Q2 2026 Unipol Gruppo SpA Earnings Call

Speaker #1: Please go ahead, sir.

Speaker #2: Good morning, and thank you very much for attending this conference. Before opening the floor to the question, as usual, let me make some remarks on the first half numbers that you saw this morning.

Speaker #2: They were numbers that confirmed the strength, resilience, and consistency of our business model. We were able to deliver excellent results across all key metrics, with the net profit reaching more than $900 million up almost 50% year on year.

Speaker #2: More importantly, these results reflect not only a strong— a very strong— earnings growth, but also a significant improvement in the quality of our earnings.

Speaker #2: Our performance is based and supported by all the core drivers of value creation: technical profitability in non-life, profitable growth in life, and resilient recurring investment income and strong capital generation.

Speaker #2: What I would particularly like to emphasize in our ability to combine business growth and improving profitability in non-life, premium increased by almost 4%, while the combined ratio improved to less than 92%.

Speaker #2: Allowing us to reach ahead of schedule the target originally envisaged for the end of the strategic plan. This is particularly important achievement because it demonstrates that growth has not come at the expense of underwriting discipline, on the contrary, the quality of our portfolio continues to improve.

Speaker #2: The result is even more remarkable considering the operating environment compared to the first half of this year. We had a larger impact coming from NATCAT, that were offset by lower impact coming from large losses.

Speaker #2: So overall, the combined effect of the two is pretty in line with the numbers of 2025 and this way in line with the expectation and the assumption of our budget and industrial plan.

Speaker #1: Buon pomeriggio, operatrice CoroSchool. Benvenuti e grazie quindi per essere partecipati alla nostra conferenza "Risultati al 30 giugno 2026". Vi ricordo che tutti i partecipanti sono solo in modalità ascolto; a fine presentazione avremo l'opportunità di porre dei quesiti.

Speaker #1: Se vi serve assistenza durante la conferenza, potete contattare l'operatore cliccando su 0 e 1 sul telefono. Lascio quindi la parola al dottor Matteo Laterza.

Speaker #2: Life business is also performing very well. We delivered strong premium growth, positive net inflows at almost a significant improvement in profitability. This recovery in earnings is being driven both by the technical component of the business and the investment income, while improving portfolio economics continue to support future profitability.

Speaker #1: Ciao Unipol, prego.

Speaker #2: Good morning and thank you.

Speaker #2: Finally, investment performance was very strong independently on the effect of the space X IPO, that is, a non-recurring component of the investment income, but even not considering the impact of SpaceX, the investment yield of the portfolio is close to 6%.

Speaker #2: That is very robust, significant, and persistent in terms of contribution coming from dividend and coupon. Finally, capital position remain a key competitive advantage for us.

Speaker #2: We closed the first half with a solvency 2 ratio of 259%, that is, the official number, but as usual I underline and remark the importance of the 290%, that is, the solvency position of the insurance group.

Speaker #2: That is a very strong number, and paved the way to be very consistent with our metrics and target in dividend distribution policy, that as I said last time that we met, is based on the 930 million for the dividend expectation for 2026, and paved the way to the dividend capability for the next for the rest of the industrial plan and in general for the next for the next future.

Speaker #2: Having said that, I am here with, as usual, with Enrico Sampietro to answer to your question. Thank you very much.

Speaker #1: This is the Carosco Conference Operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touch note telephone.

Speaker #1: To remove yourself from the question queue, please press star and 2. Please pick up the receiver when asking questions. Anyone who has a question may press star and 1 at this time.

Speaker #1: The first question comes from Tommaso Nieddu with Kepler Chevreux. Please go ahead.

Speaker #3: Hello and thank you a lot for taking my questions. The first one would be on net financial results. The underlying yield, especially I'm not talking about the SpaceX MTM, in the underlying yield, both in life and non-life, the return has been incredibly strong.

Speaker #3: Just my question would be just want to understand what's the kind of run rate we should expect in H2 and the second question is on the health business.

Speaker #3: Clearly there the profitability remains outstanding. But it seems to be that that growth has been decelerating through the first two quarters compared with last year.

Speaker #3: So should we expect a re-acceleration the next quarter or please if you can provide any color on why that shouldn't be the case. Thank you.

