Q2 2026 M&G PLC Earnings Call

September 3, 2026

Luca Gagliardi: Okay. Perfect. We are live, and welcome to M&G's 2026 H1 results. Welcome back after the summer. It is a very good set of results. Without further ado, I will hand over to Andrea Rossi, our Group Chief Executive Officer.

Speaker #1: Okay, perfect. So we're live, and welcome to M&G's 2026 half-year results. Welcome back after the summer. It's a very good set of results, so without further ado, I'll hand over to Andrea Rossi, our Group Chief Executive Officer.

Speaker #2: Thank you. Thank you. Good morning, and welcome to M&G’s 2026 half-year results. It is a pleasure to be here with you today. In the first six months of the year, we have made great progress on our strategy.

Andrea Rossi: Thank you. Good morning, and welcome to M&G's 2026 H1 results. It is a pleasure to be here with you today. In the first 6 months of the year, we have made great progress on our strategy. Despite a volatile macro environment, we delivered good net inflows from open business and strong profit growth. I am excited to see how day by day our vision for M&G is translating into operational and financial delivery. Let me share with you the main highlights of the year so far. In 2023, we set three strategic priorities for M&G. First, we focused on financial strength and simplification to set up M&G for the long-term success. Now we are delivering growth. 2025 was a good year for us, and this strong momentum continued into 2026. Operating profits of GBP 435 million is our best half result since listing in 2019.

Speaker #2: Despite the volatile macro environment, we delivered good net inflows from open business and strong profit growth. I am excited to see how, day by day, our vision for M&G is translating into operational and financial delivery.

Speaker #2: Let me share with you the main highlights of the year so far. In 2023, we set three strategic priorities for M&G. First, we focused on financial strength and simplification to set up M&G for long-term success.

Speaker #2: Now, we are delivering growth. 2025 was a good year for us, and this strong momentum continued into 2026. Operating profits of $435 million is our best half-year result since listing in 2019.

Speaker #2: It is up 15% year-on-year, thanks to a 24% increase in Asset Management and double-digit growth in PruFund. Our strategic pivot is paying off, with high-quality, capital-light earnings now representing 80% of total earnings.

Andrea Rossi: It is up 15% year-on-year, thanks to a 24% increase in Asset Management and double-digit growth in PruFund. Our strategic pivot is paying off with high-quality capital light earnings now representing 80% of total earnings, and they will continue to grow thanks to the success of our With-Profits offering. Our new With-Profits BPA, called BPA Plus, is a prime example of this. Since its launch in February, we have completed GBP 1.7 billion of sales, already improving on last year's total annuity volumes. While driving innovation in life, we continue to deliver strong Asset Management performance with GBP 2.2 billion net inflows in high-value solutions across public and private markets. As we have grown the business, we have also improved our profitability. In the first 6 months of the year, our Asset Management cost to income ratio reduced by 2 percentage points to 73%.

Speaker #2: And they will continue to grow, thanks to the success of our with-profits offering. Our new with-profits BPA, called BPA Plus, is a prime example of this.

Speaker #2: Since its launch in February, we have completed £1.7 billion of sales, already improving on last year's total annuity volumes. And what's driving innovation in Life?

Speaker #2: We continue to deliver strong asset management performance, with £2.2 billion of net inflows in high-value solutions across public and private markets. As we have grown the business, we have also improved our profitability.

Speaker #2: In the first six months of the year, our asset management cost-to-income ratio reduced by 2 percentage points to 73%. We expect further improvements in operating leverage as we continue to transform M&G.

Andrea Rossi: We expect further improvements in operating leverage as we continue to transform M&G. We have delivered over GBP 250 million in savings since 2023 and will go further. We continue to simplify our business and free up capacity that we reinvest in products and services supporting long-term growth. Let us now review our financial targets. Here, we continue to make steady progress as we reach the halfway point to our 2027 targets. Our commitment to shareholders is clear: to deliver strong capital generation, to improve the efficiency of our business, and to drive sustainable earnings growth. We are delivering. Capital generation is on track to achieve the GBP 2.7 billion cumulative targets. Our cost to income ratio improved to 73%, and we achieved record operating profit of GBP 435 million, up 15% year-on-year.

Speaker #2: We have delivered over £250 million in savings since 2023, and will go further. We continue to simplify our business and free up capacity that we reinvest in products and services supporting long-term growth.

Speaker #2: Let's now review our financial targets. Here, we continue to make steady progress as we reach the halfway point to our 2027 targets. Our commitment to shareholders is clear.

Speaker #2: To deliver strong capital generation, to improve the efficiency of our business, and to drive sustainable earnings growth. And we are delivering. Capital generation is on track to achieve the £2.7 billion cumulative target.

Speaker #2: Our cost-to-income ratio improved to 73%, and we achieved record operating profit of $435 million, up 15% year on year. In March, I told you that 2025 was the year of foundation building for M&G.

Andrea Rossi: In March, I told you that 2025 was a year of foundation building for M&G as we added distribution, product, and investment capabilities. Now we are seeing the benefits come through. We are on track to deliver low double-digit profit growth this year as we continue to experience strong momentum with clients across the group. The reason that I am confident we will continue to deliver is because we have a clear strategy and the right business model to win. Our ambition is to be Europe's leading integrated asset manager. To achieve it, we will scale across both asset management and life with the growth of one segment reinforcing and compounding the growth of the other. Life gives asset management the scale and long-term capital it needs to develop high-quality investment capabilities.

Speaker #2: As we added distribution, product, and investment capabilities, now we're seeing the benefits come through. We are on track to deliver low double-digit profit growth this year, as we continue to experience strong momentum with clients across the group.

Speaker #2: The reason that I'm confident we will continue to deliver is because we have a clear strategy and the right business model to win.

Speaker #2: Our ambition is to be Europe’s leading integrated asset manager. To achieve it, we will scale across both asset management and Life, with the growth of one segment reinforcing and compounding the growth of the other.

Speaker #2: Life gives asset management the scale and long-term capital it needs to develop high-quality investment capabilities. In return, Life benefits from this expertise, with access to alternative assets that are essential to back its core propositions.

Andrea Rossi: In return, life benefits from this expertise with access to alternative assets that are essential to back its core propositions, including PruFund and Bulk Purchase Annuities. The balanced and synergistic nature of this model is reinforced by the With-Profits Fund, which attracts insurance assets in a capital light way with limited shareholder balance sheet exposure. A real competitive advantage. Another important differentiator for M&G is our strategic partnership with Dai-ichi Life. One that builds on and leverages our business model. Like us, Dai-ichi also believes in the powerful combination of asset management and life. Fully understanding the value of M&G, Dai-ichi decided to invest in our group. Over the past year, they have become our largest shareholder with a 15.7% position. I am delighted by the strength of our partnership and to announce that senior Dai-ichi executive, Hitoshi Yamaguchi, has joined our board of directors effective today.

Speaker #2: Including proof of fund and bulk purchase annuities. The balanced and synergistic nature of this model is reinforced by the With-Profits Fund, which attracts insurance assets in a capital-light way, with limited shareholder balance sheet exposure.

Speaker #2: A real competitive advantage. Another important differentiator for M&G is our strategic partnership with Daiichi Life—one that builds on and leverages our business model.

Speaker #2: Like us, Daiichi also believes in the powerful combination of asset management and life. Fully understanding the value of M&G, Daiichi decided to invest in our group.

Speaker #2: Over the past year, they have become our largest shareholder, with a 15.7% position. I'm delighted by the strength of our partnership, and to announce that senior Daiichi executive Hitoshi Yamaguchi has joined our board of directors, effective today.

Speaker #2: He brings more than three decades of leadership experience spanning international insurance and finance. By becoming Daiichi's preferred asset manager for Europe, we have gained access to a second large balance sheet, which has already allocated over $1 billion to our investment solutions.

Andrea Rossi: He brings more than three decades of leadership experience spanning international insurance and finance. By becoming Dai-ichi's preferred asset manager for Europe, we have gained access to a second large balance sheet, which has already allocated over GBP 1 billion to our investment solutions. At the same time, we are actively exploring a number of joint business opportunities across asset management and life, including product co-development and distribution. Having covered the group highlights, I will now move on to our segments, starting with asset management. I am very proud of the progress we have made in our asset management business. Over the last three years, assets under management have grown steadily, increasing by 17% to GBP 356 billion. We have improved our diversification, becoming less reliant on our internal client and on the UK market.

Speaker #2: At the same time, we are actively exploring a number of joint business opportunities across asset management and Life, including product co-development and distribution. Having covered the group highlights, I will now move on to our segments, starting with Asset Management.

Speaker #2: I am very proud of the progress we have made in our asset management business. Over the last three years, assets under management have grown steadily, increasing by 17% to $356 billion.

Speaker #2: And we have improved our diversification, becoming less reliant on our internal clients and the UK market. Over the same period, external assets have increased by 29% to $189 billion, with our international business increasing even faster by more than 40%, and now accounting for nearly 60% of total external assets.

Andrea Rossi: Over the same period, external assets have increased by 29% to GBP 189 billion, with our international business increasing even faster by more than 40% and now accounting for nearly 60% of total external assets. We also remain disciplined on costs, translating higher volumes into better operating leverage. The cost-to-income ratio reduced to 73%, and fee-related earnings increased by 45%. The outlook is bright. New business momentum remains strong, with net inflows of GBP 1 billion in July alone. With good client demand, a GBP 7.8 billion capital queue in private markets, and new business from Dai-ichi, we are confident that we will continue to drive profitable growth in asset management. Another reason that supports my confidence is the quality of our flows. Net inflows of GBP 2.2 billion in H1 correspond to GBP 13 million in annualized net new revenues.

Speaker #2: We also remain disciplined on costs, translating higher volumes into better operating leverage. The cost-to-income ratio reduced to 73%, and fee-related earnings increased by 45%.

Speaker #2: And the outlook is bright. New business momentum remains strong, with net inflows of $1 billion in July alone. With good client demand, a $7.8 billion capital queue in private markets, and new business from Daiichi, we are confident that we will continue to drive profitable growth in asset management.

Speaker #2: Another reason that supports my confidence is the quality of our flows. Net inflows of $2.2 billion in H1 correspond to $13 million in annualized net new revenues.

Speaker #2: This proves that our focus on high-margin and high-value solutions is delivering. Both our private and public markets teams achieved good results. Within private markets, client appetite for structured credit remained very strong, and we saw renewed interest in real estate.

Andrea Rossi: This proves that our focus on high margin and high value solutions is delivering. Both our private and public markets team achieved good results. Within private markets, client appetite for structured credit remained very strong, and we saw renewed interest in real estate. Infrastructure is another priority area for our clients, where we have strengthened our leadership team. Within public markets, equities continued to outperform, thanks to great investment performance and a compelling offering across global, European, and Asian strategies. When looking at flows from a client perspective, you see a similarly positive picture. Firstly, we delivered GBP 1.1 billion of net inflows in high margin wholesale solutions. Secondly, we achieved net inflows in the UK institutional market for the second consecutive period, an important milestone as we turn around this segment. While the UK remains a mature market, we continue to innovate.

Speaker #2: Infrastructure is another priority area for our clients, where we have strengthened our leadership team. Within public markets, equities continued to outperform, thanks to great investment performance and a compelling offering across global, European, and Asian strategies.

Speaker #2: When looking at flows from a client perspective, you see a similarly positive picture. Firstly, we delivered $1.1 billion of net inflows in high-margin wholesale solutions.

Speaker #2: Secondly, we achieved net inflows in the UK institutional market for the second consecutive period—an important milestone as we turn around this segment. And while the UK remains a mature market, we continue to innovate.

Speaker #2: Later this month, we will launch our new CDI Plus proposition—an innovative, insurance-backed solution designed to optimize the investment and hedging strategy of DB pension schemes in run-on.

Andrea Rossi: Later this month, we will launch our new CDI+ proposition, an innovative insurance-backed solution designed to optimize the investment and hedging strategy of DB pension schemes in run-on. Finally, we achieved net inflows with international institutional clients for a fourth year in a row. Europe has historically been the primary driver of our expansion, but now we have added new engines for growth, establishing strategic partnership with high caliber institutions across Asia and North America as you can see on this page. As mentioned earlier, I am very pleased with the quality of the performance of our asset management business, which gives me real confidence in its future. Let's now move to our life segment. Here, I want to start by reiterating why life is now a core driver of M&G's capital light growth.

Speaker #2: Finally, we achieved net inflows with international institutional clients for a fourth year in a row. Europe has historically been the primary driver of our expansion.

Speaker #2: But now we have added new engines for growth, establishing strategic partnerships with high-caliber institutions across Asia and North America, as you can see on this page.

Speaker #2: As mentioned earlier, I am very pleased with the quality of the performance of our asset management business, which gives me real confidence in its future.

Speaker #2: Let's now move to our Life segment. Here, I want to start by reiterating why Life is now a core driver of M&G's capital-light growth.

Speaker #2: From this year, nearly all our new business in Life is being written by the With-Profits Fund. This means that we are gathering assets in a way that is capital-light for shareholders and that carries limited risk and balance sheet exposure.

Andrea Rossi: From this year, nearly all our new business in life is being written by the With-Profits Fund. This means that we are gathering assets in a way that is capital light for shareholders and that carries limited risk and balance sheet exposure. We expect to attract at least GBP 50 billion to the group by 2030 through these With-Profits solutions. The chart in the middle of this slide gives you a rough indication of the breakdown, with PruFund and the recently launched BPA+ driving the bulk of the volumes. These assets will generate at least GBP 100 million of annual operating profit by 2030, emerging across life and asset management. While offering great shareholder outcomes, the With-Profits Fund also delivers superior client outcomes. Our new BPA+ has been a great success since its launch six months ago, and with good reason.

Speaker #2: We expect to attract at least $50 billion to the group by 2030 through these with-profits solutions. The chart in the middle of this slide gives you a rough indication of the breakdown, with the PruFund and the recently launched BPA Plus driving the bulk of the volumes.

Speaker #2: These assets will generate at least $100 million of annual operating profit by 2030, emerging across Life and Asset Management. While offering great shareholder outcomes, the With-Profits Fund also delivers superior client outcomes.

Speaker #2: Our new BPA Plus has been a great success since its launch six months ago, and with good reason. Entering into a BPA transaction is the most important decision that pension trustees can make.

Andrea Rossi: Entering into a BPA transaction is the most important decision that pension trustees can make. It influences the lives of thousands of people for decades to come. When dealing with the With-Profits Fund, trustees know that their members are protected by one of the best capitalized insurance companies in Europe, a mutual that has put client interest at the heart of everything it does for over 175 years. They are getting a great deal, too. The low cost of capital of the With-Profits Fund makes its pricing attractive. If the fund achieves good investment returns, it shares them with customers, declaring a bonus on top of their guaranteed income. You can see why our BPA+ has a real edge in the UK BPA market.

Speaker #2: It influences the lives of thousands of people for decades to come. When dealing with the With-Profits Fund, trustees know that their members are protected by one of the best-capitalized insurance companies in Europe.

Speaker #2: A mutual that has put client interests at the heart of everything it does for over 175 years. And they are getting a great deal too.

Speaker #2: The low cost of capital of the with-profits fund makes its pricing attractive, and if the fund achieves good investment returns, it shares them with customers by declaring a bonus on top of their guaranteed income.

Speaker #2: You can see why our BPA Plus has a real edge in the UK BPA market. We expect to scale our sales by at least 50% this year, while remaining disciplined on pricing, and to achieve our target volumes of 3 to 4 billion in 2027.

