Good day, and thank you for standing by. Welcome to the ASR FY 2024 Results Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be the question-and-answer session. To ask a question during the session, you need to press star one one on your telephone keypad. You will then hear an automated message advising your hand is raised. To withdraw a question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to our first speaker today, Michel Hülters. Please go ahead.
Thank you, Operator, and good morning, ladies and gentlemen. Thank you for joining us today, and welcome to the ASR Conference Call on the FY 2024 Results. On the call with me today are Jos Baeten, our CEO, and Ewout Hollegien, our CFO. Jos will kick it off with the highlights of our financial results and a brief update on the progress that we have with the integration of Aegon, and he will discuss the business performance. Ewout will then talk about the developments of our financials, the capital position, and our solvency position. After that, we will open up for Q&A. We have ample time planned for this call, but we will stop sharply at 10:30 A.M. Please observe a limit of only two questions, so everybody has a chance to ask their questions.
And finally, as usual, please review the disclaimer that we have in the back of the presentation on any forward-looking statements. So I haven't said that, Jos. The floor is yours.
Thank you, Michel, and good morning, everyone, and thank you for joining this call. I'm happy to kick off the Benelux earnings season, especially with the strong set of results that we announced this morning. As I mentioned to the team this morning, do we really need to have this analyst call? What is not to like about these results? They convinced me to continue. Commercially, momentum remains strong. Financial and operational performance is right where we want it to be, maybe a touch better, actually. We are clearly delivering on the promises that we made at the CMD last year.
I will start this presentation with looking back at the promises we made at our Capital Markets Day in June last year, after which I will go through the financial highlights, our ESG performance, the integration progress, and business developments before handing over to Ewout with a deep dive into solvency and the financials. A smooth and successful integration of Aegon NL businesses is, of course, one of our key priorities. All 2024 milestones have been achieved. We're really pleased with the progress that we are making, and this bolsters our confidence in the successful integration. This enables us to accelerate a part of the projected capitalized cost synergies. We're fully on track to implement the live PIM by the end of this year and to realize the strategic targets such as the cost synergies and OCC uplift for 2026.
Secondly, we outlined our plans to deploy capital and pursue profitable growth. We continue to see strong commercial momentum in all business lines, with an organic growth in non-life exceeding the target range and strong inflows in pensions. We also announced our first pension buyouts, where we see a strong pipeline going forward and reaffirm our EUR 8 billion assets under management target in the coming years. And thirdly, delivering attractive capital return for our shareholders. Dividend per share is up 8% compared to last year, driven by a 7% increase of absolute dividends and the execution of the EUR 100 million share buyback on the back of the bank sale in Q4. Total capital return over 2024 amounts to EUR 879 million, which translates to a 75% payout ratio of OCC. So, a very strong delivery on the promises that we made eight months ago.
Let's have a look at some other highlights. Our OCC increased despite the sale of Knab to almost EUR 1.2 billion, driven by strong business performance across all segments. Favorable claims development in P&C and elevated spreads, for instance, in mortgages, have been beneficial. The Solvency II ratio increased significantly with 22 points to 198%, reflecting the strong OCC contribution supported by the sale of Knab and accelerated 6 points capitalization of cost synergies. This 198% includes the impact of the EUR 100 million share buyback, which was completed in December, but not yet the EUR 125 million that we announced today. It does include the 8% higher dividend per share, which amounts to EUR 3.12 per share. Our operating result increased with almost 50% to over EUR 1.4 billion, reflecting an overall strong performance of our businesses together with the additional six months of contributions of Aegon NL.
The operating ROE increased to 13.1% and continues to run well above our target level. Combined ratio of non-life, that is P&C and disability together, was 91.9%. This is an improvement versus last year and obviously ahead of our target range of 92%-94%. And importantly, we did this while growing our non-life premiums organically with 5.1% this year. So, very profitable growth. Additionally, we see a solid increase in pension DC inflows and annuities as well. That, together with the first pension buyout announcements, shows that we are well on track to deliver our CMD growth targets. Let's turn to slide four and see how we are progressing on our non-financial KPIs. As we strive to create sustainable value for all our stakeholders, achieving our non-financial targets is important. We continue to be recognized as a sustainable insurer.
The development of ASR reputation as a sustainable insurer has risen to 39%. This is within the target range of 38%-43%, and this was, among others, supported by our campaigns focusing on sustainable damage repair. The carbon footprint of the investment portfolio decreased by 5 percentage points, and we are making good progress with our impact investments, which now represents 8.7% of our investment portfolio, leaving us well on track to reaching our non-financial goals for the investment portfolio. Our KPIs on employee engagement and customer satisfaction have shown some expected decline due to the Aegon NL integration. We are confident that 2024 is a relatively low point on these metrics and will show improvement in the coming years. We already see some higher scores in our weekly EMOTE survey for employees.
Customer satisfaction remains strong despite our NPS-r score decreasing somewhat, but in line with the trend in the Dutch market. We see that our NPS-c remains strong and that in disability, we have been voted again as the number one disability insurer in the survey across intermediaries. Our compelling ESG profile remains acknowledged by a broad range of international ESG indices and benchmarks. This was confirmed by the inclusion in the Dow Jones Sustainable World and Europe Indices for the third consecutive year, as well as a recognition from various other leading ESG benchmarks. Overall, we are very pleased with our performance and the value we create for all of our stakeholders. Let's move to the integration milestones. We're halfway done with the integration and are fully on track to achieve the EUR 215 million cost synergy target in 2026.
At the investor update of November 2023, we talked about the cost synergies being split across three main categories. 50% would come from staff-related initiatives, 30% from IT, and 20% from others. Within staff, we are more than halfway done, reflecting a strong reduction in FTEs already, with further synergies to be realized as the integration progresses. The synergies from IT system are naturally more back-end loaded in an integration, given that the IT decommissioning is usually the final step after migrating portfolios and making sure that everything runs smoothly on the target operating system, and we have made a lot of progress towards decommissioning systems from the Aegon IT landscape and reducing the dependencies. The synergies from the other category reflect a number of different actions, from legal mergers to closing of offices, which is now largely done.
For 2025, integration milestones are set for the business lines, individual life, and mortgages, and of course, the implementation of the partial internal model for ASR Life. In 2026, we expect to finish the integration activities within pensions as the final business line. All in all, the integration is well on track, and our confidence is also visible in the accelerated capitalization of cost synergies. With the six percentage points impact from capitalized cost synergies in 2024 on top of the 3% in 2023, we have now already capitalized 75% of the earlier guided 12 percentage points uplift in solvency. Let's talk briefly about the status of the unit-linked file on the next slide. We are pleased to announce that the unit-linked file is definitely behind us. In 2023, ASR took the lead in devising a solution for this issue, which has been affecting insurers for too long.
