Half Year 2026 Zurich Insurance Group Ltd Earnings Call

August 6, 2026

Mario Greco: Today. Before we take your questions, I'd like to make a few remarks on our H1 results. I'd like to start with three messages that I'd like to highlight today. First, we delivered another record result. Business operating profit increased 13% to $4.8 billion, and core EPS grew 11.5%, with every business segment contributing to this growth. These results reflect the strength of our diversified model, our focus on execution, and our ability to generate attractive returns through the cycles. Second, we are seeing strong momentum in our strategic growth areas. In Property and Casualty, our diversified portfolio allows us to expand selectively in areas where we see attractive returns, such as specialty and middle market. In Life, protection growth reached double digits well ahead of our targets. At Farmers, policy count growth continues to build with exchanges gaining market share for the first time in a decade.

Speaker #1: Day. Before we take your questions, I'd like to make a few remarks on our half-year results. I'd like to start with three messages that I'd like to highlight today.

Speaker #1: First, we delivered another record result: business operating profit increased 13% to 4.8 billion dollars, and core EPS grew 11.5%, with average business segment contributing to this growth.

Speaker #3: I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session.

Operator 2: I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star, then zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Adrienne Lim, Head of Investor Relations and Rating Agency Management. Please go ahead.

Speaker #3: You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star then 0. The conference must not be recorded for publication or broadcast.

Speaker #1: This result reflects the strength of our diversified model, our focus on execution, and our ability to generate attractive returns through the cycles. Second, we're seeing strong momentum in our strategic growth areas.

Speaker #3: At this time, it's my pleasure to hand over to Adrienne Lim, Head of Investor Relations and Rating Agency Management. Please go ahead.

Speaker #1: In property and casualty, our diversified portfolio allows us to expand selectively in areas where we see attractive returns, such as specialty and middle markets.

Speaker #2: Good afternoon, everyone, and welcome to Zurich's first half results call. I have with me our Group CEO, Mario Greco, and our Group CFO, Claudia Cordioli.

Adrienne Lim: Good afternoon, everyone, and welcome to Zurich's H1 results call. I have with me our Group CEO, Mario Greco, and our Group CFO, Claudia Cordioli. As a reminder, we will not be taking any questions on the proposed acquisition of Beazley or commenting on its results, given we are still two separate independent companies. Before I hand over to Mario for some opening remarks, please can I remind you to keep your questions for the Q&A session to a maximum of two? Over to you, Mario.

Speaker #1: In life, protection growth reached double digits, well ahead of our targets. And at farmers, policy can growth continues to build with the exchanges gaining market share for the first time in a decade.

Speaker #2: As a reminder, we will not be taking any questions on the proposed acquisition of Beasley or commenting on its results. Given we are still two separate, independent companies, before I hand over to Mario for some opening remarks, please may I remind you to keep your questions for the Q&A session to a maximum of two.

Speaker #1: And lastly, today's results reinforces our confidence in meeting or exceeding our 2027 financial targets. We continue to see attractive growth opportunities across our business, supported by structural trends such as investment in AI infrastructure, and rising demand for protection solutions.

Mario Greco: Lastly, today's results reinforces our confidence in meeting or exceeding our 2027 financial targets. We continue to see attractive growth opportunities across our business, supported by structural trends such as investment in AI infrastructure and rising demand for protection solutions. Now, let me briefly touch on the performance across our key business segments, and as usual, I start with Property and Casualty. Gross written premiums grew 7% to nearly $30 billion, with an all-time high operating profit of $2.8 billion, up 16% year-on-year. Combined ratio was an excellent 92.7%, reflecting the strengths of our underwriting and active portfolio management. Within Commercial Property and Casualty, specialty remains a key growth area, with premiums up 8% and an underlying combined ratio of 91.2%. Construction was a particular strength, growing 18%, supported by demand from AI-related infrastructure, not just in the US, but around the globe.

Speaker #2: Over to you, Mario.

Speaker #3: Thank you, Adrienne.

Mario Greco: Thank you, Adrienne. Good afternoon, everyone. Thank you for joining us today. Before we take your questions, I'd like to make a few remarks on our H1 results. I'd like to start with three messages that I'd like to highlight today. First, we delivered another record result. Business operating profit increased 13% to $4.8 billion. Core EPS grew 11.5%, with every business segment contributing to this growth. These results reflect the strength of our diversified model, our focus on execution, and our ability to generate attractive returns through the cycles. Second, we are seeing strong momentum in our strategic growth areas. In Property and Casualty, our diversified portfolio allows us to expand selectively in areas where we see attractive returns, such as specialty and middle market. In Life, protection growth reached double digits, well ahead of our targets.

Speaker #4: Good afternoon, everyone, and thank you for joining us today. Before we take your questions, I'd like to make a few remarks on our half-year results.

Speaker #1: Now, let me briefly touch on the performance across our key business segments. And as usual, I start with property and casualty. Gross written premiums grew 7% to nearly 30 billion US dollars, with an all-time high billion US dollars.

Speaker #4: I'd like to start with three messages that I'd like to highlight today. First, we delivered another record result. Business operating profit increased 13% to $4.8 billion, and core EPS grew 11.5%, with every business segment contributing to this growth.

Speaker #1: Up 16% year-on-year. Combined ratio was an excellent 92.7% to reflect in the strength of our underwriting and active portfolio management. Within commercial property and casualty, specialty remains a key growth area, with premiums up 8% and an underlying combined ratio of 91.2%.

Speaker #4: This result reflects the strength of our diversified model, our focus on execution, and our ability to generate attractive returns through the cycles. Second, we are seeing strong momentum in our strategic growth areas.

Speaker #1: Construction was a particular strength, growing 18%, supported by demand from AI-related infrastructure, not just in the US but around the globe. This is an area where our risk engineering underwriting expertise, global capabilities, such as our fully integrated global industry vertical and ZRS expertise, give us a meaningful competitive advantage.

Speaker #4: In Property and Casualty, our diversified portfolio allows us to expand selectively in areas where we see attractive returns, such as specialty and middle market.

Mario Greco: This is an area where our risk engineering, underwriting expertise, global capabilities, such as our fully integrated global industry vertical and ZRS expertise, give us a meaningful competitive advantage. This supports our leadership position. We currently lead on around 70% of our underwritten data center projects. Within our customer segments, middle market also continued to perform strongly, with premiums up 7%, driven by growth in Germany, Italy, and France, and targeted expansion in the US. Across our commercial portfolio, margins remain healthy following several years of cumulative rate increases. We continue to see pressure in lines such as US large property and E&S. While financial lines in cyber are showing signs of stabilization as the market responds to increasing claim complexity and emerging AI-driven threats. Casualty rates continue to increase, reflecting persistent loss cost trends.

Speaker #4: In Life, protection growth reached double digits, well ahead of our targets, and our Farmers policy count growth continues to build, with the exchanges gaining market share for the first time in a decade.

Mario Greco: In our Farmers segment, policy count growth continues to build, with the exchanges gaining market share for the first time in a decade. Lastly, today’s results reinforce our confidence in meeting or exceeding our 2027 financial targets. We continue to see attractive growth opportunities across our business, supported by structural trends such as investment in air infrastructure and rising demand for protection solutions. Now, let me briefly touch on the performance across our key business segments. As usual, I’ll start with Property & Casualty. Gross written premiums grew 7% to nearly $30 billion, with an all-time high operating profit of $2.8 billion, up 16% year-on-year. The combined ratio was an excellent 92.7%, reflecting the strength of our underwriting and active portfolio management. Within Commercial Property & Casualty, specialty remains a key growth area, with premiums up 8% and an underlying combined ratio of 91.2%.

Speaker #1: And this supports our leadership position. We currently lead on around 70% of our underwritten data center projects. Within our customer segments, middle market also continued to perform strongly, with premiums up 7%, driven by growth in Germany, Italy, and France, and targeted expansion in the US.

Speaker #4: And lastly, today's results reinforce our confidence in meeting or exceeding our 2027 financial targets. We continue to see attractive growth opportunities across our business, supported by structural trends such as investment in AI infrastructure and rising demand for protection solutions.

Speaker #4: Now, let me briefly touch on the performance across our key business segments. And as usual, I start with property and casualty. Gross written premiums grew 7% to nearly 30 billion US dollars, with an all-time 2.8 billion US dollars.

Speaker #1: Across our commercial portfolio, margins remain healthy, following several years of cumulative rate increases. We continue to see pressure in line science, such as US large property and ENS.

Speaker #1: While financial lines and cyber are showing signs of stabilization, as the market response to increasing claim complexity and emerging AI-driven threats. Casualty rates continue to increase, reflecting persistent loss-cost trends.

Speaker #4: Up 16% year on year. Combined ratio was an excellent 92.7%, reflecting the strength of our underwriting and active portfolio management. Within commercial property and casualty, specialty remains a key growth area, with premiums up 8% and an underlying combined ratio of 91.2%.

Speaker #1: Importantly, the breadth of our portfolio across geographies, products, and customer segments give us the flexibility to dynamically manage our portfolio through different market cycles.

Mario Greco: Importantly, the breadth of our portfolio across geographies, products, and customer segments give us the flexibility to dynamically manage our portfolio through different market cycles. Nat Cat losses remain low at 1.9% of combined ratio, reflecting actions we have taken over recent years to reduce Cat exposure in our portfolio. In terms of the recent wildfire events in Central Europe, we currently do not see a material impact on our results. You will have seen in our materials from this morning that the Prior Year Development contributed 2.4 points to the combined ratio, somewhat above our usual level. We expect PYDs to remain modestly elevated in the near term, supported by positive experience from short-tail lines, particularly from EMEA property, where we took a conservative approach following the inflation spike in 2022.

Speaker #4: Construction was a particular strength, growing 18%, supported by demand from AI-related infrastructure not just in the US but around the globe. This is an area where our risk engineering, underwriting expertise, and global capabilities—such as our fully integrated global industry vertical and ZRS expertise—give us a meaningful competitive advantage.

Mario Greco: Construction was a particular strength, growing 18%, supported by demand from AI-related infrastructure not just in the US, but around the globe. This is an area where our risk engineering and underwriting expertise, as well as our global capabilities—such as our fully integrated global industry vertical and ZRS expertise—give us a meaningful competitive advantage. This supports our leadership position; we currently lead on around 70% of our underwritten data center projects. Within our customer segments, middle market also continued to perform strongly, with premiums up 7%, driven by growth in Germany, Italy, and France, and targeted expansion in the US. Across our commercial portfolio, margins remain healthy following several years of cumulative rate increases. We continue to see pressure in lines such as US large property and E&S, while financial lines and cyber are showing signs of stabilization as the market responds to increasing claim complexity and emerging AI-driven threats.

Speaker #1: NATCAT losses remain low at 1.9% of combined ratio. Reflecting actions, we have taken over recent years to reduce CAT exposure in our portfolio. In terms of the recent wildfire events in Central Europe, we currently do not see a material impact on our results.

Speaker #1: You will have seen in our materials from this morning that the prior year development contributed 2.4 points to the combined ratio, somewhat above our usual level.

Speaker #4: And this supports our leadership position. We currently lead on around 70% of our underwritten data center projects. Within our customer segments, middle market also continued to perform strongly, with premiums up 7%, driven by growth in Germany, Italy, and France, and targeted expansion in the US.

Speaker #1: We expect PYDs to remain modestly elevated in the near term, supported by positive experience from short tail lines, particularly from EMEA property, where we took a conservative approach following the inflation spike in 2022.

Speaker #4: Across our Commercial portfolio, margins remain healthy, following several years of cumulative rate increases. We continue to see pressure in lines such as US large property and E&S.

Speaker #1: In addition, the 2025 accident year has developed a very favorably for global travel and for our US crop business. Our approach to long tail lines remains unchanged, and we continue to carefully monitor trends in casualty given continuing social inflation.

Mario Greco: In addition, the 2025 accident year has developed very favorably for global travel and for our US crop business. Our approach to long-tail lines remains unchanged, and we continue to carefully monitor trends in casualty given continuing social inflation. On retail property and casualty, the operating profits grew 14% year-on-year. The underlying combined ratio improved by a further 60 basis points to 94.6%. Rates remain positive, and we continue to see improvements in motor and property, supported by investment in pricing and claims. In EMEA motor, for example, the combined ratio has improved by more than five points over the last two years to a healthy 96.2%, close to our longer-term ambition of operating below 96. Turning to life now. Business delivered a record operating profit of $1.3 billion. It is up 16% on a like-for-like basis.

Speaker #4: While financial lines and cyber are showing signs of stabilization, as the market responds to increasing claim complexity and emerging AI-driven threats, casualty rates continue to increase, reflecting persistent loss-cost trends.

Speaker #1: On retail, property and casualty, the operating profits grew 14% year-on-year, and the underlying combined ratio improved by a further 60 basis points to 94.6%.

Mario Greco: Casualty rates continue to increase, reflecting persistent loss cost trends. Importantly, the breadth of our portfolio—across geographies, products, and customer segments—gives us the flexibility to dynamically manage our portfolio through different market cycles. Net CAT losses remain low at 1.9% of the combined ratio, reflecting actions we have taken over recent years to reduce CAT exposure in our portfolio. In terms of the recent wildfire events in Central Europe, we currently do not see a material impact on our results. You will have seen in our materials from this morning that Prior Year Development contributed 2.4 points to the combined ratio, somewhat above our usual level. We expect PYDs to remain modestly elevated in the near term, supported by positive experience from short-tail lines, particularly from EMEA property, where we took a conservative approach following the inflation spike in 2022.

Speaker #4: Importantly, the breadth of our portfolio across geographies, products, and customer segments gives us the flexibility to dynamically manage our portfolio through different market cycles.

Speaker #1: Rates remain positive, and we continue to see improvements in motor and property. Supported by investment in pricing and claims. In EMEA motor, for example, the combined ratio has improved by more than 5 points, over the last 2 years to a healthy 96.2%, close to our longer-term ambition of operating below 96.

