Q2 2026 Allianz SE Earnings Call

August 7, 2026

Speaker #1: ladies and gentlemen, welcome to the Allianz Conference Call on the Allianz Group Financial Results for the second quarter and first half of 2026. For your information, this conference call is being streamed live on allianz.com and YouTube.

Speaker #1: A recording will be made available shortly after the call. At this time, I would like to turn over the call to your host today, Oliver Bater, Chief Executive Officer of Allianz SE.

Speaker #1: Please go ahead, Oliver.

Speaker #2: Thank you, Andrew. And, thank—

Speaker #1: Reinsurance capacity via Lloyd's coming at very attractive rates, even relative to other items, is important. And health and protection opinion. And health and protection OP stands at 1.2 billion, which is also a nice level.

Speaker #1: So on the protection side, we're happy. The other side of the coin: retirement. We have a couple of things that are important: record net inflows continue throughout the years.

Speaker #1: And by the way, "continue" as in the first half also in July. We're further supported by excellent investment performance, as you can see of that.

Speaker #1: And we are supporting further growth with investments into building our ownership in asset management, both in PIMCO with the purchase of the. In asset management, both in PIMCO with the purchase of the M units.

Speaker #1: And our investment in UOB asset management in Singapore. That combined with the acquisition of HSBC in Singapore helps us to establish a decent presence in one of the most important wealth markets in Asia.

Speaker #1: We believe Singapore has a strong future ahead, in an environment where people will be nervous about where to put your money—very strongly regulated, very well regulated, very good rule of law.

Speaker #1: So we are big fans, and we have finally had the opportunity to invest in both areas. By the way, a coincidence that is happening literally within a few days of each other, but it's no coincidence that we want to strengthen both the live side and the asset management side and Singapore has a lot of innovation opportunities.

Speaker #1: The experience that we've had in the U.S. with AZLife in the wealth market will be a big asset to bring to Singapore, just as an example.

Speaker #1: A little more detail to that on page A4, where we are showing some details. I don't want to go through this slide, actually. You could probably read faster than I can speak to it, even though I speak very fast.

Speaker #1: Just as a reminder, PIMCO buyout of minorities has been a long-term plan. It's happening now because we have reached a point where we can do it 5 years after we stop issuing the M options.

Speaker #1: We have the right to call them and we've agreed with the PIMCO leadership that this is a good time and to do this very, very good investment for many reasons, including a very decent return on a business we know very well and is doing exceptionally well.

Speaker #1: And we are very happy to and very proud to partner with UOB on asset management, a very strong bank. By the way, not just domiciled in Singapore, but in some important Southeast Asian markets.

Speaker #1: So that's quite important. On the left-hand side again, some information on HSBC. Important is to point out, if I may say so, under the ownership of FHBC, this franchise has massively transformed in a very short period of time.

Speaker #1: It's not a bancassurance agreement alone. That is important because HSBC has doubled down on building out wealth management and is partnering with Allianz in Singapore.

Speaker #1: They just added another 100 relationship managers to build out wealth. But it has other distribution structures that are important as well. Agents and more importantly, independent financial advisors.

Speaker #1: So it's multi-channel and we want to build that out further. And it's not just life, it's also a health insurance platform from which we would like to build.

Speaker #1: So we’re very happy, as we see. We think we’re going to have very good returns across these investors. And, by the way, a very good mix: low risk, a bit higher risk, so that we make sure you can, as investors, rely on us getting a decent return on investment on these growth investments.

Speaker #1: So let me then go to page A5. As a summary, then I'm already done. I love this slide. It's my favorite. Deck because it nicely shows that we are not relying on a single cylinder.

Speaker #1: We've been saying it over all of the years, that you're not every machine can really work all of the time. We're in the fortunate position at the moment that all our engines are powering the group results.

Speaker #1: To have a nice diversified portfolio and we believe we will be in a good position to hit our outlooks and the midpoint, not just for the earnings outlook, but the midpoint for our strategic cycle.

Speaker #1: We are exactly 18 months i.e. 50% into the three-year cycle. So as we can say, nicely so far, so good.

Speaker #2: So thank you very much, Oliver. And maybe moving into section B, so good afternoon everyone. As mentioned by Oliver already, we had an excellent set of results for the first half where all segments are contributing.

Speaker #2: Again, demonstrating the rigor we put in the execution of our capital market deliveries, including through leveraging AI. Building on Q1, we reached 54% of the full-year operating profit midpoint, and we have an excellent level of solvency ratio.

Speaker #2: We are very confident clearly against our yearly and our capital market day target. So on this page, you can see starting by the right-left corner that our total business volume is at 99 billion euro at the end of the first half.

Speaker #2: With an internal growth of 4.3% in Q1, we were at 4. In Q2, we are at 6% internal growth. So clearly, there is an accelerated momentum in terms of internal growth in our numbers.

Speaker #2: You can see as well in the underlying that we have a very strong performance as an example, asset management is at 19% growth in the second quarter.

Speaker #2: These level of growth in the first half of 2026 is building on a 10% internal growth that we have achieved in the first half in 2025.

Speaker #2: So if you bring the two together, we achieve a high single-digit level of growth over the last two years. The development of our operating profit demonstrates from our perspective both our technical excellence and as well our ability to grow profitably.

Speaker #2: We emerge at a 9.4 billion level of operating profit, which is our highest level ever for a first half. And we have been growing that operating profit by 9% compared to last year, which is an excellent level.

Speaker #2: To reach all segments are contributing. Including our health and protection business. So the health and protection business, you get more details as we are building on the first transparency we have been providing in the first quarter this year.

Speaker #2: So it's basically displayed transparently in the backup of this document. And you will see there that we have a 9% of underlying growth, which is also an excellent level.

Speaker #2: Our shareholder cornet income emerge at 6.4 billion euros. And you have seen that already that in the year-on-year comparison of the net income, we have many effects.

Speaker #2: This year, in the first half, we have effects coming first from the disposals that we have seen both last year and this year. And we also have the effect from the restructuring.

Speaker #2: As mentioned in the first quarter, we are leveraging the gains we have we are generating on the sale of Bajaj of the GW Bajaj to advance our AI-driven transformation.

Speaker #2: So if you adjust for both effects, meaning the disposals and the restructuring or the excess restructuring, our shareholder cornet income grew by 9%, which is an excellent level.

Speaker #2: Now, if you also further look into the analyst presentation, you will get more details on our estimate for non-operating profit for year-end. As you know, there is quite there is quite some natural volatility in that number.