Andrea Rossi: We expect to scale our sales at least by 50% this year, remaining disciplined on pricing, to achieve our target volumes of GBP 3 billion to GBP 4 billion in 2027. As we scale, we support our growth in Asset Management, in particular, thanks to the significant allocation of BPAs to private markets. Within Life, we are also making good progress on our retail strategy. Here we have two core objectives to drive sales. First, to improve the distribution of PruFund, and secondly, to broaden our proposition with other investment solutions. From a distribution perspective, we are pleased to have launched PruFund on Scottish Widows platform. We will add a second FNZ platform later this year. From a product perspective, last summer, we launched our retail fixed-term annuity, which has generated over GBP 100 million of net inflows in the first 12 months. A good start.

Speaker #2: As we scale, we support our growth in asset management, in particular thanks to the significant allocation of BPAs to private markets. Within Life, we are also making good progress on our retail strategy.

Speaker #2: Here we have two core objectives to drive sales: first, to improve the distribution of the Proof Fund, and secondly, to broaden our proposition with other investments.

Speaker #2: From a distribution perspective, we are pleased to have launched Proof Fund on the Scottish Widows platform. We will add a second FNZ platform later this year.

Speaker #2: From a product perspective, last summer we launched our retail fixed-term annuity, which has generated over $100 million of net inflows in the first 12 months.

Speaker #2: A good start. In February, we declared our first bonus for this product, giving customers an uplift of an extra 45 basis points to their investments on top of their guaranteed returns.

Andrea Rossi: In February, we declared our first bonus for this product, giving customers an uplift of an extra 45 bps to their investments on top of their guaranteed returns. Again, clear evidence of the value delivered by our With-Profits solutions. Our sales in H1 reflect this positive momentum. When combining PruFund and fixed-term annuities, our retail net flows improved by over GBP 500 million year on year. Looking ahead, we expect PruFund to deliver improved inflows in H2 and are encouraged by the positive market reaction to our launch on the Scottish Widows platform. Before handing over to Kathryn, I will briefly cover our group transformation. In March, we completed the first phase of our transformation program, achieving GBP 250 million of savings.

Speaker #2: Again, clear evidence of the value delivered by our with profits solutions. Our sales in the first half reflect this positive momentum. When combining proof fund and fixed term annuities, our retail net flows improved by over $500 million year on year.

Speaker #2: And looking ahead, we expect Proof Fund to deliver improved inflows in the second half, and are encouraged by the positive market reaction to our launch on the Scottish Widows platform.

Speaker #2: Before handing over to Kathryn, I will briefly cover our group transformation. In March, we completed the first phase of our transformation program, achieving £250 million of savings.

Speaker #2: But there continue to be exciting opportunities ahead, as we explore ways to make our business simpler and more scalable to deliver improved customer outcomes and long-term growth.

Andrea Rossi: There continue to be exciting opportunities ahead as we explore ways to make our business simpler and more scalable to deliver improved customer outcomes and long-term growth. AI plays a key role on this journey, improving personal productivity and transforming end-to-end processes. It changes how we serve our clients, how we operate, and how we grow. On this slide, you can see some of the initiatives we are working on. Our advisors are now spending less time on admin and more time with the customers. We are faster and more accurate when pricing BPA new business, answering RFPs from institutional clients, or addressing customer needs. Our research and asset sourcing teams have reduced their cycle times without compromising on quality. The core objective is always the same, to deliver a better customer experience, improve process efficiency, and free up resources which are redeployed on high-value activities that drive growth.

Speaker #2: AI plays a key role on this journey—improving personal productivity and transforming end-to-end processes. It changes how we serve our clients, how we operate, and how we grow.

Speaker #2: On this slide, you can see some of the initiatives we are working on. Our advisors are now spending less time on admin and more time with the customers.

Speaker #2: We are faster and more accurate when pricing BPA new business, answering RFPs from institutional clients, or addressing customer needs. Our research and asset sourcing teams have reduced their cycle times without compromising on quality.

Speaker #2: The core objective is always the same: to deliver a better customer experience, improve process efficiency, and free up resources, which are redeployed on high-value activities that drive growth.

Speaker #2: So, to sum up, we have had a good first half—with record operating profits, strong flows in Asset Management, and new product launches in Life.

Andrea Rossi: To sum up, we have had a good H1 with record operating profits, strong flows in Asset Management, and new product launches in Life. As we grow, we are making M&G more diversified, resilient, and capital light. Through cost discipline and business transformation, we are also freeing up resources to support our long-term ambition. We are delivering on our targets and are confident we will sustain this positive momentum in H2. With that, I will hand over to Kathryn, who will take you through the financial results.

Speaker #2: And as we grow, we are making M&G more diversified, resilient, and capital-light. Through cost discipline and business transformation, we are also freeing up resources to support our long-term ambition.

Speaker #2: We are delivering on our targets and are confident we will sustain this positive momentum in the second half. And with that, I will hand over to Kathryn, who will take you through the financial results.

Speaker #1: Thanks, Andrea. And good morning, everyone. I will now take you through the details of our H1 results, which show steady momentum across the Group and good progress against our targets.

Kathryn McLeland: Thanks, Andrea, and good morning, everyone. I will now take you through the details of our H1 results, which show steady momentum across the group and good progress against our targets. Covering first the key highlights. We delivered GBP 2.4 billion of net flows from open business, an increase of GBP 300 million year on year. In Asset Management, we continued to grow across both our wholesale and institutional channels, despite the volatile macro environment. In Life, flows improved meaningfully on the back of higher annuities and PruFund sales. Group Adjusted Operating Profit increased by 15% year on year to GBP 435 million, our best first half result since listing. Within it, Asset Management earnings increased by 24% thanks to higher recurring revenues and improved operating leverage. In Life, our higher contribution from the capital With-Profits business led to a 9% increase in profits.

Speaker #1: Covering first the key highlights. We delivered £2.4 billion of net flows from open business, an increase of £300 million year on year. In asset management, we continue to grow across both our wholesale and institutional channels despite the volatile macro environment.

Speaker #1: In life, flows improved meaningfully on the back of higher annuities and proof fund sales. Group adjusted operating profit increased by 15% year on year to 435 million pounds our best first half results since listing.

Speaker #1: And within it, asset management earnings increased by 24%, thanks to higher recurring revenues and improved operating leverage. In Life, our higher contribution from the capital-light with-profits business led to a 9% increase in profits.

Speaker #1: At £372 million, operating capital generation was £36 million lower, largely due to movements in our capital requirements and asset management, and the Corporate Centre.

Kathryn McLeland: At GBP 372 million, operating capital generation was GBP 36 million lower, largely due to movements in our capital requirements in Asset Management and the corporate center. New business drain of GBP 20 million was GBP 15 million better year on year, despite us delivering twice the volume of BPAs, reflecting the capital-light nature of our new With-Profits BPA Plus. Thanks to this good result, we remain on track to achieve our GBP 2.7 billion capital generation cumulative target. Finally, supported by our strong operating performance, the Solvency II ratio reached 247%. Let us now turn to our flows. Closing AUMA stood at GBP 387 billion, supported by GBP 2.4 billion of net inflows from open business and GBP 13 billion of positive market movements. With GBP 2.2 billion, Asset Management accounted for the majority of net flows, equally split across our wholesale and institutional channels.

Speaker #1: New business strain of 20 million pounds was 50 million pounds better year on year despite us delivering twice the volume of BPAs reflecting the capital-light nature of our new with profits BPA Plus.

Speaker #1: So, thanks to this good result, we remain on track to achieve our £2.7 billion capital generation cumulative target. Finally, supported by our strong operating performance, the Solvency II ratio reached 247%.

Speaker #1: So let's now turn to our flows. Closing AUMA stood at £387 billion, supported by £2.4 billion of net inflows from open business and £13 billion of positive market movements.

Speaker #1: With £2.2 billion in asset management accounted for, the majority of net flows were equally split across our wholesale and institutional channels. This equates to 2.4% of opening AUMA from external clients on an annualized basis.

Kathryn McLeland: This equates to 2.4% of opening AUMA from external clients on an annualized basis. As you have heard from Andrea, we delivered another GBP 1 billion of net inflows in July, with good momentum across a range of public and private strategies. While we continue to grow internationally, supported by our strategic partnership with Dai-ichi Life, we are very pleased with the continued turnaround of our UK institutional segment, where we delivered net inflows of GBP 800 million. Thanks to our business model, we are very well-placed to support UK pension schemes along their entire de-risking journey, leveraging the capabilities of both Asset Management and Life. Our new CDI+ solution, which Andrea just mentioned, is an example of our product innovation for these clients. In wholesale, our strong investment performance, particularly in public equities, remained a key attraction for clients.

Speaker #1: And as you’ve heard from Andrea, we delivered another £1 billion of net inflows in July, with good momentum across a range of public and private strategies.

Speaker #1: While we continue to grow internationally, supported by our strategic partnership with Daiichi Life, we're very pleased with the continued turnaround of our UK institutional segment, where we delivered net inflows of £800 million.

Speaker #1: And thanks to our business model, we're very well placed to support UK pension schemes along their entire de-risking journey, leveraging the capabilities of both asset management and Life.

Speaker #1: Our new CDI Plus solution, which Andrea just mentioned, is an example of our product innovation for these clients. In Wholesale, our strong investment performance, particularly in public equities, remained a key attraction for clients.

Speaker #1: Life net flows from open business of £200 million was a £700 million improvement year on year. This reflects a £500 million increase in improved fund flows year on year and continued growth in the BPA market, where we recorded £600 million in sales in the first half. Activity has picked up over the summer as we completed a further £1.1 billion in BPA transactions across July and August.

Kathryn McLeland: Life's net flows from open business of GBP 200 million was a GBP 700 million improvement year on year. This reflects GBP 500 million increase in PruFund year on year and continued growth in the BPA market, where we recorded GBP 600 million in sales in the first half. Activity has picked up over the summer as we completed a further GBP 1.1 billion in BPA transactions across July and August. We are very pleased with our continued positive growth in net flows across M&G, despite a volatile external environment as we deliver the products and solutions our clients want. Moving on now to profit. At GBP 435 million, our operating profit in the first six months was up 15%, with the key features being, firstly, 24% higher earnings and improving operating leverage in Asset Management, supporting a steady reduction in our cost-to-income ratio.

Speaker #1: We're very pleased with our continued positive growth in net flows across M&G, despite a volatile external environment, as we deliver the products and solutions our clients want.

Speaker #1: Moving on now to profit. At £435 million, our operating profit in the first six months was up 15%, with the key features being, firstly, 24% higher earnings and improving operating leverage in asset management, supporting a steady reduction in our cost-to-income ratio.

Speaker #1: Secondly, a 9% increase in life profits to £375 million, with double-digit growth in both PruFund and traditional with-profits, more than offset an £8 million reduction in annuities.

Kathryn McLeland: Secondly, a 9% increase in life profits to GBP 375 million, with double-digit growth in both PruFund and traditional with-profits, more than offsetting an GBP 8 million reduction in annuities due to lower returns on excess assets, which we flagged in March. The corporate center outcome was adverse by GBP 5 million, impacted by lower investment income and slightly higher head office expenses. Our operating profit is not just growing. It is also improving in quality as we increase the diversification of our business and pivot it to capital-light sources. Today, 80% of our operating profit comes from asset management and with-profits capital-light business. This proportion is up meaningfully from 73% last year, and we expect it to rise further over time as we now write the vast majority of our annuity business through the With-Profits Fund.

Speaker #1: This was due to lower returns on excess assets, which we flagged in March. And finally, the Corporate Centre outcome was adverse by £5 million, impacted by lower investment income and slightly higher head office expenses.

Speaker #1: Our operating profit is not just growing; it's also improving in quality, as we increase the diversification of our business and pivot it to capital-light sources.

Speaker #1: And today, 80% of our operating profit comes from asset management and with-profits, capital-light business. This proportion is up meaningfully from 73% last year, and we expect it to rise further over time as we now write the vast majority of our annuity business through the with-profits fund.

Speaker #1: So let us now look at each of our businesses in turn, starting with Asset Management. Our Asset Management business delivered a strong result, with adjusted operating profit up 24% to £159 million. This was driven by a higher asset base and resilient margins.

Kathryn McLeland: Let us now look at each of our businesses in turn and starting with asset management. Our asset management business delivered a strong result with adjusted operating profit up 24% to GBP 159 million. This was driven by a higher asset base and resilient margins, generating much improved recurring revenues. At GBP 356 billion, assets under management were up by GBP 32 billion compared to last year, supported by sustained net inflows and favorable markets. Our average fee margin remained resilient at 32 basis points as we continue to expand our business with external clients, focusing on high-value solutions, particularly in private markets. We are very pleased with the quality of our flows, which generated GBP 13 million of annualized net new revenues. Together with a growing asset base, this contributed to revenue growth in the first six months of 10%.

Speaker #1: Generating much improved recurring revenues. At £356 billion, assets under management were up by £32 billion compared to last year, supported by sustained net inflows and favourable markets.

Speaker #1: Our average fee margin remained resilient at 32 basis points, as we continue to expand our business with external clients, focusing on high-value solutions, particularly in private markets.

Speaker #1: We're very pleased with the quality of our flows, which generated £13 million of annualized net new revenues. Together with a growing asset base, this contributed to revenue growth of 10% in the first six months.

Speaker #1: Costs of £470 million increased by 7% year on year, but remained flat compared to the second half of last year. This cost base reflects our investments to support long-term growth in asset management, as we enhance our distribution and investment capabilities, including our acquisition of P Capital Partners.

Kathryn McLeland: Costs of GBP 417 million increased by 7% year-on-year, but remained flat compared to the second half of last year. This cost base reflects our investments to support long-term growth in asset management as we added distribution and investment capabilities, including our acquisition of P Capital Partners. As we grow, we continue to improve our operating leverage. In H1, the cost-income ratio reduced by two percentage points for the third straight year, reaching 73%. We are confident that we can continue to improve our efficiency in the second half of the year and remain firmly committed to our 70% target by the end of 2027. Fee-related earnings, which are a key metric for us, were up by an encouraging 17%. Finally, the operating profit also benefited from a GBP 13 million increase in investment income, mainly due to improved impact from FX revaluation given the stronger dollar.

Speaker #1: And as we grow, we continue to improve our operating leverage. In H1, the cost-to-income ratio reduced by 2 percentage points for the third straight year, reaching 73%.

Speaker #1: And we are confident that we can continue to improve our efficiency in the second half of the year and remain firmly committed to our 70% target by the end of 2027.

Speaker #1: Fee-related earnings, which are a key metric for us, were up by an encouraging 17%. Finally, operating profit also benefited from a £13 million increase in investment income, mainly due to improved impact from FX revaluation given the stronger dollar.

Speaker #1: Given the business momentum we are seeing, and by continuing to be disciplined on costs and reinvesting capacity into growth initiatives, we are confident that we will further deliver top-line expansion and operating leverage.

Kathryn McLeland: Given the business momentum we are seeing, and by continuing to be disciplined on costs and reinvesting capacity into growth initiatives, we are confident that we will further deliver top line expansion and operating leverage. Let us now turn to our life business. Here, PruFund's operating profit increased by 15% to GBP 129 million, reinforcing its role as a growth engine within the group. The main driver of this positive result was the higher opening CSM, which grew strongly in 2025, and a broadly stable amortization rate. The result of our traditional with-profits business was up by 14% year-on-year to GBP 137 million, reflecting similar positive dynamics. We are encouraged by this performance, particularly it was achieved against the backdrop of lower expected returns and risk-free rates, which we previously highlighted.

Speaker #1: Let us now turn to our Life business. Here, PruFund's operating profit increased by 15% to £129 million, reinforcing its role as a growth engine within the Group.

Speaker #1: And the main driver of this positive result was the higher opening CSM, which grew strongly in 2025, and a broadly stable amortization rate. The result of our traditional with-profits business was up by 14% year on year to £137 million, reflecting similar positive dynamics.

