As an energy group, we have an array of high-value assets and our activities cover a very broad spectrum of operations. As a company aware of accident risk, acts of nature as well as damage or theft of property, we strive to address these risk, for which purpose we have implemented an insurance management procedure at Group level. Its introduction was intended to develop a coherent system for managing the Group's insurance policies - management is exercised from PGE's Corporate Centre. Thanks to these activities, standardised and harmonised rules, forms and procedures related to obtaining security and liquidating damages, and we have enhanced PGE Group's position on the insurance market.

Amongst PGE Group's significant insurance areas are insurance policies for the most important assets as regards natural disaster risk and failure risk as well as lost revenue risk. Furthermore, we insure the Group for civil liability connected with its business and assets.

In 2016, the key event in the insurance area was PGE's accession to Towarzystwo Ubezpieczeń Wzajemnych PZUW (TUW PZUW). TUW is an alternative to classified insurance firms that operate as public limited companies and are intended to generate profits. TUW is an association of persons / entities sharing a common objective and interest, which identify not through equity ties (as a public limited company) but through belonging and shared objective - instead of profit, TUW's major objective is to fulfil its members' insurance needs. By becoming a member of TUW, PGE co-decides about policy, strategy and actual business of TUW. It should be noted that just like classic insurance firms TUW PZUW is an insurance firm subject to oversight by the Polish Financial Supervision Authority. Currently, 7 PGE Group companies are members of TUW PZUW. Agreements executed within TUW cover, among other things, comprehensive insurance for coal-fired power units (PGE GiEK - branches Elektrownia Bełchatów, Elektrownia Turów, Zespół Elektrowni Dolna Odra), insurance on assets at lignite-based mine Bełchatów, insurance of hydroelectricity plants (PGE EO) and insurance for the modernisation of units 1-3 at Elektrownia Turów as regards all construction and assembly risks and business interruptions. PGE's needs in combination with the potential of PZU - the leader of the insurance market in Poland - as regards product offerings, insurance capacity, operational scale as well as good awareness of risks on PGE, are yielding clear results in the form of lower insurance costs - we estimate that the cost to insure our plants will decrease by approx. 10% thanks to the TUW PZUW membership.

It should however be noted that the TUW PZUW membership does not mean that we do not use other forms of security - depending on needs and estimated costs, we work extensively with insurance firms and use the services of insurance brokers.