Speaker #2: That is linked in particular to the hyperinflation effects. But it's important to note that, in addition to the approximately €600 million of further Bajaj, further offset of the Bajaj gain, further restructuring could be expected in the second half in line with past experience.

Speaker #2: As an example, the minus 200 million that we have seen as per the first half of 2026. Now, coming back to these to the development of our Core EPS, you can also see that our adjusted Core EPS is at 10%, which is better than our target range of 7% to 9%.

Speaker #2: So also at an excellent level. Resilience continue to be very strong with our solvency ratio at 225% as well our operating capital generation is very good at 11 percentage point, fully in line with our expectations for the year.

Speaker #2: So we have a very healthy level of coverage and also very high financial flexibility into our numbers. This supports very well the transaction that we have announced recently.

Speaker #2: So, moving to P&C, on the previous page, here you can see our excellent level of profitability. You can also see a very good level of internal growth, with high-quality performance across the portfolio when you go into the further details.

Speaker #2: So our total business volume is close to 50 billion for the first half. Our level of internal growth is 6%. And as part of that internal growth, commercial is at 4% and retail is at 7%.

Speaker #2: That 7% is very good from my perspective. And what you see as well in the underlying is that volume growth is building up from Q1 to Q2.

Speaker #2: Q2 is at 3% volume growth in retail. Our internal growth is as well well spread. You can see in the further details as an example the very strong performance of Germany that is at 6%, also even Q2 is at 7%.

Speaker #2: Eastern Europe is at 7%. LATAM is at 13. And we see as well the continuous very strong dynamic in our platform business where direct is at 11% and partners is at 10%.

Speaker #2: Also, in terms of pricing dynamics, we see a resilient environment overall. In retail, we are at 5%. In motor, we are at 7%. And commercial continues to present quite a diverse picture, where we are clearly focused on cycle management. With good opportunities, we continue to see strength across the portfolio.

Speaker #2: Our combined ratio is at 91.4% for the for the first half. And our operating profit is at 4.9 billion, which is up 9%. This is a record level of profitability for a first half.

Speaker #2: And this record level of profitability is delivered both via the technical result and the investment result as well. Both Commercial and Retail have a very strong level of combined ratio, as you can see as well.

Speaker #2: And if you if you look further into the into the details of our insurance technical results, there you will see first that our underlying loss ratio is essentially flat year-on-year against a very strong prior year base from my perspective.

Speaker #2: This is a very good result that has been achieved while we have also added to our inflation buffers in particular in commercial out of caution.

Speaker #2: Our caution is similarly reflected in our lower level of runoff versus the prior year. In total, if you take those two elements together, the extra buildup of inflationary reserves we have performed in the first half represents approximately 1 percentage point of combined ratio.

Speaker #2: Our expense ratio as well as mentioned by Oliver, continues moving toward our long-term target. And we achieve 30 bips reduction year-on-year of the expense ratio.

Speaker #2: In terms of transformation, we continue to be very focused as an organization on revisiting our processes end to end, leveraging AI, and always putting the customer at the center.

Speaker #2: We are rolling out numerous tools as an example to improve ultimately our growth via better services, or also rate adjustment as an example what we see there is that we are embedding AI to help the productivity of our agents.

Speaker #2: We are growing the AI-assisted search and brand visibility. We are also achieving automated quote and buying capabilities, where we see as well that the funnel of success is improving quarter after quarter.

Speaker #2: And on Commercial, we continue the focus that we had presented also already in the first quarter, mainly on helping growth, as an example through faster response and booking times, to support the development of the business.

Speaker #2: So if you look at P&C at the end of the first half, we continue to deliver growth at an excellent level of profitability. Clearly, we are confident in our ability to leverage our technical strengths and as well our diversified portfolio to navigate the current environment and to deliver strong performance.

Speaker #2: Moving into life and health on page B5, overall here we see good results for the segment at the end of the first half. We see good recovery in the second quarter of a number of negative effects that we had observed in the first quarter.

Speaker #2: So the momentum is good with growth of our key indicators in line with our expectations. The value of new business is at 2.4 billion euro, which is approximately stable if you adjust for the FX effect and as well for the the impact of the GV of the disposal of the GV with UniCredit.

Speaker #2: Also adjusted, our VNB is up 4% and our PV and BP is up 9% in the second quarter standalone. So clearly, good momentum there.

Speaker #2: The high quality and the diversified profile of the growth is also supported by a healthy share of protection, health, and unit link in the underlying.

Speaker #2: We have some examples of that if you go into the details of the portfolio. We have CEs that is showing double digit growth on top of a very strong previous year.

Speaker #2: In the US, the sales are up in US dollar term. Despite promotion that was running last year in the second quarter, in particular in the RILA segments we are doing very well with a 13% growth in the second quarter.

Speaker #2: And in Italy, we continue to see very impressive development. If you adjust for the disposal of the GV with UniCredit, our volume as an example with financial advisors is up 16% in the second quarter.

Speaker #2: We see as well a good level of development of our normalized CSM, which is at 2.7%. And this is fully in line with our full year outlook.

Speaker #2: And also, the absolute level of CSM, as we covered very well from the Q1 market effect, is fully in line with our sensitivity. So you see very well the briefing of the CSM in the first detail.

Speaker #2: This improved momentum is also clearly translating into the development of our operating profit, which is up 5% FX-adjusted, and coming in at 2.9%.

Speaker #2: Just to illustrate this recapture of momentum as well into the operating profit, the operating profit was down 2% in Q1. So you really see well the positive development there.

Speaker #2: In Q2 as well, we see that the operating profit is developing positively across widespread base of operating entities. We see as well that our investment results include the reversal of some of the market volatility we have seen in particular coming from the US in the first quarter.

Speaker #2: And we also see in the investment results in in Q2 the first time dividend coming from Veridium and Concept. So overall for the first half, we have good results with strengths nicely diversified across the portfolio.

Speaker #2: We are pleased with the improved momentum which leads us well on track for the full year guidance. Moving to B6, and that's also one of my favorite page of the deck overall, we see the excellent first half results of the asset management business here with the record net inflows of 84 billion euros.

Speaker #2: We see the double digit revenue and profit growth emerging from the asset management segment. And this is coming from both asset managers which are contributing there.

Speaker #2: Our annualized organic growth is at 8%. PIMCO is at 9%. AGI is at 7%. And this is clearly an impressive level, which is at the high end of the industry, in particular for active asset managers.

Speaker #2: Clearly, what we see there as well is that we have a nice regional diversification of the emergence of the net flows. We see as well the product innovation that is coming from both asset managers, which is clearly supporting as well the good development of the margin.

