Q2 2026 Assicurazioni Generali SpA Earnings Call

August 7, 2026

Speaker #1: My life has been such a whirlwind since I saw you. I've been running around in circles in my mind, and it only seems that I'm following you.

Speaker #1: Good afternoon. This is the Decoro School Conference Operator. Welcome, and thank you for joining the Generali Group Health Year 2026 Results Presentation. As a reminder, all participants are in listen-only mode.

Operator 2: Good afternoon. This is the Chorus Call Conference operator. Welcome, and thank you for joining the Generali Group H1 2026 Results Presentation. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Fabio Cleva, Head of Investor and Rating Agency Relations. Please go ahead, sir.

Operator: Good afternoon. This is the Chorus Call Conference operator. Welcome, and thank you for joining the Generali Group H1 2026 Results Presentation. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Fabio Cleva, Head of Investor and Rating Agency Relations. Please go ahead, sir.

Speaker #1: After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone.

Speaker #1: At this time, I would like to turn the conference over to Mr. Fabio Cleva, Head of Investor and Rating Agencies Relations. Please go ahead, sir.

Speaker #2: Hello, everyone, and thank you for joining our first-half 2026 results call. Here with us today, we have the Group CEO, Philippe Donnet, and the Deputy Group CEO, Giulio Terzariol.

Fabio Cleva: Hello, everyone, thank you for joining our H1 2026 results call. Here with us today we have the Group CEO, Philippe Donnet, the Deputy Group CEO, Giulio Terzariol, the Group General Manager, Marco Sesana, and the Group CFO, Cristiano Borean. Before opening for Q&A, let me hand over to Philippe for some opening remarks.

Speaker #2: The Group General Manager, Marco Sesana, and the Group CFO, Cristiano Borean. Before opening for Q&A, let me hand over to Philippe for some opening remarks.

Speaker #3: Thank you, Fabio, and thanks to all of you for joining this call. Generali's excellent financial results for the first half of 2026 demonstrate the strength, profitability, and very solid capital position of our group once again.

Philippe Donnet: Thank you, Fabio, thanks to all of you for joining this call. Generali's excellent financial results for H1 2026 demonstrate the strength, profitability, and very solid capital position of our group once again. We have now reached the halfway mark in the execution of Lifetime Partner 27: Driving Excellence, and these results reinforce our confidence in our ability to successfully deliver our fourth strategic plan in a row. I am going to focus on five key messages. First, we recorded a strong performance across all key metrics, thanks to the robust contribution of every business segment. Gross written premium reached EUR 53.4 billion, up 5.8% from H1 2025, driven by both Life and Property & Casualty. The operating result achieved excellent growth to EUR 4.5 billion, up 11.2%, again, thanks to all business segments.

Speaker #3: We have now reached the halfway mark in the execution of Lifetime Partner 27 Driving Excellence, and these results reinforce our confidence in our ability to successfully deliver our fourth strategic plan in a row.

Speaker #3: I am going to focus on five key messages. First, we recorded a strong performance across all key metrics, thanks to the robust contribution of every business segment.

Speaker #3: Gross written premiums reached €53.4 billion, up 5.8% from half-year 2025, driven by both Life and Property & Casualty. The operating result achieved excellent growth to €4.5 billion, up 11.2%, again thanks to all business segments.

Speaker #3: This led to a 13.7% increase in the adjusted net result to €2.5 billion, leading to adjusted earnings per share growth of 14.3%.

Philippe Donnet: This led to a 13.7% progress in the adjusted net result to EUR 2.5 billion, leading to an adjusted earnings per share growth of 14.3%. Thanks to our sound capital generation, we closed Q2 with a very solid Solvency II ratio at 216%, notwithstanding the impact of the EUR 500 million buyback and the end of the subordinated bond grandfathering regime. Second, our Life business maintained a very positive growth trajectory, with the operating result increased to EUR 2.2 billion, up 8.8%. Net inflows were very strong, exceeding EUR 8.3 billion. This is a record H1 figure, achieved thanks to the positive contribution from all business lines. New business value grew significantly by 21.1%, reaching EUR 1.9 billion, benefiting from both higher volumes and improved overall profitability.

Speaker #3: And thanks to our sound capital generation, we closed the second quarter with a very solid solvency II ratio at 216%, notwithstanding the impact of the €500 million buyback and the end of the subordinated bond grandfathering regime.

Speaker #3: Second, our Life business maintained a very positive growth trajectory, with the operating result increasing to €2.2 billion, up 8.8%. Net inflows were very strong, exceeding €8.3 billion.

Speaker #3: This is a record first half figure, achieved thanks to the positive contribution from all business lines. New business value grew significantly, by 21.1%, reaching €1.9 billion, benefiting from both higher volumes and improved overall profitability.

Speaker #3: Our new business margin expanded materially to 5.86%, mainly thanks to the positive impact of a more favorable new business mix and enhanced product features.

Philippe Donnet: Our new business margin expanded materially to 5.86%, mainly thanks to the positive impact of a more favorable new business mix and enhanced product features. Third, the property and casualty operating result rose by 4.7% to over EUR 2.1 billion. This was achieved despite an additional EUR 425 million in both natural catastrophes and man-made claims compared with H1 2025. The combined ratio stood at 91.5%, from 91% at H1 2025, with a 3.6 percentage point impact from nat cat. The natural catastrophes we witnessed this year, including the recent severe wildfires in Spain and France, further highlight the importance of closing protection gaps and improving climate change preparedness across the world. In July 2026 alone, our preliminary assessment is that nat cat impacted our business for around EUR 300 million, with around EUR 60 additional million related to man-made events.

Speaker #3: Third, the property and casualty operating result rose by 4.7% to over €2.1 billion. This was achieved despite an additional €425 million in catastrophe and man-made claims, compared with the first half of 2025.

Speaker #3: The combined ratio stood at 91.5%, up from 91% at half year 2025, with a 3.6% impact from NATCAT. The natural catastrophes we witnessed this year included the recent severe wildfires in Spain and France, further highlighting the importance of closing protection gaps and improving climate change preparedness across the world.

Speaker #3: In July 2026 alone, our preliminary assessment is that NATCAT impacted our business for around €300 million, with around an additional €60 million related to man-made events.

Speaker #3: Beyond large loss events, the current inflationary trend is another factor that we will reflect in our pricing, in particular in non-motor. Fourth, the operating result of Asset and Wealth Management recorded healthy growth—31.3% year on year.

Philippe Donnet: Beyond large loss events, the current inflationary trend is another factor that we will reflect in our pricing, in particular in non-motor. Fourth, the operating result of asset and wealth management recorded healthy growth of 31.3% year on year. This was driven by the robust underlying performance of both asset management and Banca Generali. The segment generated around 16% of the group operating result, underscoring the benefit of a diversified and integrated business model. Moving to my fifth and final point, as the execution and delivery of our plan remain our top priorities, we also continue to expand our capabilities in key strategy growth areas. In this context, I would like to say a few words about Radion, the new brand for our global care platform. Radion brings together leading capabilities across employee benefits, assistance, health, and mobility, serving multinational companies, financial institutions, and millions of customers around the world.

Speaker #3: This was driven by the robust underlying performance of both Asset Management and the Bank at Generali. The segment generated around 16% of the Group operating result, underscoring the benefit of a diversified and integrated business model.

Speaker #3: Moving to my fifth and final point: as the execution and delivery of our plan remain our top priorities, we also continue to expand our capabilities in key strategic growth areas.

Speaker #3: In this context, I would like to say a few words about Radion, the new brand for our global care platform. Radion brings together leading capabilities across employee benefits, assistance, health, and mobility, serving multinational companies, financial institutions, and millions of customers around the world.

Speaker #3: It generates annual business volumes of over €5.8 billion, with more than 12,000 employees operating in over 190 countries. Radion is one of the very few truly global players in this field, being the leading employee benefits network and the second largest player in travel insurance and assistance.

Philippe Donnet: It generates annual business volumes of over EUR 5.8 billion, with more than 12,000 employees and operations in over 190 countries. Radion is one of the very few truly global players in this field, being the leading employee benefits network and the second-largest player in travel insurance and assistance. Our mission is to further leverage these leadership positions and become the world's premier care partner. Radion stands out for both its scale and technology. It's a data and AI-driven Insurtech platform that combines Generali's reach and strength with the agility and innovation of leading digital players. Building on this, we are now scaling embedded insurance, a new B2B2C growth engine that distributes seamless protection within our partners' digital journeys, from travel and e-commerce to financial services. This allows us to turn our global distribution relationship into a new and increasingly valuable source of profitable growth.

Speaker #3: Our ambition is to further leverage this leadership position and become the world's premier care partner. Radion stands out for both its scale and technology.

Speaker #3: It's a data- and AI-driven insurtech platform that combines Generali's reach and strength with the agility and innovation of leading digital players. Building on this, we are now scaling embedded insurance—a new B2B2C growth engine that distributes seamless protection within our partners' digital journeys, from travel and e-commerce to financial services.

Speaker #3: This allows us to turn our global distribution relationships into a new, and increasingly valuable, source of profitable growth. Our business model benefits from long-term structural growth drivers.

Philippe Donnet: Our business model benefits from long-term structural growth drivers, a rising demand for travel insurance and assistance, employee benefits, and embedded and integrated service ecosystems. This is why we are truly confident and excited about the opportunities for Radion, and we will, of course, provide regular updates on its progress. In conclusion, the quality of our performance in H1 of this year reflects the disciplined execution across our three key strategic priorities, excellence in our customer relationships, in our core capabilities, and in our group operating model. Furthermore, the insurance sector trends on which we build our plan are proving increasingly relevant, with some of them even accelerating.

Speaker #3: Rising demand for travel insurance and assistance, employee benefits, and embedded and integrated service ecosystems. This is why we are truly confident and excited about the opportunities for Radion, and we will, of course, provide regular updates on its progress.

Speaker #3: In conclusion, the quality of our performance in the first six months of this year reflects the disciplined execution across our three key strategic priorities.