Speaker #4: NatCat losses remain low at 1.9% of the combined ratio, reflecting actions we have taken over recent years to reduce CAT exposure in our portfolio. In terms of the recent wildfire events in Central Europe, we currently do not see a material impact on our results.

Speaker #1: Turning to life now, business delivered a record operating profit of 1.3 billion US dollars. It is up 16% on a like-for-like basis. We're particularly encouraged by the pace of growth we're seeing in protection, where premiums grew 10% ahead of our targets.

Speaker #4: You will have seen in our materials from this morning that the prior year development contributed 2.4 points to the combined ratio, somewhat above our usual level.

Mario Greco: We're particularly encouraged by the pace of growth we're seeing in protection, where premiums grew 10% ahead of our targets. Growth was supported by strong performance in the UK, Australia, and Latin America. Where we saw continued expansion in our bancassurance partnerships, in our joint venture with Centum, they are returning to volume growth. Beyond protection, both our savings and unit-linked businesses contributed to earnings growth, benefiting from strong customer inflows and favorable financial market impacts. As a result of this, we're raising our life profit guidance for the year. Looking ahead, we see significant opportunity to grow protection further as we continue to help customers address their increasing needs for protection and health solutions. Now Farmers. Farmers delivered its strongest H1 ever with operating profit of $1.2 billion.

Speaker #4: We expect PYDs to remain modestly elevated in the near term, supported by positive experience from short-tail lines, particularly from EMEA property, where we took a conservative approach following the inflation spike in 2022.

Speaker #1: Growth was supported by strong performance in the UK, Australia, and Latin America, where we saw continued expansion in our bank assurance partnerships and our joint venture with Santander returning to volume growth.

Speaker #4: In addition, the 2025 accident year has developed very favorably for Global Travel and for our U.S. Crop business. Our approach to long-tail lines remains unchanged, and we continue to carefully monitor trends in casualty, given continuing social inflation.

Mario Greco: In addition, the 2025 accident year has developed very favorably for Global Travel and for our US Crop business. Our approach to long-tail lines remains unchanged, and we continue to carefully monitor trends in casualty, given continuing social inflation. On Retail Property and Casualty, the operating profits grew 14% year-on-year, and the underlying combined ratio improved by a further 60 basis points to 94.6%. Rates remain positive, and we continue to see improvement in motor and property, supported by investment in pricing and claims. In EMEA motor, for example, the combined ratio has improved by more than 5 points over the last two years to a healthy 96.2%, close to our longer-term ambition of operating below 96%. Turning to Life now, the business delivered a record operating profit of $1.3 billion. It is up 16% on a like-for-like basis.

Speaker #1: Beyond protection, both our savings and unit-linked businesses contributed to earnings growth, benefiting from strong customer inflows and favorable financial market impacts. As a result of this, we're raising our life profit guidance for the year looking ahead.

Speaker #1: We see significant opportunity to grow protection further as we continue to help customers address their increasing needs for protection and health solutions. And now, farmers.

Speaker #4: On retail property and casualty, operating profits grew 14% year-on-year, and the underlying combined ratio improved by a further 60 basis points to 94.6%.

Speaker #1: Farmers delivered the strongest half-year ever with operating profit of US 1.2 billion dollars. The exchanges grew premiums by 4% and are organically gaining market share for the first time in more than a decade.

Speaker #4: Rates remain positive, and we continue to see improvement in motor and property, supported by investment in pricing and claims. In EMEA motor, for example, the combined ratio has improved by more than 5 points over the last two years to a healthy 96.2%, close to our longer-term ambition of operating below 96.

Mario Greco: The exchanges grew premiums by 4% and are organically gaining market share for the first time in more than a decade. This represents a key milestone and is a testament to the successful transformation that the team has executed on since 2023. The exchanges are now operating from a position of strength with an industry-leading combined ratio of 82.4% and a surplus ratio of 58.7%. Looking ahead, we expect its exchanges to benefit further from key initiatives to enhance agent productivity alongside a newly launched brand campaign. To summarize, we are just at the midpoint of our three-year financial plan. We announced it at our investor day back in 2024, and today we're pleased with the progress we're making. The strong momentum we're seeing in our H1 result reinforces our confidence in meeting or exceeding all our 2027 targets. Thank you very much for your attention.

Speaker #1: This represents a key milestone and is a testament to the successful transformation that the team has executed on since 2023. The exchanges are now operating from a position of strength, with an industry-leading combined ratio of 82.4% and a surplus ratio of 58.7%.

Speaker #4: Turning to life now, the business delivered a record operating profit of $1.3 billion. This is up 16% on a like-for-like basis. We're particularly encouraged by the pace of growth we're seeing in Protection, where premiums grew 10%, ahead of our targets.

Mario Greco: We're particularly encouraged by the pace of growth we're seeing in Protection, where premiums grew 10% ahead of our targets. Growth was supported by strong performance in the UK, Australia, and Latin America, where we saw continued expansion in our bancassurance partnerships and our joint venture with Santander returning to volume growth. Beyond Protection, both our Savings and Unit-linked businesses contributed to earnings growth, benefiting from strong customer inflows and favorable financial market impacts. As a result, we are raising our life profit guidance for the year. Looking ahead, we see significant opportunity to grow Protection further as we continue to help customers address their increasing needs for protection and health solutions. Now, Farmers. Farmers delivered its strongest half year ever, with operating profit of $1.2 billion.

Speaker #1: Looking ahead, we expect exchanges to benefit further from key initiatives to enhance agent productivity, alongside a newly launched brand campaign. So, to summarize, we are just at the midpoint of our 3-year financial plan.

Speaker #4: Growth was supported by strong performance in the UK, Australia, and Latin America, where we saw continued expansion in our bancassurance partnerships and our joint venture with Santander returning to volume growth.

Speaker #1: We announced it at our investor day back in 2024, and today we're pleased with the progress we're making. The strong momentum we're seeing in our first-half result reinforces our confidence in meeting or exceeding all our 2027 targets.

Speaker #4: Beyond protection, both our savings and unit-linked businesses contributed to earnings growth, benefiting from strong customer inflows and favorable financial market impacts. As a result of this, we're raising our life profit guidance for the year, looking ahead with a significant opportunity to grow protection further as we continue to help customers address their increasing needs for protection and health solutions.

Speaker #1: Thank you very much for your attention, and now, Claudio and I are happy to take your questions.

Mario Greco: Now Claudia and I are happy to take your questions.

Speaker #2: We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their telephone. You will hear a tone to confirm that you have entered the queue.

Operator: We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star, then two. Participants are requested to use only handsets while asking a question. Kindly limit yourself to two questions only. Anyone who has a question may press star and one at this time. The first question from Michael Huttner, Berenberg. Please go ahead.

Speaker #4: And now, Farmers. Farmers delivered the strongest half-year ever with operating profit of $1.2 billion. The exchanges grew premiums by 4%, and are organically gaining market share for the first time in more than a decade.

Speaker #2: If you wish to remove yourself from the question queue, you may press star, then 2. Participants are requested to use only handsets while asking a question.

Mario Greco: The Exchanges grew premiums by 4% and are organically gaining market share for the first time in more than a decade. This represents a key milestone and is a testament to the successful transformation that the team has executed on since 2023. The Exchanges are now operating from a position of strength, with an industry-leading combined ratio of 82.4% and a surplus ratio of 58.7%. Looking ahead, we expect the Exchanges to benefit further from key initiatives to enhance agent productivity, alongside a newly launched brand campaign. To summarize, we are just at the midpoint of our three-year financial plan. We announced it at our Investor Day back in 2024, and today we're pleased with the progress we are making. The strong momentum we're seeing in our H1 results reinforces our confidence in meeting or exceeding all our 2027 targets.

Speaker #2: Kindly limit yourself to 2 questions only. Anyone who has a question may press star and 1 at this time. The first question from Michael Huttner, Berenberg.

Speaker #4: This represents a key milestone and is a testament to the successful transformation that the team has executed on since 2023. The exchanges are now operating from a position of strength, with an industry-leading combined ratio of 82.4% and a surplus ratio of 58.7%.

Speaker #2: Please go ahead.

Speaker #3: Fantastic. Thank you. And well done on the results, but I'm really sorry. I want to focus on Beasley and only have 2 questions. On Beasley, my 2 questions are the following.

Michael Huttner: Fantastic. Thank you. Well done on the results. I'm really sorry, I want to focus on Beazley. I only have two questions. On Beazley, my two questions are the following. One, is there any update on the timing for the completion of the deal? Whether we're September, October or earlier or later, or are there any milestones we have to think about? The second is also on Beazley. This one you might choose to say, "Well, we can't answer." The results yesterday, the day before, were possibly a little bit less strong than we had hoped. Obviously, it's not a very actively followed stock anymore with a fire combined ratio which worsened by 12%. I just wondered if that's changed any of your kind of thoughts about ROE enhancement, ROI return, whatever. Thank you.

Speaker #3: One, could you is there any update on the timing for the completion of the deal? Whether we're September, October, or earlier or later, or are there any milestones we have to think about?

Speaker #4: Looking ahead, we expect exchanges to benefit further from key initiatives to enhance agent productivity, alongside a newly launched brand campaign. So, to summarize, we are just at the midpoint of our three-year financial plan.

Speaker #3: And then the second is, also on Beasley, this you might choose to say, well, we can't answer, but the results yesterday, the day before, were possibly a little bit less strong than we had hoped, obviously.

Speaker #4: We announced it at our Investor Day back in 2024, and today we're pleased with the progress we're making. The strong momentum we're seeing in our first-half results reinforces our confidence in meeting or exceeding all our 2027 targets.

Speaker #3: It's not a very actively followed stock anymore. With a cyber combined ratio, which worsened by 12%, and I just wondered if that's changed any of your kind of thoughts about ROE enhancement, ROI return, whatever.

Speaker #4: Thank you very much for your attention, and now Claudia and I are happy to take your questions.

Mario Greco: Thank you very much for your attention. Now, Claudia and I are happy to take your questions.

Speaker #3: Thank you.

Speaker #2: We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their telephone. You will hear a tone to confirm that you have entered the queue.

Speaker #1: Thank you, Michael. It's interesting that you start with the first question after Adrian said that we're not taking questions from Beasley. And that's 2 questions.

Operator 2: We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star then two. Participants are requested to use only handsets while asking a question. Kindly limit yourself to two questions only. Anyone who has a question may press star and one at this time. The first question is from Michael Huttner, Berenberg. Please go ahead.

Mario Greco: Hey, Michael. It's interesting that you start with the first question after Adrian said that we're not taking questions from Beazley. That's two questions. Look, on the timing, I don't know. We are in the process. We got approval by a number of jurisdictions, but not all of them. I would say that this is a Q4 event. Now where in the Q4, it's hard to say. There are no issues, no delays. It's just that it takes time. On the results, we have nothing to say because we don't know anything. We can't comment on something that we have no information about.

Speaker #1: So, look, on the timing, I don't know. I mean, we are in the process. We got approval by a number of jurisdictions, but not all of them.

Speaker #2: If you wish to remove yourself from the question queue, you may press star, then two. Participants are requested to use only handsets while asking a question.

Speaker #1: I would say that this is a Q4 event. Now, we're in the Q4. It's hard to say. There are no issues, no delays. It's just that it takes time.

Speaker #2: Kindly limit yourself to two questions only. Anyone who has a question may press star and one at this time. The first question from Michael Hattner, Berenberg.

Speaker #1: On the results, we have nothing to say because we have really nothing we don't know anything. And so we can comment on something that we have no information about.

Speaker #2: Please go ahead.

Speaker #1: Fantastic, thank you. And well done on the results. But I’m really sorry—I want to focus on Beasley and only have two questions. On Beasley, my two questions are the following.

Michael Huttner: Fantastic, thank you. Well done on the results. I'm really sorry—I want to focus on Beazley. I only have two questions. On Beazley, my two questions are the following: One, is there any update on the timing for the completion of the deal, whether we're talking September, October, or earlier or later? Or are there any milestones we have to think about? The second is also on Beazley—this one you might choose to say, well, we can't answer. The results yesterday, the day before, were possibly a little bit less strong than we had hoped. Obviously, it's not a very actively followed stock anymore, with a fire combined ratio which worsened by 12%. I just wondered if that's changed any of your thoughts about ROE enhancement, ROI return, whatever. Thank you.

Speaker #3: Perfect. Thank you.

Michael Huttner: Perfect. Thank you.

Speaker #1: Yeah, you're welcome.

Mario Greco: Yeah. You're welcome.

Speaker #1: First, could you give us any update on the timing for the completion of the deal? Whether we're talking September, October, earlier or later—or are there any milestones we should be thinking about?

Speaker #2: The next question is from Fahad Changazi, Kepler Chevreux. Please go ahead.

Operator: The next question is from Fahad Changazi, Kepler Cheuvreux. Please go ahead.

Speaker #4: Hello. Thank you for taking my questions. On North American rates, minus 1% and Q1 26 was flat. And I believe the outlook has changed from stabilizing to moderating, I suppose.

Fahad Changazi: Hello. Thank you for taking my questions. On North American rates, the -1% and Q1 2026 was flat. I believe the outlook has changed from stabilizing to moderating. You'd already talked about some third business lines. Could you just talk about in terms of the outlook then versus now and what's changed? I was wondering if you could also talk a little bit more about your specialty business, and where rates are developing. You highlight some segments that you've cut back and one other segment that you have increased premiums. If you could just talk around those different aspects of specialty as well, please. Thank you.

Speaker #1: And then the second is also on Beasley, and for this one you might choose to say, well, we can't answer. But the results yesterday, or the day before, were possibly a little bit less strong than we had hoped, obviously.

Speaker #4: Could you just put a bit more you already talked about some business lines, but could you just talk about in terms of the outlook then versus now, and what's changed?