Speaker #2: And we see that quarter after quarter we continue to add value to our customers. Our performance is very good. We have 93% of our asset under management that are outperforming their benchmark on a three year basis.

Speaker #2: I think it's fair to say as well that, while the environment for asset management is not so straightforward right now, with many questions—for example, on the direction of rates, on credit markets, on AI financing, etc.—our asset management business continues to respond very well with a differentiated offering.

Speaker #2: And that's also one clear element that is contributing to their success. And in July, actually, as we speak—and as we speak, we continue to see flows that are continuing, emerging, following the same pace in comparison to what we have seen in the first half.

Speaker #2: Our revenues grew by 16%, FX-adjusted, as mentioned. You can see as well a very resilient level, up by an impressive 19%, FX-adjusted too.

Speaker #2: And the good development as well of the cost income ratio is supportive of the over development of the operating profit against the revenue growth.

Speaker #2: So we are very happy with the performance in our asset management business. And as well the fundamental strengths we see there provide confidence for the future.

Speaker #2: In addition, building on those strengths, we have pursued the two transactions already mentioned by Oliver in the asset management space. And we are going to extract from that future value over time.

Speaker #2: Moving to page B7, where you can see the very clean development of our solvency ratio for the first half. We are emerging at 225% solvency ratio.

Speaker #2: Which is our highest level since 2018. And this is also you can see as well, sorry, on this page very consistent delivery of operating capital generation.

Speaker #2: Which is at 11%. And actually almost exactly at the same level for Q1 and Q2. And this is fully in line with our target of at least 22% point for the full year.

Speaker #2: As mentioned, for the future, the aggregated impact of both of both both in terms of solvency and liquidity of the M&A or the transaction we have announced is highly manageable.

Speaker #2: And we will as well generate over time attractive returns. Operations which are going to further support our positive development. So our resilience is very strong.

Speaker #2: We see high ability to manage the volatile environment in in our in our resilience overall as already mentioned by Oliver. This is clearly a focus for us as an organization.

Speaker #2: And this is a fundamental way we are operating our business. If we move to page B8, to wrap up, here you will see that first, and just as a repetition of what I said on my first page, halfway through the year we are very confident in our ability to deliver against our 2026 outlook.

Speaker #2: We are very, very well on track. But in addition, I want to spend a bit of time reviewing our status against our three-year strategic cycle.

Speaker #2: As we are exactly midpoint through the through the capital market. Journey. What you can see on the left hand side is that in terms of financial KPIs, we are very well on track.

Speaker #2: Both our growth and our profitability across all segments are very supportive of the development of our core EPS, growth, and also the development of our core ROE for both we are trending ahead of our targets as you can see.

Speaker #2: On the solvency to operating capital generation, we are also performing well against our own expectations, right? Still a way to go, and we knew that.

Speaker #2: And we are pushing on the levers we have identified. The work is ongoing, and the work is going very well. So we are confident in our ability to deliver there.

Speaker #2: In terms of strategic delivery against our three main levers, on driving smart growth, I think you have seen in the document a lot of good illustration when it comes to as an example third party net inflows.

Speaker #2: But also development of the operating profit of protection and health. On the PC retail volume growth, we see progress in our numbers at the end of the second quarter.

Speaker #2: We were at 3% volume growth. Which is at the low range of what what is our target which is 3 to 4% volume growth as part of driving smart growth.

Speaker #2: So there is still work needed together with, as part of our Growth Triathlon initiative, in order to be able to deliver— including leveraging AI to support our journey.

Speaker #2: When it comes to reinforcing productivity, we are on track against our target very clearly. But even more importantly, I think what we see across the organization is a lot of fundamental work in terms of rethinking the processes from a customer-centric manner, and also harnessing AI to advance productivity across the organization.

Speaker #2: And this is very important not only to deliver on the targets right now but also for the next strategic cycle and for the fundamental transformation required on the way we are servicing our customers also when it comes to the productive to make our product affordable for the future.

Speaker #2: Finally, on resilience, a lot of elements ongoing as I was already mentioning. Together with the fact and I want to maybe reemphasize the point I was making on the PMC business that we are actively managing the cycle which is clearly part of building resilience.

Speaker #2: And also on claims inflation given the uncertainties at this currently ongoing associated to the inflationary environment. We have built extra resilience as an example in the first half of the year.

Speaker #2: So overall this was an excellent first six months. We are very well on track to deliver our capital market the ambitions. We want to continue building resilience while sustaining profitable growth and also while tapping into new technology across the value chain.

Speaker #2: So with that, I thank you all very much for your attention and I hand over back for questions to you Andrew.

Speaker #1: Great, thank you, Claire-Marie. Okay, we are ready for questions. Just a reminder, you can either use the talk request button if you used the web to join, or I think it's *star five* if you're joining by phone.

Speaker #1: And again if you've got any problems we're happy to take emails to me or any of my team if if you have logistical issues.

Speaker #1: Okay. Look with that I think our first question is from Michael. Michael Hutner of Berenberg. Go ahead Michael.

Speaker #3: Thanks so much and congratulations lovely numbers. Two one could you all these deals that you've done I'm sure you you you've got the numbers right there at your hand and and I I don't can you give us the kind of the perform impact both in solvency and operating profit whatever metrics you think we use?

Speaker #3: I know you you you might use slightly different ones. The the the second is on AI and I so the benefits are coming through which is lovely.

Speaker #3: The the bits we I can't quite figure is is the cost of it. So I just wondered if you can give us an idea of of either the cost or how you account for it or the in in the expense ratio whatever.

Speaker #3: And, and, and in particular, if, if, if suddenly we all decided AI—we didn't like it—is there a kind of potential write-down risk?

Speaker #3: Thank you.

Speaker #1: Okay. Claire-Marie, do you want to take the first question and then...

Speaker #2: Yeah yeah sure. So just because the the line was not so good on our side what you are mostly interested into is the solvency ratio effect of the three deals right?

Speaker #3: Yeah not the solvency that's easy. I want to know the operating profit yeah yeah of course.

Speaker #2: Yeah yeah that's fine that's fine yeah yeah. No I wasn't sure. So I think like so those I mean for for all those I mean we are very rigorous in the way we are we are doing M&A as as you know.

Speaker #2: So for each of those capital deployment what we always ensure and we are looking at is at delivering a double digit level of ROI in the medium term.

Speaker #2: And here what is a bit tricky obviously to give you the exact number is that we we need to wait for the deals to be completed to really tell you what's going to impact overall as part of our trajectory but we'll do that once once we we we get there.

