Q2 2026 Hannover Rueck SE Earnings Call

August 12, 2026

Operator: Ladies and gentlemen, welcome to the conference call on Q2 2026 results. I am Sergen, the conference call operator. I would like to remind you that all participants will be in a listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. Unauthorized recordings for publication or broadcast are not permitted. At this time, it is my pleasure to hand over to Karl Steinle. Please go ahead, sir.

Operator: Ladies and gentlemen, welcome to the conference call on Q2 2026 results. I am Sergen, the conference call operator. I would like to remind you that all participants will be in a listen-only mode and the conference is being recorded. The presentation will be followed by a Q and A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. Unauthorized recordings for publication or broadcast are not permitted. At this time, it is my pleasure to hand over to Karl Steinle. Please go ahead, sir.

Speaker #1: Ladies and gentlemen, welcome to the conference call on Q2 2026 results. I am Sergeant, the call operator. I would like to remind you that all participants will be in listen-only mode and that the conference is being recorded.

Speaker #1: The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone.

Speaker #1: For operator assistance, please press star and zero. Unauthorized recordings for publication or broadcast are not permitted. At this time, it's my pleasure to hand over to Karl Steinle.

Speaker #1: Please go ahead, sir.

Speaker #2: Good morning, everyone, and welcome from sunny Hanover to our earnings call and our results for the first half-year of 2026. Today's speakers are, as always, Clemens Jungsthofel, our CEO, and Christian Hermelingmeier, our CFO.

Karl Steinle: Good morning, everyone, and welcome from sunny Hanover to our earnings call and our results for the H1 2026. Today's speakers are, as always, Clemens Jungsthöfel, our CEO, and Christian Hermelingmeier, our CFO, and for the Q&A, we are joined by Claude Chèvre and Sven Althoff. With that, I hand over to you, Clemens.

Karl Steinle: Good morning, everyone, and welcome from sunny Hanover to our earnings call and our results for the H1 2026. Today's speakers are, as always, Clemens Jungsthöfel, our CEO, and Christian Hermelingmeier, our CFO, and for the Q and A, we are joined by Claude Chèvre and Sven Althoff. With that, I hand over to you, Clemens.

Speaker #2: And for the Q&A, they are joined by Claude Chevre and Svend Ahlfoss. With that, I hand over to you, Clemens.

Speaker #3: Thank you, Karl. And good morning, everyone, from Hannover. So, let's start with slide 4. Hannover Re's business performance has been very satisfactory in the first half of 2026.

Clemens Jungsthöfel: Thank you, Karl, and good morning, everyone, from Hanover. Let us start with slide 4. Hannover Rueck business performance has been very satisfactory in the H1 2026. We have seen, I would say, a continuation of the positive developments from recent quarters. Particularly, the underlying profitability in the business was very pleasing in both business groups. Our balance sheet and the resilience have been further strengthened. The market environment in P&C reinsurance was characterized by benign losses from natural catastrophes. Nevertheless, I think it is fair to say this is simply good luck, if you like, for the insurance industry. The earthquakes in Venezuela, recently in Japan, as well as extreme weather with heavy rain, heat waves, wildfires, they all serve as a reminder that this does not reflect any change in the risk landscape.

Clemens Jungsthöfel: Thank you, Karl, and good morning, everyone, from Hanover. Let us start with slide four. Hannover Rueck business performance has been very satisfactory in the H1 2026. We have seen, I would say, a continuation of the positive developments from recent quarters. Particularly, the underlying profitability in the business was very pleasing in both business groups. Our balance sheet and the resilience have been further strengthened. The market environment in P&C reinsurance was characterized by benign losses from natural catastrophes. Nevertheless, I think it is fair to say this is simply good luck, if you like, for the insurance industry. The earthquakes in Venezuela, recently in Japan, as well as extreme weather with heavy rain, heat waves, wildfires, they all serve as a reminder that this does not reflect any change in the risk landscape.

Speaker #3: We have seen, I'd say, a continuation of the positive developments from recent quarters. Particularly, the underlying profitability in the business was very pleasing in both business groups.

Speaker #3: Our balance sheet and resilience have been further strengthened. The market environment in P&C reinsurance was characterized by benign losses from natural catastrophes. Nevertheless, I think it's fair to say this is simply good luck, if you like, for the insurance industry.

Speaker #3: The earthquakes in Venezuela, recently in Japan, as well as extreme weather with heavy rain, heat waves, and wildfires, all serve as a reminder that this does not reflect any change in the risk landscape.

Speaker #3: On the contrary, risks are increasing, driven by rising insured values, by climate change, and by geopolitical uncertainty. This clearly highlights the need for protection, and reinsurance protection can only be offered at a price that adequately reflects the risks.

Clemens Jungsthöfel: On the contrary, risks are increasing, driven by rising insured values, by climate change, and by geopolitical uncertainty. This clearly highlights the need for protection, and reinsurance protection can only be offered at a price that adequately reflects the risk. Despite the softening of reinsurance rates, this still holds true on a broad basis for the current underwriting year. Hence, we have been able to broaden our footprint in P&C reinsurance, supported by higher shares on programs with existing clients, as well as new business. I am therefore pleased to report year-to-date premium growth of +7.2% in the compound renewals in 2026. Looking ahead, I do remain confident that we will see continued growth, while strictly adhering to our margin-oriented underwriting approach. Our competitive position is well supported by our strong client relationships and a lower cost ratio compared to our peers.

Speaker #3: But despite the softening of reinsurance rates, this still holds true on a broad basis for the current underwriting year. Hence, we have been able to broaden our footprint in P&C reinsurance, supported by higher shares on programs with existing clients as well as new business.

Speaker #3: I'm therefore pleased to report year-to-date premium growth of 7.2% in the compound renewals in 2026. Looking ahead, I remain confident that we will see continued growth, while strictly adhering to our margin-oriented underwriting approach.

Speaker #3: Our competitive position is well supported by our strong client relationships and a lower cost ratio compared to our peers. So, let me come back to our overall performance in the first half of 2026.

Clemens Jungsthöfel: Let me come back to our overall performance in the H1 2026. With a group net income of EUR 1.4 billion, we are well on track to deliver on our group net income target for the full year. In P&C Re, the combined ratio of 83.2% is well within our target range below 87%. In line with our usual approach, as you know, we have booked the full large loss budget for the period, despite actual large losses coming in clearly lower. On top of that, the strong underlying profitability gave us room to further increase our reserve resiliency. The top-line growth in P&C has been impacted by currency effects and the lower volume in structured reinsurance. As explained already in our Q1 earnings call, this is really mainly driven by the anticipated reduction in the session rate for some individual large reinsurance programs.

Speaker #3: With the group net income of €1.4 billion, we are well on track to deliver on our group net income target for the full year.

Speaker #3: In P&C reinsurance, the combined ratio of 83.2% is well within our target range, below 87%. In line with our usual approach, as you know, we have booked the full large loss budget for the period, despite actual large losses coming in clearly lower.

Speaker #3: On top of that, the strong underlying profitability gave us room to further increase our reserve resiliency. The top-line growth in P&C has been impacted by currency effects and the lower volume in structured reinsurance. As explained already in our Q1 earnings call, this is mainly driven by the anticipated reduction in the cession rate for some individual large reinsurance programs.

Speaker #3: While currency-adjusted revenue in our traditional business was broadly stable year on year, the underlying premium grew by around 4%. Looking ahead, the additional premium growth achieved in the 2026 renewals will increasingly feed through into the reported revenue during the second half.

Clemens Jungsthöfel: While currency-adjusted revenue in our traditional business was broadly stable year on year, the underlying premium grew by around 4%. Looking ahead, the additional premium growth achieved in the 2026 renewals will increasingly feed through into the reported revenue during the H2. Our internal projections, compared to the revenue development in 2025, do give us confidence that the lower end of our target range for growth in traditional business in 2026 remains within reach. The new business CSM of EUR 1.7 billion mainly reflects our successful renewals in 2026 and fully supports our planning for the year. The very small new business loss component confirms the continued high quality and attractive profitability of the new business we have been writing. The business performance in life and health reinsurance is in line with the positive trends seen in recent quarters.

Speaker #3: So our internal projections, compared to the revenue development in 2025, do give us confidence that the lower end of our target range for growth in traditional business in 2026 remains within reach.

Speaker #3: The new business CSM of €1.7 billion mainly reflects our successful renewals in 2026 and fully supports our planning for the year. The very small new business loss component confirms the continued high quality and attractive profitability of the new business we've been writing.

Speaker #3: The business performance in life and health reinsurance is in line with the positive trends seen in recent quarters. We were successful in further growing our portfolio, and the new CSM generation of €385 million increased compared to the previous year.

Clemens Jungsthöfel: We were successful in further growing our portfolio and the new CSM generation of EUR 385 million increased compared to the previous year. The reinsurance service result in life and health of EUR 478 million is moderately ahead of the 50% of our full-year target, which also reflects the healthy underlying profitability of the business. The investment performance also was, I would say, really satisfactory. The ROI, the return on investment of 3.7% is comfortably above our 3.5% target, and it was not driven by any material extraordinary items. Finally, capitalization remained excellent with a solvency ratio of 254%. Operating capital generation was strong at around EUR 1.8 billion in the H1 2026. This was sufficient to cover both the increasing capital requirements from the successful expansion of our business and the quarterly accrual of the dividend.

Speaker #3: The reinsurance service result in life and health of €478 million is moderately ahead of 50% of our full-year target, which also reflects the healthy underlying profitability of the business.

Speaker #3: So the investment performance also was, I'd say, really satisfactory. The ROI, the return on investment, of 3.7%, is comfortably above our 3.5% target.

Speaker #3: And it was not driven by any material extraordinary items. Finally, capitalization remained excellent, with the solvency ratio at 254%. Operating capital generation was strong at around €1.8 billion in the first half of 2026.

Speaker #3: This was sufficient to cover both the increasing capital requirements from the successful expansion of our business and the quarterly accrual of the dividend. The moderate decrease in the solvency rate compared to year-end 2025 can be explained by movements in foreign exchange rates.

Clemens Jungsthöfel: The moderate decrease in the solvency rate compared to year-end 2025 can be explained by movements in foreign exchange rates. On the next slide, the shareholder equity rose by 2.6%. In addition to the positive contribution from our half-year result, currency effects were also a positive. The CSM grew by 11.4%, mainly reflecting our successful new business generation across both business groups. The risk adjustment increased by 5.8%, driven by new business and assumption changes in life and health. Altogether, developments on this slide really show continued positive value creation for our shareholders and an improved foundation for future earnings growth. On that note, I will hand over to you, Christian.

Speaker #3: On the next slide, the shareholders' equity rose by 2.6%. In addition to the positive contribution from our half-year result, currency effects were also a positive.

Speaker #3: The CSM grew by 11.4%, mainly reflecting our successful new business generation across both business groups. The risk adjustment increased by 5.8%, driven by new business and assumption changes in Life and Health.

Speaker #3: Altogether, the developments on this slide really show continued positive value creation for our shareholders, and an improved foundation for future earnings growth. And on that note, I'll hand over to you, Christian.

Speaker #2: Yeah, thank you, Clemens. And good morning, or good afternoon, everyone. Our P&C result is based on the strong quality of our diversified portfolio and, as we fully booked the half-year large loss budget, this result does not reflect the benign CAT environment.

Christian Hermelingmeier: Yeah. Thank you, Clemens, and good morning or good afternoon, everyone. Our P&C result is based on the strong quality of our diversified portfolio. As we fully booked the H1 large loss budget, this result does not reflect the benign cat environment. On the loss reserves booked so far this year, I would also add that, in particular, the initial estimates for potential losses in connection with the Iran war and the earthquake in Venezuela are deliberately prudent, with no meaningful claims notifications received to date. Furthermore, the combined ratio of 83.2% includes a further increase in our resiliency reserves. As you know, we can only provide exact figures and numbers based on the full reserve analysis at year-end.

Speaker #2: On the loss reserves booked so far this year, I would also add that, in particular, the initial estimates for potential losses in connection with the Iran war and the earthquake in Venezuela are deliberately prudent.

Speaker #2: With no meaningful claims notifications received to date. Furthermore, the combined ratio of 83.2% includes a further increase in our resiliency reserves. And as you know, we can only provide exact figures and numbers based on the full reserve analysis at year-end, but what I can say today is that the underlying runoff result was, again, positive, and our decision to add additional prudence is the reason why the reported runoff result is negative at minus €62 million.

Christian Hermelingmeier: What I can say today is that the underlying runoff result was again positive. Our decision to add additional prudence is the reason why the reported runoff result is negative at EUR 62 million. Therefore, the underlying combined ratio is clearly better than the reported 83.2%. Clemens already explained the main drivers for the reinsurance revenue. To a certain extent, this is simply a reflection of IFRS 17 accounting. In a softening market environment, the likelihood of upward trends for commissions and other contract features such as profit or sliding scale commissions is naturally higher. Under IFRS 4, this did not affect the premium. Under IFRS 17, though, it directly reduces reported reinsurance revenue growth in addition to the price changes. This can be meaningful, as we see.

Speaker #2: Therefore, the underlying combined ratio is clearly better than the reported 83.2%. And Clemens already explained the main drivers for the reinsurance revenue, so to a certain extent, this is simply a reflection of IFRS 17 accounting.

