Earnings Call: H1 2018

Aug 29, 2018

Good day, and welcome to the Investor Call Interim Results ASR H1 2018 Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Michel Holters. Please go ahead, sir. Thank you, operator. Good morning, ladies and gentlemen. Welcome to the ASR conference call on our first half year results. On the call with me today are Joos Badner, our CEO Christi Se, the CFO and Joos will kick off as customary with an overview, the highlights of our financial results and will discuss the business performance. Chris will then delve into the developments of our capital consultancy position. And after that, we'll open up for Q and A. We've got scheduled till 12 And as usual, please review at a time that's convenient for you the disclaimer that we have at the back of the presentation on any forward looking statements and the disclaimer. So having said that, Jos, the floor is yours. Thanks, Michel, and good morning, everyone. Good to have you all here. Thank you for joining us on this call. Ladies and gentlemen, as you have seen from our this morning published numbers, we realized very strong results in the first half of this year, and we continued to deliver solid performance. I believe we are well on track to meet or even exceed all of the medium term targets for 2018. And without further ado, let's turn to the highlights and those are on Slide 2. As you may see at this dashboard, it shows our performance over the first half of twenty eighteen and it has been solid on every key metric. Operating results amounted to SEK382,000,000, almost at the same level as the already very strong result of last year, which we already knew was going to be tough to compare with due to the exceptional favorable claims experienced last year, while in January this year, we suffered from a severe storm that impacted our non life results with 31,301,301,000. Underlying, our non life performance continues to be very strong and each of the other segments reported higher results in the first half this year, reflecting higher investment margin and good momentum in the fee based business segments. Our business yielded an operating return of 14.7% on an annualized basis, well over our target of up to 12%. Overall, I believe this is an outstanding achievement. Combined ratio of ASR stood at 97.1%, just above our target of 97%. The 97.1 includes the impact of the storm, which is 2.1 percentage points. And furthermore, the inclusion of the Generali Netherlands portfolio with the combined ratio of 101.4 in the first half of twenty eighteen, which had an impact of roughly 0.5 percentage point on the combined ratio. We remain, as you know, sharply focused on cost levels and are pleased with our achievements. Our operating expenses headline figure increased with EUR 60,000,000 to €299,000,000 and it was due to the inclusion of the €22,000,000 of operating expenses from Generali. Adjusting for additional cost base of Generali Netherlands, our operating expenses decreased by 3.2% over the first half year, driven mainly driven by expense savings within the Life segment from €8,000,000 Our Solvency II ratio remained very robust, still based on the standard formula at €194,000,000 after the interim dividend that will be paid in September. So basically, we have been able to keep our Solvency II ratio pretty stable while absorbing the impact from the generality transaction for 9 points. Organic capital generation amounted to €179,000,000 adding 5 points to the solvency. And there are some other moving parts, but Chris will provide further detail later on in this presentation. Quality of our capital remains high with unrestricted Tier 1 capital alone representing 151 of the Solvency II. And then there is still plenty headroom to maneuver. In total, we have the possibility to issue almost SEK1.6 billion of hybrid capital within the Solvency II framework. Our strong solvency position enables us to remain entrepreneurial. As we have always said, everything above 160 allows us to be entrepreneurial and to pursue profitable growth, which we have proven to do so with, for example, the acquisition of Generali Netherlands last year. Speaking about Generali, as you may recall from the call which we hosted in June, this is progressing very well. Generali Netherlands contributed to the operating results for already SEK 8,000,000 in the first half of this year. As announced last February, we introduced an interim dividend of 40% of last year's dividend. This amounts to €92,000,000 of interim dividend or €0.65 per share. Together with the full year dividend already paid, we will distribute in total 321,500,000 to shareholders this year. Let's now turn to our business portfolio and talk about the developments there. That's on Slide 3. Starting with our solid back books in Box B. In the Q1 of 2018, we finished the migration of 2 individual life books towards the software sorry, towards the software as a service platform, making the cost more variable in order to keep cost in line with the decline of the book. The migration of those two books were completed with a total of roughly 215,000 policies. Like I mentioned earlier, strict cost control is key and in the Life segments, this led to a decline of €8,000,000 of operating expenses. This is due a decline of €5,000,000 within the Individual Life business, driven by the system rationalization and a decline of SEK 3,000,000 within our pension business. In the top left, in box A, are our businesses that provide opportunity of growing cash flows. In funeral, we successfully migrated the 1st portfolio of Generali Nederland to the ASR funeral platform. The migration of 353,000 policies was finished on the 1st July. In P and C, organic growth was driven by inflow in the broker channel as well as price increases in the motor segment. Within disability, we launched 2 new products, the so called Lana Mae disability insurance in June of 2018. This is a disability product aimed at the blue collar group to offer an affordable disability product for this class with a capped payment for the insurer in case of disability. Initial market response was very positive and already in the 1st few weeks, more than 100 we could welcome more than 100 new customers in this product. Within pensions, we see good momentum in the DC area as employers decide to move to the so called Berg Neumens pension. This half year, we have reached the milestone of over 50,000 active participants and almost reached 3,000 employers who have opted for a contract with this product. Currently, over SEK 600,000,000 of assets under management are in this product group and this is going to grow on a year on year basis. In asset management, there are also very good developments to mention. We see that investors appreciate the recently launched ESG funds and we saw already an inflow of over €500,000,000 Also, the mortgage fund proved successful with new inflows of €700,000,000 The mortgage fund today has now reached over €1,000,000,000 of assets under management. Within the real estate funds, we see continued interest from investors over there. This half year, we had a withdrawal request from an investor, but we were able to provide liquidity for that investor and actually realized more inflow than outflow. Let's now move to Slide 4. As this slide shows, momentum in our operating results remained high in the first half of twenty eighteen. Despite the severe January storm, we managed to almost equal last year's results. Higher results from Life, plus SEK26 1,000,000 bank and asset management, plus SEK6 1,000,000 distribution and services, plus SEK2 1,000,000 and the holding and other, plus SEK3 1,000,000 almost offset the decline in Non Life. We are confident with our performance, but would urge some caution and not automatically multiply by 2 when projecting for the full year because, as you know, typically we see in the first half year seasonality mainly driven by the investment margin because most dividends are in the first half. For instance, half year 2 dividend could be roughly €30,000,000 lower than the first half year's dividend. Let's have a closer look at our business segments. Starting at Slide 5 with Non Life. In this segment, we still see a very strong performance. Despite the storms in January, we managed to keep our combined ratio at 100% sharp. The disability combined ratio improved even further from