Speaker #2: I think just to give you maybe some indications for each and every of those of those deals if you start with with a PIMCOM unit which is maybe the straightforward one what what will happen depending on the on the share of of the overall net income we are getting associated with the minority with the buyout of minority you will get an equivalent effect into the into the net income.

Speaker #2: So like the the the level of the the minimum level of extra ownership of PIMCO we are going to get is 4.4% which corresponds to the to the former employees and and we may have higher take up also with with the current employees.

Speaker #2: But then basically that that positive effect will not come into the operating profit but will come into the net income and you can expect from 2027 onwards to have already there a triple digit benefit to come into the into the into the net net income.

Speaker #2: Then for for UOB this is this is currently a business where where we have actually maybe I I to give you like directly the benefit the effect both for UOB and for the HSBC Singapore we have not yet closed.

Speaker #2: The closing will happen later on, and then what you should expect is, starting in 2028, I would say, to start seeing a triple-digit positive impact in terms of operating profit.

Speaker #2: From which we expect also to see quite some fast growth over time because this is definitely a growth focus. I think once we get the further detailed we will we will be happy to provide you with with more insights.

Speaker #2: And then your other question was around what is what is the effect of AI right and from the restructuring I believe that was the question.

Speaker #1: Yeah Michael I didn't quite get what was your second question. The cost of AI or.

Speaker #3: Yeah yeah the cost of AI but but also how you account for it is it applies straight off is it in the P&C just to have a feel for it.

Speaker #4: So are we activating the investment into AI and if we are on the wrong tech do we need to write it down at some point.

Speaker #2: So so basically I think I mean we are we are we are tapping into into AI across the organization. That's also as an example it's not that's also the case in asset management and that's also one driver of the very strong improvement or the good development of the cost income ratio as an example.

Speaker #2: And we are, but obviously also leveraging it very much on the P&C side, as I was already mentioning. And there we have a very strict approach when it comes to everything that is activation of those new technologies, where we are very strict across the organization to minimize possible—I mean, because simply, like, this new tech is much, much faster compared to all the historical development.

Speaker #2: And maybe because connected to to your question what is also very important is that the restructuring we have already already done right will come with ultimately a very good level of return as well.

Speaker #2: So we expect to have an overall return that is above 20% for the restructurings that have already been booked today.

Speaker #3: Good thank you.

Speaker #1: Okay thanks Michael. The next question is from Andrew Andrew Baker from Goldman Sachs. Go ahead Andrew.

Speaker #3: Great. Thanks. Thanks for taking my questions. First one just on the life and health investment income. I believe there was 87 million of dividends from Veridium and Sconcept Re.

Speaker #3: Is it fair to assume a similar level of dividends going forward? Were there any one off to consider in this? And I guess can you just confirm that we should expect these dividends come through annually just in two Q.

Speaker #3: And then secondly just curious on the alternative reinsurance capacity capabilities that you mentioned. Are you seeing any material differences in either rates or terms and conditions between what you can get on the alternative reinsurance side that you've developed versus what's available through traditional capacity.

Speaker #3: Thank you.

Speaker #2: So I think on the on the dividends basically the the higher highest contributor to the to the dividend we have received is coming from Veridium.

Speaker #2: As you know we are we are just an investor so we are just a shareholder of of Veridium. So we don't know what will be the level of dividends and what would be the pattern of dividend as well.

Speaker #2: And also what we are received this year for multiple reason is is more than a yearly dividend. So so likely also lower on a on a steady state basis but again we don't know what should be the right the right level.

Speaker #2: And then you were mentioning on on alternative reinsurance. So I think indeed I mean we we there is I think the main play with these alternative alternative reinsurance approach is actually to to ensure that we have a diversification of capacity and diversification of capacity at high quality.

Speaker #2: And very good level of rating. So so that's one one angle to it. And then I mean the overall environment when it comes to to competition for for reinsurance capacity is obviously more on the on on our side as we are a net net buyer of reinsurance as opposed to the other way around at this point in time.

Speaker #3: Great. Thank you.

Speaker #1: Thanks Andrew. Next question is from Farhad. Farhad Changazi from Kappa Shrevrook. Go ahead Farhad.

Speaker #5: Hello. Thank you for taking my question. Okay just to touch upon the plan and where we are still in retail volume growth. I think year to date the CAGR is 2.5% versus plan ambition 3 to 4%.

Speaker #5: You sort of highlighted geopolitical concerns and you take inflation buffers. So do can we or can we not expect a volume acceleration in H2 26?

Speaker #5: And in view of this, does the plan's ambition of 3% to 4% retail volume growth still stand? And again, just a plan-related question on solvency to capital generation.

Speaker #5: Could you remind us again of the management actions you've taken already, along with the recurring uplift in capital generation to date? And any update if there is visibility on future actions within the plan period?

Speaker #5: Thank you.

Speaker #1: Okay, Farhad. So your line wasn't great. You want a retail volume growth update and capital generation. Okay, yeah, go for it. Oliver, you take the first one.

Speaker #1: Go on and read the second one.

Speaker #2: Okay.

Speaker #4: Yeah. Thank you Andrew and thank you for the question. Because it's a very good one. So first we had a slow start in the in the year.

Speaker #4: It's improving in the second quarter, and I hope that we are making progress throughout the year. Which is good because it's the effect between how much we get in and then how much we retain.

Speaker #4: So the customer acquisition side is actually going very well. What is not yet according to plan at least from my expectation is the improvement in retention that we had planned to do.

Speaker #4: And there's two or three drivers for that. There is rising price elasticity in the customer side and as we are very very focused on making sure we reflect increasing claims inflation into pricing we need to do even more.

Speaker #4: To balance that with higher retention so helping clients for example to adjust their deductibles their covers in order to make sure affordability is balanced with margin even more.

Speaker #4: That's something it's a muscle that as an organization we have to train. And the second component that's is important the the low growth particularly in the core of Europe of disposable income is further increasing sensitivity.

Speaker #4: So people are actually also ensuring less overall. So that's a very good call a good question and we need to do quite a bit of more work but the good news is customer attraction to our brand super.

Speaker #4: Strong. The upside is higher retention.

Speaker #2: Yeah. So on your question on the capital capital management action. So so we are we have already done a lot when it comes to really looking at the portfolio portfolio performance capital intensity ratio of of the businesses.

Speaker #2: So a lot of work has been going there. Which has been very helpful I think to also revisit and question if we were performing or developing the business with the right level of of capital consumption.

Speaker #2: This is what has been fueling quite a lot some of the positive developments over the last 18 months. We are working in parallel on a couple of more fundamental levers and you may remember you know from the capital market day presentation we were in particular showing the share of what is a business that is operating on the internal model as opposed to the standard model.

