Warsaw (Puls Biznesu) – PZU Ukraine, the foreign subsidiary of the Polish insurance giant, is not managed well – funds are leaking, there is a big mess. More managers will lose their jobs.
The foreign expansion of PZU started by its former CEO Cezary Stypulkowski and supported by Dutch Eureko, the owner of a minority stake of PZU, has not been a success. PZU Lietuva has just been strengthened with PLN 35m of fresh capital. Similar solution will probably be adopted in Ukraine. The new management of PZU Ukraine ended last week the report stating the situation in the company. At the end of October the document was presented to the boards of PZU and PZU Zycie. The results are kept secret.
“We do not inform about it”, Maciej Socha, the management office director of PU said.
“PB” has managed to talk to a person who read the report.
“What was going on there is a shame to the board of directors and supervisory board”, he said.
The report has over 30 pages full of irregularities found in the company and suggestions how to improve the situation.
“After 18 months of operations the company are not ready to offer mass services. The sales structure has not been built yet: there are not enough outlets, incentive programs for the agents, IT systems to service products and debt collection have not been implemented. Job contracts are missing and wages are paid out after the boss says so!”, “PB” source enumerated.
PZU wanted to buy an insurance company with double digit market share in Ukraine. It failed. In 2004 it chose to buy Skide West. The acquisition was conducted in February 2005. PZU paid PLN 33m (EUR 8.5m) and increased the capital twice by PLN 39.35m jointly. So far, it has invested PLN 75.3m in Ukraine.
In Lithuania, the insurer has spent PLN 150m, including PLN 86m of net loss.
(PLN 1 = EUR 0.258)