Q1 2025 Allianz SE Earnings Call
Yeah.
Speaker Change: Ladies and gentlemen, welcome to the Allianz conference call on the Allianz group.
Speaker Change: Financial results for the first quarter of 2025.
Speaker Change: For your information This conference call is being streamed live on <unk> Dot com and Youtube.
Speaker Change: The recording will be made available shortly after the call.
Speaker Change: At this time I would like to turn the call over to your host today February constitute chief financial officer of <unk>.
Speaker Change: On the <unk> SC. Please go ahead primary thank you very much Andrew and good afternoon, everyone I'm very happy to welcome you all to our first quarter call.
Speaker Change: As you wish she is when we are in shape.
Speaker Change: Sure.
<unk> positioned to achieve its 2025 and its midterm financial targets as we focus on executing our capital market delivers the rising small growth reinforcing productivity and strengthening resilience.
If you look at our top line, which is up by almost 12% and as you can see she bought it by all segments, which is positive very positive we emerge with a total business volume of 54 million euros, which is a record level in the quarter for the unknowns Corp.
Speaker Change: Indeed engineered just format.
Also at a record level is our operating profit at $4 2 billion Euro and again year all segments are contributing.
Speaker Change: Adding to our usual.
Speaker Change: Okay.
Cliff performance issue parted by our focus on customers.
Okay.
Speaker Change: Thanks, D G, which help provide new Shanghai.
Speaker Change: When you go to more time fluctuating.
Speaker Change: Altogether, we should assume that you're going to Nike and as always welcome your feedback so that we can fund equally.
Speaker Change: Let's start on page <unk>, which provide an overview of our first quarter results call.
Okay.
Speaker Change: Well hopefully you can see that we had a very good start since it was a year.
Speaker Change: And at <unk>, very well positioned to achieve.
Speaker Change: 2025.
Speaker Change: The chief financial target as we focus on executing our capital market day.
Speaker Change: Joining mark Reuss reception liquidity and.
Speaker Change: That strength.
Speaker Change: If you look at our top line.
Okay.
Speaker Change: By almost 20.
Speaker Change: And as you can see chipotle by all segments, which she did you do.
Speaker Change: We matched with a total dividend for.
Speaker Change: <unk> 4 billion euros, which are recorded in a quarter for the ion Nicole.
Speaker Change: Also at the recombinant version is out.
Speaker Change: Yes.
Speaker Change: <unk> shipped a total of 21 year ago and again also.
Speaker Change: All segments are contributing a.
Speaker Change: I'll quit performance marked by our focus on cost.
Speaker Change: Thank you to an extent and productivity as she has been a headwind.
Speaker Change: Okay.
Speaker Change: Gum.
Speaker Change: Yes.
Speaker Change: Had two particularly Dan who she is and we have as you have seen a lower concession of the growth of our operating pushy into Osha and Dot com net income, which is due to two items first our food.
Speaker Change: <unk> 11 of restructuring this quarter compared to less than last quarter and last year.
Speaker Change: And second an exceptional tax item related to the decision to sell our stakes in Dubai Jentsch Joint ventures, and these will overtime will you'll see once we get you proceed creates more shareholder value once we receive and redeploy same ice so adjusted for the tax effect of E. P. S.
Speaker Change: Is it 7%, which is in line with our capital market day communication.
Speaker Change: Also when she continued to be strong and she bought it via Jerry Good news and also Gary can get cogeneration, which has offset the impact of our dividend accrual and our previously announced new share buyback program, which cost $4 four percentage point of solvency ratio.
Speaker Change: Let me move to page eight five and let's have a look at our P&C business. So we ended very strong quarter for the P&C business, which is leading to a record level of operating profit.
Speaker Change: Performance is due to both the earning on the roof and the very good level of combined ratio.
Speaker Change: We 7% internal growth, we see good top line development sales are growing from the 22024 days.
Speaker Change: I would have just 7% approximating 5% is price and 2% is volume in the quarter the pricing and the volume may sex is a year in retail while on commercial lines pricing momentum is slowing as we expected and as we have already communicated indicate to the market.
Speaker Change: Indeed.
Speaker Change: Let me illustrate that a little bit more on manta, we are seeing the highest level of freight in our portfolio as we continue to sheet discipline in most markets.
Speaker Change: Large corporate is moving towards flat rate and the details of our thoughtful you illustrate wendell our underwriting approach against his background with double digit percentage growth new business volumes in Germany. As an example, as we went well most successful one one renewal in motto and by contrast, we were disciplined.
Markets like the UK or some line of the National E. G. C S side.
Speaker Change: The overall level of combined ratio was very good at 91.8% even slightly ahead of the Susquehanna last year, which at the very low level of natural catastrophes of opined, 4% white for his quarter Joe.
Speaker Change: No it was to put 1%.
Speaker Change: What is striking in my view is that when you look at our portfolio is clearly Nebraska of strong performance with a large number of overreaching entities, which are delivering a combined ratio in the 80 or low ninety's, even though again, we at a certain level of natural that a squishy squad most.
Speaker Change: Most retail and commercial are contributing very nicely to <unk> 91.8 combined ratio.
Retail as seen M. La <unk> as he has been improving zwingli now and we are clearly, earning Indian unveiled to Venus each of our pricing and underwriting actions.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Sean Pushy WT remains at a very attractive liver is lower compared to last year that is mainly due to the loss share or level of natural catastrophes, we have seen.
Speaker Change: In commercial and also the lower level of discounting in an index of Sigma.
Speaker Change: Turnkey overhaul.
Speaker Change: <unk> to be well supported by our privileged productivity focus as a use as evidenced by the further improvement of our expense ratio. So overall lung cancer, which is <unk>, we see the earning of our actions is that we have undertaken and dumped Asa profitability, which is basically leading onto 11 of ability and cushy twitchy.
Speaker Change: Is at record level for our cluster at 2.2 billion euros moving.
Speaker Change: Moving to lie financial on page <unk>.
Speaker Change: Here, you can see that our customer centrally heated seat and a disciplined underwriting we have put in place is clearly leading to an excellent performance across the board.
Speaker Change: To start we what is particularly striking in our numbers is a continued strength of our new business production, we sales volumes at 17% at a very healthy new business margin of five 5%, which is driving to a nixon and new business profit growth of 14%.
Speaker Change: We are delivering these gross after what was already agreed to new business level in 2024. So for me clearly it reflects the continued strength of our product propositions.
Key elements on how we are managing our performance during uncertain times.
As I mentioned to you during the capital market day, we have a very clear focus as an organization on structural resilience and we do so comprehensively when it comes to financial volatility risk management balance sheet and liquidity strengths or governance.
Of course to get to the market context in the recent days has been more positive, but we are mindful of the volatility which has been observed in the recent months and the debate, which clearly persists on the macro outlook.
So this page provide a summary of the key features to remember for the first year alone whose policy unknowns group when it comes to.
Speaker Change: And our distribution initiatives.
Speaker Change: What is very strong as well is that our growth continues to be globally diversified as I already mentioned last year. So this is really building Anja continues a trend and you will see is weighted at within our portfolio almost all our entities and the value of new business growth, which is above 20%.
Speaker Change: Just from a new business and also the LCD dynamic we see now in force after even a good Blizzard of course, you know she S M. Each quarter clearly digital subs as she S. M will support our push WG going Salon and because we are going to M. D. C. S M infrastructure and as a consequence as well.
Okay.
Speaker Change: Of those a good development, we have a normalized GSM goes which is head of our yearly guidance at one 9% and beetles unless Yahoo. It.
Okay.
Speaker Change: This is leading to a strong development of our operating pool ships, which is supported by the earning of our CSM and as well as he backed off a small portfolio transfer we haven't done between P&C and life and hence this quarter.
Okay.
Speaker Change: So clearly we have a very healthy dynamic in their life in its segment and from my best to keep his issued by many elements. We have elaborated on during jacobson market deep, including the need for trusted solutions, both on the retirement and hence in a volatile on violence, let me move to asset management on slide <unk>.
Okay.
Speaker Change: And here you can see that our asset management business continues to see a good level of push it in EG in the sub questions in the first quarter, we had and we had strong net inflows of 29 billion euros that has been emerging from both a G. I N kimco.
Speaker Change: As you know yesterday Nonmanagement are also impacted by the market and he or she could movements and each quarter. He ethics effects were negative by almost 56 million euros, which is basically leading then to an overall stable picture on yes, it denominational side.
Speaker Change: Our net flows continued to.
Speaker Change: <unk> advisors Tong and relate relative investment performance of our franchise, which has supported a high.
Speaker Change: Market share of industry net inflows into active strategies into the quarter.
Speaker Change: Our overall revenues grew by 5%.
Speaker Change: As you know our performance each can always be volatile they are low at kimco for the quarter against a backdrop of higher performance. He saw first quarter last year.
Speaker Change: Our assets under management, driven revenues, which exclude these volatile item who strongly by around 10% in quarter as you can see shoeboxes as well by a very stable shut that U S ethanol management margin.
Speaker Change: Our operating costs increased by 5% and disease exactly 25% off of our full year outlook midpoint as you can see and when we continue our focus on productivity in the asset management segment and the lower performance fees are barely impacting your cost income ratio.
Speaker Change: Journey will continue for this segment and as an example, a.
Speaker Change: <unk> announced a strategic reshaping of each business recently, and we have posted in our nonoperating results and associated provision to support <unk> in the first quarter.
Speaker Change: Let me move to solvency on page eight <unk> eight.
Speaker Change: You can see as well here our strong capitalization at two eight which is almost unchanged versus last quarter with yoga <unk> capital generation offset by as a normalized dividend at whole engine to be young previously announced share buyback.
Speaker Change: The market effects and B note hole in the first quarter with FCC sacs increased in demonstrate volatility and movement in spread of seeking the positive effects from the interest rate and he equities in Europe.
Speaker Change: Our operating capital generation is very good at each percentage 0.1st tax which is driven by higher operating earnings a specially E. PMT segment and also some noneconomic giant piece of our life events segment, which accounts for almost one percentage point on an annualized basis, He's brings us well on track for.
Speaker Change: Ambition of about 20 percentage points operating capital generation by year end.
Speaker Change: Just concept transaction contributed positively as expected in the management actions that obviously effects should actually be or going to get their generation as a new business in the region out of the new structure already in the first quarter. Many she keeps on the lower cost of capital.
Speaker Change: On the right side, you can see our stable and also invented to ratio is undervalues stresses.
Speaker Change: Our sangeeta <unk> are mainly unchanged necessary or end of 2024. So this is clearly overall emphasizing is the structural resilience of our home.
Speaker Change: Let me move to page nine.
Sorry, but.
Just on the I, just I mean, I'm I'm conscious on the asset management opportunities you mentioned I mean theres another.
Massive asset manager on that agreements as well as is there some sort of.
Specific asset classes or anymore detail you can give us in terms of where you'll be able to provide asset management supports four for Parisian.
And then do you see them here he can.
Speaker Change: Andrew I think it would not be appropriate.
Speaker Change: Ease of setup, but maybe if you look at what was the strength of our Iridium <unk>.
Speaker Change: It's very clear in terms of value creation as a as an operator with more by optimizing I think oak irrationally just state that so we clearly see a lot of opportunities for optimization on D C and the asset side from you know as a result.
Speaker Change: A lot of expertise we do are on the matter.
Speaker Change: Well I'd like to spend a bit of time to highlight some of the key elements on how we are managing our performance during uncertain times.
Speaker Change: And then on the lifestyle, yeah, So basically I think on and I'm not sure I, 100% understood. Your question on life on that so basically what you were asking is when do we see like M&A opportunities in general in life and hence there is the organic growth that was digital which we're asking our should we concentrate.
Speaker Change: As I mentioned to you during the capital market day, we have a very clear focus as an organization on structural resilience and we do so comprehensively when it comes to financial volatility risk management balance sheet and liquidity strengths or governance.
Speaker Change: On organic growth right.
Speaker Change: Essentially just saying look we've probably spent.
Speaker Change: More than a decade of composite insurers pushing hard towards P&C.
Speaker Change: Of course to get to the market context in the recent days has been more positive, but we are mindful of the volatility which has been opened up in the recent months and the debate, which clearly persists on the macro out too.
Speaker Change: And kind of edging away from life income insurance is probably the first time, you've seen it make sense at life acquisition in a while and then you filled up with Iridium is this really.
Speaker Change: Any sorts of calling the turn of the cycle that youre, saying that youre actually its a time for where we should really be pushing the mix back towards life and health after a decade or more moving away now.
Speaker Change: So this page provide a summary of the key features to remember for the first year alone who holds the Enel group when it comes to the market to ethics into macro sensitivity in the current volatile environment.
Speaker Change: Yeah.
Speaker Change: [laughter]. So basically I mean, you know is that for US. We are now three pillar and I think when you look at it in the current environment first of all the license business is operating at a really good level of AOI and we are very stringent as I was mentioning which seem to get to market.
Speaker Change: Yeah.
Speaker Change: Our training that goes who choose items in detail. When he provides some elements I liking our confidence in underlying assets and liability positioning and the option we have for risk mitigation.
Speaker Change: I'm looking at has it pushed out ADT off each at each of our segments and their contribution to the to the overhaul. So that's why I think as well Andrew.
Speaker Change: Clearly we are very proactive as an organization, we construction Juanita we stress test we take actions as required.
Speaker Change: We have always been mentioned is that we like all three pillars and we believe that this fee Plaza clearly part of our house why did he and compared to many of our peers. We have never really moved away from life and we also by the way seeing that life and asset management ask humbly are coming to visit so it's absolutely clearly with interest rates now.