We were the first insurance company to achieve an agreement on a final settlement with the various claims organizations, and with that, we basically have created the standard for the entire industry, and today, we are the first insurance company to announce that we have reached 90% support from all affiliated claimants. This means that the final settlement agreement will be executed as presented in November 2023, so all active collective legal proceedings will be dropped, and we can start paying out the final settlement for which we are already adequately provisioned. We can now also move forward with the non-affiliate claimants in the coming months. That being said, let's look at our different business lines and their performance. I'm pleased to see our premiums received in P&C and disability increased with over 12%, reflecting a strong organic growth and additional six-month contribution of Aegon Netherlands.
Organic growth of 5.1% exceeds our medium-term target of 3%-5% and was mainly driven by tariff adjustments and increased sales volumes in P&C. Combined ratio of our P&C and disability business combined improved with 1.7 points to 91.9, which is better than our target range of 92-94, so we're outperforming both on growth and profitability, absolutely maximizing our total profits. The combined ratio of P&C improved by almost three points, supported by the absence of weather-related claims and lower number of large claims. In disability, the combined ratio improved 0.5 points, driven primarily by a strong business performance in group disability. Combined ratio of our health business stands at 99.1%, stable compared to last year. In 2024, our premiums in health declined due to the loss of 175,000 customers for the 2025 renewal season, which ended at midnight of the 31st of December.
We see a net increase of 70,000 customers. So, let's move to the life segment on the next slide. We're very happy with the solid commercial performance in our pension products. Our pension DC inflow of EUR 2.8 billion benefits from the developments in the pension market due to the pension reform, as well as the addition of the Aegon DC products. The pension DC assets under management increased with more than 20% to almost EUR 27 billion, partly reflecting positive revaluation of the investment portfolio. We see a growing premium volume from annuities as a result of the conversion of DC accumulation and the addition of Aegon NL. The majority of annuities inflow comes from converting expiring DC assets from our own book, complemented by external inflows. Around 90% of the annuity inflow relates to fixed annuities, which, as you all know, is spread business.
This puts us well on track to reach EUR 1.8 billion of annuity inflow cumulatively in the planned period. In the pension buyout space, we continue to see strong interest in the solutions that we offer, and we have already received quite a number of RFIs and RFPs. So far, we have announced two buyout deals of in total EUR 1.7 billion of assets under management. While decision-making in these processes tends to take a lot of time, we have a very healthy pipeline and remain confident that we continue to report progress on this target later in 2025, after that to reach to our EUR 8 billion targets by the end of 2027. So, let's move to our fee-based business. We've seen a strong increase of 45% in the fee income of both the asset management and distribution services businesses, reflecting business growth and the additional six-month contribution from Aegon Netherlands.
In asset management, we see improved performance in all three product lines: asset management, real estate, and importantly, mortgages. The mortgage production increased by EUR 3.7 billion to EUR 9.2 billion, helped by increased market demand. Positive real estate valuation, as well as the additional investment by third-party investors, increased the fee income from real estate. Within our distribution and services, we see that our plan regarding a D&S holding structure, which we announced in the 2021 investor update, is bearing fruit, making it a more efficient operation and improving both top and bottom line. Since that time, we have acquired 20 smaller distribution companies, of which 11 in 2024, not moving the needle from an operational result perspective, but helpful from a longer-term perspective as it enhances our footprint in the distribution space. The operating result increased with EUR 39 million to EUR 150 million.
This is ahead of our CMD target because we classified the additional investments in TKP related to the pension reform in the meantime as incidental outside the operating result. From this level, we expect stable results with the loss of fee income related to the mortgage administration that will transfer to BAWAG in 2026 to be compensated by improved business performance and, of course, synergies. Let's have a look at our capital return before I hand over to Ewout. Going back a little bit in time to the Aegon NL transaction announcement in October 2022, we did a step-up by 12% in dividend per share before we actually closed the deal, and Aegon NL would contribute to our results. Since then, we have been growing our dividend with 7% per annum or higher if you include the share buybacks. For 2024, our full dividend will be EUR 3.12 per share.
This is an 8% increase year on year, also reflecting the impact of the EUR 100 million share buyback that we completed in December after the Knab closing. Together with today's announcement of another EUR 125 million share buyback to be executed in the next three months, our total capital distribution related to 2024 will amount to EUR 879 million, reflecting almost 75% payout ratio of our OCC. Based on our market cap at the end of 2024, this EUR 879 million represents a whopping 9.2% of capital return yield. For the coming years, we maintain our progressive dividend policy of growing our absolute dividend mid- to high-single-digit and our share buyback program of EUR 175 million over 2025 and EUR 225 million over 2026, and we still have the intention to participate if and when Aegon Limited would decide to sell down their stake in ASR.
We're willing to accelerate the existing SBB program if needed. We believe that reserving for some firepower of our balance sheet for the event of these sell-downs is really to the benefit of all of our long-term shareholders. Now, I will hand over to Ewout, and he will be talking enthusiastically about our capital position and final financial details.
Yes, thank you, Jos. I will try to be very enthusiastic again. Good morning to everyone on the call. I think one could say that in front of you, you have a very proud CFO. Thanks to all our colleagues in the organization, we have realized our commercial ambition, we have reached the financial goals, and our balance sheet is strengthened materially. On top of that, the risk profile of the organization significantly improved in H2. We have made strong progress on the integration.
The unit-linked file is now closed, and we had a positive advice on CPI Plus from the High Court, opening the door for valuation improvements in residential. Happy to talk you through underlying developments starting on slide 12, and I'm sure you will remember this chart on the left from my presentation at the Capital Markets Day. It reflects our view, ASR's view about capital. The starting point of the capital wheel is a strong balance sheet that provides capital to deploy, which in turn delivers profitable growth and creates new fresh capital. This can then be used for capital return to shareholders and to further bolster the balance sheet, and we do the rounds again. With the performance presented today, one could say that our capital wheel is spinning.
