Earnings Call: H1 2017

Aug 30, 2017

Ladies and gentlemen, good day, and welcome to the Azure Conference Call on the 2017 Interim Results. Today's conference is being recorded. At this time, I would like to turn the conference over to Michel Hilters, Head of Investor Relations at Aesair. Please go ahead, sir. Thank you, operator. Good morning, ladies and gentlemen. Good morning to those of you also listening in from the U. S. It's really early. Welcome to ASR's conference call on the results for the 1st 6 months of this year. With me today are Jos Baader, CEO and Chris Vigee, CFO. And we're here to discuss the results and the business performance. Jos will start off and Chris will follow on with Capital and Solvency. After that, we'll open the call for Q and A. We have I would like to point out, we have the time till 12 o'clock this morning. So that's an hour and a half from here. I think it's sufficient time for all your questions. But I would like to suggest if you could start with your first two questions. And then if everybody has head around, then we can take follow on questions. But so before handing it over to Jose, I would like to point out also the disclaimer that we have at the back of the presentation. And I would appreciate if you could have a quick look at it after this call. So having said that, Jos, floor is yours. Thank you, Michel. Good morning, everybody. Hope you had a good night. And those who are up early, hope you will get some sleep after this call. Ladies and gentlemen, it may not come as a surprise, but we are very pleased with the strong results that we have delivered in the 1st 6 months of 2017. I'm particularly proud that the continued solid performance is driven by all of our businesses. In each of the first two quarters, we outperformed last year's results and demonstrates that we have been able to maintain the strong momentum of our businesses. We will discuss our financial performance and progress of our businesses in more detail, but let me start off with an overview of some of our key metrics and those are on Slide 2. This slide shows our performance on the key metrics that we have defined and consistently report on. Performance in the 1st 6 months this year has been strong as said on every key metric. I will highlight some of them. Our operating result was up 28.8%, yielding an operating return of more than 17% compared to our targets of up to 12%. Clearly, we are putting shareholders' money to work. All three segments, nonlife, life and non insurance showed growth. Operating expenses remained flat while absorbing the additional cost base of the acquired businesses. So focus on continuous expense reduction delivers results. In our Non Life segment, our combined ratio of 93.6% reflects our underwriting excellence and the exceptional low level of large claims in the first half year, mainly due to the benign weather conditions this year compared to the first half of last year, The 2.8 percent improvement also includes the adverse impact of hail and water damages in the Q2 of 2016. I am pleased to see that at these healthy combined ratios, our Non Life business delivered close to 6% top line growth. Our Solvency II ratio remains robust at 194. As you know, we are still using the standard formula. This is a 5 percentage point increase from the beginning of the year, strong organic capital creation of 193,000,000 and favorable markets outstrip the impact of the share buyback of roughly 5 percentage points, the lowering of the VA roughly 4 percentage points and the re risking of the investment portfolio which was 7 percentage points. Total capital sorry, total capital accretion before the share buyback amounted to €333,000,000 and this includes the additional capital generated by excess investment returns and operational efficiencies. The quality of our capital remains also high as well, with Tier 1 capital alone representing almost 165 percent of the SCR. And then there is still plenty headroom to maneuver if we need to in both terms of Tier 1, where we still have headroom of roughly €1,100,000,000 to €1,200,000,000 and Tier 2 and Tier 3, where we still have room of over 700,000,000. Chris will provide further detail on our solvency later and those of you who have listened to our calls in previous quarters know that there is little else that gives Chris more pleasure than talking about our solvency numbers. In sum, a very strong set of results. And talking about solvency, I would like to make a few remarks on that. Our strong solvency position enables us to remain entrepreneurial. As we've always said, everything above 160 makes us to be entrepreneurial to pursue profitable growth. Our strong solvency has also enabled us to participate twice in the sell downs from the Dutch state. In the 1st 6 months this year, we purchased 6,000,000 own shares for a total amount of roughly 153 $1,000,000 We consider on top of the earlier commitment, which was equal to last year's capital generation of roughly €340,000,000 to buy back an additional amount of circa €100,000,000 of shares if the Dutch state should decide to undertake a final placement of its remaining equity interest in the second half of this year. Including dividends, the total distribution to shareholders would in such case amount to approximately 440,000,000 in 20.70. Of course, this intention will depend on our solvency ratio at the moment of the decision of the Dutch state and by then market circumstances. While we are on this topic of returning capital to shareholders, I would like to emphasize that our buybacks at this time are strongly tied to the government's process of privatization of ASR and our commitment to support that process to achieve the best results. Our strategy aims to deploy capital in our businesses to grow both organically and