Speaker #1: We're encouraged by this performance, particularly as it was achieved against the backdrop of lower expected returns and risk-free rates, which we previously highlighted. Both PruFund and traditional with-profits continue to provide resilient long-term earnings for the group, and are underpinned by a combined £4.2 billion of CSM, supporting the sustainability of our future profits.

Kathryn McLeland: Both PruFund and traditional with-profits continue to provide resilient long-term earnings for the group, underpinned by a combined GBP 4.2 billion of CSM supporting the sustainability of our future profits. As you know, we switched two PruFund products to a 100/0 charges less expenses approach from 1 April, which will accelerate profit recognition on new business. Let's now turn to annuities. Here, annuities profit was down 7% year on year to GBP 105 million, reflecting the guidance given in March, specifically the lower expected returns on surplus assets, which reduced to 4.5% from 5.2% last year. These headwinds were partly offset by a higher CSM release, supported by the longevity benefit we recognized in H2 2025 and improved experience variances due to the non-repeat of the GBP 8 million headwind we flagged last year.

Speaker #1: As you know, we switched two proof fund products to a 100/0 charges-less-expenses approach from the 1st of April, which will accelerate profit recognition on new business.

Speaker #1: Let's now turn to annuities. Here, annuities profit was down 7% year-on-year to £105 million, reflecting the guidance given in March. Specifically, the lower expected returns on surplus assets, which reduced to 4.5% from 5.2% last year.

Speaker #1: And these headwinds were partly offset by a higher CSM release, supported by the longevity benefit we recognized in the second half of 2025, and improved experience variances due to the non-repeat of the £8 million headwind we flagged last year.

Speaker #1: This year, all annuity business was written by the With-Profits Fund through our BPA Plus solution. The With-Profits Fund retains roughly 80% of the economic interest after reinsuring around 20% to the shareholder balance sheet.

Kathryn McLeland: This year, all annuity business was written by the With-Profits Fund through our BPA Plus solution. The With-Profits Fund retains roughly 80% of the economic interest after reinsuring around 20% to the shareholder balance sheet. In due course, as BPA Plus volumes grow, we will evolve our disclosures to share more details on the different contributions from each book of business. Turning to other life, where we generated a profit of GBP 4 million, a turnaround on last year, primarily thanks to lower losses in our platform and advice business. Here, we continue to reduce costs and improve the efficiency of our digital platform, including the outsourcing of our back office functions. Before moving on to capital generation, I would highlight the strength of our CSM, the details of which you can find in the appendix.

Speaker #1: In due course, as BPA Plus volumes grow, we will evolve our disclosures to share more details on the different contributions from each book of business.

Speaker #1: Turning to Other Life, where we generated a profit of £4 million—a turnaround from last year—primarily thanks to lower losses in our platform and advice business.

Speaker #1: Here, we continue to reduce costs and improve the efficiency of our digital platform, including the outsourcing of our back-office functions. Before moving on to capital generation, I would highlight the strengths of our CSM, the details of which you can find in the appendix.

Speaker #1: Our Group CSM of £7 billion was up 6% since the start of the year and represents a large and growing store of future value for our shareholders.

Kathryn McLeland: Our group CSM of GBP 7 billion was up 6% since the start of the year and represents a large and growing store of future value for our shareholders. Turning now to capital generation. In H1, we generated GBP 392 million of operating capital before new business drain, keeping us firmly on track to achieving our three-year target of GBP 2.7 billion. Underlying capital generation of GBP 304 million was GBP 27 million lower than the prior year. Within it, asset management capital generation reduced by GBP 7 million, despite the higher own funds, as we experienced a GBP 14 million increase in capital requirements compared to a GBP 12 million reduction last year. We experienced a similar dynamic in the corporate center, where last year we benefited from an GBP 18 million SCR reduction.

Speaker #1: Turning now to capital generation. In the first half, we generated £392 million of operating capital before new business strain, keeping us firmly on track to achieving our three-year target of £2.7 billion.

Speaker #1: Underlying capital generation of £304 million was £27 million lower than the prior year. Within it, asset management capital generation reduced by £7 million, despite the higher own funds as we experienced a £14 million increase in capital requirements compared to a £12 million reduction last year.

Speaker #1: And we experienced a similar dynamic in the corporate center, where last year we benefited from an £18 million SCR reduction. In Life, the enforced contribution reduced by £10 million to £314 million, driven by a £15 million lower return on annuity surplus assets, which we flagged in March.

Kathryn McLeland: In life, the in-force contribution reduced by GBP 10 million to GBP 314 million, driven by a GBP 15 million lower return on annuity surplus assets, which we flagged in March. Importantly, life's new business drain improved by GBP 15 million to GBP 20 million, despite higher BPA sales, as we shifted our life new business to a capital light model. Management actions contributed GBP 68 million, primarily reflecting equity hedging activities, and we remain on track towards our annual guidance of GBP 100 million to GBP 200 million. Thanks to our good operating performance, our balance sheet continued to strengthen. The Solvency II ratio closed the period at 247% with a GBP 5 billion capital surplus. Own funds of GBP 8.4 billion include GBP 4.8 billion of PVST, the present value of future Shareholder Transfers from our With-Profits Fund. This is a unique feature of M&G, reflecting the scale and profitability of our with-profits business.

Speaker #1: Importantly, Life's new business strain improved by £15 million to £20 million, despite higher BPA sales, as we shifted our Life new business to a capital-light model.

Speaker #1: Management actions contributed £68 million, primarily reflecting equity hedging activities. We remain on track towards our annual guidance of £100 million to £200 million.

Speaker #1: Thanks to our good operating performance, our balance sheet continued to strengthen. The Solvency II ratio closed the period at 247%, with a £5 billion capital surplus.

Speaker #1: Own funds of £8.4 billion include £4.8 billion of PVST, the present value of future shareholder transfers from our with-profits fund. This is a unique feature of M&G, reflecting the scale and profitability of our with-profits business.

Kathryn McLeland: This is a unique feature of M&G, reflecting the scale and profitability of our with-profits business. The PVST is a store of future value that has grown tremendously in recent years, thanks to the success of PruFund and supportive markets. This growth has been a key driver of our improved financial performance and underpins the long-term cash earnings and capital generation of the group. We will realize this asset gradually over time and thus expect to continue to operate above our target Solvency II range over the medium term. You will also see on this page that we have updated the definition of our leverage ratio to reflect the Solvency II value of our debt instead of the nominal value.

Speaker #1: The PVSGs are a store of future value that has grown tremendously in recent years, thanks to the success of the proof fund and supportive markets. This growth has been a key driver of our improved financial performance and underpins the long-term cash earnings and capital generation of the group.

Kathryn McLeland: The PVST is a store of future value that has grown tremendously in recent years, thanks to the success of PruFund and supportive markets. This growth has been a key driver of our improved financial performance and underpins the long-term cash earnings and capital generation of the group. We will realize this asset gradually over time and thus expect to continue to operate above our target Solvency II range over the medium term. You will also see on this page that we have updated the definition of our leverage ratio to reflect the Solvency II value of our debt instead of the nominal value. On this basis, the leverage ratio stood at 29% at the end of June. We made this change to ensure consistency between the numerator and denominator of the metric and to better align our approach to industry standards.

Speaker #1: We will realize this asset gradually over time, and thus expect to continue to operate above our target Solvency II range over the medium term.

Speaker #1: You will also see on this page that we've updated the definition of our leverage ratio to reflect the Solvency II value of our debt instead of the nominal value.

Speaker #1: And on this basis, the leverage ratio stood at 29% at the end of June. We made this change to ensure consistency between the numerator and denominator of the metric, and to better align our approach to industry standards.

Kathryn McLeland: On this basis, the leverage ratio stood at 29% at the end of June. We made this change to ensure consistency between the numerator and denominator of the metric and to better align our approach to industry standards. This is still a more conservative approach than peers as we use shareholder-owned funds, not regulatory-owned funds. We are pleased with the continued strength of our balance sheet as it represents a key competitive advantage for M&G in what remains a volatile and uncertain macro environment. I will finish by briefly covering costs.

Speaker #1: This is still a more conservative approach than peers, as we use shareholder own funds, not regulatory own funds. We're pleased with the continued strength of our balance sheet, as it represents a key competitive advantage for M&G in what remains a volatile environment.

Kathryn McLeland: This is still a more conservative approach than peers as we use shareholder-owned funds, not regulatory-owned funds. We are pleased with the continued strength of our balance sheet as it represents a key competitive advantage for M&G in what remains a volatile and uncertain macro environment. I will finish by briefly covering costs. Our managed cost base at 30 June of GBP 744 million reflects the investments that we made last year to support growth, which underpin the strong new business momentum we are now seeing. In Life, we built out our BPA team, focusing on pricing and commercial capabilities. In Asset Management, we added private markets expertise, such as the acquisitions of P Capital Partners and BauMont, and scaled our distribution platform to support our international expansion. These initiatives drove a 7% increase in costs in the second half of last year.

Speaker #1: I will finish by briefly covering costs. Our managed cost base at 30 June of £744 million reflects the investments that we made last year to support growth, which underpin the strong new business momentum we are now seeing.

Kathryn McLeland: Our managed cost base at 30 June of GBP 744 million reflects the investments that we made last year to support growth, which underpin the strong new business momentum we are now seeing. In Life, we built out our BPA team, focusing on pricing and commercial capabilities. In Asset Management, we added private markets expertise, such as the acquisitions of P Capital Partners and BauMont, and scaled our distribution platform to support our international expansion. These initiatives drove a 7% increase in costs in the second half of last year.

Speaker #1: In Life, we built out our BPA team on pricing, focusing on pricing and commercial capabilities. And in Asset Management, we added private markets expertise, such as through the acquisitions of P Capital Partners and Beaumont, and scaled our distribution platform to support our international expansion.

Speaker #1: These initiatives drove a 7% increase in costs in the second half of last year. Since then, costs have stabilized, remaining flat over the months. Looking to the remainder of H2, we expect asset management costs to stay in line with the first six months of the year.

Kathryn McLeland: Since then, costs have stabilized, remaining flat over the last six months. Looking to the remainder of H2, we expect Asset Management costs to stay in line with the first six months of the year, while corporate center costs will be roughly GBP 10 million higher due to the seasonality of our head office expenses. Our approach to cost management remains the same. We will continue to create capacity by streamlining our operating model, re-engineering our processes, optimizing third-party spend, and better leveraging technology such as AI, as you heard earlier from Andrea. These savings will offset inflationary pressures and free up resources to be reinvested into growth. By investing for long-term growth and remaining disciplined on costs, we will further improve our operating leverage and achieve our target cost-income ratio by the end of next year. With that, I will hand back to Andrea.

Speaker #1: While corporate center costs will be roughly £10 million higher due to the seasonality of our head office expenses, our approach to cost management remains the same.

Speaker #1: We will continue to create capacity by streamlining our operating model, reengineering our processes, optimizing third-party spend, and better leveraging technology—such as AI, as you heard earlier from Andrea.

Speaker #1: These savings will offset inflationary pressures and free up resources to be reinvested into growth. By investing for long-term growth and remaining disciplined on costs, we will further improve our operating leverage and achieve our target cost-income ratio by the end of next year.

Speaker #1: And with that, I'll hand back to Andrea.

Andrea Rossi: Thank you, Katherine. Before concluding, I want to summarize the key elements of M&G's investment case. Our message is simple. We are becoming Europe's leading integrated asset manager. Our synergistic business model underpins our growth. We operate in attractive markets with clear competitive strength, including our unique With-Profits Fund. By delivering a balanced combination of yield, growth, and quality, we offer consistently strong outcomes to our shareholders. Life underpins our attractive dividend yield. Asset Management and With-Profits drive the group's growth. As they do that, the quality of our profits improve. 2026 has been a strong year so far, with record profits and real business momentum. That reflects the hard work of colleagues across M&G, and I want to thank everyone for their contribution to these half-year results. We will build on this track record, maintain our momentum, and continue delivering for our clients and shareholders.

Speaker #2: Thank you, Kathryn. Before concluding, I want to summarize the key elements of M&G's investment case. Our message is simple: we are becoming Europe's leading integrated asset manager.

Speaker #2: Our synergistic business model underpins our growth. We operate in attractive markets with clear competitive strength, including our unique With Profits Fund. And by delivering a balanced combination of yield, growth, and quality, we offer consistently strong outcomes to our shareholders.

Speaker #2: Life underpins our attractive dividend yield. Asset management and with-profits drive the group's growth. And as they do that, the quality of our profits improves.

Speaker #2: 2026 has been a strong year so far, with record profits and real business momentum. That reflects the hard work of colleagues across M&G, and I want to thank everyone for their contribution to these half-year results.

Speaker #2: We will build on this track record, maintain our momentum, and continue delivering for our clients and shareholders. I am proud of what we have achieved, and I'm energized by the opportunity ahead as we enter this new phase of growth.

Andrea Rossi: I am proud of what we have achieved. I am energized by the opportunity ahead as we enter this new phase of growth. Thank you. Now we are going to do Q&A. We have to move on. How do we Oh, you move that one? Okay, I will take my water. Excellent. Oh, thank you, Luca. I always like to see you working. Good.

Speaker #2: Thank you. And now we're going to do Q&A. We have to move, so how do we—oh, you moved that one? Okay, I'll take my water.

Speaker #2: Oh, thank you, Luca. I always like to see you working. Good. So, thank you very much, Andrea and Kathryn. We can move to the Q&A, as usual.

Luca Gagliardi: Thank you very much, Andrea and Kathryn. We can move to the Q&A. As usual, for those that are following us online, when you ask a question, please pull out the microphone from the seats, push down and hold down the button, state your name, the firm you are working for, and then go with your three questions or more nestled into one. We will later take questions online. A couple of analysts could not make it in the room, but they have already submitted questions. We will keep them for last. David, Andrew, Farooq, and Tom, in that order.

Speaker #2: For those that are following us online, when you ask questions, please pull out the microphone from the seats. Push down and hold down the button.

Speaker #2: State your name, the firm you’re working for, and then go with your three questions, or more if you have them, all nestled into one. We’ll later take questions online—a couple of analysts couldn’t make it into the room, but they’ve already submitted questions.

Speaker #2: But we'll keep them for last. So, David, Andrew, Farooq, and Tom, in that order.

Speaker #3: Hi, thank you for taking my question. David Pech, RBC Capital Markets. I'll kick off with only two questions, actually, just to start.

Dawid Piech: Hi. Thank you for taking my question. Dawid Piech, RBC Capital Markets. I will kick off with only two questions, actually, just for a good start. The first one on dividend and excess capital. I suppose with the shareholders solve a situation of 247, it sits materially above the top end of your stated operating range. Just wondering, how do you think about shareholder returns going forward, especially in light of the strong capital position? Is there maybe a specific point at which you would consider a more meaningful step up in those returns? Second question on asset management. The private markets AUM continues to grow, which is very good to see. However, the blended margins stay flat, and also the private markets margin actually decreased 1 basis point year over year.

Dawid Pych: Hi. Thank you for taking my question. Dawid Piech, RBC Capital Markets. I will kick off with only two questions, actually, just for a good start. The first one on dividend and excess capital. I suppose with the shareholders solve a situation of 247, it sits materially above the top end of your stated operating range. Just wondering, how do you think about shareholder returns going forward, especially in light of the strong capital position? Is there maybe a specific point at which you would consider a more meaningful step up in those returns? Second question on asset management. The private markets AUM continues to grow, which is very good to see. However, the blended margins stay flat, and also the private markets margin actually decreased 1 basis point year over year.

Speaker #3: The first one on dividend and excess capital. I suppose, with the shareholder solidity ratio of 247, it sits materially above the top end of your stated operating range.

Speaker #3: I'm just wondering, how do you think about shareholder returns going forward, especially in light of the strong capital position? Is there maybe a specific point at which you would consider a more meaningful step up in those returns?