Speaker #1: It's not a very actively followed stock anymore. With a cyber combined ratio, which worsened by 12%, I just wondered if that's changed any of your thoughts about ROE enhancement, ROI return, whatever.

Speaker #4: And I was wondering if you could also talk a little bit more about specialty your specialty business, and where rates are developing. You highlight some segments where you've cut back at some and one other segment that you have increased premiums.

Speaker #1: Thank you.

Speaker #3: Thank you, Michael. It's interesting that you start with the first question after Adrian said that we're not taking questions from Beasley. And that's two questions.

Mario Greco: Hey, Michael. It's interesting that you start with the first question after Adrienne said that we're not taking questions from Beazley, and that's two questions. Look, on the timing, I don't know. We are in the process; we got approval by a number of jurisdictions, but not all of them. I would say that this is a Q4 event. Where in Q4, it's hard to say. There are no issues, no delays; it's just that it takes time. On the results, we have nothing to say because we have really nothing. We don't know anything, we can't comment on something that we have no information about.

Speaker #4: But if you just talk around this different aspects of specialty as well, you.

Speaker #1: Yeah. So, look, on the rates, and in particular the US rates, the rates in the second quarter have been very positive double-digit positive on a specialty.

Mario Greco: Yeah. Look, on the rates, in particular the US rates, the rates in Q2 have been very positive, double digits positive on specialty. They've been high single digits positive on liability and motor. As in all the past years, have been close to flat on workers' comp. They've been negative on property. Property remains negative in the rounding of 10%. That's the composition. With respect to Q1, specialty has improved, motor and liability have stayed on the same levels. Property has slightly worsened. Workers' comp is practically unchanged. That's the situation on the North American grades. The rates are slightly better or are better in EMEA. This is probably structural characteristic. The market is less competitive. It's not just a lag in transmission. It is just rates in EMEA are structurally higher than the ones in the US.

Speaker #3: So, look, on the timing, I don't know. I mean, we are in the process. We got approval by a number of jurisdictions, but not all of them.

Speaker #3: I would say that this is a Q4 event. Now, we're in Q4. It's hard to say. There are no issues, no delays—it's just that it takes time.

Speaker #1: They've been high single-digit positive on liability and motor as in all the past years, have been close to flat on workers' comp. And they've been negative on property.

Speaker #3: On the results, we have nothing to say because we really have nothing; we don't know anything. And so we can't comment on something that we have no information about.

Speaker #1: Property remains negative in the rounding of 10%. That's the composition. Respect, I would respect to Q1, specialty has improved. Motor and liability have stayed on the same levels.

Speaker #1: Perfect. Thank you.

Michael Huttner: Perfect. Thank you.

Speaker #3: Yeah. You're welcome.

Mario Greco: Yeah. You're welcome.

Speaker #2: The next question is from Fahad Chagazi, Kepler Chevreux. Please go ahead.

Operator 2: The next question is from Fahad Changezi, Kepler Cheuvreux. Please go ahead.

Speaker #5: Hello. Thank you for taking my questions. On North American rates, minus 1%, and Q1 at 26 was flat. And I believe the outlook has changed from stabilizing to moderating.

Fahad Changezi: Hello. Thank you for taking my questions. On North American rates, minus 1% and Q1 2026 was flat. I believe the outlook has changed from stabilizing to moderating. I suppose—could you just put a bit more, you've already talked about some business lines, but could you just talk about, in terms of the outlook then versus now, what's changed? I was wondering if you could also talk a little bit more about your specialty business and where rates are developing. You highlight some segments where you've cut back, and one other segment that should have increased premiums. If you could just talk around the different aspects of specialty as well, please. Thank you.

Speaker #1: Property has slightly worsened. And workers' comp is practically unchanged. So that's the situation on the North American rates. The rates have slightly better or are better in EMEA.

Speaker #5: I suppose—could you just elaborate a bit more? You already talked about some third business lines, but could you discuss, in terms of the outlook then versus now, what's changed?

Speaker #1: And this is probably structural characteristic. The market is less competitive. So it's not just a lag in transmission. It is just rates in EMEA are structurally higher than the ones in the US.

Speaker #5: And I was wondering if you could also talk a little bit more about your specialty business, and where rates are developing. You highlighted some segments where you've cut back, and one other segment where you have increased premiums.

Speaker #5: But if you could just talk around those different aspects of specialty as well, please. Thank you.

Speaker #3: Yeah. So look, on the rates—in particular, the US rates—the rates in the second quarter have been very positive, double-digit positive on Specialty.

Mario Greco: You asked about specialty, but what particular angle of specialty do you want me to answer you on? On rate or on the volumes?

Mario Greco: Yeah. Look, on the rates, in particular the US rates, the rates in the Q2 have been very positive, double digits positive on specialty. They've been high single digits positive on liability and motor. As in all the past years, have been close to flat on workers' comp, and they've been negative on property. Property remains negative in the rounding of 10%. That's the composition. With respect to Q1, specialty has improved. Motor and liability have stayed on the same levels. Property has slightly worsened, and workers' comp is practically unchanged. That's the situation on the North American rates. The rates are slightly better, or are better in EMEA, and this is probably structural characteristic. The market is less competitive, so it's not just a lag in transmission. It is just rates in EMEA are structurally higher than the ones in the US.

Speaker #1: Then you ask about specialty, but what particular angle of specialty do you want me to answer you on? On rates or on the volumes?

Mario Greco: You asked about specialty, but what particular angle of specialty do you want me to answer you on? On rate or on the volumes?

Speaker #3: Malika.

Fahad Changazi: Well, I suppose you can do both. If you could also segment between the large specialty business and the middle market specialty business as well.

Speaker #4: Yeah, I suppose you can do both. And if you could just also segment between the large specialty business and the middle market specialty business as well.

Speaker #3: They've been high single-digit positive on liability and motor, as in all the past years; they have been close to flat on workers' comp, and they've been negative on property.

Speaker #1: Yeah. So on specialty, of course, the predominant component in our results is what the construction and infrastructure vertical does. This has been the highest source of growth.

Mario Greco: On specialty, of course, the predominant component in our results is what the construction and infrastructure vertical does. This has been the highest source of growth, and it is also probably the most rewarding one for us in terms of margins. E&S has performed slightly better than it did in the past years, but it remains for us an area of careful underwriting. Financial lines, as Claudia said I think a number of times already, is showing some improvements in the rates and in the margins. Energy remains a growth area for us and quite stable. As it happens every number of years, we got some losses in surety for some of the exposures that we had now related with construction and infrastructures. On cyber, we see a market which we expect now to turn into better. The rest of specialty for us is insignificant.

Speaker #3: Property remains negative in the rounding of 10%. That’s the composition. With respect to Q1, specialty has improved. Motor and liability have stayed at the same levels.

Speaker #1: And it's also probably the most rewarding one for us in terms of margins. E&S has performed slightly better than it did in the past years.

Speaker #3: Property has slightly worsened, and workers' comp is practically unchanged. So that's the situation on the North American rates. The rates are slightly better, or are better, in NAMIA.

Speaker #1: But they remain for us an area of careful underwriting. Financial lines is showing as Claudio said, I think a number of times already showing some improvements.

Speaker #3: And this is probably a structural characteristic. The market is less competitive, so it's not just a lag in transmission; it is just that rates in Namibia are structurally higher than the ones in the US.

Speaker #1: And the rates and then the margins, energy remains a growth area for us and quite stable. We got some as it happens every number of years.

Speaker #1: So we got some losses in surety. For some of the exposures that we had, not related with the construction and infrastructures, and on cyber, we see a market which we expect now to turn into better.

Speaker #3: Then you ask about specialty, but what particular angle of specialty do you want me to answer you on—on rates or on the volumes?

Mario Greco: You ask about specialty, but what particular angle of specialty do you want me to answer on? On rates, or on the volumes?

Speaker #1: Malika, I suppose

Fahad Changezi: Well, I suppose you can do both. If you could also segment between the large specialty business and the middle market specialty business as well, that would be helpful.

Speaker #5: You can do both. And if you could also segment between the large specialty business and the middle market specialty business as well.

Speaker #1: The rest of specialty for us is insignificant.

Speaker #5: If I may add, implicit in Mario's comment, there's also the geography. Aspect, right? It's great to see that the growth is broad-based. So it's not a US topic only.

Claudia Cordioli: If I may add, implicit in Mario's comment, there is also the geography aspect, right? It is great to see that the growth is broad-based, so it is not a US topic only.

Speaker #3: Yes, so on specialty, of course, the predominant component in our results is what the construction and infrastructure vertical does. This has been the highest source of growth.

Mario Greco: Yes. On specialty, of course, the predominant component in our results is what the Construction and Infrastructure vertical does. This has been the highest source of growth, and it's also probably the most rewarding one for us in terms of margins.

Mario Greco: Yeah.

Claudia Cordioli: As you were rightly pointing out, there is some overlap as well between middle market and specialty. Roughly one-third of specialty is done with middle market customers, and this is a big driver of growth in the European markets as well. The UK has been traditionally leading, but what we are seeing now becoming more and more prominent is continental Europe. There's a number of, beyond data centers, infrastructure projects, very large projects in the energy field, which need a lot of insurance support. We're very happy to be growing there. It's double digits in Germany, in Italy, France, Benelux on a smaller basis. Those are great markets for us, and we are very well positioned to be growing there.

Speaker #5: As you were rightly pointing out, there is some overlap as well between middle market and specialties for roughly one-third of specialty is done with middle market customers.

Speaker #5: And this is a big driver of growth in the European markets as well. So the UK has been traditionally leading, but what we are seeing now becoming more and more prominent is continental Europe.

Speaker #5: There's a number of beyond data centers infrastructure projects very large projects in the energy field. Which need a lot of insurance support. So we are very happy to be growing there.

Speaker #5: It's double-digit in Germany, in Italy, France, Benelux, on a smaller basis. So those are great markets for us. And we are very well positioned to be growing there.

Speaker #4: Great. Thank you.

Fahad Changazi: Great. Thank you.

Speaker #2: The next question from Ian Pierce, BNP Paribas. Please go ahead.

Operator: The next question from Iain Pearce, BNP Paribas. Please go ahead.

Speaker #6: Hi. Afternoon. Thanks for taking my questions. The first one was just if you could talk a little bit particularly about the commercial access and your combined ratio XCAT trend.

Iain Pearce: Hi. Afternoon. Thanks for taking my questions. The first one was just if you could talk a little bit specifically about the commercial accident year combined ratio ex-CAT trend. That was 120 basis points higher year on year. Could you talk a little bit about how you're expecting that number to trend, and if you think that the retail improvements can offset that? On the expense ratio, obviously, that was quite a bit higher year on year as well. You flagged business mixing and commission impact, but when I look, it looks as if the expense ratio has basically gone up in all regions ex-APAC and in both the retail and commercial division. I was just trying to see if there's anything else to flag in the expense ratio trend across the different segments. Thank you.

Speaker #6: So that was 120 basis points higher. Year on year. Could you talk a little bit about how you're expecting that number to trend? And if you think that the retail improvements can offset that.

Speaker #6: And then on the expense ratio, obviously that was quite a bit higher year on year as well. You flagged business mix and commission impact.

Speaker #6: But when I look, it looks as if the expense ratio is basically gone up in all regions X APAC. And in both the retail and commercial divisions.

Speaker #6: So it's just trying to see if there's anything else to flag in the expense ratio trend across the different segments. Thank you.

Speaker #1: Yeah. So I'll start the interview with the expense ratio and then Claudia will continue on the combined ratio commercial and retail. Look, on the expense ratio, there are two things that are happening.

Mario Greco: Yeah. I'll start, Iain, with the expense ratio. Claudia will continue on the combined ratio, commercial and retail. Look, on the expense ratio, there are two things that are happening. The pure expenses, we're very confident that you see them by year-end coming down. We're still confident that we're going to show by year-end, and then in the next year, a reduction of the pure expenses component into this. On the commission side, however, that reflects the business mix, and reflects partially the different composition of the premiums that we are reporting in our portfolio. Now, we will carefully manage it over time, making sure that this doesn't worsen further. In a sense, this is also a more stable business mix for us. It's a more encouraging business mix on the margins than the one with a lower commission ratio.

Speaker #1: The pure expenses we are very confident that you'll see them by year-end coming down. And so we're still confident that we're going to show by year-end and then in the next year, a reduction of the pure expenses component into this.

Speaker #1: On the commission side, however, that reflects the business mix. And reflects partially the different composition of the premiums that we are reporting in our portfolio.

Speaker #1: Now, we will carefully manage it over time, making sure that this doesn't worsen further. But in a sense, this is also a more stable business mix for us.

Speaker #1: It's a more encouraging business mix on the margins. Than the one with a lower commission ratio. There are products like travel, but also F&I, which do have a higher commission ratios but then they offer us an important benefits on customer loyalty and in profitability of the relationship.

Mario Greco: There are products like travel, also F&I, which do have higher commission ratios. They offer us important benefits on customer loyalty and in profitability of the relationship. Is that enough on the expenses and commissions, or can I move to Claudia?

Speaker #1: Is that enough on the expenses and commissions or can I move to Claudio?

Speaker #6: Yeah, that's clear. Thank you.

Iain Pearce: Yeah, that's clear. Thank you.

Speaker #1: Yeah.

Mario Greco: Yeah.

Speaker #5: So thank you. Thank you, Mario. On the loss ratio, I mean, just to give you some context, out of the year on year, move on the combined ratio, two-third is loss ratio and one-third is the commission, essentially the commission point that Mario already mentioned.

Claudia Cordioli: Thank you, Mario. On the loss ratio, just to give you some context, out of the year-on-year move on the combined ratio, two-thirds is loss ratio and one-third is essentially the commission point that Mario already mentioned. The year-on-year worsening on the loss ratio, while it's there, it's 80 basis points. In the context of a book that's growing 7%, being able to maintain this business mix and this level of margin. Sorry, let me reiterate that because I think it kind of comes across as if it were obvious, it's not. There's a lot of proactive portfolio management that's done to keep a portfolio of this size growing at 7% at 91 combined. Important that we reiterate that. In terms of the loss ratio changes, there's a bit of a mix impact there as well.