Speaker Change: Also our diversified business model the strength of our franchisees and the management two books provide strong downside protection to our organization.
Speaker Change: Well clearly this is super important for us to manage risk in volatile times, our strengths can add whaler Lewis to take advantage of dislocations are kept show up the opportunities as well he can be too sure rules are also to promote life and asset management product propositions as an example.
Speaker Change: I mean, increasing eating increased H clearly also.
Speaker Change: There are more opportunities in their life and energy segments compared to what was available in their life and niche segments when interest rates were I.
Speaker Change: I mean negative or close to zero. So this is strengthening just says the appetite, but also the more flexibility you can create strategically in that segments. We also see a lot of opportunity on the protection on the protection side and on the health side that we are also developing very strongly but I will see many organically.
Speaker Change: Let me move to page 18, and conclude here, what I want to stress our teas, our strong performance in the first quarter to first quarter I seen positive contributions from all segments delivering again, a record level of operating profit showed very good growth and underlying productivity is.
Speaker Change: He is very good start into the year allows us to reaffirm with confidence our output.
Speaker Change: We also see opportunities from an inorganic perspective. So so for me, it's just very logical in line with our with our strategy.
Speaker Change: Our year end at 16 billion year old plus minus 1 billion year old, which also good resilience in the context of any potential volatility.
Speaker Change: And we have a lot of focus to produce growth in a in an organic manner.
Speaker Change: Those results were in line with our capital market day targets, if I address for he effect associated with the posting of the tax effect associated to the bad by judge transaction.
Speaker Change: But we also selectively looking at inorganic opportunities when they emerge and when they make sense against the guidelines I have always I always provide it back to you.
Speaker Change: E transaction will over time create value for our shareholders with the expected proceeds creating more opportunity for accretive deployment and financial flexibility.
Speaker Change: Thank you so much.
William: Oh, great. Thanks, Andrew next question is from William William Hardcastle will go ahead, sorry will from UBS go ahead.
Speaker Change: We are focused on executing our capital market day targets, we just first quarter already fleet, reflecting positively on the journey to deliver higher organic growth improve capital generation and ongoing productivity improvement.
William: Thanks, Andrew.
William Hardcastle: First one is I guess can you help us to understand how you think about that.
William Hardcastle: I N C margin delivery, we know that in the past runoff is often managed alongside Nat cat.
Speaker Change: With that I'm happy to take your question and I hand over back to you Andrew.
William Hardcastle: How do we think about discounting volatility, which looked higher today do you always let this flow through the P&L or is there a management if that's all true attritional.
Speaker Change: Great. Thank you from roof October ready for questions. Just a couple of housekeeping points first of all if you are using the word core function.
William Hardcastle: And the second one is just seeking an update really we've seen a lot of capital market FX volatility quarter to date in April and May I guess can you give us an update on the asset management AUM net flows so far plays or at least to the end of April. Thank you.
Speaker Change: There is a talk of course button on the top right hand corner.
Speaker Change: Possibly if you've dialed in shifting some of you have it is store five earned in we would on mute you.
William Hardcastle: Yeah. Thank you very much for your question. So indeed, a lot of market volatility. So I hope. That's why also we have provided these overview on what it means for us and how we are thinking about it overall and he's on his new page, but when it comes to the asset management segment.
Speaker Change: And again on housekeeping, if we could stick to two questions.
Speaker Change: And then Uh huh.
Speaker Change: If we have time, we you can rejoin rejoin the queue.
Speaker Change: Okay with that.
Speaker Change: I think we're ready for the first question.
Speaker Change: Which looks to be from Andrew Andrew Sinclair from Bank of America go ahead.
William Hardcastle: Where we stand at this point in time in the in the quarter, we have seen mid single digit.
Speaker Change: Yeah.
Speaker Change: Thanks, guys.
William Hardcastle: Net inflows in the in the quarter, So where we are and we see we see good development. So clearly after elsewhere in the month of April is that I think was a very volatile.
Speaker Change: Two for me then F. First was just on Verde them actually.
Speaker Change: What can you tell us about the transaction.
Speaker Change: Waters costs for Allianz, how much you'll get from Aratana and relief.
William Hardcastle: As we all know.
Speaker Change: What it brings to Allianz to tubular transaction is the first question.
William Hardcastle: Then you asking around th TNC margin they need to rewrite.
Speaker Change: And second is possessed datasets slightly cryptic.
William Hardcastle: I think so we haven't given a target for the entire year our guidance for the combined ratio is around 93%. So we are clearly very comfortable with is we use guidance for FY 2025.
Speaker Change: Picture question, one on life and health.
Speaker Change: If look to income insurance easier if taken a stake in for Iridium Youre doing was a huge amount more organically suites really punchy sales there, but the good news.
William Hardcastle: And can you say I like the moving components you on lighting. So for US what is important is that we believe that the normalized cat load is a Honda she doesn't that basically also.
Speaker Change: Is this just a signal that this is the right time in the cycle to be pushing more for growth in life should that should we be getting more excited about Elliot, maybe pivoting a little bit towards life and health.
Speaker Change: Real growth opportunity here.
William Hardcastle: Normalized level.
William Hardcastle: Level of Oh.
Speaker Change: Two questions.
William Hardcastle: Uh huh.
William Hardcastle: Well between the two and three years, two and three percentage percentage points is that also is the type of magnitude you should have in mind and then when it comes to margin development. I mean, we are also normal seasonality that you should I mean discounting or so sorry like discounting. We are also on track for the discounting guidance, we have provided but we also.
Speaker Change: Okay. Thank you very much Andrew for your questions. So maybe let me start with a very young.
Speaker Change: So he's very Jim you know, we are thought of as a consortium of investors and we have an equity stake that is around 20% in a in very young we I really appear to be part of the battlefield that consortium and the rational for US I would say is three fold as I have mentioned to you. So first of all being the CFO clearly very good.
William Hardcastle: Some some seasonality teams of discounting effect and that's clearly what you see now in the first quarter as the discounting is higher which is just quite logical because you have a higher level of reserves in the in the at the beginning of the year and you have a lower level of reserve towards the end of the year. So as such this fall.
Speaker Change: Investment is double digit IRR. So we are we are as we expected.
Speaker Change: The value generation from our investment.
Speaker Change: They're in very young.
Speaker Change: Secondly, we also.
William Hardcastle: Discounting is reduced need sent during the year. So you have that seasonality effect.
Speaker Change: We also want to I mean, we also see that as an opportunity for our asset management business and over time, he will provide opportunities for the fall of deploying more of our own.
William Hardcastle: And then the last piece of seasonality.
William Hardcastle: Then I commit to.
William Hardcastle: To answer your question that the last piece of seasonality is clearly at the beginning of the year. When you are an actuary or when you are reserving actuary you are always more carefully.
Speaker Change: Asset management into a into into very jumped because that's clearly part and connected to our <unk> communication and we have made in the capital market day off she bacci more convergence between life and asset management. So that is that clearly thought about of that EOG and the sudden dimension is that for us is very important.
William Hardcastle: And what you are peaking as being your attritional loss ratio right. It's very natural because you addressed in the first quarter. So you have not seen all year. The densities that could allow you as an example to to relax some of the assumptions you are going to use to pick up you are your attritional loss ratio. So we don't.
Speaker Change: That that European liver disease, and as Asia. Good quality of that book integrator that is a daily burn and obviously with the knowledge we have but also with the knowledge that was our thought is joining us as the consortium as we as we are now establishing a high quality Bank book operate offers European market, which is providing flexibility.
William Hardcastle: No.
William Hardcastle: And then I think to your question. So I think that's the way we are thinking about it usually market.
William Hardcastle: In particular in the Attritional loss ratio pick and the beginning of the year and then waiting for the quality of the business and the quality of the underwriting to evidence itself to emerge later in the year.
Speaker Change: It was a market as well and we May also become at some point a.
Speaker Change: Client of us that back book over at operator, as well now I think you were asking also in particular I'm interested.
William Hardcastle: And then I think if you're asking a more generic question on how we are managing runoff against the rest I think is very natural I will say is that when you are in a very positive environment, where you see you mentioned I mean, it's.
Speaker Change: Just on that just yet.
Speaker Change: Just on the asset management opportunities you mentioned I mean theres another.
Speaker Change: Passive asset manager or the owner to agreements as well as some sort of.
William Hardcastle: When we level off course, each who can also be a bit more careful in your best estimate peak region, we need the best estimate range exactly along the lines of what I have mentioned in the full year cool right and that was typically expands we add in particular in the commercial segment in the first quarter.
Speaker Change: Specific asset classes or anymore detail, you can give us in terms of where you'll be able to provide asset management support for for failure.
Speaker Change: Cannot be extreme here specific Andrew I think it would not be appropriate in the in the setup, but maybe if you look at what was the strength of our iridium in terms of historically in terms of value creation as a as an operator, who is more by optimizing I think operationally just setup. So we clearly.
William Hardcastle: Yeah.
William Hardcastle: That's very clear thank you.
William Hardcastle: Thanks, Phil.
Michael: Next question is from Michael Michael Huttner from Burn book go ahead Michael.
William Hardcastle: Okay.
Speaker Change: See a lot of opportunities for optimization on DSA and the asset side from the level of expertise. We do are on the matter.
William Hardcastle: Fantastic. Thank you.
William Hardcastle: Congratulations on an amazing result, I was actually with the point to that.
William Hardcastle: You'll see it was loan because he would do.
William Hardcastle: <unk> reacted a bit more to one that's focused on anyway.
Speaker Change: And then on the lifestyle, yeah, So basically I think on and I'm not sure I, 100% understood. Your question on LIFO Nasser when basically what you are asking is when do we see like M&A opportunities in general in life and health versus the organic growth that was digital which we're asking or should we consider.
Speaker Change: On pimco.
Speaker Change: Also on the solvency, so pimco you talked about restructuring.
Speaker Change: Clearly a big charge.
Speaker Change: Just wanted to see if you can talk a little bit of a month or two and what's the benefit could be cost ratio growth or whatever.
Speaker Change: Sounds great on organic growth right.
Speaker Change: Essentially you're saying we're fully spent.
Speaker Change: Also I know I've asked the question in the past you've always battled it back, but maybe I'll be lucky.
Speaker Change: More than a decade of composite insurers pushing hard towards P&C.
Speaker Change: And kind of edging away from life.
Speaker Change: The plan to maybe buy out some of the Oh.
Speaker Change: Income insurance is probably the fructose unit bank centered life acquisition in a while and then you filled up with Iridium is really.
Speaker Change: Founding members of Pimco.
Speaker Change: Where we are and what's your thinking on that and then on solvency that was the one number which I really do think I mean, the operating capital generation is fantastic, but there's something number itself I don't understand why it was was clearly off.
Speaker Change: Any sort of calling the turn of the cycle that youre, saying that youre actually it's the time for where we should really be pushing the mix back towards life and health after a decade or more moving away now.
Speaker Change: Consensus I just wonder if you can talk a little bit more about how you see that.
Speaker Change: Now.
Speaker Change: And so basically I mean, you know that for US we have our three pillar and I think.
Speaker Change: It's true.
Speaker Change: Really strange consensus, which I think is.
Speaker Change: A lot of it because I ran into some not all of them but.
Speaker Change: When you look at it in the current environment first of all are the life and health business is operating at a really good level of AOI and we are very stringent as I was mentioning was soon to get to market.
Speaker Change: And then you reported two alright, so there's clearly something there.
Speaker Change: I cant explain it.
Speaker Change: Sure I mean, if you want I can give you a bit emotional as well on the shaft.
Speaker Change: Looking at the profitability of each at each of our segments and their contribution to the to the overhaul. So that's why I think as well.
Speaker Change: And better.
Speaker Change: So I have it but clearly.
Speaker Change: So, let's say under restructuring dimension that you were mentioning the restructuring I mentioned that went into the Susquehanna results in particular among ourselves right.
Speaker Change: Andrew we have always been mentioning that we like all three pillars and we believe that the three pillars are clearly part of our strategy and compared to many of our peers. We have never really moved away from life and we also by the way seeing that life and asset management are strongly coming together, so that the allergic clearly with interest rate.
Speaker Change: We I think that we are also quite some comments on the restructuring they are I mean, there are.
Speaker Change: Always a bit of volatility in the restructuring items, you never know when when the imminent right. So this quarter, we had a bit more this quarter versus last year, which was extremely low and by the way remember that for the full year last year as our restructuring was 670 million euros right. So.
Speaker Change: Now all I mean, increasing eating increased days clearly also.
Speaker Change: There are more opportunities in their life and edge segments compare to what was available in their life and niche segments. When interest rates were the oil I mean negative or close to zero. So this is strengthening that says our appetite, but also the more flexibility you can create strategically in that segment. We also see a lot of opportunity on the potash.
Speaker Change: Anyway, so going back to your question so as our restructuring I was mentioning in the asset management segment is related to is not related to inquiries related to a G. I.
Speaker Change: So what.
Speaker Change: <unk> as mentioned is a strategic reorganization in particular and that is that is that is being implemented actually to support <unk> growth strategy of of hei.
Speaker Change: <unk> on the protection side and on the health side that we are also developing very strongly booked area, we'll see mainly organically, but we also see opportunities from an inorganic perspective. So so for me. It's just very logically in line with our with our strategy and.
So the focus is on optimizing Adam.
Speaker Change: And we have a lot of mucus dirt producer growth in a in an organic manner.
Speaker Change: Just sit that are in the public market segments and also in designing a new setup for the private market to expand further also client offering on the on the private market.