by acquisitions, preferably small bolt ons. And ladies and gentlemen, we still see opportunity and will stick to our strict financial discipline and focus on value over volume. Let's now turn to our business portfolio and the key developments during the 1st 6 months of the year and those are on Slide 3. I'm sure you're familiar with this matrix in which we plot our businesses as we have done since our IPO. This slide highlights some recent developments and achievements in the execution of our strategy. First of all, in the top left in Box A are our businesses that provide stable cash flows. Here, we focus on organic growth. In P and C, we achieved an above market premium growth of almost 6%. New sales were up almost 22%, while margins expanded partly due to premium increases in motor, especially in sec liability motor insurance. Further on in this segment, the Nivo migration will be completed expectably in the last half of twenty seventeen, and that will be within Bagchets and within times and within time, synergies from integration of both Accent and Nivo start to materialize. Above that, in our funeral business, we have adopted pricing to interest rate environment to protect margins. We lowered the calculatory rate from 2.25 to 2, which means that our new business is now priced at a 6% higher level. In the Capital Lights space, Box C, we have made also further progress. We've done an external placement in our ASR Dutch Mobility office fund for roughly 150,000,000 euros We launched our ASR Mortgage Fund, which attracted a lot of interest from investors and we already got within a few weeks a firm commitment of over 300,000,000 in the first half and that continued in the second half of this year. Further on, the total of the 3rd party assets under mandates grew with close to €1,000,000,000 And finally, last year, we launched our general pension fund and we already by then signed a few smaller contracts. In the meantime, in the first half of this year, we have signed the Arkara Dispension Fund contract, which is roughly about 1,100,000,000. Dollars In Box B on the left angle down are the large service books we are managing. As you may know, our focus there is maintaining a low cost level and variabilized cost over time. We continued to migrate those books to our new platform and finalized in the first half year the migration of the Falcon book, which was one of the most complex books within our company. We now have started with the last few books and those should be done at the end of next year, latest Q1 2019. And finally, in Box D, the business where we decide to divest, we have completed the sale of 6 offices of the last year acquired portfolio of the Dutch Railways that didn't fit in the ASR Dutch Mobility Funds. Let's now move to Slide 4. And as already mentioned in my introduction, momentum of our business remains at a high level. Both the first and the second quarter were considerably stronger than the same periods of last year. Underlying performance is very sound, while we have also benefited from benign claims, as said earlier, in the P and C business due to the benign winter and favored from financial markets in our life business because the investment portfolio delivered a better yield pickup. All key business segments contributed to the increase as you can see on the next slide and that's Slide 5. The operating result increased by $86,000,000 to $385,000,000 As you can see on this slide, all three key segments, life, non life and non insurance contributed to the higher results. Non life result was up 44,000,000 to 106,000,000 while life was up 40,000,000. I will talk about those 2 in more detail in a moment on the following slide, but first some comments on our non insurance activity, which combined were up €2,000,000 in the 1st 6 months. Banking and Asset Management improved due to an inflow of assets under management, resulting in a higher fee income. As mentioned, we see good business developments in asset management and this segment has the potential to grow to a $20,000,000 business in some years' time. Acquisitions of Corins and Super Herant contributed to an increase in the operating result in distribution and services. This segment is up to speed and is gaining further mass and could potentially contribute already this year a contribution of $20,000,000 To finalize holding and other, a decline of $4,000,000 shows impact from higher current net service costs for pension obligations of our own personnel, mainly due to the low interest rate environment. So overall strong increase in operating results driven by gains across the various businesses. Let's now turn to Slide 6, where we highlight the developments in our operating expenses. Key message there is ASR is on track with the delivery of our cost targets. Our ongoing focus on cost is one of the key drivers of operating earnings and long term value creation. We believe we may well be the leader in terms of cost discipline and cost culture as demonstrated by the expense ratios of all of our businesses. Overall, operating expenses decreased with $1,000,000 and this already includes the absorption of the additional cost base of the acquired business of roughly $6,000,000 in the first half year. So we are, as said, on track to deliver our cost reduction. In non life, the expense ratio improved from 8.4 to 7.5 driven by strict cost discipline and portfolio growth without FTE growth. In Life, the expense ratio was also better 9.6 compared to the 10.1 of last year. Operating expenses decreased benefiting from synergy efficiencies of acquired portfolios and the migration of live books to our new platform. Let me now turn to Slide 7 for some key developments in our Non Life segments. In the Non Life segment, our underwriting expertise is market leading. All Non Life