Speaker #2: So there is quite some work ongoing to move more of our business into the internal model. That will give us a further support when it comes to the capital intensity of our of our business.

Speaker #2: And that's where we know the work is ongoing. We are working also closely with our regulators and we are confident it's going to get there.

Speaker #2: And by the way there will be also further benefit after 2027 but that's what is also creating that sort of one-off effect a bit later on.

Speaker #1: Okay. Thank you Farhad. The next question is from Vineet. Vineet Malhotra of Mediobanka. Go ahead Vineet.

Speaker #5: Yes. Good afternoon. Thank you very much. I hope you can hear me. I'll take I'll take one question which is on the internal growth.

Speaker #5: And I'm more curious about commercial lines. Where there's been a bit of up and down. I mean 4Q was not so good. Then 1Q was a bit of a jump.

Speaker #5: And now again we have a 1%. And I can see I mean I can see some of these numbers. AGCS is minus 1.8 but also maybe UK has a minus sign.

Speaker #5: I don't know if it's linked to the commercial topic, but if you could just comment on commercial, and maybe also throw in a comment on these two OEs, which are showing a negative internal growth.

Speaker #5: That would be very kind. Thank you very much.

Speaker #2: Sure. So I think, indeed, you are right. There is quite some volatility in the numbers, in particular when you look at Q1 versus Q2.

Speaker #2: And this is also linked to some technical effects in the in the underlying. So for me what I will do and I think that's the most interesting way to look at it is more to look at force the first half overall together.

Speaker #2: And what you you see if you do first half overall together is actually that the the the volume growth is the volume growth is actually flattish.

Speaker #2: That's that's what you see in the in the underlying. And then it's and then you have a very nuanced and diverse picture across across our various parts of of the portfolios.

Speaker #2: First of all you will have the the micro business which is actually performing in a in a robust manner in the overall environment with also a good level of rate overall.

Speaker #2: At at at the first half as the first half level. You will have in the case of partners a very very good dynamic which is which is fueled as well with with different parts of the business which are responding quite well.

Speaker #2: But in particular I think the travel business is is doing well as an example. And then you will have trade. That is doing well in terms of volume growth in particular building on the on the diversified picture between between shorty and and credit.

Speaker #2: But what we see overall is that the rate environment continues to closely follow, in the credit part, the current economic environment we are operating in.

Speaker #2: And then in the case of AGCS we have we have a rapid rapid softening in particular in the we have observed a rapid softening in the in the second quarter in particular around property around natural resources and construction as an example as a type of business.

Speaker #2: But the the team is doing a very good job also at continue sleep tapping into the the areas where they can perform well in terms of in terms of technical excellence.

Speaker #2: So I think overall I'm I'm happy with the picture I see in commercial and how the various parts of our comprehensive commercial book are responding in the environment.

Speaker #5: Thank you. Can I just also ask my second question on inflation please? The inflation buffer that's coming in the commercial book isn't it? There's a comment somewhere in there.

Speaker #2: Yeah. So basically, overall for the overall book, we have built 1 percentage point of inflation, or further inflation buffer, into our numbers.

Speaker #2: So, it's an increased level, and it's mainly in commercial, but it's not only in commercial.

Speaker #5: Okay. Thank you.

Speaker #1: Thanks Vineet. Next question is from William. William Hawkins of KPW. Go ahead William.

Speaker #6: Hello everyone. Thank you for taking my questions. First of all could you talk a bit about your view of the sustainable growth rate for life new business value please.

Speaker #6: You're still down in the first half and I know the reasons for that. But I'm kind of wondering what you think you can accelerate to.

Speaker #6: You know, for businesses of your size, is that 5 to 10 percent, or could you do better than that? And sorry to be very short term.

Speaker #6: I'm not very clear about the seasonality of your new business value. So is the second half expected to be better than the first half or are there structural headwinds?

Speaker #6: And then secondly Oliver around your slide on A3 I appreciate this is a very big topic so just asking you for key top of head views.

Speaker #6: But after the Singapore deals how do you view Allianz's positioning for growth in Asia? Do you think you've kind of taken your main actions now so it's all about execution or is there other stuff you need to do to be really comfortable with your footprint and growth potential?

Speaker #6: Thank you.

Speaker #1: Could I raise you want to kick off first and?

Speaker #2: Sure. Sure. Sure. So indeed you are right. It's a bit it's a bit noisy but the the way I will think about it is that you can also now is the last quarter where we have seen the effect associated with with with the only credit GV.

Speaker #2: So you can take the second half of last year as being a reference in terms of PV and BP. And you can apply our expected growth rate of 5%, as we have communicated on Capital Markets Day.

Speaker #2: So I think that should give you a good order of magnitude.

Speaker #5: Can I take the second one?

Speaker #1: Yeah. Go for it. Yeah.

Speaker #5: So thank you for the question. So this was very important for us because we again we had a a gap in Singapore. We established presence there in '91.

Speaker #5: We never really had a strong operating business on the life and health side in Singapore itself. And as you know we've been trying for a while to build a proper beachhead that reflects the power of the brand.

Speaker #5: So this this has been achieved. If you are asking for additional investments we always are open. So we are happy with now having closed that chapter.

Speaker #5: But there's tons of opportunity in Asia still coming and we will always continue to look at it. As we have said in the past always on a market by market asset by asset basis.

Speaker #5: Sorry that I don't give you I have a gap in this country or a gap in this in terms of materiality though we have to say Singapore has been one of the most important things to be looking at because relative to the national size you would say why do you invest in something that has only six million people or six and a half million people now.

Speaker #5: It is the most important market for wealth growth—market for wealth—in Southeast Asia, so that was essential. But we're never done.

Speaker #6: That's great. Thank you.

Speaker #1: Thanks, William. The next question is from Andrew Crean of Autonomous. Go ahead, Andrew.

Speaker #6: Good afternoon everyone. I just had a couple of questions. Firstly your restructuring provisions this year which look to be about possibly 1.3 1.5 billion by the time you finish.

Speaker #6: Could you tell me how much of that is writing off software as opposed to active investment? And can you give us a sense as to what the return on that in sort of billion plus investment will be over the next couple of years?

Speaker #6: So that's the first question. The second question is a very small one. Your corporate center losses are just 20.1% of your target for the full year.

Speaker #6: Can you give us a sense as to where you think that'll land this year because it's clearly not going to be 800 minus 800 million.