Speaker #3: Excellence in our customer relationships, in our core capabilities, and in our Group operating model. Furthermore, the insurance sector trends on which we build our plan are proving increasingly relevant, with some of them even accelerating.

Speaker #3: This is particularly true when it comes to new needs deriving from major long-term social and environmental trends, including an aging population and insufficient public healthcare, the protection gap related to the increase in extreme weather events due to climate change, as well as changing customer expectations driven by market and technological shifts.

Philippe Donnet: This is particularly true when it comes to new needs deriving from major long-term social and environmental trends, including an aging population and insufficient public health care, the protection gap related to the increase in extreme weather events due to climate change, as well as changing customer expectations driven by market and technological shifts. It is a constantly evolving environment that requires us to stay agile, innovative, and forward-thinking, to lead and to deliver lasting value to our customers as their lifetime partner and to all our stakeholders as a standalone group. The three foundations that underpin the plan are key to this. Our talented people and the structured implementation of AI and data are allowing our business units to strengthen their core technical capabilities in underwriting, while further improving the quality of service to our customers and distribution partners.

Speaker #3: It is a constantly evolving environment that requires us to stay agile, innovative, and forward-thinking—to lead and to deliver lasting value to our customers as their lifetime partner, and to all our stakeholders as a standalone group.

Speaker #3: The three foundations that underpin the plan are key to this. Our talented people and a structured implementation of AI and data are allowing our business unit to strengthen their core technical capabilities in underwriting, while further improving the quality of service to our customers and distribution partners.

Speaker #3: We also continue to demonstrate the quality and consistency of our approach to sustainability. The Financial Times recently recognized us as one of Europe's climate leaders, while TIME and Newsweek included us in their rankings of the world's most sustainable and greenest companies.

Philippe Donnet: We also continue to demonstrate the quality and consistency of our approach to sustainability. The Financial Times recently recognized us as one of the Europe's climate leaders, while Time and Newsweek included us in their rankings of the world's most sustainable and greenest companies. We are proud of these important recognitions, which make us even more determined to keep driving profitable growth while supporting a green and just transition and strengthening societal resilience. Finally, before we open our Q&A, I'm pleased to inform you that we will be holding an Investor Day on 18 November in London. This will give us the chance to further update you on the execution of our plan, as well as to showcase in detail some of our strategic initiatives. You will receive all the details in the upcoming weeks. We look forward to welcoming you there.

Speaker #3: We are proud of this important recognition, which makes us even more determined to keep driving profitable growth while supporting a green and just transition, and strengthening societal resilience.

Speaker #3: Finally, before we open our Q&A, I am pleased to inform you that we will be holding an Investor Day on November 18th in London.

Speaker #3: This will give us the chance to further update you on the execution of our plan, as well as to showcase in detail some of our strategic initiatives.

Speaker #3: You will receive all the details in the coming weeks, and we look forward to welcoming you there. I thank you very much again for your continued interest in Generali, and together with all my colleagues, we are now happy to take your questions.

Philippe Donnet: I thank you very much again for your continued interest in Generali. With all my colleagues, we are now happy to take your questions.

Speaker #2: Thank you. This is Dr. Roscoe, Conference Operator. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone.

Operator 2: Thank you. This is the Chorus Call conference operator. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. To remove yourself from the question queue, please press star and two. We kindly ask to use handsets when asking questions. Anyone who has a question may press star and one at this time. The first question is from Michael Huttner, Berenberg.

Operator: Thank you. This is the Chorus Call conference operator. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. To remove yourself from the question queue, please press star and two. We kindly ask to use handsets when asking questions. Anyone who has a question may press star and one at this time. The first question is from Michael Huttner, Berenberg.

Speaker #2: To remove yourself from the question queue, please press star then two. We kindly ask that you use handsets when asking questions. Anyone who has a question may press star then one at this time.

Speaker #2: The first question is from Michael Hartner, Berenberg.

Speaker #1: Fantastic. Thank you so much. I have two questions—one a little bit cheeky. I think on the last call, Julio said that he used the metro quite often to go and visit UniCredit to discuss business sales and such.

Michael Huttner: Fantastic. Thank you so much. I have two questions, one a little bit cheeky. I think on the last call, Giulio said that he used the Metro quite often to go and visit UniCredit to discuss business, sales and stuff. Of course, today Allianz also reports. Allianz, sadly for them, they lost the UniCredit franchise. Is that the one that you're going to pick up, or are there plans here? Anything you could say would be quite interesting. The other one is standard. You talked about inflation and pricing. Could you give us a few numbers on what inflation we're seeing? The feeling I have is inflation has picked up. Pricing is still lagging. I don't know how you're seeing it. Thank you.

Speaker #1: And, of course, today Allianz also reports. Allianz, sadly for them, lost the UniCredit franchise. Is that the one that you're going to pick up, or are there plans here?

Speaker #1: Anything you could say would be quite interesting. And then the other one is standard. You talked about inflation and pricing—could you give us a few numbers on what inflation we're seeing?

Speaker #1: The feeling I have is that inflation has picked up. Pricing is still lagging, but I don't know how you're seeing it. Thank you.

Speaker #3: Thank you very much, Michael. The first question is for Philippe; the second is for Julio and Marco.

Fabio Cleva: Thank you very much, Michael. The first question is for Philippe. The second is for Giulio and Marco.

Speaker #4: Wait, sorry, Philippe. I didn't say I go to UniCredit often. I said there are five train stops between UniCredit and Allianz and Generali. That's a different story, okay?

Giulio Terzariol: Wait, sorry, Philippe, I didn't say I go to UniCredit often. I said there are five train stops between UniCredit and Allianz, and Generali that's a different story, okay?

Speaker #3: So we are already doing significant business with UniCredit, including bancassurance and distribution in Central and Eastern Europe, as well as some asset management business.

Philippe Donnet: No, we are already doing significant business with UniCredit, including bancassurance and distribution in Central and Eastern Europe, including some asset management business as well. Definitely, we would be happy to expand the business we are doing with them as we would be happy to investigate any other kind of business opportunities in Italy and out of Italy.

Speaker #3: And definitely, we would be happy to expand the business we are doing with them, as we would be happy to investigate any other kind of business opportunities in Italy and outside of Italy.

Speaker #1: Thank you.

Michael Huttner: Thank you.

Speaker #4: Okay, so on the pricing environment, I can tell you what we saw in the first six months. On the motor side, we see basically pricing heading up, holding up pretty nicely against a risk premium.

Giulio Terzariol: Okay. On the pricing environment, I can tell you what we saw in the first six months. On the motor side, we see basically pricing holding up pretty nicely against the risk premium, so we have a little bit of a positive spread. When we look at the loss trends part, we see basically that the inflation is more or less in line with what we saw last year. We are speaking of inflation between 4% and 5%, but we see also frequency decreasing. I don't know if you remember, in the Q1, we told you that frequency was going up a bit, but that was also related to the difference in the weather-related events between the Q1 2026 and the Q1 2025. Now with the six months, we see this sort of normalization.

Speaker #4: So, we have a little bit of a positive spread. And when we look at the loss trends part, we see basically that the inflation is more or less in line with what we saw last year.

Speaker #4: So, we are speaking of inflation between 4% and 5%. But we also see frequency decreasing. I don't know if you remember, in the first quarter, we told you that frequency was going up a bit, but that was also related to the difference in the weather-related events between the first quarter 2026 and the first quarter 2025.

Speaker #4: And now, with the six months, we see this sort of normalization. So I would say, inflation-wise, very stable compared to what we saw last year. From a frequency point of view, I would say also still a decrease in frequency.

Giulio Terzariol: I would say inflation-wise, very stable compared to what we saw last year. From a frequency point of view, I will say also still a decrease in frequency. On the non-motor side, I would say in general, same story. Just a country where we see a little bit of a pickup of inflation in non-motor, which is Germany. We spoke about that also, if you remember, in end of June, we are taking rate increases. Just to remind you, the combined ratio in non-motor in Germany is well below 90%. We are speaking anyway of a very strong performance, but as always, we try to keep the marginality as much as we can.

Speaker #4: On the no-motor side, I would say in general, it's the same story. There is just one country where we see a little bit of a pickup in inflation in no-motor, which is Germany.

Speaker #4: We spoke about that. Also, if you remember, at the end of June. And we are taking rate increases. But just to remind you, the combined ratio in non-motor in Germany is well below 90.

Speaker #4: So, we are speaking, anyway, of a very strong performance. But, as always, we try to keep the marginality as much as we can.

Speaker #1: So maybe adding a few words. So, we have a close monitoring of all the drivers that can cause inflation. We are monitoring all the spare parts across Europe, across brands, across Asia.

Marco Sesana: Maybe adding a few words. We have a close monitoring about all the drivers that can cause inflation. We are monitoring all the spare parts across Europe, across brands, across Asia. We look at different drivers, we look at the medical rates, if they are going up. At the moment, as Giulio was saying, we broadly see the market that is constant in the way we see inflation. Around that 4% that Giulio was mentioning. There might be inflation. We are monitoring. We don't see it yet. We are preparing. We know that as soon as we see inflation, we know how to act. By the way, I just want to remind you also that in non-motor, a large part of the portfolio is indexed to inflation. There is also an automatic, I would say, recovery that we can make.

Speaker #1: So we look at the different drivers. We look at the medical rates—if they're going up. So, at the moment, we, as Julio was saying, we broadly see the market as constant in the way we see inflation.

Speaker #1: So, around that 4 percent that Julio was mentioning: there might be inflation. We are monitoring; we don't see it yet, but we are preparing. So we know that as soon as we see inflation, we know how to act.

Speaker #1: By the way, I just want to remind you also that in no-motor, a large part of the portfolio is indexed to inflation. So there is also an automatic, I would say, recovery that we can make.

Speaker #1: So at the moment, we see that the market is expecting that. We don't see it yet in our portfolio, but we monitor and look, and we know how to act if we see the sign of inflation.