product lines showed combined ratios below 100 and ahead of their targets and we are proud of that. Gross written premiums rose by 5.6% due to growth in P and C and Health. The market developments towards more rational prices allowed us to grow our top line by both prices as well as more volume still within our strict pricing and underwrite discipline. In the P and C business, the increase was mainly driven by the success of our new combined product, the vanute 4dillbakat in Dutch. And in disability, our volume focus led Bezava customers to choose for the lower price proposition of government entity UWV. Operating results in non life increased 71% to 106%. The increase was driven by strict underwriting and claim handling, the absence of large claims and favorable weather conditions in the first half of this year, while last year we had €25,000,000 of claims from hail and water damages. This is reflected in the favorable development of the combined ratio. Overall, the combined ratio is at 93.6%, so well below our target of 97%, an improvement of 2.8 points compared to last year reflects broad based improvement in claims ratio, expense ratio and commission ratio. In P and C, the claims ratio was exceptional strong at 92.7%, partially due to the already mentioned favorable weather conditions. However, also on a normalized basis and normalized for us is a 4 years average level for large claims, the combined ratio of the P and C business would still have been under 96. In the disability business, the combined ratio slightly increased to 91.9%. It was 90.2% in the first half of twenty sixteen and this is due to higher claims relating the short term absenteeism. This was partially offset by the release of the technical provision related to WGA Own Risk Portfolio. The combined ratio to finalize of Health Business improved by 1.1 percentage points to 97.1 due to the higher benefits this reporting period from the recalculation of claims by the Dutch National Healthcare Institute and better underwriting results from supplementary health insurance. To sum this up, very strong performance in non life in the 1st 6 months of this year. So let's have a look at Slide 8, the performance of our life business. Operating result in Life increased almost 15% to 314,314,000,000 Our investment margin increased with $58,000,000 due to higher direct investment returns. Those were up roughly $16,000,000 dollars as a result of higher yielding investments, especially in equities and mortgages. Within the investment portfolio and mortgages within the investment portfolio and a higher contribution from realized capital gains, those were up roughly $42,000,000 The latter is part of our shadow accounting method. However, we also incurred lower results on cost coverage. This was down 5,000,000 dollars due to the shrinking individual life book and a lower result on other technical sources, those were down $13,000,000 such as mortality in the first half year. More people than expected died. Chris will provide some further color on our Life earnings. The decrease in gross written premiums in Life to $848 is driven by the acquisition of Nivo and the large pension contract last year, which both were recognized within single premiums. Excluding those 2 one off effects, gross written premium increased in life by 3.4%, while recurring premiums remained stable. The share of capital light defined contribution products in new pension business continued to increase and is nowadays roughly 3 fourth of the total new business that was in the first half of twenty sixteen at roughly half. The growth of new business premiums from the new DC project increased with 60%. Having said that, we are now on Page 9. And to conclude my part of the presentation, our performance has been strong on all key metrics during the 1st 6 months. We have been able to keep up our business momentum at a high level and our performance is better than our medium term targets. Of course, we will continue to work hard to make the second half of this year as successful as well. And I now hand over to Chris. Jos, thank you very much. I have to make one small correction. Jos told us the best thing in life is to talk about solvency. Actually, there's one thing in life that's more fun than talk about solvency is to create solvency. And for those of you that question my mental state, I'm talking about my professional life, of course. But never mind, let's move on to Page number 11. To talk about book values, I always like to look at book values as a sign of long term developments. Healthy companies do generate book value over time in spite of accounting fluctuations. Page 11 shows our IFRS equity and our Solvency II owned funds. So an accounting or more market value oriented book values we can see over time growth in book value. IFRS equity grew by 6% since the last time we measured it from 4.481 to 4.845. If we had excluded share buybacks, our growth in book would have been about 9% in the first half year. Total book value growth in IFRS equity was 15% in the last 2 years. So I think the continuous growth in book value in IFRS equity or even in Solvency II equity is demonstrating the underlying development of our group. To move to our solvency level, Page number 12. Page number 12 shows the stock of solvency that we have. A solvency level without any actuarial or theatrical fertilizer, it's the actual decent clean solvency number as we calculate and number of 194% with very solid tiering levels. Not in this presentation, but if you were to click and combine our historic presentation, you would find that our quarterly solvency levels since we started reporting Q1 2016 have not dipped below 186,000,000 and moved between 186,000,000 and 194,000,000 in those quarters in spite of us in total distributing over 500,000,000 