PZU insurer plans to cut costs sharply

APA - Austria Presse Agentur
01-08-2006, 09:59

Warsaw (Puls Biznesu) – PZU, Poland’s former monopoly insurer, is facing a shock therapy, which will be most visible in the Warsaw headquarters. The aim is to cut costs by PLN 200m (EUR 50.9m) annually.

Warsaw (Puls Biznesu) – PZU, Poland’s former monopoly insurer, is facing a shock therapy, which will be most visible in the Warsaw headquarters. The aim is to cut costs by PLN 200m (EUR 50.9m) annually.

Reducing the operational costs is one of the elements of PZU strategy till the year 2010 prepared by the former management. Also the new one, headed by Jaromir Netzel, believes that cutting costs is one of the priorities. In the 2006 budget, the management assumed that the gross premium growth will amount to 4.2 percent. However, fixed costs of the insurance group will grow two times faster than the revenues. In the first quarter, the leader of the Polish market collected 1 percent less premiums than a year earlier.

Ernst & Young will support PZU at the restructuring. The audit and preparations for the implementation of the program should take about three months. Although it is not specifically stated that PZU will fire employees, some of the departments may be closed, training costs and business trips costs will be reduced. The previous management wanted to save PLN 110-140m annually. The present management would like to reduce costs by up to PLN 200m every year.

(PLN 1 = EUR 0.254)


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Podpis: APA - Austria Presse Agentur

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