Marco Sesana: At the moment, we see that the market is expecting that, but we don't see yet in our portfolio. We monitor and look, and we know how to act if we see the sign of inflation.

Speaker #1: Brilliant. Thank you very much.

Michael Huttner: Brilliant. Thank you very much.

Speaker #3: Thank you, Michael. Next question, please.

Fabio Cleva: Thank you, Michael. Next question, please.

Speaker #2: The next question is from Fahad Changazi, Kepler Cheuvreux.

Operator 2: The next question is from Fahad Changazi, Kepler Cheuvreux.

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

Speaker #5: Thank you for taking my question. Could I just follow up on P&C and inflation? I mean, again, in Q1, you also said that you would look at making a decision on volume growth in P&C in H2.

Fahad Changazi: Thank you for taking my question. Could I just follow up on P&C and inflation? Again, on Q1, you also said that you would look at make a decision on volume growth in P&C in H2. It looks like it's Germany, sort of the odd one out. In terms of other countries, where are you standing in terms of P&C volume growth? My second question is on capital. The SCR ticked up in both life and non-life. Presumably, that is normal business growth. You will still end up very strong Solvency duration full year 2026, and we have the Solvency II review on 30 January. Is it fair to say you will reassess your capital levels at full year results? Also, I suppose, will you still want to operate near the top end of the range? Thank you.

Speaker #5: So it looks like Germany is sort of the odd one out, but in terms of other countries, where are you standing in terms of PNC volume growth?

Speaker #5: And my second question is on capital. The SCR ticked up in both life and non-life—presumably, that is normal business growth. But you will still end up in a very strong solvency situation for year-end 2026.

Speaker #5: And we have something to review on January 30th. Is it fair to say you will reassess your capital levels at the full year results?

Speaker #5: And also, I suppose, will you still want to operate near the top end of the range? Thank you.

Speaker #3: Thank you very much, Fahad. The first question is for Julio, while the second one is for Cristiano.

Fabio Cleva: Thank you very much, Fahad. The first question is for Giulio, while the second one is for Cristiano.

Speaker #4: Yeah. So, speaking about the volume growth, I can tell you, first of all, speaking for the motor and non-motor in aggregate, I would say that 20 percent of our growth in motor is coming from volume, so a little bit less than 20 percent.

Giulio Terzariol: Speaking about the volume growth, I can tell you, first of all, speaking for the motor, non-motor in aggregate, I would say that 20% of our growth in motor is coming from volume, so a little bit less than 20%. When we look at non-motor, including also accident health and disability, we are speaking of almost one-third of growth coming from volume. When I look at the geography, I can tell you that we see, actually, I'm speaking about motor right now, a good development of volume across the board. There are just, I would say, three exceptions. One is Switzerland, because we do a lot of pruning, and you can see the improvement in the combined ratio is remarkable. Another one is Spain, where we're also doing pruning. We're getting to a different, better level of combined ratio.

Speaker #4: When we look at non-motor, including also accident and health and disability, we are speaking of almost one-third of growth coming from volume. When I look at the geography, I can tell you that we see—actually, I am speaking about motor right now—a good development of volume across the board.

Speaker #4: There are just, I would say, three exceptions. One is Switzerland, because we do a lot of pruning. And you can see the improvement in the combined ratios is remarkable.

Speaker #4: Another one is Spain, where we are also doing pruning. We are getting to a different, better level of combined ratio. And then in Italy, if you compare this quarter, these six months, to last year's six months, you see a decrease.

Giulio Terzariol: In Italy, if you compare this quarter, this six months, to last year six months, you see a decrease. In reality, the situation is stabilizing. Here we go back that we are managing clearly volume and profitability and try to find the right balance, we have a very good performance on our motor book in Italy. I would say in all the other countries, you can see a nice or good growth in volume. When we look at non-motor, I would say you see growth everywhere, with the exception of Switzerland, where we are doing a lot of pruning, obviously. Also, in this case, you can see the improvements. Overall, I would say from a volume point of view, there is definitely a momentum, which is stronger compared to what we had a couple of years ago.

Speaker #4: But in reality, the situation is stabilizing. And here, we go back to the fact that we are clearly managing both volume and profitability, and trying to find the right balance.

Speaker #4: And we have very good performance on our motor book in Italy. So I would say, in all the other countries, you can see a nice or good growth in volume.

Speaker #4: When we look at no-motor, I would say you see growth everywhere, with the exception of Switzerland, where we are doing a lot of pruning, obviously.

Speaker #4: And also in this case, you can see the improvement. So overall, I would say from a volume point of view, there is definitely a momentum which is stronger compared to what we had a couple of years ago.

Speaker #3: Yeah. Regarding the capital hike, Fahad, I think what you are seeing is the push for business growth, as we were already saying. Clearly, depending on the mix of this growth—when you have, like we had, in net inflows, especially this half year, an even distribution between all the lines, where traditionals usually have a slightly higher capital absorption—this also explains some part of the capital put to work for the new business, which is coherent with the positive environment and the future deployment for growth.

Cristiano Borean: Yeah. Regarding capital height, Fahad. I think that you are seeing the push for business growth, as we were saying already. Clearly, depending on the mix of also this growth, when you have like we had in net inflow, especially this H1, even distribution between all the lines, where traditional usually have a slightly higher capital absorption. This also explain some part of the capital put at work for the new business, which is coherent with the positive environment and the future deployment for growth that we are having, foreseeing already the Solvency II review. I reconfirm that in end of January 2027, that Solvency II review will enter into practice. We will have 15 percentage points uplift. For sure, on the final 2026 result, we will show a comparative starting point, which is a common practice, I think, among the whole industry.

Speaker #3: But we have already foreseen the solvency review. I reconfirm that at the end of January 2027, but the solvency review will enter into practice.

Speaker #3: We will have 15 percentage points of lift, for sure, on the final year 2026 result. We will show a comparative starting point, which is common practice, I think, throughout the whole industry.

Speaker #3: We discussed all together, I think, as well in the forum. And regarding the level of the risk appetite framework, we confirm the level we had as we discussed in the general exploring event of March.

Cristiano Borean: We discuss all together, I think, as well in the forum. Regarding the level of the risk appetite framework, we confirm the level we had as we discussed in the Exploring Generali event of March. Our top ceiling element at 230 still is confirmed. Our idea is to put this capital at work in four forms. I repeat it. We are already consuming a little bit of capital from SAA optimization, something in the order of two points per quarter. This quarter, we did slightly less because of the positive rate environment, which was not necessity leaving to obtain the desired target or investment result, to push for further risky asset. In general, we are hinting for two points per quarter of SAA optimization. There was also a small event of Belgium downgrade, which accounted for 0.5 percentage point negative effect on solvency.

Speaker #3: Our top ceiling element at 230 still is confirmed. Our idea is to put this capital to work in four forms. I repeat, we are already consuming a little bit of capital from SAA optimization—something in the order of two points per quarter.

Speaker #3: This quarter, we did slightly less because of the positive rates environment, which was not necessarily leading to obtaining the desired target or investment result.

Speaker #3: We are pushing further into risky assets, but in general, we are targeting two points per quarter of SAA optimization. There was also a small event regarding the Belgium downgrade, which accounted for a 0.5 percentage point negative effect on solvency.

Speaker #3: Overall, we will continue to deploy these extra points on four drivers. The first one is business growth, as we are already starting. The second one is investment—SAA, as you said—and we will continue to invest in the business, in the infrastructure, in Europe.

Cristiano Borean: Overall, we will continue to deploy these extra points on four drivers. The first one is business growth, as we are already starting. Second one is the investment, SAA, as you said, and we continue to invest in the business, in the infrastructure in Europe and overall. The third one, for sure, will be also in allowing us to have a better mix between the subordinated debt and the senior debt, which is not necessary now as required as capital as in the past. Fourth is for sure capital deployment, be it for growth, for M&A or for sure returning capital to shareholders.

Speaker #3: And overall, the third one, for sure, will also allow us to have a better mix between the subordinated debt and the senior debt, which is not necessarily now as required or as capitalized as in the past.

Speaker #3: And fourth is, for sure, capital deployment—be it for growth, for M&A, or certainly for returning capital to shareholders. Thank you, Fahad. Next question, please.

Fahad Changazi: Thank you very much.

Fabio Cleva: Thank you, Fahad. Next question, please.

Speaker #2: The next question is from William Hawkins, KBW.

Operator 2: The next question is from William Hawkins, KBW.

Operator: The next question is from William Hawkins, KBW.

Speaker #6: Hello, everyone. Thank you for taking my question. I just have one topic with a few questions, please. Could you talk a bit more about your view of the outlook for the new business value?

William Hawkins: Hello, everyone. Thank you for taking my question. Just one topic with a few questions, please. Could you just talk a bit more about your view of the outlook for the new business value? You've printed this very strong, in my view, EUR 1.89 billion. Just very short term, can we annualize it or could there be some variance in H2? What are you kind of thinking about the longer term drivers? I always think a big company like you should be growing that number 5% to 10%. I don't know if I'm kind of off base to the upside or downside. If you could talk a bit about the drivers, I noticed in the detail, Asia seems to have had a huge step up, which is great. Germany is a bit weaker, and Italy and France are in the middle.

Speaker #6: You've printed this very strong, in my view—€1.89 billion. So, just very short term, can we annualize it, or could there be some variance in the second half?

Speaker #6: And then, what are you kind of thinking about the longer-term drivers? I always think a big company like you should be growing that number by 5 to 10 percent, but I don't know if I'm kind of off base to the upside or downside.

Speaker #6: And if you could talk a bit about the drivers, because I noticed in the detail, Asia seems to have had a huge step up, which is great.

Speaker #6: Germany is a bit weaker, and Italy and France are in the middle. So, yeah, just help me on the outlook for new business value, please.

William Hawkins: Yeah, just help me on the outlook for new business value, please.

Speaker #3: Thank you very much. William, the first question is for Giulio. The second is for both Giulio and Marco.