of capital to our shareholders. So we believe that the stability of our solvency number is one of the more agreeable features of our balance sheet. Headroom, Tier 1 headroom stays above SEK 1,000,000,000 dollars Tier 2 and Tier 3 headroom, dollars 747,000,000 up $100,000,000 since the last time we measured. So we continue also to add solvency Tier 1 and Tier 2 headroom, which gives our group substantive amount of capital flexibility. Like DT, at 60% of our potential, that appears to be a reasonably conservative number. But again, you can see this number the own funds and the required capital and how we got to another 94%. We're particularly pleased with the not only just the level of capital, but also the build up of the capital and the amount of Tier 1 capital in there. Page number 13 gives more intelligence and details on the Solvency of Life, our Life segment. From a capital perspective, this still is the biggest entity that we have. The solvency level of our Life business is 187%, owned funds of SEK 5,200,000,000, required capital of SEK 2,700,000,000. Just as a background, 187 percent solvency as is at a UFR of 2.2%, which we reflect on as a more economic metric of solvency. The Life segment solvency will be around 134%, so still substantively above 100%. And if you were to exclude the UFR or the volatility adjusted altogether, in our estimate, the Solvency II of our Life business would still be above 100%. So, very strong Solvency on Life business in 187%. Page 31 and Page 32 of our document give more detail on the Life earnings and the Life back book, which no doubt will feature in your questions, but that's some more intelligence there. And to complete the analysis, the Solvency II of our non life entity, Escharre, is 189%. So whereas the solvency of the group is 194%, both our legal entities have Solvency II ratios according to the standard formula substantially over 180%, 187% and 189%, percent respectively. Moving then from stock to flow on Page number 14. There are various ways to look at the solvency of capital development. I will say, if you ask 10 analysts, you got 15 different metrics to look at the way you bucket and decompose your delta and solvency. We share too capital accretion, which is on Page 14 and organic capital creation, which is the next page. Capital accretion basically is the delta between the solvency at the beginning of the period, at the ending of the period and then broken down into sources and uses of capital. As you can see, we sourced or created about SEK 690,000,000 of capital in the first half year just by running the business. Here we talk about technical results, underwriting results, investment results, release of capital from our book. How do we spend or use the capital? We spent about $357,000,000 in our business, which is adding to market risks, which is the absorption of the U. R. Patent wind, which is the payment of contractual obligations to our bondholders, which then leaves about SEK 330,000,000 of accretive capital. Out of this, we have spent we have paid €153,000,000 in total on share buybacks, retaining about €180,000,000 on our books in the first half year. And as you have seen in our press release, contingent upon a final sell down, contingent upon the situation at the time, It is our intention or we are exploring the ability to spend about $100,000,000 buying back shares out of this further retained capital in the first half of the year. If we would do that, that will bring the total distribution to our shareholders in this calendar year to well over SEK 400,000,000. But again, we said that no matter how you bucket and decompose capital developments, there was SEK 690,000,000 we added, SEK 360,000,000 that we used. And out of that, the remainder was €330,000,000 was accretive of capital out of which we shared already about €150,000,000 On rerisking, Page 27 of our documents shows development in our required capital, the SCR, That gives a bit more color on how we re risked. The market risk of our group increased by $182,000,000 in the first half year, predominantly in equities. There was a small increase in real estate, a small increase in credit risk. Those were the key areas that we allocated market risk and reduced our currency risk. Increased our counterparty risk a bit, mainly in mortgages, €30,000,000 more consumption of SCR mortgages, some on medical expenses. And in our business side, you can see that the allocation of capital is gradually tilting towards non life with the additional use of capital of the non life business exceeded the use of capital in our life business. Page 27 shows you the bridge of our Adelphi SCR and you can see how our capital consumption moved. In terms of the whole rerisking program, program nearing completion, we spent about 7 points SCR point in the first half year, but 5 percentage points in Q1, 2 points in Q2 were done on equities. Actually, we derisked a bit on equities at the end of last quarter and during the summer in Q3, more from a tactical perspective. We felt that the market was a bit heavy, so a small derisking of equities. On the mortgage side nearer completion, we produced over $1,000,000,000 of new mortgages in the first half year and we're happy with our mortgage allocation. On real estate, we're actually done on real estate. We will make some small adjustments. Remember, we allocated more to real estate in the first half year as we warehoused the offices portfolio of our books. That added to our real estate exposure in the first half. Then at the end of the first half and during the summer, we placed those assets at external investors according to our plan. That room will now make up because that came out of our own balance sheet and that will give us more room to invest into real estate to move back to our target