language Foundation. In addition, in 2023 Alior Bank received two certificates from the Plain Polish Workshop, the first for the FAQ messages of the InfoNina bot, the second for simplified legal documents.