Speaker #3: And then, second question on asset management. The private markets AUM continues to grow, which is very good to see. However, the blended margin stays flat.

Speaker #3: And also, the private markets margin actually decreased one basis point year over year. So if you could just share more color on what drove the contraction there, and how you think about the trajectory going forward.

Dawid Piech: Just if you could share more color on what drove the contraction there, and how do you think about the trajectory going forward? Thank you.

Dawid Pych: Just if you could share more color on what drove the contraction there, and how do you think about the trajectory going forward? Thank you.

Speaker #3: Thank you.

Speaker #2: Perfect. So, if you want, you've got a bonus question later if you want to come back to it. In terms of the first question, I guess there were two questions in one.

Andrea Rossi: Perfect.

Luca Gagliardi: Perfect. If you want, you have got a bonus question later, so if you want to come back to it. In terms of the first question, I guess there were two questions in one. One was around dividend, and one is around maybe more capital returns. Maybe we will split them a little bit. I do not know, Andrea, if you want to

Luca Gagliardi: If you want, you have got a bonus question later, so if you want to come back to it. In terms of the first question, I guess there were two questions in one. One was around dividend, and one is around maybe more capital returns. Maybe we will split them a little bit. I do not know, Andrea, if you want to

Speaker #2: One question was around dividends and one is maybe more about capital returns. So maybe we'll split them a little bit. I don't know, Andrea, if you want to.

Speaker #3: Yeah, I mean, and this time I didn’t show our clear capital management framework, which every time we show. I hope you remember what the four different things are.

Andrea Rossi: Yeah. This time, I did not show our clear capital management framework, which every time we show. I hope you remember what the four different things. As you know, we have a clear capital management framework in place, and we have been on a journey in the last three, four years. If you remember, in the beginning, we were focusing on financial strength, and we have been strengthening the balance sheet. We have been improving our leverage, improving liquidity. Then it was about making sure we, when the business was doing better, to actually pay out attractive dividends. We came out with a growing dividend policy 18 months ago. Let us not forget that our investors, and I meet many of them, they are very pleased with what we are doing. We have been returning back to our investor over GBP 4.4 billion since we listed in 2019.

Speaker #3: But, as you know, we have a clear capital management framework in place, and we've been on a journey in the last three or four years.

Speaker #3: If you remember, in the beginning, we were focusing on financial strength. We have been strengthening the balance sheet, improving our leverage, and enhancing liquidity.

Speaker #3: And then it was about making sure we, when the business was doing better, actually paid out attractive dividends. And we came out with a growing dividend policy 18 months ago.

Speaker #3: Let's not forget that our investors—and I've met many of them—are very pleased with what we're doing. We have returned over £4.4 billion to our investors since we listed in 2019.

Speaker #3: And also a double-digit annual total shareholder return. So our investors are very, very pleased with what we're doing in terms of capital returns.

Andrea Rossi: Also, a double-digit annual total shareholder return. So our investors are very pleased with what we are doing in terms of capital returns. Now it is time for growth. We are focusing on growth. That is our focus. Those results that you see there is thanks to a relentless focus on growth and investing for growth. That is our focus. We will do so by making sure we realize double digits IRRs above our cost of capital. So that is our focus. I do not know, Kathryn, if you want to add on something.

Speaker #3: Now it's time for growth. We are focusing on growth. That's our focus. Those results that you see there are thanks to a relentless focus on growth and investing for growth.

Speaker #3: And that's our focus. We will do so by making sure we achieve double-digit IRRs above our cost of capital. So that's our focus.

Speaker #3: I don't know, Kathryn, if you want to add on something.

Speaker #4: Well, I guess only that we also think that, at 247% today, it is quite an uncertain and volatile time. And it is a competitive advantage to have a very strong balance sheet.

Kathryn McLeland: Well, I guess only that we also think that at 247%, today is quite an uncertain volatile time, and it is a competitive advantage to have a very strong balance sheet. One of the points I made also was we have a great asset with the PVST at GBP 4.8 billion. We have quite a unique own funds because of the strength of PruFund. This really does underpin today's results. It will flow through into earnings, cash, and capital generation over time. We have strong financial flexibility to do the growth investments that you heard Andrea talk about. So now very comfortable where we are, and we are already delivering good returns back to our shareholders.

Speaker #4: And one of the points I made also was we've got a great asset with the PBSG at £4.8 billion. We've got quite a unique own funds because of the strength of the Proof Fund.

Speaker #4: But this really does underpin today's results. It will flow through into earnings, cash, and capital generation over time. And we've got strong financial flexibility to do the growth investments that you heard Andrea talk about.

Speaker #4: So, no, we're very comfortable where we are, and we're already delivering good returns back to our shareholders.

Speaker #2: And Andrea, maybe you want to tackle separately the dividend question? So, in terms of the dividend trajectory...

Luca Gagliardi: Andrea, maybe do you want to tackle separately the dividend question, so in terms of the dividend trajectory?

Speaker #3: Yes. Well, on the dividend question—and as you all know, the dividend is a matter for the Board. But if you look at our results today, obviously we're very, very pleased with the AUP growth.

Andrea Rossi: Yes. Well, on the dividend question, as you all know, dividend is a matter for the board. If you look at our results today, obviously, we are very pleased with the AOP growth. You should not see a one-to-one relationship in the short term between AOP and DPS. There are other elements you should take into account. There is capital generation. There are the state of the business. All these things means more you should look at it from a more longer term perspective. Obviously, we are very pleased that we have a growing dividend policy, as I said before. It is a matter for the board. It will be discussed in February next year. But I feel comfortable with the market expectations in terms of DPS growth. I am sure you know what the market expectations are.

Speaker #3: But you should not see a one-to-one relationship in the short term between AUP and DPS. I mean, there are other elements you should take into account.

Speaker #3: There is capital generation. There is the state of the business. So all these things mean you should look at it from a longer-term perspective.

Speaker #3: Obviously, we're very, very pleased that we have a growing dividend policy. As I said before, it's a matter for the board and will be discussed in February.

Speaker #3: Next year, but I feel comfortable with the market expectations in terms of DPS growth. I'm sure you know what the market expectations are, and obviously, it's a discussion for the board in February next year.

Andrea Rossi: Obviously, it is a discussion for the board in February next year.

Speaker #2: Perfect. And moving on to the asset management point—it was around private markets and the impact on markets.

Luca Gagliardi: Perfect. Moving on to the asset management point. It was around private markets and the impact on markets.

Andrea Rossi: Well, I would like to say one thing here. I am sure if you look at some of our peers, they must be very jealous about our trajectory because we have resilience on average bps. Yes, some peers might move up, but they move up from such a low bps that it does not really matter. Look at our average bp at 32. That is a good average bp. Of course, that is driven by strong flows in our wholesale solution at an average of 55 bps. Private markets is important for us. It went down by one bp, I think, 37, 38, but that is mix of whatever private assets we have. If you look at our private assets, the quality and our performance, it is very positive. We had GBP 1.3 billion of net inflows in the first six months.

Speaker #3: Well, I'd like to say one thing here. I mean, I'm sure if you look at some of our peers, they must be very jealous about our trajectory because we have resilience on average bids.

Speaker #3: Yes, some peers might move up, but they move up from such low bids that it doesn't really matter. Look at our average bid—it's at 32.

Speaker #3: I mean, that's a good average bid. And, of course, that is driven by strong flows in our wholesale solution at an average of 55 bids.

Speaker #3: And private markets are important for us. I mean, it went down by one bid, I think 37, 38. But that's a mix of whatever private assets we have.

Speaker #3: But if you look at our private assets, the quality and our performance, it's very, very positive. We had £1.3 billion of net inflows in the first six months.

Speaker #3: Of that, we had £1.2 billion in private credit and structured credit, and we see good momentum here. And let's not forget, when we talk about private and structured credit, this is nearly 100% Europe.

Andrea Rossi: Of that, we had GBP 1.2 billion in private credit and structured credit, and we see good momentum here. Let us not forget, when we talk about private and structured credit, this is nearly 100% Europe. I know that there are issues with private credit, mainly in the US. We have no exposure to the US, no real exposure to tech and software either. So we are very pleased with what we are doing there. The interesting thing here as well is that we have a capital queue of GBP 7.8 billion in our private assets for our private asset franchise. So you should see resilience in that, I would say, for private markets. Of course, I took the institutional one. It is also fixed income in institutions. It is not owned by private assets. We have fixed income mandates, buy and maintain mandates. We have equity mandates.

Speaker #3: I know that there are issues with private credit. It's mainly in the US. We have no exposure to the US, and no real exposure to tech and software either.

Speaker #3: So we're very, very pleased with what we're doing there. And the interesting thing here as well is that we have a capital Q of $7.8 billion in our private assets for our private assets franchise.

Speaker #3: So you should see resilience in that, I would say, for private markets. And of course, I took the institutional one; it's also fixed income in institutions.

Speaker #3: It's not owned by private assets. We have fixed income mandates, buy-and-maintain mandates, and we have equity mandates, so it's a mixture. But you should see resilience in our average margin in terms of bids, which I think is a great result.

Andrea Rossi: So it is a mixture, but you should see resilience in our average margin in terms of bps, which I think is a great result.

Speaker #2: Thank you very much, Andrea. Andrew Baker from Goldman Sachs. So, I've done the introduction for you.

Luca Gagliardi: Thank you very much, Andrea. Andrew Baker from Goldman Sachs. I have done the introduction for you.

Speaker #5: Great. Thanks, Luca. Appreciate the intro. Three questions, please.

Andrew Baker: Great. Thanks, Luca. Appreciate the intro. Three questions, please.

Speaker #2: Three questions.

Andrea Rossi: Three questions.

Speaker #5: So, the first one, I guess, if I look at slide 11, you're guiding—or at least self-guiding—to $3 to $4 billion.

Andrew Baker: First one, I guess if I look at slide 11, you are guiding or at least soft guiding to 3 billion to 4 billion.

Luca Gagliardi: Andrew, can you speak up a lot? I cannot hear a struggle to you.

Speaker #2: Can you speak up a little bit?

Speaker #5: Because we struggle to hear you. OK, hopefully. So, if I look at slide 11, it looks like you're guiding, or at least self-guiding, to $3 to $4 billion of BPA flows to '27 to '30.

Andrew Baker: Okay. Hopefully. If I look at slide 11, it looks like you are guiding or at least soft guiding to GBP 3 billion to 4 billion of BPA flows of 2027 to 2030. Given, I guess, the advantages that you have outlined versus peers, I guess post 2027, when you hit your GBP 3 billion to 4 billion target, why shouldn't we expect a material increase in flows after that? Is there any constraints to volume growth that is maybe not obvious that is stopping being a bit more aggressive there? Secondly, just on the asset management underlying capital generation, are you able to give a bit more detail on the SCR increase and if there is anything we need to be thinking about going forward there? Thirdly, hopefully a quick one on the leverage change of methodology. Is there any change to the 30% target level? Thank you.

Speaker #5: Given the advantages that you've outlined versus peers, I guess post-2027, when you hit your $3 to $4 billion target, why shouldn't we expect a material increase in flows after that?

Speaker #5: Are there any constraints to volume growth that might not be obvious, which are preventing you from being a bit more aggressive there? And then secondly, just on the asset management underlying capital generation, are you able to give a bit more detail on the SCR increase and if there's anything we need to be thinking about going forward there?

Speaker #5: And then, thirdly—hopefully a quick one—on the leverage change in methodology: Is there any change to the 30% target level? Thank you.

Speaker #2: So, probably, I'd say the first one, Andrea, if you want to take it, while the other two are for Kathryn.

Luca Gagliardi: Probably I would say the first one, Andrea, if you want to take it, while the other two for Kathryn.

Speaker #3: Yes, I think we have to remember where we came from. Four years ago, we were not growing in our life business in the BPA market.

Andrea Rossi: Yes. I think we have to remember where we come from. Four years ago, we were not growing in our life business in the BPA market. We re-entered it, and when you look at our track record, we have been consistently growing by 50% on average every year. Of course, the GBP 1.7 billion that we have done the first 8 months this year, for me, is very strong performance. We have a unique feature, which is true. I mean, I said it today about the BPA Plus. I think the With-Profits Fund gives us a competitive advantage. You have all the, I am not going to repeat them again, the key features here. But it gives me that confidence that we can continue to grow. We will grow, as I said this year, at least 50% year on year, and we will continue to grow next year.

Speaker #3: We re-entered it. And when you look at our track record, we've been consistently growing by 50% on average every year. And, of course, the $1.7 billion that we have done in the first eight months this year, for me, is very, very strong performance.

Speaker #3: And we have a unique feature, which is true. I mean, I said it today about the BPA Plus. I think that with the profit fund, it gives us a competitive advantage.

Speaker #3: You have all the key features here—I'm not going to repeat them again. But it gives me that confidence that we can continue to grow.

Speaker #3: We will grow, as I said, this year at least 50% year on year. And we will continue to grow next year. And if you look at the markets roughly 40 to 50 billion, that means that we have in three years, three or four years, moved from 0 to 6 to 8% market share, which I think is a very relevant performance.

Andrea Rossi: If you look at the markets, roughly GBP 40 billion to GBP 50 billion, that means that we have in 3 years, or 4 years, moved from zero to 6% to 8% market share, which I think is a very relevant performance. Beyond that, we will see what we can do, and we will see whether that can continue. Of course, we have, in my view, strong competitive advantage with the BPA Plus, but it's not only about BPA Plus. It's also about other innovation that we have brought to this market. You saw last year when we presented results, our BPA value share, where we share the economics with the scheme sponsors. Now, of course, we also launched the CDI+ for run-on. So we have what it takes in order to provide a solution across whatever requirements that pension schemes are looking for.

Speaker #3: Now, beyond that, we will see what we can do, and we will see whether that can continue. Of course, we have, in my view, strong competitive advantage with the BPA Plus.

Speaker #3: But it's not only about BPA Plus. It's also about other innovation that we have brought to this market. You saw last year when we presented Result, our BPA value share, where we share the economics with the scheme sponsors.

Speaker #3: And now, of course, we have also launched the CDI Plus for run-on. So we have what it takes to provide a solution for whatever requirements pension schemes are looking for.

Speaker #3: And last but not least—and I think this is a critical element, because we see a lot of partnerships out there—we have the unique combination of having a very strong asset manager supporting our Life balance sheet.

Andrea Rossi: Last but not least, I think this is a critical element because we see a lot of partnerships out there. We have the unique combination of having a very strong asset manager supporting our life balance sheet. We are very strong in private assets, in private credit, and as you know, there's a significant allocation into private credit, and of course, also public fixed income. So we have all the elements to grow, and that's why we are growing. Let us get to 2027, GBP 3 billion to GBP 4 billion, and then we will talk about the future growth.

Speaker #3: We're very, very strong in private assets, in private credit, and as you know, there is a significant allocation into private credit—and of course, also public fixed income.

Speaker #3: So we have all the elements to grow, and that's why we're growing. Let us get to 2027, $3 to $4 billion, and then we will talk about the future growth.

Speaker #2: And maybe, Kathryn, on the BPA, do you want to add anything on, kind of, pricing discipline and capital constraints, or lack of, with-profit funds?

Luca Gagliardi: Maybe, Kathryn, on the BPA, do you want to add anything on kind of pricing discipline and capital constraints or lack of in the With-Profits Fund?

Kathryn McLeland: Yes. Obviously, one of the real advantages is the lower cost of capital of the With-Profits Fund. We are very much focused on obviously delivering these schemes and their members superior outcomes with the possibility of this bonus and the very strong backing capital ratio behind it. We are delivering double-digit IRRs. That's what we remain very focused on. The earnings profitability will improve over time. We are still in sort of scale-up mode. We will get more operating leverage as we go into 2027, and the H2 should also improve versus the H1. So we are very disciplined, and that's why also to Andrea's point, we are really comfortable with the guidance of GBP 3 billion to GBP 4 billion, given what that means, where we will be in the market. Obviously importantly, it delivers the AUM and fees for our asset management business. Shall I cover? We expected this.