Speaker #5: So the year-on-year worsening on the loss ratio while it's there, it's 80 basis points. So in the context of a book that's growing 7%, being able to maintain this piece of this business mix and this level of margin is really and sorry, let me reiterate that because I think it kind of comes across as if it were obvious is not, right?

Speaker #5: There's a lot of proactive portfolio management that's done to keep a portfolio of this size growing 7% at 91 combined. So important that we reiterate that.

Speaker #5: So in terms of the loss ratio changes, there's a bit of a mix impact there as well. So obviously the rates movement in properties such that we are growing less in property and here and there we are also proactively pruning some business where rates are no longer adequate.

Claudia Cordioli: Obviously the rates movement in property is such that we are growing less in property, and here and there, we are also proactively pruning some business where rates are no longer adequate. That is also visible, obviously, in the loss ratio. There are a few losses, as Mario was mentioning. It is very pointed on the surety book or the underwriting years, but it is coming through the accident year. Some relatively small in the context of the overall books, but there are a number of factors coming together. The volumes, property, some very specific losses coming through. We want to continue to grow the book, in our target and strategic areas. The combined ratio might move slightly from here. Obviously, we have a very strong focus on expenses, as you know, and we continue to have it going forward.

Speaker #5: So that's also visible obviously in the loss ratio. There are a few losses as Mario was mentioning. I mean, it's very pointed on the surety book or the underwriting years, but it's coming through the accident year.

Speaker #5: So some relatively small in the context of the overall book, but there are a number of factors coming together. So the volumes, property, some very specific losses coming through.

Speaker #5: We want to continue to grow the book in our target and strategic areas. The combined ratio might move slightly from here. Obviously, we have a very strong focus on expenses, as you know, and we'll continue to have it going forward.

Speaker #5: But we are happy about the context of the book as a whole and where it's going. As long as we are growing at this rate with this type of margins and profitability.

Claudia Cordioli: We are happy about the context of the book as a whole and where it is going, as long as we are growing at this rate with this type of margins and profitability.

Mario Greco: Can I add a comment? Because not many of you have been around in 2018, 2019, but I was there, and at the time, there was a similar discussion where some of your colleagues were asking us, what about for the reduction of the combined ratio, we are saying we are targeting EPS growth and BOP growth. We are not targeting low combined ratios. We are running targets for targets which are on BOP and EPS, and this is what we want to achieve. We are not in a race to have the lowest possible combined ratio, no matter what the BOP and the EPS are. Please be mindful of this because, otherwise, you do not understand what we are trying to do here.

Speaker #1: And can I add a comment? Because not many of you have been around in 2018, 2019. But I was there. And at the time, there was a similar discussion when where some of your colleagues were asking us, what about for the reduction of the combined ratio?

Speaker #1: We're saying, we're targeting EPS growth and BOP growth. We're not targeting low combined ratios. We're running targets for targets, which are on BOP and EPS.

Speaker #1: And this is what we want to achieve. We're not in a race to have the lowest possible combined ratio no matter what the BOP and the EPS are.

Speaker #1: So please be mindful of this because otherwise, you don't understand what we're trying to do here.

Speaker #5: And the growth maybe that might be a related question on this, right? The growth that we are pursuing just to be very clear on that point as well is mostly growth that's coming through very profitable, mostly short-tail lines, right?

Claudia Cordioli: The growth, that might be a related question on this. The growth that we are pursuing, just to be very clear on that point as well, is mostly growth that is coming through very profitable, mostly short tail lines. We are not, just again, to reiterate, we are not making compromises on the underwriting discipline. We are not taking long-term bets on casualty. We are not growing casualty, in fact, on a net basis. We are not taking bets on future social inflation trends. We want to grow the book in the lines that are mostly profitable, and they happen mostly to be short tail, specifically in the specialty middle market area.

Speaker #5: So we are not just again to reiterate, we're not making compromises on the underwriting discipline. We're not taking long-term bets on casualty. We're not growing casualty.

Speaker #5: In fact, on a net basis, right? So we are not taking bets on future social inflation trends. We want to grow the book in the lines that are mostly profitable.

Speaker #5: And they happen mostly to be short-tail specifically in the specialty and middle market area.

Speaker #6: Greatly. Thank you.

Iain Pearce: Very clear. Thank you.

Speaker #4: The next question from William Hawkins, KBW. Please go ahead.

Operator: The next question from William Hawkins, KBW. Please go ahead.

Speaker #7: Hi, Mario and Claudia. Thank you very much. Could you first talk about any major issues you want us to be aware of in terms of seasonality or sequential change when we think about 2H versus 1H?

William Hawkins: Hi, Mario and Claudia. Thank you very much. Could you first talk about any major issues you want us to be aware of in terms of seasonality or sequential change when we think about H2 versus H1? There may be a lot to say on the non-life side, obviously Nat Cat seasonality. It would be good to have an update about whether you think PYD or other loss picks could limit the impact of that in H2. I'd prefer if you could start by talking about the life result, please, because you have just had a great print. I'm not sure about the seasonality of life. From first principles, I'd have thought your life results should be stronger in H1 than H2 because of things like dividends.

Speaker #7: There may be a lot to say on the non-life side. Obviously, NACCAT seasonality and it would be good to have an update about whether you think PYD or other loss picks could limit the impact of that in the second half.

Speaker #7: But I'd prefer if you could start by talking about the life result, please, because you have just had a great print. And I'm not sure about the seasonality of life.

Speaker #7: From first principles, I'd have thought your life result should be stronger in the first half and the second half because of things like dividends.

Speaker #7: But the history seems to show that actually the second half gets better relative to the first half. So I'm just trying to manage my expectations for that.

William Hawkins: The history seems to show that actually H2 gets better relative to H1. I'm just trying to manage my expectations for that. Thank you. Also thank you very much for slide 19, where you did dug a bit more into margins on the life side. For me, at least, that's really helpful. Thank you. Secondly, much shorter question. In the SST walk, there's a very small change in target capital, which seems a positive surprise to me given how much you're growing the business. Could you help me understand why there's almost no change in required capital and what the outlook is, please? Thank you.

Speaker #7: Thank you. And also thank you very much for slide 19 where you've dug a bit more into margins on the life side. That for me at least, that's really helpful.

Speaker #7: Thank you. Then secondly, much shorter question. In the SST walk, there's a very small change in target capital which seems a positive surprise to me given how much you're growing the business.

Speaker #7: So could you help me understand why there's almost no change in required capital and what the outlook is, please? Thank you.

Speaker #1: Okay. I'll start, William. And by the way, thank you very much for the title you used. This morning to your report on us on the sonar of a lesser God.

Mario Greco: Okay. I'll start, William. By the way, thank you very much for the title you used this morning to your report on us, on the Son of a Lesser God. Life, no more that. You remember that I said many, many times, and I'm happy to see that it's finally coming back to be a normal sun. Then I'll ask Claudia to take the capital question. Look, seasonalities. Of course, in the H2 of year, you start watching the weather reports every morning or twice a day, especially on the US. That's a constant thing. One thing, however, I want to stress is that if you look over the past years, we constantly outperform the market in terms of share we have on natural catastrophes.

Speaker #1: For life, no more of that. You remember that I said many, many times and I'm happy to see that it's finally coming back to be a normal sun.

Speaker #1: And then I'll ask Claudia to take the capital question. Look, seasonalities. Of course, in the second half of year, you start watching the weather reports every morning or twice a day, especially on the US.

Speaker #1: That's a constant thing. Now, one thing however I want to stress is that if you look over the past years, we constantly outperformed the markets in terms of share we have on natural catastrophes.

Speaker #1: We have become very good at selecting the cat exposures meaning that we're less exposed to anybody else I would say in the industry. To cat events.

Mario Greco: We have become very good at selecting the cat exposures, meaning that we're less exposed than anybody else, I would say, in the industry to cat events. That is the fundamental seasonality in the H2 of the year. I think on the cost side, vice versa, H1 is kind of heavier, because we make investments, we make cost decision at the beginning of the year, and then in the remainder of the year, we manage the results. We typically reduce it, and that's why we're confident that the costs will be lighter by year-end. Life, I think the only change that exists between H1 and H2 really is that some of our distribution channels will feel the constraint of meeting their budgets, and they will be forced to do better on the sales.

Speaker #1: But that is the fundamental seasonality. In the second half of year. I think on the cost side, vice versa, H1 is kind of a heavier because we make investments we make cost decision at the beginning of the year.

Speaker #1: And then in the remainder of the year, we manage the results. And so we typically reduce it. And that's where confident that costs will be lighter.

Speaker #1: By year end. Life, I think the only change that exists between H1 and H2 really is that some of our distribution channels will feel the constraint of meeting their budgets and they will be forced to do better on the sales.

Speaker #1: And so we expect actually that on the sales side, we should report even stronger numbers by year end for that. But other than that, there isn't much seasonality there.

Mario Greco: We expect actually that on the sales side, we should report even stronger numbers by year-end for that. Other than that, there isn't much seasonality there. On capital?

Speaker #1: On capital.

Speaker #5: On capital, so relatively easy explanation, William. So there's a very tiny incremental net incremental increase in the capital that we need. But most of it has been diversified away because the growth is so broad-based in terms of where it's coming between life, non-life, and geographies as well.

Claudia Cordioli: On capital, relatively easy explanation, William. There is a very tiny net incremental increase in the capital that we need, but most of it has been diversified away because the growth is so broad-based in terms of where it's coming between life, non-life, and geographies as well. This is a place where talking about seasonality, we might see potentially a bit more of an impact in the H2, but it still stays in the low single-digit areas.

Speaker #5: This is a place we're talking about seasonality. We might see potentially a bit more of an impact in the second half, but it still stays in the low single digit.

Speaker #5: Areas.

Speaker #7: Thank you.

Mario Greco: Thank you.

Speaker #4: The next question from Vinit Malhotra, Mediobanca. Please go ahead.

Operator: The next question from Vinit Malhotra, Mediobanca, please go ahead.

Speaker #1: Yes, good afternoon. Thank you, Mario. Thank you, Claudia. So my two questions. One is and sorry, back on life, but more thinking about I mean, this unit has persistently surprised positively over many years.

Vinit Malhotra: Yes, good afternoon. Thank you, Mario. Thank you, Claudia. My two questions. One. Sorry, back on life, but more thinking about, this unit has persistently surprised positively over many years. I'm just thinking that if we are getting above 10% earnings growth this year, what could theoretically business-wise, say, drive further growth next year? Just looking next year or next years, of what could be in the business that could make another push on growth on life. Second question is, again, slightly hypothetical. The data centers in the US obviously is one of your key drivers at the moment, I think, from all the conversations. Recently there was some article in The Economist, which was titled Compute North, which basically shows that the populations or the people in the US are beginning to object to such data centers.

Speaker #1: And I'm just thinking that if we are getting a plus 10, above 10% earnings growth this year, then how I mean, what could theoretically business-wise say year?

Speaker #1: So just looking next year or next years, of what could be in the business that could make another push on growth on life? Second question is, again, slightly hypothetical.

Speaker #1: The data centers in the US obviously is one of your key jewels at the moment, I think, from all the conversations. I mean, recently there was some article in The Economist which was titled Not Compute, which basically shows that the population in the or the people in the US are beginning to object to such data centers.

Speaker #1: And I understand that that's where you come in, right? You're there for the warranty, the project being built. Are you seeing anything? Are you hearing anything about such kind of risks to this business line from a claims perspective or are you seeing anything there that is worth flagging?

Vinit Malhotra: I understand that that's where you come in, right? You're there for the warranty, the project being built. Are you seeing anything, are you hearing anything about such kind of risks to this business line from a claims perspective? Are you seeing anything there that is worth flagging? Thank you.

Speaker #1: Thank you.

Speaker #2: Yeah, but that sorry, let me address this reactively. That's not a risk for us because we only insure projects which are authorized which are decided authorized and can officially start.

Mario Greco: Yeah. Sorry. Let me address this reactively. That's not a risk for us because we only insure projects which are authorized, which are decided, authorized, and can officially start. If there is opposition, the project will not even start. In any way, that's not a risk for us that the project then will not be, how can I say, will not be authorized to continue. The risk for us is that the project doesn't deliver what is supposed to deliver because construction doesn't work, because construction is not appropriately realized. We fundamentally insure two things. One is the builder's risk, and one is the constructional risk. Plus, we insure the workers, we insure the transportation, we insure the energy definition of the solution for the location, for the place. The opposition of the people is before the project starts, if there is.

Speaker #2: So if there is opposition, the project will not even start. And anyway, that's not a risk for us that the project then will not be how can I say?

Speaker #2: Will not be authorized to continue. The risk for us is that the project doesn't deliver what it's supposed to deliver because construction doesn't work, because construction is not appropriately realized.

Speaker #2: So we fundamentally ensure two things. One is the builder's risk and one is the constructional risk. Plus we ensure the workers. We ensure the transportation.

Speaker #2: We ensure the energy definition of the solution for the location for the place. The opposition of the people is before the project starts if there is.

Mario Greco: For life, look, first of all, I'm glad that life starts to be considerably valued. I think our life business is fully discounted in our results. I believe that in 2027, we'll grow even further. We are expanding very nicely across Asia, for example, where our results have been not very significant in the past. We have been investing in Hong Kong, in the development of the life market in Hong Kong. We're even investing in branding around there. That's an area where we expect further returns. Japan has been a fantastic surprise for us, the success we reported there. We own today 8% of the unit-linked market in Japan, with incredible success of our products and services, and all done on a ground-up basis. Brazil, Latin America, especially with Santander, we've discussed it many times. I think they still have something to recuperate.