We have strengthened the balance sheet as planned with the sale of the bank and the capitalization of a large part of the cost synergies. The capital that we deployed in growth in pensions, non-life, and the re-risking of the investment portfolio resulted in an OCC of almost EUR 1.2 billion in 2024, a bit better than anticipated. We are really well on track to get to the target of EUR 1.35 billion in 2026. Finally, we have increased dividends and share buyback, resulting in a DPS accretion of over 8%. Combined, we are returning almost 75% of the OCC that we generated in 2024. As Hannibal in the A-Team used to say, "I love it when a plan comes together." Let's have a look at the developments of our solution in 2024. Over the past year, we have been able to significantly strengthen our balance sheet.
Our solvency now stands at 198%, providing ample flexibility for deployments. The 198% means an increase of 22 solvency points compared to last year. Let's have a look at the main drivers. As you all know, the sale of Knab added solvency points, 17 solvency points. Our level of capital generation delivered another 19 percentage points to the solvency, and we will talk about this later on. The capitalization of cost synergies added six solvency points, leaving roughly three solvency points on the table for the next two years, and the acceleration of cost synergies recognition is triggered by the progress in the integration and the higher level of confidence that this brings in achieving our targeted cost synergies. The cost synergies are part of the market and operational movements in the waterfall, which combined showed a net impact of minus 2 percentage points.
Next to cost synergies, this includes a small positive from revaluation of residential real estate, tightening of mortgage spreads compared to the full year 2023, and finally, a benefit from the harmonization of mortality rates of ASR with Aegon NL. These pluses were offset by a 5% impact of re-risking, limited negative impact from 50 basis points credit spread widening, including an offsetting effect of 3 basis points higher volatility adjustment, and lastly, the impact of lowering of the UFR to 3.3%. This altogether brings the solvency ratio to 211% before capital distribution to shareholders, and therefore 198% after dividends and the additional EUR 100 million share buyback that we executed end of last year, and the strong solvency is a good starting point for further deployment of capital, amongst other in buyouts.
We expect to close the announced EUR 1.6 billion buyout deal in the beginning of Q2, further bolstering our level of capital generation in 2025. Let's turn to capital generation on the next slide. OCC increased with EUR 319 million to EUR 1.193 million, mainly driven by strong business performance in non-life and fee-based business, the benefit from re-risking the investment portfolio, and the additional six-month contribution of Aegon Netherlands. Last year, we revised the mapping and methodology of our OCC to bring it even closer towards free cash flow and to closely align with IFRS 17 metrics. Firstly, business capital generation amounts to EUR 390 million, reflecting solid business growth and improved combined ratio in non-life, as well as the additional contribution of Aegon Netherlands.
Secondly, finance capital generation is with EUR 663 million, the largest component of OCC, reflecting higher excess returns being partly offset by higher finance expenses and a slightly higher UFR drag. The execution of our re-risking plan is gradually coming into effect and is expected to further increase OCC in 2025. Lastly, net capital release amounts to EUR 140 million and represents the release of capital from maturing books, as well as the capital strength from new businesses. Now, let's have a look at segmental OCC in the bottom graph of the slide. Segment life is the largest contributor to the OCC. This is consisting mostly of finance capital generation, reflecting the investment margin from the large investment portfolio, and further supported by the capital release from the run-off of the book. The non-life segment contributed EUR 273 million to our OCC, reflecting strong underwriting results in P&C and disability.
Since we are growing our non-life book and we have a growing health book in 2025 as well, the OCC is subject to a new business strain. A new business strain drives seasonality in our non-life business OCC, particularly from group disability and health, as you all know. Of course, we are very happy with the new business capital strain when it's positive because it brings future OCC as it leads to higher business capital generation and capital releases in the future. Taking everything into perspective, we are right on track to deliver on our 2026 OCC target. What are the major items on our radar screen if we look forward to the OCC for this year? Firstly, let's get the base to start from. Our 2024 OCC of EUR 1.193 million benefited from favorable weather and lower large claims in P&C.
Normalizing towards the middle of the combined ratio 92%-94% range would roughly mean EUR 30 million deduction from the reported OCC. So that brings us to a normalized level of 11.60% for 2024. In 2025, we would expect positive impact from four main buckets. We are growing the business. We are realizing synergies. We have higher excess returns from re-risking, but also from positive revaluation in real estate and equities. And the pension buyout, the EUR 1.6 billion buyout that we announced in December, will start to contribute as from H2, and other deals will contribute to 2025 OCC depending on the timing. In total, we expect that this will provide around, let's say, EUR 80 million-EUR 100 million uplift compared to the normalized 2024 OCC. So getting towards the EUR 1.25 billion level, well on track to deliver the EUR 1.35 billion in 2026.
On the next slide, I will bridge OCC to the operating result. Although there are many differences between solvency and IFRS, bridging the OCC to the operating result can, high level, be done in three steps. Firstly, when looking at business capital generation, the OCC is lower. This reflects the way we have to account for the timing differences in insurance profit recognition. As in OCC, insurance profits flow directly into the own funds at the moment of inception and in the operating results during the contract expiration via the release of the CSM. This effect is largest and mostly in the segment life, where new business contribution is heavily outweighed by the CSM release of the existing book. Secondly, the finance capital generation where OCC is higher.
Here, the biggest difference is from the high inactive liability accrual from the illiquidity premium, what we call within ASR, the LIP, under IFRS 17 compared to the VA solution, too. To give a sense, the LIP was on average 50 basis points compared to the 20 basis points of the VA. This difference is caused by a LIP based on the own asset portfolio, while the VA is based on the European reference portfolio of insurance. Among other markets, exposure is included in the LIP opposed to the VA. Thirdly, and that's actually the easiest part, namely adjusting for the net capital release, which is not presented in IFRS. Of course, operating result is pre-tax where OCC is the post-tax. Now, let us dive into the operating result on the next slide.
Operating result increased with 47% to 1,428, so almost EUR 1.33 billion of euros. We see a step increase of EUR 385 million in the operating result of segment life, reflecting the addition of Aegon Netherlands, the benefit from re-risking, and an increase in release of CSM. The total CSM of ASR increased by 10%, driving future profitability. The sharp increase is driven by the capitalization of cost synergies and the update of the mortality rates based on our own portfolio experience, aligning to Aegon methodology, and in non-life, as mentioned before, we have benefited from improved underwriting margin in combination with over EUR 500 million increased premiums. As Jos already mentioned, the fee-based business also shows strong results, and this is driven by increased fee income, resulting in an operating result of EUR 150 million for the full year 2024. Moving to the investment portfolio. This slide shows a high-quality investment portfolio.