already very strong levels. Our gross written premium increased by 16 point 5, mainly driven by the inclusion of Generali Netherlands. Excluding Generali Netherlands, the gross written premium increased with 4.5. So organic growth over the first half year again was very high with 4.5. All of our business lines showed an increase of the gross written premium, driven by new sales and in some areas with price increases within the existing portfolio, we still see good opportunities to grow organically in the non life segment. Combined ratio, as said, was 97.1 in the first half and slightly above our target of 97. The storm in January had an impact on the combined of 2.1 percentage points and the inclusion of the Generali Netherlands portfolio had an impact of 0.5 percentage points. When adjusting for those two events, a normalized score of the portfolio is below 96, meaning that we have a very profitable underlying combined ratio at this moment. As the Health business is more regulated also from a margin and profitability point of view, we also look at a non life combined ratio, excluding Health and consisting of only P and C and disability. On this basis, the combined ratio of ASR would be 96.7. The combined ratio of P and C and disability, excluding generality Netherlands, would be 96.0. So all in all, a very solid combined ratio in the non life area. In the breakdown of the combined ratio, you can see a pickup in the claims as an effect of the storm of January 4 this year. We had roughly 12,000 claims only due to this storm. The increase in the commission ratio is mainly a consequence of the inclusion of the Generali Netherlands portfolio. This portfolio comprises mostly P and C products, which in general come at a higher commission ratio. Therefore, the uptick in the commission ratio is a reflection of the change in the distribution mix. If we were to look at the combined ratios for each of the different business lines, you can see good momentum in the disability portfolio. Last year, we saw unfavorable claims development in the absenteeism portfolio, but we took measures of the result we took measures over there and resulting in margin expansions within this portfolio. Let's now have a look at Slide 6, the Life segment. In Life, we saw a strong increase of operating results of 8.3000000 towards €340,000,000 This increase was mainly driven by an increase of the investment margin of €27,000,000 The increase of investment margin was driven by a number of factors. First of all, our direct investment income benefited from the re risking we have done of the last year of the investment portfolio. For instance, we received €10,000,000 more dividends. Furthermore, as the individual life book runs off, there is also a decline of required interest, which is positive for the investment margin as investment income remains relatively stable. Generale Netherlands had a contribution of €8,000,000 mainly within the investment margin. We see most of the increase of the Life result as sustainable for the coming years. Please bear in mind that H1 is typically supported by dividends, as I just have mentioned. Furthermore, we are pleased with the inflow, which we see in the so called Neiman expansion. Currently, 82% of the new business APE is for the new DC solution, which is a very positive development because it's all recurring premium. The gross written premium of the Life segment increased towards €885,000,000 due to the increase of Capital Light gross written premium within pensions and a contribution of €54 of Generali Netherlands. This positive development was slightly offset by experienced higher latches in the individual life portfolio. Let's now turn to the other segments of ASR, which are gaining traction, and that's on Slide 7. Operating result of the bank and asset management showed a strong increase to SEK 11,000,000. This was driven by the launch of the mortgage fund and ESG funds, which resulted in additional fee income from third parties for the asset manager and higher fee income from the real estate funds. Furthermore, the operating result of the bank increased mainly due to lower costs. Operating result of the Distribution and Services segment increased with 20% to CHF 12,000,000. This was driven by a strong contribution from Dutch ID and a contribution from the Generali Netherlands distribution companies like Anak, which contributed almost €1,000,000 Holding results were slightly better. This was mainly driven by lower net current service cost due to our own pension scheme for an amount of SEK1 1,000,000 and lower incidental costs compared to last year. Now let's move to Slide 8 to measure our performance against our targets. As said in my introduction, our performance has been strong on all key metrics in the first half of twenty eighteen. We've been able to keep our business momentum at a high level and our performance is better than our medium term targets. As you may know, 2018 is the final year of the medium term targets and we will present new medium term targets at the Capital Markets Day in October this year. Having said this, I would like to hand over to Chris for further details on our capital and solvency. Chris, the floor is yours. Very good. Thank you very much, Joss. Gentlemen, please ladies and gentlemen, please turn to Page 10, where we start to talk about our solvency. Firstly, apologies for my voice. Obviously, our solvency is better than my voice, but it's still better than the other way around. But my voice keeps cracking out from time to time, so bear with me. Page 10 shows our book values, IFRS Equities and sold into 2 owned funds and we see continued growth in book values, something we like. In the long run, we appreciate that the book values of our company, whether measured from an IFRS perspective or a Solvency II perspective, continue to grow, grow slightly less than last year, growth around the 1% to 2% mark year on year. Due to the fact that in the first half year, we tend to pay our dividends. We acquired Generali in this first half year. And as you understand in Financial Markets, the valuation, the unrealized capital gains were a bit less than last year. But in spite of dividends and the Generali acquisition, we continued to grow our book value. Interesting to note that the owned funds of our group, incremental hybrids touched to $7,000,000,000 That's not a specific goal in itself, but it's fun to see that we've met $7,000,000,000 just before repeated DRIMS and the unrestricted Tier one level is around SEK5.4 billion, just a bit of background to our solvency numbers. Then turn to Page number 11 please on our solvency level. Solvency II, 194% as per the standard formula, after payment of interim dividends before interim dividends at 196. So business wise, effectively, our solvency stayed stable from the year end last year, 196 to 30th of June this year, 196. And then you take out the interim dividends to get to 194,000,000. In the Appendix E, you find more data and more intelligence on the development of the required capital. At this point, safe to say that we feel strong and comfortable with the level and quality of solvency. Tier 1 is about 78 percent of our capital. The Tier 1 ratio alone would be 151%. Tier 2 and Tier 3 headroom is SEK 750,000,000 actually an increase from Q4 last year. ASR does not use Tier 3 capital. We do not have the DPA. We still have a net DTL position on our books. LACBT is still at 74% and our market risk is at 43%, leaving some room to re risk our business. And it's fair to presume that depending on markets in H2 of this year, we will spend some of our capital on re risk our business. We feel that spreads have now widened to and around where they become attractive again. The equity market is stable. So expecting us to use some of that market risk room to continue to support our earnings, not the entire 7%, but some point of solvency we will spend on market risk. So as far as we can see, a solvency good from a level perspective and good from a quality perspective. Please move to Page 12 on capital accretion. We continue to amass capital. Page 12 shows a breakdown of the sources and uses of capital, generating an accretion of SEK 331,000,000 or about 9% to 10% of our required capital. Then after repayment of $92,000,000 of interim dividends, we get to retention of capital of about CHF 239,000,000 or 6% of our capital