Speaker #1: Welcome to Quarter Call. Please enter your passcode followed by the pound key, or *0 for an operator. Quarter Call.

Speaker #2: Okay, concerning the first question, without considering SpaceX Mark to market, that as I said before is an exceptional component, very volatile, and it comes from an investment that we did in the past that was very worth to do considering the evolution in terms of Mark to market evaluation of SpaceX stock.

Speaker #2: Si prega di digitare il PIN seguito dal cancelletto. Il codice è confermato. State per essere inseriti in conferenza.

Speaker #3: Rimane un vantaggio competitivo fondamentale per noi. Abbiamo chiuso l'H1 con il coefficiente Solvency 2 del 295%. Questo è il numero ufficiale. Però, come al solito, sottolineo—anzi, faccio proprio rimarcare—questa importanza del 290%, che è la posizione Solvency di tutto il gruppo assicurativo.

Speaker #2: It is not a strategic stake and we will see the opportunity to divest the investment as soon as there will be the market condition to do it.

Speaker #3: È un numero veramente forte, solido, ed è quello che ci apre, come dire, la strada per poter essere in conformità con tutte le nostre metriche e tutti i nostri target che riguardano proprio le politiche di distribuzione del dividendo.

Speaker #2: And without considering SpaceX, as I said before, overall the investment yield of PNC and life not related to the segregated portfolio gestioni separate is 6%.

Speaker #3: Come dicevo nell’arco dell’ultimo nostro incontro, tempo fa, questo si basa sui 930 milioni di euro, che sono le aspettative del dividendo per il 2026, quindi per l’anno in corso. E ripeto, questo ci apre a questa capacità di avere distribuzione di dividendo, appunto, per il prossimo piano industriale e, in generale, anche per il nostro prossimo futuro.

Speaker #2: The running rate that is the component related to coupon and dividend is 5% because 1% is the component related to Mark to market valuation of asset that are Mark to market to PNL.

Speaker #3: Bene, ciò detto, sono qui, ovviamente con Enrico Sampietro, per rispondere ai vostri quesiti. Grazie. Bene, operatrice Chorus Gold, in questo momento possiamo cominciare la sessione domande e risposte.

Speaker #2: And so if you want to consider and to extrapolate the investment income for the second half, if you want to be prudent, you should consider only the 5% that I said that I said before.

Speaker #3: Se volete porre un quesito, schiacciate *1 sul telefono. Se invece volete uscire dalla prenotazione delle domande, dovete schiacciare *2. Ricevitore del telefono per fare domande.

Speaker #2: Consider that to this 5% a very important contribution come from dividend coming from the equity investment. Dividend are allocated in the first half of the year and so you can't expect a replication of the dividend stream coming in the second half of the year so if you if you skip the dividend component from the run rate you should arrive to a number close to 4% if you want to have an idea of the contribution coming from the investment to the second half of the year.

Speaker #3: In questo momento, quindi, è possibile cominciare a fare domande schiacciando *1. Domanda numero 1: Tommaso Nieddu, Kepler Cheuvreux. Prego.

Speaker #4: Buongiorno e grazie per questa opportunità. Allora, la prima domanda sarà sui risultati netti, quindi sul rendimento soggetto, senza fare riferimento appunto al tipo di SpaceX.

Speaker #4: Quindi, per quanto riguarda il rendimento, sia Vita sia Danni, vedo che questi ritorni sono stati incredibilmente elevati, per cui la mia domanda a questo scopo è: che tipo di run rate ci possiamo aspettare nel secondo semestre, cioè nell'H2?

Speaker #2: Of course you have also the Mark to market of the asset that are booked to PNL that will give a contribution depending on the performance of financial market in the second half of the year.

Speaker #4: Domanda numero 2: per quanto riguarda il comparto salute, Health, in questo caso la redditività rimane di nuovo eccellente. Però, sembra che nei primi due trimestri questa crescita stia perdendo un po' di impeto.

Speaker #2: The second question regards the health the health business. There is a point considering the trend of premium that were in a sort of sense subdued in the first half of the year because the performance of bank assurance and agent was very strong but in terms of contribution to total premium this two component are still not the majority of the premium of the company.