Speaker #4: Yes. So obviously, one of the real advantages is the lower cost of capital of the with-profits fund. And we're very much focused on, obviously, delivering the schemes and their members superior outcomes, with the possibility of this bonus and the very strong backing capital ratio behind it.

Speaker #4: And we're delivering double-digit IRRs. That's what we remain very focused on, and the earnings profitability will improve over time. We're still in sort of scale-up mode.

Speaker #4: We'll get more operating leverage as we go into 2027, and the second half should also improve versus the first half. So we're very disciplined.

Speaker #4: And that's why, also to Andrea's point, we're really comfortable with the guidance for $3 to $4 billion, given what that means and where we'll be in the market.

Speaker #4: And obviously, importantly, it delivers the AUM and fees for our asset management business. Should I cover? So we expected this. It does look quite unusual.

Kathryn McLeland: Shall I cover? We expected this. It does look quite unusual. Asset management profits are up 24%, yet you have a reduction in underlying capture and own funds is up, obviously, so there is nothing there. We had a difficult comparator, so we had quite an unusually low impact last year. Seeding numbers were pretty low compared to normal. There was an FX element as well, and that is more normalized. It just happened to be unusually low last year, which meant we had a bigger swing in capital requirements year-on-year. Again, another FX element this year. Nothing in particular I would call out, just a notable year-on-year delta in the capital requirements of the business. I think on leverage

Kathryn McLeland: It does look quite unusual. Asset management profits are up 24%, yet you have a reduction in underlying capture and own funds is up, obviously, so there is nothing there. We had a difficult comparator, so we had quite an unusually low impact last year. Seeding numbers were pretty low compared to normal. There was an FX element as well, and that is more normalized. It just happened to be unusually low last year, which meant we had a bigger swing in capital requirements year-on-year. Again, another FX element this year. Nothing in particular I would call out, just a notable year-on-year delta in the capital requirements of the business. I think on leverage

Speaker #4: Asset management profits are up 24%. And yet, you've got a reduction in underlying cap gen. Owned funds is up, obviously, so there's nothing there.

Speaker #4: We had a difficult comparator, so we had quite an unusually low impact last year. Seeding numbers were pretty low compared to normal. There was an FX element as well.

Speaker #4: And that is more normalized. So, it just happened to be unusually low last year, which meant we had a bigger swing in capital requirements year on year.

Speaker #4: And again, another FX element this year, but nothing in particular I would call out. Just a notable year-on-year delta in the capital requirements of the business.

Speaker #4: And I think on leverage—yeah, so leverage, we've been wanting to do this for some time. We have now completely aligned the numerator and denominator.

Luca Gagliardi: The last question on leverage.

Kathryn McLeland: Well, leverage, we have been wanting to do this for some time. We have now completely aligned the numerator and denominator. We have seen a movement, obviously reflecting the Solvency II value of debt, and that has meant we are now at 29%. We do still have a range, a guidance range, not a target, guidance of around 30%. We are obviously at 29%, so we are really comfortable where we are.

Speaker #4: And so we've seen a movement, obviously reflecting the solvency to value of debt, and that's meant we're now at 29%. We do still have a guidance range, or a target guidance, of around 30%.

Speaker #4: And so, we're obviously at 29%, so really comfortable with where we are.

Speaker #2: So, Farooq from J.P. Morgan, while you pull out the microphone.

Luca Gagliardi: Farooq?

[Analyst] (J.P. Morgan): Yeah.

Farooq Hanif: Yeah.

Luca Gagliardi: From J.P. Morgan, while you pull out the microphone.

Speaker #5: Thank you for the introduction. So, two or three questions. Firstly, on the BPA—the £3 to £4 billion that you're writing—can you tell us a little bit about what size of scheme you're targeting, and what size of scheme you're allowed to target by distribution?

[Analyst] (J.P. Morgan): Thank you for the introduction. So two, three questions. Firstly, on the BPA, the GBP 3 billion to 4 billion that you are writing, can you tell us a little bit about what size of scheme you are targeting and what size of scheme you are allowed to target by distribution? I mean, is it more possible to go for middle size or small size? Just some detail around that. Secondly, on the CDI+, can you just explain a little bit what you see as the opportunity there, the margin, how that is going to work? Is it going to be a big market run on, or do you think it is just a supplement? My very last question is on operating leverage. Is 70% the right number for you?

Farooq Hanif: Thank you for the introduction. So two, three questions. Firstly, on the BPA, the GBP 3 billion to 4 billion that you are writing, can you tell us a little bit about what size of scheme you are targeting and what size of scheme you are allowed to target by distribution? I mean, is it more possible to go for middle size or small size? Just some detail around that. Secondly, on the CDI+, can you just explain a little bit what you see as the opportunity there, the margin, how that is going to work? Is it going to be a big market run on, or do you think it is just a supplement? My very last question is on operating leverage. Is 70% the right number for you?

Speaker #5: So, I mean, is it more profitable to go for mid-size or small-size? Just some detail around that. And then, secondly, on the CDI Plus, can you just explain a little bit what you see as the opportunity there, the margin, and how that's going to work?

Speaker #5: Is it going to be a big market, a run-on, or do you think it's just a supplement? And my very last question is on operating leverage.

Speaker #5: So, is 70% the right number for you? I mean, I know you can't give us guidance on where you're going to be in '28, '29, '30, but it feels like you're saying AI is generating efficiency, which you will then reinvest in the business and remain efficient.

[Analyst] (J.P. Morgan): I mean, I know you cannot give us guidance on where you are going to be in 2028, 2029, 2030, but it feels like you are saying AI is generating efficiency, which you then reinvest in the business and remain efficient rather than AI as an overall cost reduction, operating leverage measure. I just want to understand qualitatively, at least, what you meant by that. Thank you.

Farooq Hanif: I mean, I know you cannot give us guidance on where you are going to be in 2028, 2029, 2030, but it feels like you are saying AI is generating efficiency, which you then reinvest in the business and remain efficient rather than AI as an overall cost reduction, operating leverage measure. I just want to understand qualitatively, at least, what you meant by that. Thank you.

Speaker #5: Rather than AI as an overall cost reduction or operating leverage measure, I just want to understand qualitatively, at least, what you meant by that. Thank you.

Speaker #5: OK.

Speaker #3: Why don't I do the cost-to-income ratio, and then you can do the rest.

Andrea Rossi: Why don't I do the cost to income ratio and then you can do the

Speaker #4: Yep.

Kathryn McLeland: Yep

Speaker #3: BPA. Is 70% the right number? It's a target we have for the end of next year. I mean, when you look at our track record, remember, we were at 79% three years ago.

Andrea Rossi: BPA. Is 70% the right number? It is a target we have for the end of next year. When you look at our track record, remember, we were at 79% three years ago, and now we are at 73%. We have gotten there by also investing in the business. We have been investing in distribution, we have been investing in product capabilities, we have been doing some bolt-ons. All that are what I call the good costs. We have also been very disciplined on cost, because when you go and look at H2 of last year with H1 of this year in asset management, costs have been flat. Of course, then there is the top line, there is market effect, but it is the quality of the flows which I think are critical. There is a number you should remember of today, the 13 million of annualized net new revenues.

Speaker #3: And now we're at 73%, and we have gotten there by also investing in the business. We've been investing in distribution, and we've been investing in product capabilities.

Speaker #3: We've been doing some bolt-ons, all of which I call good cost. But we've also been very disciplined on cost, because when you go and look at the last H2 of last year with H1 of this year in asset management, costs have been flat.

Speaker #3: And of course, then there is the top line. There is a market effect. But it's the quality of the flows, which I think is critical.

Speaker #3: I mean, there is a number you should remember from today: it's the £13 million of annualized net new revenues. This is a key KPI, because making flows with negative net new revenue is not that great.

Andrea Rossi: This is a key KPI, because making flows with negative net new revenue, it is not that great. What you want is you want positive. So that shows that we have flows in the right higher margin investment solution, private assets, public equities, et cetera. Also, of course, seeing strong momentum on wholesale. So when I am looking for end of the year and 2027, we have the operating draws in order to deliver that 70%, which is without performance fees. Remember, we do not put performance fees because of the, I would say, the volatility or lumpiness of the performance fees. Let us get to the 70% end of next year.

Speaker #3: What you want is, you want positive. So, that shows that we have flows in the right higher-margin investment solutions—private assets, public equities, et cetera.

Speaker #3: And also, of course, we see strong momentum on wholesale. So when I am looking toward the end of the year and 2027, we have the operating drivers in order to deliver that 70%, which is without performance fees.

Speaker #3: Remember, we do not include the performance fees because of the, I would say, the volatility or lumpiness of the performance fees. Let us get to the 70% by the end of next year.

Speaker #3: I think that is a target I'm confident we will deliver, given the strength of our investment capabilities, the strength of the investment performance, capital of £7.8 billion in private assets, and also Dai-ichi obviously putting in more money as well.

Andrea Rossi: I think that is a target I am confident we will deliver given the strength of our investment capabilities, the strength of the investment performance, capital queue of GBP 7.8 billion in private assets, and also Dai-ichi, obviously putting in more money as well. So let us get there and then we will see after 2027 what targets we will put. At the moment, I think 70% is a good target, and as you can see from the track record, we have been consistently improving this cost to income ratio by 2 percentage points per year.

Speaker #3: So, let us get there, and then we will see after 2027 what targets we will set. But at the moment, I think 70% is a good target.

Speaker #3: And as you can see from the track record, we have been consistently improving this cost-to-income ratio by two percentage points per year.

Speaker #2: And Andrea, on AI, is it kind of a key driver of cost reduction?

Luca Gagliardi: Andrea, on AI, is it a key driver of cost reduction or just improvement?

Speaker #3: AI—well, AI is an interesting one. I mean, and for those who know me a little bit, I did Six Sigma at the end of the '90s.

Andrea Rossi: AI is an interesting one. For those who know me a little bit, I did Six Sigma in end of the 1990s. I wish we had AI then. It would have made my life much easier, because we were transforming processes in order to improve customer outcomes. It took us 4 or 5 months to improve from 3 Sigma to 3.5. With AI, all this can be done, I am not saying instantly, but it can help you substantially to improve your processes and improve, I would say, client outcomes and quality that you deliver to your clients. It is something that we are implementing in a very smart way. We are very careful how we implement it because as Kathryn says, we do it only if it covers our cost of capital. It needs to deliver double-digit IRR. But we have been doing it in several processes in our business.

Speaker #3: I wish we had AI then; it would have made my life much easier, because we were transforming processes in order to improve customer outcomes.

Speaker #3: It took us like four or five months to get to improve from 3 Sigma to 3.5. With AI, all this can be done I'm not saying instantly, but it can help you substantially to improve your processes and improve, I would say, client outcomes and quality that you deliver to your quality.

Speaker #3: So, to your clients. So, it's something that we are implementing in a very smart way. We're very careful how we implement it, because, as Kathryn says, we do it only if it covers our cost of capital.

Speaker #3: It needs to deliver double-digit IRR. But we've been doing it in several, I would say, in several processes in our business. We've been doing it, and you can show the slide if you don't mind.

Andrea Rossi: But we have been doing it in several processes in our business. We have been doing it, and you can show the slide if you don't mind.

Andrea Rossi: We have been doing it, and you can show the slide if you don't mind.

Luca Gagliardi: Yeah.

Speaker #3: In order to grow our business. So for example, we do when we do now our BPA pricing, we utilize AI. And that has significantly improved the speed of pricing.

Andrea Rossi: In order to grow our business. For example, when we do now our BPA pricing, we utilize AI, and that has significantly improved the speed of pricing. When we do RFPs for institutional clients, the same thing, it is taking it down by a substantial number. But it is also about how we service our clients. Very important. For example, I was up in Scotland, we have a big customer service center there. Well, the way now we resolve issues or even how we do policy management has significantly reduced the time, and our operators can now work on more value-add activities. The good news in all this is, yes, it takes down costs or it creates efficiency and productivity. But if you are growing your business, this means that I can support my growth. So yes, there should be an improvement in the, I would say, numbers moving forward.

Speaker #3: When we do RFPs for institutional clients, it's the same thing—you're bringing it down by a substantial number. But it's also about how we service our clients.

Speaker #3: Very, very important. For example, I was up in Scotland. We have a big customer service center there. Well, the way we now resolve issues, or even how we do policy management, has significantly reduced the time.

Speaker #3: And our operators can now work on adding more value-add activities. The good news in all this is, yes, it takes down costs, or it creates efficiency and productivity.

Speaker #3: But if you're growing your business, this means that I can support my growth. So yes, there should be an improvement in the, I would say, numbers moving forward.

Speaker #3: It's a bit too early to start talking about what the returns are, but surely this will support your growth. There's no doubt about it.

Andrea Rossi: It is a bit too early to start talking about what the returns are. But surely this will support your growth, there is no doubt about it, and it will support your growth at lower unit costs. And we are a growing business, as you can see. So this is supporting our growth, profitable growth, I should say.

Speaker #3: And it will support your growth at a lower unit cost. And we're a growing business, as you can see, so this is supporting our growth.

Speaker #3: Profitable growth, I should say.

Speaker #4: Going to the other questions around the BPA volumes that we're seeing—so, I would, and you've obviously seen a number of other market players give their results already.

Kathryn McLeland: Going to the other questions around the BPA volumes that we are seeing. You have obviously seen a number of other market players give their results already. I am really pleased that we have been obviously delivering the GBP 1.7 billion above the GBP 1.5 billion for the whole of last year. We are comfortable with our guidance of 50% up this year and next year. Over the, I guess, 8 months of the year, we have seen both a small and slightly larger scheme. We have been really pleased to be able to participate at the smaller end, but also larger schemes as well. That is important for us as we clearly are a new player. We have got great credibility with the team. Kerrigan, who leads the business, is here in the room today.

Speaker #4: And I'm really pleased that we have, obviously, delivered the £1.7 billion—above the £1.5 billion for the whole of last year. And we're comfortable with our guidance of 50% up this year and next year.

Speaker #4: So, over the, I guess, eight months of the year, we've seen both small and slightly larger schemes. So we've been really pleased to be able to participate at the smaller end, but also larger schemes as well.

Speaker #4: And that's important for us, as we clearly are a new player. We've got great credibility with the team. Kerrigan, who leads the business, is here in the room today.

Speaker #4: But given our size ambitions, we're not going to be at the large end of the market that some of the bigger players who are in the market participate in.

Kathryn McLeland: Given our size ambitions, we are not going to be at the large end of the market that some of the bigger players who are in the market participated. Just going back to discipline on pricing and double-digit IRRs. On CDI+, this is a product we will be launching. We have not launched it yet, and it is designed, and this is one of the benefits of our business model because we call this an insurance-enabled product because we benefit from all the asset management capabilities, fixed income credit, cash flow matching, as well as the insurance balance sheet that gives the schemes who want to run on and not yet ready to do buy-in or buyout, the ability to manage their cash flows. They have got liquidity that is available for payouts or whenever they might need it.

Speaker #4: And just going back to discipline on pricing and double-digit IRRs. On CDI Plus, this is a product we will be launching—we haven't launched it yet.

Speaker #4: And it's designed—and this is one of the benefits of our business model—because we call this an insurance-enabled product. We benefit from all the asset management capabilities: fixed income, credit, cash flow matching.

Speaker #4: As well as the insurance balance sheet that gives schemes who want to run on, and are not yet ready to do buy-in or buyout, the ability to manage their cash flows.

Speaker #4: They've got liquidity that's available for payouts or whenever they might need it, and also the advantage of a strong balance sheet with strong collateral flexibility, which is a real plus for some of these schemes.