Fabio Cleva: Thank you very much, William. The first question is for Giulio, the second is for both Giulio and Marco.

Speaker #4: Oh, thank you, William. So, on the new business value, I wouldn't say you can tell the number two times two, because actually, especially in China, we have a much stronger production in the first part of the year.

Giulio Terzariol: Thank you, William. On the new business value, I wouldn't say you can take the number do times two, because actually, especially in China, we have a much stronger production the first part of the year. Part of it is always happening because it's linked to the Chinese New Year. There is a lot of production basically happening in Q1. Also in this situation, there was some fire sale effect because of a change in the illustration rates in Q2. From that point of view, you need to normalize China from a growth point of view. Otherwise, the rest of the portfolio is evolving actually pretty normally. There is also one other element to consider.

Speaker #4: Part of it is always happening because it's linked to the Chinese New Year. So there is a lot of production basically happening in the first quarter.

Speaker #4: And then also, in this situation, there was some fire sale effect because of a change in the illustration rates in the second quarter. So, from that point of view, you need to normalize China from a growth point of view.

Speaker #4: Otherwise, the rest of the portfolio is evolving actually pretty normally. There is also one other element to consider. It's true, this is not the highest new business margin.

Giulio Terzariol: It's true, this is not the highest new business margin business that we have, but also the protection business of France, which is delivering new business value, is particularly skewed to the first part of the year. From that point of view, I wouldn't take the number and do times two, but I can assure to you that we are going to have a much stronger growth in VNB than last year, and definitely we're going to meet this year your objective of 5% to 10% value of business growth is going to be most likely much more for this year. Moving forward, I will say clearly one driver of growth in our value of business is going to be Asia. By the way, Asia is not only China. We're also growing our franchise in India.

Speaker #4: The business that we have, but also the protection business of France, which is delivering new business value, is particularly skewed to the first part of the year.

Speaker #4: So from that point of view, I won't tell the number and two times two, but I can assure you that we are going to have much stronger growth in VNB than last year.

Speaker #4: And definitely, we're going to meet this year. Your objective of 5% to 10% value on the business growth is going to be, most likely, much more for this year.

Speaker #4: Moving forward, I will say clearly that one driver of growth in our value as a business is going to be Asia. By the way, Asia is not only China.

Speaker #4: We are also growing our franchise in India. I don't know if you remember, but basically, last year we found a new joint venture partner.

Giulio Terzariol: I don't know if you remember, basically last year we found a new joint venture partner. This joint venture partner is a bank. Even if in India there is not exclusive bancassurance, clearly we get access to the branches of this bank. I can tell you that, in India, we had also a nice increase in present value of business profit and also in value of new business. The marginality in India is about 7% right now, and we are doing, for H1, about EUR 250 million present value of new business premium. That's also something to consider because I expect this to grow moving forward. We go back to Europe. Definitely, we see a good dynamic in France.

Speaker #4: This joint venture partner is a bank. So, even if in India there is not exclusive bancassurance, clearly we get access to the branches of this bank.

Speaker #4: And I can tell you that in India, we also had a nice increase in present value of business profit and also in value of the business.

Speaker #4: The marginality in India is about 7 percent right now. And we are doing, for the quarter, for the six months, about €250 million present value on the business premium.

Speaker #4: So that's also something to consider, because I expect this to grow moving forward. And then we go back to Europe. Definitely, we see a good dynamic in France.

Speaker #4: I cannot tell you this is going to go forever, but I would expect to see strong results coming from France also in the coming months or next year.

Giulio Terzariol: I cannot tell you this is going to go forever, but I would expect to see strong results coming from France also in the coming months or next year. Italy is doing very nicely from a VNB point of view. If you look at Italy, even if the present value of new business premium is down, the value of new business growth is 5%, which is definitely a good starting point. Eventually, clearly the situation in Germany is going to normalize. From that point of view, I would say Asia, clearly leading in terms of growth, but also in Europe, I think we have a strong franchise and we are going to push to have quality value of new business growth.

Speaker #4: Italy is doing very nicely from a VNB point of view. If you look at Italy, even if the present value on the business premium is down, the value of new business growth is 5%, which is definitely a good starting point.

Speaker #4: And then, eventually, clearly the situation in Germany is going to normalize. So, from that point of view, I would say Asia is clearly leading in terms of growth, but also in Europe, I think we have a strong franchise, and we're going to push to have quality value on the business growth.

Speaker #5: Yeah. A couple of points that I think it's worth mentioning. So, the first is, clearly, we see the development of Asia, but also, coming back to Europe, the dynamics of the demographic impingement and the needs of people in this segment are going to be an important driver for us in the future, both, I would say, Germany, Italy, but also the CE is going to be important. The second point that I want to mention is that the type of articulation of product that we have developed over the years—you know, we always mention our multi- and our hybrid products.

Marco Sesana: A couple of points that I think is worth mentioning. The first is, clearly we see the development of Asia, coming back to Europe, the dynamics of the demographic in pension and the need of people in this segment are going to be an important driver for us in the future. Both, I would say Germany, Italy, but also the CEE is going to be important. The second point that I want to mention is that the type of articulation of product that we have developed over the year, we always mention our hybrid products, multi-line product, and the ability and the sustained growth of protection inside this product is going to be a driver of sustaining of the new business margin and therefore of new business value.

Speaker #5: So, multi-line product. And the ability and sustained growth of protection inside this product is going to be a driver of sustaining the new business margin.

Speaker #5: And therefore, of new business value. So we, as you know, as Giulio already pointed out, we have always made choices—and when we have a trade-off, we have made choices based on value.

Marco Sesana: As Giulio already point out, we always have done choices and when we have a trade-off, we have done choices on value. For example, you see how good was the development of value in Italy, notwithstanding the decrease of volume. There is always this choice that we make. To recap, demographic, pension, and also the type of product we put on the market will be core driver of sustained growth of value for the future.

Speaker #5: And so, for example, you see how good the development of value was in Italy, notwithstanding the decrease in volume. So there is always this choice that we make.

Speaker #5: And so, to recap, demographic pension and also the type of product that we put on the market will be a core driver of sustained growth of value for the future.

Speaker #6: Interesting. Thank you, gentlemen.

William Hawkins: Interesting. Thank you, gentlemen.

Speaker #3: Thank you, William. Next question, please.

Fabio Cleva: Thank you, William. Next question, please.

Speaker #7: The next question is from Andrew Baker, Goldman Sachs.

Operator 2: The next question is from Andrew Baker, Goldman Sachs.

Operator: The next question is from Andrew Baker, Goldman Sachs.

Speaker #8: Hi, thank you for taking my questions. First one: just given the strong investment performance in the second quarter, is there any change to either your operating investment guidance on the Life side, or the investment result guidance that you previously gave on the P&C side?

Andrew Baker: Hi. Thank you for taking my questions. First one, I guess just given the strong investment performance in Q2, is there any change to either your operating investment guidance on the life side or the investment result guidance you've previously given on the P&C side? Secondly, I guess just taking a step back, adjusted EPS grew 16% last year. It's up 14% in H1 this year. There's obviously no change to your targets at this point, but is it fair to assume that you'll come in materially above the top end of the target range for both 2026 and I guess the three-year target as well, just based on where we're sat today? Thank you.

Speaker #8: And then, secondly, I guess just taking a step back, adjusted EPS grew 16 percent last year. It's up 14 percent in the first half of this year.

Speaker #8: There's obviously no change to your targets at this point, but is it fair to assume that you'll come in materially above the top end of the target range for both 2026 and, I guess, the three-year target as well, just based on where we're sitting today?

Speaker #8: Thank you.

Speaker #3: Thank you, Andrew. Both questions are for Cristiano. Yeah. Hi, Andrew. So I would say, speaking first about the P&C effect in the second quarter, you have observed very positive recurring growth of the investment result, where there was a reduction of dividend from our private equity side. But we confirm the guidance given of €1.1 billion so far. But this is a proof point of the very good reinvestment activity done there.

Fabio Cleva: Thank you, Andrew. Both questions are for Cristiano.

Cristiano Borean: Hi, Andrew. Speaking about first, the P&C effect in Q2, you have observed a very positive recurring growth of the investment result where there was a reduction of dividend from our private equity side, but we confirm the guidance given of EUR 1.1 billion so far. This is a proof point of the very good reinvestment activity done there together with the growth of the business. The life side, I think especially in Q2 in isolation, there were EUR 25 million more while in the P&C there were EUR 24 million less. Here there are EUR 25 million more on Lion Re dividend and kind of EUR 20 million more of dividends from the funds in China, which are more a kind of timing shift. That is why we still stick to the EUR 900 million operating investment result for life as well.

Speaker #3: Together with the growth of the business, at the Life side, I think especially in the second quarter in isolation, there were €25 million more, while in the P&C there were €24 million less.

Speaker #3: Here, there are €25 million more from Lion River dividends, and about €20 million more in dividends from the funds in China, which are more of a timing shift.

Speaker #3: That's why we still stick to the €900 million operating investment result for Life as well. Going back to the second question related to adjusted EPS, we are not changing the target, but we are hinting that we are confident that, given this momentum, we will overachieve our target.

Marco Sesana: Going to the second question related to adjusted EPS. We are not changing target, but we are hinting that we are confident that given this momentum, we will overachieve our target, and I think that this is the most important thing out of it, and it is not the first time we are saying it.

Speaker #3: And I think that this is the most important thing out of it, and it is not the first time we are saying it.

Speaker #8: All right. Thank you.

Andrew Baker: All right. Thank you.

Speaker #3: Thank you, Andrew. Next question, please.

Fabio Cleva: Thank you, Andrew. Next question, please.

Speaker #7: The next question is from Andrea Lisi, Equity.

Operator 2: The next question is from Andrea Lisi, Equita.

Operator: The next question is from Andrea Lisi, Equita.

Speaker #5: Yeah. Thank you. Good morning, and thank you for taking my questions. The first one is about the rumors we've read in the newspapers regarding a possible merger between the Generali Italian Network and Alleanza.