Speaker Change: But we also selectively looking at inorganic opportunities when they emerge and when they make sense against the guidelines I have always I always provided back to you.
Speaker Change: Clearly also this strategy implies that there will be a discontinuation of certain activities. There is as well clearly January didn't six we will be streamlining also with young immunization in order to to basically increase.
Speaker Change: Thanks very much.
Speaker Change: Great. Thanks, Andrew next question is from William William Hardcastle will go ahead, sorry will from UBS go ahead.
Speaker Change: The quality of service delivery to the to their customers and also eating a more efficient organization overall, so I will not provide the granular details of each one but it will be supporting each supporting both strategically higher gross and also bottomline improvement ultimately hum.
Speaker Change: Thanks, Andrew.
William Hardcastle: First one is I guess can you help us to understand how you think about that.
William Hardcastle: I N C margin delivery, we know that in the past runoff is after me managed alongside Nat Cat I guess, how do we think about discounting volatility, which looked higher today do you always let this flow through the P&L or is there a management, that's all true Attritional and.
Speaker Change: Then I think you had a you had a question on the operating capital generation for the first quarter, Alright, and did it seems there is a bit of confusion. So he is the operating capital generation is.
William Hardcastle: And the second one is just seeking an update really we've seen a lot of capital market FX volatility quarter to date April and May I guess can you give us an update on the asset management AUM net flows so far plays or at least to the end of April. Thank you.
Speaker Change: Tax pre dividend. So before you knew we were used to present, an operating capital generation that was supposed tax post dividend. So if you were to take a six percentage point each quarter, it's equivalent under all metrics two three percentage points of operating capital generation post tax plus dividend.
William Hardcastle: Yeah. Thank you very much for your question.
William Hardcastle: So indeed, a lot of market volatility. So I hope that's why also we have provided this overview on what it means for us and how we are thinking about it overall on these on these new page, but when it comes to the asset management segment.
Speaker Change: Which compare to one percentage point last year. So it's clearly much stronger compared to last year and it's really a demonstration of as I was mentioning high quality of our of our earnings engine the hole and also some.
William Hardcastle: Where we stand at this point in time in the in the quarter, we have seen a mid single digit net.
William Hardcastle: Net inflows in the in the quarter as who we are and we see we see good good developments clearly after elsewhere in the month of April that I think was a very volatile of UC as we as we all know.
Speaker Change: Plus it is I N T, which have emerged from the life in this segment.
Speaker Change: So I hope that answers your question on the operating capital generation and I think you had the last question, which now I missed some just on solvency you wanted to it I know two agents and the number you are not responsible for the analyst day, but it's true.
William Hardcastle: Then you were asking around th P&C margin they need to rewrite.
William Hardcastle: I think so we haven't given a target for the entire year our guidance for the combined ratio is around 93%. So we are clearly very consorted well wishes are with your guidance for FY 2025, and kidney Jr. Zoe moving components UI lighting. So for US what is important is that.
Speaker Change: So still the difference I don't understand it.
Speaker Change: <unk>. This is what you mean right now yes.
Speaker Change: Yeah.
Speaker Change: Can I ask about what you're trying to understand why we missed consensus is that the question, yes. The specialty area I mean, if I could add my input I mean I think.
Speaker Change: We can't tell exactly how how you guys model everything.
William Hardcastle: We believe that the normalized cat load is a Honda she doesn't that basically also our normalized level.
Speaker Change: Uh huh.
Speaker Change: There was quite a big accrual in the quarter.
William Hardcastle: Awesome.
Speaker Change: Most of the buyback, which we flagged, but I'm not sure all of the concerns is captured the ordinary dividend growth.
William Hardcastle: After her enough ease as well between two and three years, two and three percentage percentage points is that also the type of magnitude you should have in mind and then when it comes to margin developments and I mean, we are also normal seasonality that we should I mean discounting or so sorry like discounting. We're also on track for that.
Speaker Change: And the final point is camera has already highlighted the market impacts.
Speaker Change: You might have expected to be positive.
Speaker Change: And they work, but we had some offsets from FX and interest rate volatility.
William Hardcastle: This accounting guidance, we have provided that we also have some and.
Speaker Change: Okay.
Speaker Change: Is that the capital generation is what we're focused on that clearly we think it was a good number.
William Hardcastle: Some seasonality in the discounting effect and that's clearly what you see now in the first quarter. When the discounting is higher which is just quite logical because you have a higher level of reserves in the in the at the beginning of the year on year, the lower level of reserve towards the end of the year, who is such that these four discounting is reducing incentives.
Speaker Change: Thank you very much thank you.
Speaker Change: Michael.
Speaker Change: The next question is from Andrew Baker from Goldman Sachs Go ahead Andrew.
Andrew Baker: Hi, guys. Thanks for taking my questions.
Andrew Baker: So the first one yeah, you're able to just give a bit more detail on the pricing dynamics that youre seeing adcs by line of business.
Yeah, So you have that seasonality effect.
William Hardcastle: And then the last piece of seasonality and then I coming directly to answer your question that the last piece is an entity is clearly at the beginning of the year. When you are an actuarial when you are reserving actuary you are always more carefully in.
Andrew Baker: Then secondly.
Andrew Baker: Just on retention, so you've talked about retention being one of the highest sort of areas of attention for the group.
Andrew Baker: There's no sort of mention of it today. So just curious how are you tracking I. Appreciate it takes some time to come through but how are you tracking against your retention initiatives and most of the best way for us to sort of Seo progress here from the <unk> side, given the disclosure. Thank you.
William Hardcastle: What you are peaking as being your attritional loss ratio right.
Andrew Baker: Yeah.
William Hardcastle: He's very natural all because you are dressed in the first quarter. So you have not seen all year. He dances that could allow you as an example to to relax some of the assumptions you are going to use to pick up.
Andrew Baker: Yeah.
Andrew Baker: Well I think.
Andrew Baker: Here's what we see is that we see right rich sense a rate change.
William Hardcastle: You are your Attritional loss ratio so we don't.
Andrew Baker: Reducing our across the board. So I think like a softening is happening across our lines of business and across our geographies in general right and then the status is quite different depending on the line of business and the geographies, where we see the highest level of price price reduction or softening, we'll be in financial lines inside there.
William Hardcastle: So.
William Hardcastle: And then I think to your question. So I think that the way we are thinking about it usually market food in particular in the Attritional loss ratio pick and the beginning of the year and then waiting for the quality of the business and the quality of the underwriting to evidence itself twos and emerge later in the year.
William Hardcastle: And then I think if you're asking a more generic question on how we are managing runoff against the rest I think is very natural I will say is that when you are in the.
Andrew Baker: That also are quiet.
Andrew Baker: Quite she is quite largely are in poverty.
Andrew Baker: Yeah.
Andrew Baker: And around in general around AR.
William Hardcastle: Very positive environment, where you see imaging a strong level of coffee you can also be a bit more careful in your best estimate peak within within the best estimate range exactly along the lines of what I have mentioned in the full year whole right and that was typically expands we add in particular in the commercial.
Andrew Baker: I mean in general across our across the business, we are seeing still a level off.
Andrew Baker: Right at the questions that is positive. So we are still on the days, where we can grow from right. So I think it's more we have we are in a situation, where we have to be extremely nuance and selective in the way. We are in the way we are growing that's what we see and see country.
William Hardcastle: Segment in the first quarter.
William Hardcastle: Yeah.
Andrew Baker: We also see good opportunities in some areas where the market is also.
William Hardcastle: That's very clear thank you.
William Hardcastle: Thanks will.
Speaker Change: Our next question is from Michael Michael Huttner from Bernbach go ahead Michael.
Andrew Baker: <unk> started to adjust again, a bit lax will typically that will be a liability our marine where we see also positive rate change as an example, most negative market definitely at this point in time will be a U K and Australia. These are at this point in time.
William Hardcastle: Okay.
William Hardcastle: Fantastic. Thank you.
Speaker Change: Congratulations on an amazing reserve I was actually with a point to that.
William Hardcastle:
William Hardcastle: You'll see it was non casino.
Andrew Baker: Yes.
William Hardcastle: He might have reacted a bit more to why why the stock is there anyway.
Andrew Baker: And then you were asking a second question around retention right.
William Hardcastle: Yes.
Andrew Baker: Which is how do we think about it so so the way.
William Hardcastle: On pimco.
William Hardcastle: Also on the solvency, so pimco you talked about restructuring.
Andrew Baker: The way we are we are looking at it from them.
William Hardcastle: That's clearly a big charge.
William Hardcastle: I just wanted to see if you can talk a little bit of a modeler and what the benefit could be as in cost ratio growth or whatever and also I know I've asked the question in the past you've always battled it back, but maybe I'll be lucky.
Andrew Baker: Actually we are measuring your retention ratio.
Andrew Baker: Business, but indeed, we are not communicating how retention ratio.
Andrew Baker: Externally.
Andrew Baker: And I don't think it really makes sense because you have many components right, which are showing up in the level of volume we are seeing where we have like.
Speaker Change: Plan to maybe buy out somebody.
William Hardcastle: The founding members of Pimco.
Andrew Baker: So price and volume effect and also like a different dynamic on the new business that is a renewed business, which it will be very very complex to sure that what you can see nonetheless, when you look at our at our business and deliver awesome.
William Hardcastle: Where we are at and what you're thinking on that and then on solvency that was one number which I really do think I mean, the operating capital generation is fantastic with this whole team number itself.
William Hardcastle: Why was was clearly off.
William Hardcastle: Consensus I just wonder if you can talk a little bit more about how you see that.
Andrew Baker: Internal goes we are we are showing on page benign as an example, you will see that we have.
William Hardcastle: It's true, it's really strange consensus, which I think is.
Andrew Baker: I mean, a lower level of internal growth in the UK as an example, which is clearly linked to the fact that we are being very stringent when it comes to.
William Hardcastle: A lot of it clever analysts not all of them but.
William Hardcastle: 2000, and you reported two away so there's clearly something there.
William Hardcastle: I cant explain it.
William Hardcastle: Okay.
Andrew Baker: We go in the underwriting.
William Hardcastle: So I mean, if you want I can give you a bit emotional as well on the shaft and weather.
Which basically is showing up than in our in our own dynamic approach to the opposite I would say, we have a lot of our growth initiatives.
William Hardcastle: So I have it but clearly.
William Hardcastle: Yeah.
William Hardcastle: So, let's say under restructuring dimension.
Andrew Baker: Which are leading to a very high level of internal rules as an example in Germany or in Latin America to take like a very different market, where we are really tapping into the into the market momentum also leveraging into.
William Hardcastle: Such we're mentioning sort of restructuring I mentioned that went into the Susquehanna results in particular among ourselves right.
William Hardcastle: By the way I think that we're also quite some comments on the restructuring there.
William Hardcastle: I mean, there are always a bit of volatility in the restructuring items you never know when when the amount right through this quarter, we had a bit more this quarter versus last year, which was extremely low and by the way remember that for the full year last year's our restructuring was 670 million euros right. So anyway, so going back to your quest.
Andrew Baker: New tools, new practices in terms of distribution to support to support to support the growth and those are example of that more on the commercial side will be alliance partners, but you can see ashwin.
Andrew Baker: Very high level of growth, we are eating which is building on the also on the on the good retention and new business as well.
William Hardcastle: <unk> chooses a restructuring I was mentioning in the asset management segment is related to is not related to inquiries related to agi.
Andrew Baker: Thank you.
Speaker Change: Next question is from in Pearce from Exxon go ahead.
William Hardcastle: So what <unk>.
William Hardcastle: <unk> as mentioned is a strategic reorganization in particular and that is that is that is being implemented actually to support <unk> growth strategy off of hei.
Pearce: Hi, Thanks for taking my questions. The first one was just on the motor combined ratios in the $92 two that you reported in Q1.
Pearce: That's a significant improvement on what you reported last year and a massive one on 2023 I'm. Just wondering if you see that as a sustainable number and particularly with the rate increases that you're talking about.
William Hardcastle: So the focus is on the optimizing Adam.
William Hardcastle: The setup in the public market segments and also in designing a new setup for the private market to expand further also client offering on the on the private market.
Pearce: The first three months of the year, if you expect that number to continue to improve.
Pearce: And the remainder of the year and the second one was on the <unk>.
William Hardcastle: Clearly you all to this strategy implies that there will be discontinuation of certain activities days as well clearly January didn't ease we will be a streamlining of the organization in order to to basically increase.
Pearce: Organic capital generation, So obviously very strong number but you've got some one offs in the life and health.
Pearce: Segmented from from Nonoperating variances.
Pearce: Noneconomic, Brian So could you just talk on what they are and how big that that benefit is.
William Hardcastle: The quality of service delivery to the to their customers and also a leaner more efficient organization overall, so I will not provide the granular details of each one but it will be supporting each supporting both strategically higher gross and also bottomline improvement ultimately.
Pearce: Thank you.
Pearce: So I think like maybe I start with the operating capital.
Pearce: The generation question. So like we have like six percentage point growth right.
Pearce: I'll 66 percentage points of operating capital generation I would have is one the.
William Hardcastle: Then I think you had a you had a question on the operating capital generation for the first quarter Alright, Indeed, it seems as a bit of confusion susie's operating capital generation is.
Pearce: Life Science is our almost one percentage point and also the operating capital generation, which is why I was mentioning the fact that I think is above 20% to 20 percentage points of operating capital generation is the right restaurants point for the year as we have already announced by until we are basically fully on track.
William Hardcastle: First tax pre dividend. So before you knew we were used to present.