Speaker #2: Yeah. So on the on the year rest so I as mentioned Andrew overall from what we have already performed in terms of restructuring at this point in time right we have we have the 200 million of debt losses on that one we expect to get 40 million OP more on a full year basis.

Speaker #2: Obviously at the end of this year we will already have seen three quarter of the of the benefit coming through. And for for the 400 million of of acceleration of decommissioning of IT system associated with AI that we have that went through in the in the second quarter you should expect to see something approximately like 70 million euro of operating profit to come through forward through lower future amortization.

Speaker #2: That and then I think from what is going to to come to come on top I would expect as well to see further positive associated benefits benefits as things go forward right.

Speaker #2: And then I think you were on the corporate centers. There is as always a lot of seasonality as you know in the in the corporate center.

Speaker #2: We see usually 40% of the cost coming in the first half of the year 60% of the cost coming in the second half of the of the year.

Speaker #2: This year as well in addition given the inflationary environment we have seen higher benefit coming from the inflation linked bonds. So there is always conservatism in the 800 of the in the 800 million euro negative we are seeing there.

Speaker #2: I think you can you can take some assumptions but but in particular I think you can reflect as an example the effect of the inflation linked bonds as an example.

Speaker #5: Thanks. Andrew I I love your question. Can I give a bit of strategic content contact if that's okay also to our friend Mr. Craig because.

Speaker #1: Go go for it. Go for it. Yeah.

Speaker #5: Yeah, it's very important. So, there was obviously a reason when we said that the bad judge disposal will be reinvested. And what we mean by that is that the AI revolution will fundamentally change the way we build and deploy software.

Speaker #5: That has two components. One, we need to continuously look at the investments that we've made to date and whether they are valuable. Two, can we use the new tools already to expedite restructuring? And that basically means transforming the operations and the tech stack that's involved.

Speaker #5: And the third one is how do we have to think about the longevity of investments into technology and that's something that we need to debate a bit more into the future i.e. is it really useful to activate software for a decade where you have no idea how software will look in 24 to 36 months.

Speaker #5: The last one I don't want to discuss today because it's more for the the broader investor community to to have a look at it at what people do.

Speaker #5: We are therefore using the very strong gains that we have to make sure we do everything we can in order to keep our tech stack not just technically, but economically updated.

Speaker #5: So, it's exactly right how you're looking at it. It's not a one-quarter thing. It is an acceleration of what we're doing in order to make sure that our ops space stays economically viable, right?

Speaker #5: And you don't have, at the end of the day, at some point, the tech assets on the balance sheet where anyone would ask himself or herself, what's that actually really worth.

Speaker #5: Right. So thanks for the question because it's quite quite a very important point for us. And we're doing everything to not just get the benefits but making sure we we invest and re restructure properly to stay future ready.

Speaker #5: Thank you for the question.

Speaker #1: Okay. Thanks, Andrew. The next question is from Ian Pierce from BNP. Go ahead, Ian.

Speaker #6: Hi. Thanks for taking my questions. First one is just a following following up on on this restructuring stuff and and the the benefits going forwards.

Speaker #6: First part of it is sort of if you're to have further positive experience including you're running ahead of plan do you see opportunities to go further?

Speaker #6: Would you be willing to go further on this? Obviously if it's generating a a 20% return that's that's pretty attractive. So so would you like to do more and reinvest any further positive experience you might have into into some further restructuring?

Speaker #6: And is it mainly the reduction in amortization that is the main benefit, or should we be expecting other items as well? And maybe you can just elaborate on that.

Speaker #6: And the second one is is just on on the cash position and and liquidity buffers that that you have at the moment because there's obviously been a lot of there are going to be a lot of ins and outs on cash with the acquisitions and and disposals.

Speaker #6: Could I was just wondering if you could give us an update on where you see yourself sort of on on disposal and the funding of of these these deals.

Speaker #6: Thank you.

Speaker #2: So basically starting maybe with your second question on on cash. So if you if you look at it overall right and maybe if you start if you if you start from what we had shared with with all of you as part of the capital market day where we are saying that we have a conservative liquidity buffer of approximately 8 billion euros.

Speaker #2: What we meant at that point in time with conservative liquidity buffer of 8 billion euros is that we had more. Than 8 billion euros.

Speaker #2: And I think you can use that as a starting point to do to do the math and see where we are after after the acquisition we have we have announced or the transactions we have announced so I I think you can easily take the the dividends the share buyback and then and then also take into account the fact that we have received in terms of proceeds from the two disposals approximately like 3 3 billion 3 more than 3 billion euros and so on and so forth.

Speaker #2: And then if you do that, what I think you can see very easily is that we land in a similar order of magnitude compared to the conservative liquidity buffer we have been announcing.

Speaker #2: So overall, what it means—and that’s also what I was mentioning when I was presenting—is that both from a solvency ratio and from a liquidity perspective, we can really do those transactions in a very good manner.

Speaker #2: Also because we have been very conservative when it comes to M&A and we have not undertaken M&A for a long period of time beyond small things that we have been doing on an ongoing manner.

Speaker #2: And then when when when it comes to to the question you were you were asking on further further type of actions I think we don't you know we don't dictate what is the type of restructuring to do or not to do.

Speaker #2: They they come also like they come associated with the transformation and what we think is meaningful against the transformation we are performing. For me what is what is very interesting is that as we are pushing with AI and as we are pushing in terms of transformation of our processes what we see clearly is that there is more and more opportunity in terms of what can be transformed and where we can create more accretive value for our for our shareholders ultimately.

Speaker #2: So that's why I think beyond the operating profit effects that as an example is associated currently to the to some of the accelerated decommissioning we have been mentioning I think more building on the point of Oliver what is creating or we believe is going to create a lot of value is a modernization of the environment allowing us more flexibility and faster ability to evolve as well in the future.

Speaker #1: Okay. Thanks Ian. The next question is from Henry Henry Heathfield from Morningstar. Go ahead Henry.

Speaker #6: Yes. Thank you very much for taking my questions. Just two from me. I was wondering if you might be able to give me the discrete quarter two rate change on renewal within property and casualty if possible.

Speaker #6: And then secondly on the attritional loss ratio I was also just wondering if you might be able to give a bit more color on the 50 basis point change between quarter two this year and quarter two last year.

Speaker #6: Thank you.

Speaker #1: There you go. I think it's the accounting changes referring to. Sorry. Firstly Henry sorry just to clarify you wanted the renewal rate change discrete Q2.

Speaker #1: I think we we only provide the 6M YTD and which you have the 6M and you have the Q3 and there's some mixed changes.