base, so 6% retention out of 9% net accretion. That actually is the increase in the fungible and upstreamable and investable capital that we have. And as you are aware, we have a very strong and consistent capital spend framework, but the €240,000,000 gives additional flexibility for a group to invest. Page number 13 is our alternative view or the most common view these days of capital generation. It's a solvency ratio movement. Let me give you some further details on this. On this page, you can see how we spent 9 percentage points on generic acquisition from 196 to 187. So that actually is the base you could start with to assess how our solvency moved through a year. So we moved from $187,000,000 to $197,000,000 which is again the 9% to 10% capital accretion that I explained in the previous page. In this page, we have an operating capital creation of 179,000,000, organic capital generation of 179,000,000 slightly less than last year, but if you appreciate the fact that we this year had a significant storm as well to absorb, The underlying capital generation ability of the group actually gone up. I just explained the storm charge in H1 was €31,000,000 in January. Secondly, there was some water damage in May. Last year, we had no large claims in Q1. So effectively, in our Property and Casualty business on a like for like basis, we generated less capital than last year. Fully understandable, it's a comparison thing, large claims or it's a strong thing. If you adjust for the storm, you can actually see that the underlying organic capital generation is up. And if you dive deep into the sources of that increase of the structural improvement in capital generation, it is with a lower U. S. Bar in wind, which is actually countered by slightly higher hybrid cost, but it's higher excess spreads, it's lower cost and higher returns in our disability business. So all in all, we feel comfortable with the organic cap generation, €179,000,000 that structurally elevated versus last year. And also, of course, generality starts to contribute to that level. Think about a €5,000,000 to €7,000,000 of CapGen structural CapGen ratio that the Generali business adds to this number. And if you look at our OCC over the quarters, there's no much point in principle to look at quarterly OCC, but in Q2 this year, Q2 2018 versus Q2 2017, we already have $9,000,000 higher OCC in the quarter, which converted in a quarter where there is no storm and in normal claims pattern, this group generates more capital than it did last year. Finally, to preempt any questions that are no doubt coming towards us, if we were to align the investment spread to actual market rates, so instead of using our long term investment assumption to market rates, the OCC will increase about about SEK 7,000,000 So we aligned fixed income spreads, we aligned the VA, you'd add about SEK 7,000,000. And if we were to put our equity and fixed income actually in real estate returns, let's say, 7%, you could add another SEK 16,000,000 to the organic replicable capital generation. Now again, that's not our policy, but just for your perusal, for your background, aligning to fixed income market rates at 7%, aligning to 7%, as an example, for equities in real estate, as of SEK 60,000,000. But that's for you to assess how you wish to use it. Overall, we see 10% solvency accretion, out of which is 5% is organic, 3% paid out in dividends, ending up with a virtually stable solvency ratio in spite of the acquisition of Generali, in spite of the lowering of the UFR. From our perspective, Tantamount to the ability of ASR to continue to advance capital. Move to Page 14 please, if you wish, sensitivity of our ratio to the UFR. You can see the stock of our solvency at various UFR levels, the flow, the addition of our lowered UFR unwind and the amount of owned funds. At this point in time, the UFR is 4.05. We expect it to be dropping by 15 basis points a year. So by the year 2021, as far as we can see today, you're expected to drop to 3.6%, at least according to the current market information. Roughly, every 15 basis points drop of UFR cost us 3.5%, 3.6% of solvency, but adds about SEK 5,000,000 of lower UFR unwind per year. That was also the case in this year. This was the actual development in the UFR contribution and the UFR unwind. So with 183%, we are very well able to absorb any lowering of the UFR if they come due. Furthermore, please note the solvency at the UFR of 2.4. You may be aware of our more economic view of the UFR where we said that economically speaking, you would like the UFR to reflect your investment income and use that as a more economically consistent solvency metric. The economic QFR was increased from 2.2% to 2.4%, reflecting a higher investment income, also in line with the IFRS results and operating results that just reported in Life. I think the investment income is structurally higher than where it used to be, adding 20 basis points to that long term more economic UFR, which gives a Solvency II ratio at a UFR of 2.4percentup154percent safely north of a 100 safely north of our risk appetite of 120%. And finally, if you were to calculate the solvency ex UFR and ex VA, depending how you deal with TRIN, think about the number around 110%, 120 25% in terms of solvency ex U of our XVA. So in essence, the impact of LPG measures on our solvency is very, very manageable and very, very well under control. Moving then to Page 15, which is our strong balance sheet. Balance sheet strong with ample financial flexibility. You can see here again our solvency composition of 194%. Financial flexibility, again, there is no DTA. We only have a DTL on our balance sheet. Headroom has increased, so we can actually there's sufficient financial flexibility if we wanted to further strengthen our capital base. Financial leverage is at 25%. I think if you did on a more like for like basis compared to industry norms and you'd adjust for the shadow accounting reserve that is not reflected in our book equity, a more comparable number would be around low 20s. So both from a Solvency II perspective as an IFRS perspective, this group has financial flexibility. This is confirmed by interest cover, which is still at 12 times on basis of IFRS. If you had an operating results interest cover, it would be 9.4 versus 10.2 last year. So again, where you take the IFRS perspective or you take the operating result perspective, interest cover is stable to strong, a strong balance sheet with ample financial flexibility. And last but not least, our solvency and cash position. All in cash at the first half year is SEK 229,000,000. Just to reiterate our holding cash policy, we do not strive to maximize cash at the holding. We believe for a company's ASR, one jurisdiction, one management team, one regulator, that cash is best placed at the operating entities. That is just the way we do things around here and the way we continue to do things around here. So we hold holding cash to cover holding costs, to cover hybrid costs and to cover dividends, not so much to optimize a cash pool of the holding. We believe it's best served in the business where it supports our customers and where it yields an income. Holding cash at the Group 229 actually comparable to last year was 201, so up 28 from last year. 195 remittances, little details, little note here, the 195 is a net remittance. Actually the gross remittance to the group was 246 so we upstreamed 246,000,000 out of our entities to the group, injected 51,000,000 back into the Generali entities just after the acquisition, in order to fund some rerisking of the Generali business, which gives the SEK195 1,000,000. So SEK 246 1,000,000 was the upstream out of the traditional ASR businesses, which is equal roughly equal to the $253,000,000 we upstreamed last year. We just injected cash back into Generali. And when the Generali entities merged back into Arias and Life and A and C, that cash showed up back into the Arias and Life business. So there was a small kind of circling out of cash to support the timely rebasing of the Generali balance sheet. But again, remittances exceed our operating capital generation at around 70 capital generation at around 70% of the net operating profit. And finally, all our entities this year will contribute cash to the holding, not just Life and P and C, but also, for example, the asset manager, also, for