January 9, 2018 / 5:25 PM / a month ago

UPDATE 1-Polish insurer PZU raises 2020 return on equity target

(Adds more details and background)

Jan 9 (Reuters) - Poland’s biggest insurer PZU SA has raised its return on equity (ROE) target for 2020 to more than 22 percent from 18 percent previously, it said in a strategy update on Tuesday.

The company said it expected to achieve benefits from changing the way it works with clients, such as by using artificial intelligence and improving its use of databases.

It also sees benefits from closer cooperation with banks.

PZU bought a stake in medium-sized lender Alior Bank in 2015, and in Poland’s second largest bank Pekao SA last year.

It hopes business with banks will contribute more than 900 million zloty ($257 million) to group annual profit in 2020.

“We will gather one billion zloty of insurance premiums thanks to cooperation with banks and (will deliver) a million new clients for banks,” PZU CFO Tomasz Kulik was quoted as saying in a statement.

PZU also said it planned to pay out at least 50 percent of its net profit in dividends, and this proportion could rise to 80 percent if it did not conduct a major takeover. Analysts do not expect PZU to make a big acquisition.

Last year PZU shares rose 27 percent, slightly outperforming the main Warsaw stock index, while the banking sector rose by more than 35 percent.

$1 = 3.5080 zlotys Reporting by Marcin Goclowski; Editing by Mark Potter

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