Speaker #2: On life, look, I mean, first of all, I'm glad that life starts to be reconsidered, revalued. I think our life business is fully discounted in our results.

Speaker #2: I mean, I believe that in 2027, we'll grow even further. We are expanding very nicely across Asia, for example, where our results have been not very significant in the past.

Speaker #2: We have been investing in Hong Kong and in the development of the life market in Hong Kong. We're even investing in branding. Around there, that's an area where we expect further returns.

Speaker #2: Japan, as being a fantastic surprise for us, the success we reported there, we own today 8% of the unit-linked market in Japan. With incredible success of our product and services and all done on a kind of ground-up basis.

Speaker #2: Brazil, Latin America, especially with Santander, we discuss it many times. I think they still have something to recuperate. And Santander has very aggressive plans for the growth.

Speaker #1: Welcome to Quartz Call. Quartz Call follows the EU General Data Protection Regulation. For more information, please visit.

Mario Greco: Santander has very aggressive plans for further growth. Even there, I expect better results. To start with, now we want to deliver further improvements in the H2 of the year, and we want to deliver a BOP result of Life exceeding $2.5 billion, which will be, for Zurich, a very important achievement. We will concentrate on 2027. You remember all the investments we made in Life. We changed the organization. We brought it to a global platform. We insourced underwriting. Today, we have a global database of risks in Life, which allows us to price and underwrite centrally, giving very good services to customers and achieving full control of how we manage the business. We never had that before, and probably not many companies have it. It's a journey that now is starting to deliver the results and the profits.

Speaker #2: So even there, I expect better results. But to start with, now we want to deliver further improvements in the second half of the year.

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Speaker #2: And we want to deliver above the result of life exceeding 2.5 billion, which will be for Zurich in a very important achievement. And then we will concentrate on '27.

Speaker #3: This is fully discounted in our results. I mean, I believe that in 2027 we'll grow even further. We are expanding very nicely across Asia, for example.

Speaker #2: But do you remember all the investment we made in life, we changed the organization, we brought it to a global platform, we insourced underwriting, today we have a global database of risks in life which allows us to price and underwrite centrally giving very good services to customers and achieving full control of how we manage the business.

Speaker #3: Our results have not been very significant in the past. We have been investing in Hong Kong and in the development of the life market in Hong Kong.

Speaker #2: We never had that before. And probably not many companies have it. So it's a journey that now is starting to deliver the results and the profits.

Speaker #1: Sure. Can I just follow up quickly, please? Because we mentioned Hong Kong. I mean, there's been loads of news around Chinese tax authorities decisions.

Vinit Malhotra: Sure. Can I just follow up quickly, please? You mentioned Hong Kong. There's been loads of news around Chinese tax authorities' decisions. I just presume that that kind of offshore business is not what Zurich does. It should be more protection, shouldn't it?

Your passcode has been confirmed, please. Wait, while you are joined to the conference. This is fully discounted in our results. Um, I, I mean, I believe that in 2027 we grow even further. Uh, we are expanding very nicely according to, for example, where our results have been, not very significant in the past. Uh, we have been investing in Hong Kong, uh, and in, in the development of the life Market in Hong Kong where even investing in branding, um, around there. Um, that's an area where we expect, uh, uh, for the returns. Um, Japan has been a, uh, fantastic surprise for us, the success. We reported there. Um, we own today, 8% of the unit link Market in Japan, um, with uh, incredible success of our product and services and all done. Um,

Speaker #1: And I just presume that that kind of offshore business is not what Zurich does. It should be more protection, shouldn't it?

Speaker #2: Yeah, yeah. I mean, and we're not doing offshore business. We're doing business with Hong Kong residents. We're not doing offshore business.

Mario Greco: Yeah. We're not doing offshore business. We're doing business with Hong Kong residents. We're not doing offshore business.

Speaker #1: Sure. Thank you. Thank you.

Vinit Malhotra: Sure. Thank you.

Speaker #2: But there is very significant wealth there. And so to demand there is super high and super hot. And this is a great opportunity for us.

Mario Greco: There is very significant wealth there. The demand there is super high and super hot, and this is a great opportunity for us.

Speaker #1: Thank you, Mario.

Vinit Malhotra: Thank you, Mario.

Speaker #2: Yeah, you're welcome.

Mario Greco: Yeah. You're welcome.

Speaker #3: The next question from Will Hardcastle, UBS. Please go ahead.

Operator: The next question from Will Hardcastle, UBS. Please go ahead.

Speaker #4: Oh, hi there. It's a question on the data center growth, maybe a couple of sub-questions actually. I'm trying to get to grip on Zurich's competitive edge you have here.

Will Hardcastle: Oh, hi there. It's a question on the data center growth, maybe a couple of sub-questions, actually. I'm trying to get to grip on Zurich's competitive edge you have here. You've discussed that edge of what the risk engineers give you in the past, but maybe the addition. Is scale also a key advantage? I'm trying to understand perhaps what line size you can offer versus competitors and whether the lead role, because of your capability, is really differentiating in price versus the follow market. Just as an extension, I read there's some consortia happening and they're scaling up together to offer higher limits. Are you seeing that as a threat to the price or not at the moment? Thank you.

Speaker #4: You've discussed that edge of what the risk engineers give you in the past, but maybe the addition is scale also a key advantage. I'm trying to understand perhaps what line size you can offer versus competitors and whether the lead role because of your capability is really differentiating in price versus the follow market.

You know, kind of ground up basis, um, you know, Brazil, um, Latin America, especially with Santan. There we discussed it many times. I think they still have something to recuperate, um, and something there has very aggressive plans of further growth. Um, so even there, I expect better results. Uh, but to start with now we want to deliver. Um, you know, further improvements in the second half of the year and we want to deliver um, a pop result of life. Um, exceeding 2.5 billion which uh, will be uh, for jury in a very important achievement. Um, and then we will concentrate on 27, but you remember all the Investments that we made in life. We changed the organization. We brought it to to a global platform. We insourced the um, underwriting. Um, today we have a global database of

Risks in life, which allows us to price and underwrite centrally, um, giving a very good service to customers. And, uh,

Speaker #4: And just as an extension, I read there's some consortiums happening and they're scaling up together to offer higher limits. Are you seeing that as a threat to the price or not at the moment?

Achieving full control of, uh, how we manage the business. Um, we never had that before, and probably not many companies have it. Um, so it's, um, it's a journey that now is starting to deliver the results and the profits

Speaker #4: Thank you.

Speaker #2: No, well, construction and infrastructure has always been the main competence of Zurich on property and casualty. Since really decades ago. You remember that we advertised years ago as the insurance company who made the Panama Canal.

Mario Greco: No. Well, construction and infrastructure has always been the main competence of Zurich on property and casualty since really decades ago. You remember that we advertised years ago as the insurance company who made the Panama Canal, and that was really decades ago. What we have, which is special, besides having hundreds, really hundreds of specialized underwriters in this, now we have the risk engineering. Also we run this as a vertical, as I mentioned before. Vertical means that we don't just offer construction, builder's risk, and constructional risk. We offer the customers integrated in the constructional risk and builder's risk, the offer for everything else that they need. This is motor, transportation, marine. This is workers' comp. This is fleets. Of course, this is also surety. Nobody, I think, in the market comes to them with an integrated offer.

Sure, can I just follow up with you on this? Because, as we mentioned, Hong Kong,

I mean, there's been a lot of news around Chinese tax.

Authorities' decisions. And I, I just—I just presume that that kind of option business is not what, sir, it does. It should be more protection. Shouldn't it be?

Speaker #2: And that was really decades ago. What we have, which is special, I mean, besides having hundreds, really hundreds of specialized underwriters on this. Then we have the risk engineering.

Yeah. Yeah. I mean, and we're not doing offshore business. We're doing business with homeowner residents; we're not doing offshore business.

Speaker #2: But also, we run this as a vertical, as I mentioned before. Vertical means that we don't just offer construction, builders risk, and constructional risk.

Sure. Thank you, thank you. But there is there is there is significant wealth there. Um and so to demand there is super high and super hot and this is a great opportunity for us.

Thank you, mayor.

Yeah, you're welcome.

Speaker #2: We offer the customers integrated in the constructional risk and builders risk. The offer for everything else that they need. And this is motor transportation, marine, this is workers' comp, this is fleets, every kind of and of course, this is also surety.

The next question from Will Hardcastle, UBS. Please go ahead.

Speaker #2: Nobody, I think, in the market comes to them with an integrated offer. And we have people who have done this for years. And they know very well how to make this project from the insurance standpoint and how to support the customers doing that.

Oh, hi there. Uh, it's a question on the data center growth. Maybe a couple of sub questions. Actually, I'm trying to get to grip on your Competitive Edge. You have here, you've discussed that edge of what the risk Engineers give you in the past, but maybe the addition is scale. Also a key Advantage. I'm trying to understand perhaps what line size you can offer versus competitors and whether the lead role

Mario Greco: We have people who have done this for years, and they know very well how to make these projects from the insurance standpoint and how to support the customers doing that. Look, this is a market which is clearly in excess demand, not in demand of insurance. I'm not afraid of anything. Actually, there are projects who are waiting to start because there is no insurance available. We're happy if some capacity comes because we'll be able ourselves to do more. We can do all by us. We have limits. We control our exposures, we control our concentration of risks. As long as there is a clear excess of demand from the customers, we're happy with everybody entering. I don't see how this can be reverted in a situation of excess supply. I really don't see that happening anytime.

Speaker #2: Look, this is a market which is clearly in excess demand, not in demand of insurance. So I'm not afraid of anything. Actually, there are projects who are waiting to start because there is no insurance available.

Because of your capability, it is really differentiating in price versus the follow market. And just as an extension, I read that some consortia are happening and they're scaling up together to offer higher limits. Are you seeing that as a threat to the price or not at the moment? Thank you.

Speaker #2: We're happy. If some capacity comes, because we'll be able ourselves to do more, we can do all by us. We have limits. So we control our exposures.

No. Well, construction and infrastructure has always been the main competence of Zurich on Property and Casualty, um, really since decades ago,

Speaker #2: We control our concentration of risks. And as long as there is a clear excess of demand from the customers, we're happy with everybody entering.

Speaker #2: And I don't see how this can be reverted in a situation of excess supply. I really don't see that happening any time.

Speaker #5: Yeah, right at this point in time, if I may add, I will. There's this rather constraint on the insurance and the capital side as well that goes into ensuring data centers.

Claudia Cordioli: Yeah. Right at this point in time, if I may add, there's further constraint on the insurance and the capital side as well that goes into insuring data centers. I think we put it in the deck as well. We were successful in a new strategic placement. We placed a variable quota share now 1 July, which gave us $1 billion of additional capacity that we now can deploy in the market to support new projects. As Mario said before, if we had more capacity to give to our engineering teams, the request is there. They would be actually super happy to deploy more in other projects.

Speaker #5: We've been I think we put it in the deck as well. We were successful in a new strategic placement. We placed a variable quota share.

Speaker #5: Now, 1st of July, which gave us 1 billion of additional capacity that we now can deploy in the market to support new projects. But as Mario said before, I mean, if we had more capacity to give to our engineering teams, the request is there.

This is a vertical. As I mentioned before, vertical means that we don't just offer construction, builders’ risk, and construction or risk. We offer the customers integrated – uh, in the construction of risk and builders’ risk, they offer for everything else that they need, and this is, uh, motor, transportation, marine. Um, this is, uh, workers’ comp. Uh, this is fleets – um, um, every kind of – and, of course, this is also surety. Um, nobody, I think, in the market comes to them with an integrated offer.

And we have people who have done this for years, and they know very well how to make this project work from the insurance standpoint, and how to support the customers doing that.

Speaker #5: They would be actually super happy to deploy more in other projects. So right now, I think we are at a point where the traditional insurance and reinsurance market is coming to a limit in terms of the capacity.

Claudia Cordioli: Right now, I think we are at a point where the traditional insurance and reinsurance market is coming to a limit in terms of the capacity and solutions that are more innovative, that foresee Some type of consortia or bundled capacity, I think they're actually a necessity, right, to be able to continue to support projects of this scale. We are welcoming them. We are exploring ourselves as well, some innovative forms.

Speaker #5: And solutions that are more innovative, that foresee some type of consortia or bundled capacity, I think they are actually a necessity, right, to be able to continue to support projects of this scale.

Um, look, this is a market which is clearly in excess demand, not in demand of insurance. Um, so I'm not afraid of anything. Actually, there are projects that are waiting to start because there is no insurance available.

Speaker #5: So we are welcoming and we are exploring ourselves as well. Some innovative forms.

Um, we're happy. If some capacity comes because we'll be able ourselves to do more, we can do, um, all all, all all by us, we have limits, um, you know, so we control our exposures. So we control our concentration of risks.

Speaker #2: Also, Will, just be mindful that okay, data center is something that it's easy to visualize, but this is about infrastructures. It's about energy projects.

Mario Greco: Also, Will, just be mindful that, okay, data center is something that it's easy to visualize, but this is about infrastructures, it's about energy projects, it's about transportation needs. A lot of these projects are just about, in Europe, for example, are about highway and railway systems. A good part of what Germany is now planning to do or started doing is about that. There are lots of energy building infrastructure across Europe. In the Middle East, there are lots of projects, significant ones, focused on energy. It's easy to talk about data center because it's intuitively important for everyone. A lot of what we do there is infrastructures. Again, this is nice job for us. We know it. This is core business for us.

Speaker #2: It's about transportation means. Because a lot of these projects are just about in Europe, for example, are about highway and railway systems. A good part of what Germany is now planning to do or started doing is about that.

And, uh, as long as there is a clear excess of demand from the customers, we're happy with everybody, and I say, entering. Um, and I don't, I don't see how this can be reverted in a situation of excess supply. I really don't see that happening any time.

Right at this point in time.