example, distribution businesses are able and will be able to also in cash. So in terms of cash holding cash, we hold cash to support the operating businesses and for us we keep the cash in the holdings or in the operating entities. With that, I give you back to Joss who is going to wrap up. Thank you, Chris. And as said to wrap up this call, I would like to conclude that we are very pleased with the strong set of results. We were able to match our records of operating results in the first half of twenty seventeen despite the severe impact of the storm in January. Our businesses are all very well performing and that enables us to remain entrepreneurial. We have shown that we put our excess capital to work. We are pleased with the progress of the integration of Generali Netherlands, but also with its contribution to the operating results and the OCC of ASR. Before we open for Q and A, may I remind you of our Capital Markets Day, which will be hosted on the 10th October, where we will provide a full update on strategy and a fresh new set of medium term targets. And with that, I would like to conclude this presentation, and we are very happy to take any question that you might have. We can now take our first question from Kare Turis from ABN Bank. Please go ahead. Good morning. Cor Kluis, ABN AMRO. I've got a couple of questions. First of all, about the on funds of Solvency II. Could you elaborate a little bit more on the category markets and operational developments, which is minus 50 €3,000,000 And that includes, of course, the UFR effect of minus €93,000,000 but which other components are in that category. Related to that, also the rerisking, what could be the effect of the solvency ratio of the rerisking in the second half of the year? And of course, related to that, the P and L effect of that, how much could it enhance the profit stream? And as we are already in at the end of almost the end of the 2nd month of Q3, could you give an update on the Solvency II ratio developments in the Q3, especially given what's going on in the macro environment? And the last question is about the bank and asset manager, which had quite strong results in the first half. Is this a kind of run rate? Or was there something one off in it? Those were my questions. Great. Good quarter. Chris here. Thanks for your questions. I'll take them all 4 1 by 1. On the bucket on market developments, indeed, it was minus €53,000,000 I mean, the key driver of course was the U. S. Dollar decline. Had it not been for the U. S. Par decline, the single would have been roughly €15,000,000 positive. And the rest is really a collection of different bits and pieces, some pluses, some minuses. On the positive side, we have an increase in the VA that supports this bucket. We have some positive revaluations in real estate especially. On the neutral to slightly negative side, we had impacts on equities in the first half year and to some but lesser extent, credit spreads widened. There were some tailwind from rate developments, especially on our BBO owned pension plan according to a very specific IAS 19 modeling. And then there were some modeling and assumptions changes in the Life test estimates. We increased our lapse rate assumption and we just talked about the Life business. We see a structurally elevated level of unnatural lapses, which has to do with a deleveraging cycle that's going through our country. Clients are paying down their mortgages lapsing policies. It's slightly less than what it used to be last year, but we think the last level in life is structurally elevated. We reflected that in our best estimates. And finally, we made some modeling changes in our disability business. Here it gets a bit techie and a bit geeky, but for example, claims handling costs used to be classified as claims costs. We moved them from claims to expenses. And when you expense them, the capital charge for expense risk and NPV of the duration of the disability book is a bit higher. So we reserve more capital due to the reclassification of claims handling costs within cost capital. There's nothing change in the business. It's just the charge which goes up. By the way, we've done it pretty prudently. If you would go further, that means the reclassification of expenses will also actually lead to a lower modeling of lapses, which should lead to a small release of lapsed risk, which we haven't yet put through. So in summary, a bunch of, I would say, a very nitty gritty, almost geeky changes in modeling where we've taken a prudent approach. And that together drove a minus €90,000,000 -fifty 3,000,000 But again, if it hadn't been for the UFR decline, it would have been a €50,000,000 plus. On your second question on the rerisking, I think it depends a bit on the market. I mean, when we commenced this year, we had a rerisking ambition. During the first half, we paused it. If you look at the developments in markets, spreads that were widening, there's no point in rerisking while the markets are very jibbery. Today, with spreads widening, we think we can continue again. Think about up to 5 points of solvency. Depends a bit on how the market develops, but think of up to 5 solvency points that we can spend. We'll continue on real estate. We're very comfortable on our real estate business. We'll continue on mortgages. I think we will pick up the tab again on credits where spreads have widened and there will be some room to buy an equity, buy a piece. I think the return on solvency capital is today around 12% after diversification is our estimate. So if you look at the direct yields that we're going to make on these investments after diversification, so on this 5%, we think we can make around 12% return on capital, which will get gradually feed in. So, that's not immediately it will feed in if you reinvest those cash and if the drivers start to contribute to earnings. That's the order of magnitude that we're looking at. Solvency II during the quarter is positive. Markets were a little bit volatile. The VA widened a bit year to date. I think the VA is now around 12 ish points. So from where we are today, which is the 29th August, solvency of the Group has probably moved up a few points. But again, that's really the weekly lay of the land. The formal numbers only will be done on a quarterly basis. But when I look at our weekly monitor, it shows supportive development. And finally, on the asset manager, indeed we're proud with a significant increase in earnings, with an increase in fee based earnings. What I like a lot is that both the Asset Manager and Distribution business together, our fee based earnings are now at $23,000,000 earnings. So, they're on track to contribute for the full year at least one point of solvency, which is where we wanted we actually would like to go further, but the fee based earnings adds 1 point of solvency during the year from an OCC perspective. I wouldn't double the number. I would be careful just to take full year is twice half year, but we'll continue to see some growth in the asset management earnings. And the 12% return coming back on your rerisking, is that around SEK 20,000,000 or something in extra profit stream pretax? No, it's €75,000,000 of required capital, right? So that if you think about the current solvency is €190,000,000 €194,000,000 which means €75,000,000 required capital is about up to 5% of ratio impact. So you think about 12% on the required capital is more like CHF 10,000,000 to CHF 15,000,000. Okay, okay. Yes, there's no it is also a numerator effect. If you spend 5% on the denominator, the total ratio, you need to multiply by the ratio itself. So, 5% is after the multiplication effect. Okay. Very clear. Thank you. Thank you. Next question comes from Albert Bloe from ING. Please go ahead. Yes. Good morning. Thank you for taking my questions. I have basically 3. One is on the live earnings, which clearly were quite strong. In the opening remarks, you already mentioned and also Kovstein not to double for the full year. I recognize the impact of the extra dividends in the first half. But adjusted for the different effect, can you then in the line basically, okay, the second half could then mirror the first half adjusted for the dividends? So that's question 1. On the nonlife premiums, which stripping out the acquisition impacts, we're still up, I think, around 4.5% organically, quite a strong