I'll start with the sovereign portfolio and then also briefly discuss market spreads development and market circumstances for real estate. Sovereign portfolio, high quality, as you know, and well-diversified, mostly within European countries. Although spreads in our credit portfolio widened with 50 basis points, the solvency impact is partly offset by the countercyclical effect of the VA and the SCR effects from the partial internal model. On the top left on this slide, we show the development in our real estate portfolio. Especially the residential portfolio shows good momentum with a positive revaluation of 8% in 2024. The residential property is about half of our real estate portfolio. It's clear that the market, now uncertainty about CPI Plus is out of the way, appreciates the strong fundamentals in residential real estate. Our retail property also reported a solid increase as it appreciated 6%.
Rural accounts for about 20% of the portfolio. For the other real estate categories, we have seen small negative revaluation, but in total, a good year for real estate, leading to a revaluation of the total portfolio of about 5%. Lastly, turning to mortgage spreads, always a favorable topic to talk about. After extreme spread widening year-end 2023, the spread movements on reporting date during 2024 have been moderate. It is important to bear in mind that short-term volatility of mortgage spreads is uneconomical in the sense that it does not reflect a change of risk, but rather the timing difference between swap rates and the change in mortgage tariffs. As mentioned earlier to many of you, it is on our agenda for 2025 to look where we can adjust the methodology, making spread movements less volatile.
In any case, risk return on mortgages is unmatched compared to other asset classes, not only as a model outcome, but also because the mortgage portfolio remains of very high quality, low amounts of payment arrears, and eligible credit losses. To give you an example, the average loan to value amounts to 55% and 80% of the portfolio as an LtMV lower than 65%. Finally, when it comes down to the investment portfolio, it's worthwhile mentioning the execution of our re-risking plan. We optimized the sovereign bond portfolio where we shifted from triple-A rated bonds to more double-A rated bonds for additional spread. Moreover, we increased the exposure to equities, and we have invested around EUR 500 million in illiquids to catch up on this one with competitors without aiming to follow this trend materially. In total, we have invested five solvency points.
The benefits also because of the fact that we increased the exposure in equities. The benefits of re-risking will be further reflected in capital generation in 2025. Let's now have a look at the flexibility of the balance sheet on the next slide. In March last year, we issued a restricted tier one instrument to refinance the maturing tier two in September of 2024. By replacing the tier two with an RT1, we have rebalanced our headroom over tier two and tier three versus the RT1, enhancing our financial flexibility. And as you can see on the bottom right-hand side, our debt maturity schedule remains nicely staggered over time. Our financial leverage decreased to the comfortable level of 21.7% due to a higher equity value and the increased CSM.
Lastly, which we are very proud of, it's good to mention that the outlook for the S&P's IFS ratio has changed from stable to positive, awaiting a final decision. We are very happy that also S&P is appreciating the progress that we are making both strategically, financially, and from the risk profile perspective, and we are looking forward to monetize the positive outlook. Let's have a look at our HoldCo liquidity and remittances at the next slide. We have a very comfortable cash position. As you all know, we only remit enough cash from our entities to cover dividends, coupons, and HoldCo's expenses. Proceeds of the bank sale led to a lower holding cash remittance from our operating companies.
Especially the solvency ratio of Aegon Life increased significantly to the level of 194%, driven by excess OCC over remittance, positive revaluation on the large residential portfolio, and capitalization of cost synergies. Strong capital position at Aegon Life allows us to be an active player in the buyout market. And just as a final reminder, the solvency ratio of ASR Life and non-life are determined on the basis of standard formula. When everything runs according to plan, we implement the Partial Internal Model for ASR Life in H2 2025, which will further raise the solvency ratio. And with this, I would like to end my presentation and hand back over to you, Jos, to do an enthusiastic wrap-up.
Thank you, Ewout. And dear friends, this concludes our presentation. And before we take your questions, let me highlight a couple of key messages.
First of all, we achieved a very strong performance in all of our business segments, and our OCC is on track to achieve the medium-term target of EUR 1.35 billion in 2026. We continued a very strong commercial momentum, driving our organic growth, pension buyout pipeline, and overall sustainable value creation. Robust solvency ratio of 198%, supported by our strong OCC and the sale of Knab, makes that we are comfortably in the entrepreneurial zone and a positive outlook for the full 2025 with the introduction of the PIM for ASR Life by year-end. Finally, the integration of Aegon NL is halfway done, and we're well on track to deliver on the synergy targets. We are now happy to take any questions.
Thank you, dear participants.
As a reminder, if you wish to ask a question, please press star one one on your telephone keypad and wait for a name to be announced. To withdraw a question, please press star one one again. Please stand by. We'll compile the Q&A roster. This will take a few moments. And now we're going to take our first question. And the question comes to the line of Hadley Cohen from Morgan Stanley. Your line is open. Please ask your question.
Yeah, morning everyone. Thanks very much. A couple of questions, please. So firstly, on the buyback and the comments around it being completed by May 20th at the latest, I think that naturally begs the question around the prospect for more buybacks to come later in the year.
And I guess given the strength of your solvency and thinking about what may stop you from doing more buybacks, could be other opportunities for growth and what have you. Is it possible to talk about the pipeline that you're seeing in that respect and how we should think about that prospect more broadly? And then the second question is in relation to the PRT pipeline. I think previous commentary has sort of suggested that a lot of these transactions are expected to be back-end loaded, but it feels like things are coming through much quicker than you expected. Is that fair? And why do you think that's the case? And it'd be interesting to understand the competitive landscape in that environment right now. Thanks very much.
Thanks, Hadley. And first of all, congratulations.
Not only ASR made a step up in the results, but you made a step up in your career, so that's great to see and welcome back in the analyst environment. First of all, your question on the buyback. During the Capital Markets Day, we said that we will do the 125, 175, 225 in the following years, but we also made clear that we fully realize that if and when Aegon comes to the market with a sell down, that it could be helpful to adopt a part of that sell down, so that's still the case. If and when Aegon, for example, tomorrow they do their annual results, would announce that they would start, which we don't know, of course, that they will start a sell down, we're willing to fast forward to full 525 to adopt at least 10%-15% from such a sell down.
That's one. Secondly, we also made it clear that we look in two ways to our capital position. First of all, for the medium and long term, it is good to grow the business and to grow the potential for further uplift of OCC for the long term. And being active in the pension buyout market is one, but also the growing annuity market that we see is important. And we prefer to spend capital on that because that creates long-term growth. Having said all that, if we can't spend the capital, and if that would become clear this year already, if we can't spend the capital on growth or on other value creative opportunities, we're fully aligned with shareholders. If the return on ASR drops below the 12%, we're willing to look at further buybacks.