Andrea Lisi: Yeah. Thank you. Good morning. Thank you for taking my questions. The first one is on the rumors we have read in newspapers about a possible merger between the Generali Italian network and Alleanza. If you can provide any thoughts on this, if you think that this can accelerate the synergies and development of the business, as well as potentially extend the perimeter of collaboration with Banca Generali. The second question is on new business margin. We have seen a really nice development, if you think that we can go ahead of the guidance that you have provided so far. The other is, if there is any possibility, if you can provide us an indication over your full year expectation on net other non-operating expenses that have declined quite materially year on year. Any thoughts on this is appreciated. Thank you.

Speaker #5: If you can provide any thoughts on this, and if you think that this can accelerate the synergies and development of the business, as well as potentially extend the perimeter of collaboration with Banca Generali.

Speaker #5: The second question is on new business margin. We have seen really nice development, and I was wondering if you think we can go ahead of the guidance you have provided so far.

Speaker #5: And the other is whether there is any possibility you can provide us with an indication of your expectation on net other operating expenses, which have declined quite materially earlier.

Speaker #5: And so any thoughts on this can be appreciated. Thank you.

Speaker #3: Thank you very much, Andrea. On your first question, as always, we never comment on articles, rumors, or speculations. The second question on the new business margin will be taken by Giulio.

Cristiano Borean: Thank you very much, Andrea. On your first question, as always, we never comment on article, rumors, or speculations. The second question on the new business margin will be taken by Giulio, while the third one on the non-operating items is going to be taken by Cristiano.

Speaker #3: While the third one on the non-operating items is going to be taken by Cristiano.

Speaker #5: Sorry, guys. Yes. On the new business margin, clearly it is a nice development, but what we want to point out is that it is also driven by a nice increase in new business margin in Italy, and also the new business margin development in Asia is really favorable.

Giulio Terzariol: Sorry, guys. Yes, on the new business margin, clearly a nice development. By the way, I want to point out it is driven also by a nice increase on new business margin in Italy, and also the new business margin development in Asia is really favorable. For this year, I would say definitely we are going to be at the guidance that we gave you. We said also many times in the last calls that we are not really focused necessarily on the 6% new business margin. For us, it is more important, also coming back to what William was saying before, to look at the value of new business growth. If we need to, in some cases, have a little bit of less new business margin to add growth and new business value growth, we are going to do that. I want to give you an example.

Speaker #5: For this year, I would say definitely we're going to be at the guidance that we gave you. But we also said many times in the last quarters that we are not really focused necessarily on the 6% new business margin.

Speaker #5: For us, it's more important—also coming back to what William was saying before—to look at the value of new business growth. So, if we need to, in some cases, have a little bit less new business margin to add growth and new business value growth, we are going to do that.

Speaker #5: I want to give you an example. If you have a target of 6% new business margin, everything that is below a 6% new business margin can be considered diluted from that point of view.

Giulio Terzariol: If you have a target of 6% new business margin, everything which is below 6% new business margin can be dilutive from that point of view. In theory, we should be in a situation where we had to forgive maybe business at 4% or 5% on business margin just to keep it this 6%. From that point of view, this is not necessarily the best course of action. Yes, we are basically at the 6% level. We might maintain it, but if we see there are possibilities to grow the value of the business stronger, then we are going to be happy also to drift away a bit from the 6% level.

Speaker #5: So in theory, we should be in a situation where we have to forgive maybe business at 4 or 5 percent new business margin, just to keep this 6 percent.

Speaker #5: So from that point of view, this is not necessarily the best course of action. So yes, we are basically at the 6% level.

Speaker #5: We might maintain it, but if we see there are possibilities to grow the value of the business stronger, then we are going to be happy also to drift away a bit from the 6% level.

Speaker #3: Yes, Andrea. Regarding the net other non-operating expenses, as you may recall, we had the 'Exploring Generali' event on financing in March. At that time, we provided some, let's say, range guidance of €200 million to €300 million on these specific other non-operating net expenses.

Cristiano Borean: Yes, Andrea Lisi, regarding the net other non-operating expenses, as probably you may recall, we had the Exploring Generali event on finance in March. We were giving some, let's say, range guidance of EUR 200 to 300 million on the specific other non-operating net expenses. Clearly, be please mindful that this kind of item is pretty erratic in nature. Usually also with a seasonality skew towards Q4 as well as, don't forget that we are also working, and that is the reason why you are seeing this reducing for allocation. We did already in the past moved from that item more than EUR 80 million of cost, which are now being split evenly between life and non-life operating.

Speaker #3: Clearly, be please mindful that this kind of item is pretty erratic in nature. Usually also with a seasonality skew towards the fourth quarter. As well as don't forget that we are also working and that is the reason why we are you are seeing this reducing for allocation and we did already in the past moved from that item more than 80 million euro of cost which are now being split evenly between life and non-life operating.

Speaker #3: And we are continuing this journey of extreme rigor around that to really keep higher, let's say, much lower capability to use that item in order to concentrate all the operating result impact of all the loading and charges, apart from very, very specific topics.

Cristiano Borean: We are continuing this journey of extreme rigor around that to really keep a much lower capability to use that item in order to concentrate all the operating result impact of all the loading and charges apart from very specific topic. There are also other parts which are parallel to that, like the amortization of intangibles. You know that the more you do activity of growing the business like we did last year, purchasing asset management company MGG, we have amortization of intangible for the client value part in it, which is part also of the non-operating overall results.

Speaker #3: There are also other parts which are parallel to that, like the amortization of intangibles. And you know that the more you do activity of growing the business, like we did last year purchasing asset management company MGG, we have amortization of intangibles for the client value part in it, which is also part of the non-operating overall results.

Speaker #5: Thank you.

Andrea Lisi: Thank you.

Speaker #3: Thanks to you, Andrea. Next question, please.

Cristiano Borean: Thanks to you, Andrea. Next question, please.

Speaker #7: The next question is from Gianluca Ferrari, Mediobanca.

Operator 2: The next question is from Gianluca Ferrari, Mediobanca.

Operator: The next question is from Gianluca Ferrari, Mediobanca.

Speaker #8: Yes. Hi. Good afternoon, everyone. Sorry to go back to Andrea's question. On the net other non-operating expenses, if I recall properly, in the fourth quarter last year you had a lot of early retirement plans that affected this line.

Gianluca Ferrari: Yes. Hi, good afternoon, everyone. Sorry to go back to Andrea's question on the net other non-operating expenses. If I recall properly, Q4 last year, you had a lot of early retirement plans that affected this line. Are you expecting another kind of round of early retirement in Q4 this year? The second is on cat losses. If you can give a bit more detail on the EUR 300 million you mentioned and if you can have some kind of guidance for the cat budget for full year 2026. Thank you.

Speaker #8: Are you expecting another round of early retirement in Q4 this year? The second question is on cut losses: if you could give a bit more detail on the €300 million you mentioned, and if you can provide some guidance for the cut budget for the full year 2026.

Speaker #8: Thank you.

Speaker #3: Thank you, Gianluca. The first question is for Cristiano, while the second one is for Marco.

Cristiano Borean: Thank you, Gianluca. The first question is for Cristiano, while the second one is for Marco.

Speaker #4: Yes. So, Gianluca, first of all, I recall what I was mentioning before about the subcategory 'Other Net Non-Operating Expenses'—adjust the 200 to 300 million.

Cristiano Borean: Yes. Gianluca, first of all, I recall what I was mentioning before was that the subcategory other net non-operating expenses adjusted EUR 200 to 300 million. In the same event of Exploring Generali, we were hinting between EUR 100 to 150 million of restructuring charges throughout the year. Far, we are trying to find any possible opportunity, but I think we will have more detail eventually in the nine-month result. If we can accelerate further, I mean, for example, the pension reform in Germany is allowing us to work on further accelerating efficiencies, and we are seeing whether this is something that can happen in 2026 or in 2027. In any case, there is an opportunity that this reform is bringing to streamline further. We will be more precise by nine months.

Speaker #4: In the same event of Generali Exploring Generali, we were hinting at €100 to €150 million of restructuring charges throughout the year. So far, we are trying to find any possible opportunity.

Speaker #4: But I think we will have more detail eventually in the nine-month result. If we can accelerate further—I mean, for example, the pension reform in Germany is allowing us to work on further accelerating efficiencies—and we are seeing whether this is something that can happen in '26 or in '27.

Speaker #4: In any case, there is an opportunity that this reform is bringing to streamline further. And so, we will be more precise by nine months.

Speaker #8: Thank you.

Gianluca Ferrari: Thank you.

Speaker #5: So, on the net cut, I think the €300 million that you referred to are the ones in July, that we have recorded in July.

Marco Sesana: On the nat cat, I think the EUR 300 million that you referred to are the one in July, that we have recorded in July. Those are mainly 2 type of event. One is severe convective storm, I think in the first part of July. That is more around EUR 25, 30 million, and the other one is the hail storm in Europe in the second part of July in Italy, France, and Germany. Clearly this is going to be on top of what you see in the H1. Overall, what I can tell you regarding the budget is that we are very close to the budget, more likely we are going to end up there or slightly more. It's always difficult to forecast any nat cat.

Speaker #5: So, those are mainly two types of events. One is a severe convective storm. I think in the first part of July, there was more, around $25 million to $30 million, and the other one is the hailstorm in Europe in the second part of July.

Speaker #5: In Italy, France, and Germany. So, clearly, this is going to be on top of what you see in the half year. Overall, what I can tell you regarding the budgets is that we are very close to the budget.

Speaker #5: So, more likely we are going to end up there, or slightly more, but it's always difficult to forecast any net cat. Now, if I can add, I also want to remind you how we are covered on the net cat, because I think there is good work that we have done on the reinsurance treaty this year. So there is not only the per-event treaty, which is above the €300 million, but also the cat aggregate.