Speaker #2: In a softening market environment, the likelihood of upward trends for commissions and other contract features, such as profit or sliding scale commissions, is naturally higher. Under IFS 4, this did not affect the premium.

Speaker #2: Under IFRS 17, though, it directly reduces reported reinsurance revenue growth, in addition to the price changes. And this can be meaningful, as we see for our traditional business.

Christian Hermelingmeier: For our traditional business, this is the main driver of the difference between the around 4% premium growth and the flat revenue development. Importantly, we are successful in growing our traditional treaty portfolio. The expansion recorded in the recent renewals will also support the revenue growth, becoming increasingly visible in the remainder of the year. The investment result increased, mainly driven by a higher contribution from our fixed income portfolio. The other result does not include any unusual items. The currency result was neutral. Looking now at the IFRS 17 components of the P&C service result, the main contributor is the CSM release, fueled by the successful renewals in 2025 and 2026. A prudent reserving approach is the main reason again for the negative experience variance and the negative runoff result.

Speaker #2: This is the main driver of the difference between the roughly 4% premium growth and the flat revenue development. Importantly, we are successful in growing our traditional treaty portfolio.

Speaker #2: The expansion recorded in the recent renewals will also support the revenue growth, becoming increasingly visible in the remainder of the year. The investments result increased, mainly driven by a higher contribution from our fixed income portfolio.

Speaker #2: And the other result does not include any unusual items. The currency result was neutral. Looking now at the IFRS 17 components of the P&C service result, the main contributor is the CSM release, fueled by the successful renewals in 2025 and 2026.

Speaker #2: And our prudent reserving approach is, again, the main reason for the negative experience variance and the negative runoff result. Additional prudence for business earned from recent underwriting years is reflected in the experience variance, while additional prudence for prior underwriting years shows up as a negative runoff result.

Christian Hermelingmeier: Additional prudence for business earned from recent underwriting years is reflected in the experience variance, while additional prudence for prior underwriting years shows up as a negative runoff result. The very low new business loss component confirms that rates remained adequate on a broad basis, despite the rate decreases in the recent renewals. The increase in CSM is mainly driven by the new business written in the successful 2026 renewals, with a diversified contribution from different regions and lines of business. The new business CSM amounted to EUR 1.7 billion. Compared to the previous year, this is a decrease of EUR 265 million. Around EUR 175 million can be explained by different foreign exchange rates and interest rates. The rest, so close to EUR 100 million, reflects the combined effect of price and volume changes in our portfolio. Compared to the Q1 numbers, this is a clear improvement.

Speaker #2: The very low new business loss component confirms that rates remained adequate on a broad basis, despite the rate decreases in the recent renewals. The increase in CSM is mainly driven by the new business written in the successful 2026 renewals, with a diversified contribution from different regions and lines of business.

Speaker #2: The new business CSM amounts to €1.7 billion, and compared to the previous year, this is a decrease of €265 million. Around €175 million of this can be explained by different foreign exchange rates and interest rates.

Speaker #2: The rest, so close to €100 million, reflects the combined effect of price and volume changes in our portfolio. So, compared to the Q1 numbers, this is a clear improvement, and apart from the successful growth, the Q2 number is also supported by an updated and more positive reflection of our retrocession program, which was not entirely included in Q1.

Christian Hermelingmeier: Apart from the successful growth, the Q2 number is also supported by an updated and more positive reflection of our retrocession program, which was not entirely included in Q1. Life and health reinsurance recorded a strong top-line growth of 12%, adjusted for currency effects. This positive development mainly came from U.S. financial solutions and diversified growth opportunities in traditional business. A large part of the gross revenue contribution from U.S. financial solutions does not end up in the net revenue. Furthermore, the revenue contribution might be lower in the coming year due to its shorter-term nature. The reinsurance service result of EUR 478 million for the H1 is slightly more than 50% of our EUR 925 million target for the full year. Hence, we are also very well on track with regard to the profitability of our portfolio.

Speaker #2: In life and health reinsurance, we recorded strong top-line growth of 12%, adjusted for currency effects. This positive development mainly came from US financial solutions and diversified growth opportunities in traditional business.

Speaker #2: A large part of the gross revenue contribution from U.S. financial solutions does not end up in the net revenue. Furthermore, the revenue contribution might be lower in the coming year due to its shorter-term nature.

Speaker #2: The reinsurance service result of €478 million for the first half is slightly more than 50% of our €925 million target for the full year.

Speaker #2: Hence, we are also very well on track with regard to the profitability of our portfolio. Looking at the details, the contribution from our financial solutions book was particularly strong, and our traditional portfolio also performed well in many areas, leading to a positive experience variance.

Christian Hermelingmeier: Looking at the details, the contribution from our financial solutions book was particularly strong, and our traditional portfolio also performed well in many areas, leading to a positive experience variance. As usual, not all trends are developing in the same direction. Within the overall positive experience, we have recorded some negative effects from claims volatility in our Australian disability book in the Q2, and I would like to point out that this is connected to business which can be repriced regularly, generally allowing us to react rather quickly to any development. The investment result mainly reflects the ordinary income from our fixed income portfolio, but also includes a negative impact from the valuation of a net equity participation. The currency result was EUR 47 million, driven by a mix of currency movements against the euro.

Speaker #2: As usual, not all trends are developing in the same direction. Within the overall positive experience, we have recorded some negative effects from claims volatility in our Australian disability book, and in the second quarter.

Speaker #2: And I would like to point out that this is connected to business, which can be repriced regularly, generally allowing us to react rather quickly to any development.

Speaker #2: The investment result mainly reflects the good ordinary income from our fixed income portfolio, but also includes a negative impact from the valuation of an equity participation.

Speaker #2: The currency result was minus €47 million, driven by a mix of currency movements against the euro. Looking here at the IFRS 17 profit drivers, the main contribution comes from the CSM release.

Christian Hermelingmeier: Looking here at the IFRS 17 profit drivers, the main contribution comes from the CSM release. This is actually slightly above our expected range, mainly driven by our financial solutions business, including some deals with a rather quick release pattern compared to the rest of the book. The risk adjustment release was in line with expectations. As mentioned, the experience variance is overall positive. The main reason for the loss component are assumption changes for onerous business and the prudent increase in the risk adjustment for morbidity business. The larger part of this can be attributed to Critical Illness business in China, but other regular assumption reviews also contributed to the overall number. The business growth is well reflected in new CSM generation of 385 million, with a diversified contribution from financial solutions and traditional business.

Speaker #2: This is actually slightly above our expected range, mainly driven by our financial solutions business, including some deals with a rather quick release pattern compared to the rest of the book.

Speaker #2: The risk adjustment release was in line with expectations. And as mentioned, the experience variance is overall positive. The main reason for the loss component is assumption changes for Honoris business and the prudent increase in the risk adjustment for morbidity business.

Speaker #2: A larger part of this can be attributed to the critical illness business in China, but other regular assumption reviews also contributed to the overall number.

Speaker #2: The business growth is well reflected in new CSM generation of €385 million, with a diversified contribution from financial solutions and traditional business. Changes in estimates are mainly driven by some model updates for longevity, and regular enforcement management actions for the traditional business.

Christian Hermelingmeier: Changes in estimates are mainly driven by some model updates for Longevity and regular in-force management actions for the traditional business. Including positive currency effects, the CSM increased by 6%. The development of our investments was again very satisfactory. The return on investment of 3.7%, comfortably ahead of our 3.5% target. The increasing ordinary investment income reflects the continued roll-over in a higher yield environment. As you know, we accelerated this with active loss realizations in 2025 and are now benefiting from these actions. To conclude my remarks, the H1 of 2026 has been very successful for Hannover Rueck, whose net income provides a strong basis for delivering on our full-year target.

Speaker #2: And including positive currency effects, the CSM increased by 6%. The development of our investments was again very satisfactory; the return on investment of 3.7% is comfortably ahead of our 3.5% target.

Speaker #2: The increasing ordinary investment income reflects the continued roll-over in a higher yield environment. And as you know, we accelerated this with active loss realizations in 2025 and are now benefiting from these actions.

Speaker #2: So, to conclude my remarks: the first half of 2026 has been very successful for Hannover Re. Group net income provides a strong basis for delivering on our full-year target.

Speaker #2: A further strengthened balance sheet provides an additional more than €200 million of unused large loss budget, which is a significant buffer for large losses with the peak hurricane season ahead of us.

Christian Hermelingmeier: The further strengthened balance sheet provides additional confidence in future earnings, and more than EUR 200 million of unused large loss budget is a significant buffer for large losses with the peak hurricane season ahead of us. On that note, I hand back to you, Clemens, for comments on the outlook.

Speaker #2: On that note, I hand back to you, Clemens, for comments on the outlook.

Speaker #1: Yes, thank you, Christian. So before we have a look at the outlook, let's just briefly look at the renewal slide on slide 15. The successful conclusion of all major treaty renewals in 2026 is another reason to be positive about the future. Based on our strong market position and the long-term client relationships, we were able to further expand our traditional treaty portfolio. Year-to-date premium growth, as you can see here, is plus 7.2%.

Clemens Jungsthöfel: Yes. Thank you, Christian. Before we have a look at the outlook, let's just briefly look at the renewal slide on slide 15. The successful conclusion of all major treaty renewals in 2026 is another reason to be positive about the future. Based on our strong market position and the long-term client relationships, we were able to further expand our traditional treaty portfolio. Year-to-date premium growth, as you can see here, is +7.2%. Despite increased competition and clearly pressure on pricing, reinsurance rates remained at least adequate on a broad basis, and we are willingly providing capacity to our clients and programs that do meet our margin requirements. The mid-year renewals, I'd say, fit well into this picture. The premium volume of our traditional treaty portfolio increased by 12.3%.

Speaker #1: Despite increased competition and clear pressure on pricing, reinsurance rates remained at least adequate on a broad basis. Hence, we are willingly providing capacity to our clients and programs that do meet our margin requirements.

Speaker #1: The mid-year renewals, I'd say, fit well into this picture. The premium volume of our traditional treaty portfolio increased by 12.3%. The growth is rather broad-based, with good contributions from the Americas.

Clemens Jungsthöfel: The growth is rather broad-based, with good contributions from the Americas, from Australia, and within the specialty lines, from Credit and Surety and our digital business. The volume of dedicated cat business up for renewal in June and July was broadly stable, reflecting continued underlying exposure growth for well-priced risks. The volume in Asian markets decreased as a result of our disciplined underwriting approach in mostly competitive markets. Competition continued to center around pricing, with moderate discussions on terms and conditions. The overall risk-adjusted price change for our diversified portfolio was -4.5%. Rate reductions were most significant for loss-free Property Catastrophe business. As in previous renewals, price pressure in other parts of the portfolio was less pronounced. On a year-to-date basis, this brings the price change for our traditional portfolio to -3.9%.

Speaker #1: From Australia, and within the specialty lines, from credit insurance and our digital business. The volume of dedicated CAT business up for renewal in June and July was broadly stable.

Speaker #1: Reflecting continued underlying exposure growth for well-priced risks, the volume in Asian markets decreased as a result of our disciplined underwriting approach in mostly competitive markets.

Speaker #1: Competition continued to center around pricing, with moderate discussions on terms and conditions. The overall risk-adjusted price change for our diversified portfolio was minus 4.5%.

Speaker #1: Rate reductions were most significant for loss-free property CAT business. As in previous renewals, price pressure in other parts of the portfolio was less pronounced.

Speaker #1: So on a year-to-date basis, this brings the price change for our traditional portfolio to minus 3.9%. Based on the business performance in the first half-year and the outcome of recent renewals, we do confirm our guidance for 2026 without any changes.

Clemens Jungsthöfel: Based on the business performance in the H1 and the outcome of recent renewals, we do confirm our guidance for 2026 without any changes. As explained, delivering on our IFRS growth target in P&C will be ambitious, but the lower end of our target range remains achievable. More importantly, the strong quality of our P&C portfolio, with a combined ratio of 83.2% in the H1, including the fully booked large loss budget, as Christian mentioned, puts us in a very good position to deliver on the combined ratio target of below 87%. Finally, even based on a normal large loss experience, we should remain in a position to build additional resiliency reserves in 2026.

Speaker #1: As explained, delivering on our IFRS growth target in P&C will be ambitious, but the lower end of our target range remains achievable. More importantly, the strong quality of our P&C portfolio, with a combined ratio of 83.2% in the first half—including the fully booked large loss budget, as Christian mentioned—puts us in a very good position to deliver on the combined ratio target of below 87%.

Speaker #1: Finally, even based on a normal large loss experience, we should remain in a position to build additional resiliency reserves in 2026. Also, in Life and Health, we are well on track to achieve our target for the reinsurance service result of around €925 million.

Clemens Jungsthöfel: Also in Life and Health, we are well on track to achieve our target for the reinsurance service result of around EUR 925 million, and the target for return on investment remains at 3.5%. Altogether, we are confident that we will deliver earnings growth in 2026 and in the following years. This concludes my remarks, and we would be happy to answer your questions now. Thank you.

Speaker #1: And the target for return on investment remains at 3.5%. So, altogether, we are confident that we will deliver earnings growth in 2026 and in the following years.

Speaker #1: This concludes my remarks, and we would be happy to answer your questions now. Thank you.