Speaker #1: I'm not I'm not sure we'll go for discrete Q2. And your second question was the attritional loss ratio delta Q2 year on year or 6M?

Speaker #6: Q2 year on year.

Speaker #1: Okay. Fine.

Speaker #2: Okay, so basically, just to provide you with the 6M — the 6M rate change on renewal, right? You can see that on page C12, right.

Speaker #2: So it's basically 3.3% for the for the rate change. And the delta in attritional loss ratio you can also find on page C14. So basically would be would be 0.

Speaker #2: sorry 0.7 0.7% in in the quarter. What I think just to put that quarter delta into perspective you have two elements you need to have in mind.

Speaker #2: There is one which is associated to an accounting change between attritional loss ratio and runoff ratio which is approximately 0.4 percentage points that you need to correct to.

Speaker #2: So that would basically reduce that delta. And then and then you will have also the buildup of the inflationary reserve I was mentioning that is contributing to that delta.

Speaker #2: For me what is also again important to to have in mind is the fact that last year second quarter was a very low level as well for the undiscontinued attritional loss ratio.

Speaker #2: So if you want to have a good sense of the development you should better refer I believe to the full year full year 2025 to understand the positive development.

Speaker #2: So that's why I was mentioning that I'm very happy with the development of the attritional loss ratio.

Speaker #6: So, just if I can clarify, would that be how much of the inflationary reserve buildup is there in that delta? Is that...?

Speaker #2: So we are not displaying the exact effect of the inflationary reserve into the attritional loss ratio overall between both undiscontinued attritional loss ratio and runoff ratio.

Speaker #2: For the half year we have put through 1 percentage point of inflationary reserve.

Speaker #6: Okay. Thank you.

Speaker #1: Thanks, Henry. Next question is from Ben—Ben Cohen from RBC. Go ahead, Ben.

Speaker #6: Good afternoon. Thanks for taking my questions. I had two questions, please. The first is on Asset Management. I think this is the fourth quarter now in a row where you're comfortably better than your sort of 61% cost-income ratio target for the division as a whole.

Speaker #6: I just wonder if you could give us some outlook in terms of how you see that improving going forward and and maybe the sort of the leverage to sort of top line growth.

Speaker #6: And my second question was, I guess, a sort of bancassurance question. I just wonder about the opportunities and risks that you see from the kind of bank M&A that we're seeing playing out at the moment in Germany and in Italy.

Speaker #6: Do you think that there might be opportunities coming out of that? Is there any risk to any of the the distribution arrangements that you have?

Speaker #6: Thank you.

Speaker #1: Claire-Marie do you want to take the cost income and Oliver do you want to talk about commerce or the bank assurance threats or I think that Ben was referring to in terms of any changes to bank ownership etc.

Speaker #1: Claire-Marie do you want to go ahead?

Speaker #2: Yes. Sure. Sure. So basically cost income ratio we have said strictly below 61. I think it's still a good reference to use strictly below 61.

Speaker #2: You are right. I would expect we continue on a good path, but we are also always dependent on some seasonality effects there that are also coming through later on in the year.

Speaker #1: And Oliver I think you're on mute.

Speaker #3: No no. Bank assurance.

Speaker #6: Just trying to make sure, but my sneezing here is not online. So, thanks for the question. So, two or three comments, John. Bancassurance remains a super important topic globally for Allianz.

Speaker #6: It's a very important distribution channel, and it's growing. There are very different reactions to things like the Danish compromise and others by region. As you can see from HSBC, just as an example, they are very focused on where they do bancassurance themselves and production in Hong Kong, and they're very clear where they need world-class partners, like Allianz. Singapore is an example of that.

Speaker #6: So there is no sort of singular trend on banks are insourcing insurance production or outsourcing insurance production. One thing what you would like to do what capital regions tell you what to do and the other one are you actually capable of doing what you may want to do on paper.

Speaker #6: Second obvious conversation, particularly in Europe, is the Danish compromise. It is a farce in terms of regulation. It's just simple capital arbitrage. By the way, it's relevant economically, or just for you to know, mostly in capital-intensive life insurance, particularly where there is a lot of risk that is not put under capital. What do I mean? You still have the doom loop risk in Europe, where capital is not required for investing into domestic government debt. As a reminder, we believe that's just not right from a regulatory standpoint, because risks, if and when we—.

Speaker #6: To do that because at the end of the day the quality of the product the service and the brand behind it will determine the success.

Speaker #6: So in our mix of channels we feel very well positioned and the practical example is only credit Italy one year after we ended the joint venture we're almost as where we were before because of the strengths that we have in Italy with our IFA and agency distribution.

Speaker #6: So thanks for the questions. Highly relevant but we feel well positioned. And by the way we have more inbound inquiries in working with banks than we have risks added.

Speaker #6: So I expect us to grow very successfully with our bank partners, and a few examples are going to come over the next few years. HSBC is just one of them.

Speaker #6: Thank you.

Speaker #1: Thanks Ben. Okay. Michael you have a follow-up question. I'm being generous on this the summer's day. So go ahead Michael Hutner from Berenberg.

Speaker #6: Thank you so much. And it's back to the topic of software and stuff. So I was trying to two questions which relate. So in the balance sheet you have 18.6 of the year end in intangibles in in now you've got 18.8.

Speaker #6: Probably not quite the same number. So out of that, how much is software or, you know, which you could kind of write off and reinvest at this lovely 20% rate?

Speaker #6: Yeah, basically that's the question. I just want to have a kind of max number, if you like.

Speaker #2: Sorry. What was your second question?

Speaker #6: That that was it. That was it. I couldn't think of it. Oh yeah. No. I do have a second question. One of your peers yesterday in peers and neighboring country agreeing fantastically in Germany and I was thinking how can how can that be?

Speaker #6: How is Allianz letting a peer a competitor grow? So you'll probably know who who I'm referring to but I I'd be interested to understand why why you haven't covered all the bases there.

Speaker #1: Sorry. I I let's answer your first question first and then we might have to ask you to I didn't quite understand your second question.

Speaker #1: So first question software.

Speaker #2: Yeah. Software on the balance sheet right. It's something like 3.5 billion at at this point in time. So it's going down obviously after what we have done.

Speaker #2: And also, as mentioned by Oliver, we are very strategic in the way we are capitalizing software, in the sense that we have really reduced dramatically the way we are capitalizing software as well.

Speaker #1: What was the second question, Michael, in simple terms?

Speaker #6: Well I mentioned so yesterday ING said they were growing through MGAs in in Germany hugely and I was thinking how can that be? How is Allianz letting letting this opportunity go by?