Speaker #2: There are lots of energy building infrastructure in across Europe. In the Middle East, there are lots of projects, significant ones, focused on energy. So it's easy to talk about that as center because it's intuitively important for everyone.

Speaker #2: But a lot of what we do there is infrastructures. And again, this is nice job for us. I mean, we know it. This is core business for us.

Speaker #4: Super helpful. Thank you.

Will Hardcastle: Super helpful. Thank you.

Speaker #3: The next question is from Andrew Crean, Autonomous. Please go ahead.

Operator: The next question is from Andrew Crean, Autonomous. Please go ahead.

Speaker #4: Good afternoon, everyone. I wanted to focus on slide 11 first. You've given us this new breakdown between US commercial, international, global specialties. You've given us the accident year combined XCAT.

Andrew Crean: Good afternoon, everyone. I wanted to focus on slide 11 first. You've given us this new breakdown between US commercial, international, and global specialties. You've given us the accident year, combined ex-CAT, which I think went up from 90.4 to 91.6. I think the global specialty deteriorated from 85.3 to 91.2. Could you just give us the combined for the other two sections, both H1 2025 and 2026, the US commercial and the international, because they must have been improving if specialty was going down. That was the first question. The second question is actually coming back onto data centers. You focused very much on the construction, insuring the construction of data centers. Are you also big in the insurance of data centers once they're up and running? Because I've seen some reports where the rates online there-

From a add. Um, how well there's, um, there's rather a constraint on the, on, on the insurance and the capital side as well that goes into uh, ensuring data centers. Uh, we've been, um, I think we put it in in, in the deck as well. Uh, we were successful in, uh, in in a new strategic placement. We, we placed a variable quarter share. Now, first of July, which, uh, gave us 1 billion of additional capacity that we now can deploy in the market to, to support new projects. But that's why you said before. I mean, if we had more capacity to to give to our engineering teams, they you know the request is there, they would be actually super happy to deploy more in in other projects. So right now, I think we are at a point where the traditional insurance and reinsurance Market is coming to a limit in terms of the capacity and solutions that are more Innovative that foresee.

Speaker #4: Which I think went out from 90.4 to 91.6. And I think the global specialty deteriorated from 85.3 to 91.2. Could you just give us the combined for the other two sections, both 1st half 25 and 26, the US commercial and the international?

Speaker #4: Because they must have been improving if specialty was going down. That was the first question. And the second question is actually coming back onto data centers.

Speaker #4: You focused very much on the construction, ensuring the construction of data centers. Are you also big in the insurance of data centers once they're up and running?

Some type of consortia, uh, or bundled capacity. I think, uh, I think that actually a necessity, right to be able to continue to support, uh, projects of this scale. So we, we are welcoming and we are exploring ourselves as well. So, Innovative forms also well, um, just be mindful that, um, okay. Data center is something that it's easy to visualize. But this uh, is about, uh, infrastructures. So it's about energy projects. Um, it's about Transportation means, uh, because a lot of these projects are just about in Europe, for example, or about Highway in Railway systems. Uh, a good part of what Germany, um, is now, uh, planning to do a started doing is about that. There are lots of energy, um,

Speaker #4: Because I've seen some reports where the rates online there.

Building infrastructure in and across Europe, and in the Middle East as well. There are lots of projects—significant ones—focused on energy.

Speaker #2: No, we're not. No, no, we're not.

Mario Greco: No, we're not

Andrew Crean: You don't do it.

Mario Greco: No, we're not.

Speaker #4: You walk away once.

So, it's easy to talk about that as a center because it's intuitively important for everyone.

Andrew Crean: You walk away once you've built it.

Mario Greco: No, because that's casualty, and that's not the target risk for us. We're not. We're not targeting their markets. It's a completely different story, and that's not our bread and butter.

Speaker #2: No, because that's casualty. And that's not the target risk for us. So we're not. We're not targeting that market. It's a completely different story.

But a lot of what we do there is infrastructure.

And again, this is a nice job for us. I mean, we know it. This is called business for us.

Speaker #2: And that's not our bread and butter.

Super helpful. Thank you.

Speaker #4: Okay.

Andrew Crean: Okay.

Speaker #2: We are focusing on construction. That's an easy answer. Sorry to interrupt you, but that's easy.

Mario Greco: We are focusing on construction. That's an easy answer. Sorry to interrupt you, but that's easy.

Speaker #4: No, no, sure. That's easier.

Andrew Crean: No, sure.

The next question is from Andrew Green, Autonomous. Please go ahead.

Mario Greco: That's not-

Andrew Crean: That's easy.

Mario Greco: Yeah. On the other one, I need support, because I don't have out of my mind.

Speaker #2: Yeah. On the other one, I need support because I don't have in my out of my mind.

Speaker #5: So go ahead. Go ahead, Andrew.

Claudia Cordioli: Go ahead, Andrew.

Speaker #4: Do you want me to take this up afterwards? It's a bit of a detailed question.

Andrew Crean: Do you want me to take this up afterwards? It's a bit of a detailed question.

Speaker #5: Yeah, no, let's do that. The one point that I think is important to note and I think you asked is actually in the supplement.

Claudia Cordioli: Yeah, no, let's do that. The one point that I think is important to note, and I think US is actually in the supplement, so it's visible there, the North America piece, which is essentially US.

Speaker #5: So it's visible there. The North America piece, which is essentially the US. But more importantly.

Andrew Crean: US commercial will have the specialty, some of the specialty in it, right?

Speaker #4: The US commercial will have the specialty some of the specialty in it, right?

Andrew Crean: US commercial will have the specialty, some of the specialty in it, right?

Speaker #5: Yes, yes. Okay. So you were asking for US specialty standalone?

Claudia Cordioli: Yes. Okay. You were asking for US specialty standalone?

Speaker #2: No, for the US specialty.

Andrew Crean: No, for US without specialty.

Speaker #5: USCI. Okay.

Claudia Cordioli: USGI. Okay.

Andrew Crean: You split things out on slide 11.

Speaker #4: You split things out on slide 11. I was just wondering the accident year. Combined XCAT. For those I think we've got the specialty, but it's just the other two.

Claudia Cordioli: Yes. There we are.

Andrew Crean: I'm just wondering the accident year, combined ex-CAT.

Claudia Cordioli: Yes. Okay.

Sensors. Um, you focused very much on the construction—ensuring the construction of data centers. Um, are you also big in the insurance of data centers once they're up and running? Because I've seen some reports where—

Andrew Crean: I think we've got specialty, it's just the other two. Great. Thank you.

The line there.

Speaker #4: Great. Thank you.

Claudia Cordioli: Okay. Let's do it separately. The one point that I wanted to emphasize is that they're actually improving year on year. Both the US ex specialty underlying combined ratio and the international one, specifically in international, almost a point. There's a lot of good underwriting going on, and the quality of the underlying portfolio is improving year on year. We'll give you the exact numbers offline, Andrew.

Speaker #5: Okay. Let's do it separately. The one point that I wanted to emphasize is that there are actually improving year-on-year. So both the US X specialty underlying combined ratio and the international one, specifically in international, almost a point.

Yeah, you know, you walk away once, you know, that's that's that's casualty and that's not the target uh, risk for us. So we're not we're not targeting the market, it's a completely different story and that's not our bread and butter.

Speaker #5: So there's a lot of good underwriting going on. And the quality of the underlying portfolio is improving year-on-year. We'll give you the exact numbers offline, Andrew.

Um, we are focusing on construction. That's an easy answer. Sorry to interrupt you with that, but that's easy. No, no—sure, that's easy.

Yeah.

Speaker #4: That's really kind. Thanks, Claudia.

Andrew Crean: That's really kind. Thanks, Claudia.

Speaker #5: Thank you.

Claudia Cordioli: Thank you.

Speaker #3: The next question from William Hawkins, KBW. Please go ahead.

Operator: The next question from William Hawkins, KBW. Please go ahead.

On the other hand, I need support because I don't have it out of my mind. So, um,

Speaker #6: Hey, sorry for the follow-up. I know it's greedy. Mario, you made that passing remark in your prepared remarks about expected PYD to remain modestly elevated.

William Hawkins: Hey, sorry for the follow-up. I know it's greedy. Mario, you made that passing remark in your prepared remarks about expected PYD to remain modestly elevated. Is that just in H2 or is that a more prolonged statement? When I hear that, I think of cycle management. You're doing PYD to offset deteriorating attritional claims ratios. How do you want me to interpret that kind of emphasis you made on the prolonged PYD, please?

Go ahead. Go ahead. Andrew, do you want me to take this up afterwards? It's a bit of a detailed question.

Speaker #6: Is that just in the second half, or is that a more prolonged statement? Because when I hear that, I think of cycle management. So you're doing PYD to offset deteriorating attritional claims ratios.

Speaker #6: So how do you want me to interpret that kind of emphasis you made on the prolonged PYD, please?

Yeah, no, let's do that. Uh, the 1 point that I think is important to, to know then I think the US is actually in in the supplement. So it's, it's visible there, uh, the North America piece, which is essentially the US, um, but but but more important because us commercial will have the specialty some of the specialty in it, right?

Speaker #2: Because we see as I mentioned that we have an excess that we have been to over the past years in shorter lines that we cannot further hold.

Mario Greco: We see, as I mentioned, that we have in excess that we have built over the past years in shorter lines that we cannot further hold, and we have no reason to do that. We will continue, likely in H2, to unload that. That's not cycle management. We have buffered up our reserves as we should have done over the past years, and we don't like to do cycle management, and we don't plan to do that. If we exaggerate on shorter lines, I don't know what to do with that. We need to get rid of it. This is not cycle management, it's just, if you want, correcting excess or mistakes of the past couple of years.

Uh, yes, yes, okay. So, you were asking about U.S. Specialty? Uh, standalone.

Speaker #2: And we have no reason to do that. And so we will continue likely in H2 to unload that. But that's not cycle management. We have buffered up our reserves, as we should have done over the past years.

No special USCI. Okay, you split things out on slide level? Yes, they are. Just wondering about the accent—yeah, combines X cats.

Uh, for those, they—I think we've got the specialty. It's just the other two.

Speaker #2: And we don't like to do cycle management. And we don't plan to do that. But if we exaggerate on shorter lines, then I don't know where what to do with that.

Speaker #2: I mean, we need to get rid of it. So this is not cycle management. It's just if you want correcting excess or mistakes of the past a couple of years.

Great. Thank you. Okay, let's do it. Separately. The 1 that I wanted to um, uh, to to emphasize is that, um, they're actually improving, um, year on year. So both the US X specialty, um, uh, underlying combined ratio and, uh, and the international 1 specifically in international almost a point. So there's a lot of good underwriting going on and the quality of the underlying portfolio is improving here on year. We'll give you the the exact numbers offline. Thank you. That's really kind. Thanks, goodbye.

Speaker #5: And please be mind, William, that we have also in the past, for sure two years, probably three years, we have been extra cautious. And we continue to be extra cautious in the way we've been reserving, particularly for property lines that were subject to a lot of inflation pressure.

Claudia Cordioli: Please bear in mind, William, that we have also, in the past, for sure 2 years, probably 3 years, we have been extra cautious and we continue to be extra cautious in the way we've been reserving, particularly for property lines that were subject to a lot of inflation pressure. This is now coming through in the PYD. As I said, we continue with that approach going forward as well. There were areas where we thought that we would be seeing a lot of inflation pressure. In some places that's materialized, some other it hasn't. This is what we're seeing coming through. Travel is one of the other lines as well that are seeing exactly the same impact from inflation prudence in the past.

Hawkins KBW. Please go ahead.

Speaker #5: So this is now coming through in the PYD. And as I said, we continue with that approach going forward as well. But there were areas where we thought that we would be seeing a lot of inflation pressure.

Hey, sorry for the follow-up. I know it's greedy um Mario you made that passing remark in your prepared remarks, about expected, pyd, to remain modestly elevated. Um, is that just in the second half or is that a more prolonged statement? Um, cuz, you know, when I hear that, I think of cycle management. So you're doing pyd to offset deteriorating a traditional claims ratios. So,

How do you want me to interpret that kind of emphasis you made on the prolonged "paid," please?

Speaker #5: And in some places, that's materialized. Some others, it hasn't. And this is what we're seeing. Coming through. And travel is one of the other lines as well that seeing the same exactly the same impact from inflation prudence in the past.

Speaker #2: Trust me, that we have been doing the opposite. What you think we did. So we actually continue to buffer up. But since we don't plan to use it, you have to put a limit to that.

Mario Greco: Trust me that we have been doing the opposite of what you think we did. We actually continue to buffer up. Since we don't plan to use it, you have to put a limit to that, because otherwise, we create a new kind of excess capital, which is very difficult to liquidate at a point in time.

Speaker #2: Because otherwise, we create a new kind of excess capital which is then very difficult to liquidate. At a point in time.

Um, because we see as I, as I mentioned that we have in excess that we have been to over the past year since short-term lines that we cannot further hold, uh, and we have no reason to do that. And so we will continue likely in H2 to unload that but that's not cycle management. Um, we have buffered up our resources, we should have done over the past years and uh um, we don't like to do uh psycho management and we don't plan to do that.

Speaker #6: Understood. Thank you very much.

William Hawkins: Understood. Thank you very much.

Speaker #3: The next question from Ben Cohen, RBC. Please go ahead.

Operator: The next question from Ben Cohen, RBC. Please go ahead.

Uh, but if we exaggerate on shorter lines, then, um, you know, I don't know what to do with that. I mean, we need to get rid of it.

Speaker #6: Oh, hi. Good afternoon. Thanks for taking my questions. I just wanted to ask on farmers if I could. I think that the grocery and premium growth of 4% in the first half is below the outlook given for the full year.

Ben Cohen: Hi. Good afternoon. Thanks for taking my questions. I just wanted to ask on Farmers, if I could. I think the gross written premium growth of 4% in H1 is below the outlook given for the full year. Could you talk through, I guess, the mechanisms by which you think you are going to achieve that growth? Maybe if you could give us some color by line and by geography in terms of how your competitiveness is working out and maybe a bit more color in terms of what seems like a very competitive end market. Thank you.