Operator: Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and 2. Anyone with a question may press star and 1 at this time. The first question comes from Will Hardcastle from UBS. Please go ahead.

Speaker #2: Ladies and gentlemen, we will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the telephone.

Speaker #2: You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and one at this time.

Speaker #2: And the first question comes from Will Hardcastle from UBS. Please go ahead.

Speaker #3: Good morning. Just coming back to that new business CSM. You touched on a few of the key moving parts there, but if only €100 million or so is the year-to-date impact, that’s sort of 5%.

Will Hardcastle: Morning there. Just coming onto that new business CSM. You touched on a few of the key moving parts there, but if only EUR 100 million or so is the year-to-date impact, that is 5%. Perhaps given where premiums have come in this year, maybe implies just less than 1 percentage point of a combined ratio impact year-to-date. It seems maybe a little generous given the pricing declines on, how do I comp that with the risk-adjusted price change of -3.9%, recognizing that is not quite apples for apples on timing. Then just thinking about 12% premium growth in that mid-year renewal. I guess, we can paint this in a couple of different lights. Some might question that from a cycle management perspective, I guess.

Speaker #3: And perhaps, given where premiums have come in this year, it maybe implies just less than 1 percentage point of a combined ratio impact year-to-date. It seems maybe a little generous, given the pricing declines, and how do I reconcile that with the risk-adjusted price change of minus 3.9%—recognizing that's not quite apples to apples.

Speaker #3: On timing—and then just thinking about 12% premium growth in that mid-year renewal—I guess we can paint this in a couple of different lights.

Speaker #3: If I—some might question that from a cycle management perspective, I guess—and can you help us to understand why you guys are so comfortable with the extent of that growth into what, with the price declines, looks like diminishing margins?

Will Hardcastle: Can you help us to understand why you guys are so comfortable with the extent of that growth into what, with the price declines, looks like diminishing margins. Perhaps discussing which of the competitive advantages you are really leaning on here. That would be helpful. Thank you.

Speaker #3: Perhaps discussing which of the competitive advantages you're really leaning on here would be helpful. Thank you.

Speaker #1: Yeah, thank you, Will. So let me start with the second question. As you can see, the majority of the growth has come from renewal business—so business we know really, really well.

Sven Althoff: Yeah, thank you, Will. Let me start with the second question. As you can see, the majority of the growth has come from renewal business. Business we know really well. We are obviously very comfortable pricing that business. It is clear that given how the market is developing, the pricing levels are not as attractive as they were last year, and last year was a deterioration on the year prior. But still, despite the fact that the attractiveness of margins has reduced, it is still attractive in the sense that it is making our hurdle rates, and therefore growing in these lines of businesses is value accretive, also in a softening market environment. You also have to keep in mind that the extent of the softening is not happening to the same extent everywhere.

Speaker #1: So we are obviously very comfortable pricing that business. It's clear that, given how the market is developing, the pricing levels are not as attractive as they were last year.

Speaker #1: And last year was a deterioration on the year prior. But still, I mean, despite the fact that the attractiveness of margins has reduced, it's still attractive in the sense that it's making our hurdle rates, and therefore, growing in these lines of business is where you are accretive.

Speaker #1: Also, in a softening market environment, you have to keep in mind that the extent of the softening is not happening to the same degree everywhere.

Speaker #1: So, Clemens already highlighted that property CAT is the area where we see the most softening, and that many other parts of our portfolio are significantly more stable when it comes to the terms and conditions.

Sven Althoff: Clemens already highlighted that Property Catastrophe is the area where we see most softening, and that many other parts of our portfolio are significantly more stable, when it comes to the terms and conditions. Therefore, when it comes to new business, it has been a diversified picture. We have written some more cyber non-proportionate business, for example, which was new demand. Business that was not previously purchased, to give you one example. Same goes for Credit and Surety, where the surety products become more prominent in some of the more emerging country environments. And both businesses certainly not subject to the kind of pricing pressure we see on the Net Catastrophe side. Still on the Net Catastrophe side, we are also growing a little bit, but we are doing that with strict profitability criteria.

Speaker #1: So therefore, when it comes to new business, I mean, it has been a diversified picture. We have written some more cyber and non-proportionate business, for example, which was new demand.

Speaker #1: So business that was not previously purchased, to give you one example. Same goes for credit and surety, where the surety products become more prominent in some of the more emerging country environments.

Speaker #1: And both businesses are certainly not subject to the kind of pricing pressure we see on the nat CAT side. Still, on the nat CAT side, we are also growing a little bit, but we're doing that with strict profitability criteria.

Speaker #1: So, whatever we wrote new, despite the rate reductions, is making our hurdle rates, and we were also prepared to write fewer positions on business where the pricing did not work so well any longer.

Sven Althoff: Whatever we wrote new, despite the rate reductions, is making our hurdle rates, and we were also prepared to write lesser positions on business where the pricing did not work so well any longer. The reason why we still find some new business in Net Catastrophe attractive, of course, has to be seen in the context that our relative market share in natural catastrophe business is significantly lower compared to our average market share across all lines of business. As we explained on previous occasions, we are prepared to engage a little more capital to write Property Catastrophe business. If you take that all together, we are comfortable in growing in this market environment, as we still see that as an attractive market environment.

Speaker #1: The reason why we still find some new business in net CAT attractive has to be seen in the context that our relative market share in natural catastrophe business is significantly lower compared to our average market share across all lines of business.

Speaker #1: And, as we explained on previous occasions, we are prepared to engage a little more capital to write property catastrophe business. So, if you take that all together, we are comfortable growing in this market environment, as we still see it as an attractive market environment.

Speaker #1: And you can also see that by the still very limited loss component we are showing after the first half of the year, which clearly demonstrates that the growth will be value-creative over time when we release the CSM.

Sven Althoff: You can also see that by the still very limited loss component we are showing after the H1 of the year, which clearly demonstrates that the growth will be value accretive over time when we release the CSM. On your first question, yes, you are right. What we said on previous occasions, we reckon that with the pricing reductions that we have experienced to date, and there was a little bit of an acceleration quarter to quarter, that the impact on our combined ratio should be roughly 2% on the entire portfolio. That is certainly holding true. I guess the reason why in the new business generation, you are not seeing that so directly, it also has to do with the growth we are showing, because that growth comes with a positive CSM margin, as I have just explained.

Speaker #1: On your first question—yes, you're right. I mean, as we said on previous occasions, we reckon that with the pricing reductions that we have experienced to date—and there was a little bit of an acceleration quarter to quarter—the impact on our combined ratio should be roughly 2% on the entire portfolio.

Speaker #1: So that is certainly holding true. And I guess the reason why, in the new business generation, you are not seeing that so directly also has to do with the growth we are showing.

Speaker #1: Because that growth comes with a positive CSM margin, as I've just explained. So, therefore, it's somewhat reducing the effect from the dilution of the combined ratio on the renewal of business.

Sven Althoff: Therefore, somewhat reducing the effect from the dilution of combined ratio on the renewable book of business. On top of that, as Christian has explained, there are also some interest rate and foreign exchange movements which give a certain volatility quarter to quarter to the new business generation number.

Speaker #1: And then, on top of that, as Christian has explained, there are also some interest rate and foreign exchange movements which give a certain volatility quarter to quarter to the new business generation number.

Speaker #2: The next question comes from Andrew Baker from Goldman Sachs. Please go ahead.

Operator: The next question comes from Andrew Baker from Goldman Sachs. Please go ahead.

Speaker #3: Hi. Thank you for taking my questions. First one, can you just help me just pick apart your confidence in, I guess, the catch-up of the growth in P&C reinsurance for the second half?

Andrew Baker: Hi. Thank you for taking my questions. First one, can you just help me pick apart your confidence in, I guess, the catch-up of the growth in P&C reinsurance for the H2? Is it purely the strong renewals, or are there also some base effects at play given all of the noise around the NDIC, in particular last year? I guess more specifically in the current period, were the year-on-year NDIC headwinds on revenue growth higher in Q1 or Q2 this year? Secondly, on the Life and Health Re side, are you able to help us think about the growth outlook for U.S. financial solutions? Given obviously the strong growth that you have achieved here so far, should we expect an uptick in the CSM release rate going forward?

Speaker #3: Is it purely the strong renewals, or are there also some base effects at play, given all of the noise around the NDIC in particular last year?

Speaker #3: And I guess, more specifically in the current period, were the year-on-year NDIC headwinds on revenue growth higher in one Q or two Q this year?

Speaker #3: And then, secondly, on the Life and Health side, are you able to help us think about the growth outlook for US Financial Solutions? And given, obviously, the strong growth that you've achieved here so far, should we expect an uptick in the CSM release rate going forward?

Speaker #3: Because I believe Financial Solutions has a faster run-off profile than the rest of the traditional business. Thank you.

Andrew Baker: Because I believe financial solutions has a faster runoff profile than the rest of the traditional business. Thank you.

Speaker #4: Yeah, Christian speaking here. Thanks, Andrew, for the questions. So let me take the first one—on the catch-up effect that we expect for our traditional P&C re top line—and you're absolutely right.

Claude Chèvre: Yeah. Christian speaking here. Thanks, Andrew, for the questions. Let me take the first one on the catch-up effect that we expect for our traditional P&C Re top line. You are absolutely right, the main reason is the strong renewals and the volume change that we saw. The year to date, 7%, it is clearly above the 4% in premium that we saw. This will help us to move upwards. Secondly, indeed, there is also the baseline effect as the H2 of 2025 was a bit weaker last year, and together this will have a positive impact and supports our unchanged guidance. Part of that is the NDIC component that is not completely stable over the year in the earn pattern. In 2026, the NDIC effect, so the downside effect, was a bit stronger in Q1 than in Q2.

Christian Hermelingmeier: Yeah. Christian speaking here. Thanks, Andrew, for the questions. Let me take the first one on the catch-up effect that we expect for our traditional P&C Re top line. You are absolutely right, the main reason is the strong renewals and the volume change that we saw. The year to date, 7%, it is clearly above the 4% in premium that we saw. This will help us to move upwards. Secondly, indeed, there is also the baseline effect as the H2 of 2025 was a bit weaker last year, and together this will have a positive impact and supports our unchanged guidance. Part of that is the NDIC component that is not completely stable over the year in the earn pattern. In 2026, the NDIC effect, so the downside effect, was a bit stronger in Q1 than in Q2.

Speaker #4: The main reason is the strong renewals and the volume change that we saw. So, the year-to-date 7% is clearly above the 4% in premium that we saw.

Speaker #4: So this will help us to move upwards. And secondly, indeed, there is also the baseline effect, as the second half of 2025 was a bit weaker last year, and together this will have a positive impact and supports our unchanged guidance.

Speaker #4: And part of that is the NDIC component that is not completely stable over the year in the earned pattern. So in 2026, the NDIC effect—the downside effect—was a bit stronger in Q1 than in Q2.

Speaker #4: That also is part of the positive momentum we see in the figures.

Claude Chèvre: That also is part of the positive momentum we see in the figures. Maybe on your life and health questions, on the U.S. financial solutions, we do not expect to see further stronger growth on financial solutions business in the U.S. because the competition is quite strong over there. You also mentioned the CSM release uptick that we have seen from Q1 to Q2 right now. Also there, we do not expect further upticks because when you look into the new business generation that we have from the new CSM of 385, I can tell you that the biggest part this time is not coming from U.S. financial solutions, but it is coming from our traditional business across the world, including LatAm, France, and also traditional business from the U.S.

Christian Hermelingmeier: That also is part of the positive momentum we see in the figures.

Speaker #2: Maybe on your life and health questions. On the US financial solutions, we don't expect to see further, stronger growth on a financial solutions basis in the US, because the competition is quite strong over there.

Claude Chèvre: Maybe on your life and health questions, on the U.S. financial solutions, we do not expect to see further stronger growth on financial solutions business in the U.S. because the competition is quite strong over there. You also mentioned the CSM release uptick that we have seen from Q1 to Q2 right now. Also there, we do not expect further upticks because when you look into the new business generation that we have from the new CSM of 385, I can tell you that the biggest part this time is not coming from U.S. financial solutions, but it is coming from our traditional business across the world, including LatAm, France, and also traditional business from the U.S.

Speaker #2: You also mentioned the CSM release uptick that we have seen from Q1 to Q2 right now. Also there, we don’t expect further upticks, because when you look into the new business generation that we have done—the new CSM of 385—I can tell you that the biggest part this time is not coming from US financial solutions, but it’s coming from our traditional business across the world, including LatAm, France, and also traditional business from the US.

Speaker #3: Really clear. Thank you.

Andrew Baker: Really clear. Thank you.

Speaker #2: The next question comes from Ivan Bockmuth from Barclays. Please go ahead.

Operator: The next question comes from Ivan Bokhmat from Barclays. Please go ahead.

Speaker #5: Hello, good morning. Thank you very much. I've got a few questions. Maybe the first one, I'll just start with the third quarter large loss experience.