Marco Sesana: Now, if I can add, also I want to remind you how we are covered on the nat cat, because I think there is a good work that we have done on the reinsurance treaty this year. There is not only the per event treaty, which is above the EUR 300 million, but also the catastrophe aggregate that is working in excess of EUR 1.2 billion for EUR 550 million of capacity. Also this year, the structure is very interesting because we have a EUR 10 million franchise, it's a very favorable setup. What you see here and what you have reported, you need always to remind that the net is going to be different because of this. Overall, yes, we are going to be close to the budget, on the other side, we will be covered also by the catastrophe aggregate.

Speaker #5: There is working in excess of €1.2 billion for €550 million of capacity, and also this year the structure is very interesting because we have a €10 million franchise, so it's a very favorable setup. So, what you see here and what we have reported, you need always to remember that the net is going to be different because of this. So overall, yes, we are going to be close to the budget, but on the other side, we will be covered also by the cat aggregate.

Speaker #8: Thank you very much.

Iain Pearce: Thank you very much.

Speaker #3: Thank you, Gianluca. Next question, please.

Fabio Cleva: Thank you, Gianluca. Next question please.

Speaker #7: The next question is from Ian Pierce, BNP Paribas.

Operator 2: The next question is from Iain Pearce, BNP Paribas.

Operator: The next question is from Iain Pearce, BNP Paribas.

Speaker #6: Sorry, it was just a follow-up on the net cut question, actually, because the convective storm and hail losses—industry reports I've seen on those seem to be set around a billion, slightly above a billion, in industry loss.

Iain Pearce: Sorry, it was just to follow up on the nat cat question, actually, because the convective storm and hail losses, I mean, the industry reports I've seen on those seems to be sat around EUR 1 billion, slightly above EUR 1 billion industry loss. The market share seems very high. We haven't really heard your peers talk about this as yet. Just wondering if there's anything specific about that loss, why you might be picking up a slightly higher market share. Just to follow up on the savings new business margin, which improved a lot half on half, could you just give us a bit more color around what's driving that improvement, please?

Speaker #6: So, I just— the market share seems very high, and we haven't really heard your peers talk about this as yet. So, just wondering if there's anything specific about that loss— why you might be picking up a slightly higher market share.

Speaker #6: And then, just to follow up on the savings new business margin, which improves a lot half on half, could you just give us a bit more color around what's driving that improvement, please?

Speaker #3: Of course, Ian. The first question is for Marco, while the second one is for Julia.

Fabio Cleva: Of course, Iain, the first question is for Marco, while the second one is for Giulio.

Speaker #5: Yes. So we have on this on the loss that you mentioned we have probably estimate that our higher compared to what you mentioned. So we are almost between four and six billion.

Marco Sesana: On the loss that you mentioned, we have probably estimate that are higher compared to what you mentioned. We are almost between EUR 4 and 6 billion. I would say our losses are in line with our market share. At the moment, we don't see any different pickup of losses compared to our market share. This is going to be very much in line with the business. The source that we are getting, these are market sources, from broker reports. I would say we are in line with our market share.

Speaker #5: So I would say our losses are in line with our market share. So we don't see—at the moment we don't see any different pickup of losses compared to our market share.

Speaker #5: This is going to be very much in line with the business. And the source that we are getting these from are market sources, so from broker reports. So, I would say we are in line with the market with our market share.

Speaker #5: Regarding new business margin, there are basically two drivers. One is Asia, where we see an increase in new business margin both in China and also in India. In the case of India, this is because of volume.

Giulio Terzariol: On the savings new business margin, there are basically two drivers. One is Asia, because we see an increase in new business margin both in China and also India. In the case of India, it's because of volume. In the case of China, it's also volume, because clearly when you grow faster, your expense over run and the run gets better. The quality of the production in China is better than last year. We are basically selling par business, which is matched with a guarantee level, which is going down. From that point of view, there is a quality of business which is better compared to last year. These two elements, volume and quality of business, are improving the new business margin. The other country is Italy.

Speaker #5: In the case of China, it is also a matter of volume, because clearly, when you grow faster, your expense overrun or underrun gets better. Also, the quality of the production in China is better than last year.

Speaker #5: We are basically selling per business, which is matched with the guarantee level, which is going down. So, from that point of view, there is a quality of business which is better compared to last year.

Speaker #5: So these two elements, volume and quality of business, are improving the new business margin. And the other country is Italy. As I was saying before, yes, production has gone down in Italy, but actually the value of new business is going up.

Giulio Terzariol: As I was saying before, yes, production has gone down in Italy, but actually the value of new business is going up. This is driven by the marginality, and I can tell you that we have increased by the marginality in traditional savings by about 100 basis points. From that point, this is coming from product mix. Also last year, we still had some products which were on commercial discount, and this year we are just running without any kind of commercial discount. From that point of view, there is a quality production also on the savings part.

Speaker #5: This is driven by the marginality, and I can tell you that we have increased the marginality in traditional savings by about 100 basis points.

Speaker #5: And so from that point, this is coming from product mix. Also, last year we still had some products which were on commercial discount, and this year we are just running without any kind of commercial discount.

Speaker #5: So, from that point of view, there is a quality production also on the savings part.

Speaker #3: Perfect. Thank you. Thank you, Ian. Next question, please.

Iain Pearce: All right, thank you.

Fabio Cleva: Thank you, Iain. Next question please.

Speaker #7: The next question is from James, Shock City.

Operator 2: The next question is from James Shuck, Citi.

Operator: The next question is from James Shuck, Citi.

Speaker #4: Thank you. Good afternoon. I just have a question on the strategic asset allocation and investment. Could you please remind me what the expected yield pickup is?

James Shuck: Thank you. Good afternoon. I just had a question on the strategic asset allocation and investment. Can you just remind me what the expected yield pickup is, please? I know you're investing 2 points per quarter of SCR. What's the expected yield pickup? I guess I'm most interested in what the marginal return on that SCR is generating for you. Secondly, a bit more of a big picture question, but we've seen State Farm take a completely different approach to paying its agents, essentially focusing much more on new business at the expense of kind of harvesting the back book. Can you update a little bit on how the tied agents that you have in your networks are remunerated, and whether you have any plans to change that? Thank you.

Speaker #4: I know you're investing two points per quarter of SCR. So, what's the expected yield pickup? I guess I'm most interested in what the marginal return on the SCR is generating for you.

Speaker #4: And then secondly, a bit more of a big-picture question, but we've seen State Farm take a completely different approach to paying its agents—essentially focusing much more on new business at the expense of kind of harvesting the back book.

Speaker #4: Are there any plans? Can you update a little bit on how the TIDE agents that you have in your networks are remunerated and whether you have any plans to change that?

Speaker #4: Thank you.

Speaker #3: Apologies, James. The line was not very good on your second question. Could you please repeat it for us?

Fabio Cleva: Apologies, James. The line was not very good on your second question. Could you please repeat it for us?

Speaker #4: Certainly. Hopefully you can hear me now. Is it better?

James Shuck: Certainly. Hopefully you can hear me now. Is it better?

Speaker #3: It is a bit better. Yes, thank you.

Fabio Cleva: It is a bit better. Yes, thank you.

Speaker #4: Okay. Yeah. No, it's just a question. Given what State Farm is doing in the US, I'm just intrigued about potentially paying the agents in a different way.

James Shuck: Okay. Yeah. No, it is just a question, given what State Farm is doing in the US, I am just intrigued about potentially paying your agents in a different way. Are there any plans to focus more on new business generation rather than just harvesting the back book? Thank you.

Speaker #4: Are there any plans to focus more on new business generation, rather than just harvesting the back book? Thank you.

Speaker #3: Thank you very much, James. So, the first question is for Marco, and the second question is for Julia.

Fabio Cleva: Thank you very much, James. The first question is for Marco, and the second question is for Giulio.

Marco Sesana: I can give you a highlight, and then also Cristiano can add on the topic. As we said, we were working on our SAA, in particular on the P&C side, because we wanted to re-risk the SAA. The uplift that you see on our operating income is coming both from the increase in assets under management and also from an increased rate that we have done, that we have developed thanks to the re-risking of the SAA. What you are seeing now in terms of operating income, especially on the P&C, is something that you should expect going forward, probably even slightly higher, if I can give you this guideline.

Speaker #5: I can give you a highlight, and then also Cristiano can add on the topic. So, as we said, we were working on our SAA, particularly on the PNC side, because we wanted to re-risk the SAA, and so the uplift that you see on our operating income is coming both from the increase in assets under management and also from an increased rate that we have developed thanks to the re-risking of the SAA.

Speaker #5: So what you are seeing now in terms of operating income, especially on the PNC, is something that you should expect going forward—probably even slightly higher, if I can give you this guideline.

Speaker #3: Yeah. So, giving you a few numbers—if we concentrate on the core countries, where we developed the strategic asset allocation, which is the core part of the group—we are seeing our investment yield, including all the asset classes, including private assets, of 4.24%. This is allowing us to keep a spread of almost 1% more than the redemption component of what is happening, which is allowing us to get a better commercial offer, and then clearly embedded investment margin.

Cristiano Borean: Yeah. Giving you a few numbers. If we concentrate on the core countries where we developed the strategic asset allocation, which is the core part of the group, we are seeing a reinvestment yield, including all the asset classes, including private assets of 4.24%, which is allowing us to keep a spread of almost 1% more than the redemption component of what is happening, which is allowing us to get better commercial offer and then clearly embedded investment margin. I am referring this about life portfolio. Clearly, this number goes to 4.01 if we just look at the P&C portfolio, clearly talking about the core, which means excluding hyperinflationary countries or countries where we have a minor, clearly, weight versus the core European operations.

Speaker #3: I'm referring to this about the life portfolio. Clearly, this number goes to 4.01 if we just look at the P&C portfolio. Clearly talking about the core, which means excluding hyperinflationary countries or countries where we have a minor, clearly, weight versus the core European operations.

Speaker #5: And to your question about changing the remuneration to the agents, we are not changing the remuneration to the agents. I can tell you, anyway, that clearly growth is a component which is important in the remuneration of agents.