Um, so this is not cycle management. It's just, uh, if you want, correcting excess or mistakes of the past couple of years.

Speaker #6: I just could you talk through sort of, I guess, the mechanisms by which you think you are going to achieve that growth? And maybe if you could give us some color by line and by geography in terms of how your competitiveness is working out and maybe a bit more color in terms of what seems like a very competitive end market.

And please keep in mind William that we have also um in the past for sure 2 years uh probably 3 years, um we have been extra cautious and we continue to be extra cautious in the way we've been reserving, particularly for property lines that were subject to a lot of inflation pressure. So this is now coming through in in in the pyd and as I said, we continue

Speaker #6: Thank you.

Speaker #2: Yeah. So as I said in my remarks, farmers is gaining market share, which means that many of the peers have grown much less than 4% this year.

Mario Greco: Yeah. As I said in my remarks, Farmers is gaining market share, which means that many of the peers have grown much less than 4% this year. The 4% is composed of two pieces. One is the average rates on the portfolio for the renewal of the portfolio, and Farmers is improving on portfolio retention. The rates are not very high on renewals because the market is kind of soft for auto and homeowners in the US at the moment. There is the growth, where they grew the customers or the policies in forces by 215,000 in H1, which is the biggest number for them in many years. That doesn't compensate the slow growth of the portfolio. This is how you get to 4%. Considering the market condition, considering what the competitors are doing, I think this is an excellent result.

Speaker #2: The 4% is composed of two pieces. One is the average rates on the portfolio for the renewal of the portfolio. And farmers is improving on portfolio retention.

With that with that approach going forward as well, but there were areas where we thought the that we would be seeing a lot of inflation pressure and in some places, it has materialized some other. It hasn't. And this is what we're seeing uh, coming through and travel is 1 of the the other lines as well. That seeing the same exactly the same impact from inflation Prudence in the past.

Speaker #2: But the rates are not very high on renewals. Because the market is kind of soft for auto and homeowners in the US at the moment.

Uh, since we don't plan to use it, you have to put the limit to that, because otherwise...

Speaker #2: And then there is the growth where they grew the customer or the policies enforced by 215,000 in H1, which is the biggest number for them in many, many years.

Uh, we create a new kind of excess capital, which is then very difficult to liquidate at a point in time.

Understood, thank you very much.

The next question is from Ben Cohen at RBC, please.

Speaker #2: And that doesn't compensate the slow growth of the portfolio. And this is how you get to 4%. Considering the market condition, considering what the competitors are doing, I think this is an excellent result.

Speaker #2: The growth of the portfolio is accelerating. And as soon as the rates will become more conducive, we will see much more satisfactory numbers of growth from farmers.

Mario Greco: The growth of the portfolio is accelerating, and as soon as the rates will become more conducive, we will see much more satisfactory numbers of growth from Farmers. They clearly have the capital to do it. Does that answer you?

Speaker #2: And they clearly have the capital to do it. Does that answer you?

Hi, good afternoon. Thanks for taking my questions. I just wanted to ask in on Farmers if I could I think the the gross certain premium growth of 4% in in the first half is below. Uh, the Outlook that's given for the full year. I just could you talk through as sort of, I guess the mechanisms by which you you think you are going to achieve that growth and maybe if you could give us some color, um, by by line and by geography in terms of, you know, how how your competitiveness is working out and maybe a bit more color in terms of what seems like a very a very competitive End Market. Thank you.

Ben Cohen: Well, I guess. Are you seeing the signs that actually pricing is turning in that market? Is that why there is that confidence? I take it in terms of the PIF growth, but in terms of, sounds like you need price to move as well, is there a risk there-

Speaker #6: Well, I guess, I mean, are you seeing the signs that actually pricing is turning in that market? I mean, is that why there is that confidence?

Yeah. So, as I said in my remarks, pharmacists are gaining market share, which means that many of the peers have grown much less than 4% this year.

Speaker #6: I take it in terms of the PIF growth. But in terms of it sounds like you need price to move as well. And is there a risk there in terms of price doesn't move?

Uh, the 4% is composed of two pieces. One is the

Mario Greco: Yeah

Ben Cohen: if price doesn't move?

Speaker #2: Yeah. Yeah. I mean, the other thing that you have to consider in our numbers is that farmers still had in this first six months a tale of cancellation.

Adrienne Lim: Good afternoon, everyone. Welcome to Zurich’s H1 Results call. I have with me our Group CEO, Mario Greco, and our Group CFO, Claudia Cordioli. As a reminder, we will not be taking any questions on the proposed acquisition of Beazley or commenting on its results, given we are still two separate, independent companies. Before I hand over to Mario for some opening remarks, please can I remind you to keep your questions for the Q&A session to a maximum of two? Over to you, Mario.

Mario Greco: The other thing that you have to consider in our numbers is that Farmers still had, in these H1, a tail of cancellation from the cleaning actions of the past years, which depressed the portfolio numbers. They are over now. From now on, the growth is the growth, and they don't have further impact from cancellation, which is a better condition in H2 and then next year than they had before. Remember that they started the transformation in 2023, and then they started acting on portfolio cancellation in 2024, 2025, and they're still seeing, in H1 this year, the tail of these cancellations. Overall, I would say that it's a little bit unfair to consider these results. They're better. We look at all the reported numbers from Farmers's competitors. These results stand out.

Speaker #2: From the cleaning actions of the past years, which depressed the portfolio numbers. And they are over now. So from now on, the growth is the growth.

Speaker #2: And they don't have further impact from cancellation, which is a better condition in H2 and then next year. And they had before. Because remember that they started the transformation in 23.

Mario Greco: Thank you, Adrienne. Good afternoon, everyone. Thank you for joining us today. Before we take your questions, I'd like to make a few remarks on our H1 results. I'd like to start with three messages that I want to highlight today. First, we delivered another record result: business operating profit increased 13% to $4.8 billion. Core EPS grew 11.5%, with every business segment contributing to this growth. These results reflect the strength of our diversified model, our focus on execution, and our ability to generate attractive returns through the cycles. Second, we are seeing strong momentum in our strategic growth areas. In Property and Casualty, our diversified portfolio allows us to expand selectively in areas where we see attractive returns, such as specialty and middle market. In Life, protection growth reached double digits, well ahead of our targets.

Speaker #2: And then they started acting on portfolio cancellation in 24, 25. And they're still seeing in H1 this year the tale of this cancellations. But overall, I would say that it's a little bit unfair to consider this results.

Average rates on the portfolio for the renewal of the portfolio and Pharmacy is improving on portfolio, retention. Uh, but the rates are not very high on, uh, renewals because the market, uh, is kind of soft, uh, for uh, um, Auto and homeowners, uh, in the US at the moment. And then there is the growth where they grew the customer, uh, or the policies enforced by 215,000 in H1, which is, um, the biggest number for them in uh, many, many years. Um, and that doesn't compensate, um, the, um, as low, uh, growth of the portfolio. And this is how you get to 4%, uh, considering the market condition, considering what the competitors are doing. I think this is an excellent result. Um, the growth of the portfolio is accelerating. Um, and as soon,

As the rates will become more conducive, we will see much, uh, much more satisfactory number of, of growth from Farmers.

And they clearly have the capital to do it.

Speaker #2: I mean, there are better I mean, we look at all the reported numbers from farmers' competitors. These results stand out. I mean, and I can mention them one by one.

Does that answer you?

Um,

Mario Greco: I can mention them one by one, I'm sure that you've seen them yourself.

Speaker #2: But you can do them. I'm sure that you have seen them yourself.

Speaker #6: Thank you very much.

Ben Cohen: Thank you very much.

Speaker #2: You're welcome.

Mario Greco: You're welcome.

Speaker #3: We'll take the last question from Mr. Michael Huttner, Berenberg. Please go ahead.

Operator: We'll take the last question from Mr. Michael Huttner, Berenberg. Please go ahead.

Well I guess I mean are you seeing? Are you seeing the signs? That actually that actually pricing is is turning in that market? I mean is, is that why is that why? There is that? That confidence I take it in terms of the the pif growth in terms of sounds like you need price to move as well. And is there a risk there? Yeah, it doesn't move.

Speaker #6: Thank you so much. Just to.

Michael Huttner: Thank you so much.

Speaker #2: I have a question on this one, Michael.

Mario Greco: You have a question on B, Michael?

Mario Greco: At Farmers, policy count growth continues to build, with the exchanges gaining market share for the first time in a decade. Lastly, today's results reinforce our confidence in meeting or exceeding our 2027 financial targets. We continue to see attractive growth opportunities across our business, supported by structural trends such as investment in air infrastructure and rising demand for protection solutions. Now, let me briefly touch on the performance across our key business segments. As usual, I’ll start with Property & Casualty. Gross written premiums grew 7% to nearly $30 billion, with an all-time high operating profit of $2.8 billion, up 16% year-on-year. The combined ratio was an excellent 92.7%, reflecting the strength of our underwriting and active portfolio management. Within Commercial Property & Casualty, specialty remains a key growth area, with premiums up 8% and an underlying combined ratio of 91.2%.

Speaker #6: Say again? What did you say?

Michael Huttner: Say again? What did you say?

Speaker #2: We have a question on this, please.

Mario Greco: You have a question on B, please.

Speaker #6: No, no, no, no. I think. No, no, no. You're absolutely fair. No, no, of course. No, the first one is you highlighted that your growth is bump.

Michael Huttner: No, I think.

Mario Greco: Sorry, I'm talking.

Michael Huttner: No, you're absolutely fair. No. Of course. No. The first one is, you highlighted that your growth is BOP and EPS, but maybe it's not combined ratio, but to understand this better. Back of the envelope, my guess is you are now writing non-life overall, so everything in at somewhere around 30% after tax in terms of ROE. The way I do it is, really simple. I take the combined ratio, so margin 9%, and I'm assuming that after diversification, there's about 30% capital allocated and nine divided by 30. I know there's tax, but there's also investment income that's probably offset. Is that roughly the way you think about it? Because that of course makes huge amount of sense. Why not grow when you're making such high ROEs?

Yeah. I I mean the, the other thing that uh, um, you have to consider in our numbers is that farmers still had uh, in this first 6 months, a tale of cancellation um, from the uh cleaning actions of the past years.

Speaker #6: And EPS, but maybe to it's not combined ratio, but to understand this better, back at the envelope, my guess is you're now writing non-life overall.

which depressed, um, the portfolio numbers.

And they are over now.

Speaker #6: So everything in at somewhere around 30% after tax in terms of ROE. And then the way I do it is, I mean, really simple.

Speaker #6: I take the combined ratio so margin 9%. And I'm assuming that after diversification, there's about 30% capital allocated. And 9 divided by 30 is and I know there's tax, but there's also investment income that's probably offset it.

Speaker #6: Is that roughly the way you think about it? And because that, of course, makes huge amount of sense. Why not grow when you're making such high ROEs?

So from now on, um, the growth is the growth, and they don't have further, uh, impact from cancellation, which is a better condition, um, in H2 and then next year than they had before. Uh, because remember that they started the transformation in '23, and then they started acting on portfolio cancellation in '24–'25, and they're still seeing, um, in H1 this year, the tail of this, uh, of these cancellations.

Speaker #6: And then the last one is I know you give a big interview to Bloomberg last week, the week before. I can't remember on whatever happened in Switzerland.

Michael Huttner: The last one is, I know you gave a big interview to Bloomberg last week, the week before, I can't remember, on whatever happened in Switzerland, but I was really puzzled. Obviously, there was a mistake made. You've dealt with it. It's past, but it sounds to me, or the way I understood it, that in fact Zurich, Switzerland, so not your decision, but whoever was there at the time, actually were giving better pricing to the pension funds than allowed or authorized by the regulator. I thought that was strange. Anyway, there we are. It was just a question.

Speaker #6: But I was really puzzled. I thought that I mean, obviously, there was a mistake made. You've dealt with it. It's past. But it sounds to me, or the way I understood it, that in fact, Zurich, Switzerland, so not your decision, but whoever was there at the time, actually were getting better pricing to the pension funds than allowed or authorized by the regulator.

Mario Greco: Construction was a particular strength, growing 18%, supported by demand from AI-related infrastructure, not just in the US but around the globe. This is an area where our risk engineering, underwriting expertise, and global capabilities—such as our fully integrated global industry vertical and ZRS expertise—give us a meaningful competitive advantage. This supports our leadership position: we currently lead around 70% of our underwritten data center projects. Within our customer segments, middle market also continued to perform strongly, with premiums up 7%, driven by growth in Germany, Italy, and France, and targeted expansion in the US. Across our commercial portfolio, margins remain healthy following several years of cumulative rate increases. We continue to see pressure in lines such as US large property and E&S, while financial lines and cyber are showing signs of stabilization as the market responds to increasing claim complexity and emerging AI-driven threats.

But overall, I would say that it's a little bit unfair, to consider these results. I mean, there are, there are better. I mean, uh, we look at all the reported numbers from Farmers competitors. Uh, this results stand out. Uh, I mean, and I can mention them but 1 by 1, but, uh, you can do, I'm sure that you have seen them yourself.

Thank you very much.

You're welcome.

Speaker #6: I thought that was strange. Anyway, that was just a question.

Mario Greco: I'm not sure I understand what's your question, Michael, on Switzerland. Yes, they were giving lower prices to the customers. Yes. They benefited the customers against the company. Yeah. That was what they did.

Speaker #2: I'm not sure I understand what your question, Michael, on Switzerland. So yes, they were giving lower prices to the customers. Yes. So they benefited the customers against the company.

Speaker #2: Yeah. That was what they did.

Speaker #6: But why? Okay. But why did the regulator object to that? This is why I didn't.