performance. I guess you're clearly winning market share. I know in the past you alluded that you want to remain very disciplined on underwriting, but yes, the low combined ratio gives you some leeway to become also a bit more aggressive on the market share. Is this basically a reflection of that? And should we expect this to continue going forward as well? And then the final question is a bit more related to on accounting on IFRS 9 in 'seventeen. A competitor for yours disclosed that you made quite some upfront investment costs already for the potential impact of IFRS 17? Thank you. Yes. So, potential impact of IFRS 17? Thank you, Albert. I'll take the first two. Chris will answer the last one. On the Life earnings, yes, it's right that we said you shouldn't double it. And your assumption that if you take out the dividends and could you tablet, then the answer is yes. So the assumption made by you, that would be a fair way of looking at the Life earnings. On your Non Life question, the 4.5 percentage points of growth, we are very happy with that indeed. We, however, did not change our way of looking to risk. We still are running the company value over volume. But within that, we have identified market parts where we are able to grow our business, especially in packages, in individual packages for families. There we have seen significant growth, and that is all within the strict criteria of accepting risks. And for example, in Q2, our combined ratio was at 96%, which is below target is better than target. So we haven't changed our philosophy. And yes, we are growing in market share, but not at the price of getting sloppy on how we look at risk. Okay. Albert, on your question on IFRS 9, IFRS 17. To be honest, Albert, the mood in this group is very cheerful this morning, but now you're mentioning IFRS 9 and 17. It's darkening a event. But we're facing our decision with operational bravery. No, I mean, in the first half year, we spent about SEK 3,000,000 on IFRS 9, IFRS 17. So it actually is a costly project. I think we're going to spend SEK 3,000,000. I think the second half will spend probably at least another SEK 3,000,000 probably more SEK 5,000,000 in the second half of the year. We'll try to keep our costs as low as possible, be as constrained as possible. That's kind of the realistic perspective on this. And any thoughts on, let's say, actual implications of IFRS 1709? Yes, many. Yes, early days. I think we'll spend some time on this in our Capital Market Day in October, perhaps not then or to the full extent because if we're all trying to read tea leaves here, IFRS nine, IFRS nine, IFRS nine will be postponed by 1 year or by 2 years. I mean, our honest perspective is, I wouldn't mind a small postponement, but not a lot. I mean, if we have to go through it, rather close our eyes and walk our way through it and just not continue to postpone it. So, 1 year would be good, more than 3 if you actually postpone about more than 2 years, you'll find that the cumulative cost will go up. The more you take, the more you stand. But again, in the CMD, we'll talk about more about IFRS 17. We can give some first color on what it means, but it depends also a bit on what we get and what we learn on the timing from April. Okay. Thank you. Thank you very much. Next question comes from Matthijs de Wiis from Kempen. Please go ahead. Hi, good morning and thank you for taking the questions. The first one is on the Life business. You referred to the decline due to the acceleration of lapses linked to the mortgage prepayments. Just wonder if you could expand a bit on this. So what's just, for example, the like for like decline in reserves or number of policies? And is there any that this could accelerate going forward to a level, for example, where it becomes more difficult to cover the costs? And then just linked to that, I remember you updated us once on the unit cost assumptions in the best estimate liability. Can you update us on these in light of everything what's happening in the light business? And then just secondly on the non light business, can you provide a breakdown of the organic growth in the premiums between pricing and volumes? And is there anything you can say in general on the pricing environment you're currently observing in the non life business? Thanks. Yes. All right, Matthias, on life, the unexpected lapses, the unexpected lapses were up. We said to ourselves, we think that book will when we IPO ed our business, we said our book will decline in terms of premiums, in terms of policies by about 9 to 10, 9 points a year on average. I think if we compare to our premium levels today as to the IPO, is about 2 years back. Our premium level is about 5% less than what we expected at IVO, which is 2 years down the road. So actual expirations of life policies were in terms of premium levels were 5% more than what we expected. So the unexpected lapses, think about another 2 percentage points in the number of policies or number of premium level on an annual basis. I'll give you some color on the order of magnitude. Now in terms of context and nuances, actually this level, the unexpected lapses peaked, appeared to peak in Q3, Q4 last year. If we look at the unnatural losses, Q3, Q4 last year, they were really up high. Also in our mortgage business, we saw an increase then in mortgage redemptions since then. So today, H1 'eighteen versus H2 'seventeen, the unexpected latches have dropped back by another 20 points, 20%. Mortgage redemption has also dropped by another 7%. So, in the last 2 years, 2 percentage more decline in our premium levels per annum that we expect because of unexpected lapses. It's probably structurally at an elevated level, but calming down a bit after last year's deleveraging wave. That's kind of the one thing. 2nd observation is this affects premiums, affects number of policies. It affects much less our reserve base. So the reserve base in our Life entity declined by 2.5 percentage points a year. So you get to see lapses in terms of number of policies, lapses in terms of number of clients, but much smaller impact when it comes to the total reserve base and therefore total asset base, which in the long run will have the consequence that our Life business becomes much more an investment business. You can see a shift in the investment contribution to our life earnings will gradually grow. The contribution from technical results will gradually fade away as the book declines. In the last half year, we have been able to keep the technical results stable. So components vary, but mortality and cost results were virtually unchanged for the last year, but in the longer term expect this to decline, expect the investment result to keep up for longer. So that's kind of some point on lapses. Secondly, on unit cost. So the unit cost on Life has gone up a tiny bit. The cost per policy simply because of its lapsing effect. We are reducing cost in the Life business. But when there is a peak lapse event, you can't just cut your cost as quickly as that. So our cost initiatives will continue to feed through. I would expect us to take initial cost initiatives in the coming years. That's something we're contemplating. We're moving fast when it comes to the migration of policies and then the integration of generality, for example, at scale and ultimately ultimately to further improvement in the cost per policy. So we're responding to this by cutting costs, passing the migration and doing scaled deals like generality where you take out much more cost, so the average cost policy goes down. When it comes to the unit cost assumption, our best estimates, we feel very comfortable that the assumptions and the best estimates today we can and will meet. So the lowering lapses, we've had some has been reflected in our liabilities, but it's more on a best estimate side than in the cost element. So and then when it comes to unit cost and best estimates, we feel comfortable in that in that area. Over that answer, it's a lengthy answer, but I'll give you some color on the last developments. Yes. And if I remember correctly, you were yes, sorry, can I just very briefly follow-up? Did I remember correctly, you were assuming rising unit cost assumptions for both funeral and individual life and group life. Is that still the case or? Yes, up to a certain, but not entirely up to some reason. So you can't have