allocation. So re risking virtually complete, a bit of work to be done on credit and headroom to refill the real estate allocation of those assets that we sold to 3rd party investors. Moving to Page 15, which is the organic capital creation or solvency movements. On this page you can see the below the line and above the line development of owned funds and our SCR. Very pleased with a capital increase of 10 percentage points before buyback, so €189,000,000 moved to €199,000,000 after which we had a 5% spend on buyback and that was 194%. Organic capital generation, dollars 193,000,000 consisting of which is about almost 6% of capital in the first half, which roughly is 4% of operational capital generation, 3% of release of capital, 1% UFR drag technical movements and then a 4 points in market and operational developments. What we like of this number is that the total eligible owned funds increased by 143 plus 500. And we think ultimately in the long run, the test of success in insurance business is whether one is able to generate own funds. That actually adds to solvency in the book. So $643,000,000 of own funds. 2nd agreeable feature, the release of the risk margin €58,000,000 exceeds the unwinding of the UFR. So that gives stability and kind of inherent stability to our solvency level. And finally, we believe the operational capital generation of 143 is in line with without giving any guidance, but should be more than sufficient to cover ordinary difference during the year. If you reckon, we added SEK143,000,000 of operational business cap generation in the first half of the year. A few words on the market and operational developments. We can spot €500,000,000 of own funds generation and €188,000,000 of allocation of capital. In terms of points that is 4 percentage points in solvency. And the calculation goes as follows and everybody has a pen and paper in their hand should follow me 12% of additional financial market returns plus small modeling gains, plus 3% gain on the Unilever transaction leads to 15% point of SCR, take out 7 points of rerisking, take out 4 points of the lower VA gives a net increase of 4 percentage points in our solvency ratio. So it's 12 plus 3 minuteus 7 minuteus 4 equals the net 4 percent of additional market and operational development contribution to our solvency level. Furthermore, please note that the organic capital generation of SEK 193,000,000 decrease about 70% to 75% of the operating profit after tax and after hybrid. So the conversion ratio of profit to capital stable at about 70% to 75%. No doubt you'll have tons of questions on this, we'll take them as they come. But also far we're pleased with the organic generation of capital. Page 16 then shows the sensitivity of our numbers for various UFR levels. You will remember that we believe that the UFR that is commensurate to the actual cash investment return that one makes is a good metric or a good view on the economic solvency of the group. Historically, we've estimated that number at 2.2%. We will revisit that number, of course, at the end of the year, also bearing in mind actual cash yields, bearing in mind the actual rate levels that consist of the time. But at the UFR of 2.2, our Solvency II ratio would be 151% in for ASR as a group, about 134% for ASR Life. And at that level, the UFR unwind would be less be lowered by about €60,000,000 and the eligible owned funds would at that point be €5.4 billion. This picture also has the numbers for the end of the year, the SEK 4.05 billion UFR that Aeopa is predicting for the end of the year and the target 3.65, which is the current target level that Aeopa has in mind for the UFR if and when we get there. And you can see that our solvency II ratio would then move to 191 or 183 respectively and the UFR unwind would be reduced by €3,000,000 or €13,000,000 respectively. So this should give the analyst community sufficient material to perform calculation and assess solvency basis, capital basis at various UFR levels. 4.2% is the official number, dropping to 4.05%. Economically speaking, we think the 2.2% is probably more relevant figure, which then can be compared to something that should be well above 100. And at 151 sold here at the UFR at 2.2, we are safely and solidly above 100%. Page 17 shows the group sensitivities. As you as we have presented them before, our starting point in Solvency should be enabling us to absorb reasonable sensitivity without endangering any dividend paying levels or investment payment levels. You can show you can see here the spread level where we show the basis points impact after a VA adjustment. Roughly speaking, any point in VA, 1 point in VA is 1 point solvency ratio. So, 75 basis points of credit spread impact is after a 21 point of VA contributions and 21 points in VA tends to be 21 solvency points. So that you can actually break down numbers into a gross and to a net number. The number that's not on this page, which you may find interesting is just sensitive to government spreads, to sovereign spreads. If the sovereign spreads were to widen by 50 basis points, 5-0, we would assume at that point the VA would also widen by 9 points, giving us a net net 5 percentage point drop in our SCR ratio. So 50 basis points spread widening and severance minus 9 or supported or deflected by 9.VA widening will give a 5 percentage point drag in our Solvency II ratio. So that our solvency for your approval. The sharper analysts will find that the interest sensitivity of the group has changed a bit. We manage and hedge our interest rate risk on an economic basis, on a cash flow hedge basis as much as possible. In practice, we have a hedging bandwidth because you can never Given the market environment, we have actually looked for the upper end of the bandwidth. So the interest rate sensitivity