Speaker #4: Ci possiamo aspettare una ripresa, una riaccelerata nel terzo e quarto trimestre? Ci può dare qualche informazione sul perché, se così sarà? Grazie. Per quanto riguarda la prima domanda, la terza: senza considerare, ripeto, l’MM, il mark to market di SpaceX, come fatti vi dicevo prima, è stata una componente eccezionale e estremamente volatile.

Speaker #4: Ed è quella che deriva proprio da degli investimenti che abbiamo effettuato nel passato. È valsa la pena fare quell'investimento, considerando quella che poi è stata l'evoluzione della stessa valutazione mark to market delle azioni di SpaceX.

Speaker #2: The most important component is the corporate, the big contract that we have with the big institution that in the first half of the year grew a mid single digit we expect an acceleration in the second half of the year.

Speaker #4: Dunque, non è una quota strategica e cercheremo di capire qual è stata l'opportunità, eventualmente fare un disinvestimento, e questo appena ci saranno le giuste condizioni di mercato per farlo.

Speaker #2: As a consequence of the acquisition possible acquisition of new contracts. In terms of profitability the profitability was very strong and we expect to maintain this trend also over the span of the industrial plan that means the second half of 2026 and 2027.

Speaker #4: Senza considerare, quindi, come diceva lei, SpaceX, e come dicevo anch'io un attimo fa, vi devo ricordare che in generale il rendimento degli investimenti del TLC e anche del Vita, in questo caso non faccio riferimento a quelle che sono le gestioni separate, in questo caso abbiamo un 6%.

Speaker #4: In questo caso, l'RR, quindi il running rate, come sapete, è il componente che riguarda i dividendi e le cedole, okay? Siamo al 5%, proprio perché l'1%, invece, è la componente che riguarda la valutazione, mark to market, degli attivi che sono appunto mark to market/PNL.

Speaker #3: Okay, thank you.

Speaker #1: The next question comes from Michael Huttner with Berenberg. Please go ahead.

Speaker #4: Thank you very much. I hope you can hear me. I'll just switch off my ventilator. The congratulations. I'm fantastic results. I had two questions and they come a little bit from listening to your competitor a little bit earlier.

Speaker #4: Per cui, se riprendo, vogliamo considerare, meglio ancora estrapolare, quello che è il reddito derivato dagli investimenti nel secondo semestre. Stando prudenti, dobbiamo considerare solamente il 5% di cui ho appena parlato.

Speaker #4: The one is on cats. Can you talk about what you've seen in July maybe? And the second is on the underlying trends in non-life and the balance between inflation if there is any and pricing and what you intend to do in pricing going forward.

Speaker #4: Consideriamo però che a questo 5%, e da questo 5, un contributo importante arriva dai dividendi, che a loro volta arrivano dagli investimenti. Investimenti allocati però nel primo semestre dell'anno, per cui non ci possiamo aspettare una replica di questo stesso reddito nell'H2, secondo semestre.

Speaker #4: Thank you.

Speaker #2: Hi Michael. I'm Enrico. So the first question is about the NATCAT events. So as you have seen in the first half the overall amount of NATCAT losses was not concerning.

Speaker #4: Questo vuol dire quindi che, se noi saltiamo, togliamo la componente dividendo, appunto, dall'RR, dal run rate, si arriva a un numero che è vicino al 4%. Quindi, se desidera avere un'idea di quello che potrebbe essere il contributo in arrivo dagli investimenti, appunto, nell'H2, secondo semestre.

Speaker #2: So around 150 million then in July as it happened to Italy France Germany Switzerland between 15 and 20 July there were several convective storms.

Speaker #4: Ora, va da sé che c'è anche l'MTM, il mark to market, anche di quegli attivi, di quegli asset che abbiamo messo appunto nel P&L, per cui questo vuol dire che daranno certo contributo, ma a seconda del livello di performance dei mercati finanziari nel secondo semestre del 2026.

Speaker #2: In our estimation this could have an impact that is of course quite significant but still not concerning compared to what we put in our in our budget in our in our plan.