Ivan Bokhmat: Hello. Good morning. Thank you very much. I have got a few questions. Maybe the first one, I will just start with about the Q3 large loss experience. I think, Clement, you mentioned that there is a fairly high frequency of events. I was just wondering if that actually filters through the insured losses, given the benign hurricane season. How do you think about this kind of potential benefit from, if there is one, from the hurricane season? Is that another opportunity to add to buffers over the H2? My second question is actually related to large losses. I think on your slides, you book those losses almost gross to net, so I can only calculate the recoveries at about 7%, which I think is the lowest since COVID. Why is it so low, and how do you expect this to develop later in the year?

Speaker #5: I think, Clemens, you've mentioned that there's a fairly high frequency of events, but I was just wondering if that actually filters through to the insured losses, given the benign hurricane season.

Speaker #5: How do you think about this kind of potential benefit—if there is one—from the hurricane season? Is that another opportunity to add to buffers over the second half?

Speaker #5: And my second question is actually related to large losses. I think on your slides, you've booked those losses almost gross to net. So I can only calculate the recoveries at about 7%, which I think is the lowest.

Speaker #5: It's COVID. Why is it so low, and how do you expect this to develop later in the year? Maybe you can expand a little bit here and talk about the changes to your outwards and inwards book?

Ivan Bokhmat: Maybe you can expand a little bit here and talk about the changes to your outwards and inwards book. How should we think about your retro spend and retro recoveries? Thank you.

Speaker #5: How should we think about your retro spend and retro recoveries? Thank you.

Speaker #1: Yeah. Thank you, Ivan. Well, when it comes to third quarter loss experience, it's certainly a very busy quarter, with quite a number of wildfires almost on every continent.

Sven Althoff: Well, thank you, Ivan. When it comes to Q3 loss experience, it is certainly a very busy quarter with quite a number of wildfires, almost on every continent, you could say. Flood events. We had a recent earthquake in Colombia and a typhoon hitting China. From that point of view, clearly a busy quarter. When it comes to the US hurricane season, let us wait and see, I would say. Maybe the forecast on frequency is down, but it only takes one Category 5 hurricane to make landfall in the US to change the picture completely. From that point of view, I would not like to talk about buffer building in the context of a Q3 excellent quarter experience as of yet.

Speaker #1: You could say, flood events, we had a recent earthquake in Colombia and a typhoon hitting China. So, from that point of view, clearly a busy quarter.

Speaker #1: And when it comes to the US hurricane season, I mean, let's wait and see, I would say. Maybe the forecast on frequency is down, but it only takes one Category 5 hurricane to landfall in the US to change the picture completely.

Speaker #1: So from that point of view, I wouldn't like to talk about buffer building in the context of Q3 accident quarter experience as of yet. So from that point of view, as Clemens highlighted, we have definitely enough losses in the system to highlight what the macro drivers for our products are and why having risk-adjusted pricing remains very important.

Sven Althoff: From that point of view, as Clement highlighted, we have definitely enough losses on the system to highlight what the macro drivers for our products are and why having a risk-adequate pricing remains very important. When it comes to your second question on the major losses, in the context of retro, some of the losses happened relatively late in the quarter. Look at Venezuela, that happened very late in June. Therefore, we have taken a more prudent approach, and as part of the prudent approach, we have decided that we have booked a gross for net number. You can also see that elsewhere in the major loss list, like our position we have taken on Iran. This is not saying that there will not be any retro recoveries on those losses in the end.

Sven Althoff: From that point of view, as Clemens highlighted, we have definitely enough losses on the system to highlight what the macro drivers for our products are and why having a risk-adequate pricing remains very important. When it comes to your second question on the major losses, in the context of retro, some of the losses happened relatively late in the quarter. Look at Venezuela, that happened very late in June. Therefore, we have taken a more prudent approach, and as part of the prudent approach, we have decided that we have booked a gross for net number. You can also see that elsewhere in the major loss list, like our position we have taken on Iran. This is not saying that there will not be any retro recoveries on those losses in the end.

Speaker #1: When it comes to your second question on the major losses, I mean, in the context of retro, some of the losses happened relatively late in the quarter.

Speaker #1: So, look at Venezuela—that happened very late in June. Therefore, we have taken a more prudent approach, and as part of this prudent approach, we have decided that we have booked a gross-for-net number.

Speaker #1: You can also see that elsewhere in the major loss list, like our position we have taken on Iran. So this is not saying that there will not be any retro recoveries on those losses in the end, but as we knew when we closed the books, that we are well within the major loss budget, which we are booking in any case.

Sven Althoff: But as we knew when we closed the books, that we are well within the major loss budget, which we are booking in any case. We just decided to take a more prudent approach here and there. On the other hand, it is fair to say when you look at all the natural catastrophe losses, they will be too small for us to make recoveries on our event tower for them individually. So from that point of view, the main retro vehicle that will come into play is going to be our K-Cessions. As you will remember, K is not covering on a global basis, but it is covering on a peak scenario basis. So the territories where we do have the protection from K is North America, it is Europe, it is Japan, it is Australia. It is not everywhere in the world.

Speaker #1: We just decided to take a more prudent approach here and there. On the other hand, it's fair to say that when you look at all the natural catastrophe losses, they will be too small for us to make recoveries on our event tower for them individually.

Speaker #1: So from that point of view, the main retro vehicle that will come into play is going to be our K facility. And as you will remember, K is not covering on a global basis, but it's covering on a peak scenario basis.

Speaker #1: So, the territories where we do have the protection from K are North America, Europe, Japan, and Australia. It's not everywhere in the world.

Speaker #2: Probably one addition, Ivan, on the large losses and on the budget—just to remind everyone that we don't evenly distribute the large loss budget of €2.3 billion to the quarters.

Christian Hermelingmeier: Probably one addition, even on the large losses and on the budget, just to remind everyone that we do not evenly distribute the large loss budget of EUR 2.3 billion to the quarters. So there is an allocation of roughly EUR 1 billion for the Q3, and as Sven rightly said, way too early to speak about that. But let us just look at it. The underutilized budget for the H1, plus the remainder of the year, leaves us with EUR 1.5 billion of remaining large loss budget for the remainder of the year.

Clemens Jungsthöfel: Probably one addition, even on the large losses and on the budget, just to remind everyone that we do not evenly distribute the large loss budget of EUR 2.3 billion to the quarters. So there is an allocation of roughly EUR 1 billion for the Q3, and as Sven rightly said, way too early to speak about that. But let us just look at it. The underutilized budget for the H1, plus the remainder of the year, leaves us with EUR 1.5 billion of remaining large loss budget for the remainder of the year.

Speaker #2: So, there is an allocation of roughly $1 billion for the third quarter, and as Sven rightly said, it's way too early to speak about that.

Speaker #2: But let's just look at it: the underutilized budget for the first half year, plus the remainder of the year, leaves us with €1.5 billion of remaining large loss budget for the remainder of the year.

Speaker #5: Thank you.

Ivan Bokhmat: Thank you.

Speaker #2: The next question comes from Cameron Hossain from J.P. Morgan. Please go ahead.

Operator: The next question comes from Kamran Hossain from JPMorgan. Please go ahead.

Kamran Hossain: Hi, good morning. Two questions from me. The first one is on, I guess the part of the P&C insurance revenue where you don't have guidance. Clearly traditional, you've explained there's underlying growth there. Doesn't look quite as good on a reported basis. Structured was really one of the really big headwinds for you in the H1 of the year. Can you talk about whether we should expect the reduction for 2026 to continue at kind of high teens levels in structured? Can you just confirm, I think it should do, but does the drag completely disappear from structured in 2027, or does it continue slightly further than the end of the year? The second question is for Sven. Clearly, everything seems to be going in the wrong direction from a good starting point in P&C.

Speaker #3: Hi. Good morning. I have two questions. The first one is about the part of the P&C insurance revenue where you don't have guidance.

Speaker #3: Clearly, traditional— you’ve explained there’s underlying growth there. It’s not quite as good on a reported basis. But structured was really one of the big headwinds for you.

Speaker #3: In the first half of the year, do you talk about whether we should expect the reduction for 2026 to continue at kind of high-teens levels in Structured?

Speaker #3: And can you just confirm? I think it should be, but does the drag completely disappear from structured in 2027, or does it continue slightly further than the end of the year?

Speaker #3: The second question is for Sven. Clearly, everything seems to be going in the wrong direction from a good starting point in P&C.

Speaker #3: Do you think, when we get to Monte Carlo, brokers will push for improved T&Cs for cedents? I guess it feels a little bit easier to go back to your boss and say price declines weren't as big as last year.

Kamran Hossain: Do you think when we get to Monte Carlo, brokers will push for improved P&Cs for cedents? I guess it feels a little bit easier to go back to your boss and say price declines weren't as big as last year, then kind of forgetting to mention kind of P&C softening. Just interested in whether you think that would be a key battleground and kind of what the outcome might be, at Monte Carlo, I guess kind of more importantly at 1/1. Thank you.

Speaker #3: And then kind of forgetting to mention T&C softening. So I'm just interested in whether you think that would be a key battleground and what the outcome might be.

Speaker #3: At Monte Carlo, I guess, kind of more importantly at 1.1. Thank you.

Speaker #4: Beyond the structured side, Cameron, I mean, the developments we have in this calendar year are that we have very few clients reducing their session rates. Those clients happen to see big volumes of premiums.

Sven Althoff: On the structured side, Kamran, the development we have in this calendar year is that we have a very few clients reducing their session rates. Those clients happen to cede big volumes of premiums. When we look at the entire portfolio, we can say we have added to the number of contracts. We are growing on the new business, so we don't have to show all the reduction in the premium that we would have on just the renewal book. So we are compensating a good part of those reduced sessions. In general, the pipeline for surplus relief solutions, and also earnings volatility protections, is still very good and positive and sent our number of contracts continue to grow. So in that sense, we remain positive when it comes to the development of our structured portfolio.

Speaker #4: And when we look at the entire portfolio, we can say we have added to the number of contracts; we are growing on the new business.

Speaker #4: So, we don't have to show all the reduction in the premium. That would only be on the renewal book. So, we are compensating a good part of those reduced cessions.

Speaker #4: In general, the pipeline for surplus relief solutions and earnings volatility protections is still very good and positive. Hence, our number of contracts continues to grow.

Speaker #4: So, in that sense, we remain positive when it comes to the development of our structured portfolio. It's too early to make any comments on where this will go when it comes to the 2027 calendar year.

Sven Althoff: It's too early to make any comments on where will this go, when it comes to the 2027 calendar year. As I said, this year's development is driven by less than a handful of individual decisions at the client level. So we have to wait and see where they will go with their decisions, and we are not in a position to guide you in that respect yet. Hopefully, that gets a little clearer when we meet for our Investors' Day in November, when we will certainly talk about that development. When it comes to what to expect for 2027, as you mentioned, Monte Carlo, where the industry is meeting. Our experience with the softening of the market so far has been that it's really concentrating on price only. The very few discussions we have on terms and conditions in general are client-specific, so very bespoke discussions.

Speaker #4: As I said, this year’s development is driven by less than a handful of individual decisions at the client level. So, we have to wait and see where they will go with their decisions, and we are not in a position to guide you in that respect.

Speaker #4: Yet, hopefully, that gets a little clearer when we meet for our investor's day in November when we will certainly talk about that development. When it comes to what to expect for 2027, as you mentioned Monte Carlo, where the industry is meeting, I mean, with our experience with the softening of the market so far has been that it's really concentrating on price only.

Speaker #4: The very few discussions we have on terms and conditions in general are client-specific, so very bespoke discussions. It may be an hours clause here.

Sven Althoff: It may be an hours clause here, it may be the reintroduction for Strike, Riot, and Civil Commotion coverage there. But really individual cases, no trends, no general pressure that reinsurers are now supposed to cover something which they did not cover before, in a very broad sense. So from that point of view, price-only retention levels are holding at nominal 2023 levels. Also very little pressure here. When it comes to the aggregate protections, yes, some clients are buying a little more than they did in the past, but it is very often clients that have always purchased aggregate protections. So again, the market is not awash with this kind of product. Quite frankly, as we talk today, that is the general picture we would expect also going into 2027.

Speaker #4: It may be the reintroduction for strike, riot, civil commotion coverage there. But really, individual cases—no trends, no general pressure that reinsurers are now supposed to cover something which they didn't cover before.

Speaker #4: In a very broad sense, so from that point of view, price-only retention levels are holding. At nominal 2023 levels, there's also very little pressure here.

Speaker #4: And when it comes to the aggregate protections, yes, some clients are buying a little more than they did in the past. But it's very often clients that have always purchased aggregate protections.

Speaker #4: So again, the market is not awash. With this kind of product—and quite frankly, as we talk today—that's the general picture we would expect also going into 2027.

Speaker #4: And of course, we would say particularly on the property cat side, the base level from which we are starting in many cases is now through two renewal cycles with meaningful discounts.

Sven Althoff: Of course, we would say, particularly on the Property Catastrophe side, the base level from which we are starting in many cases is now through 2 renewal cycles with meaningful discounts. Therefore, the room for further discounts is certainly no longer the healthy 2023 levels, and therefore logic would tell you that we would see a certain deceleration.

Speaker #4: So, therefore, the room for further discounts is certainly no longer at the healthy 2023 levels. And, therefore, logic would tell you that we would see a certain deceleration.

Speaker #3: Can I just ask, on that point, where clients have asked for slightly widened terms and conditions, hours clauses, etc.? Have those been things that you've maybe accepted, or have you just said no?