in 2,040, you divide all the costs on one policy. So, there's a gradual increase up to a certain point mitigated by long term some variableization. But our cost assumptions in our best estimates, I would not see them as very aggressive in light of the book development. On your last question on Life, organic growth, it was on average 4.5%. All three businesses were able to meet that number. In P and C, it was mainly pure organic growth, roughly 4% out of 4.5% was organic growth and 0.5% was due to price increases, especially in car insurance. In the disability business, the pricing in the individual area remains stable. And out of the total growth of 4.5% in disability, roughly 3% is due to a better market position And 2.5% is due to price increases, especially in absenteeism that we have done over last year. And in Health, there we also have seen some growth. There, the total growth is due to premium increases that we did last year. On your second part of the question, pricing conditions in the market, we still see the continued hardening of prices, especially in P&C, the storm over the first in the Q1 has helped to stop thinking about lowering prices in the market. So we think that is still a favorable development going forward. Same in disability, there is currently not a lot of downward pressure on the price level. So that's also good. And health, we will have to see in the last quarter because health insurance, as you may know, Mattias in the Netherlands is only in December, a product where people can make a new choice for their insurance company. So in general, pricing conditions still favorable in terms of better margins going forward. Okay. Very clear. Thanks a lot. Next question is from Farooq Hanif from Credit Suisse. Please go ahead. Hi there, guys. Thank you very much. Could you comment again on your plans for internal model? I know it's a pain to do it and you've talked about that in the past, but it seems to me that as you think about growing inorganically and given AOPR, etcetera, etcetera, it seems to be something that probably has gone up your agenda. So could you comment on preparations for that? And on the debt capacity, is your kind of capacity number that you give on Slide 15, do they also work on a kind of rating agency framework where you look at financial leverage and interest coverage ratio? So do you think you could raise that much debt and remain within tolerable levels? Thank you. Okay. Ferg, it's Chris. On the internal model, couple of perspectives. If you look at our solvency level today, Standard Formula, there is no immediate need or immediate benefit to go to an internal model. As you will say, we could report a higher number, but it wouldn't materially change the business. We, of course, continue to look at the IOTA rules and regulations. I think the recent consultation paper that they published is reasonable, although for even 0.1, this car is honestly yes, the for even 0.1 of the consultation paper was out in December last year, had some very inappropriate ideas on how to calculate solvency for a Dutch insurance company. Luckily, they didn't make the final report. So the final report gives a solvency number that we still see as really appropriate. We are, of course, always on the lookout for what it would mean and could mean if you were to move to an internal model. We've done some sketches and done some calculations on what it could mean and what it would require. We need to be vigilant on understanding that today the same people that would build the Intuit model would also be the same people that would build IFRS 17. So you think very careful about capacity planning and where you could do it in parallel. And finally, when it comes to M and A, I can't imagine cases where model might very well work very well in an inorganic growth situation, but it depends, of course, on that very situation. So in summary, Farooq, not much news to add. There's no immediate obstacle to building an internal model. We need to be careful in capacity planning. I can see the uplift in the numbers from doing internal model, but we have to find a meaningful way to use the proceeds from that model. And it depends on how the external market develops and depends on how AOPA develops. When it comes to debt capacity, I go to Slide 15. You asked a question about the rating agencies and how they look at stuff. I think from a rating agency perspective, we of course would have room to leverage the business. I think the capital redundancy from an S and P perspective, we're at a AAA level, whatever that could mean, but basically we're at AAA level. I think the formal upper limit for leverage in an S and P and value is 40% and interest coverage between 4 to 7 times. So with the current level, we could actually add more debt within the current rating band. I think within the current rating band, I would think they're probably pretty strong in the single A rating band that we have. But again, it also depends what you do with the debt. If you just raise money just for the heck of it, I don't think S and P would see the humor of that. If you raise debt to make a meaningful acquisition, make an investment, put the money to work, it makes sense. So I think at today's rate and today's balance sheet, there is no constraint from either our own balance sheet or a rating agency perspective. Can I just come back on one thing? Sorry, this is actually a third question. But just on the great development that you've had in bank and asset management and all the sort of fee based businesses. Have you what is your ability to grow further inorganically there? I mean, it seems that the payback from what you've been doing has been great. So is that something that you are is constantly on the radar as well still? So Farooq, maybe one more comment on your on the piece of debt. It's not that we're just now about to go to massively do debt finance acquisitions, but we have the headroom to do it, of course, it also depends on what you're actually doing with it. If you have a business suppose if you were to acquire a business completely debt free, it would make sense to buy deleverage. If you were to buy a business that already has significant debt on its balance sheet, we definitely need to take into account in the funding mix. But I think what we have today is flexibility from multiple perspectives to optimize financing and yet then you have to take into account what you should do with the money. When it comes to the asset manager, we're very pleased with the fee based income. It's both in the real estate business and in the Capital Markets business, where the fee has grown up. Today, we're looking at mostly organic growth opportunities. We are not at this point looking at massive inorganic opportunities in the asset management space. I think most asset management are fairly expensive and or not for sale. But if you jump into a more niche play or where you can continue on our buy and build strategy, yes, we definitely look at it. So if you look at what we've done, we bought a small LDI specialist, we bought a specialist in making money for government institutions, We have invested money in buying a portfolio warehousing then turning into a fund. Think more about those buy and build type of initiatives rather than pursuing a big standalone asset manager at current valuations. Thank you very much. Thank you. Next question comes from Robin van den Broek from Mediobanca. Please go ahead. Yes. Good morning, everybody. Thank you for taking my questions. Sorry to come back on the bank asset management and distribution and services. But last year, you seemed to show quite a bit of seasonality on H2 versus H1. So I appreciate the comments you made before. But can you maybe explain why that seasonality is there? Just to give a little bit more understanding what kind of number we should add to the second half of the year. The second question is on the economic UFR. As spreads and yields have moved up and down quite a bit over the last few years and this is the first time you've basically changed your economic UFR. So I was just wondering why now and how often are you planning on doing this? 3rd question is on M and A. I guess, I won't ask too much about FEEDAT specifically, but I was more wondering from an operational and financing point of view. I mean, you've been talking about M and A for quite a