Speaker #4: Sulla seconda domanda, riguarda il business salute, e dunque c'è un punto che devo fare: consideriamo la tendenza del premio. In questo caso erano abbastanza deboli nella prima metà dell'anno, perché?

Speaker #4: Perché la performance della bancassicurazione e anche delle agenzie è stata una performance molto alta, ma per quanto riguarda il contributo alla premialità totale, questi due componenti non rappresentano ancora la maggior parte dei premi della società, nel senso che il componente più importante è proprio il corporate, cioè il grande contratto che abbiamo con un grande istituto che nella prima metà dell'anno è riuscito a crescere mid-single digit.

Speaker #2: So in the plan the overall amount that we are expecting for NATCAT events both on motor rudder damages and property is around 550 million euros.

Speaker #2: And we think that we are we are on track to stay in this amount or lower. The second question is about the underwriting underlying trends in non-life generally of course when you it comes to motor third-party liability the price momentum is going down on the market and this is something that is true also for us in the price increase is lower than the previous year.

Speaker #4: Quindi ci aspettiamo una ripresa, un'accelerazione nella seconda parte dell'anno, e questa sarà la conseguenza della possibile acquisizione di questo nuovo contratto. Per quanto riguarda la redditività, dunque, vi ricordo che è stata molto elevata, molto forte, e ci aspettiamo peraltro anche di mantenere questa stessa tendenza, direi, durante tutto l'arco di vita del piano industriale, per cui seconda metà del 2026 e poi tutto il 2027.

Speaker #2: In the region of 2% and as you have seen in the first half the motor combined ratio is slightly worsened but the motor third-party liability is exactly the same level of combined ratio.

Speaker #4: Molto bene, grazie. Prossima domanda: Michael Hutner, Berenberg, prego. Grazie. Spero mi sentiate bene. Cerco anche di spegnere il ventilatore. Complimenti per i risultati fantastici.

Speaker #2: And the worsening is related to NATCAT events on motor rudder damages. So this is for the motor business. Non-motor has become quite profitable for the market.

Speaker #4: Due domande da parte mia, che appunto mi vengono anche ascoltando il vostro concorrente, che ho appena ascoltato. Ci potete commentare i risultati di luglio, innanzitutto, e poi le tendenze non Vita, per cui Danni, quindi questo equilibrio che c’è, come dire, tra inflazione da una parte, ma anche il pricing, cioè ciò che intendete fare a livello di pricing nel prossimo futuro?

Speaker #2: This means of course the price momentum is changing and in some cases for instance in general third-party liability the whole market is decreasing the amount of premium written that is of course due to the fact that after years in which general third-party liability was quite a problematic type of business nowadays has become really profitable and so the market has become softer the price are decreasing and of course also the overall amount of premium written and this is true also for us as you can see our business now that was not increasing is general third-party liability.

Speaker #4: San Pietro. Michael, buongiorno. Dunque, la prima domanda riguarda appunto luglio con gli eventi NATCAT. Allora, come evidentemente hai visto nell'H1, nel primo semestre, quindi la quantità totale di perdite NATCAT non è stata preoccupante.

Speaker #4: Thank you. Thank you.

Speaker #1: The next question comes from Antonio Gianfrancesco with Intermonte. Please go ahead.

Speaker #4: Nel senso che siamo arrivati a circa 150 milioni di euro. Poi però, in luglio – questo succede ormai solitamente all'Italia, alla Francia, alla Svizzera, alla Germania – tra il 15 e il 20 luglio anche quest'anno abbiamo avuto alcuni eventi pesanti, meteo, e quindi, secondo le nostre stime, questi eventi potrebbero avere un impatto.

Speaker #4: Yes, good morning and thank you for taking my questions. I have three. The first one is on the agreement we think is a San Paolo for the acquisition of the Banca Montepaschi carve out because I was wondering if you could if you could help us to understand how fixed the agreement we think is at this stage.

Speaker #4: If in case I were to revise the terms of its offer of Montepaschi should we assume that the terms of the agreement between in case and Unipol on Montepaschi carve out are fully locked or could there be any risk on changes in price perimeter or other condition that could be less favorable for Unipol.

Speaker #4: Sì, un impatto significativo, però non è ancora preoccupante, almeno in confronto a quello che abbiamo scritto nel nostro budget e fatto nelle nostre previsioni.