Michael Huttner: Okay. Why did the regulator object to that? This is what I didn't understand.

Speaker #2: Because prices are controlled in Switzerland. And at the regulator cares for solvency more than customers' satisfaction. And set the prices where they think that the solvency of the company must be.

Mario Greco: Because prices are controlled in Switzerland, and the regulator cares for solvency more than customers' satisfaction and set the prices where they think that the solvency of the company must be. Now, why the Swiss colleagues did that is still a mystery because this was not incentivized, it was not a KPI, they had no budgets for. I have no idea of why they did that. I presume they started as a mistake, and then they thought that it was easier to continue with the mistake against fixing the mistake. That's my guess. Yes, it's precisely that. They underpriced customers, or a number of customers, and this is non-compliance with the rules on that product. Yeah.

Speaker #2: Now, why the Swiss colleagues did that is still a mystery. Because this was not incentivized. It was not a KPI. They had no budgets for.

Mario Greco: Casualty rates continue to increase, reflecting persistent loss cost trends. Importantly, the breadth of our portfolio across geographies, products, and customer segments gives us the flexibility to dynamically manage our portfolio through different market cycles. Net CAT losses remain low at 1.9% of combined ratio, reflecting actions we have taken over recent years to reduce CAT exposure in our portfolio. In terms of the recent wildfire events in Central Europe, we currently do not see a material impact on our results. You will have seen in our materials from this morning that Prior Year Development contributed 2.4 points to the combined ratio, somewhat above our usual level. We expect PYDs to remain modestly elevated in the near term, supported by positive experience from short-tail lines, particularly from EMEA property, where we took a conservative approach following the inflation spike in 2022.

Speaker #2: So I have no idea why they did that. I presume they started as a mistake. And then they thought that it was easier to continue with the mistake.

Speaker #2: Against the fixing the mistake. But that's my guess. But yes, it's precisely that. They sold. They underpriced customers. And or a number of customers.

Is is Bob and an EPS but maybe to you know it's not combined ratio but to understand this better back of the envelope my guess is you're now writing non-life overall. So you know, everything in at somewhere around 30% after tax in terms of, Are We? And then the way I do it is, I mean, really simple. I take the combined ratio, uh, so margin 9% and I'm assuming that after diversification, there's about 30% Capital allocated and and 9 divided by 30 is, uh, and I know there's tax, but there's also investment income that's probably offset. It is, is that roughly the way you? You think about it? Um, and, and because that of course, makes huge amount of sense, you know, you why not grow when you're making such high rises. And then the, the last 1 is, um, I know you give a, a big interview to Bloomberg last week, the week before. I can't remember on whatever happened in in Switzerland, but I was really puzzled. I, I thought that um, I mean, obviously the

There was a mistake made. You've dealt with it. It's past, but it sounds to me, or the way I understood it, that in fact, um,

Speaker #2: And this is no compliance with the rules on that product. Yeah.

Speaker #6: Very clear.

Michael Huttner: Very clear.

Speaker #2: Then on your calculation, look, I'm not very familiar on how you got it. My point is simpler. I mean, first of all, we're growing a short tail line.

Mario Greco: On your calculation, look, I'm not very familiar on how you got it. My point is simpler. First of all, we're growing short tail lines, so capital is pretty light on these short tail lines. The targets that the companies have is on BOP, and it's on EPS growth, and it's on remittances, on dividends that they send to the business. Yes, we do control carefully the combined ratio, but we don't target the combined ratio against the BOP. Put in a different way, if I look at 2024 versus 2026, we still have an improvement of our combined ratio. We still have an improvement of roughly 20 basis points, but we have an improvement of almost $1 billion in BOP. That for me is a good trade. That's a good way to run the business. Because I'm creating space to remunerate shareholders.

Zurich, Switzerland. Uh, so not your decision, but whoever was there at the time actually was getting better pricing to the, um, uh, to the pension funds that were allowed or authorized by the regulator. I thought that was strange, anyway. Well, it's just a question.

Speaker #2: So capital is pretty light on this short tail lines. And we run I mean, the targets that the companies have is on both. And it's on EPS growth.

I'm not sure I understand, but to question Michael on Switzerland—so, they will be in lower prices to the customers? Yes. So the benefit is to the customers, against the company? Yeah. That was what they did.

Mario Greco: In addition, the 2025 accident year has developed very favorably for global travel and for our US crop business. Our approach to long-tail lines remains unchanged, and we continue to carefully monitor trends in casualty, given continuing social inflation. On retail property and casualty, the operating profits grew 14% year-on-year, and the underlying combined ratio improved by a further 60 basis points to 94.6%. Rates remain positive, and we continue to see improvement in motor and property, supported by investment in pricing and claims. In EMEA motor, for example, the combined ratio has improved by more than 5 points over the last two years to a healthy 96.2%, close to our longer-term ambition of operating below 96%. Turning to Life now, the business delivered a record operating profit of $1.3 billion, up 16% on a like-for-like basis.

Speaker #2: And it's on remittances on dividends. That they send to the business. Then yes, we do control carefully the combined ratio. But we don't target the combined ratio against the BOP and I mean, putting it different way, if I look at 94 sorry, at 2024 versus 2026, we still have an improvement of our combined ratio.

Speaker #2: We still have an improvement of roughly 20 basis points. But we have an improvement of also of almost a billion in BOP. That for me is a good trade.

Speaker #2: That's a good way to run the business. Because I'm creating space to remunerate shareholders. I'm growing the business, which means that I have more customers.

Mario Greco: I'm growing the business, which means I have more customers that I can then loyalize. I improved, over two years, the combined ratio still by something like 20 basis points. That reminds me of the discussion in 2018 and 2019.

Speaker #2: That I can then loyalize. And I improved over two years the combined ratio still by something like 20 basis points. That reminds me of the discussion in '18 and '19.

But why, okay? So but why did the regulator object to that? This is what I didn't understand because because because, because prices are controlled in Switzerland and at the, uh, the regulator cares for solvency, more than customers, uh, satisfaction and, uh, set the prices, uh, where they think that the solvency of the company must be now, why did you the Swiss, uh, colleagues did that is still a mystery? Because this was not incentivized was not a kpi, they had no budgets for. Um, so I I have no idea why they did that. I presume. They started as a mistake and then they thought that it was, uh, easier to continue with the mistake, um, against the fixing the mistake, but that's my guess. Uh, but yes, it's precisely that they sold. They underpriced customers.

Um, and, or a number of customers. And this is, um, no compliance with the rules on that product. Yeah. Okay. Um,

Mario Greco: We're particularly encouraged by the pace of growth we're seeing in Protection, where premiums grew 10% ahead of our targets. Growth was supported by strong performance in the UK, Australia, and Latin America, where we saw continued expansion in our bancassurance partnerships and our joint venture with Santander returning to volume growth. Beyond Protection, both our Savings and Unit-Linked businesses contributed to earnings growth, benefiting from strong customer inflows and favorable financial market impacts. As a result of this, we are raising our life profit guidance for the year. Looking ahead, we see significant opportunity to grow Protection further as we continue to help customers address their increasing needs for protection and health solutions. Now, Farmers. Farmers delivered its strongest half year ever with operating profit of $1.2 billion.

Speaker #6: Very, very clear. Thank you.

Michael Huttner: Great. Very clear. Thank you.

Speaker #2: Yeah. Thank you.

Mario Greco: Yeah. Thank you.

Speaker #3: This was the last question. I would like to turn the conference back over to Mr. Greco for closing remarks.

Operator: This was the last question. I would like to turn the conference back over to Mr. Greco for closing remarks.

Speaker #2: All right. Then thank you very much for your question. And for the interest in our results. Let me just repeat quickly the key messages for today.

Mario Greco: All right. Thank you very much for your question and for the interest in our results. Let me just repeat quickly the key messages for today. We are delivering an outstanding performance in the H1 of the year with a record operating profit and double-digit EPS growth. All business segments contributed to this, and we're seeing strong progress against our key strategic priorities. Coupled with a strong balance sheet and a high cash conversion rate, this position us well to execute in the best long-term interest of our shareholders. We'll talk later in the year. I wish you a very good summer. Bye guys.

Speaker #2: We're delivering an outstanding performance in the first half of the year, with the record operating profit and double-digit EPS growth. All business segments contributed to this.

Speaker #2: And we're seeing strong progress against our key strategic priorities. Coupled with a strong balance sheet and a high cash conversion rate, this position as well to execute in the best long-term interest of our shareholders.

then on your calculation, look, I'm, I'm not, um, I'm not very familiar on how you got it. My point is simpler. I mean, first of all, um, we're we're growing a short tail lines, so capital is pretty light on this shortened lines, um, and we run, I mean, the targets that, uh, the companies have is on Bob and it's on, uh, EPS, um, growth and it's on remittances on dividends, uh, that they that they sent to the business. Then, yes, we do control carefully, the combined ratio, but we don't Target the combined ratio against the Bob, uh, and I mean, putting in a different way. Um, if I look at 94, I'm sorry at 2024 versus 2026, we still have an improvement of our Combi ratio. Uh, we still have an improvement of roughly 20 basis points, uh, but

We have an improvement also of almost a billion in BOP.

Mario Greco: The exchanges grew premiums by 4% and are organically gaining market share for the first time in more than a decade. This represents a key milestone and is a testament to the successful transformation that the team has executed on since 2023. The exchanges are now operating from a position of strength, with an industry-leading combined ratio of 82.4% and a surplus ratio of 58.7%. Looking ahead, we expect the exchanges to benefit further from key initiatives to enhance agent productivity, alongside a newly launched brand campaign. To summarize, we are just at the midpoint of our three-year financial plan. We announced it at our investor day back in 2024, and today we're pleased with the progress we're making. The strong momentum we're seeing in our H1 results reinforces our confidence in meeting or exceeding all our 2027 targets.

Uh, that, for me, is a good trade.

Uh, that's a good way to run the business.

You know, because I'm creating space to remunerate shareholders. I'm growing the business, which means I have more customers that I can, the loyalize.

And I improved, um, over two years, the combination still by something like 20 basis points. Um, that reminds me of the discussion in '18, um, '18 and '19.

Okay, very clear. Thank you.

Yeah.

Thank you. This was the last question. I would like to turn the conference back over to Mr. Greco for closing remarks.

All right. Um, then thank you very much for your question and for the interest in our results. Um,

Uh, the key message is that, for today, we are delivering an outstanding performance in the first half of the year, with record operating profit and double-digit growth.

Mario Greco: Thank you very much for your attention. Now, Claudia and I are happy to take your questions.

Operator: We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star then two. Participants are requested to use only handsets while asking a question. Kindly limit yourself to two questions only. Anyone who has a question may press star and one at this time. The first question is from Michael Huttner, Berenberg. Please go ahead.

All business segments contributed to this, and we're seeing strong progress against our key strategic priorities, coupled with a strong balance sheet and a high cash conversion rate. This positions us well to execute in the best long-term interests of our shareholders.

We will talk later in the year. I wish you a very good summer.

Hi guys.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Michael Huttner: Fantastic. Thank you. Well done on the results. I'm really sorry. I want to focus on Beazley. I only have two questions. On Beazley, my two questions are the following. One, is there any update on the timing for the completion of the deal, whether we're September, October, or earlier or later, or are there any milestones we have to think about? The second is also on Beazley. This one you might choose to say, well, we can't answer. The results yesterday, the day before, were possibly a little bit less strong than we had hoped. Obviously, it's not a very actively followed stock anymore with a fire combined ratio which worsened by 12%. I just wondered if that's changed any of your kind of thoughts about ROE enhancement, ROI return, whatever. Thank you.

Mario Greco: Hey, Michael. It's interesting that you start with the first question after Adrienne said that we're not taking questions from Beazley, and that's two questions. Look, on the timing, I don't know. We are in the process. We got approval by a number of jurisdictions, but not all of them. I would say that this is a Q4 event. Where in Q4, it's hard to say. There are no issues, no delays. It's just that it takes time. On the results, we have nothing to say because we have really nothing. We don't know anything, and we can't comment on something that we have no information about.

Michael Huttner: Perfect. Thank you.

Mario Greco: Yeah. You're welcome.

Operator: The next question is from Fahad Changezi, Kepler Cheuvreux. Please go ahead.

Fahad Changazi: Hello. Thank you for taking my questions. On North American rates, -1% and Q1 2026 was flat. I believe the outlook has changed from stabilizing to moderating. I suppose, could you just put a bit more, you'd already talked about some business lines, but could you just talk about in terms of the outlook then versus now and what's changed? I was wondering if you could also talk a little bit more about your specialty business, and where rates are developing. You highlight some segments where you've cut back and one other segment that should have increased premiums. If you could just talk around the different aspects of specialty as well, please. Thank you.

Mario Greco: Yeah. Look, on the rates— in particular, the US rates— the rates in Q2 have been very positive: double-digit positive on Specialty; they've been high single-digit positive on Liability and Motor. As in all the past years, they've been close to flat on Workers' Comp, and they've been negative on Property. Property remains negative in the rounding of 10%. That's the composition. With respect to Q1, Specialty has improved; Motor and Liability have stayed at the same levels; Property has slightly worsened; and Workers' Comp is practically unchanged. That's the situation on the North American rates. The rates are slightly better, or are better, in EMEA, and this is probably a structural characteristic. The market is less competitive, so it's not just a lag in transmission— it is just that rates in EMEA are structurally higher than the ones in the US.

Mario Greco: You ask about specialty, but what particular aspect of specialty do you want me to answer on? On rates, or on the volumes?

Fahad Changazi: Well, I suppose you can do both. If you could also segment between the large specialty business and the middle market specialty business as well.

Mario Greco: Yes. In terms of specialty, of course, the predominant component in our results comes from what the construction and infrastructure vertical does. This has been the highest source of growth, and it's also probably the most rewarding one for us in terms of margins.

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Half Year 2026 Zurich Insurance Group Ltd Earnings Call

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