William Hardcastle: And operating capital generation that was post tax post dividend. So if you were to take our six percentage point each quarter, it's equivalent under he all matrix two three percentage points of operating capital generation post tax plus dividend, which compared to one percentage point last year. So it's clearly much stronger compared to last.
Pearce: For for the fossil kept operating capital generation and we had announced I think it is always a positive IMTT on the life side. They are just reflecting on some of the.
Pearce: Some of the so first.
Pearce: First of all the outcome of both positive and negative.
William Hardcastle: Yeah, and it's really a demonstration of as I was mentioning high quality of our of our earnings in general and also some.
Pearce: Suddenly got people to life Sciences, we have seen now mainly related to some of the adjustment of of our.
Pearce: Of our lapse assumptions as an example also some.
William Hardcastle: Portuguese Int's, which have emerged from the life in this segment so.
William Hardcastle: So I hope that answers your question on the operating capital generation and I think you had the last question, which now I missed some adjustments.
Pearce: Some correction some expectations of aging.
Pearce: So a lower level of inflation, we have observed against.
William Hardcastle: Just on solvency you wanted to it I know two agents in a number and you are not responsible for the analyst day, but it's true.
Pearce: Our own assumptions, so each correcting basically for the effect of a more conservative assumptions, we add in our life and is.
William Hardcastle: So there's still a difference I don't understand it and you'll go into age. This is what you mean right now.
Pearce: Operating are operating a reserve status, where does materialize, which is a very good sign which basically means as well that we were maybe a bit too conservative on some of those operating capital generation emergence.
Speaker Change: If I could ask what youre trying to understand why we missed consensus is that the question. Yes. That's basically it yeah I mean, if I could add my input I mean I think.
Pearce: In the previous years, which are now being corrected the issue of naturally as we addressed some of our assumptions against reality.
Speaker Change: We can't tell exactly how how you guys model everything.
Speaker Change:
Pearce: And then I think on a.
Speaker Change: There was quite a big accrual in the quarter.
Pearce: Our motto combined ratio I am not sure could you repeat what was exactly your question. So you were using.
Speaker Change: The buyback, which we flagged, but I'm not sure all consensus captured the ordinary dividend growth.
Pearce: So you reported 92 point trade promotion in the quarter.
Speaker Change: And then the final point is camera has already highlighted the market impacts.
Speaker Change: It's a massive improvement on what we've seen in the last year before I'm just trying to establish if there's any sort of one offs, you've seen anything, particularly public safety, where I thought the baseline we should be earning through.
Speaker Change: You might have expected to be positive.
Speaker Change: And they work, but we had some offsets from FX and interest rate volatility.
Speaker Change: Okay.
Speaker Change: Is that the capital generation.
Pearce: The rate increases that youre getting this holiday this year from <unk>.
Speaker Change: Is what we're focused on are not clearly we think it was a good number.
Pearce: No I think so basically what we see in the intermodal market in general is a is a lot of D.
Speaker Change: Lovely. Thank you very much. Thank you thanks Michael.
Andrew: The next question is from Andrew.
Michael: Andrew Baker from Goldman Sachs Go ahead Andrew.
Pearce: Discipline in terms of in terms of pricing as many actually in particular, the European market. There is still need for a well behaved environment as we continue to see some inflationary trends, which are sticky in particular on the on the on the mobile market as you know.
Andrew Baker: Hi, guys. Thanks for taking my questions.
First one are you able to just give a bit more detail on the pricing dynamics that you're seeing in adcs by line of business.
Andrew Baker: And then secondly.
Speaker Change: Just on retention, so you've talked about retention being one of the highest sort of areas of attention for the group.
Pearce: And then if it's still the same as what I mentioned last year, we had anticipated some of the effects of we continue to benefit from from this environment and we also see that being earned as well into into our profitability, but I would not expect that to change fundamentally in the.
Speaker Change: There's no sort of mention of it today. So just curious how are you tracking I. Appreciate it takes some time to come through but how you're tracking against your retention initiatives and most of the best way for us to sort of Seo progress here from the <unk> side, given the disclosure. Thank you.
Speaker Change: Yeah.
Pearce: In the upcoming quarters.
Pearce: Okay.
Pearce: Okay.
Pearce: Thanks Ian.
Speaker Change: Well I think on the army to here's what we see is that we see rates reach sense rich and are reducing our cost of virtu I think legs. This softening is happening across lines of business.
Speaker Change: Our next question is from Vineet <unk> Malhotra from Mediobanca.
Pearce: Go ahead beneath.
Vineet Malhotra: Yes. Good afternoon. Thank you very much. So if you can hear me just one on the line. Please.
Speaker Change: And across our geographies in general all right and then the status is quite different depending on the line of business and the geographies, where we see the highest level of price price reduction or softening, we'll be in financial lines inside there that also are quite.
<unk> is on the normalized CSM, which is has.
Vineet Malhotra: Has grown very strongly.
Vineet Malhotra: So.
Vineet Malhotra: One 9% I think the annual target is about five.
Vineet Malhotra: Just curious whether there's anything one off ish here I mean, you had mentioned China.
Speaker Change: But she is quite largely in poverty.
Vineet Malhotra: Had someone else as well and also you've seen very very strong growth in life.
Speaker Change: And around in general around.
Speaker Change: In general across our cost of business, we are seeing still at level offer.
Vineet Malhotra: So just curious to hear about.
Vineet Malhotra: And growth in life.
Vineet Malhotra: Very quick one on the determine combined ratio.
Speaker Change: Right at the questions that is positive. So we are still on the days, where we can grow from rent. So I think it's more we have we are in a situation, where we have to be extremely nuance and selective in the way. We are in the way we are growing that's what we see and secondly.
Vineet Malhotra: I'm just sort of following up here because.
Vineet Malhotra: If it is linked to the motor recovery.
Vineet Malhotra: Just you've just described and there is an 80 basis point improvement year on year in Germany.
Speaker Change: And we also see good opportunities in some areas where the market is also.
Vineet Malhotra: Which is quite strong so I'm just checking that's all water and if I can just follow up.
Speaker Change: Started to adjust again.
Vineet Malhotra: But on the sensitivity.
Speaker Change: The clash with typically that will be a liability our marine where we see also positive rate change as an example, most negative market definitely at this point in time will be a U K and Australia. These are at this point in time.
Vineet Malhotra: This is we are increasing the cross effect.
Vineet Malhotra: From 3% at 42, 5%.
Vineet Malhotra: And in the past, we talked about how it was a good achievement to reduce it so I'm just curious.
Speaker Change: Okay.
Vineet Malhotra: Is it just market volatility picking that number or something else.
Speaker Change: And then you were aging a second question around retention right.
Vineet Malhotra: Sure.
Speaker Change: Which is how do we think about it so so the way.
Vineet Malhotra: Okay.
Vineet Malhotra: Thanks, a lot on the.
Speaker Change: The way we are we are looking at it from them.
Vineet Malhotra: Here's some development I think there is I mean, there is nothing particular to be to be highlighted in the in the CSM development is I mean, I think the main point to be highlighted is that there is yes, and the normalized <unk> is connected.
Speaker Change: Actually we are measuring your retention ratio in our business, but indeed, we are not communicating how retention ratio.
Speaker Change: Externally and.
Speaker Change: And I don't think it will make sense because you have many components right, which are showing up in the level of volume we are seeing where we have like.
Vineet Malhotra: With the development of our value of new business, which is always a bit higher in the in the first quarter compared to the two yourself.
Speaker Change: So price and volume effect and the oldest of a like a different dynamic on the new business that is a renewed business, which it will be very very complex to sure that what you can see nonetheless, when you look at our at our business and deliver our firm.
Vineet Malhotra: I mean to the sensor developed 19, Tuesdays yours or quarters in particular, because you have some business you set when you more in the in India.
Vineet Malhotra: In the in the on the first of January. So typically you will have some protection and health business in the French market. As an example, but you have other markets like that where you you asked it.
Speaker Change: Internal goes we are we are showing on page benign as an example, you will see that we have.
Vineet Malhotra: More new business, if she wants to coming up in the in the first part of the year that then is being is being is coming.
Speaker Change: I mean, a lower level of internal calls in the UK as an example, which is clearly linked to the fact that we are being very stringent when it comes to.
Vineet Malhotra: Coming screens a nomination M goes so that's why we always see that pattern.
Vineet Malhotra: That we have a higher level of normalized CSM goes in the first quarter and usually a lower level of phenomenon Ics angles. As an example in this third quarter, which is traditionally the way.
Speaker Change: Regal, India underwriting, which basically is showing up than in our in our own dynamic approach to the opposite I would say, we have a lot of growth initiatives and.
Vineet Malhotra: Compared to the two user one as an example.
Speaker Change: Which are leading to a very high level of internal rules as an example in Germany.
And then I think you are asking a question around.
Speaker Change: In Latin America to take like a very different market, where we are really tapping into the into the market momentum also leveraging into.
Vineet Malhotra: Iran is a combined ratio in general and you're right. That's what you were asking.
Vineet Malhotra: Just following up and it's all motor driven improvement.
Speaker Change: New tools, new practices in terms of distribution to support to support to support the growth and those are example of that more on the commercial side will be alliance partners, where you can see as well.
Vineet Malhotra: So the question was is it all motor driven as part of the question.
Vineet Malhotra: Yes, Okay right.
Vineet Malhotra: Germany, Yes, so I think like a lot I think we what we see in Germany of course, because their bodies are really good.
Speaker Change: The very high level of growth, we are eating which is building on the also on the on the good retention and new business as well.
Vineet Malhotra: The earnings of all.
Vineet Malhotra: The underwriting actions that have been taken in retail so we see a very strong improvement.
Speaker Change: Thank you.
Vineet Malhotra: In retail, Germany caused about I would say and water is a very strong contributor to that improvement as well.
Andrew Baker: Thanks, Andrew.
Speaker Change: Next question is from Ian in Pearce from Exxon go ahead in.
Vineet Malhotra: And these opportunities. This morning. So I can also leverage is want to congratulate our German colleagues for all the work you have done that is really coming through as well in terms of a.
Ian: Hello, Thanks for taking my question.
Ian: First one was just on the motor combined ratios from the 93 point to that you reported in Q1.
Vineet Malhotra: Both schools and and push diabetes basically and.
Ian: That's a significant improvement on what you reported last year and a massive one on 2023 I'm. Just wondering if you see that as a sustainable number and particularly with the rate increases that you're talking about in the first three months of the year. If you expect that number to continue to improve.
Vineet Malhotra: And then your last question was around sensitivities as well.
Vineet Malhotra: Yeah.
Vineet Malhotra: Yes about the costs.
Vineet Malhotra: Bind effect, which we sometimes.
Vineet Malhotra: Volatile markets.
Vineet Malhotra: It's gone up a little bit from 3% of IHOP and indeed, so there's a bit there's a.
Ian: And the remainder of the year and the second one was on the <unk>.
Ian: Organic capital generation, So obviously very strong number but you've got some one offs in the life and health.
Vineet Malhotra: Nothing particular to be highlighted here is it just like you know sort of noise from the from the gross effect. So it's really really small.
Ian: Segmented from from Nonoperating variances.
Ian: Non economic burdens, which could you just talk on what they are and how big that that benefit is.
Vineet Malhotra: And it's actually even a bit lower it was actually slightly lower in the in the fourth quarter. Indeed, but there is nothing special to be writing tweet.
Ian: Thank you.
Ian: So I think like maybe I'll start with <unk>.
Vineet Malhotra: Okay. Thank you.
Nathan: Thanks Nathan.
Ian: Operating capital generation question, so like we have like six percentage point growth right.
Nathan: You snuck in three questions up anyway.
Nathan: [laughter] so.
Ian: Our six six percentage points of operating capital generation I would have is one the life positive ions is our almost one percentage point of operating capital generation, which is why I was mentioning the fact that I think is over 20% to 20 percentage points of operating capital generation is there.
Nathan: <unk>.
William Hawkins: As for William William Hawkins from <unk> go ahead William.
Nathan: Oh.
Nathan: Okay.
Nathan: Thanks, Andrew Hi, preliminary.
Nathan: Couple of questions also on the life business. Please.
Nathan: Slide 19 can you help me just understand the the outlook for the expected enforce return to $748 million.
Ian: <unk> reference point for the year as we have already announced by until we are basically fully on track for further.
Nathan: Kind of just multiply that by four and assume in the future that Raj is in line with the CSM, which feel simple, but hasnt recently being the case.
Ian: For the fossil kept operating capital generation and we had announced I think it is always a positive inte on the life side. They are just reflecting on some of the.
Nathan: <unk> is actually quite flat year on year and is actually down about 8% on the fourth quarter.
Ian: Some of the.
Ian: First of all the outcome of both positive and negative.
Nathan: What's your stock is less sensitive to interest rates.
Ian: <expletive> Tivo to life vantage, we have seen there are mainly related to some of the adjustment of of our.
Nathan: On the next slide refer to interest rate sensitivity and lower overall return assumptions. So I'm just.
Nathan: Just trying to get a feel for is that setting for a stable base going forward or do I need to be clever probably too.
Ian: Of our lapse assumptions as an example also some.
Ian: Some correction some expectations of aging.
Nathan: And then secondly, ultimately yes it has.
Ian: Lower so a lower level of inflation, we have observed against.
Nathan: Market volatility in April had any impact on the life <unk> operating profits and then again do we have any way of gauging sensitivity to that.
Ian: Our own assumptions, so each correcting basically for the effect of a more conservative assumptions, we add in our life and health.
Nathan: April has been.