Kamran Hossain: Can I just ask one? Where clients have asked for slightly widened terms, conditions, hours clauses, et cetera, have those been things that you have maybe accepted or you just said that, "No, we have given you enough price. We just will not broaden the terms.

Speaker #3: We've given you enough price. We just won't, kind of, broaden the terms.

Speaker #4: Well, the discussions often enough happen in the context of property cat reinsurance, which will not surprise you. And our response has been different case by case, depending on what exactly it was.

Sven Althoff: Well, the discussions often enough happen in the context of Property Catastrophe reinsurance, which will not surprise you. Our response has been different case to case, depending on what exactly it was.

Speaker #3: Okay, thanks, Sven. Next question comes from Ian Pierce from BNP Paribas. Please go ahead.

Kamran Hossain: Thanks.

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

Speaker #5: Hi, good morning. Thanks for taking my questions. The first one is just on the development of the P&Ls in H1. Obviously, you've had quite a bit of growth in NatCat, but also expansion in the retro program at the start of the year.

Iain Pearce: Hi, morning. Thanks for taking my questions. The first one is just on the development of the PMLs in H1. So obviously you have had quite a bit of growth in that cat, but expansion in the retro program at the start of the year. Just trying to get a feel for how you see PMLs trending over the first half of the year now the renewals are all done. The second one is just on the impact from the equity participation in the lifebook. Can you just give us a bit more details about what that is and if this is something we need to look out for going forward? Thank you.

Speaker #5: So, just trying to get a feel for how you see PMLs trending over the first half of the year, now that the renewals are all done.

Speaker #5: And the second one is just on the impact from the equity participation in the Life book. Can you just give us a bit more detail about what that is, and if this is something we need to look out for going forward?

Speaker #5: Thank you.

Speaker #4: Yeah, Ian. I mean, on the property side, our PMLs keep increasing. I mean, as I said earlier in the call, we have identified metric-attached, free business as an area where we can still grow our market share.

Sven Althoff: Yeah, Iain. On the property side, our PMLs keep increasing. As I said earlier in the call, we have identified natural catastrophe business as an area where we can still grow our market share. We have done that very successfully since 2023. Also in 2026, we are being a stable to slightly growing portfolio, not everywhere in the world because the cycle from a pricing point of view is giving us more opportunities in certain territories, whilst we are happy in others. But the underlying trend is still that the PMLs are going to increase also in 2026.

Speaker #4: If we have done that very successfully since 2023, also in 2026, we are seeing a stable to slightly growing portfolio—not everywhere in the world, because the cycle from a pricing point of view is giving us more opportunities in certain territories, whilst we are happy in others.

Speaker #4: But the underlying trend is still that the PMLs are going to increase also in 2026.

Speaker #5: And coming to your question around the equity participation, what I can tell you is that that's a non-strategic participation we hold, and this is a one-off effect.

Christian Hermelingmeier: Coming to your question around the equity participation. What I can give you, that is a non-strategic participation we hold, and this is a one-off effect. Going forward, you should not expect any more material movements here.

Speaker #5: So, going forward, you should not expect any more material movements here.

Speaker #3: The next question comes from Vinid Malhotra from Mediobanca. Please go ahead.

Operator: The next question comes from Vinit Malhotra from Mediobanca. Please go ahead.

Speaker #5: Yes, thank you. Very good presentation, sir. There are just a few, maybe, clarifications or queries, if you like. First one, just on the premium underlying growth—4% in H1—could you also provide how Q1 was, just to get a sense of whether it's stable, worsening, or better than Q1?

Vinit Malhotra: Yes, thank you. Very good presentation, sir. Just a few maybe clarifications or queries, if you like. The first one, just on the premium underlying growth, 4% in H1. Could you also provide how Q1 was, just to get a sense of whether it is stable, worsening, or better than Q1. Then just on the resiliency reserves build up, could you confirm that, should we assume that same EUR 200 to 250 million runoff positives per quarter, which would make it between EUR 400 to 500 million, and instead we have the number we have on the slide. So could that be used as well this quarter. If I can throw in one on the large losses. There seems to be a little bit more frequency type of events, as in more number of events, smaller losses here and there in the quarter.

Speaker #5: Then, just on the reserve resilience build-up, could you confirm: should we assume that same €200 to €250 million runoff positive per quarter, which would make it between €400 to €500 million, and instead we have the number we have on the slide—could that be used as well this quarter?

Speaker #5: Just if I can throw in one on the large losses—there seems to be a little bit more frequency, in terms of the number of events, with smaller losses here and there.

Speaker #5: In the quarter, I know your threshold is $10 million, which is lower than some of the peers. Would you think that is the reason that the number is looking different from peers?

Vinit Malhotra: I know your threshold is EUR 10 million, which is lower than some of the peers. Would you think that is the reason that the numbers are looking different from peers, or would you just say that this was luck, or would you say this is part of business. When you are saying that you are trying to emphasize that the risk scenario has not changed just because of low hurricane, are your insurance clients sympathetic to that view, or do you think there will be some pushback there. Sorry, loads of questions, but maybe three topics really. Thank you.

Speaker #5: Or would you just say that this was luck, or would you say this is part of the business? And when you’re saying that, you’re trying to emphasize that the risk scenario hasn’t changed just because of low hurricanes. Are clients, or insurers, or your insurance clients, sympathetic to that view, or do you think there will be some pushback there?

Speaker #5: Sorry, loads of questions, but maybe three topics, really. Thank you.

Speaker #4: Vinid, can you explain this last question? In what sense?

Sven Althoff: Vinit, can you explain this last question. In what sense-

Vinit Malhotra: The last question is because we talked about wildfires, floods. You said that it is not that just because hurricanes are milder, the risks have gone away. So you are trying to create the business scene for the risk still being out there. How sympathetic do you think clients are to that from what you know or what you think they will say? Thank you.

Speaker #5: The last question is because we talked about wildfire and floods, and we said—or you said—that it's not that just because a hurricane is milder the risks have gone away.

Speaker #5: So, you're trying to create the business scene for the risk still being out there. How sympathetic do you think clients are to that, from what you know or what you think they will say?

Speaker #5: Thank you.

Speaker #4: Well, I'm not aware that clients really have made that argument, that we should take this very short-term perspective into account when pricing their business.

Sven Althoff: Well, I am not aware that clients really have made that argument that we should take this very short-term perspective into account when pricing their business. As I just said, the El Niño effect does most likely have an impact on the observed frequency at the end of the day, but it does not say a lot about the intensity of those, maybe fewer, but still hurricanes that will make landfall at the end of the day. So from that point of view, very difficult to have a positive view on this. The flip side is also true. In a La Niña year where we expect the frequency to be higher, clients are also not volunteering to pay more for their reinsurance. So from that point of view, we are looking more at the long-term development of those exposure and how does climate change impact them over the longer cycle.

Speaker #4: I mean, as I just said, the linear effect most likely does have an impact on the observed frequency at the end of the day.

Speaker #4: But it doesn't say a lot about the intensity of those, maybe fewer, but still hurricanes that will make landfall at the end of the day.

Speaker #4: So, from that point of view, it's very difficult to have a positive view on this. The flip side is also true. I mean, in a London year, where we expect the frequency to be higher, clients are also not volunteering to pay more for their reinsurance.

Speaker #4: So, from that point of view, we are looking more at the long-term developments of those exposures and how climate change impacts them over the longer cycle.

Speaker #4: When it comes to your major loss question, yeah, you're absolutely right. I mean, our threshold for reporting the losses is certainly lower compared to some of our peers.

Sven Althoff: When it comes to your major loss question, you are absolutely right. Our threshold reporting the losses is certainly lower compared to some of our peers. So it is only EUR 10 million. If you look at the distribution of the natural catastrophe losses, which is a total of 10 losses, six out of the 10 is in the band, EUR 10 to 20 million. So a lot of frequency in that respect. Therefore, we would not read anything unexpected into these numbers. We are looking at our major loss budget year on year, and we are, from a direction of traveling point of view, increasing the number year on year, given the underlying growth of our portfolio. That, of course, also takes into account that we will have, given the growth of the portfolio, have to expect more losses exceeding the threshold of EUR 10 million compared to previous periods.

Speaker #4: So it's only €10 million. If you look at the distribution of the network catastrophe losses, which is a total of 10 losses, 6 out of the 10 are in the band €10 to €20 million, so a lot of frequency.

Speaker #4: In that respect, and therefore, we wouldn't expect anything unexpected in this number, as you know. I mean, we are looking at our major loss budget year on year, and we are, from a direction of travel point of view, increasing the number year on year, given the underlying growth of our portfolio.

Speaker #4: And that, of course, also takes into account that we will have, given the growth of the portfolio, to expect more losses exceeding the threshold of €10 million compared to previous periods.

Sven Althoff: That, of course, also takes into account that we will have, given the growth of the portfolio, have to expect more losses exceeding the threshold of EUR 10 million compared to previous periods.

Speaker #4: So from that point of view, nothing surprising for us in that respect, and very often climate change related—the kind of losses we are talking about.

Sven Althoff: From that point of view, nothing surprising for us in that respect. Very often climate change related, the kind of losses we are talking about. So also clearly demonstrating that this is an exposure trend the industry needs to take into account when setting retentions and setting pricing for the product. On your first question, Vinit, I do not have the equivalent number of the 4% underlying earned premium number for the full H1 when it comes to Q1 standalone. We would have to get back to you on that.

Speaker #4: This also clearly demonstrates that this is an exposure trend the industry needs to take into account when setting retentions and pricing for the product.

Speaker #4: And on your first question, Vinid, I don't have the equivalent number for the 4% underlying earned premium for the full half-year when it comes to Q1 standalone.

Speaker #4: We would have to get back to you on that.

Speaker #5: And, Vinid? Yeah, please, please. Thank you. Yeah. And then let me take your question on the resiliency reserves. So, in general, the logic or the view I talked about also last time is still correct.

Christian Hermelingmeier: Yeah, please. Thank you.

Christian Hermelingmeier: Sorry.

Christian Hermelingmeier: Vinit?

Vinit Malhotra: Let me take your question on the resiliency reserves. In general, the logic or the view I talked about also last time is still correct. We expect a positive runoff result, and taking a direction of 200 would be a fair number. In the second quarter in this year was not different. Of course, there are also moving parts below that and a lot of accounting details. You should maybe not take a completely 100% for your estimate looking forward, but we could in Q2, again, substantially add to the resiliency reserves. As we also mentioned already in our introduction, of course, we have the full picture only once a year when we have the full actuarial analysis.

Christian Hermelingmeier: Yeah. And then let me take your question on the resiliency reserves. So in general, the logic or the view I talked about also last time is still correct. So we expect a positive runoff result, and taking a direction of 200 would be a fair number. But in the second quarter in this year was not different. But of course, there's also moving parts below that and a lot of accounting details. So you should maybe not take a completely 100% for your estimate looking forward, but we could in Q2, again, substantially add to the resiliency reserves. And as we also mentioned already in our introduction, of course, we have the full picture only once a year when we have the full actuarial analysis.

Speaker #5: So we expect a positive runoff result, and taking a direction of 200 would be a fair number. But in the second half or the second quarter, this year was not different.

Speaker #5: But of course, there are also moving parts below that, and a lot of accounting details, so you should maybe not take a completely 100% estimate looking forward.

Speaker #5: But we could, in Q2, again substantially add to the resiliency reserves and, as we also mentioned already in our introduction, of course we have the full picture only once a year when we have the full actuarial analysis.

Speaker #5: Great. Thank you very much.

Vinit Malhotra: Great. Thank you very much.

Operator: The next question comes from James Shuck from Citi. Please go ahead.

Speaker #1: The next question comes from James Chuck from Sydney. Please go ahead.

Speaker #5: Hi, good morning. I had three questions, please. The first one: I often think we focus a little bit too much on the higher return periods when it comes to what pricing is doing in that cap.

James Shuck: Hi, good morning. I had three questions, please. The first one, I often think we kind of focus a little bit too much on the higher return periods when it comes to what pricing is doing in Nat Cat. Could you comment a little bit around what pricing is doing in the lower return periods? I am particularly interested in how the retention levels, which to some extent, even if they are not being increased, are being inflated away. How do they translate into return periods this year versus last, after the latest renewal period? Then second question, I am going to try on this, but I appreciate some of it is going to be competitively sensitive. But I am very keen to understand where you are in terms of current year technical pricing in P&C Re, ideally kind of with a view of Nat Cat, non-Nat Cat property, and casualty.

Speaker #5: Could you comment a little bit on what pricing is doing in the lower return periods? I'm particularly interested in how the retention levels—which, to some extent, even if they're not being increased—are being inflated away.

Speaker #5: How do they translate into return periods this year versus last, after the latest renewal period? Then, second question—I'm going to try on this, but I appreciate some of it is going to be competitively sensitive.

Speaker #5: But I'm very keen to understand where you are in terms of current-year technical pricing in P&C re. Ideally, kind of with a view of net cat, non-net cat property, and casualty.

James Shuck: But I am very keen to understand where you are in terms of current year technical pricing in P&C Re, ideally kind of with a view of Nat Cat, non-Nat Cat property, and casualty.

Speaker #5: I think earlier on, you made a comment that was quite short. What did you mean by it? Are you saying that, overall, we're kind of back to 2023 levels?