of the group has increased a bit. Within our management bandwidth, we've allowed the team to take a little bit more interest rate risk and to be a little bit more interest rate exposed given the development on QE that appears to be gradually, quickly unfolding. So you can see the rate sensitivity of the group to go up gradually, which is still within our bandwidth, but the upper end of the management bandwidth that we've set. Finally, our strong and resilient balance sheet on Page 18, we'd love to stress that our balance sheet is very strong. Various metrics, so too strong in terms of level and in terms of composition. Substantive flexibility, we've got Tier 1 and Tier 2 and 3 headroom. As a management team, we always think about are there opportunities to use a Tier 2 or Tier 3 headroom. And if an event would take place, we would certainly explore various Tier 1 or Tier 2 opportunities to further support our balance sheet. We've got headroom there. Cash remittance, we upstreamed $250,000,000 out of our businesses to our holding. That is not a restrained number, but we cannot do more. It's a deliberate choice to keep the cash and capital in our various operating entities. We did upstream SEK 2.50 €4,000,000 but there's no limitations. It's our policy to keep cash there where people are making the money. And if you look at the operating returns of our entity of entities, that's where money is being made. The solvency levels of our entities, which I said was well above 180, do not provide at this point in time any limitations for upstream enough capital. So no concerns in that field. Leverage metrics, financial leverage, 23.5 percent on an IFRS basis, well within our target range. Double leverage, 103% within our target range. Had we not bought that shares for $153,000,000 our double leverage would have been nearly precise under 100%. Actually, 100 point 3 would have been a double leverage excluding share buyback. So it's still very safe within our range. Interest cover 15 times on an IFRS basis and 11 times on operating earnings basis. So we think ASR stands out with a very robust and resilient balance sheet. That ends my presentation. And knowing that Joss loves nothing more than wrapping up, I'd like to hand the sheet back to us, Joss. Thank you, Chris. And it's not only wrapping up the story. I will wrap you up afterwards. So before we open the session for your questions, I indeed will conclude some key takeaways. We are very proud of the strong performance during the 1st 6 months of this year. The increase in our operating performance was driven by solid performance in all of our business segments and we are very happy with that. Especially, I would like to mention again our underwriting and claims handling skills combined with the financial discipline resulting in a market leading and profitable combined ratio, particularly noteworthy is the fact that each product line is ahead of targets. Our solvency, as Chris already explained, remains robust at 194. And just to reiterate, this is still based on the standard formula and after absorbing rerisking and share buybacks. We believe that with this strong balance sheet and Solvency II, we are in a very good position to pursue profitable growth both organically and through acquisitions. And finally, as already explained, we consider on top of the earlier commitments to buy back an additional amount of circa €100,000,000 of shares if the Dutch state should decide to undertake a final placements of its remaining equity interest in the second half of this year. And I'm sure and I want to stress that you will understand that this is an intention and that this intention is dependent on the then prevailing market conditions and undynamics strong solvency. With that, ladies and gentlemen, I hand over and we are happy to take questions. Ladies and gentlemen, as said, we will start the question and answer session now. The first question is coming from Mr. Cor Kluis, Avian Abrau. Go ahead please. Damian, got a couple of questions. First of all, about your solvency. It's already very strong solvency, but it seems that you use quite conservative leggity assumption, especially in life insurance, of around 60%. Some peers are using more around 75%. Could you give an indication of what your solvency ratio would be if solvency the negative T would be 75% and what it would be if the negative T would be around 100%. Second question is about the de risking. You de risk somewhat on equities and real estate, as you explained during the call. What's the positive Solvency II effect of those two actions? And last question is about the fires or at least some large fires, which we have seen here in the Netherlands in the Q3. I think I counted around 5 or 6 now already. Roland Casino was a big one, of course. Can you give yes, do you have better in the writing than peers like you've seen in the last 8, 9 quarters? Those are my questions. Okay. Very good. On LAC DT, we've indeed used a LAC DT figure of about 60%. Look, there's very I'm not going to comment on what our colleagues do, I'm going to comment on how we run our business. Although we tend to think pretty conservatively on our LACTT numbers. I think that as a Russian saying it says free Ts can only be found in a mouse trap. Lagged PT is a number that could vary over time. And in our view, you don't have a Lagged PT number that's very dependent on current performance of the group, because then you enter a situation if you ever have a dire year and your solvency is under pressure, you don't want to have lag DT evaporate at a time when actually you need it most. Our LAG DT, if you think about the various components that LAG DT should have, uses predominantly component 1, 2 and 3. So very little use of component 4 except for the runoff of the risk margins. So