Speaker #4: The second one is on the dividend policy. Because I was wondering if you could give us a bit more color on dividend policy after the very strong capital generation you delivered in the first half.

Speaker #4: Quindi nel piano l'ammontare totale che ci aspettiamo per eventi NATCAT, ma anche per i property e anche motor damage, siamo sui 550 milioni di euro e, sì, sapendo che insomma siamo sulla buona strada, come dire, per poter rimanere all'interno di questa forchetta, se non appunto più in basso.

Speaker #4: You already generated 300 million of excess capital in this first half on top of the half billion in full year 25. So given the approval of capital increase and the consequent higher number of shares should we think that you your ambition is to manage a stable or growing DPS year after year including 26 on 25 and 27 on 26 and this also even before the first material synergies from Beper Montepaschi combination start to be to be visible.

Speaker #4: Seconda domanda. Questa tua domanda riguardava appunto le tendenze, diciamo, soggiacenti, sottostanti per quanto riguarda il Non Vita, quindi il Danni. Fondamentalmente, quando si parla di responsabilità TPL, devo dire che c'è questo impeto che sta un po' perdendo vigore sul mercato, e questo succede anche per noi, perché appunto l'aumento prezzi è comunque stato più basso dell'anno precedente: siamo sul 2%.

Speaker #4: And the third and last one is on corporate structure because I was wondering if you could give us a qualitative sense on how you think about the medium long term corporate structure because in theory once Beper and Montepaschi carve out are combined a bank lead holding inversion could be a way to improve capital efficiency.

Speaker #4: E poi, come deve aver visto, in effetti nell’H1, nel primo semestre, il combined ratio auto è appena appena peggiorato. È però vero che il TPL invece è esattamente allo stesso livello del CR, del combined ratio, per cui il peggioramento ha a che fare proprio con, ripeto, i danni e NATCAT.

Speaker #4: In that case obviously considering the current shareholder situation this let's say action could be dilutive for current main shareholders of Unipol. Also making the financial conglomerate exposed to takeover risk.

Speaker #4: Questo per quanto riguarda il business auto. Sul non auto, quel settore è diventato abbastanza redditizio per il mercato, perché appunto questo impeto che c'è riguardo al pricing sta cambiando, come dicevo prima, e per quanto riguarda appunto la TPL, le terze parti, è tutto il mercato, in effetti, che sta scendendo e sta riducendo la quantità di premi scritti, sottoscritti. Perché?

Speaker #4: So do you think that the more realistic path is first to increase progressively the stake in the combined bank over several years before any structure change could be considered?

Speaker #4: Thank you.

Speaker #2: Thank you. Thank you to you. The first question regards the agreement with with Intesa Sanpaolo that we disclosed when we did the conference call in the early of of June.

Speaker #4: Perché dopo anni e anni in cui la TPL è stata una linea di business problematica, adesso la TPL è diventata veramente molto redditizia, e questo vuol dire che il mercato, insomma, si è ammorbidito, nel senso che il prezzo sta scendendo e si riesce a generare la quantità totale, appunto, di premi.

Speaker #2: The agreement of course remain the same as we said before we have a cap in the acquisition of the carve out that is 3.5 billion.

Speaker #4: E questo vale anche per noi, peraltro, come puoi vedere dai numeri che in effetti non stanno aumentando. Questa è la situazione, appunto, per noi del TPL.

Speaker #2: Once reached this cap we are protected by by the cap. And so any decision that Intesa Sanpaolo will take in the offer will follow the what is contained in the agreement.

Speaker #4: È molto chiaro, grazie. Prossima domanda. Antonio Gianfrancesco, Intermonte, prego. Buon pomeriggio, grazie per questa opportunità. Dunque, io avrei tre domande. La prima è la seguente e riguarda l'accordo con Intesa Sanpaolo per l'acquisizione del carve-out, ma Banca Montepaschi.

Speaker #2: That means that we will pay half of the multiple that Intesa Sanpaolo will pay for for for Intesa for Montepaschi kept at 3.5 billion.