while. There's still loads of opportunity in the funeral market, in the non life and in the life market. So I was just wondering how would you prioritize M and from an operational perspective, from a financing perspective. If you could elaborate on that a little bit, that would be very, very handy. And with operationally, I mean basically integrating the asset. Is it a binding constraint that you can only do 1 or can you do more at the same time basically? On the seasonality, I'll take a little bit on the seasonality of the asset manager, Jos will take distribution business. On the asset manager, in principle, it's not that much seasonality. It depends on how your assets under management develop. So I think you can see continued earnings growth in H2. I just wouldn't double it simply because if you look at the pipeline of asset under management discussions we have, there are a number of significant potential assignments out there, but they need to fall, right, they need to close. And of course, the summer period, I mean, you get new inflows in the months up to May June, then July August is very few new mandates are being assigned. So you have always this seasonality when money comes in. So there will be growth in the asset management fees. I just thought it's not something you'd double because it depends on actually how the pattern of new inflows actually evolves. And in distribution, distribution commission business. For us, the inflow is our commissions are earned by the for the distribution company. And there it fully depends on how a portfolio looks like. If you, for example, have a portfolio only existing out of car insurance and they came in constantly over a year, then there will not be a lot of seasonality. But traditionally, the Q1 and the last quarter, you see more commissions in distribution companies. And in the second and in the Q3, the level of commission is lower because people tend to go on vacation, don't buy insurance. So it's fully depending on the portfolio of the distribution company. The Van Campen Group, for example, is more and the P and C business, that's more through the year a consistent picture. Borthogroup is more in disability and there it is more loaded in Q1 and last quarter. That to the seasonality on distribution, Chris, on the economic U of R. But the economic the setting and determination of the economic U of R is actually quite an elaborate process. It's not that our 2 guys are always like to pick a number. We look at the actual returns we make on the investment portfolio and then we run an extensive multi cardio simulation that if we value our liabilities with this new U of R and we run 10,000 risk and return scenarios around it, What is the and we just continue our policy, distribution policy that we have today, what are the odds of us at some point missing our solvency levels? So you stress it, the Monte Carlo simulated with a UFR of 2.4 and then we assess the annual and the underscoring probability. That's what we do in the Q1 of every year. So it's quite an elaborate process. It takes time. So we do it once a year, mostly around the end of the first quarter when the full year results are done. When the strategic asset allocation review has been done, that program is underway in implementing and that's when we do the annual economic UFR reassessment. So it's an annual thing done around March, April. And on your last question, the M and A flexibility from a more operational point of view, I think Chris already elaborated a little bit on the room to maneuver that we do have financially. It's depending on how the balance sheet of a company looks like, whether it is fully loaded with debt or not. Operationally, it depends on the type of business you acquire. For example, we already integrated the funeral portfolio of Generali. So if we could do a funeral transaction tomorrow, the team in Enschede is ready to integrate such a portfolio because they are already done with the integration of all the funeral portfolios we acquired recently. In Non Life, we are in the middle of the integration of the portfolio of Generali. That should be done somewhere over the Q1. So that wouldn't withhold us from looking seriously at potential non Life portfolios, same for disability. In Life, it's more a matter of building a queue to integrate to bring our portfolios to our software as a service platform. So that wouldn't withhold us from buying businesses even when we could do a very good and responsible transaction. So in general, there is no operational reason for us at the moment for not looking at potential transactions in the area of the insurance business. Same for distribution. Distribution companies are not integrated into ASR. We leave them alone and entrepreneurial. So that wouldn't withhold us in that area. So in general, Robin, if and when there would be an opportunity, there wouldn't be a lot of operational reasons not to look at it. Having said that, let's assume there starts a process tomorrow. It normally takes 3 to 4 months to get a signature. Then you need 2 to 4 months to close the transaction. So any integration would start as from mid next year. Okay. That's very helpful. And then maybe, Chris, one follow-up on the economic UFR. I mean, I guess, to some sort of gain between stock and flow. But is there any implication connected to the fact that you've raised it on how you look at M and A as well? Or is it irrelevant? No, it's not linked to M and A. It's more it gives you more feeling on our well, in essence, it gives you some feeling on our capital capacity, right? If the U of R moves from 2.2 to 2.4 from our perspective, we believe that if you compare that number 1 154 to say 120, there's a good 30 percentage points of capital that is actually not immediately needed to run the business from that perspective. It gives me more feeling on our capital strength and our investment thoughts. But it's less it's not too much give up given by we do this once a year, we run the numbers, we test it and out comes the economic UFR and this which then drives the number and gives you a feeling of our distribution or investment capacity. It's not but it's not that means that comes first and how we spend it comes later. It's not that the spending plan comes first and then we think, oh, gee, how we're going to make a view of our next business plan. That's not the way we work. That's very clear. Thanks. Next question comes from Andrew Barker from Citi. Please go ahead. Hi. Thank you for taking my questions. Just two questions, please. First is on the individual life systems. I know you converted 2 in this period to the software as a service platform. Can you just remind me how many are left in the queue and what the approximate timing and size of these conversions are? And if there's any reason to believe that the cost savings associated with the 2 systems in this period would be materially higher or lower versus the other systems in the Q? And then secondly, you touched on the EOPA changes or proposed changes for the standard formula briefly. Are you in a position where you're able to give any potential impacts to your ratio at this point? Thank you. On the individual life systems, the software as a service system, Andrew, is a system which we don't own. So we only pay the variable cost per policy. There are 2 in the queue currently. 