Giulio Terzariol: To your question about changing the remuneration to the agents. We're not changing the remuneration to the agents. I can tell you, anyway, that clearly growth is a component which is important in the remuneration of agents. I would also say that generally, because I need to generalize, obviously, we have different type of agency forces in different countries. On the life side, a lot of the remuneration with agents, incentive to the agents, are dependent on growth, and also growth is defined as net growth, clearly net of potentially what there could be lapses, loss in portfolio. From that point of view, it's basically remuneration, which is geared to grow the portfolio, grow the assets under management. On the P&C side, it's a combination, clearly of growth or new production. There is also an incentive on retention.

Speaker #5: I would also say that, generally—because I need to generalize; obviously, we have different tied agency forces in different countries—but on the life side, a lot of the remuneration of agents and incentives to the agents are dependent on growth. And also, growth is defined as net growth, clearly net of potentially what there could be—lapses, loss in portfolio.

Speaker #5: So from that point of view, it is basically remuneration which is geared to grow the portfolio and grow the assets under management. On the PNC side, it's a combination, clearly, of growth of new production, there is also an incentive on retention, and then we add, generally, an incentive on quality of the business.

Giulio Terzariol: We add, Generali, also an incentive on quality of the business. Fundamentally, I would say that clearly our incentive system, which is not just a compensation, but also you have other forms on urging the agents to push production, is definitely geared in terms of increasing the productivity of the agents. That's the ultimate goal, basically, of any remuneration system.

Speaker #5: So fundamentally I would say that clearly our incentive system which is not just a compensation but also you have other forms on the agents to push production is definitely geared in terms of increasing the productivity of the agents that's the ultimate goal basically of any remuneration system.

Speaker #3: Hey James, to complete—because I think I didn't answer—the return on the CR benefit: we are adding 1.5 percentage points of return on a CR from this investment, compared to the previous asset allocation.

Cristiano Borean: James, to complete, because I think I didn't answer the return on the ACR benefit. We are adding 1.5 percentage point of return on ACR from this investment compared to the previous asset allocation. It is, as we called it, ROIC accretive, return on risk capital accretive.

Speaker #3: So, it is, as we called it, RORC-accretive—return on risk capital accretive.

Speaker #4: Thank you.

James Shuck: Thank you.

Speaker #3: Thank you, James. Next question, please.

Fabio Cleva: Thank you, James. Next question, please.

Speaker #7: The next question is from Elena Perini, Intesa Sanpaolo.

Operator 2: The next question is from Elena Perini, Intesa Sanpaolo.

Operator: The next question is from Elena Perini, Intesa Sanpaolo.

Speaker #6: Yes. Good afternoon, and thank you for taking my questions. The first one is a follow-up on the most recent NAT cuts. Do you have any impacts from the wildfires in France and Spain? Because you didn't mention them before.

Elena Perini: Yes. Good afternoon, and thank you for taking my questions. The first one is a follow-up on the most recent nat cats. Do you have any impacts from the wildfires in France and Spain? You didn't mention before. The second question is on the pension reform in Germany. What are the steps that are still now ahead for its adoption? Will it come into force on 1 January as you were mentioning at the event in June? When would it start to contribute to your life and asset management business? Thank you very much.

Speaker #6: And then the second question is on the pension reform in Germany. What are the steps that are still ahead for its adoption? So, will it come into force on the 1st of January, as you mentioned at the event in June?

Speaker #6: And when would this start to contribute to your Life and Asset Management business? Thank you very much.

Speaker #3: Thank you very much, Elena. The first question is for Marco, while the second one is for Julia.

Fabio Cleva: Thank you very much, Elena. The first question is for Marco, while the second one is for Giulio.

Speaker #5: So, like, correctly, you're pointing out correct points. I didn't mention the wildfires that are at the moment in France, but also Spain, I would say.

Marco Sesana: Correctly, you're pointing out a correct point. I didn't mention the wildfire that are at the moment in France, but also Spain, I would say. These are typically booked under the man-made, not nat cat. These are very recent. We are looking at that. We are doing our first estimation. We believe they're going to be under EUR 100 million. Both combining the French side and the Spanish side, we believe they can be less than EUR 100 million, I would say. Considerably less. Please remember, these are booked under the man-made.

Speaker #5: These are typically booked under the man-made not the NAT cut. So we are these are very recent. We are looking at that. So we have we are doing our first estimation.

Speaker #5: We believe they are going to be under the €100 million. So, both combining the French side and the Spanish side, we believe they can be—yeah, less than €100 million, I would say considerably less. And therefore—but please remember these are booked under the man-made.

Speaker #4: So, on the pension reform in Germany—maybe, also because I don't know if everybody is familiar with the pension reform in Germany—so I will just describe how the pension reform is working.

Giulio Terzariol: On the pension reform in Germany, maybe I also, because I don't know if everybody's familiar with the pension reform in Germany, I'll just describe how the pension reform is working. It's basically a substitute for the Riester products.

Speaker #4: It's basically a substitute for the Riester products. The state has decided to introduce a standard product. The standard product is a very low-cost product, but this also means a little bit lower value in the sense that there isn't much choice in funds, and also there is not an option with a guarantee.

Giulio Terzariol: The state has decided to introduce a standard product. The standard product is a very low-cost product, but this also means a little bit low value, in the sense there is not much choice in funds, and also there is not an option with a guarantee. Anyway, you need to be offering the standard product in order to offer other solutions where you can put guarantees, or you can put a wider, broader fund allocation. Also, a change is that for the products without guarantees, also non-insurance players can offer this product. Technically speaking, banks, asset manager, and neo broker. Another point which is a positive is that the subsidies are larger compared to the subsidies that were given before. This clearly is going to increase the number of people that are going to go into this solution.

Speaker #4: So anyway, you need to be offering the standard product in order to offer other solutions where you can put guarantees, or you can put a wider, broader fund allocation.

Speaker #4: Also, a change is that for products without guarantees, non-insurance players can also offer these products. So technically speaking, banks as a manager, neo broker. Another point, which is a positive, is that the subsidies are larger compared to the subsidies that were given before.

Speaker #4: And so, this clearly is going to increase the number of people that are going to go into this solution. Also, the amount of people who are eligible for this kind of product has increased.

Giulio Terzariol: Also, the amount of people which are eligible for these kind of products have been increased. The immediate effect, because we're seeing effects, has been that actually production has slowed down. When we look at what is happening right now is people clearly are staying on the sideline because they're waiting for the reform to come. We are positioning us for 1 January. As you know, we are very strong in life in Germany. We have the strongest distribution footprint compared to any competitor, which is DVAG. Also, DVAG is very strong on this kind of solution. From that point of view, we think that sure, it's going to be a little bit of losing some customer, getting some customers, but we are very well positioned. We are also starting soon a marketing campaign in order to be prepared for 1 January.

Speaker #4: The immediate effect, because we see an effect, has been that actually production slowed down. When we look at what is happening right now, people clearly are staying on the sidelines because they're waiting for the reform to come.

Speaker #4: And we are positioning ourselves for January 1st. As you know, we are very strong in life in Germany. We have the strongest distribution footprint compared to any competitor, which is DVG.

Speaker #4: And also, DVG is very strong on this kind of solution. So, from that point of view, we think that sure, it's going to be a little bit of losing some customers and getting some customers.

Speaker #4: But we are very well positioned. We are also starting a marketing campaign soon, in order to be prepared for January 1st. So, all in all, I would say this could be an opportunity for us, if we play this well.

Giulio Terzariol: All in all, I would say this could be an opportunity for us if we play this well.

Speaker #3: Thank you, Elena. Next question, please.

Fabio Cleva: Thank you, Elena. Next question, please.

Speaker #7: The next question is from Farquhar Mireille, Autonomous.

Operator 2: The next question is from Farquhar Murray, Autonomous.

Operator: The next question is from Farquhar Murray, Autonomous.

Speaker #8: And just two questions, if I may. Firstly, with regards to Radio, I just wondered if you could walk us through the industrial reasoning for the new setup there and maybe what the key changes will be on the ground, and how you expect that to carry through into target deliverables.

Farquhar Murray: Morning, all. Just two questions, if I may. Firstly, with regards to Radion, I just wondered if you could walk us through the industrial reasoning for the new setup there, and maybe what the key changes will be on the ground, and how you expect that to carry through into target deliverables. I suppose it's mainly a revenue discussion built around wallet share, but just want to check whether there's a cost or capital management angle to this, too. Secondly, can you just explain what's driving the higher yields in the non-life investment portfolio? In particular, is that just like a passive reinvestment outcome into the current curves or a more active consequence of portfolio management? Thanks.

Speaker #8: I suppose it's mainly a revenue discussion built around wallet share, but I just want to check whether there's a cost or capital management angle to this too.

Speaker #8: And then secondly, can you just explain what's driving the higher yields in the non-life investment portfolio in particular? Is that just a passive reinvestment outcome into the current curves, or is it a more active consequence of portfolio management?

Speaker #8: Thanks.

Speaker #3: Thank you very much, Farquhar. The first question is for Julia, while the second one is for Cristiano.

Fabio Cleva: Thank you very much, Farquhar. The first question is for Giulio, while the second one is for Cristiano.

Speaker #4: So, I would say the radio-on business consists of two pillars, and then we also add in some other capabilities into this business.

Giulio Terzariol: I would say the Radion business consists of two pillars, and then we also adding some other capabilities into this business. One pillar is the pillar basically of the travel and mobility assistance. This business is overall doing about EUR 4.5 billion of turnover. Just to give you an idea, 60% of this turnover is in travel, 30% is mobility, and then the rest is in other form of assistance. It's a business also that has a lot of travel business in the US, is about 40% of our exposure, and then the rest is 50% around of the business is in Europe, and 10% of the business is fundamentally in Asia. That's one part of the business. The other part of the business is the employee benefits.

Speaker #4: One pillar is basically the travel and mobility assistance. This business is overall doing about €4.5 billion of turnover. Just to give you an idea, 60% of this is mobility, and then the rest is in other forms of assistance.