Kathryn McLeland: Also the advantage of a strong balance sheet with strong collateral flexibility, which is a real plus for some of these schemes. So slightly better economics for them also, more flexibility. Again, it is the combination of an insurance business and an asset management capability, which is really, really strong in the key areas of cash flow matching. We will share a little bit more on the economics. It will be fee based when we launch the product.

Speaker #4: So, slightly better economics for them also, more flexibility, and again, it's the combination of an insurance business and an asset management capability, which is really, really strong in the key areas of cash flow matching.

Speaker #4: So we'll share a little bit more on the economics. It'll be fee-based when we launch the product.

Speaker #2: I think there was first Tom Bateman from BNP Exxon, then let's go to Andrew, and we could do.

Luca Gagliardi: I think there was first Tom Bateman from BNP Paribas Exane. Let us go to Andrew and we could do.

Speaker #5: Thanks, Luca. Morning, all. Could I just ask about the profitability of PACL? I think we had the numbers over the past few months, and I guess the profitability on the UK GAAP is quite different to what you report at a group level.

Thomas Bateman: Thanks, Luca. Morning, all. Could I just ask on the profitability of PAC, I think we had the numbers over the past few months. I guess the profitability on the UK GAAP is quite different to what you report at a group level. It looks like the equity position is still falling.

Tom Bateman: Thanks, Luca. Morning, all. Could I just ask on the profitability of PAC, I think we had the numbers over the past few months. I guess the profitability on the UK GAAP is quite different to what you report at a group level. It looks like the equity position is still falling. Could you just help me understand that, if that is a concern at all? The second question is just on the tax outlook, another positive one-off on capital generation. What is the outlook for full year? Finally, I just want to understand the economics from writing all of the life business on the With-Profits Fund balance sheet. You are gaining GBP 100 million of operating profit there, but presumably you are giving something up. Could you just help me put those pieces of the puzzle together? Thank you.

Speaker #5: So, it looks like the equity position is still falling. Could you just help me understand if that's a concern at all? The second question is just on the tax outlook.

Thomas Bateman: Could you just help me understand that, if that is a concern at all? The second question is just on the tax outlook, another positive one-off on capital generation. What is the outlook for full year? Finally, I just want to understand the economics from writing all of the life business on the With-Profits Fund balance sheet.

Speaker #5: Another positive one-off on capital generation. What's the outlook for the full year? And then finally, I just want to understand the economics from writing all of the life business on the with-profits balance sheet.

Speaker #5: You're gaining $100 million of operating profit there. But presumably, you're giving something up. Could you just help me kind of put those pieces of the puzzle together?

Thomas Bateman: You are gaining GBP 100 million of operating profit there, but presumably you are giving something up. Could you just help me put those pieces of the puzzle together? Thank you.

Speaker #5: Thank you. That's good. I can.

Luca Gagliardi: It is good again.

Speaker #4: So I think just.

Kathryn McLeland: I think the first-

Speaker #5: Could you be able to see it for yourself? That's good.

Luca Gagliardi: Yeah, I will stay for you. It is good.

Speaker #4: So, I think the first question was on Prudential—the subsidiary profits. Is that right? Yes. So, yes, I think, looking at—you'll probably have seen the full-year 2025 numbers.

Kathryn McLeland: I think the first question was on Prudential, the subsidiary profits, is that right? Yeah. I think looking at, you will probably have seen the full year 2025 numbers, got the CFO in the room. They had profits UK GAAP basis, GBP 971 million. You might have seen we did a capital reserve release from Scottish Amicable Reserve into retained earnings. That is looking really, really strong. In terms of PAC, there have been, like you see in our IFRS numbers, you will have seen some moves in terms of interest rate rises impacting statutory numbers, which affect many of our peers that you cover. That will have impacted their statutory numbers. In the H1 also we will have had a ground rents impact.

Speaker #4: We've got the CFO in the room. And so, they had profits, UK GAAP basis, of £971 million. You might have seen we did a capital reserve release from the Scottish Amicable Reserve into retained earnings.

Speaker #4: So that's looking really, really strong in terms of PAC. There have been—as you see in our IFS numbers—you will have seen some moves in terms of interest rate rises impacting statutory numbers.

Speaker #4: Which affect many of our peers that you cover, and so that will have impacted their statutory numbers. And, obviously, in the first half, it will also have had a ground rents impact.

Speaker #4: But they'd be sitting at around just under £1 billion in terms of balance sheet equity, which is a really strong position. And also, obviously, PACMA is more profits than it also dividends up, as you can see from their numbers.

Kathryn McLeland: They would be sitting at around just under GBP 1 billion, in terms of balance sheet equity, which is a really strong position. Also obviously, PAC makes more profits, then it also dividends up, as you can see from their numbers. Again, what we look at in terms of obviously the strong capital, strong liquidity position of the group, we have got GBP 2.7 billion of equity at the holding company, GBP 2.2 billion in retained earnings. We obviously dividend up to the whole curve, GBP 700 million, to keep that stable. It was a bit lower this year. We had a slightly higher employee share scheme payment at the holding company.

Speaker #4: And so, again, what we look at, in terms of the strong capital and strong liquidity position of the group, we've got £2.7 billion of equity at the holding company.

Speaker #4: $2.2 billion of retained earnings. And we obviously dividended up through the whole curve $700 million to keep that stable. It was a bit lower this year.

Speaker #4: We had a slightly higher employee share scheme payment at the holding company.

Luca Gagliardi: Does that help?

Speaker #5: Does that help?

Thomas Bateman: Yeah, I think we might be talking about slightly different numbers, but I can pick it up again offline.

Tom Bateman: Yeah, I think we might be talking about slightly different numbers, but I can pick it up again offline.

Speaker #2: Yeah, I think we might be talking.

Speaker #5: ...about slightly different numbers. But I can pick it up again offline. But I think the key point is almost like, think about return on equity impact—it was £1 billion last year.

Kathryn McLeland: Okay. I was give-

Luca Gagliardi: I think the key point is almost like, think about returning equity in PAC was GBP 1 billion last year. We've done half a billion of reserves shift. So it went up to GBP 1.5 billion. Clearly in H1 you've got the impact of ground rent, but we are still sitting at around GBP 1 billion. On a normalized basis, PAC generates more earnings than what it upstreams to the parent company. So that balance should grow naturally over time. Then obviously over the last couple of years, you've had interest rates rising, which does impact as a market movement.

Speaker #5: We have done half a billion of reserves shift to say went up to one and a half billion. Clearly, in H1 you've got the impact of ground rent.

Speaker #5: But we are still sitting at around $1 billion. And on a normalized basis, PAC generates more earnings than what it upstreams to the parent company.

Speaker #5: So that balance should grow naturally over time. Then, obviously, over the last couple of years, you've had interest rates rising, which does impact as a market movement.

Speaker #5: So, let's follow up, because I—on the equity position—did fall again. I'll pick it up. Yep.

Kathryn McLeland: Exactly.

Luca Gagliardi: Let's follow up because

Kathryn McLeland: We can follow up.

Thomas Bateman: I think the equity position did fall again, but I will pick it up.

Tom Bateman: I think the equity position did fall again, but I will pick it up.

Speaker #4: Yeah, we can go through those numbers.

Kathryn McLeland: Yep.

Luca Gagliardi: Sounds good.

Kathryn McLeland: We can go through those numbers.

Speaker #5: Another question: And regarding the other answer, what's the tax outlook for the full year?

Luca Gagliardi: Got other questions.

Kathryn McLeland: So,

Luca Gagliardi: The last, tax outlook for the full year.

Speaker #4: Yes, so I think it's more—again, there's another one that perhaps we can pick up offline. You've seen, historically, we obviously had the benefits in the last two full-year results into the tax numbers.

Kathryn McLeland: Yeah. I think it is more, again, that is another one that perhaps we can pick up offline. You have seen historically, we had obviously the benefits in the last two full year results into the tax numbers. We still have some impact coming from the loss absorbency, which impacted capital actually more than the tax numbers. I do not think there is anything unusual in today's numbers. The statutory losses obviously have a tax impact that you see. Apart from that, there is just no major impact on the numbers and nothing that we guide to at this stage either for full year. Because obviously the dynamics that impact that depend on clearly, the IFRS results, the capital numbers that you see and the loss absorbency that we might need or have under stress when we do all our modeling.

Speaker #4: We still have some impact coming from the loss absorbency, which impacted capital actually more than the tax numbers. So I don't think there's anything unusual in today's numbers.

Speaker #4: The statutory loss obviously has a tax impact, as you see. But apart from that, there's just no major impact on the numbers, and nothing that we guide to at this stage either for the full year.

Speaker #4: Because, obviously, the dynamics that impact that depend on, clearly, the IFS results, the capital numbers that you see, and the loss absorbency that we might need or have under stress when we do all our modeling.

Speaker #4: So, no, nothing unusual to call out here, or nothing yet either for the full year. And so, I think the final question was on the economics.

Kathryn McLeland: No, nothing unusual to call out here or nothing yet either for full year. I think the final question was on the economics.

Speaker #4: Yeah, so I guess this is something that we've shown before in terms of the profitability of the products, because we are clearly writing quite a different profit signature from these—from the products that we put into the With Profits balance sheet.

Luca Gagliardi: Economics.

Kathryn McLeland: Yeah. I guess this is something that we have shown before in terms of the profitability of the products, because we are clearly writing quite a different profit signature from the products that we put on the With-Profits Fund balance sheet. What we have said is that we will have 10 to 15 bps of profit on AUM that we put on the books. When we think about where that will come from, you have got GBP 3 billion to 4 billion of BPAs that we have guided to. Typically PruFund is about GBP 6 billion. We did GBP 3.3 billion growth in H1, which is good, and we are obviously writing new business from some of the other smaller individual products. So that is the sort of numbers where you get to the 50 odd billion that you can see over the next five years.

Speaker #4: And so what we've said is that we'll have 10 to 15 basis points of profit on AUM that we put on the books. When we think about where that will come from, you've got $3 to $4 billion of BPAs that we've guided to.

Speaker #4: Typically, pre-fund is about $6 billion. We did $3.3 billion gross in the first half, which is good. And we're obviously writing new business from some of the other smaller, individual products.

Speaker #4: So that's the sort of numbers where you get to the 50-odd billion that you can see over the next five years.

Speaker #4: And of course, we also have the asset management revenues, which will see a similar margin to what you're currently seeing in the financials on the internal AUM that we manage, which is about 20 basis points of revenue margin.

Kathryn McLeland: Of course, we also have the asset management revenues also, which will be a similar margin that you are currently seeing in the financials on the internal AUM that we manage, which is about 20 bps of revenue margin. The guidance, this comes through over the years to 2030. The important point to make also is that clearly we become more profitable, we get greater operating leverage. We are really comfortable with our guidance, and this is very high quality earnings, very transparent. Alongside also this switch that we have talked about from 90/10 to 100/0 for the PruFund products, which only started on 1 April. So they will feature more next year and the years after.

Speaker #4: So, the guidance—I mean, this comes through over the years to 2030. The important point to make also is that, clearly, we become more profitable, we get greater operating leverage, and we're really comfortable with our guidance.

Speaker #4: And this is very high-quality earnings, very transparent, alongside also this switch that we've talked about from 90/10 to 100/0 for the pre-fund and products.

Speaker #4: Which only started on the 1st of April, so they'll feature more next year and the years after.

Speaker #5: And in terms of what are we giving up? In many ways—look, we were not in BPAs. And there's a question of whether we would be big and growing as much in BPAs if we didn't have the business with private funds.

Luca Gagliardi: In terms of what are we giving up, in many ways, look, we were not in BPAs, and there is a question of whether would we be big and growing as much in BPAs if we would not have the With-Profits Fund. I would not see that portion as we are giving up something. It is generally a new stream of business from a new product that is growing very nicely. On the PruFund side, you are right, that we have always been writing PruFund and the volumes are, we are now getting to dramatically different products volumes. We are just simply suggesting that the profit signature will change slightly. From a value perspective on that portion of the book, it is meant to be a zero-sum game because we do not want to take advantage of the With-Profits Fund, and the With-Profits Fund does not want to take advantage of the shareholder.

Speaker #5: I wouldn't see that portion as us giving up something. It's generally a new stream of business from a new product that is growing very nicely.

Speaker #5: On the proof end side, you're right that we have always been writing 'proof end.' And the volumes are—we're not getting too dramatically different products.

Speaker #5: Volumes. We're just simply suggesting that the profit signature will change slightly. From a value perspective, on that portion of the book, it is meant to be a zero-sum game because we don't want to take advantage of the with-profits fund and the with-profits fund doesn't want to take advantage of the shareholder.

Luca Gagliardi: We are just simply suggesting that the profit signature will change slightly. From a value perspective on that portion of the book, it is meant to be a zero-sum game because we do not want to take advantage of the With-Profits Fund, and the With-Profits Fund does not want to take advantage of the shareholder.It is just coming through in a more predictable, transparent, fee-based nature, which we think is helpful from a public market perspective. We had Andrew Crean, and then if I remember correctly, there was a Bid.

Speaker #5: It's just coming through in a more predictable, transparent, fee-based nature, which we think is helpful from a public market perspective. So, we had Andrew Creen.

Luca Gagliardi: It is just coming through in a more predictable, transparent, fee-based nature, which we think is helpful from a public market perspective. We had Andrew Crean, and then if I remember correctly, there was a Bid.

Speaker #5: And then, if I remember correctly, there was a bid—it's Andrew Creen. It was autonomous. Can we stay on that slide? I mean, I think what Tom is trying to get to is the counterfactual.

Andrew Crean: Bid, it is Andrew Crean, Autonomous. Can we stay on that slide?

Andrew Crean: Bid, it is Andrew Crean, Autonomous. Can we stay on that slide? I think what Thomas is trying to get to is the counterfactual. You set a target of annuities of GBP 3 billion to GBP 4 billion.

Andrew Crean: I think what Thomas is trying to get to is the counterfactual.

Andrew Crean: You set a target of annuities of GBP 3 billion to GBP 4 billion.

Speaker #5: You set a target for annuities of $3 to $4 billion.

Speaker #4: Yep.

Luca Gagliardi: Yeah.

Kathryn McLeland: Yeah.

Speaker #5: That was before this. Clearly, that £3 to £4 billion is going to be written largely out of the with-profits fund, with 20% still on the shareholder fund.

Andrew Crean: That was before this. Clearly, that GBP 3 billion to GBP 4 billion is going to be written largely out of the With-Profits Fund, 20%.

Luca Gagliardi: Yeah

Kathryn McLeland: Yeah

Andrew Crean: still on the shareholder fund. That means that the shareholder annuity profits are going to be less than they were. So when we look at that GBP 100 million, you are going to get the asset management profits anyway. That is not an additional. Then you have got the 10 to 15 basis points on the new With-Profits Fund, which is GBP 50 million to GBP 75 million by 2030. What we are after is the counterfactual.

Speaker #5: That means that the shareholder annuity profits are going to be less than they were. So, when we look at that 100 million, you are going to get the asset management profits, anyway.

Speaker #5: That's not an addition. Then you've got the 10 to 15 basis points on the new with-profits fund, which is £50 to £75 million by 2030.

Speaker #5: What we're after is the counterfactual of what you lose in the annuity profits there. And I think, expanding the question from there, I mean, you've got a very strong solvency ratio.

Andrew Crean: of what you lose in the annuity profits there. I think expanding the question from there, you have got a very strong solvency ratio. You say you have got to invest in the business, but you are increasingly investing in the business through the With-Profits Fund as opposed to the shareholder. So it does come back to this question, and it is difficult to understand why there is a slightly curmudgeonly approach around dividends and buybacks.