Nathan: Volatile month for equities and in the past that can have hedging effects in <unk> life. So is there anything that we need to be calling out for that please.
Ian: Operating are operating our results versus where does materialize, which is a very good sign which basically means as well that we were maybe a bit too conservative on some of those operating capital generation emergence.
Nathan: Yep.
Speaker Change: Thank you very much so basically on your first question on the expected in fast return.
Speaker Change: Indeed, I think like you know ours is expected to be in first redone. He's made a friday, it's related to boost our GSE business and our DBA business.
Ian: In the previous years, which are now being corrected the issue off naturally as we addressed some of our assumptions against reality.
Ian: And then I think on.
Speaker Change: So in the in the GSE business is based on the market rate. We expect and then you expected over return we expect to see and on the BBA business. We are we are using are locked in and locked in a rate trend. So I think the reason why as you expected in force redone in general is lower this year compared to last year.
Ian: Our motto.
Ian: Minor issue I am not sure could you repeat what was exactly your question. So you were using them.
Ian: So you reported 92 point trade promotion in the quarter.
Ian: Yes.
Ian: Improvement on what we've seen in the last year before I'm just trying to establish if there's any sort of one offs you've seen any.
Speaker Change: Is it related to the fact that.
Ian: Particularly public safe alright thought the baseline we should be earning through.
Speaker Change: I mean interest interest rates are moving down that's basically what is what is mainly driving driving these one so I think last year I had provided as well to.
Ian: Rate increases that youre getting in consolidated share from yeah.
Ian: No I think so basically what we see in the intermodal market in general is a is a lot of the offer.
Speaker Change: What was the Formula I think as a team can can provide that again to you but in a nutshell, what what you do for them.
Ian: Discipline in terms of in terms of pricing as many actually in particular, the European market. There is still need for a well behaved environment as we continue to see some inflationary trends, which are which are sticky in particular on the on the on the mobile market.
Speaker Change: To estimate our overall expected are expected to return you would take for the ESI business. What is our market what what is the market rate and just to give you a sense each move.
Speaker Change: The risk free rate that you can move from fee for last year, two to three Dcs because that will be the main driver of the effect.
Ian: As you know and then you can see the same as what I mentioned last year, we had anticipated some of the effects of we continue to benefit from from this environment and we also see that being earned as well into into our profitability, but I would not expect that to change fundamentally.
Speaker Change: And then you have some waiting effects that you need to inject set the team can explain in detail to you and when it comes to the locked in a rate on the DDA side. It also went down a little bit from four five to four 3%. That's also explaining why.
Speaker Change: Or he expected in fast return is lower so for more details you can reach out to the team. They will give you the exact formula but thats. The overall direction and then on the easy life.
Ian: In the upcoming quarter.
Ian: Yeah.
Ian: Okay.
Ian: Thanks Ann.
Ian: Our next question is from Vineet <unk> from <unk> Malhotra from Mediobanca.
Speaker Change: You are right that we can.
I mean, some market volatility can impact indeed, the aging cost fall product.
Ian: Go ahead Bennett.
Ian: Yes. Good afternoon. Thank you very much. So if you can hear me just one on the line. Please.
Speaker Change: In <unk> life.
Speaker Change: Portfolio.
Speaker Change: For most of our business.
Ian: On the normalized CSM, which is correct.
Speaker Change: <unk> can be managed within the product feature and we do I mean, we use things like you know the credit team or the participation rate as an example, so it's basically as these logic is applied to the to our entire book except for the historical League Liga you guys see a variable annuity book where and.
Ian: They have grown very strongly.
Ian: So.
Ian: One 9% I think the annual target is about five so just curious whether there's anything one off ish here I mean, you had mentioned that Shannon.
Ian: At some one offs as well and also we feel very very strong growth in life.
Speaker Change: This is coming directly directly on us that basically are there has been no significant impact in the up market movements and actually even under any circumstances. When we do stress testing on wet may impact it will be something like a low double digit kind of level of impact so not something that would.
Ian: So just curious we hear about.
Ian: And growth in life.
Ian: A very quick one on the <unk>.
Ian: German combined ratio.
Ian: Yeah.
Ian: I'm just sort of following up here because if.
Ian: If it is linked to the motor recovery.
Speaker Change: Structurally impact our performance. So you can be really reassured as well from the from that perspective.
Ian: You just described and there is an 80 basis point improvement year on year in children.
Brian So: Brian Thank you very much.
Ian: Which is quite strong so I'm just checking that.
Ian: Our water and if I can just follow up a little bit.
Hadley: Thanks, Phil next question is from Hughley Hadley Cohen from Morgan Stanley Go ahead Hadley.
Ian: On the sensitivity.
Ian: This is we are increasing the cross effect.
Brian So: Okay.
Ian: From 3% at 422, 5%.
Speaker Change: Thanks, very much Andre Michael Emery.
Ian: And in the past, we talked about how it was a good achievement to reduce it. So I'm just curious if this would just market volatility if you think back number or something else. Thank you.
Speaker Change: Just a couple of quick questions remaining from my side, please firstly and apologies if I've missed this.
Speaker Change: And the.
Speaker Change: The valuation result, another in P&C I think it was.
Ian: Yes.
Ian: Yes.
Ian: Thanks, a lot.
Ian:
Speaker Change: But I minus 800.
Ian: On the CSM development I think there is I mean, there is nothing particular to be to be highlighted in the in the GSM development is I mean, I think the main point to be highlighted is at the CSM. The normalized GSM goes east connected with with the development of our value of new business, which is always.
Speaker Change: For FY 'twenty four.
Speaker Change: And I think he said at the time it was in line with normal expectations, but I think the guidance is now.
Speaker Change: Minus $5 million to $600 million.
Speaker Change: On a normalized basis I'm, just wondering what the whats changed there.
Speaker Change: There's an offset somewhere else that we should be mindful of.
Ian: A bit higher in the in the first quarter compare to the to your first the first.
Speaker Change: And then my second question is in relation to slide benign.
Ian: And to just further develop 19 Tuesdays user quarters in particular, because you have some business is that when you more in the in India.
Speaker Change: Which is very useful.
Speaker Change: Thank you very much but more specifically on that I am just wondering around your U S assets.
Ian: In the in the on the first of January. So typically you will have some protection and health business in the French market. As an example that you have other markets like that where you use these.
Speaker Change: I guess beyond those assets backing the.
Speaker Change: Your U S liabilities, how are you thinking about your U S exposure.
Ian: More new business, if she wants to coming up in the in the first part of the year that then is being is being is coming screens a nominal Ics EM growth. So that's why we always see that pattern.
Speaker Change: More broadly right now does it structurally still makes sense to have.
Speaker Change: The exposure to the extent you're doing thank you.
Ian: We have a higher level of losses normalize he assembled in the first quarter and usually a lower level of her nomination and growth as an example in the third quarter, which is traditionally a bit lower.
Speaker Change: So I think.
Speaker Change: So I think your first question was on the evolution of results and it was that right, where we see indeed.
Ian: Compared to the year two user one as an example.
Speaker Change: Aloha.
Ian: And then I think you are asking a question around.
Speaker Change: Like we normally expectation for the year would be something around 500 went to 601 million annually.
Ian: Iran is a combined ratio in Germany, right. That's what you were asking.
Ian: Just following up and it's all model driven.
Speaker Change: This is basically lower.
Speaker Change: Well for this.
Speaker Change: It will be lower now going forward as we have seen a reclassifying some of our GSE business, you know basically from P&C to life and hence to ask some of them. Some of the business has moved away from that from the segment is no longer going to impact the valuation of resets and all that.
Speaker Change: So the question was is it all motor driven is that the question.
Ian: Yes, yes, okay alright.
Ian: For Germany, Yes, so I think like a lot I think we what we see in Germany of course caused their bodies are really good.
Ian: Good earnings of all our Z underwriting actions that has been taken in retail so we see a very strong improvement.
Speaker Change: So that's why you should use that guidance more off of <unk> to $1 six.
Ian: In retail, Germany caused about I would say and more toys, a very strong contributor to that improvement as well.
Speaker Change: For the full year. Nonetheless, we had we also had a negative FX effects that came through.
Speaker Change: And these opportunities is mining so I can also leverage is want to congratulate our German colleagues for all the work you have done that is really coming through as well in terms of.
Speaker Change: In the in the <unk>.
Speaker Change: In the in the in the quarter as well, which is linked with a very very small level of ethics.
Both schools and and profitability are basically now.
Speaker Change: Ethics valuation, we see on the on some of our business which are.
Ian: And then your last question was around sensitivities as well.
Speaker Change: <unk> has also impacted impacted that number or do you see as well.
Speaker Change: Yeah.
Speaker Change: Yes about the cost.
Speaker Change: No she's element on the valuation reserves and is offset in the base E income interest income, obviously that you need to take and went into account when you are going to do the correction overall.
Speaker Change: Combined effect, which we sometimes look at.
Speaker Change: Volatile markets.
Speaker Change: It has gone up a little bit from 3% to five.
Speaker Change: Indeed, it was as if it is as there is nothing particular to be highlighted here I'd just like you know sort of the noise from the from the gross effect. So it's really really small.
Speaker Change: I think also the team can provide you with a more a line by line item and she wants to do a full assessment on that side.
Speaker Change: And then you were asking in general on a on U S exposure. So I think where we are in the asset portfolio winds that was that was your question. So I think it's in general we have our portfolio is at a very very diversified and we don't take and if you look at the overall page, where we are showing how we are thinking about it in general we haven't.
Speaker Change: And it's actually even a bit lower it was actually slightly lower in the in the first quarter. Indeed, but there is nothing special to be read into it.
Speaker Change: Okay. Thank you.
Nathan: Thanks Nathan.
Speaker Change: I'll note that you snuck in three questions up anyway.
Speaker Change: So my question is.
Speaker Change: Very good.
Speaker Change: Larry talk show the approach of.
William Hardcastle: As for William William Hawkins from <unk> go ahead William.
Oh matching our assets and our liabilities as much as possible you see that.
William Hardcastle: Okay.
William Hardcastle: Thanks, Andrew Hi, Claire Marie.
Speaker Change: And then we take some some structured decision when it comes to certain type of asset classes typically on the equity side to our listed equity would be edge.
William Hardcastle: Couple of questions also on the life business. Please.
Speaker Change: Slide 19 can you help me just understand the the outlook for the expected enforce return to $748 million.
Speaker Change: In general our alternatives portfolio was our edge.
Speaker Change: Can I, just multiply that by four and assume in the future that it rises in line with the CSM, which feels simple but has recently been the case. So a certain floor rate is actually quite flat year on year and is actually down about 8% on the fourth quarter.
Speaker Change: In the P&C segment, except for the private equity.
Speaker Change: Exposure, where we have decided economically that it was not making sense to edge to edge that portfolio and this is his portfolio you see creating a bit of.
Speaker Change: What's your stock is less sensitive to interest rates.
Speaker Change: Market movements in the.
Speaker Change: You will note from the next slide refer to interest rate sensitivity and lower overall return assumptions. So I'm just.
Speaker Change: In general.
Speaker Change: Sorry, non operating and nonoperating side here, we clearly see that the economic tradeoff makes sense, we are mainly focusing on the aging our balance sheet to protect the residents of obviously organization and there's no cost of hedging would not make sense against as you expected value creation. This is a very low level of <unk>.
Speaker Change: Just trying to get a feel for is that certain for a stable base. So I can go forward or joining it's a big driver.
Speaker Change: Right.
Speaker Change: And then secondly, also I would like this.
Speaker Change: As market volatility and April had any impacts on the AZ life U S. Operating profits and then again do we have any way of gauging sensitivity to that.
Speaker Change: Exposure overall, because our private equity exposure in P&C against the anti U.
Speaker Change: April has been.
Speaker Change: A volatile month for equities and in the past that can have some hedging effects in AC life. So is there anything that we need to be calling out for that please.
Speaker Change: Yeah.
Speaker Change: P&C portfolio is something like a 1% of yours, a whole asset base was actually a very low level and that makes sense in terms of our risk return profile and also for electricity management.
Speaker Change: Yep.
Speaker Change: Thank you very much so basically on your first question on the expected in first redone.
Speaker Change: Understood. Thank you.
Speaker Change: Thanks Hadley.
Speaker Change: Indeed, I think I know like you know ours is expected to be in phosphate and he's made a friday, it's related to boost our GSE business and our DBA business. So in the in the GSE business is based on the market rate. We expect and then do you expected over return, we expect to see and on the BBA.
Speaker Change: One is from Kamran Kamran Hossain from JP.
Speaker Change: JP Morgan.
Kevin: Go ahead Kevin.
Kevin: Yeah.
Kevin: Come on are you muted.
Kevin: Alright.
Speaker Change: Yes. We are we are using are locked in and locked in a rate right. So I think the reason why as you expected in force redone in general is lower this year compared to last year is related to the fact that.
Kevin: Understood.
Perfect.
Kevin: Yes, Sir.
Kevin: So it's a super going up so much.
Speaker Change: The first question is just in the direction of translated commercial which it sounds like the person. So I'd stay has some tail winds behind it.
Speaker Change: I mean interest interest rate moves.
Speaker Change: Moving down that's basically what is what is mainly driving driving this one so I think last year I had provided as well.
Kevin: In terms of mostly coming through on the commercial side.
Speaker Change: [laughter] peaks are now slowing down.
Kevin: But starting to behave.
Speaker Change: To you what what was the Formula I think is the timken can provide that again to you but in a nutshell, what what you do for.
Kevin: Can you figure, which is following each different margin.
Kevin: Or do you think the combined ratios will inevitably kind of trend up students and then kind of what your.
