CIG Pannónia Életbiztosító : Pannonia Life Insurance Plc. - Quarterly Report Q2 2023

CIG PANNONIA

LIFE INSURANCE PLC.

Quarterly report

On the basis of the consolidated financial statements prepared according to the International Financial Reporting Standards adopted by the EU

Q2 2023

					28 August 2023, Budapest 1
CIG Pannonia Life Insurance Plc. - Quarterly report

dr. István Fedák

Chief Executive Officer

Summary

PREAMBULUM

The Issuer would like to draw the attention of Shareholders and other capital market actors to the fact that this report - similarly to the first quarterly report of 2023 - was prepared in accordance with IFRS 17 as required by regulation, which is based on a different logic and methodology than previous periodic reports, and therefore the understanding and analysis of the facts, data and information in the report published in light of these rules requires knowledge of the regulatory logic.

Our company, as a premium category issuer of the Budapest Stock Exchange, due to this new content, intends to formulate all relevant information in an objective manner in the summary, which helps to assess the Issuer through the eyes of investors, and tries to present the accounting differences caused by the deviation from the previous accounting principles in their full context, and with explanations. In order to fully understand the new assessment - in our opinion - needs to be analyzed for several periods, since the review of the Issuer's business performance at new standards are based upon actual business occurrences.

1. SUMMARY

TARTALOM

Preambulum	2
Summary	2
Financial statements	15
Transition to IFRS 17	23
Changes of accounting policy	50
Operating Segments	51
Number of employees, ownership
structureNumber of employees,
ownership structure	56
Information published in
the period	58
Disclaimer	59

1.1. Economic summary

CIG Pannónia Life Insurance Public Limited Company (registered office: 1097 Budapest Könyves Kálmán krt. 11, building "B"; company registration number: 01 10 045857; court of registration: Registry Court of the Metropolitan Court (hereinafter: Issuer or Company) publishes on this day its second quarterly report (hereinafter: Report) for 2023. The Issuer publishes in this Report for the second quarter of 2023, as required by the legislation, its consolidated, unaudited data in accordance with the International Financial Reporting Standards adopted by the EU (hereinafter: EU IFRS). The Report has been prepared in accordance with the provisions of IAS 34.

1.1.1. Significant results of the first half-year of 2023:

• Our organic consolidated after-tax profit increased in one year by more than HUF 1.7 billion compared to last year's first half-yearaccording to IFRS 17 - reaching HUF 1,385 million - if we exclude the one-timeHUF 475 million corporate tax effect of the capital increase due to the transition to IFRS 17 and the HUF 321 million tax effect of the extra profit tax introduced from 1 July 20221.
• Our consolidated after-taxprofit calculated according to IFRS 17, which supports the comparison of business performance, in the

1 The 2023 first half-year effect of the extra profit tax is an estimate	2
CIG Pannonia Life Insurance Plc. - Quarterly report

Summary

1. SUMMARY

(continuation)

first half of 2023 more than doubled compared to the HUF 645 million after-tax profit published for the first half of 2022 and determined according to the IFRS 4 standard.

• Our premium income grew by 43%, i.e. HUF 6.4 billion - Life Insurance premiums by 24%, while EMABIT premiums by 145% - in one year compared to the first half of 2022, reaching HUF 21.3 billion. Our dynamic business growth is demonstrated by the fact that our second quarter premiums exceed the 2022 second quarter data by an even higher rate, by 45%2.
• Premium growth was driven by our credit coverage (HUF 2.6 billion growth) and corporate property (HUF 1.1 billion growth) insurance services.
• In both quarters of 2023, our premium income exceeded HUF 10 billion, a huge improvement compared to recent years
• The key component of our consolidated profit after tax, our technical result (calculated in accordance with IFRS 17), which reflects business performance, reached a profit of HUF 814 million in the first half of this year, taking into account the impact of the extra profit tax, following a loss of HUF 927 million last year. The increase in our performance is mainly due to group insurance and corporate property insurance, which portfolio groups reached profit growth exceeding HUF 300 million each.
• Our insurer's capital position is stable, our capital adequacy ratio is 234%.

2 Without considering the premiums of investment contracts	3
CIG Pannonia Life Insurance Plc. - Quarterly report

Summary

Our consolidated Profit After Tax was HUF 1 385 million

if we don't take into account the one-time IFRS 17 transition effects (HUF 475 million corporate tax, and HUF 321 million extra profit tax)

Record Profit increase

ITE (IFRS 17) from HUF -927 million

to HUF +814 million

Our insurance premium have increased by 43%

+24% Lifeinsurance premium

+145% EMABIT premium

The key feature of the increase is the premium income increase

Credit coverage insurance HUF 2.6 billion Corporate property insurance HUF 1.1 billion

Increase in sales network

+240% bank network

+23% alternative network

(based on quarterly premiums, same quarter of the year)

234% Consolidated Capital Adequacy

(required rate by the supervisors is 150%)

1.1.2. A short summary for the interpretation of our report

Our 2023 first quarterly report was a milestone in the life of both our Company and the domestic insurance sector. In our previous quarterly report, we provided our shareholders with a detailed presentation of the new standard, the impact of the transition on our Company's

Summary

equity, and gave a detailed explanation of the valuation for FY 2022 under the new methodology.

An important feature of IFRS 17 is the use of three different valuation methodologies. We categorize the types of contracts offered by our company according to the following valuation methodologies for each segment:

Life insurance	- traditional (risk) life and
segment	accident insurances	- unit linked life and pension
	- permanent group life
	insurances	- annually renewed individual
	and permanent accident
	- traditional savings (mixed)	and group life, accident and
	insurances
	life, grace and pension	health insurances
	- group credit coverage
	insurances
	insurance with life insurance
	services
Non-life insurance			- home insurance
segment	- technical, suretyship		- travel insurance
	insurances		- fleet casco
	- group credit insurances,		- industrial property and
	non-life insurances		liability insurance
			- group non-life insurances

In order to provide our Shareholders with the most clear and transparent information on our Company's business performance as possible, we have introduced another categorization for our portfolio groups in addition to the

assessment along valuation methodologies. The table below summarizes which of our services belong to which portfolio group.

Group life, accident and	- group life, accident and health insurance
health insurance	- group service financing insurance
	- MVM Accident and Health Insurance
	packages
Individual life, accident	- traditional life, accident and health
and health insurance	insurance
Single premium UL	- life insurance linked to single-premium
	investment units in Euro and Forint
Regular premium UL	- life insurance linked to regular-premium
	investment units in euro and forint
Traditional regular	- traditional regular-premium grace,
premium life savings
savings and pension insurance
insurance
Risk life insurance	- traditional regular-premium risk life
	insurance

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