Speaker #4: And it's a business also that has a lot of travel. Business in the US is about 40% of our exposure, and then the rest is 50% of the business in Europe and 10% of the business is fundamentally in Asia.

Speaker #4: So that's one part of the business. The other part of the business is the employee benefits. And this is a business that right now has $1.5 billion of revenue, but with the acquisition of Swiss Life, we are going to basically double those revenues.

Giulio Terzariol: This is a business that right now has EUR 1.5 billion of revenue, but with the acquisition, Swiss Life, we are going to double basically those revenue. I would look at these two businesses as two different pillars. Also, we are using Radion for potentially expanding embedded insurance, especially when we have embedded insurance on an international kind of platform, because Radion is clearly capable to work with a different business unit. They do that in the assistance business, and they have the capabilities clearly to do this also in other lines of business. If you remember, when we presented a strategic plan in January of last year, we talked about the Health Service Factory. This is also something that Radion is basically put in place. From that point of view, it's a global platform. It's also a global platform which is digitally enabled.

Speaker #4: I will look at these two businesses as two different pillars. Also, we are using RADION for potentially expanded spending in embedded insurance, especially when we have embedded insurance on an international kind of platform, because RADION is clearly capable to work with the different business units.

Speaker #4: They do that in the assistance business, and they had the capabilities clearly to do this also in other lines of business. If you remember, when we presented the strategic plan in January of last year, we talked about the health service factory.

Speaker #4: This is also something that RadioOn is basically put in place. So from that point of view, it is a global platform. It's also a global platform which is digitally enabled.

Speaker #4: And so, this allows us to be very nimble in pushing lines of business where you want to have, basically, a direct connection to the consumer.

Giulio Terzariol: This allow us to be very nimble in pushing lines of business where you want to have basically a direct connection to the consumer. Look at this business somehow also a little bit like B2C business with a good level of digitalization. Now, the numbers that we saw in the last years have been very positive. Also, if you look at the six-month numbers, you can see in the Radion, what we call assistance and insurance business, a double-digit growth both of revenue and also of profit. We continue to invest in this business to make sure that we can see continued growth also in the future.

Speaker #4: So, look at this business somehow also a little bit like a B2C business, with a good level of digitalization. Now, the numbers that we saw in the last years have been very positive.

Speaker #4: Also, if you look at the six-month numbers, you can see in the range on what we call Assistance and Insurance business, a double-digit growth both in revenue and also in profit.

Speaker #4: We continue to invest in this business to make sure that we can see continued growth also in the future.

Speaker #2: So, hello Farquhar. Regarding the hiring on the portfolio, just to set the delta, especially between what is invested at 4.10% in the core portfolio and what is maturing at 2.37%, which makes a 1.64% positive spread pulling up, is something driven by liquid asset classes investment.

Cristiano Borean: Hello, Farquhar. Regarding the higher yield on the portfolio, just to set the delta, especially between what is invested at 4.01 in the core portfolio and what is maturing at 2.37, which makes +1.64% spread pulling up, is something driven by liquid asset classes investment. Maybe you noted that the amount of private debt is basically substituting simply which was there. There is a higher weight of liquid fixed income, in particularly on the credit side. This is consistent with the statement and explanation we were given before of putting the capital at work, because clearly the benefit is purely shareholder driven, and we have enough risk-bearing capacity in this environment to profit from that.

Speaker #2: Maybe you noticed that the amount of private debt is basically substituting simply what was there. So there is a higher weight of liquid fixed income, particularly on the credit side.

Speaker #2: And this is consistent with the statement and explanation we were given before of putting the capital at work, because clearly the benefit is purely shareholder-driven, and we have enough risk-bearing capacity in this environment to profit from that.

Speaker #2: Clearly within our risk appetite framework, but this in any case is already showing its fruit because, clearly, on a healthier overall P&L basis, you see on this kind of component an €87 million improvement of recurring income.

Cristiano Borean: Clearly, within our risk appetite framework, but this, in any case, is showing already its fruit, because clearly on a healthier, overall fair basis, you see on these kind of components, a kind of EUR 87 million improvement of recurring income.

Speaker #3: Thank you very much, Farquhar. Next, please.

Fabio Cleva: Thank you very much for Farquhar. Next question, please.

Speaker #7: The next question is from Michael Hartner at Berenberg.

Operator 2: The next question is from Michael Huttner, Berenberg.

Operator: The next question is from Michael Huttner, Berenberg.

Speaker #8: And thank you very much for this opportunity. I hope I have something clever. The first one is a really general question: your operating capital generation, I think, is €2.4 billion.

Michael Huttner: Thank you very much for this opportunity. I hope I have something clever. The first one is a really general question. Your operating capital generation, I think EUR 2.4 billion net of SCR. That's a lovely number. It is, however, just 9% of the total pot, if you like. Some of your peers have higher numbers. They're not hugely higher, but they seem to be consistently higher. I know you don't obviously want to talk about your peers, but I just wondered, is your accounting more cautious, or is there something I'm missing? Then my traditional question, Cristiano, can you talk about cash? I love cash. I'd like to think you're going to bathe in it during your holidays, but any indication will be lovely.

Speaker #8: That's a lovely number. It is, however, just 9% of the total pot, if you like. And some of your peers have higher numbers. Now, they're not hugely higher, but they seem to be consistently higher.

Speaker #8: And I know you obviously don't want to talk about your peers, but I just wondered: is your accounting more cautious, or is there something I'm missing?

Speaker #8: And then my traditional question, Cristiano: can you talk about cash? I love cash. I'd like to think you're going to bathe in it during your holidays, but any indication would be lovely.

Speaker #4: For sure. So, I'll start with the most boring and then I'll end with the happy part—jokes aside. So, the first topic on the operating capital generation is something that we are looking at.

Cristiano Borean: For sure. I start with the most boring, and then I will end with the happy part, jokes aside. The first topic on the operating capital generation, it is something that we are looking at. For sure there is a difference if we compare ourselves towards other, let's say, standard of industry, because the component, as explained in Exploring Generali, especially the best estimate change of the prior year development is not part of the capital generation. Clearly we are underrunning a couple of 1 to 2 percentage points of operating capital generation, if you want really to compare like for like on the peers. There is another element related to potential asymmetries. There are countries and peers which operate under equivalent regime and countries like us, where we do not have equivalent regime.

Speaker #4: And for sure, there is a difference if we compare ourselves to other, let's say, industry standards, because the component, as explained in exploring generally, especially the best estimate change of the prior year development, is not part of the capital generation.

Speaker #4: So clearly we are underrunning by a couple of one to two percentage points of operating capital generation, if you want really to compare like for like on the peers.

Speaker #4: Then there is another element related to potential asymmetries. There are countries and peers which operate under the equivalence regime, and countries like us, where we do not have an equivalent regime.

Speaker #4: So when we evaluate capital generation, we use Solvency II rules, even in countries where Solvency II is not applied, and it is much more punitive compared to the local capital part.

Cristiano Borean: When we evaluate the capital generation, we use Solvency II rules, even in countries where Solvency II is not applied, and it is much more punitive compared to the local capital part. If you take also wiping out these, let's call regulatory asymmetries, without any form of real underlying limitation for the local development of the business, we were, in our opinion, in line. Another difference, which I think I've noticed, is that we account for the full deduction of the cash spent for the full amount of any LTI plan used and not for the actual cost that we pay for it. In some cases, we buy more shares than the one which were actually needed with the data from the capital, and we don't have a kind of positive recovery out of that. Going to cash.

Speaker #4: So, if you take also wiping out these, let's call, regulatory asymmetries—without any form of real underlying limitation for the local development of the business—we were, in our opinion, in line. Another difference, which I think I've noticed, is that we account for the full deduction of the cash spent for the full amount of any LTI plan used, and not for the actual cost that we pay for it.

Speaker #4: So in some cases we buy more shares than the ones which were actually needed. We deduct it from the capital, and we don't have a kind of positive recovery out of that.

Speaker #4: Going to cash. First, I want to share some good news for both you and me, which we do care about: in July, we received the first remittance from Switzerland.

Cristiano Borean: First, I want to have a good news for both you and I, which we do care. In July, we received the first remittance from Switzerland.

Speaker #4: So I think this is very positive news, which we have been hinting at for years, and we were explaining even in the plan, and it is here. I mean, on capital, the job is finished; on business, the job is not finished, but clearly there is very good momentum in the expense ratio and all the changes that they are making.

Michael Huttner: Yay. Fantastic.

Cristiano Borean: I think this is a very positive news, which we were hinting from years, and we were explaining even in the plan, and it is here. On capital, job finished. On business, job not finished. Clearly there is a very good momentum in the expense ratio and all the change that they are doing. Having said that, we are almost, but not at 95% of the total remittance of the year collected so far, and it is EUR 4.6 billion. I hope this brings a very nice number to put in your projections.

Speaker #4: Having said that, we are almost, but not at, 95% of the total remittance of the year collected so far, and it is €4.6 billion. I hope this brings a very nice number to put in your projections.

Speaker #8: Brilliant. Thank you so

Michael Huttner: Brilliant. Thank you so much.

Speaker #3: Thank you, Michael. Next question, please.

Fabio Cleva: Thank you, Michael. Next question please.

Speaker #7: There are no more questions registered at this time. I will now turn the conference back to you for any closing remarks.

Operator 2: There are no more questions registered at this time. I turn the conference back to you for any closing remarks.

Operator: There are no more questions registered at this time. I turn the conference back to you for any closing remarks.

Speaker #3: Thank you very much for listening to our call. Of course, should you have any follow-up questions, the Investor Relations team is at your full disposal, and we all look forward to seeing you in London on November 18th.

Fabio Cleva: Thank you very much for listening to our call. Of course, should you have any follow-up questions, the investor relations team is at your full disposal, and we all look forward to seeing you in London on 18 November. Have a great weekend and goodbye.

Speaker #3: Have a great weekend, and goodbye.

Operator 2: Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.

Operator: Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephone.

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