Speaker #4: Mi sembra infatti che sto chiedendo: è possibile per cortesia capire un pochino meglio com'è l'accordo con Intesa in questo momento? Cioè, se Intesa dovesse cambiare l'offerta o i termini, le condizioni, con Montepaschi, queste condizioni tra Intesa e Unipol sul carve-out Montepaschi potrebbero cambiare?

Speaker #2: And this is this is the point. Concerning the the dividend policy we have a new floor at 930 billion that is that was the 800 million that we disclosed before considering the capital increase that we think to be able to execute within the end of of the year.

Speaker #4: Cioè, ci potrebbe essere qualche rischio in questo momento di cambiamento? Come dire, di prezzi o di perimetri? In sostanza, condizioni meno favorevoli per voi di Unipol?

Speaker #4: Domanda numero due: politica di distribuzione dei dividendi. Mi sembra infatti che stiate chiedendo: è possibile qui avere qualche informazione in più su questa policy dopo questa fortissima generazione di capitale che avete ottenuto nel primo semestre?

Speaker #2: And this will be the floor for for the future. Having said that we also gave some numbers of the of the net profit that we could do once we will become hopefully a conglomerate taking the control of Montepaschi and Beper and put together having the control of of Beper.

Speaker #4: Avete già 300 milioni di euro di capitali in eccesso nei primi sei mesi, oltre a tutto quello che è stato fatto appunto nel 2025, per cui, vista l'approvazione dell'aumento di capitale e anche i numeri più elevati di azioni, dobbiamo allora pensare che la vostra ambizione consista nel gestire un DPS anno dopo anno stabile, se non in crescita, compreso '25-'26, ma anche '26-'27?

Speaker #2: With a total profitability close to 2 billion. And so you can do your math in order to understand which could be the possible dividend policy that we could implement in the future assuming that 930 billion is the is is is the floor.

Speaker #4: E ci saranno queste sinergie materiali B per Montepaschi? Perché queste sinergie potrebbero diventare visibili. Terza domanda: struttura aziendale. Ci può dare qualche informazione, qualitativa, su cosa pensate a medio e lungo termine per la struttura corporate?

Speaker #2: Concerning the third question as you correctly said our ambition within the next the next future is to execute the the transaction that we disclosed in the early of June that means to create a big financial conglomerate that will have an insurance leg and a banking leg of the same contribution in terms of in terms of profitability.

Speaker #4: Perché, in teoria, una volta combinato il carve-out B per Montepaschi, ci potrebbe essere una modalità per migliorare l'efficienza di capitale. In questo caso, considerando l'attuale situazione dell'azionariato, questa, chiamiamola azione, potrebbe essere diluita per gli attuali azionisti, appunto, di Unipol.

Speaker #4: Senza considerare, appunto, il rischio di copertura. Morale: andrete ad aumentare progressivamente la quota nell'arco di alcuni anni, prima di cambiamenti strutturali? Grazie. Bene, grazie a te.

Speaker #2: Our ambition is to to to be to have a stake more than than 30% in the new financial entity. And then depending on our capability in terms of capital generation we look forward over time to increase the stake if we will have the capital to do it.

Speaker #4: Allora, prima domanda, la terza. L'accordo appunto con ISP, con Intesa Sanpaolo. Dunque, ne abbiamo fatto disclosure proprio nel momento in cui c'è stata la conference call, questo all'inizio di giugno.

Speaker #4: Allora, l'accordo rimane immutato, rimane lo stesso, quindi, come dicevamo prima, abbiamo un cap, un tetto massimo per l'acquisizione del carve-out. Si tratta di 3,5 miliardi di euro, quindi una volta raggiunto questo tetto, questo cap, siamo protetti dal tetto stesso, nel senso che ogni decisione che Intesa Sanpaolo, che ISP, possa prendere a livello di offerta seguirà esattamente quello che è scritto nell'accordo.

Speaker #2: And consequently any possibility of inverse merger is not is not on the table today because as you correctly said we'll it it would change quite radically the the the the structure of the shareholding of of the company and it is a decision of the shareholders of of of the company and it is the shareholder meeting that has to take this kind of of the of the decision.

Speaker #4: Questo vuol dire che noi pagheremo metà del multiplo che Intesa Sanpaolo pagherà per Montepaschi e, in questo caso, il cap, lo ripeto, è 3,5 miliardi.