James Shuck: I think earlier on you said a comment, I was not quite sure what you meant by it, but are you saying that overall, we are kind of back to 2023 levels, overall? Do you mean that in terms of return on risk capital? Is that the best way to look at it? Then final just quick question. I am just interested if you actually are deploying capital in P&C Re. So when I look at the underwriting SCR in 2026, is that actually growing? Are you confident that you continue to grow that into 2027, even if the cycle does maintain its current course? Thank you.

Speaker #5: And do you mean that in terms of return on risk capital? Is that the best way to look at it? And then, final quick question, I'm just interested if you are actually deploying capital in P&C re.

Speaker #5: So when I look at the underwriting SCR in '26, is that actually growing? And are you confident that you can continue to grow that into '27, even if the cycle does maintain its current course?

Speaker #5: Thank you.

Speaker #4: Yeah, thank you, James. Well, when you look at the lower layers of natural catastrophe protections, you're of course absolutely right. The market has managed to keep the retention levels on a nominal basis, which were achieved in 2023.

Sven Althoff: Well, thank you, James. When you look at the lower layers of natural catastrophe protections, you are of course, absolutely right. The market has managed to keep the retention levels on a nominal basis, which were achieved in 2023. Sometimes clients are volunteering higher retentions because they feel that the risk transfer, as they have to pay a high rate on line, is not so very attractive. But in general, I would say it is nominally stable, which you are spot on by saying that over time, given underlying inflation, this of course means that there is a certain dilution in the quality of this nominal retention. Therefore, also somewhat reducing the return period from which the program is then starting to allow for recoveries.

Speaker #4: Sometimes clients are volunteering higher retentions because they feel that the risk transfer, as they have to pay a high rate online, is not so very attractive.

Speaker #4: But in general, I would say it’s nominally stable, which you are spot-on in saying. Over time, given underlying inflation, this of course means that there is a certain dilution in the quality of this nominal retention.

Speaker #4: Therefore, also somewhat reducing the return period from which the program is then starting to allow for recoveries. That's one of the reasons why the development and pricing on the lower layers is a little more of a mixed bag when it comes to property cat at large.

Sven Althoff: That is one of the reasons why the development and pricing on the lower layers is a little more of a mixed bag, when it comes to the Property Catastrophe at large. So, very much also depends on the own loss experience of the client. At the lower level, there are losses from time to time, or at least, losses that approach the existing retention, which would lower the reductions in the pricing. Secondly, you can also say that if you look at the industry at large, the risk appetite from the industry is getting bigger the higher up in the program you are. There is clearly enough capacity also for the lower end of programs. But the oversupply is not quite as dramatic, and therefore dampening the price reductions a little bit. Still, there are price reductions also on lower layers.

Speaker #4: So very much also depends on the client's own loss experience, and at the lower level, there are losses from time to time, or at least losses that approach the existing retention.

Speaker #4: Which would lower the reductions in the pricing. And secondly, you can also say that if you look at the industry at large, the risk appetite from the industry is getting bigger the higher up in the program you are.

Speaker #4: So, there is clearly enough capacity also for the lower end of programs, but the oversupply is not quite as dramatic. Therefore, it is dampening the price reductions a little bit; but still, there are price reductions also on lower layers.

Speaker #4: I hope that gives you a feel. When it comes to your technical pricing question outside CAT, I mean, that's of course a super complex one.

Sven Althoff: I hope that gives you a feel. When it comes to your technical pricing question outside Catastrophe, that is of course a super complex one. Because you really have to look at the lines of business on a regional basis. Therefore, I would say that the pressure on pricing is nowhere else as high as on the Property Catastrophe side. There are one or two lines of business in the specialty space, where we have seen similar price reductions. Marine, for example, would be one line of business which also have the same oversupply dynamics. But everywhere else, demand and supply are still much more in equilibrium. Whilst we see some reductions, the absolute bulk of our business is comfortably above our capital hurdle rates. That is why we do not have to go into cycle management mode yet, on the bulk of the business.

Speaker #4: Because you really have to look at the lines of business on a regional basis, and therefore, I would say that the pressure on pricing is nowhere else as high as on the property cat side.

Speaker #4: There are one or two lines of business in the specialty space where we have seen similar price reductions. Marine, for example, would be one line of business which also has the same oversupply dynamics, but everywhere else, demand and supply are still much more in equilibrium.

Speaker #4: And whilst we see some reductions, the absolute bulk of our business is comfortably above our capital hurdle rates, and that's why we don't have to go into cycle management mode yet.

Speaker #4: Regarding the bulk of the business—and again, you can also see this in the loss component—which is a relatively small number for the first half of the year.

Sven Althoff: Again, you can also see that in the loss component, which is a relatively small number for the H1 of the year. I do not think I can go into more details, when it comes to what does that mean exactly for which line of business in which region.

Speaker #4: I don't think I can go into more detail when it comes to what that means exactly, for which line of business in which region.

Speaker #5: And James, let me comment briefly on the capital deployment. So, when we look at where we are standing mid-year 2026, I can fully confirm that we have successfully deployed the capital.

Christian Hermelingmeier: James, let me comment briefly on capital deployment. When we look where we are standing mid-year 2026, I can fully confirm that we could successfully deploy the capital. Clemens already mentioned a bit the operating capital generation of around EUR 1.8 billion, and that was supporting our business growth or covering our business growth and the pool of the dividends. The SCR is increasing in line with the premium numbers, and exposure that Sven already talked about. You have to see that it is not only P&C Re, of course, using the capital, but also the favorable growth in life and health, and also the volume of our assets under management contribute here to the deployment. Looking forward, it is of course, too early to talk about 2027 and beyond, but our last indication we gave is that we think it will trend slightly down.

Speaker #5: So Clemens already mentioned a bit the operating capital generation of around €1.8 billion, and that was supporting our business growth, or covering our business growth and the pool for the dividends.

Speaker #5: And the SCR is increasing in line with the premium numbers and exposure that Sven already talked about. You have to see that it's not only P&C Re, of course, using the capital, but also the favorable growth in Life and Health, and also the volume of our assets under management contribute here to the deployment.

Speaker #5: Looking forward, it's, of course, too early to talk about 2027 and beyond, but our last indication we gave is that we think it will trend slightly down.

Speaker #5: And within the planning process, we have to see if this slightly has to be adjusted. But it's too early to comment on. That's very helpful.

Christian Hermelingmeier: And within the planning process, we have to see if this slightly has to be adjusted. But, it is too early to comment on.

James Shuck: That is very helpful. Thank you very much.

Speaker #5: Thank you very much.

Speaker #1: The next question comes from Chris Hartwell from Autonomous. Please go ahead.

Operator: The next question comes from Chris Hartwell from Autonomous. Please go ahead.

Speaker #5: Good morning, and thank you for taking my questions — a couple, if I may. Firstly, just thinking about the investment book. There seem to be quite a few moving parts.

Chris Hartwell: Good morning, and thank you for taking my questions. A couple if I may. Firstly, just thinking about the investment book. It seems to be quite a few moving parts, quarter on quarter. If anything, it looks like the quality of the portfolio has actually improved. I do not know how much of that is market. The duration has also extended. And I guess coupled with what you said before, on the realized loss harvesting, I am trying to think about how all of this sort of fits together, and sort of thinking about the potential improvement or further improvement as we go through 2027. On the overall investment yield. And I think, to some extent also, if you could touch upon, you were just talking about capital deployment in operation in P&C.

Speaker #5: Quarter on quarter, I mean, if anything, it looks like the quality of the portfolio has actually improved. I don't know how much of that is market; the duration has also extended.

Speaker #5: And I guess coupled with what you've said before, on the realized loss harvesting, I'm trying to sort sort of think about how all of this sort of fits together and sort of thinking about the potential improvement or further improvement as we go through 2027 on the overall investment yield.

Speaker #5: And I think, I mean, to some extent also, if you could sort of touch upon—I mean, you were just talking about capital deployment in operations in P&C—but what about how you're thinking about the risk in the investment book, and potentially deploying more capital into that?

Chris Hartwell: What about how you are thinking about some of the risk in the investment book and potentially deploy more capital into that? Secondly, apologies, but I did not quite catch the comment in the opening remarks on CSM release in life. That was quite a bit better in Q2 versus Q1. I think, essentially, you were saying there is sort of one-off in that. Should we be thinking more what sort of the average sort of release seen through 2024, 2025? If I may just sneak in a third as well. Just on sort of the loss environment currently, and we have been getting questions on potential insurance implications from the heatwave. Obviously, we all know about the risks from fire.

Speaker #5: And then, secondly, apologies, I didn't quite catch the comment in the opening remarks on CSM release in Life. That was quite a bit better in Q2 versus Q1.

Speaker #5: I think you essentially were saying there's sort of a one-off in that. So should we be thinking more about what sort of the average release seen through 2024, 2025?

Speaker #5: And if I may just sneak in a third as well—just on the loss environment currently. I mean, I've been getting questions on potential insurance implications from the heatwave.

Speaker #5: I mean, obviously we will know about the risks from fire. But I'm sort of thinking about sort of broader sort of drought and we're in our however many number of heat waves that we've had so far in Europe.

Chris Hartwell: I am sort of thinking about sort of broader sort of droughts and we are in our however many number of heatwaves that we have had so far in Europe. I was sort of wondering about sort of potential risks coming through the agriculture book or non-damage BI, that sort of thing, if there is any help you could give me on that. Thank you very much.

Speaker #5: I was sort of wondering about potential risks coming through the agriculture book or non-damage BI, that sort of thing, if there's any help you could give me on that.

Speaker #5: Thank you very much.

Speaker #2: Maybe I start with the investment questions. So of course there's also a bit every time a bit of movement in the portfolio, but overall, I think we've been very consistent in our asset allocation.

Christian Hermelingmeier: Maybe I start with the investment questions. Of course, there is every time a bit of movement in the portfolio. Overall, I think we have been very consistent in our asset allocation. I can also confirm that I look also at the quality of the book, like you stated it. Clemens mentioned that before, no extraordinary item. Actually, on the impairments, it was a zero included in that numbers. We cannot expect this every quarter to happen, but I think it shows we are really conservative and high quality focused in our book here. The hidden losses have increased again a bit in the balance sheet. That is not a surprise because of the interest rate movement and the loss harvesting we might talk about later in the year if there is room to maneuver to comment on the influence of the active realizations from last year.

Speaker #2: And I can also confirm that I also look at the quality of the book, like you stated. And Clemens mentioned that before—no extraordinary item actually on the impairments.

Speaker #2: There was a zero included in those numbers. We cannot expect this to happen every quarter, but I think it shows we are really conservative and highly quality-focused in our book here.

Speaker #2: The hidden losses have increased again a bit in the balance sheet. That’s not a surprise because of the interest rate movement and the loss harvesting, which we might talk about later.

Speaker #2: In the year, if there is room to maneuver, I would comment on the influence of the active realizations from last year. So, you see—or I can give you—the numbers for our book yield.

Christian Hermelingmeier: You see, or I can give you the numbers for our book yield. We are now at 3.7%. That is roughly 30 basis points higher than 12 months ago. That is not a very exact figure, but roughly half of that, so close to 15 basis points, I would attribute to the realizations we took last year. Looking forward, the reinvestment yield is now, or at the end of Q2, it was 4.4%. Actually, today, it is even a bit higher. You see there is still a meaningful gap, and every fresh money or maturing capital that we redeploy here and reinvest will help moving upwards some basis points during the year, just by the normal portfolio roll over.

Speaker #2: So we are now at 3.7%. That's roughly 30 basis points higher than 12 months ago. And it's not a very exact figure, but roughly half of that—so, close to 15 basis points—I would attribute to the realizations we took last year.

Speaker #2: And looking forward, the reinvestment yield is now, at the end of Q2, was 4.4%. Actually, today it's even a bit higher. So, you see, there is still a meaningful gap, and every fresh money or maturing capital that we redeploy here and reinvest will help move it upwards.

Speaker #2: Some basis points during the year, just by the normal portfolio rollover. And for the last question on market risk, I don't see any change in strategy here or any movement except the reflection of business growth on the P&C and the Life and Health side.

Christian Hermelingmeier: And for the last question on market risk, I do not see any change in strategy here or any movement except the reflection of business growth on the P&C and the life and health side that is coming also with higher provisions and reserves that we have for our asset management then.

Speaker #2: That is also coming with higher provisions and reserves that we have for our asset management then.

Speaker #4: Yeah, and when it comes to the European heat wave, Chris, I mean, outside the direct impact from the fires—from the physical damage that is caused by the fires—we are expecting relatively limited direct impact from the losses at this stage.

Sven Althoff: Yeah. When it comes to the European heatwave, of course, outside the direct impact from the fires, for the physical damage that is caused by the fires, we are expecting relatively limited direct impact from the losses at this stage. When it comes to non-damage BI, that is still a coverage where the market is very careful to provide the coverage at all. If it does, it normally does only do this on a named supplier basis with small limits. From that point of view, in order to trigger BI, you really still, for the absolute majority of the exposures, need a direct physical damage impact for the policyholder. When it comes to agriculture, yes, we do expect some losses coming out of the heatwave. But the way we have built our portfolio, we are underweight in Europe.