Speaker #6: I I obviously you can't say what your competitor is doing but I was just wondering whether there's bits of growth that you're missing.

Speaker #2: I think it's a bit difficult to answer because I don't know what they are exactly going after. Obviously, we feel very confident about our positioning in Germany across our businesses.

Speaker #2: And yeah if it's live I think it's also self-answered with what Oliver was mentioning right when you look at the size of Allianz Labour the ability of Allianz Labour to operate at a certain scale and cost level is very difficult to replicate by by competition.

Speaker #6: Brilliant. Thank you.

Speaker #3: Maybe if I can add to what Claire-Marie just said. Germany is an example but it's an interesting one. When you as a broker or a bank advising a client in Germany on buying a pension product and you don't have the best performing company in terms of customer benefits in terms of unit costs and in terms of brand on your advisory schedule you are exposing yourself to mis-selling advice and and we we're damn serious.

Speaker #3: So it's really interesting that a lot of these—and I personally expect, therefore, a lot more changes to the bancassurance market and in its agreements. You have to not just be big and have great technology and great product; you have to have all of it.

Speaker #3: Yeah. So, scale will matter, but what matters more is customer value. This is not true yet in every market. There are some markets in Europe where stuff is being sold that's not very good for consumers because of the level of rigor by regulators to look market by market.

Speaker #3: But let's bear that in mind. We often think about supply-side dynamics. My personal point of view, after 10 or 15 years of capital regulation—colleagues and investors—we ain't seen nothing yet on consumer protection regulation.

Speaker #3: That's about to come. And the only answer is to be loyal to leader in what you do. Yeah. So I think we're playing too many games in terms of people trying to in-house stuff.

Speaker #3: You have to be good. By the way last comment I believe is against strategic AI will even accessibate the pressure of integrated product providers and sellers to improve quality because today when you are asked intelligent models you're getting really good answers to things that you couldn't get answers in the past.

Speaker #3: So, my point of view is I don't believe in the closed shop. I sell my craft across all channels, all the time. It does not work.

Speaker #3: But it's a very personal point of view.

Speaker #1: Okay, thanks, Michael. And the final question is from William—William Hardcastle at UBS. Go ahead, Will.

Speaker #7: Thank you. Just coming back to something you said earlier, Oliver, on the customer elasticity increase in retail. I guess, is there any potential that some of this is structural, with greater insight in pricing trends perhaps available through AI?

Speaker #7: And what prevents the younger customer in particular essentially behaving like a UK motor market in that environment? Just coming back to what your the actions you're taking to try and improve that retention and then it should be a very quick answer hopefully.

Speaker #7: Just any initial comments on the July weather events that have happened across Europe. Thank you.

Speaker #1: Okay. Oliver do you want to kick off? You're on mute. Okay. Hang on. We seem to have a technical issue. Claire-Marie do you want to start on the July?

Speaker #2: Yeah. Yeah. I would I would dig the July weather and then we see if we can fix on the on explaining more what is the dynamic on customers.

Speaker #2: So so basically on there was I'm happy to take it. On the on the July weather you're right we have seen quite a lot of secondary period activities across across Europe with wildfire with the wildfires but also ale as an example across Germany and Italy as an example.

Speaker #2: So it's a bit too early to to assess what will be what will be the impact for us. But I think stands we we expect the overall cat load of basically cat loss to be within our quarterly quarterly cat load.

Speaker #1: Okay. Oliver could you repeat

Speaker #3: Sorry, I was—that's why I had put on mute. I couldn't really hear that part, the second part of the question. Could you repeat it for me?

Speaker #1: Go ahead Will. Can you repeat the question on price versus elasticity?

Speaker #7: Absolutely. Just coming back to your customer elasticity point on retail and trying to understand if if any of this could be structural with customers being able to use more AI to to see competition in pricing etc.

Speaker #7: And the danger that could extrapolate to be a bit more like UK motor across Europe, or—and then just trying to understand the actions you're now starting to undertake, or are undertaking, to improve that retention.

Speaker #3: Yeah, it's a really interesting debate we all always have—it often depends on what country you come from. Andrew is also from the UK, and therefore, you know, we get this question.

Speaker #3: My personal point of view is as follows: AI has the ability—depending on the price, by the way. We shouldn't forget a lot of these tools are provided for free at the moment, and customer behavior may change at scale, in particular depending on what the price of the token or the use of the tools would be.

Speaker #3: So, the first observation is you get richer information back. When people ask, for example—as in the UK often—what's the cheapest car insurance, because it's considered a commodity, you get more differentiated questions and answers on: how good is the claims service, what's the reputation of the brand, and things like that.

Speaker #3: By the way also spillover effects from other product which is very important for us to know which means you cannot be strong in one product area and weak in a neighboring area.

Speaker #3: So it makes things more complicated in a multi-product environment because, for example, the LLMs tell the customers, 'You should be asking for a bundle bonus if you have both home and motor,' right?

Speaker #3: So it's a longer conversation we need to talk about it at the time. My personal point of view it's it's not a threat it's a huge opportunities because you can really in a positive sense teach the LLMs to do look at more than just price only and we already see.

Speaker #3: The second thing, which is a huge opportunity that we already see, is that where we are performing strongly on product, service, and brand, the conversion ratios are a lot higher than on traditional search.

Speaker #3: So the effectiveness, again, depending on how expensive the tools are going to be, can be significant on a product or service if you cannot really offer clients choice in terms of optimized risk cover versus price and versus service. We need to be a lot more concrete about why it's worth paying for something, but it's also—

Speaker #3: A tremendous opportunity to differentiate beyond price.

Speaker #1: Okay. Thanks, William. Thanks, Oliver. We have no more questions, so thank you for your interest. I know it's been a long week. Have a nice summer break.

Speaker #1: That concludes today's analyst call on our Q2 2026 financial results. My team and I are available for follow-up questions. Thank you for your participation, and goodbye.

Speaker #1: Good morning, everyone, and welcome to Allianz's second quarter and half-year 2026 media conference call. Thank you very much for joining us today. My name is Frank Stoffel, Head of Financial Communications and Investor Relations.

Speaker #1: I'm joined today by our Chief Executive Officer, Oliver Bäte, our Chief Financial Officer, Claire-Marie Coste-Lepoutre, and our Head of Group Communications and Corporate Affairs, Lauren Day.

Speaker #1: Before we go into the presentations, let me briefly cover the usual housekeeping items. We will answer all questions in English. However, if you feel more comfortable asking your questions in German, please feel free to do so.

Speaker #1: We will then repeat the question in English for everyone else on the call. If you want to ask a question during the Q&A session.