Speaker #2: So it is completely premature to think about this this possibility.

Speaker #4: Dunque, okay, questo è il punto, è la situazione attuale. Domanda numero due: politica che riguarda i dividendi. Dunque, in questo momento abbiamo low floor che, appunto, dicevo prima essere 930 milioni; erano gli 800 di cui abbiamo fatto precedentemente disclosure, considerando però l'aumento di capitale che secondo noi potremmo raggiungere da qui a fine anno.

Speaker #4: Very clear. Thank you.

Speaker #1: The next question comes from Andrea Lisi with Equita. Please go ahead.

Speaker #5: Hey, good afternoon. Thank you for taking my my questions. The the first one is related to what you have already stated in the previous answer.

Speaker #5: So the fact that you are willing progressively to increase the stake in in Beper also potentially from the kind of close to 30% at which you will end up following the transaction if successful.

Speaker #5: In particular we know that you have the realty position in particular you have entered into 4.9% revenue in on Beper capital at the beginning of June if you can provide us some update on your expected capital impact if you were to convert this derivatives right now.

Speaker #5: So the part on solvency if you have any indication on that. The the second question is on excess cash. We have seen that you are ahead of the plan and the 1 billion target by 2027 is more than visible.

Speaker #5: You have indicated in in in the plan that this could would use or for growth or to be returned to shareholders. Just wondering if the approach used this excess cash has in some way changed with the potential transaction in place regarding Beper Monte Unipol Beper and Montepaschi.

Speaker #5: And really last one is just if you can provide us the most recent market to market regarding the value of the SpaceX stake. So if we were today relative to what has been an indication at the 30th of June what have been the the value or the impact on on financials.

Speaker #5: Thank you.

Speaker #2: Thank you to you Andrea. So the position in Beper today is physically we own a little bit less than 20% of stake and on top of that we have 10% of of of derivatives.

Speaker #2: The 20% physical stake is as these two component have completely different impact on the capital in the sense that today we consolidate at equity Beper having 20% physical stake on on the shares.

Speaker #2: On the opposite 10% investment that we have in derivative are considered as an equity investment in terms of contribution to capital. Of course if you convert the five the 4.9% from derivative to physical the impact would be quite important as you as you know because we we say this several times we don't have the reverse Danish compromise and for for for this reason and this is a completely unfair position for us compared to what is the treatment of for the for banks having having a stake of of of insurance having 5% of stake in physical stake in in the bank is a very is very hard and means almost 30 points of impact in terms of capital position.

Speaker #2: So you can understand that for us capital is very important because this capital is put at work at a very high profitability but it is a lot of money compared to what you would invest if you were a bank investing in an insurance in an insurance company.

Speaker #2: Considering the excess capital that you mentioned yes we are on track to over deliver the target of the industrial plan but we have already an idea to put at work this capital that is the the acquisition of the carve out of of Montepaschi.

Speaker #2: Of course with the 2.5 billion of capital increase that we hopefully will execute within the end of of of the year. So we need this organic capital that we create in order to be able and to be in the position to have a very solid capital position to finance the the the the transaction.

Speaker #2: Finally SpaceX today at at 30th of June it was 200 million of unrealized gain. Today it is almost half of that. But it it changed on a daily basis.

Speaker #2: So it is a very volatile a very volatile investment and as I said for us is not strategic and depending on market condition we don't think to to to take this investment for a very long time.

Speaker #5: Thank you very much.

Speaker #1: The next question is a follow-up from Michael Huttner with Berenberg. Please go ahead.

Speaker #4: Thank you very much for this opportunity. It was just one question. You you mentioned in your remarks that the life profit growth which was fabulous came both from investment margin and the technical side.

Speaker #4: I just wondered if you could explain a little bit more on on the technical side what this means and what it could also mean going forward.

Speaker #4: Thank you.

Speaker #2: Yes Michael was was both of that. If you go if you go to the presentation you can see that we worked very hard in order to improve the yield of the segregated portfolios.