The preference is business and having a strong capital position if and when Aegon starts to sell down. To your second question, I can't remember that we ever said that the PRT market will be back-end loaded. Maybe others made that comment. We've been always optimistic on that market. I think the proof that optimistic approach is also a realistic one is that we for this year already onboard EUR 1.7 billion of assets under management. We have a very strong pipeline. As said during the presentation, the leeway for a final buyout is quite long. You start with an initial offering, then there comes a final offering, and then together with the pension fund, you have to go to DNB and they have to agree on the pension buyout.
I'm not going to put numbers on the pipeline, but if you have listened between the lines, one of the statements we made was that we expect that we also in 2025, we can further announce transaction in that area. It is and remains lumpy business, but we're optimistic that we can grab a nice part of that market, meeting the at least 12% return on invested capital.
I appreciate your comments. Thanks very much, Jos. Just very quickly following up on that last comment there, the competitive landscape more broadly in the PRT space. I mean, is it as competitive as you expected or you're not seeing that to the same extent?
We do see two important competitors being NN and Athora.
Given the fact that we were able to close transactions well in line with our return requirements, it is competitive, but not competitive in the way that we can't do deals. So we are fully able to do transactions and optimistic about it.
Understood. Thanks very much.
Thank you. Now we're going to take our next question. And the question comes to the line of Cor Kluis from ABN AMRO-ODDO BHF. Your line is open. Please ask your question.
Hello, good morning and congratulations with the good results. A couple of questions. First of all, on the real estate portfolio for the residential houses, I think you still value that at around 30% discount. And of course, historically, I think it was 20% discount. Can you update us a little bit on when that might be adjusted? I understand that it's dependent on transactions, etc.
If it would be adjusted from 30 to 20, what the effect on the Solvency II ratio would be? That's my first question. My second question is about capitalized cost synergies from the Aegon integration, which surprised positively in H2 last year. Could you, first of all, give us the effect on the cost effect on the own funds in the second half of the year or the full year? It's fine. Also, how much extra capitalized cost synergies will come in 2025 and 2026? So further Solvency II ratio enhancements are probably expected. My last questions about the acquisitions. Achmea is off the table now. There's not much big companies available anymore. Could you give us an update on potential acquisitions? Are you still seeing the whole array of possible acquisitions or did something change in positive or negative sense? That were my questions.
Yes, thanks, Cor. I think I will take the first two questions and Jos also answer the third one. Starting with the real estate. We were very happy actually with the 2024 development that we have seen in residential real estate, positive revaluation of 8%. And when we look to the dynamics behind it, we actually see that this is supported by higher house prices in the Netherlands. But we also see improvement in terms of transactions and the overall attractiveness of the investment category. Already in 2024, we have seen that it led to a positive impact on the solvency ratio. Having said that, we talked indeed in the past about the valuation gap between the rental value that we have on the balance sheet versus the value in the free market. By the way, not something that we determine ourselves.
It's done by external valuators that indeed look also to transactions. And what we actually see is that the valuation gap did not materially change. So we still see actually an uplift from the 70% that we see today towards the, let's say, around 8% that we have seen in the past. When we bring that to what is then the impact on the solvency? So let's say that we'll, given the fact that we have somewhere between EUR 4.5 billion and EUR 5 billion of residential real estate on the balance sheet, a 10% uplift, a tax deduction taken into account that you also have to hold more required capital. I think it's fair to assume that there's still a kind of potential for solvency points uplift from the revaluation of residential real estate.
If I have to put years on it, how long will it take before we see that coming through? It's always difficult because, like you said, transactions are the main driver for that. But let's say somewhere between one and two years. I think that is the best assumption to make today when we see the valuation gap closing. And then on the capitalization of the cost synergies, maybe to shed some light on it, what was the trigger of that? So as everyone knows, in your life segment, you have to include in the life reserves for expenses. Those are based on the expected cost for the whole term that we have life policies in our portfolio.
What we have seen already since the beginning is that the expected synergies by merging Aegon into ASR was in total 12 solvency points to our ratio after we have realized the synergy ambition. In 2023, we have recognized the first three solvency points awaiting evidence for successful integration. What we now see is that the progress that we have made in the integration, the high level of confidence that that brings in achieving our targeted cost synergies, yeah, that triggers an acceleration of the recognition of this benefit in our solvency ratio. When it comes down to what is the number of own funds contribution, I think that's roughly EUR 250 million-EUR 300 million. That would be my best guess of contribution to AOF. Your question was, what's the remaining? You also asked what is the remaining portion.
That's three solvency points is the remaining. Expect that to materialize somewhere in the next two years.
Okay. Thanks.
And Cor, to your third question, how does the M&A environment look like? Actually, our view hasn't changed during the last six months. We're still on the lookout for further M&A in the P&C business, but the leeway, especially with smaller companies and not always owned by rational owners, might take time. But we definitely expect that over the next couple of years, some of those companies will need to find a new ownership. There's a lot ongoing in the field of distribution and services. We still intend to grow our business there. On the other hand, pricing there is still on the higher side, and we want to remain disciplined. But even when we can do transactions there within our financial discipline, we're willing to.
In life, I think the life market is not yet ready. Some of the life players, and of course, you're right with your comment on Achmea, but some of the life players still need to do something. We remain on the lookout and optimistic that there might be opportunities over there.
Okay. Very clear. Thank you.
Thank you. Now we're going to take our next question. The question comes to the line of Farooq Hanif from J.P. Morgan. Your line is open. Please ask your question.
Hi. Thank you very much, everybody. Two questions. The first one, going back a little bit to Hadley's question on what's happening in pensions reform, could you also talk about the DC market? DC is growing strongly. Are you finding that there's more demand from corporates to look at an insured solution for the DC?
Can you just talk about what the kind of opinions are in the market around this? And secondly, a more technical question. So on slide 15, where you give that very helpful bridge between IFRS and OCC, can you talk about how the balance between the BCG and FCG line will develop over the next few years? Can we assume, like the slide suggests, that this will kind of neutralize? Thank you.
Farooq, there was some echo on the line. Maybe you can repeat the last question.
Sorry. So slide 15, can you talk about how BCG and FCG will develop in the next few years? Is it going to be roughly in balance like it was in 2024?
Okay. Thanks. Let me answer the first one. We actually do see an increased demand in pension DC due to the new pension law.