Andrew Crean: I think expanding the question from there, you have got a very strong solvency ratio. You say you have got to invest in the business, but you are increasingly investing in the business through the With-Profits Fund as opposed to the shareholder. So it does come back to this question, and it is difficult to understand why there is a slightly curmudgeonly approach around dividends and buybacks. You say you are on a journey. At what point do you think you can come back to us with a different strategy? Finally, the last question is, you have given us very helpfully the BPA sales in July and August. You only gave the net flows into the asset management business in July.

Speaker #5: You say you've got to invest in the business, but you're increasingly investing in the business through the With-Profits fund as opposed to the shareholder.

Speaker #5: So it does come back to this question, and it's difficult to understand why there's a slightly curmudgeonly approach around dividends and buybacks. And you say you're on a journey.

Andrew Crean: you say you are on a journey. At what point do you think you can come back to us with a different strategy? Finally, the last question is, you have given us very helpfully the BPA sales in July and August.

Speaker #5: At what point do you think you can come back to us with a different strategy? And then finally, the last question is—you've given us, very helpfully, the BPA sales in July and August.

Speaker #5: You only gave the net flows into the asset management business in July.

Andrew Crean: You only gave the net flows into the asset management business in July.

Speaker #4: July.

Luca Gagliardi: July.

Kathryn McLeland: July.

Andrew Crean: How has August gone?

Speaker #5: How's August gone?

Luca Gagliardi: Well, on the last one, it is simply because BPA sales are big, chunky, so you see them right away. It is hard to get them wrong. In asset management, it takes a few days after the period close to actually get the data. So it is purely due to the lumpiness of BPAs that allows them to identify them very easily in the MI, while typically, we get asset management flows 5, 10 days after a period end, so we do not have them yet and it would be inappropriate to guide on August asset management flows at this point in time. But Katherine, on that bigger and longer question.

Speaker #2: Maybe on the last one, it's simply because BPA sales are big and chunky, so you see them right away. It's hard to get them wrong in asset management.

Speaker #2: It takes a few days after the period close to actually get the data. So it's purely due to the lumpiness of BPAs that allows them to identify them very easily in the MI, while typically we get asset management flows five to ten days after a period ends.

Speaker #2: So, we don't have them yet, and it would be inappropriate to guide on August asset management flows at this point in time.

Speaker #5: But Kathryn on that.

Speaker #2: Bigger and longer question.

Andrew Crean: Poor Catherine.

Speaker #5: Or Kathryn.

Speaker #4: No. So, on the counterfactual, on the profitability of the in-force book versus the new book, I think, in terms of clearly what we're trying to do for our shareholders—and not just the shareholder balance sheet of PAC—but is to really improve the quality of the earnings.

Kathryn McLeland: No. On the counterfactual, on the profitability of the in-force book versus the new book, I think in terms of clearly what we are trying to do for our shareholders, not just the shareholder balance sheet of PAC, is to really improve the quality of the earnings. It is doing capital light business because we obviously focus on the 20% that we have in the shareholder balance sheet, which aligns interest with the With-Profits Fund and the shareholder. Over time, and it is an over time to 2030, we will deliver those profit numbers and with those volume growth, for our shareholders. So the quality is clearly coming through because it is nice and visible. It will expand in quality. We are disciplined on the capital hurdle rates that we have talked about.

Speaker #4: And it is doing capital-light business because we obviously focus on the 20% that we have in the shareholder balance sheet, which aligns interest with the With-Profits Fund and the shareholder.

Speaker #4: And so, over time—and it is over time to 2030—we will deliver those profit numbers and that volume growth for our shareholders.

Speaker #4: So the quality is clearly coming through because it's nice and visible. It will expand in quality. We're disciplined on the capital hurdle rates that we've talked about.

Speaker #4: And the key thing is we're going to grow profits, and we've got very clear guidance out for profit growth over the next few years.

Kathryn McLeland: The key thing is we are going to grow profits, and we have got very clear guidance out for profit growth over the next few years. You will see that given that also the scale of CSM and the profits that we already have locked in that flow into profits, they are very, very meaningful. It is GBP 7 billion. If not that comment, is the CSM up 6%? So we are very pleased, and it is GBP 4.2 billion across the With-Profits Fund. So that will underpin really strong profits every year, depending on where CSM clearly finishes, some of the drivers of that and the amortization rates. But that really will underpin a core part of our annual profits. On top of that, we have got the new flow that is coming in, that has got the guidance we have given that will deliver this additional GBP 100 million in 2030.

Speaker #4: And so you will see that, given also the scale of CSM and the profits that we already have sort of locked in that flow into profits, they are very, very meaningful.

Speaker #4: It's $7 billion. It's not that common to see CSM up 6%, so we're very pleased. And it's $4.2 billion across the With-Profits Fund.

Speaker #4: So that will underpin really strong profits every year, depending on where CSM clearly finishes. Some of the drivers of that are the amortization rate.

Speaker #4: But that really will underpin a core part of our annual profits. And then, on top of that, we've got the new flow that's coming in, and we've given the guidance that will deliver this additional £100 million in 2030.

Kathryn McLeland: On top of that, we have got the new flow that is coming in, that has got the guidance we have given that will deliver this additional GBP 100 million in 2030. Obviously with the benefit also from asset management revenues with the 20 bps margin on that.

Speaker #4: And obviously, with the benefit also from asset management revenues, with the 20 basis points margin on that.

Kathryn McLeland: Obviously with the benefit also from asset management revenues with the 20 bps margin on that.

Speaker #5: And again, just to repeat on the counterfactual, when we first presented the £3 to £4 billion target in terms of annuity sales, the very first time that we presented it, we also clearly stated that we were confident of getting there because we would have also launched the with-profits fund, which has been in the making for the last 18 months before launch.

Luca Gagliardi: And again, just to repeat on the counterfactual, when we first presented the GBP 3 billion to GBP 4 billion target in terms of annuity sales, the very first time that we presented it, we also clearly stated that we were confident to getting there because we would have also launched the With-Profits Fund, which has been in the making for the last 18 months before launch, right? We would have not put out that target without the confidence of the With-Profits Fund. So on that, I totally get the counterfactual that you are asking on the PruFund side, but on the BPA volume, we would not be where we are, and we would not have this ambition and this target if we would not have this very distinctive and competitive proposition, which does allow us to have confidence in reaching those volumes.

Speaker #5: So we would not have put out that target without confidence in the With Profits Fund. So on that, I totally get the counterfactual that you're asking on the proof end side.

Speaker #5: But on the BPA volume, we would not be where we are, and we wouldn't have this ambition and this target if we didn't have this very distinctive and competitive proposition, which does allow us to have confidence in reaching those volumes.

Speaker #4: So this second question was around the capital ratio and distributions. Do you want to kick that off, and then I can follow?

Kathryn McLeland: The second question was around the capital ratio and distributions. Do you want to kick that off and I can

Speaker #5: Do it.

Luca Gagliardi: Do it.

Andrea Rossi: Do it.

Speaker #4: So yes, we're operating above our range at 247%. And when Andrea talks about the capital framework—the four quadrants that we've used consistently over the last three and a half years—we also have a...

Kathryn McLeland: Yes, we are operating above our range at 247%. When Andrea talks about the capital framework, the four quadrants that we have used consistently over the last three and a half years, we also have, given our focus is very much around investing in the business because we want to continue the growth that we are seeing. We want to continue delivering the momentum in flows and obviously hit our profit and our capital generation target. We have got a strong balance sheet at the moment in terms of the stock of CSM of GBP 7 billion. I talk about underpins earnings. The previous year, GBP 4.8 billion underpins earnings, capital, and cash generation over the next few years. We have got real financial flexibility, which is very good for us because it allows us to continue to invest in the business.

Speaker #4: Given our focus is very much around investing in the business, because we want to continue the growth that we're seeing, we want to continue delivering the momentum and flows.

Speaker #4: And obviously, our profit and our capital generation target—we have got a strong balance sheet at the moment in terms of the stock of CSM, £7 billion.

Speaker #4: I talk about underpinning earnings. The previous year, £4.8 billion underpins earnings, capital, and cash generation over the next few years. We've got real financial flexibility, which is very good for us because it allows us to continue to invest in the business.

Speaker #4: So, what we've said is we've done the £4.4 billion of returns we've given back to shareholders. We only moved to a progressive dividend 18 months ago.

Kathryn McLeland: We've said we've done the GBP 4.4 billion of returns we've given back to shareholders. We only moved to a progressive dividend 18 months ago. We kept it at 2% last year despite flat earnings. Profits are up strongly this year. We've guided double digit for full year. One of the elements around what might trigger an increase in shareholder distributions would be sustainable earnings growth. We're only 18 months into progressive dividend. It's a really incredibly different strategy that we're now pursuing with great success in today's numbers. We do value absolutely delivering good returns to shareholders. For this year, we're comfortable with expectations, as Andrea said, and it's very much a decision for the board. We've also said we would expect to be at this sort of solvency range for the medium term. Shareholder returns are important to us.

Speaker #4: We kept it at 2% last year, despite flat earnings. Profits are up strongly this year. We've guided to double-digit for the full year, and one of the elements around what might trigger an increase in shareholder distributions would be sustainable earnings growth.

Speaker #4: We're only 18 months into the progressive dividend. It's a really incredibly different strategy that we're now pursuing, with great success in today's numbers. We absolutely value delivering good returns to shareholders.

Speaker #4: For this year, we're comfortable with expectations, as Andrea said. And it's very much a decision for the Board. We've also said we would expect to be at this sort of solvency range for the medium term.

Speaker #4: But shareholder returns are important to us.

Speaker #5: Good. So, over to a bit from Pamir.

Andrea Rossi: Good. Over to Abid from Panmure.

Luca Gagliardi: Good. Over to Abid from Panmure.

Speaker #2: Thank you. I have the same from Pamir Lieberman. I've got three questions. The first one is on fees for the new mandates. Just wondering what the fee rate is on the DICI mandates that are coming in, and on the $7.8 billion private markets capital question.

Abid Hussain: Thank you. It's Abid Hussain from Panmure Gordon. I've got three questions. The first one is on fees on the new mandates. Just wondering what the fee rate is on the Dai-ichi mandates that are coming in on the GBP 7.8 billion private markets capital queue. The second one is on the equity release disposal. I'm not sure if I've read that right in the release, but it looks like there is a disposal there. Just wondering what was the driver behind that and what are you going to do with any capital released?

Abid Hussain: On the GBP 7.8 billion private markets capital queue. The second one is on the equity release disposal. I'm not sure if I've read that right in the release, but it looks like there is a disposal there. Just wondering.

Speaker #2: And then the second one is on the equity release disposal. I'm not sure if I've read that right in the release, but it looks like there is a disposal there.

Speaker #2: So, just wondering what was the driver behind that, and what are you going to do with any capital released? And then the final one is on capital itself.

Abid Hussain: what was the driver behind that and what are you going to do with any capital released? The final one is on capital itself. I am still trying to understand, just following on from Andrew's question, how do you assess the excess capital position? Is it on the regulatory balance sheet or the shareholder view of that? I think at the moment on the regulatory basis, you are running at sort of 180, 181. Where do you want to operate on that basis? Just trying to triangulate, where do you actually want to operate there?

Abid Hussain: The final one is on capital itself. I am still trying to understand, just following on from Andrew's question, how do you assess the excess capital position? Is it on the regulatory balance sheet or the shareholder view of that? I think at the moment on the regulatory basis, you are running at sort of 180, 181. Where do you want to operate on that basis? Just trying to triangulate, where do you actually want to operate there?

Speaker #2: I'm still trying to understand, just following on from Andrew's question. How do you assess the excess capital position? Is it on the regulatory balance sheet, or the shareholder view of that?

Speaker #2: And I think at the moment, on the regulatory basis, you're running at sort of 180, 181. Where do you want to operate on that basis?

Speaker #2: So, just trying to triangulate, where do you actually want to operate that?

Kathryn McLeland: Sure. Do you want to start on Dai-ichi?

Speaker #4: Sure. Do you want to start on Q2?

Speaker #5: Oh, I'm afraid it's on fees as well. I mean, on fees, you have to talk. But, I mean, DICI, it's obviously—we're very pleased with the partnership.

Andrea Rossi: Well, I am afraid it is on fees. Well, I mean, on fees you have to talk, but Dai-ichi, obviously we are very pleased with the partnership. When I look at what we have been delivering since we signed the partnership in May, GBP 1.1 billion of inflows, and it has been 50/50 between public and private. I do not think we are giving out-

Speaker #5: And when I look at what we have been delivering since we signed the partnership in May, $1.1 billion of inflows, and it's been 50/50 between public and private.

Speaker #5: So, I don't think we're giving out, on fee, what we do. I mean, we are obviously treating them as a large institutional client, and therefore, obviously, higher fees in private assets, lower fees in fixed income.

Kathryn McLeland: No

Andrea Rossi: on fee what we do. We obviously treating them as a large institutional client. Therefore, obviously higher fees in private assets, lower fees in fixed income. But it is a partnership which for us is important, not only because access to the balance sheet. You should not forget, Dai-ichi co-owns Asset Management One in Japan with Mizuho, a big distribution in Japan, and we are looking to do things with them. But they also are significant in Asia with a large footprint, and we are looking to see opportunities for working with them as well in Asia. So it goes beyond just access to the balance sheet. But when you think about our model, live balance sheets, asset management, and in particular private assets, we now have access to a significant second balance sheet, which, by the way, today also did an acquisition in New Zealand.

Speaker #5: But this partnership, for us, is important not only because of access to the balance sheet. You should not forget, DICI co-owns Asset Management One in Japan with Mizuho.

Speaker #5: Big distribution in Japan. We're looking to do things with them, but they are also significant in Asia, with a large footprint. And we're looking to see opportunities for working with them as well in Asia.

Speaker #5: So it goes beyond just access to the balance sheet. But when you think about our model—live balance sheets, asset management, and in particular private assets—we now have access to a significant second balance sheet, which, by the way, today also did an acquisition in New Zealand.

Speaker #5: So their balance sheet is increasing even further. So, very, very important partnership for us. And the commitment they had of doing $6 billion US dollars over five years—we're at £1.1 billion sterling after a little more than one year.

Andrea Rossi: Their balance sheet is increasing even further. A very, very important partnership for us. The commitment they had of doing $6 billion of US dollar

Kathryn McLeland: Yeah

Andrea Rossi: over 5 years. We are at GBP 1.1 billion after little more than 1 year. I am confident that will grow significantly in the coming months and years. I am very, very pleased with the relationship. Having on board Hitoshi Yamaguchi will also help to engage further and create an even stronger relationship. More to come with Dai-ichi.

Speaker #5: I mean, I'm confident that that will grow significantly in the coming months and years, so very, very pleased with the relationship. And having on board Yamaguchi-san will also help to engage further and create an even stronger relationship.

Speaker #5: So, more to come with DICI.

Speaker #4: And obviously we've got the $7.8 billion of private markets capital queue that we've talked about. And we answered the question on—I think what happened in the first half, which is a bit of a mix effect in terms of private markets margin.

Kathryn McLeland: We have the 7.8 billion of private markets capital queue that we talked about. We answered the question on, I think what happened in H1, which is a bit of a mix effect in terms of private markets margin. Given the strength that we talk about in structured credit, some good demand in real estate. Overall, feeling really confident about the private markets interest that we have got with that size capital queue. The success of our public equities market in the wholesale channels supports the 55 bps that you see in wholesale. I would say record revenues in wholesale in H1 as well. That is in other markets as well.

Speaker #4: So, given the strength that we talk about in structured credit, some good demand in real estate, but overall feeling really confident about the private markets interest that we've got with that size capital, Q.

Speaker #4: And obviously, the success of our public equities market in the wholesale channels supports the 55 basis points that you see in wholesale. And actually, I would say record revenues in wholesale in the first half as well.

Speaker #4: So, but obviously that's in other markets as well. On the equity release mortgage transaction, which was a post-balance sheet event, you will see some notes in the financial statements about that transaction. Actually, you might have seen one of our peers did something similar.