Speaker Change: To estimate our overall expected expected redone you would take for the ESI business. What is our market is a market rate and just to give you a sense each move.
Kevin: Purchases.
Kevin: It was like in Q1.
Kevin: Sorry, so you can defend the margin.
Kevin: Second question is just a follow up clarification on <unk>.
Speaker Change: The risk free rate that you can move from fee for last year two to three this year. So that will be the main driver of these effect and then you have some waiting effects that you need to inject set the team can explain in detail to you and when it comes to the locked in a rate on the DDA side. It also went down a little bit from four five to four 3%.
Kevin: The question of wallboard.
Speaker Change: You told us about.
Speaker Change: You have a mid single digit shares quarter to date, which I assume you probably could.
Speaker Change: A bit more than April.
Speaker Change: Could you maybe tell us how the pimco has.
Speaker Change: This moved courts.
Speaker Change: I just don't want to get a surprise in Q2 I assume some of it that's right.
Speaker Change: I took some explaining why.
Speaker Change: There are some movies.
Speaker Change: He or she expected in fast return is is lower so for more details you can reach out to the team. They would give you the exact formula but that's the overall direction and then on an easy life.
Speaker Change: Outweigh the costs.
Speaker Change: Trying to figure things out thank you.
Speaker Change: Yes, so I think on the second question I mean, clearly understand I cannot provide you with a certain level of detail. That's clearly not something that is available at this point in time, then I think your question on commercial right I think commercial what is very important from my perspective is first of all.
Speaker Change: Our rights that we can.
Speaker Change: I mean, some market volatility can impact indeed, the hedging cost for our product.
Speaker Change: In <unk> life.
Speaker Change: Portfolio.
Speaker Change: For most of our business. It was a change can be managed within the product feature and.
Speaker Change: Look at the structure on the islands for you when it comes to commercial we have a I think a very different book compared to many.
Speaker Change: We do I mean, we use things like you know it was a crazy thing or the participation rate as an example, so it's basically as these logic is applied to the to our entire book, except for the historical League Liga Ligue variable annuity book, where he sees coming directly directly on us that directly.
Speaker Change: Of our peers. He's made made also in large corporate.
Speaker Change: Book, which is D. C. D. C is book than we ever announced trade credit insurance book, we have the mid cap portfolio and also we have also as you announce a report for you that is part of his overall are made up of our.
Speaker Change: There has been no significant impact in the up market movements and actually even under any circumstances. When we do stress testing on wet may impact it will be something like a low double digit kind of level of impact, but not something that would.
Turnkey commercial and specialty portfolio and clearly the dynamic of those different business easy shrunk and also the cycle effect ingalls values portfolio as well.
Speaker Change: And depending on the.
Speaker Change: Structurally impact our performance. So you can be a really reassured as well from the from that perspective.
Speaker Change: On where we are so I think that was the point you were making is more related as an example to GTS.
Speaker Change: Brian Thank you very much.
Speaker Change: Yes, we're I was mentioning we see in general that we are at a good level of rate adequacy that has reduced clearly, but still it's not negative.
Speaker Change: Thanks, Phil next question is from Hughley.
Speaker Change: The Cohen from Morgan Stanley go ahead Harley.
Speaker Change: Negative rate adequacy at this stage for growth in particular in the areas, where we feel quite strong like specialty will be an area, but also some international business, where we have a lot. We can play with our <unk> T as well, where there's also a lot we can offer in that.
Speaker Change: Okay.
Speaker Change: Thanks, very much Andre Michael Emery.
Speaker Change: Just a couple of quick questions remaining from my side, please firstly and apologies if I've missed this.
Speaker Change: The.
The valuation result, another.
Speaker Change: That business on trade side clearly I.
Speaker Change: P&C.
Speaker Change: It was.
Speaker Change: Just below minus 800.
Speaker Change: Uh huh.
Speaker Change: For FY 'twenty four.
Speaker Change: We are more cautious on the on the underlying assumptions as we still saw some of the underlying risks are increasing but the quality of the underwriting cranky.
Speaker Change: And I think you said at the time it was in line with normal expectations, but I think the guidance is now.
Minus $5 million to $600 million.
Speaker Change: On a normalized basis I'm just wondering what's.
Speaker Change: The quality of our underwriting is very strong, but clearly as always met what we see as well is that the emergence of of course. It is also very strong in the into content environment. So we will see no reason to also take when they get in assumptions when it comes to the.
Whats changed there.
Speaker Change: Yes.
Speaker Change: There's an offset somewhere else that we should be mindful of.
Speaker Change: And then my second question is in relation to slight benign.
Speaker Change: Which is very useful.
Speaker Change: Two two.
Speaker Change: It was a push WT on the trade side beyond some normal level of normalization of all and makeup is also in a very different stage, depending on the values market with some markets being more challenging than it was that and is very connected with what I was mentioning before so mainly I would say U K or Australia will be markets.
Speaker Change: Thank you very much but but more specifically on that I am just wondering around your U S assets.
Speaker Change: Exposure I guess beyond those assets backing the.
Speaker Change: Your U S liabilities, how are you thinking about your U S exposure on the asset side more broadly right now does it structurally still makes sense to have.
Speaker Change: Which are more challenged.
Speaker Change: Hum.
Speaker Change: On the right dynamic, which does not mean that it is not rate adequate again to mention so so overall, we are very comfortable.
Speaker Change: The exposure to the extent your day. Thank you.
Speaker Change: So I think.
Speaker Change: With the development of our commercial book I also forgot sorry, two mentioned partner as it is.
Speaker Change: So I think your first question was on the evolution of results and it was a right where we see indeed.
Speaker Change: Also contributing to the commercial our commercial portfolio that is also a different dynamic so overall no.
Speaker Change: Lower I mean lower AR.
Speaker Change: Like we normally expectation for the year would be something around 500 went to 601 million annually.
Speaker Change: Reason to change our guidance.
Speaker Change: We see the stronger on the Applebee's. He made a combined ratio of 92% for the for the commercial business with a continued careful trajectory, but still a strong trajectory and as part of your overall, our P&C portfolio.
This is basically lower lower for these.
Speaker Change: It will be lower now going forward as we have been a reclassifying some of our GSE business, you know basically from P&C to life and hence to ask some of the some of the business has moved away from that from the segment is no longer going to impact as evaluation and research and all that so that's why you should use that guidance more offer.
Speaker Change: Sure.
Karen: Thanks, Karen.
Andrew Crean: Next question is from Andrew Andrew Crean from Autonomous go ahead Andrew.
Karen: Okay.
Karen: Okay.
Speaker Change: I'll point to 1.6.
Karen: So you might be muted Andrew.
Speaker Change: For the for the full year Nonetheless.
Karen: Yeah.
Speaker Change: We had we also had a negative FX effects that came through in.
Karen: Hello.
Speaker Change: In the in the.
Speaker Change: In the in the in the quarter as well, which is linked with a very very small level of ethics.
Karen: Andrew really muted.
Speaker Change: We can't we can't hear you I'm afraid so it will come back to.
Ah ethics variation, we see on the on some of our business which would.
Speaker Change: If we could move to.
Speaker Change: <unk> has also impacted impacted that number or do you see as well.
Speaker Change: The next question then.
Speaker Change: Is from Henry Heathfield from Morningstar go ahead Henry.
Speaker Change: No she's element on the valuation reserves and is offset in the base E income interest income obviously that you need to take as went into account when you are going to do the correction overall.
Speaker Change: Yeah.
Speaker Change: Oh good good afternoon can you hear me.
Speaker Change: Yes, we can.
Speaker Change: Thank you.
Speaker Change: I think also the team can provide you with a more a line by line items you want to do a full assessment on that side.
Speaker Change: Good afternoon, and thank you for taking my questions just.
Speaker Change: A small a couple of questions. Please.
Speaker Change: I'm wondering if you could talk a little bit more about what happened to <unk> performance fees and pimco.
Speaker Change: And then you were asking in general on a on U S exposure. So I think where we are in the asset portfolio winds that was that was your question. So I think it's in general we have our portfolios at a very very diversified and we don't take and if you look at the overall page, where we are showing how we are thinking about it in general we haven't.
Speaker Change: I think in the past it's been highlighted in Q4, they tend to be heavier loaded in Q4, but it doesn't look like.
Speaker Change: That's entirely full picture here. So I was wondering if you could just kind of on the street and then incorporate although that's kind of.
Speaker Change: Very good.
Speaker Change: It looks to be coming in quite a bit below your $800 million full year target. So I was also wondering if you could talk a little bit about what's driving that thank you.
Speaker Change: Very structural the approach of Av.
Speaker Change: Matching our assets and our liabilities as much as possible you see that.
Speaker Change: And then we take some some structured decision when it comes to certain type of asset classes typically on the equity side to our listed equity would be edge.
Speaker Change: Yeah, maybe on the corporate segment and also are they really nursing in particular to be to be highlighted you know, it's always an area, where we are definitely very cautious when we when we set our outlook. So the level of cautiousness. If you want on the spend on the corporate corporate segments are being confirmed.
Speaker Change: In general our alternatives portfolio is our edge.
Speaker Change: In the P&C segment, except for the private equity exposure.
Speaker Change: Exposure, where we have decided economically that it was not making sense to edge to edge that portfolio and this is his portfolio you see creating a bit of a.
Speaker Change: For the for the quarter.
Speaker Change: So far the for Tim Cofer deliver of performances Pimco.
Speaker Change: As I mentioned and you rightfully say too as well.
Speaker Change: Market movements in the.
Speaker Change: None none sorry, non operating and nonoperating side here, we clearly see that the economic trade offs makes sense. We are mainly focusing you know on the aging our balance sheet to protect the residents of obviously organization and there's no cost of hedging would not make sense against as you expected value creation. This is a very.
Speaker Change: <unk> is always a volatile right in a in nature and last year. It was a particularly strong for the first quarter.
Speaker Change: Maybe just to give you a sense on how to think about it like in the previous.
Speaker Change: The 10 first quarter, we had on average at the pharmacy share of around 4% of our total revenues.
Speaker Change: So a little off of exposure overall, because our private equity exposure in P&C against the anti U.
Speaker Change: And so with a range of 2% to 6% of the revenues.
Speaker Change: P&C portfolio is something like 1% of yours, a whole asset base was at a very low level and that makes sense in terms of our risk return profile and also volatility management.
Speaker Change: Thank you to the documents in the first quarter of 2025 sales year, we had 2%.
Speaker Change: Hum.
Speaker Change: <unk>.
Speaker Change: Against the total total level of revenues. So it's basically within the range, but you hit the low end low end of the range and if you look if you followed that same logic for the full year for over the last the next the last 10 years actually we have achieved the hummus. He shares that is in terms of.
Speaker Change: Understood. Thank you.
Speaker Change: Thanks Hadley. Our next question is from Kamran Kamran Hossain from.
Speaker Change: J P Morgan.
Speaker Change: Go ahead Kevin.
Speaker Change: Okay.
Speaker Change: Khamenei meters.
Speaker Change: Percentage of total revenues it is between 4% and 10%.
Speaker Change: Hi.
Speaker Change: Understood.
Speaker Change: And so we expect to be within that range for 2025, and there is no thing I can say more at this point in time, because obviously there is a volatility that is also connected to the volatility of the market in the aforementioned.
Speaker Change: Perfect.
Speaker Change: Yes, Sir.
Speaker Change: It's about growing up so much.
Speaker Change: Just the first question is just in the direction of translated commercial which it sounds like the person. So I'd stay has some tailwind behind it.
Speaker Change: Okay. Thanks Henry.
Speaker Change: In terms of mostly coming through on the commercial side.
Speaker Change: Next question is from Fahad Fahad Chung Ghazi from Kepler.
Speaker Change: Peaks are now slowing down.
Speaker Change: Go ahead Rob.
Speaker Change: With respect.
Speaker Change: But how are you doing.
Speaker Change: Yeah.
Speaker Change: Do you think your Richards followings defend margin.
Speaker Change: Hello, Hi, Thank you for taking my question just very quick follow ups left.
Speaker Change: Or do you think the combined ratios will inevitably kind of trend up students and then kind of what your purchases.
Speaker Change: On substitute capital generation it looks like the life underlying capital generation was about $1 1 billion euros.
Speaker Change: Q1.
Speaker Change: Volume sorry, so you can defend the margin.
Speaker Change: That's a good level to build from or will it be a bit higher due to the assumption change I'm not sure if its including or excluding experienced variance there.
Speaker Change: Second question is just a follow up clarification on Welles' question of wallboard.
Speaker Change: You told us about.
Speaker Change: Mid single digit shares quarter to date, which was probably a bit more than April.
Speaker Change: And another one just on us.
Speaker Change: The extra capital management actions.
Speaker Change: Just concentrate transaction of course.
Speaker Change: Could you maybe tell us how the printer.
Speaker Change: But again can you give us any insight into other management actions, we will be implementing in 2025.
Speaker Change: Okay.
Speaker Change: Don't want to get a surprise in Q2 I assume some of it.
Speaker Change: To increase on future capital generation. Thank you.
Speaker Change: There are some movies.
Speaker Change: And of course, sorry, just so just trying to figure things out. Thank you.
Speaker Change: So I think on the implementation of the action for Oh can you get there.
Speaker Change: Yes, so I think on the second question I mean, clearly understand I cannot provide you with a set level of detail. That's clearly not something that is available at this point in time, then I think your question on commercial right I think commercial what is very important from my perspective is first of all to.
Speaker Change: Our operating capital generation in the year I cannot really give you a give you an answer.