Every employer in the Netherlands has to reconsider how they will offer a pension solution to their employees, and what we now see, and that's why we also show significant growth in the DC market, what we now see is that the demand has increased. ASR is now the number one, number two in the pension DC and AuM market, and that's why we talk relatively optimistic about the future growth of annuities because every DC contract you have will turn into, at the end of the day, will turn into an annuity because people in the Netherlands can't take the full amount of money from the insurance company, but they have to buy an annuity, and there we potentially see further growth because some of the pension funds that offer solutions, their pensioners also may get the opportunity to buy annuities from insurance companies.
The combination of pension DC and annuities, we are optimistic that we are able to grow that business further. As said in the presentation, 90% of the annuities acquired now are fixed. That means that it is spread business. On spread business, we can make additional results. For your second question, I'm happy to hand over to Ewout. That was my expectation. The BCG and FCG, and I hope I answer your question because the line was not completely clear, but I think your question was, what do we think about the BCG and FCG development in comparison between operating results? What we see when it comes down to the business capital generation, also in the future, we expect that business capital generation is always a bit lower in the OCC compared to what it is in the operating result.
And the main driver for that is the recognition of profitability, where you see that in the IFRS 17, it's part of the CSM, and the CSM is released over time. So future profitability is released over time, while in Solvency II, you recognize it at day one. And that's the main differences why the business capital generation is lower than operating profit is. Then on the FCG, there we see that it's all that on the Solvency II. So on the OCC, it's always a bit higher than we actually see under the operating result. And that has everything to do with actually the illiquidity premium that we apply under IFRS 17, well, roughly 50 basis points, what I already mentioned in the call. While when you look to the volatility adjustment, that's always lower. And that is 20 basis points in 2024.
And it's always lower because that is a reference portfolio. While when you look to your own portfolio, and that's what you include under IFRS 17, there you also take into account, for example, mortgages, but also other types of investment categories that makes actually the spread on your own book higher than you actually recognize in your solvency position. Those are the two main drivers. When we look more to the development, hard to say, but I think what you actually will see is that over time, actually, it's both the operating profits, so the FCG on the IFRS 17 as well on the OCC will go up, for example, because of the buyouts that we see, also because of the re-risking that we do. And you see that both coming through the operating result as well on the OCC. That's one.
When it comes down to more the business capital generation, I think there you will see both the benefit of growing, for example, your non-life book also coming through both in the BCG as well in the operating result. So hopefully that answers your question, Farooq. But again, the line was not perfect.
Yeah, that does help. And anyway, I can ask about it tonight. So thank you.
Okay.
Thank you. Now we're going to take our next question. And the question comes to the line of David Barma from Bank of America. Your line is open. Please ask your question.
Good morning. Thanks for taking my questions. Firstly, on non-life, the P&C combined ratio of 89% was clearly helped by lack of weather in the second half. But how much would you say that benefited the ratio versus your average weather experience?
And also linked to that, I was a bit surprised to see that the top line in P&C grew only 1% in the second half versus the previous year, but maybe there's just seasonality after a strong first half. So if you can talk about that. And then secondly, on the IFRS results for the life business, which was very good in the second half, especially in the insurance service result component, it seems a big part of this is a reversal of the negative variance that we saw in H1. But could you explain maybe a bit more generally how we should see this 2024 operating profit for the life segment and whether it's a good underlying level? And then lastly, a small question on the re-risking of the asset portfolio. And how much did that support the OCC in 2024?
How are you tracking versus your EUR 30 million-EUR 50 million guidance? Thank you.
Okay. To your first question, David, if we would have a normal year with normal weather-related events and large claims, the combined ratio would go up with one percentage point. Sorry? With one percentage point. On the second part of your question, if we talk about growth, we talk about P&C and disability, and there we have seen a 5.1% growth. I think in your question, you included also the health segment, but that is the health segment is outside of our growth ambition. Our ambition is to remain stable. And as I said, last year, we had a decline in number of customers from 175,000, and that was corrected this year with an additional growth of 70,000. But in our communicated targets, we exclude always the health business.
Sorry, Jos.
I was just looking at P&C in the second half compared to last year. So you had a strong boost in 1H, but the second half didn't grow much, the P&C top line?
Well, in the second half last year, we included Aegon, the Aegon business, and that was included in the first half of this year for the second part. So I think you're comparing numbers, including and excluding Aegon business. But the real growth was 5.1%.
Thank you. Now we're going to.
I think, sorry, I think there were two other questions which I would love to answer, actually. So the second question that David had was on the negative experience, sorry. What we had in H1 was that in H1, there was a kind of straight thing that we also disclosed during the call.
And what we also said we are looking into solving that issue is that the way we dealt with that in the IFRS 17 is that when a policy lapses, then the fact that you don't have that premium in the future was actually running through the experience variance, while the fact that you don't have to pay future claims was running through the CSM. So there was a kind of strange way of how IFRS 17 worked. And we have worked on this topic and to actually solve that. And then you see that now we are dealing with it that when a policy lapses, it goes both through the experience variance, and then you don't have that negative P&L impact in the experience variance. That's the main differences that you see compared to H1, David.
Already during the call half a year ago, we told you. Yeah, we have said that we are working on this, and that's now solved and very happy because now you get a much cleaner number on what a real experience variance is. Then your third question was on the re-risking. How much did that contribute to OCC in 2024? It's roughly EUR 10 million because the majority of EUR 10 million-EUR 50 million, because the majority that we have done on re-risking is actually executed in H2. And then you see only limited, only one or two quarters of benefits from that. So the full benefit of the, well, the EUR 30 million-EUR 50 million that we have said still has to come through. And we already expect, let's say, around EUR 30 million if you also include the revaluation in 2025. Hopefully, that answers your question.
Perfect. Thank you.
Thank you.
Now we're going to take our next question. And the question comes to the line of Benoît Pétrarque from Kepler Cheuvreux. Your line is open. Please ask your question.
Yes, good morning. So the first question is actually on the pension reform. Yeah, we've seen a new proposal from NSC and BBB recently, basically pushing for votes from members. And yeah, I just wanted to get your feedback on that and what is currently the political move, let's say, likely political move from that, and also what you see from your, well, the pension funds you've been talking to, whether they postpone a bit or they actually don't care and they kind of accept the risk and still want to move on with that reform. The second one will be on the non-life. So last year, we discussed the big repricing, more than 10% in P&C in June.
I was wondering if you have a pipeline of repricing actions also in 2025 and if you executed something early, let's say in the early stage in 2025. And always the competitive environment also in P&C, you have a strong combined ratio. So yeah, I would expect maybe a bit more pressure from the competition, but of course on that. And just finally, yeah, just on the fee-based business, which was really strong, I think you mentioned one-off there. Just wanted to get the figure. But yeah, you seem to be very cautious still in terms of guiding for trading results and basically saying it will remain flat, although you have a very strong achievement in 2024. So I'm just wondering if it's not too much conservatism there. Thank you.