Speaker #4: I mean, when it comes to non-damage BI, that is still a coverage where the market is very careful to provide the coverage at all.

Speaker #4: And if it does, it normally does only do this on a named supplier basis with small limits. So from that point of view, in order to trigger BI, you really still, for the absolute majority of the exposures, need the direct physical damage impact for the policyholder.

Speaker #4: And when it comes to agriculture, yes, we do expect some losses coming out of the heatwave, but the way we have built our portfolio, we are underweight in Europe. The bulk of our exposures would be in the Americas and in parts of Asia.

Sven Althoff: The bulk of our exposures would be in the Americas and in parts of Asia. From that point of view, nothing that would make us concerned at this stage.

Speaker #4: So, from that point of view, there's nothing that would make us concerned at this stage.

Speaker #5: Then maybe on your question on the life and health side. I mean, you're right that the CSM release, if you compare it from Q1 to Q2, increased slightly.

Christian Hermelingmeier: Then maybe on your question on the life and health side. You are right that the CSM release, if you compare it from Q1 to Q2, increased slightly. The reason for this increase was the FS business we have been writing in Q1. But you should not expect this CSM release to increase until the end of the year. What I explained in the first question that we got, the reason for that is that the new CSM generation of EUR 385 million that we have produced in the first half of this year is mainly coming from the traditional business. Traditional business has a much less fast release pattern of the CSM than the FS business. That is the reason why I would not expect a higher release pattern into the future.

Speaker #5: The reason for this increase was the FS business we have been written in we have been writing in Q1. But you shouldn't expect this CSM release to increase until the end of the year.

Speaker #5: And what I explained in the first question that we got—the reason for that is that the new CSM generation of 385 that we have produced in the first half of this year is mainly coming from the traditional business.

Speaker #5: And the traditional business has a much slower release pattern of the CSM than the FS business. And that's the reason why I wouldn't expect a higher release pattern in the future.

Speaker #5: Okay, thank you very much.

Chris Hartwell: Okay. Thank you very much.

Speaker #1: The next question comes from Henry Hatfield from Morningstar. Please go ahead.

Operator: The next question comes from Henry Hatfield from Morningstar. Please go ahead.

Speaker #6: Oh, good morning. Yeah, thank you for taking my questions—just a couple from me. I was wondering if you could talk a little bit about, or just provide a bit more color on, the property losses within the large losses.

Henry Hatfield: Good morning. Thank you for taking my questions. Just a couple from me. I was wondering if you could talk a little bit about, or just provide a little bit more color on, the property losses within the large losses. That has gone from around, I think, 1 in Q1, amounting to around EUR 12 million, up to 7 and amounting to EUR 148.6 million. That seems it has just gone up quite a bit, and I was wondering if you could just elucidate a little bit on that. The second question is, I think you mentioned in the opening remarks that the Well, I can see that the experience variance in life and health has deteriorated a bit between Q1 and Q2. You mentioned disability in Australia, Critical Illness in China, Longevity assumption updates, and I was just wondering what relates to what. Thank you.

Henry Heathfield: Good morning. Thank you for taking my questions. Just a couple from me. I was wondering if you could talk a little bit about, or just provide a little bit more color on, the property losses within the large losses. That has gone from around, I think, 1 in Q1, amounting to around EUR 12 million, up to 7 and amounting to EUR 148.6 million. That seems it has just gone up quite a bit, and I was wondering if you could just elucidate a little bit on that. The second question is, I think you mentioned in the opening remarks that the Well, I can see that the experience variance in life and health has deteriorated a bit between Q1 and Q2. You mentioned disability in Australia, Critical Illness in China, Longevity assumption updates, and I was just wondering what relates to what. Thank you.

Speaker #6: So that's gone from around, I think, one in the first quarter amounting to around €12 million, up to seven and amounting to €148.6 million. That seems—well, it has just gone up quite a bit, and I was wondering if you could just elucidate a little bit on that.

Speaker #6: And then the second question is, I think you mentioned in the opening remarks that the—well, I can see that the experience variance in Life & Health has deteriorated a bit between Q1 and Q2.

Speaker #6: You mentioned disability in Australia, critical illness in China, and longevity assumption updates. I was just wondering what relates to what, to you.

Speaker #4: Yes, thank you. I'll start with your questions on the man-made losses. You're right; we have seen a frequency of fire-related losses in the second half of the year.

Sven Althoff: Yeah, thank you. I start with your questions on the man-made losses. You are right. We have seen a frequency of fire-related losses in H2. It is coming from different types of industries, but there is a certain concentration coming from the downstream onshore energy segment, where we have seen a few fires and explosions. In that respect, we are watching this carefully, whether Q2 has just been a quarter where we have seen an unusual amount of frequency or were there any underlying trends. At this stage, we are not seeing any trends in that respect yet. You are right to highlight the frequency of fire losses.

Speaker #4: I mean, it's coming from different types of industries, but there is a certain concentration coming from the downstream onshore energy segment, where we have seen a few fires and explosions.

Speaker #4: So, in that respect, we are watching this carefully, whether Q2 has just been a quarter where we have seen an unusual amount of frequency or whether there are any underlying trends.

Speaker #4: At this stage, we are not seeing any trends in that respect yet. But you're right to highlight the frequency of fire losses.

Speaker #5: Then, on your question on the negative experience variance that we have experienced in Q2 standalone, this is—as Christian already said—really due to the Australian disability business.

Claude Chèvre: Then on your question on the negative experience variance that we have experienced in Q2 standalone. This is, as Christian already said, this is really due to the Australian disability business. More concretely, it is related to the Total and Permanent Disability cover that we are having in the group life portfolio. As you know, and Christian alluded to it, the group life portfolio is regularly repriced, so it is nothing that we should be worried about. This is on the experience variance Q2. Then you were mentioning also model change in Longevity, or I mentioned model change in Longevity. This is related to the changes, the positive changes in estimates that we have seen over the H1 of the year.

Speaker #5: More concretely, it's related to the total and permanent disability cover that we have in the group life portfolio. And as you know, and as Christian alluded to, the group life portfolio is regularly repriced.

Speaker #5: So, it is nothing that we should be worried about. This is on the experience variance in Q2. Then, you were mentioning also model change in longevity, or I mentioned model changes in longevity.

Speaker #5: This is related to the changes—the positive changes in estimates—that we have seen over the first half of the year. They're not only coming, obviously, from longevity, but also, as I said already, from assumption changes in the traditional side, from the US, from France, and also from Latin America.

Claude Chèvre: They are not only coming obviously from Longevity, but also, as I said already, from assumption changes in the traditional side, from the U.S., from France, and also from Latin America. Last but not least, you were mentioning the Critical Illness business in China. This is reflected in our loss component that we have already covered in the Q1 of this year.

Speaker #5: And last but not least, you were mentioning the critical illness business in China. This is reflected in our loss component that we have already covered in the first quarter of this year.

Speaker #6: All right, thank you very much.

Henry Hatfield: All right. Thank you very much.

Henry Heathfield: All right. Thank you very much.

Speaker #1: The next question comes from Ben Cohen from RBC Capital Markets. Please go ahead.

Operator: The next question comes from Ben Cohen from RBC Capital Markets. Please go ahead.

Speaker #5: Oh, hi there. Thanks very much. Good morning. I just wanted to ask on the P&C business, sort of now that the major renewals have completed and ahead of Monte Carlo, what is your message going to be to the brokers and insurers in terms of your risk appetite looking into next year?

Ben Cohen: Oh, hi there. Thanks very much. Good morning. I just wanted to ask on the P&C business, now that the major renewals have completed and ahead of Monte Carlo, what is your message going to be to the brokers and insurers in terms of your risk appetite looking into next year? I guess specifically in terms of markets where, as the portfolio has moved this year, where you still see yourself as underrepresented against the longer-term plans that you have talked about in the past. Maybe, I guess because you have not talked about it on the call at all, in terms of how you see casualty markets globally at the moment. I know that is an area where you have a longstanding underweight. Thank you.

Speaker #5: And I guess specifically, in terms of markets where, as the portfolio has moved this year, where do you still see yourself as underrepresented against the sort of longer-term plans that you've talked about in the past?

Speaker #5: And maybe, and I guess you—because you've not talked about it on the call, I think, at all—in terms of how you see casualty markets globally at the moment.

Speaker #5: I know that's an area where you've had a long-standing underweight. Thank you.

Speaker #4: Well, I mean, we will certainly talk about the macro drivers. We continue to see climate change, and frequency of loss is one topic. I mean, we have a very dynamic and at times unstable geopolitical situation.

Sven Althoff: Well, we will certainly talk about the macro drivers we continue to see, and climate change and frequency of loss is one topic. We have a very dynamic, and at times, unstable geopolitical situation and inflation. In the context of casualty exposure, social inflation remain topics which do ask for risk-adequate pricing. So we will certainly stress that. We will also certainly confirm that we will continue to have the approach that we want to have long-term partnerships with our clients. We want to help them to support their growth trajectory. So nothing really surprising, really, in that respect when it comes to messaging. Casualty in itself, this, of course, a situation we are observing very carefully. We do see signs that the level of rate increases in the U.S. have slowed down.

Speaker #4: And inflation, and in the context of casualty exposure, social inflation, remain topics which do ask for risk-adequate pricing. So we will certainly stress that.

Speaker #4: We will also certainly confirm that we will continue to have the approach that we want to have long-term partnerships with our clients. We want to help them to support their growth trajectory, so nothing really surprising in that respect when it comes to messaging. And yeah, casualty in itself—this, of course, is a situation we are observing very carefully.

Speaker #4: I mean, we do see signs that the level of rate increases in the US has slowed down. So, depending on who you ask, some would say they are now at trend loss cost trend.

Sven Althoff: So depending on who you ask, some would say they are now at trend, loss cost trend. Some would say they have now formed below loss cost trend. If the latter is the case, then of course this would be very concerning because this is certainly a part of the global portfolio, where I have yet to meet anyone who is bullish enough to say that they feel that there could be rate reductions or only rate increases below a loss cost trend to remain a profitable situation. So that is certainly a space we are watching very carefully.

Speaker #4: Some would say they have now fallen below loss cost trend. If the latter is the case, then of course this would be very concerning.

Speaker #4: Because this is certainly a part of the global portfolio where I have yet to meet anyone who is bullish enough to say that they feel there could be rate reductions, or only rate increases below loss cost trend, to remain a profitable situation.

Speaker #4: So that is certainly a space we are watching very carefully.

Speaker #5: And sorry, are there areas where you think you're still underrepresented going into next year, where you want to grow?

Ben Cohen: Sorry, and areas where you think you are still underrepresented going into next year where you want to grow?

Speaker #4: Well, we expect that 2027 will continue to be a year where we find growth opportunities. But it will be very diversified. I mean, if you look at the growth we had at Hannover Rück over the last 10 years, I mean, it was truly global.

Sven Althoff: Well, we expect that 2027 will continue to be a year where we find growth opportunities, but it will be very diversified. If you look at the growth we had at Hannover Rueck over the last 10 years, it was truly global. It was truly across many product lines. We expect the future to be exactly the same. As I said, it is our ambition to build long-term partnerships with our existing clients and make them deeper and broader. It also depends a little bit on where do our clients see growth opportunities. We will try to be a good partner for them on that business. We do not have a wish list where particularly we want to grow. It is just following the growth trajectory of our clients.

Speaker #4: It was truly across many, many product lines, so we expect the future to be exactly the same. As I said, our ambition is to build long-term partnerships with our existing clients and make them deeper and broader.

Speaker #4: So, it also depends a little bit on where our clients see growth opportunities, and we will try to be a good partner for them in that business.

Speaker #4: So we don't have a wish list where, particularly, we want to grow. It's just following the growth trajectory of our clients.

Speaker #5: Great. Thank you very much.

Ben Cohen: Great. Thank you very much.

Speaker #1: The next question comes from Will Hardcastle from UBS. Please go ahead.

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

Speaker #2: Oh, thanks for the follow-up. Just thinking about the long-term outlook on structured reinsurance—primaries are well capitalized. We read and hear about other reinsurers with a greater focus on this area.

Will Hardcastle: Well, thanks for the follow-up. Just thinking about the long-term outlook on structured reinsurance. Primaries are well capitalized. We read and hear about other reinsurers with a greater focus on this area. Perhaps pointing to a bit of intensified competition. Is this a practical downside risk, be it on demand or on pricing on this marketplace? Is there something, a material shift, that you are really confident that this marketplace is going to grow beyond the traditional market in coming years? There is a couple of very quick clarifications, if that is okay. On a specific loss, first of all, just on the European storm, it really increased from Q1. Anything specific we need to think about there? The second one. In your new business that you talked about from renewals, you mentioned cyber and non-proportional.

Speaker #2: So perhaps pointing to a bit of intensified competition. Is this a structural downside risk, be it on demand or on pricing on this marketplace, or is there some material shift—or are you really confident that this marketplace is going to grow beyond that?

Speaker #2: Additional market in coming years? And then there are a couple of very quick clarifications, if that's okay. On a specific loss—first of all, just on the European storm—it really increased from the first quarter?

Speaker #2: Anything specific we need to think about there? And then the second one: in your new-new business that you talked about from renewals, you mentioned cyber and non-proportional.

Speaker #2: I didn't know if it was cyber non-proportional growth, or if they were two separate things—cyber, and then non-proportional. Thank you.