the runoff of the risk margin and the contribution to that does to your future earnings capacity. That actually the only part of component for that we've used in our LAG DT, which means that today in our view there's very limited downside to it. Is there upside? Possibly, possibly, but that depends on us reviewing that number. It also depends on us reviewing our DTL position over time. In terms of sensitivity, if we were to move the LAGP of ASR Live to around, say, 80%, that's the number that I have, I guess that would add about for the group about 6 points 8 points of solvency for the group. So from 60 to 80 ASR Life, group solvency would move up by 8. We were to move likely to 100. From 60 to 100, that would add about 17 points for the group. Although I think in practice moving to 100 is a pretty daunting exercise and I think that's yes, that would create a vulnerable number. But it gives you some feel for the flexibility that likely T has or the impact it has. We believe downside is limited. For upside to take place, we need to view component 4. Please note, there's an EIOPA consultation paper out there at this point in time. The consultation paper does note that various European countries have various perspectives on the LAC DT and that the largest two countries, Germany and France, hardly use components for. So I have no crystal ball on what AOPA will decide, but we think at this point in time, it is wise to have a stable, defendable number and don't run ahead of what Aopa does, especially others first would love to see how our LEC on DTL develops as well. But these numbers give you some feeling 60% to 80% would increase group solvency level by about 8 points in SCR. From the de risking well, that has a small benefit. I mean, we derisked a bit in equities. It's much less than we added in risk, but actually it was more profit taking exercise and then massive derisking. It may support group solvency ratio across all the activities at the end of June July by one point or something like that, that order of magnitude. So don't so we de risk it was like a profit taking exercise rather than a massive de risking or a solvency push up exercise. And your last question, Cor, on the developments of the combined ratio in non life, until now, and we're not giving any guidance going forward. We haven't seen any large adverse developments. As far as I know, we were not in one of the large claims in the big fires last period. But theoretically, it can happen tomorrow. And the same is for weather related claims. As we have seen last year, it could be possible that a big storm occurs and that would harm us too. And I said, if we look at our combined ratio in non life, and I would normalize that for the 4 years average in large claims, it would be still below 96. So in terms of looking forward, a number between 92.5% and 95.5% is a safe number as far as we can see it today. Okay. Very good. Thank you. The next question comes from Mr. Albert Ploegh, ING Bank. Please. Good morning. Yes, three questions from my side, 2 operational ones. First on the Life performance, the technical result was down. You mentioned on the mortality side with influenza. But is that the full explanation of the year on year decline? Or is there something else going on well? And the second question on the non life on the disability. Yes, premiums were slightly down. You mentioned also in the presentation that some clients switched to the U. S. A. Due to better pricing. Basically, where will this bottom out? Because I guess this trend is not yet fully ended. So maybe a little bit more color on the premiums on disability would be helpful. And the third question is on, let's say, your capital allocation. And you mentioned also in your opening statements to remain disciplined on also on bolt on acquisitions. Is there anything you can give, let's say, in terms of update on the pipeline? Are you is there anything to be expected there? Or is it still quite silent on that side in terms of files? Thank you. Very good. Albert, let me it's Chris. Thanks for your question. Let me answer the question on Life. On the technical results, it went from €59,000,000 to €46,000,000 €13,000,000 decline. I would say about €8,000,000 decline that was a lower mortality results, which we see as predominantly incidental. We had an influenza wave in the winter that caused more deaths. So, dollars 8,000,000 of that is incidental influenza wave, dollars 5,000,000 really is other, other, other stuff that happens in your business. So, the majority of the decline of the technical result, we see as an incidental event because of influenza in the winter. Okay. And on your non life question on disability, Albert, we have seen quite aggressive pricing from the UWV in the Bezavah area and we have decided not to compete with irrational pricing at least from our point of view. That did cost in our top line roughly $13,000,000 of gross written premium. So the effect is not that big. Going forward, if a client decides to take insurance from the public system, he is obliged to stay there for 3 years. So those customers will not return in the next 3 years. We don't expect large adverse developments going forward, but before this area will start to grow again that could take another 2 to 3 years. So hopefully that answers your questions. On acquisitions, I'm hesitating a little bit, but let me tell you a story about my youth. When I was young, I love to look at beautiful girls and I try to understand how the character was, but I never discussed this with my parents until I was sure that she also would fell in love with me and we were able to have some kind of an understanding that we would go further with each other. So and actually the same is with acquisitions. We see a lot of beautiful girls, some with a nice