Okay.
On the first question, the political environment and what do we expect from the proposals that are done by NSC? My current view is, having talked informally to some other political parties, etc., that most of them are not willing to meet the requirements to make big changes in the already agreed law in Parliament. We finally have to see how that will play out. The request from NSC does come at a cost, and nobody wants to take up those costs, and it will create a lot of hassle in the pension fund. So my personal expectation is that it will create some discussion in Parliament, but at the end of the day, that a change will not be applied to the pension law.
The way most pension funds have reacted is actually that it is impossible to do it in the way NSC requires, so give people voting rights, etc. It doesn't hold them back from working towards implementing the new pension law. Specifically, if I look at the pipeline we have, it even might play out a little bit positive because instead of entering in all the hassle to bring over the collective obligations to individuals, some pension funds may think, well, it's better to hand over to an insurance company and that they run off based on a fixed agreement. It may play out a bit positive for the insurance industry, but that's not certain yet. That's more of the feeling that we have about it today.
And then your second question was on the pricing dynamics in the P&C, but maybe you want to reflect on that.
Yeah.
So what we have seen, so I think we have discussed it lengthily, is that by in May, June, that we started to increase prices, especially on the motors, quite material, double-digit number. And we are now actually executing it. So every month, you do kind of on renewal date, you do a part of those policies. And actually, we don't lose customers by increasing premiums. We also see large competitors doing actually the same. Also, for the next year, we still see premium increases by competition. And we are currently looking at what we believe is needed for our book to further price increases.
But we are currently still on the path of increasing the premiums with, well, double-digit number for motors, especially motor, and that will be finalized in May. And then we have to decide whether it's needed to maintain healthy combined ratios to do another round of additional premium increase. Not yet made a decision on that one. And I think the third question was on.
Sorry, just on disability.
Yeah. Disability, I think then we have to make a distinction between the different products that we have in disability, Benoît. So on one end, when we look to group disability, that performed very well. So we have increased prices a bit, but more kind of following inflation when it comes down to the number. What we have seen in H2 of 2024 is that the sickness leave portfolio behaved a bit less good.
So in total, it was a good performance, but the sickness leave portfolio behaved a bit less good. And those are products that you reprice every year. And there you see much higher price increase, more towards the mid to high single-digit level. So in P&C, price increases will be there, especially in the sickness leave portfolio. Group disability is okay. Individual disability is also okay. But especially group disability, there we expect high single-digit premium increase. And then I think the third question was I think on the fee-based. Oh, the fee-based. Yeah. So there was indeed so one of them that we also mentioned during the H1 call was related to the investments that we needed to make for take-up pay in getting up to speed for the changing regulatory environment.
So, the accounting rules actually say that you then have to classify that as an incidental when it has to deal with regulation. That was a one-off of EUR 15 million, EUR 15 million. For the rest, we benefited there from higher fees across the segments. And that was related to the fact that in asset management, we see the increase in the DC inflow that was planned for. But we also saw a sharp increase in the due to market movements. So market movements were favorable. Secondly, we have seen real estate going up. So we're not only managing the real estate for our own book, but we also do that for third-party clients. And with the higher valuation of real estate, also the fee income increased. And like Jos said, also in mortgages, we have seen more production than we anticipated.
So also that helped actually to end up with a higher number than earlier expected. I think your question was also, are you a bit cautious there? Now, what we see actually is that from here, the main contributor that we will see in the fee segment will be from the synergies that we realize in the mortgage business that we are having. So in 2025, we have plans to migrate the mortgage portfolio to the platform that we have within ASR. And then we have one mortgage, then we have one mortgage company. And there we expect a good amount of synergies from. On the other hand, we also, and you will see that coming through in 2026 because we finalized it at the end of 2025.
On the other hand, in 2026, we also lose the administration that we are doing, the administration fee that we are doing for the mortgage book of Knab because we hand that over to BAWAG. And those are more or less offsetting effects. So that's why we say from here, more or less a stable path compared to what we have presented today.
Thank you very much for that.
Thank you. Now we're going to take our next question. And the question comes to the line of Anthony Yang from Goldman Sachs. Your line is open. Please ask your question.
Hi, good morning. Thank you for taking my questions. The first one is on the non-life. Could you give a color on the price increase that you indicated? Is it a sector phenomenon or is it ASR specific? And how does that compare to claims inflation in general?
Is it in line or is it much higher than claims inflation? Maybe a bit color in both P&C and disability will be helpful. And then the second question is actually on the liquidity management. So I think looking at slide 18, it seems there is a debt maturing in 2025. Will that be? Will you issue more debt to repay that, or will that be redeemed from the existing cash profile? Thank you.
Thank you, Anthony, on your first question. What we have seen specifically in motor, actually since 2023, that repair costs have gone up significantly due to inflation and repair time has increased. And it was not an ASR-specific event, but I think the whole market has seen that. So the whole market has increased motor pricing in 2024.
Given the fact that we were able to combine the price increases with the 5.1% growth that we have seen in non-life, I think our competitive position wasn't harmed by that because everybody had to do with it. Yes, it is sector-specific. The way we looked at it is that we at least wanted to cover the uptick in the inflation. I think we were able to do so. The way we're looking at it now, and I think Ewout already said something about it, mid-year, the current price increases will be fully adopted in our portfolio. For the next couple of months, we will deep dive into how is inflation development ongoing, and do we need to increase premiums further? If there is room in the market, of course, we will take that into account.
We have at least seen one competitor recently announcing further price increases. We are not yet there. If and when there is room to optimize profitability, we definitely will look at that. Disability, I think Ewout already answered for disability line there, specifically in sickness leave. We might need to increase premiums further due to the claims development. We see still an increase in the Netherlands in people called in sick. In the other areas in disability, it tends to be a bit more stable. The question on liquidity. Yeah, thanks, Anthony. We'll see that indeed we have a call date in September coming up. Michel always tell me I should never comment on anything that has to do whether or not we are going to call the instrument. I can answer your question, I guess.
The answer to your question is that I think we are very happy and comfortable with the leverage ratio that we are seeing today. So if we're going to call the instrument, that it will be a refinancing of debt with other outstanding debt. With other debt, sorry, because the leverage ratio of 21.7% for us is perfectly sensible. And also when you look to the ICR, we see that we are well above eight, so in a very comfortable zone. So for us, it makes all sense to kind of maintain the current amount of leverage.