Speaker Change: At the two books that I mentioned in the scatter market.
Speaker Change: Clearly we are working on.
Speaker Change: I mean, many many levers to improve our operating capital generation and.
Speaker Change: Look at the structure of the.
Speaker Change: Portfolio when it comes to commercial we have a I think a very different book compared to many.
Speaker Change: And I think some of them will start bearing fruits as well this year, but also some of them when you Kelly.
Speaker Change: Of our peers. He's made made also large corporate.
Speaker Change: Our net piece much later on is or towards the end of the plan or even like you know.
Speaker Change: Book, which is D. C. D. C is book than we ever announced trade credit insurance book, we have the mid cap portfolio and also we have also announced a report for you that he started his overhaul made up of our.
Speaker Change: Outside of the plan horizon. So Ed at this point in time I can really not give you a more detail except reassurance that we are really working very actively on it and we see a lot of momentum in the in the organization around around the topic.
Speaker Change: GMP commercial and specialty portfolio and clearly the dynamic of those are different businesses easy shrunk and also the cycle effect induced values portfolios as well.
And then I think you went so could I just could I could I just follow up on that you said some outside the plan, but we are still sort of on track for the 'twenty four 'twenty five.
Speaker Change: And depending on the.
Speaker Change: Operating capital generation target of course.
Speaker Change: On where we are so I think the point you were making is morally today as an example to gcs, where I was mentioning we see in general that we are at a good level of rate adequacy that has reduced clearly but not.
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: So 23 seven target. So there's all this just to be clear has more than 20 on the metric you see the six for Q1 more than 20 is what we set as a target for your 25 and then.
Negative rate adequacy. So there is space for growth in particular in the areas, where we feel quite strong like specialty will be an area, but also the international business, where we have a lot. We can play with our AFP as well whether you threw a lot we can offer in that.
Speaker Change: Yes.
Speaker Change: Is actually transferring certain 'twenty four 'twenty five.
Speaker Change: And the reason is that they are also I mean I would've those.
Speaker Change: I mean.
Speaker Change: We're working on many different levels right some of the levers.
Speaker Change: That business on trade side, clearly our engineer holder I mean like.
Speaker Change: Also will be related to getting some regulatory approval. So obviously it will take time and are also linked to the fact that there is a lot of preparation preparatory work and also Susan.
Speaker Change: Uh huh.
Speaker Change: We are more cautious on the on the underlying assumptions as we see also some of the underlying risks are increasing but the quality of the underwriting karate.
Speaker Change: That will take time time to imagine now also a lot of other actions, which we think should provide you know.
Speaker Change: Quality of our underwriting is very strong, but clearly as always met what we see as well is that the emergence of of course. It is also very strong in the into content environment. So we will see no reason towards will take when they get to the assumptions when it comes to the.
Speaker Change: Then if it earlier on but you also have you know a lot of underlying ingersoll effects like I don't know the mix is contributing to that some of the diversification benefits and finance with fossil is very difficult to give a very precise impact differs by the virtue and exactly when they're going to and so I think at this point in time eating Oliver.
Speaker Change: <unk>.
Speaker Change: And to the push WT on the trade side beyond some normal level of normalization of all and Midcap is also in a very different stage, depending on the values market with some markets being more challenging than others and it's very connected with what I was mentioning before so mainly I would say U K or Australia will be markets, which are more challenged.
Speaker Change: Ambition that is strictly superior to what we had last year is from my perspective.
Speaker Change: Guidance.
Speaker Change: And then I think you were asking a question on the solvency too.
Speaker Change: <unk> capital generation for the life segment on a standalone basis or like basically how much of the.
Speaker Change: Hum on the rate dynamics, which does not mean that he's not rate adequate again to mention so so overall, we are very comfortable with.
Speaker Change: The correction, we should be taking out of the.
Speaker Change: Because it is <unk> right.
Speaker Change: He says the development of our commercial book.
Speaker Change: Yes, that's correct.
Speaker Change: I also forgot sorry, two mentioned partner and that is also contributing to the commercial our commercial portfolio that is also a different dynamic. So overall no reason to change our guidance.
Speaker Change: So.
Speaker Change: We do not.
Speaker Change: The split in in absolute as part of the overall.
Speaker Change: I would come.
Speaker Change: It's the operating capital generation.
Speaker Change: We see the stronger on the Opex you may combine ratio of 92% for the for the commercial business with continued careful trajectory, but still a strong trajectory and as part of the overall P&C portfolio.
Speaker Change: Because I mean again you added is mix effect than you ever since the diversification that he thinks that he says that is coming through.
Speaker Change: India operating capital generation. So what I will do is I will take the overall numbers. We have shared and then you can reduce it.
Speaker Change: Thanks, Karen.
Speaker Change: I mean.
Andrew Crean: Next question is from Andrew Andrew Crean from Autonomous go ahead Andrew.
Speaker Change: A little bit Homsey, almost one percentage point of positive <unk>, we have been sharing with you that is coming from the life side and then normally you will have a positive additional.
Speaker Change: Okay.
Speaker Change: So you might be muted Andrew.
Speaker Change: Our priorities are additional elements that is going to come through from the earnings of the concept.
Speaker Change: Okay.
Speaker Change: The structure into the into the life, a life operating our capital capital generation.
Hello.
Speaker Change: Yeah.
Speaker Change: Andrew really muted.
Speaker Change: Which we have not yet reflected that.
Speaker Change: Okay.
Speaker Change: Well, we cant we cant hear you im afraid so it will come back to.
Speaker Change: Punch in time now.
Okay. That's great. Thank you very much thank you.
Speaker Change: If we could move to the.
Speaker Change: Thanks, Rob.
Speaker Change: The next question then.
Speaker Change: Next question is from James Timeshare.
Henry: Is from Henry he filled from Morningstar go ahead Henry.
Speaker Change: <unk> from Citi go ahead, Josh.
Speaker Change: Thanks, Good afternoon February Andrew.
Henry: Oh good good afternoon can you hear me.
Speaker Change: Just wanted to ask about the sort of underlying loss ratio development if you like.
Speaker Change: Yes, we can.
Henry: Thank you.
Speaker Change: Good afternoon, and thank you for taking my questions just.
Speaker Change: Discounts that attritional.
Henry: A small a couple of questions. Please.
Speaker Change: Loss ratio ex cats.
Speaker Change: 10.
Henry: I'm wondering if you could talk a little bit more about what happened three performance fees and pimco.
Speaker Change: Basically what's been Friedman.
Speaker Change: Yeah.
Speaker Change: You didn't give us.
Speaker Change: The total combined ratio.
Henry: I think in the past it's been highlighted in Q4, they tend to be heavier loaded in Q4, but it doesn't look like.
Speaker Change: Commercial but really interested in what's happening on the underlying trends.
Speaker Change: Can you spell <unk>.
Henry: That's entirely full picture here. So I was wondering if you could just kind of gone through that a bit and then incorporate other that's kind of.
Speaker Change: <unk> was between retail and commercial.
Speaker Change: Buying loss ratio for me take place in Q1.
Henry: Yeah.
Henry: It looks to be coming in below your $800 million full year target.
Speaker Change: And then secondly.
Speaker Change: Just in terms of cyber insurance can you just remind me what your premium side, it's in the slide.
Henry: I was also wondering if you could talk a little bit about what's driving that thank you.
Speaker Change: So just what line she tend to put that okay. Thank you.
Henry: Yeah, maybe on the corporate segment and also are they really nursing in particular to be to be highlighted you know, it's always an area, where we are definitely very cautious when we when we set our outlook. So the level of cautiousness. If you want on the spend on the corporate.
Speaker Change: Okay.
Speaker Change: I'm sorry could you repeat your question on cyber.
Speaker Change: I think I got it I think you said you wanted the roughly how big we are in cyber.
Speaker Change: The loan size of retention.
Corporate segments are being confirmed for the for the quarter.
Speaker Change: Right, Yeah, that's right that's right.
Speaker Change: Okay.
Henry: So far the four Tim Cofer deliver of performances Pimco.
Speaker Change: Okay, maybe maybe I first answer your question globally right on the Attritional.
Henry: As I mentioned and you rightfully say too as well and fulfillment is always volatile right.
Speaker Change: The attritional.
This country the attritional loss ratio.
So I am I have provided the guidance for the year end results that we expect.
Henry: In nature and last year, it was a particularly strong for a first quarter.
Speaker Change: If you take all the elements I have been mentioning we expect.
Henry: Maybe just to give you a sense on how to think about it like in the previous.
Speaker Change: Attritional loss ratio to be within 71 to 71 five.
Henry: 10 first quarter, we had on average at the pharmacy sale for one 4% of our total revenues.
Speaker Change: Corrida in terms of in terms of experience and actually what we have what we have seen in the first quarter and as provision I think onto on the page. We added 71, five so we are well within our corridor and discontinued Attritional attritional loss ratio.
Henry: And so with a range of 2%.
Henry: Of the revenues associated to the performance in the first quarter of 2025. So this year, we added 2%.
Henry:
Speaker Change: Which is also slightly improving compare compared to last year and then when you look in the underlying actually we have we are also further or additional <unk> is.
Henry: Performance.
Henry: Against the total our total level of revenue. So it's basically within the range that you see at the low end low end of the range and if you issue follows that same logic for the full year.
Speaker Change: Is that we have we have the ash transaction that is contributing negatively to the discontinued attritional loss ratio and we also have.
Henry: For over the last the next solar.
Henry: 10 years actually we have achieved the <unk> shares that is in terms of percentage of total revenues. It is between 4% and 10% and so we expect to be within that range for 2025, and there is nothing I can say more at this point in time, because obviously the volatility that it also connects double edged 80 of them.
Speaker Change: The transfer of some of our <unk> health business that moved from them from the P&C segment to the to their life in that segment that is also contributing negatively to Z and discounted our attritional loss ratio. So if I bring all of that together what we see is.
Speaker Change: Is this sort of 30 bps improvement of our and discounted attritional loss ratio year on year.
Market in the aforementioned.
Henry: Yeah.
Henry: Okay. Thanks Henry.
Speaker Change: And then.
Speaker Change: And digitally it means that we are well within our expectations for 40 and discounted attritional loss ratio for for the year at this point in time in the in the quarter and then I think more generally on your question on what's happening between retail and commercial in retail, we really see the full earning of our <unk>.
Speaker Change: Next question is from Fahad Fahad trying ghazi from Kepler.
Rob: Go ahead Rob.
Speaker Change: Hello, Hi, Thank you for taking my question just very quick follow ups left.
Speaker Change: On substitute capital generation it looks like the life underlying cash generation was about $1 1 billion euros.
Speaker Change: Underwriting actions that is coming through.
Speaker Change: He and his continued attritional loss ratio, we should so very strong level of stability Indian discontinued attritional loss ratio on the commercial side and the reason why is the commercial loss ratio or combined ratio goal is higher than what I mentioned, we had a look I mean.
Speaker Change: Is that a good level to build from or will it be a bit higher due to the assumption change I'm not sure if its including or excluding any experience variance there.
Speaker Change: And another one just on us.
Speaker Change: The extra capital management actions.
Speaker Change: Justice concentrate transaction of course.
Speaker Change: Mitch much higher level of Nat cat load in the water for the commercial business.
Speaker Change: But again can you give us any insight into other management actions, we will be implementing in 2025 to.
Speaker Change: And also remember the discounting effects on the commercial side, so basically the reduction after discounting benefits.
Speaker Change: The increase on future capital generation. Thank you.
Speaker Change: So I think on the implementation of the action for all again you get.
Speaker Change: The commercial side.
Speaker Change: He is much higher because the commercial business tend to be longer.
Speaker Change: Our operating capital generation in the year I cannot really give you a give you an answer you know if you look at the full toolbox that I mentioned in the capital market day, clearly we are working on.
Speaker Change: Compared to our longer duration compared to retail one and Thats why you have these higher negative effect of the reduction of the rates on the on your combined ratio for commercial lines.
Speaker Change: I mean, many many levers too.
Speaker Change: Then I think you were asking for.
Speaker Change: To improve our operating capital generation and.
Speaker Change: Far from cyber for cyber insurance. So overall, we have approximately.
Speaker Change: And I think some of them will start bearing fruits as well this year, but also some of them will be clearly provide a peace naturals later on Asia towards the end of the plan or even actually no.
Speaker Change: On a standalone cyber and <unk> web application that easily.
Speaker Change: 350.
Speaker Change: Arthur.
Speaker Change: Outside of the plan horizon. So Ed at this point in time I can't really not give you a more detailed except reassurance that we are really working very actively on it and we see.
Speaker Change: DPW and show them and we indeed see the softening I was I was referring to as part of the overall.
Speaker Change: The development of our cyber and we take a very very cautious our plush when it comes to our underwriting on the answer cyber cyber side. So we have small carriers are there.
Speaker Change: Lot of momentum in India in the organization around around the topic.
Speaker Change: And then I think you expect could I just could I could I just follow up on that you said some outside of the plan.
Speaker Change: Or is there a limit.
Speaker Change: And which are basically between 10 million and $15 million depending on the business is when new business is razor thin nuance. It March 15.
Speaker Change: We are still sort of on track for the 'twenty four 'twenty five.
Speaker Change: Turning capital generation target of course.
Speaker Change: In addition to that we have a very very conservative reinsurance structure is that he's made of several layers, which are sort of segregate king and financial photo basically we have a quota share we have an event and then aggregate excel cover in place we are extremely well protected when it comes to cyber risk overall.
Speaker Change: Yes, it does.