Will Hardcastle: I didn't know if it was cyber non-proportional growth or they were two separate things, cyber and then non-proportional. Thank you.

Speaker #4: Yeah, no, it's cyber non-proportional. It's not two different topics. So, our cyber proportional book remains very stable, but we do see additional demand on the non-proportional side.

Sven Althoff: No, it is cyber non-proportional. It's not two different topics. Our cyber proportional portfolio remains very stable. We do see additional demand on the non-proportional side. That's where a little bit of a growth is coming from. When it comes to the long-term prospects of structured reinsurance, our experience to date is that the demand for the product continues to be strong. The number of contracts we can write is increasing. Even though clients are reducing sessions from time to time, our percentage share on the remaining session tends to go up rather than down. From that point of view, we would still see the structured portfolio as one of the engines of potential growth for the business group P&C for the foreseeable future. We are not concerned that given capitalization levels at primaries, that demand will just disappear globally.

Speaker #4: So that's where a little bit of the growth is coming from. When it comes to the long-term prospects of structured reinsurance, I mean, our experience to date is that the demand for the product continues to be strong.

Speaker #4: The number of contracts we can write is increasing. Even though clients are reducing sessions from time to time, our percentage share on the remaining sessions tends to go up rather than down.

Speaker #4: So, from that point of view, we would still see the structured portfolio as one of the engines of potential growth for the business group P&C.

Speaker #4: For the foreseeable future, we are not concerned that given the capitalization level, the primary demand will just disappear globally. And so from that point of view, we continue to be positive.

Sven Althoff: From that point of view, we continue to be positive. When it comes to the Q1 loss, I guess you're referring to the situation in Spain. We have reassessed the claim after more information became available. The Q1 number was clearly too low. The Q2 number is now showing the best view on the risk, so we would not expect any further movement in that respect. Of course, at the same time, the market loss has, of course, also increased. The market overall was more optimistic at the end of Q1 than it would be today.

Speaker #4: It comes to the Q1 loss, and I guess you're referring to the situation in Spain. We have reassessed the claim after more information became available.

Speaker #4: So the Q1 number was clearly too low. The Q2 number is now showing the best view on the risk. So we would not expect any further movement in that respect.

Speaker #4: And of course, at the same time, the market loss has also increased. So the market overall was more optimistic at the end of Q1 than it would be today.

Speaker #2: Thank you. That's great.

Will Hardcastle: Thank you. That's great.

Speaker #1: The next question comes from Jochen Schmidt from Metzler. Please go ahead.

Operator: The next question comes from Jochen Schmitt from Metzler. Please go ahead.

Speaker #3: Thank you. Good morning. Just a broader question on non-life reinsurance pricing, as far as you want to answer. What is your expectation? Where are we currently standing in the pricing cycle, and when might prices start to stabilize on average?

Jochen Schmitt: Thank you. Good morning. Just a broader question on non-life reinsurance pricing as far as you want to answer. What is your expectation where we are currently standing in the pricing cycle? When might prices start to stabilize on average? That is my question.

Speaker #3: That's my question.

Speaker #4: Well, as I implied on the property CAT side, we had two rounds of significant rate reductions over the last 24 months, so the base is significantly lower.

Sven Althoff: Well, as I implied on the Property Catastrophe side, we had 2 rounds of significant rate reductions over the last 24 months. So the base is significantly lower, therefore there is less room for further price reductions. Therefore, we do expect a deceleration of the price reductions. Everywhere else, we would say, well, the softening has not started as early as on the Property Catastrophe side. It is significantly lower compared to what we have experienced on the Property Catastrophe side. Therefore, there is no change in sight. At the end of the day, it all depends on the loss experience of the clients. If that is very positive, reinsurers will be minded to take that into account. If there have been losses, then even today, we also see rate increases. Therefore, there is less of a general trend outside Property Catastrophe.

Speaker #4: So, therefore, there is less room for further price reductions. And, therefore, we do expect a deceleration of the price reductions. Everywhere else, we would say, well, the softening has not started as early as on the property CAT side.

Speaker #4: It's significantly lower compared to what we have experienced on the property CAT side. So, therefore, I mean, there is no change in sight. And at the end of the day, it all depends on the loss experience of the clients.

Speaker #4: I mean, if that is very positive, reinsurers will be minded to take that into account. If there have been losses, then even today, we also see rate increases.

Speaker #4: So, therefore, there's less of a general trend outside property CAT.

Speaker #3: Thank you very much.

Jochen Schmitt: Thank you very much.

Speaker #1: The next question comes from Roland Tender from Auto BHF. Please go ahead.

Operator: The next question comes from Roland Pfänder from ODDO BHF. Please go ahead.

Speaker #2: Yes, good morning. Two questions from my side, please. I would like to come back to the P&C segment and new business. It was quite solid.

Roland Pfänder: Yes, good morning. Two questions from my side, please. I would like to come back to the P&C CSM new business. It was quite solid, the EUR 600 million in the second quarter, going up by more than 30%. It is clear you had renewed growth, but also lower pricing. Is the rest attributable to your retro book, or how can you square this? Secondly, life CSM new business was quite a low number in the second quarter. Is it just quarterly volatility, or can you point to something else? Maybe you can also describe a little the competitive situation in financial solutions in Asia. I think you are shooting for a more traditional business, growing the mortality book. So where do you stand here? Thank you.

Speaker #2: The €600 million in the second quarter went up by more than 30%. It's clear you had renewal growth, but also lower pricing. Is the rest attributable to your retro book, or how can you square this?

Speaker #2: Secondly, live CSM new business was quite a low number in the second quarter. Is it just quarterly volatility, or can you point to something else?

Speaker #2: Maybe you can also describe a little bit the competitive situation and financial solutions in Asia. And I think you are shooting for a more traditional business, growing the mortality book.

Speaker #2: So, where do you stand here? Thank you.

Speaker #3: Yeah, thanks for your questions, Roland. Let me start with the P&C regarding CSM new business. And it's right that, as said, the retro update was one of the drivers that this looks quite positive.

Claude Chèvre: Yeah, thanks for your questions, Roland. Let me start with the P&C CSM new business. It is right that, as said, retro update was one of the drivers that this looks quite positive. On the other side, it is also a different impact of FX and discount between Q1 and Q2. There was a meaningful drag from these two components in Q1. In Q2 standalone, this was rather stable, even slightly positive. So that made the big change between Q1 and Q2. On life and health, you are looking at the CSM new business. Obviously, this changes quarter by quarter, because it is very volatile. When you write the business, some of this business, which has huge CSM new business, is bulky, and it depends when you write it. So there is nothing to be interpreted in the volatility of the new business CSM overall.

Christian Hermelingmeier: Yeah, thanks for your questions, Roland. Let me start with the P&C CSM new business. It is right that, as said, retro update was one of the drivers that this looks quite positive. On the other side, it is also a different impact of FX and discount between Q1 and Q2. There was a meaningful drag from these two components in Q1. In Q2 standalone, this was rather stable, even slightly positive. So that made the big change between Q1 and Q2.

Speaker #3: And on the other side, it's also a different impact of FX and discount between Q1 and Q2. So there was a meaningful drag from these two components in Q1.

Speaker #3: And in Q2 standalone, this was rather stable, even slightly positive. So, that made the big change between Q1 and Q2.

Speaker #2: And then on Life & Health, you're looking at the CSN new business. Obviously, this changes quarter by quarter because it is very volatile when you write the business.

Claude Chèvre: On life and health, you are looking at the CSM new business. Obviously, this changes quarter by quarter, because it is very volatile. When you write the business, some of this business, which has huge CSM new business, is bulky, and it depends when you write it. So there is nothing to be interpreted in the volatility of the new business CSM overall.

Speaker #2: Some of this business will just have huge CSM. New business is bulky and it depends when you write it. So there is nothing to be interpreted in the volatility of the new business CSM overall.

Speaker #2: The 385 is a good number, and we're very happy with it. It's even higher than what we have been able to do in the first half-year in '25.

Claude Chèvre: The 385 are a good number, and we are very happy with it. It is even higher than what we have been able to do in the H1 in 2025. So all good on that side. The competition on FS in general is increasing. I said it already before, not only in the US, and as you said, also in Asia, we see quite a bit of competition. But we are still writing new business CSM also on the financial solutions side across the world. So Asia, US, and also Europe, by the way. You mentioned that we are looking into traditional business. We have always been looking into traditional business. It is just right now, so far, we have been creating more new business CSM on traditional side and on financial solutions, but this can change during the course of the year.

Speaker #2: So all good on that side. The competition on FS in general is increasing—I said it already before. Not only in the US, and as you said, also in Asia, we see quite a bit of competition. But we're still writing new business CSM, also on the financial solutions side, across the world.

Speaker #2: So, Asia, the US, and also Europe, by the way. You mentioned that we're looking into traditional business. We have always been looking into traditional business.

Speaker #2: It's just that right now, so far, we have been creating more new business CSM on the traditional side and on financial solutions. But this can change during the course of the year.

Speaker #2: Thank you.

Roland Pfänder: Thank you.

Speaker #1: Yeah, no more questions at this time. I would now like to turn the conference back over to Clemens Jungsthofel for any closing remarks.

Operator: There are no more questions at this time. I would now like to turn the conference back over to Clemens Jungsthöfel for any closing remarks.

Speaker #2: Yes, thanks a lot, really, for the very good discussion and for your questions. Just to round off the discussions, we spoke a bit about the large losses and the reserving, etc., and I just wanted to comment on this.

Claude Chèvre: Yes. Thanks a lot really for the very good discussion and for your questions. Just to round off the discussions, we spoke a bit about the large losses and the reserving, et cetera. I just want to comment on this. As we also spoke about the loss components, we have clearly not changed our prudent reserving approach, neither when it comes to our initial loss picks, and Sven alluded to the loss component. This is really a reflection of our unchanged reserving approach in our initial reserving. As we spoke about the large losses, also when it comes to the large losses. As you know, we do book the large loss budget anyway. I would say we have rather taken a more prudent approach when it comes to our large loss reserving, just to be clear on that.

Clemens Jungsthöfel: Yes. Thanks a lot really for the very good discussion and for your questions. Just to round off the discussions, we spoke a bit about the large losses and the reserving, et cetera. I just want to comment on this. As we also spoke about the loss components, we have clearly not changed our prudent reserving approach, neither when it comes to our initial loss picks, and Sven alluded to the loss component. This is really a reflection of our unchanged reserving approach in our initial reserving. As we spoke about the large losses, also when it comes to the large losses. As you know, we do book the large loss budget anyway. I would say we have rather taken a more prudent approach when it comes to our large loss reserving, just to be clear on that.

Speaker #2: So, and as we also spoke about the loss component, we have clearly not changed our prudent reserving approach—neither when it comes to our initial loss picks.

Speaker #2: And Sven alluded to the loss component. So this is really a reflection of our unchanged reserving approach in our initial reserving, but also, as we spoke about the large losses, also when it comes to the large losses.

Speaker #2: And as you know, we do book the large loss budget anyway. So, I would say we have rather taken a more prudent approach when it comes to our large loss reserving, just to be clear on that.

Speaker #2: On the growth opportunity, as Sven said, we do remain positive due to the fact that we have built a very diversified portfolio. That long-term partnership approach that we've taken is giving us comfort to grow with our clients.

Claude Chèvre: On the growth opportunities, as Sven said, we do remain positive due to the fact that we have built a very diversified portfolio. That long-term partnership approach that we have taken is giving us comfort to grow with our clients. One thing to mention also is when it comes to technical pricing, as a lot of questions directed to that, is our lower cost ratio. The low cost ratio coming with the lean operating model clearly helps to maintain and support the margin in the business, just to be clear. Overall, that underlying profitability, that growth outlook, together with our very strong balance sheet, and you have heard we keep even building resilience in the quarter, gives us comfort to grow our earnings also in the future. Thank you again for your time, for your interest, and for the questions, and speak to you.

Clemens Jungsthöfel: On the growth opportunities, as Sven said, we do remain positive due to the fact that we have built a very diversified portfolio. That long-term partnership approach that we have taken is giving us comfort to grow with our clients. One thing to mention also is when it comes to technical pricing, as a lot of questions directed to that, is our lower cost ratio. The low cost ratio coming with the lean operating model clearly helps to maintain and support the margin in the business, just to be clear. Overall, that underlying profitability, that growth outlook, together with our very strong balance sheet, and you have heard we keep even building resilience in the quarter, gives us comfort to grow our earnings also in the future. Thank you again for your time, for your interest, and for the questions, and speak to you.

Speaker #2: But one thing to mention also is, when it comes to technical pricing—as a lot of questions are directed to that—is our lower cost ratio. The low cost ratio, coming with the lean operating model, clearly helps to maintain and support the margin in the business, just to be clear.

Speaker #2: So, overall, that underlying profitability, that growth outlook together with our very strong balance sheet— and you've heard, we keep even building resilience in the quarter.

Speaker #2: This gives us comfort to grow our earnings also in the future. So thank you again for your time, your interest, and your questions.

Speaker #2: And speak.

Operator: Ladies and gentlemen, the conference is now open to remain on disconnect your lines. Goodbye.

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Q2 2026 Hannover Rueck SE Earnings Call

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