Thank you.
Operator, next question, please.
Yes, of course. And now we're going to take our next question. It comes to the line of Nasib Ahmed from UBS. Your line is open. Please ask your question.
Hi, morning. Thanks.
So just to follow up on the previous two questions on the pricing increase in motor and sickness, the same kind of double-digit, so let's call it 10%. How does that square with the 3%-5% premium growth that you're targeting? If you're not losing volume, it seems like you could beat that for 2025, at least if you're putting in rate increases. Second question on kind of the solvency ratio going forward. And partly linked to that, what was the metrics that you achieved on the EUR 1.6 billion pension? So if you can kind of include that in the solvency bridge, anything you're expecting from real estate, mark-to-market, what is the pro forma? And then if I can quickly add a third one as well on the health business, the combined ratio deteriorated a little bit. Do you see that stabilizing going forward? Thanks.
Thank you, Nasib.
I will take question one and three, and Ewout will cover the second one. Historically, if we tie in price increases to the growth level, it's one-third price increases and two-thirds is new customers. In the current market situation, and that's what we expect also for 2025, two-thirds of the premium growth will come from price increases kicking in, as mentioned, the 10% that we did half year. And one-third will come from organic growth. And we expect that that will be the line for 2025. And we are optimistic that we will be able to meet the 3%-5% growth in the P&C business going forward. So having said that, to health, we expect that results going forward will develop in a stable way. So within the targeted range, let's say between 98.5% and 99%.
If the health business meets that, then they are delivering the 12% return on capital that we have invested in that business. We were able to reprice rationally during the last season. The market has become more rational because we were able, despite strong repricing and uplift in price, to gain 70,000 new customers. Relatively optimistic on that going forward. The second question, Ewout?
Yeah. I hear that there's a kind of what is the market to the year-to-date market developments when it comes down to the Solvency II position. I think not a lot changed. Actually, I think equity markets went up a bit when you look to our solvency position, our solvency sensitivities that might cost one solvency points. I think VA slightly lower might also cost one solvency points. But that's kind of year-to-date that we see.
The deal, as you know, a buyout of EUR 1 billion costs us on average one and a half solvency points. When we use longevity reinsurance, it will be at the lower end of a range of 1%-2%. When we don't use longevity reinsurance, it will be at the higher end of the 1%-2%. We have not yet made a decision whether or not we use longevity reinsurance for that. We are still in the discussions with longevity reinsurance, whether it is attractive enough because we believe it should result in a material step up in the IRR. When it's attractive enough to use actually longevity reinsurance for this deal.
So depending on that, so the EUR 1.6 billion will then, depending on that cost, on average, let's say on average, will cost roughly two to two and a half solvency points, which brings, of course, also future level of capital generation.
Perfect. Thank you.
Thank you. Now we're going to take our next question. And the question comes to the line of Michael Huttner from Berenberg. Your line is open. Please ask a question.
Thank you very much. And yeah, congratulations again on amazing results. I had two questions that are more like dream questions. First one, you mentioned the annuity spread business, and you said a couple of times that you can get extra margin. I just wondered if you can make us dream a little bit on that point. I don't know how relative to your 12% kind of target.
And then the second, the cash is in the operating units, not so much in the holding. Can you say or can you give us a feel for what the kind of comfort level you have or the excess or whatever? Thank you.
Well, two amazing questions, Michael. Thank you. On the first one, as management of an insurance company, you shouldn't be dreaming too much. You should be realistic. And the way we price our business, so also our annuity business, it needs to deliver above 12%. And I think we're overshooting that outcome currently. So I don't want to put an exact number on it, but it's much better than the 12% we in general project. And as you know, for the next three years, including 2024, we have projected EUR 1.8 billion of annuities going forward.
And at the same time, we do see growth in our pension DC business. And every pension DC pensioner will have to buy an annuity going forward. And 90% of those annuities, at least that is what we expect, will end up in a fixed annuity. And that is spread business. So sometimes we've said to each other, well, the Dutch life market for a long time has been seen as a declining market. And if we now look at our life balance sheet going forward, and then the dreaming starts from a managerial point of view, we start to dream that due to the new pension reform, the life balance sheet over time will remain much more stable than expected or even be able to grow due to all those developments. So we're not going to put numbers on it, but we're quite optimistic from that perspective.
The second question is for you.
Yes. Back to reality.
Yeah.
We have a very comfortable cash position, I would say. The way we are looking to cash at HoldCo is that it needs to be enough actually to cover the dividends, the coupons, but also the HoldCo expenses that we have for one year. That's actually the policy that we are having and following. The only reason that we think it is wise not to do more. This is, to our extent, very comfortable, by the way. This year it's already of almost EUR 900 million, where we are talking about.
The reason that we are leaving this at the operating entities is that when you look to return that you can make, when it's at the HoldCo, you have to take that also into account in how you invest the cash that you have at the HoldCo. And it returns less compared to when you leave it at the legal entity. And that's why we have a preference actually to follow this policy, but also not to do more. So we have made extra return on the excess cash that we are actually having in the legal entities. That's the philosophy behind it, Michael.
Thank you very much.
Thank you. And now we're going to take our next question. Just give us a moment. And the next question comes to Rhea Shah from Deutsche Bank. Your line is open. Please ask your question.
I have one question left.
So you've spoken a lot about pricing in P&C, but you also mentioned in the statement that you've seen underwriting improvement in 2024, and that helped the performance. So could you provide some more color on this element for 2025, and also how to think about that combined with the impacts of pricing on the combined ratio for 2025 versus the 92%-94% target?
Yes, of course. Thanks. Well, if we include the normal level of weather-related claims that we always count with and the average level of large claims to large incidents, I think the right way to think about it is that we would end up somewhere around the 93.0% level in the combined ratio. Of course, we always try to do better.
Everything else being equal, including the price increases that gradually are flowing in now, we are positive that we also for 2025 are able to deliver at least within the 92%-94% combined ratio, combined with healthy growth, so meeting the 3%-5% growth ratio.
Excuse me, Rhea. Any further questions? Thank you. There are no further questions for today. I would now like to hand the conference over to your speaker, Jos Baeten, for any closing remarks.
Thanks, everybody, for joining us. I think we already said it at the start. We're quite happy with the results we delivered. We're looking forward to meet you all tonight to continue the conversation on those great results. With that, I thank you very much for joining us. Enjoy the release of the colleagues over the next couple of days.
As said, happy to see you tonight.
This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.