1 of that is a portfolio of our own and the other one is the Generali portfolio. And they should both be done before the end of next year. And then we might be able to shut down some of the existing systems where which are all based on fixed cost, and that would be a next jump in lowering the cost in our Life business. But that's all projected in our target to lower the cost according to the less of the decrease of the portfolio. So that's already in the plan, those lower costs. On the EIOPA review of the standard formula, Andrew, if you go through your entire report, which I hope you do not do, but if you were to do it, we could be affected or could impact us, which is the capital charge for rate risk, which is government guaranteed mortgages and we just lack DT. On rate risk, that could be a small negative for us. The existing standard model does not allow for negative rates, and the new model actually does allow for negative rates, which makes all the sense in the world that will feature in over time. There will be a small negative. In the past 6 months, we actually did tighten our rate exposure a bit. We reduced our interest rate exposure. So the impact of this change is a function on your interest rate exposure anyway, how much your lower or negative rate assumption could affect you. It's going to be a small negative, but not a huge amount because through rate management, you can actually manage a lot of this. Secondly, the new EIOPA regulation do as you recognize government guaranteed element in mortgages that will reduce the counterparty default element of your mortgage book. That's a small positive. And finally, there is a lag DT. Today, our lag DT does not require any future fiscal profits to substantiate our LAC DT. Our LAC DT is fully built up, current year profits and DTLs or run up of the risk margin. So, pure future profits are not in there. And the way I interpret the AEOPA documentation is that actually there is some more room to include future profits under certain conditions as substitution for your liability. So it could give some upside to your liability if you were to use that component as well to substantiate and underpin your lack BT assumption. Today, we haven't done that yet. The net of all those 3 components, I would guess it's a neutral, possibly a small positive depending on how far you want to go in your LAP DT assumption. So far, we've been quite conservative on LAP DT and the way we substantiate it. So, depending on how far you want to stretch yourself in that field, it's a neutral to possibly a small positive given the fact that the tightening of our interest rate hedge has actually reduced the small rate shock. Very clear. Thank you. Last question comes from Ashik Musaddi from JPMorgan. Please go ahead. Hi. Good morning, Barton and Chris. I have three questions, if I may. So first of all, I mean, if I read the press release and your presentation, it looks like you're talking about rerisking your assets versus full year 'seventeen. But then if I look at one of the slides, which is where you have shown the market move, the SCR movement, Slide 26, So that says that market risk is going down by $63,000,000 in the SCR. So you re risk your assets, you have acquired Generali's asset portfolio. So that should have brought some market risk, whereas this slide shows market risk has gone down. So what am I missing? Because this slide shows that spread risk has actually decreased there as you have moved more into corporate bonds. So that's one question. The second question is, I may have misheard it, but you mentioned that your solvency to ex EFR is 154. Percent. And if we ex out VA, it's somewhere in 110% and 125%. So that looks like your VA benefit is north of 30 points. That number doesn't sound doesn't make a lot of sense to me because if I look at your sensitivity, you is that understanding correct? Or I is that understanding correct? Or I misheard something when you mentioned ex UFRX VA number? And the third thing is, can we give some clarity as to your IFRS numbers and Solvency II capital generation is diverging a bit for past 2 years as well and this half as well, your Solvency II to capital generation dropped by 7% year on year, whereas your IFRS earnings was only down 1%. And in past 2 years as well, the similar trend has been visible 2017 versus 2015. So any thoughts on these three questions would be very helpful. Thanks. Yes, Ashita, Chris, I think you referred to Page 26. Indeed, you can see our market risk down by 63. That market risk reduction actually is a result of various moving parts. In the first half year, real estate risk was up a tiny bit. Equities was virtually stable in that portfolio. Spread risk was down slightly, not because we declined our corporate bond portfolio, but we shortened the duration of our corporate bonds. And so, basically, the sensitive again spread movement was down. So it was a duration of credit spreads while in credit spreads as such. But the main driver of the reduction in market risk was a limitation on the rate exposure on rate risk, which we felt actually the expected return on the non interest rate position is very small. And given today's rate and market environment, we've always said again, not very useful to run some rate risk. So we actually reduce our rate risk. That interest rate risk component, that was the key driver behind market risk. If you'd net for that, market risk would actually have gone up during the first half. And so the re risking we're proposing today will be as of before Solvency Per Today. So in the first half market risk ex rate went up, I need it. It was net negative due to interest rate risk charts and we will go up again. But that will be on the classical, I think it lasted credit equities and some of the mortgages. Sorry, just a follow-up on that. I mean sorry, just a follow-up on that. You're mentioning that you're shortening the duration of credit and you're rate. So how does that stack up with your duration matching or cash flow matching? Is that not getting changed? Because if I mean, I think last year as well, you mentioned that you have shortened the duration of your sovereign bonds. So if you keep on shortening your duration, does that match with your cash flow profile or duration? No, because we also have a significant derivatives program. So the interest rate management is a function of corporate bonds, corporate bonds, swaps and swaptions. So it's a mix of the thing that works. So we tightened the interest rate risk on a total holistic basis in that we shortened corporate credit to some extent. We swapped some traditional government even for Italian government bonds post the spread widening. And we and there's a swap and swaptions portfolio that is the rounding to make sure that the total interest rate risk is where it is. But we felt at this point in first half year that was more physically slightly less duration credit plus more long dated swaps than the other way around. Okay. Yes. And on the UFR, you slightly misunderstood me, apologies for that. I think the solvency at a UFR of 2.4 is 154, right. There is another UFR of 0, but UFR of 2.4 is 1.324. Our VA effect is around 10, while one point of VA is a 1.1 solvency effect. So if you were to look at our solvency ex VA, you would move from 194 to 184. The solvency ex VA and ex UFR is $113,000,000 to $127,000,000 to be very precise. Depending on a bit on whether you if you take a simple UFR out, you get the $127,000,000 If you at that time, we would also take a hit for less tiering risk, if the UFR would be taken out completely, you would have a tiering issue like most others have today. If you adjust for the tiering, you move to 113. So to recap, Solvency 194, solvency XVA 184, XVA XUFR 127 and if I then take the harshest view on tiering, assuming that there would be mechanical consequences for Thieving, I get to 113. So with the UFR of 2.4%, it's 154%. Yes, got it. That's clear. Thank you. And the third question on Ibrance. Sorry, sorry, Ashik, on your third question, I think there are various parts I think the gap between the 2 are on operating results and sold into cash generation is possible. Share accounting, share accounting results do contribute to operating results or the release of the capital gains reserve does contribute to our operating results, but does not contribute to our solvency. And the CapGen release was effectively stable, it was down 6,000,000 in the end for NAV year, effectively stable. When it comes to headline IFRS numbers, I think they probably move more in sync. There you see slightly less capital gains than we had last year and a good contribution to the generalities social plan costs to fund the reorganization of Generali. Okay. That's very clear. Thank you. Thank you. That concludes today's questions. I will now turn back to the host for any additional or closing remarks. Well, thank you. Hopefully, this call was helpful to answer all your questions. We were happy to do so. We look forward to meet you all at our Capital Markets Day at the end of October. And in the meantime, we continue to deliver on our medium term targets, and we're confident that we will be able to continue the delivery in a way as we have done it until today. So thank you all and I wish you all a very good day. Thank you. That concludes today's conference. Thank you for your participation, ladies and gentlemen. You may now disconnect.