Speaker Change: 27 target. So there's all this just to be clear has more than 20 on the metric you see six for Q1 more than 20 is what we set as a target for your 25 million.
Speaker Change: The target is actually transferring certain 'twenty four 'twenty five.
Speaker Change: Sure.
Speaker Change: Is there a reason is that they also I mean I would've Zeus.
Speaker Change: It's very helpful. Thank you so much thanks James.
Speaker Change: And although we have our last question, which is a follow up question.
Speaker Change: I mean, we are working on many different levels right. Some of the levers are also will be related to getting some regulatory approval. So obviously it will take time and are also linked to the fact that there is a lot of preparation preparatory work and also that will take time time to imagine now also a lot of other actions.
Michael: From Michael.
Michael Huttner: Huttner from Bahrenburg go ahead Michael.
Speaker Change: Thank you so much the one is a phase, but also meeting with them.
Speaker Change: On the expense ratio of $24 one wishes.
Speaker Change: So it feels like a huge improvement on last year.
Speaker Change: Which we think should provide you know.
Speaker Change: Then if it earlier on but you also have you know a lot of underlying those are effects like I don't know the mix is contributing to that some of the diversification of initiates and finance will foster is very difficult to give a very precise impact differs by dealers, who and exactly when they're going to and so I think at this point in time eating Oliver.
Speaker Change: And then the second one is online.
Speaker Change: I'm, sorry, I'm being really nitpicky.
Speaker Change: The LIFO.
Speaker Change: Terrific.
Speaker Change: Lovely.
Speaker Change: This will supplement.
Speaker Change: It is good 14%, but it is actually down on all the quarters last year when it was 16.
Speaker Change: If you think it's sort of interesting.
Speaker Change: Of ambition that is strictly a superior to what we had last year is from my perspective, a good a good guidance.
Speaker Change: If you know of anything it would be interesting. Thank you.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: And then I think you were asking a question on the solvency too.
Speaker Change: Sorry, just to be clear, Michael because it's quite hard to make sure you're.
Speaker Change: Operating capital generation.
Speaker Change: We're focused on the expense ratio trajectory.
Speaker Change: <unk> for the life segment on a standalone basis or like basically how much of the.
Speaker Change: When the license sales.
Speaker Change: The correction, we should be taking out of the.
Speaker Change: <unk> and <unk>.
Speaker Change: It actually came down quarter on.
Speaker Change: Quarter over quarter.
Speaker Change: Positive inte right.
Speaker Change: Understood.
Speaker Change: Yes, that's correct.
Speaker Change: Okay.
Speaker Change: Very good I think like one of the main driver for the for the life of OE being being down as you. As you mentioned is related to the fact that the numerator has been impacted by the tax provision followed by judge because that's the main explanation. If you want the exact details you can.
Speaker Change: So we.
Speaker Change: We do not.
Speaker Change: The split in in absolute as part of the overall.
Speaker Change: Outcome.
Speaker Change: It's the operating capital generation.
Speaker Change: Because I mean again you added is mix effect in your a versus the diversification. He thinks that he is a that is coming through.
Speaker Change: You can lead with the teams they will basically give us the exact effect, but the main driver is each Kelly bedrock. What I think is super important Michael is so quality at which we are underwriting busy Cal new business and clearly our life in its new business.
Speaker Change: Indeed.
Speaker Change: India operating capital generation, So what I will do is that I would take the overall numbers. We have shared and then you can reduce it.
Speaker Change: I mean.
Speaker Change: A little bit Homsey, almost one percentage point of positive <unk>, we have been sharing with you that is coming from the life side and then normally you will have a positive additional.
Speaker Change: Hawk, all basically like you know wage positioning against.
Speaker Change: Wait hours for 'twenty, two our expectation is available for a 15% across the portfolio. So we have a very very strong.
Speaker Change: A positive additional elements that is going to come through from the earnings of the concept.
Speaker Change: Four months at which we are underwriting our lunch business, where we are very confident on the quality as well of the future profitability that they're going to emerge from our nice business.
Speaker Change: Our structure into the into the life a.
Speaker Change: The LIFO, Gary Ciena capital capital generation.
Speaker Change: It.
Speaker Change: And then I think your what was your question.
Speaker Change: Which we have not yet reflected a.
Speaker Change: At this point in time now.
Speaker Change: It was.
Speaker Change: Okay.
Speaker Change: Atkins expense ratio in detour in the P&C expense ratio I think first quarter, we had a 50 bps improvement of the P&C expense ratio not all of that is related to productivity.
Rob: That's great. Thank you very much. Thank you okay. Thanks, Thanks, Rob.
Speaker Change: Next question is from James <unk>.
Speaker Change: <unk> from Citi go ahead, Josh.
Speaker Change: Yeah.
Speaker Change: We have a mix effect as always.
Thanks, Good afternoon February Andrew.
Speaker Change: In the P&C expense ratio in the second special effect is related to.
Speaker Change: Just wanted to ask about the sort of underlying loss ratio development if you like.
Speaker Change: Also the arch transaction that is still creating noise due to <unk>.
Speaker Change: On discounts as Attritional.
Speaker Change: Loss ratio ex cats.
Speaker Change: I mean, the Attritional loss ratio as I have just mentioned and the expense ratio.
Speaker Change: 10.
Speaker Change: Basically the improvement year on year.
Speaker Change: Basically Uh huh.
Speaker Change: Yeah.
Speaker Change: You didn't give us.
Speaker Change: Offsetting.
Speaker Change: It shows there so that's that's what.
Speaker Change: The total combined ratio between retail and commercial but really interested in NAFTA and EMEA.
Speaker Change: That's what's driving up so partially some of the improvement in the expense ratio. What is more important is that fundamentally we see he and are now expecting trends to deliver against our expectation of expectations.
Speaker Change: <unk> trends.
Speaker Change: Can you spell <unk>.
Speaker Change: <unk> was between retail and commercial.
Speaker Change: Buying loss ratio for me in Q1.
Speaker Change: Expectations of minus 30 bps.
Speaker Change: And then secondly.
Speaker Change: Year on year associated with our productivity initiatives.
Speaker Change: Just in terms of cyber insurance can you just remind me what your premium size is an insider.
Speaker Change: Thank you very much.
Speaker Change: Great. Thanks.
Speaker Change: So just what line.
Michael Huttner: Thanks, Michael and that was the last question, maybe before closing if I could just remind you.
Speaker Change: She tend to put that okay. Thank you.
Speaker Change: Okay.
Speaker Change: He is a very nice place in late spring.
Speaker Change: I'm sorry could you repeat your question on cyber.
Michael Huttner: We have been a couple of weeks' time or inside Allianz session.
Speaker Change: I got it I think you said you wanted the roughly how big we are in cyber.
Speaker Change: Which will be focusing on our commercial business our health business.
Speaker Change: Alongside this or retention.
Speaker Change: Yes, that's right that's right.
Speaker Change: Life and also some technology. So I would encourage you to sign off if you havent when we can give you even more details.
Speaker Change: Okay.
Speaker Change: Okay, maybe maybe I first answer your question globally right on the Attritional.
Speaker Change: With that.
Speaker Change: Thank you very much.
Speaker Change: Concludes our Q1 'twenty five cool thanks.
Speaker Change: The attritional and discounted attritional loss ratio.
Speaker Change: So I am I have provided the guidance for the year end results that we expect.
Speaker Change: Okay.
Speaker Change: If you take all the elements I have been mentioning we expect.
Speaker Change: Attritional loss ratio to be within 71 to 71 five.
Speaker Change: Corrida in terms just in terms of experience and actually what we have what we have seen in the first quarter and as provision I think onto on the page. We added 71 point in time, So we are well within our corridor and discounted attritional attritional loss ratio.
Speaker Change: Which is also slightly improving compare compared to last year and then when youre looking at the underlying actually we have we are also further or additional <unk> is.
Speaker Change: Is that we have.
Speaker Change: We added the ash transaction that is contributing negatively to the tune and discontinued attritional loss ratio and we also have the transfer of some of our of the health business that moved from them from the P&C segment to the to their life in that segment that is also contributing negatively to zee and <unk>.
Speaker Change: The attritional loss ratio, so if I bring all of that together, what we see is a set of 30 bps improvement of our <unk> and discounted attritional loss ratio year on year.
Speaker Change: And then.
Speaker Change: And basically it means that we are well within our expectations for 40 and discounted attritional loss ratio for for the year at this point in time in the in the quarter.
Speaker Change: And then I think more generally on your question on what's happening between retail and commercial in retail we really see the full earning of our underwriting actions that is coming through.
Speaker Change: He and his continued attritional loss ratio, we should so very strong level of stability Indian discontinued attritional loss ratio on the commercial side and the reason why the commercial loss ratio or combined ratio goal is higher than what I mentioned, we had.
Speaker Change: Yeah.
Speaker Change: Mitch much higher level of Nat cat load in the quarter for the commercial business and also remember discounting effects on the commercial side. So basically the reduction after discounted benefits.
Speaker Change: The commercial side.
Speaker Change: Much higher because the commercial business tend to be longer.
Speaker Change: Compared to our longer duration compared to retail one and that's basically why you entities higher negative effect of the reduction of the rates on the on the combined ratio for commercial.
Speaker Change: Then I think you were asking for.
Speaker Change: For Ciber for cyber insurance, so overall, we have approximate heavily.
Speaker Change: On a standalone cyber and <unk>, we have Apple C met easily.
Speaker Change: 350.
Speaker Change: Arthur.
Speaker Change: B W.
Speaker Change: And we indeed see the softening I was I was referring to as part of the overall.
Speaker Change: The development of our cyber and we take a very very cautious approach when it comes to our underwriting on the answer cyber cyber side. So we have small Terry.
Speaker Change: Our risk limits.
Speaker Change: Which are basically between.
Speaker Change: $10 million and 50 million depending on the business is when new business is razor thin.
Speaker Change: Nuance It March 15, and in addition to that we have a very very conservative reinsurance structure.
Speaker Change: He's made of several layers.
Speaker Change: Which are the first aggregating and financial photo basically we have a quota share we have an event and then aggregate excel cover in place we are extremely well protected when it comes to cyber risk overall.
Speaker Change: Sure.
Speaker Change: It's very helpful. Thank you so much thanks James.
Speaker Change: And then we have our last question, which is a follow up question.
Michael Huttner: From Michael Michael Huttner from Bahrenburg go ahead Michael.
Speaker Change: Thank you so much the one is a phase <unk>.
Speaker Change: Whether we.
Speaker Change: We're ahead of plan or whatever on the expense ratio of $24 one wishes.
Speaker Change: Feels like huge improvement on last year.
Speaker Change: And then the second one is online.
Speaker Change: Adam I'm, sorry, I'm being really nitpicky, you said the life.
Speaker Change: And you really lovely.
Speaker Change: To supplement its as good 14%, but it's actually down on all the quarters last year when it was 16.
Speaker Change: If you think of sort of interesting.
Speaker Change: If you know of anything as being strict.
Speaker Change: Yeah.
Speaker Change: Okay.
Michael Huttner: Sorry, just to be clear, Michael because it's quite hard to make sure you're.
Speaker Change: We're focused on the expense ratio.
Speaker Change: And then.
Speaker Change: On the license sales not only in R&D, which actually came down quarter on quarter.
Speaker Change: Quarter over to floor.
Speaker Change: Understood.
Speaker Change: Okay very.
Speaker Change: Very good I think like one of the main driver for the for the LIFO, leading being down.
Speaker Change: As you as you mentioned right is related to the fact that the numerator has been impacted by the tax provision followed by judge because that's the main explanation is you want the exact details you can.
Speaker Change: You can lead with the teams they will basically.
Speaker Change: The exact effect.
Speaker Change: Main driver is each Kelly by judge what I think is super important Michael is so quality at which we are underwriting busy Cal new business and clearly our life in its new business.
Speaker Change: Hawk are basically like you know wage positioning against.
Speaker Change: Wait hours for 'twenty two.
Speaker Change: Your expectation is available for a 15% across the portfolio. So we have a very very strong.
Speaker Change: Four months at which we are underwriting our life business, where we are very confident on the quality as well of the future profitability the tagging to emerge from our nice business.
Speaker Change: And then I think your question.
Speaker Change: It was.
Speaker Change: Yes.
Speaker Change: <unk> expense ratio in detour in the P&C expense ratio I think for the quarter. We had a 50 bps improvement of the P&C expense ratio not all of that is related to productivity. Obviously, we have a mix effect as always in the in the P&C expense ratio in the second especially effect is related to.
Speaker Change: Also the arch transaction that is still creating noise due to.
Speaker Change: Between the Attritional loss ratio as I have just mentioned and the expense ratio.
Speaker Change: Offsetting.
Speaker Change: It shows air So that's that's what.
Speaker Change: That's what's driving up so partially some of the improvement in the expense ratio. What is more important is that fundamentally we see he and are now expecting trends to deliver against our expectations.
Speaker Change: Expectations of minus 30 bps.
Speaker Change: Year on year associated with our.
Speaker Change: Okay.
Speaker Change: Thank you very much.
Speaker Change: Great. Thanks.
Speaker Change: Thanks, Michael and that was the last question, maybe before closing if I could just remind you.
Speaker Change: <unk> is a very nice place in late spring.
Speaker Change: We have been a couple of weeks' time or inside Allianz session.
Speaker Change: Which will be focusing on our commercial business our health business.
Speaker Change: Life and also some technology. So I would encourage you to sign off if you havent when we can give you even more details.
Speaker Change: And with that.
Speaker Change: Thank you very much and that concludes our Q1 'twenty five cool. Thanks.
Speaker Change: Okay.