Kathryn McLeland: On the equity release mortgage transaction, which was a post balance sheet event, you will see some notes in the financial statements about that transaction, which actually, you might have seen one of our peers did something similar. It was just to make a more optimal balance sheet structure in our matching adjustment, delivering a superior outcome across the key financial metrics that we look at. I think we gave some disclosures around the size of the book, and there might be a little bit more at full year, but it was just basically optimizing the position there.

Speaker #4: But it was just to make a more optimal balance sheet structure in our matching adjustment, delivering a superior outcome across the key financial metrics that we look at.

Speaker #4: So, I think we gave some disclosures around the size of the book, and there might be a little bit more at full year. But it was just basically optimizing the position there.

Speaker #4: There's nothing meaningful that I would call out in terms of capital or any other benefits that we get. And so, I guess, back to the solvency ratio.

Kathryn McLeland: Nothing meaningful that I would call out in terms of capital or any other benefits that we get. I guess, back to the solvency ratio, what we have said is that we have got quite a unique balance sheet because we have such a successful With-Profits Fund. The PruFund has grown to GBP 73 billion and the PVST asset has also grown to GBP 4.8 billion, and that has driven a lot of the growth also in the ratio to 247%. We are saying that we expect to operate at about this level or above the target, the top of our target range for some time because of the success of PruFund. Obviously, we have said that this strong financial position is giving us flexibility to continue to invest in the business, to drive growth, which is coming through in today's numbers.

Speaker #4: What we've said is that we have got quite a unique balance sheet because we have such a successful With-Profits Fund. And the With-Profits Fund has grown to £73 billion.

Speaker #4: And the PBSD asset has also grown to $4.8 billion, and that's driven a lot of the growth also in the ratio to 247%. So we're saying that we expect to operate at about this level, or above the top of our target range, for some time.

Speaker #4: Because of the success of Proof Fund, and obviously we've said that this strong financial position is giving us flexibility to continue to invest in the business to drive growth, which is coming through in today's numbers.

Speaker #4: And yeah, continuing also to deliver good outcomes for our shareholders. So it is a high ratio, reflecting the shape of our balance sheet. But very importantly, this asset—this PBSD asset—underpins today's numbers that you're seeing, the great results that answer the earlier question around the size of earnings from our With-Profits business.

Kathryn McLeland: Continuing also to deliver good outcomes for our shareholders. It is a high ratio reflecting the shape of our balance sheet, but very importantly, this asset, this PVST asset, underpins today's numbers that you are seeing, the great results, the answer to the earlier question around this size of earnings from our with profits business. It also underpins the future earnings, the future capital and cash generation. It is a great position to be in, and we are very pleased with this asset, and it just means that our solvency ratio will be a little bit higher for the medium term.

Speaker #4: It also underpins the future earnings, the future capital, and cash generation. So it's a great position to be in, and we're very pleased with this asset.

Speaker #4: And it just means that our solvency ratio will be a little bit higher for the medium term.

Speaker #2: Kathryn, actually, there are a couple of questions online. We'll come back and make sure we ask all the questions. Alejandra Chavez Valencia from CT asked, regarding today's ground rent or the Leasehold Reform Bill, whether you can remind us of all the impacts taken?

Luca Gagliardi: Catherine, actually, there are a couple of questions online.

Kathryn McLeland: Yeah.

Luca Gagliardi: We will come back. We will make sure we ask all the question. Alejandra Chavez Valencia from CT asked regarding to the ground rent or the Leasehold and Freehold Reform Act 2024.

Luca Gagliardi: We will come back. We will make sure we ask all the question. Alejandra Chavez Valencia from CT asked regarding to the ground rent or the Leasehold and Freehold Reform Act 2024. Whether you can remind us of is all the impact taken. I guess there is an element of one-off impact upon announcement. Back in February, you might recall, we did talk about an ongoing impact on AOP and capital generation. We quoted a number of GBP 50 million, so I just wanted to understand what has taken place, what will take place, and are the numbers broadly in line?

Luca Gagliardi: whether you can remind us of is all the impact taken. I guess there is an element of one-off impact upon announcement. Back in February, you might recall, we did talk about an ongoing impact on AOP and capital generation. We quoted a number of GBP 50 million, so I just wanted to understand what has taken place, what will take place, and are the numbers broadly in line?

Speaker #2: I guess there's an element of one-off impact upon announcement. And then, back in February, you might recall we did talk about an ongoing impact on AOP and capital generation.

Speaker #2: We quoted a number of £50 million, so she just wanted to understand what has taken place, what will take place, and whether the numbers are probably in line.

Speaker #4: Yes. So, the impact on our balance sheet and our financials from ground rents that you see today is identical to what we put out in March.

Kathryn McLeland: Yep. The impacts in our balance sheet and our financials from ground rents that you see today are identical to what we put out in March. So, it reflects the government announcement around a 40-year transition and the GBP 250 cap. There is nothing new in today's numbers. We obviously will look at the 28 October budget. We are clearly engaging, as you would expect, with the government. We are not expecting any changes really to this position. We were prudent anyway leading up to it. We took a very conservative position on the balance sheet. I think we did guide to a modest GBP 10 million AOP impact at the end of 2028 as a result of this. So that is just the key guidance, which again, today, we are not changing it. So it is very consistent, completely consistent with what we have given to the market before.

Speaker #4: So, it reflects the government announcement around a 40-year transition and the £250 cap. So, there's nothing new in today's numbers. We obviously will look at the October 28 budget. We're clearly engaging, as you'd expect, with the government.

Speaker #4: We're not expecting any changes to this position. We were prudent anyway leading up to it. We took a very conservative position on the balance sheet.

Speaker #4: I think we did guide to a modest $10 million AOP impact at the end of 2028 as a result of this. So that's just the key guidance, which again, today we're not changing.

Speaker #4: So it's very consistent. It's completely consistent with what we've given to the market before.

Speaker #2: And just for clarity, that is an impact across AOP and capital generation, roughly similar from the end of 2028 onwards. And another question, line from Nazib at UBS.

Luca Gagliardi: And just for clarity, that is an impact across AOP and capital generation roughly similar.

Kathryn McLeland: Yeah

Luca Gagliardi: from the end of 2028 only onwards. Another question line from Nasib at UBS. He is asking whether, can you do more 100/0 products? Basically, can't you just write everything on a 100/0 basis on the With-Profits Fund? Because we referenced that two of our PruFund flavors are on 100/0, so I guess that is also what prompted the question.

Speaker #2: He is asking whether you can do more than 100 products. Basically, can't you just write everything, everything on a 100 basis on the With-Profits Fund?

Speaker #2: Because we referenced that two of our proof fund flavors are on 100-zero, so I guess that's also what prompted the question.

Speaker #4: Yes. So we will be moving the other final large products, or sleeve, for Proof Fund onto a 100-zero charges less expenses approach, which is really transparent.

Kathryn McLeland: Yeah. We will be moving the other final large product or sleeve for PruFund onto a 100/0 charges, less expenses approach, which is really transparent. It accelerates the profit recognitions. You will see it earlier in the CSM, slightly earlier recognition also in terms of underlying cap gen. We are very comfortable that that is the right thing to do for PruFund. No changes to other products. It was really important for us also with the BPA Plus, to have the 20% reinsurance with the shareholder so that they are completely aligned, in terms of the economics, and motivations and financial metrics for BPA Plus. It will just be on PruFund, but all PruFund.

Speaker #4: It accelerates the profit recognitions. You'll see it earlier in the CSM. There's slightly earlier recognition also in terms of underlying capital generation. And we're very comfortable that that is the right thing to do for Proof Fund.

Speaker #4: No changes to other products. And it was really important for us, also with the BPA Plus, to have the 20% reinsurance with the shareholders so that they are completely aligned in terms of the economics, motivations, and financial metrics for BPA Plus.

Speaker #4: So it will just be on proof, and put all proof fund.

Speaker #2: Perfect. So, those were the questions online. We can come back to Farooq at JP Morgan.

Luca Gagliardi: Perfect. Those were the questions in line. We can come back to Farooq, J.P. Morgan.

Speaker #5: Hi, Farooq from JP Morgan. I want to explore the counterfactuals-type question again.

[Analyst] (J.P. Morgan): Hi. Farooq from J.P. Morgan. I want to explore the counterfactual type question again.

Farooq Hanif: Hi. Farooq from J.P. Morgan. I want to explore the counterfactual type question again.

Speaker #4: Yep.

Kathryn McLeland: Yep.

Speaker #5: When you first talked about capital-light or with-profits BPA, was the implication that you would be able to accept a slightly lower hurdle rate?

[Analyst] (J.P. Morgan): When you first talked about capital light or with-profits BPAs, the implication was that you would be able to accept a slightly lower hurdle rate.

Farooq Hanif: When you first talked about capital light or with-profits BPAs, the implication was that you would be able to accept a slightly lower hurdle rate.

Kathryn McLeland: That is right.

Speaker #5: ...than your peers. But given that you're aligned, you have this 20% share—are you actually just writing the same kind of IRRs that you would have?

[Analyst] (J.P. Morgan): than your peers. But given that you are aligned, you have this 20% share, are you actually just writing the same kind of IRRs that you would have? Associated with that, is this 20% reinsurance an annual kind of arrangement? For example, are you able to say, okay, right, we can adjust that reinsurance rate if we feel like we want to invest capital in this because either shareholders like it again, or we feel like we are getting good margins or there is a big opportunity coming. I am just kind of wandering around the counterfactual. Thank you.

Farooq Hanif: than your peers. But given that you are aligned, you have this 20% share, are you actually just writing the same kind of IRRs that you would have? Associated with that, is this 20% reinsurance an annual kind of arrangement? For example, are you able to say, okay, right, we can adjust that reinsurance rate if we feel like we want to invest capital in this because either shareholders like it again, or we feel like we are getting good margins or there is a big opportunity coming. I am just kind of wandering around the counterfactual. Thank you.

Speaker #5: And associated with that, is this 20% reassurance an annual kind of arrangement? So, for example, are you able to say, okay, right, we can adjust that reassurance rate if we feel like we want to invest capital in this because either shareholders like it again, or we feel like we're getting good margins, or there's a big opportunity coming?

Speaker #5: So I've just kind of been wandering around the counterfactuals to the counterfactual. Thank you.

Speaker #4: I can take that, perhaps. And it's a really good question, because we have got this new, exciting product, which is definitely capital-light for the shareholder.

Kathryn McLeland: I can take that perhaps. It is a really good question because we have got this new exciting product, which is definitely capital light for the shareholder. If you look at the numbers, and you will spend some time, I am sure, after today's call to look at some of the detail in our disclosures, and what we have said is we had GBP 20 million strain down from GBP 35 million last year. That is across the whole of the business. It does reflect a threefold increase in BPA volumes. Obviously, we have strain across the whole GBP 600 million of premiums, and also you can look at the shareholder component. Just as a reminder, we do not reinsure longevity, at point of pricing for these transactions. It remains a management tool that we can use at some point.

Speaker #4: If you look at the numbers, and you'll spend some time, I'm sure, after today's call to look at some of the detail in our disclosures, what we've said is we had 20 million strain, down from 35 million last year.

Speaker #4: That's across the whole of the business, so it does reflect a threefold increase in BPA volumes. Obviously, we have strain across the whole £600 million of premiums.

Speaker #4: And also, you can look at the shareholder component. Now, just as a reminder, we do not reinsure longevity at the point of pricing for these transactions.

Speaker #4: It remains a management tool that we can use at some point. We have a lot of flexibility, given the strength of the balance sheet and our appetite for longevity risk as well.

Kathryn McLeland: We have a lot of flexibility given the strength of the balance sheet and our appetite for longevity risk as well. That is an element that will impact strain. What we have talked about is obviously just making sure that we get the shareholder, double digit IRRs. That is absolutely key for us. Yes, essentially the key benefit for trustees and clients is that we can deliver superior pricing. We can have the ability to deliver better economics. They have this bonus. You have already seen a 45 basis point bonus on fixed-term annuities. It is obviously a different product, but it has got a lower cost of capital in the With-Profits Fund.

Speaker #4: So that's an element that will impact strain. What we've talked about is obviously just making sure that we get the shareholder double-digit IRRs—that's absolutely key for us.

Speaker #4: So yeah, essentially the key benefit for trustees and clients is that we can deliver superior pricing. So that's the key. We have the ability to deliver better economics, and they have this bonus—you've already seen a 45 basis point bonus on fixed term annuities.

Speaker #4: It's obviously a different product, but it has got a lower cost of capital in the with-profits fund. I think in a previous call we talked about the regulations and the With-Profits Committee and how they think about profitability and what we need to do in terms of their hurdle rates for this business, which Luca actually also covered earlier on the call.

Kathryn McLeland: I think in a previous call, we talked about the regulations and the With-Profits Committee and how they think about profitability and what we need to do in terms of their hurdle rates for this business that Luca actually also covered earlier on the call. Happy to pick it up later. That means that we can speak to these trustees and the consultants, and we know that we have got, and Andrea talked about having this essentially mutual on the balance sheet. We have got the ability to be really competitive, and also with the attractive prospect of a potential bonus at some point. Those are essentially how we think about the hurdle rates. On the 20%, we are guiding to 20%. I think we said approximately 20%.

Speaker #4: I'm happy to pick it up later. But that means we can speak to these trustees and the consultants, and we know that we've got—Andrea talked about having this essentially mutual on the balance sheet—we have got the ability to be really competitive, and also with the attractive prospect of a potential bonus at some point.

Speaker #4: So yeah, those are essentially how we think about the hurdle rates. And on the 20%, we're guiding to 20%. I think we said approximately 20%.

Speaker #4: I think we're not encouraged—technically, we could, of course, change and put something on the shareholder balance sheet with a greater number, but we're really comfortable at that level, and I think we're encouraging people to assume that it will stay close to 20%.

Kathryn McLeland: I think technically we could, of course, change and put something on the shareholder balance sheet with a greater number, but we are really comfortable at that level. I think we are encouraging people to assume that it will stay close to 20%. Again, we can be quite flexible around how and when we do that, but that is a sort of annual number.

Speaker #4: And again, we can be quite flexible around how and when we do that, but that's a sort of annual number.

Speaker #2: And Farooq, what might help on the hurdle rates is that you have to think about the transaction as a transaction between the DB pension scheme and the with-profits fund.

Luca Gagliardi: Farooq, what might help on the hurdle rates is that you have to think about the transaction as a transaction between the DB pension scheme and the With-Profits Fund. The With-Profits Fund will price to achieve this IRR, and that is the transaction, right? After that, there is a reinsurance between the With-Profits Fund and M&G plc, and M&G plc will achieve its target IRRs, right? So it is very transparent, but you see the outcome as one transaction, but it is really a two-step, and that is why different parties can achieve the thresholds that they are targeting. Cool. I do not see any raised hands, so I think this brings the results to an end. Thank you very much for being here with us today.

Speaker #2: The with-profits fund will price to achieve this IRR, and that's the transaction, right? And then after that, there's a reinsurance agreement between the with-profits fund and M&G PLC.

Speaker #2: And M&G PLC will achieve its target IRRs, right? So, it's very transparent, but you almost see the outcome as one transaction, when it's really a two-step process.

Speaker #2: And that's why different parties can achieve the thresholds that they're targeting. Cool. I don't see any raised hands, so I think this brings the results to an end.

Speaker #2: Thank you very much for being here with us today.

Andrea Rossi: Thank you.

Kathryn McLeland: Thanks.

Andrea Rossi: Thank you, everyone.

Kathryn McLeland: Thank you.

Andrea Rossi: Thank you.

Browse all earnings call transcripts

Q2 2026 M&G PLC Earnings Call

Request TrialDemo

M&G

Earnings