Speaker #2: By increasing them quite consistently from 3.35% to 3.43% gross. Of this number we debated the policy holder 2.35% that is a net yield that is very competitive with what you can get from the treasury market of other alternative investment and we keep for us 1.08% by increasing by two basis point the profitability of the technical profitability of the of the investment products.

Speaker #2: On top of that we increase the profitability also in other kind of product categories like for instance the term premium that was very important and on top of that also the investment income gave a quite significant contribution to the total profitability.

Speaker #2: So all the driver of the business line of life gave a very positive contribution to the profitability on life and this is the reason why the number were very very strong in the first half.

Speaker #4: Brilliant. Thank you.

Speaker #1: The next question is from Elena Perini with Intesa Sanpaolo. Please go ahead.

Speaker #3: Yes hello everyone and then thank you for for taking my my questions. The first one is just a a follow-up on this last on this last question about life.

Speaker #3: Considering all what you have said should we expect life to incorporate a better run rate going going forward because if we look at the the CSM release we are at approximately 140 to 150 million every six months.

Speaker #3: So on top of that we have this the financial income and it seems that the the running yield is going quite well. Then the second question is on the trend on your solvency ratio of the insurance perimeter.

Speaker #3: Which was very high 290% and an increase of 11 percentage points compared to the end of 25 but a decline if I remember well of 5 percentage points compared to March.

Speaker #3: I don't know if you can elaborate a bit on the the moving parts in this second quarter. Thank you very much.

Speaker #2: Thank you to you Elena and concerning life insurance the answer is you can consider recurring the component related to the operating profitability improvement. Of course not for the contribution income that was positively affected by very strong performance of financial market in the first half of the year in particular in the second quarter of of of the year.

Speaker #2: On the other side the improvement that we had in the technical profitability in the investment product and in the term in the term premium product could be considered as as as recurring.

Speaker #2: In terms of solvency at the moment I can't explain the the the the involution that you mentioned of the the insurance group from the 30th of March to the 30th of June but I expect this to be related to the increase of the investment that we did in BPER over time.

Speaker #2: But then with Alberto Zoya we will go going deep more in the number and I will revert to you. The improvement generally of the solvency ratio is due to the capital generation contribution coming from the usual business.

Speaker #2: Of course on one end we had also in the second quarter of the year the approval of a component of the partial internal model that concerning the NATCAT exposure that gave a contribution positive contribution of 4 percentage points and then we deducted the expected dividend that we will pay in for the 2026 and we deducted also the investment that we did in BPER after the execution of the merger with Banca Popolare di Sondrio in order to come back to less than 20% that is the number at which we are authorized to be.

Speaker #3: Okay thank you.

Speaker #1: For any further questions please press star and one on your telephone. The next question is a follow-up from Michael Huttner with Vorenberg. Please go ahead.

Speaker #4: And I it's just such a great opportunity. I'm I'm sorry to to keep you on the phone. The I was discussing with with with an investor the difference between you you know your market leader in Italy incredibly focused that some of your peers are more diversified and and the only difference I could think of was because you you probably have to pay more for reinsurance or you less diversified in a way.

Speaker #4: I I just wondered if you can give us a feel for the it's now benefit reinsurance costs are coming down. Are we seeing this in our numbers or should we start seeing it next year?

Speaker #2: Hi. So Michael the overall issue about the cost of reinsurance is not only about geographical diversification of your exposure but it's about of course the quality of your portfolio the quality of information you provide and of course your underwriting strategy that allow reinsurance to to to offer better prices.

Speaker #2: Market reinsurance market is soft has become to reduce prices also in already in the in the last renewals in 2025 Iran and the the the market sentiment is about further decrease in the reinsurance cost of course unless some events that can change this kind of momentum.

Speaker #2: So so far I think that this will this is quite probably happening. And I think that you can also see in our reinsurance result something that is improving compared to the previous year because of course we were able to to to reduce prices.

Speaker #2: And at the same time also to strengthen the level of our cover.

Speaker #4: Brilliant. Thank you very much.

Speaker #1: As a reminder if you wish to register for a question please press star and one on your telephone. Gentlemen there are no more questions registered at this time.

Speaker #2: Okay thank you very much for attending this conference. Have a good vacation for who of you will go on on holiday. And we will meet again in November for the September results.