character, some with a less nicer character. And as soon as we have decided to engage, then we will come up to the market. Yes, okay. We shall see a lot of beautiful girls. Let me then rephrase it a bit. I mean, yes, so far you'll be very explicit, the buyback's done and also to help all the budget, the €100,000,000 you announced this morning, very much tied to the sell down of the government stake. But yes, you're still generating a lot of capital as you show. And I know you're looking first for organic growth bolt ons, but I mean the headroom still remains quite a lot. So yes, I would like to find out, I mean, is it an ongoing buyback program something you clearly consider if there would be no files on the table? What we have said as from our IPO, we are not capital hoarders. So if and when we don't see any opportunities to invest organically or inorganically in the business and our return on equity would start to deteriorate, then we definitely would come up with the most efficient way to return capital that is not used by the group to shareholders. At this moment in time, we still see sufficient opportunities to put capital at work. We still see organic growth opportunities and some inorganic growth opportunities. The next question comes from Mr. Stephen Haywood, HSBC. Go ahead please. Good morning. Thank you. I'm just wondering, out of curiosity, if the Unilever transaction was not announced, would you have been in a position to announce the potential €100,000,000 buyback that you expected to do when the Dutch state sales down? Just out of curiosity, that was. And then you mentioned the €20,000,000 earnings from both of your non insurance businesses. Now is this the limit of these operations? Or do you think they can potentially get bigger and contribute more to the group? And if not, then I guess what are the bigger drivers going to be of the group in terms of the Life business and non Life business? Where is the growth going to come from here? Thank you. Stephen, on your first question on the unit labor trade, yes, well, that's got speculation on a what if scenario. We would have to see at that point safe to say that excluding Unilever, our solvency would have been 191%, so still well positioned to return capital and to continue to invest in our business. What we had done at that time, honestly, it's kind of speculating on a hypothetical event. Our perspective, 191 ex Unilever would have been a very robust solid solvency level that gives us lots of capital flexibility. It is we found that the Unilever was a tremendous exceptional event and we'd love to share exceptional gains with our shareholders. And of course, as you also this is all of course we're not going to we can't write a blank check. I mean it depends on the timing of the sell down and depends on the situation at hand. But our intention is to share an exceptional gain over and above what we are running on with our shareholders. In terms of the $20,000,000 distribution business, we think this business would grow this year towards a $20,000,000 annual run rate. That is not the end of it. I mean, this is a growth business. So we think there's further growth in this business ongoing. So we said in the long run, we believe the distribution business should have between 5% 10% annual profit growth and that number I think is still there. So it could go to $20,000,000 and continues to grow at a reasonable pace between 5% 10% going forward. We still stick to that forecast. Yes. And you mentioned that on you mentioned €20,000,000 earnings for the banking asset management as well. But in the long term, is that the cap or is there potential again to grow this The distribution side is nearing the €20,000,000 mark. It's exactly half within the first half year. So double digitized to 20. Percent. And we think, well, 20 percent is more like a mental number that this has relevance and substance. If it's 20,000,000 you guys at least you are noticing it. So thank you for that. So when it's $20,000,000 it's noticeable business, it could grow from there. Our banking asset management is not yet at the $20,000,000 mark, but I think is on track to get there eventually and continue to grow. So it's not a cap, sort of a cap. The distribution business is already at the level of substance and will continue to grow. Banking and SM Management will grow towards substance. And I have no reason to believe that they will stop growing after that. Okay. I appreciate that. Thank you very much. The next question comes from Mr. Robin van den Broek, Mediobanca. Go ahead please. Yes, good morning. Thank you for taking my questions. First question is on Slide 25, where you annualize your net operating result to get to your ROE number. And I was just wondering the $5.44 of course includes equity dividends and a particularly strong combined operating ratio in the first half of the year. But could you maybe give some more elaboration on how close could we get actually to the $5.44 for the full year, also giving and taking into account some more cost savings coming through and the rerisking program that you have launched? That's the first question. The second one is on your long term investment margin assumptions. You indicate that you significantly outperformed on those assumptions again. I was just wondering if you could quantify that. And I'm, of course, aware that these are long term investment margin assumptions. So you probably don't want to revise them next year. But how will you look at this going forward? How soon could you be revising these assumptions again? Because it seems to me that your peers are more aggressive there and you are basically pushing more organic capital generation towards the market bucket. That's the second question. And the third one is on a payout ratio. I think you've indicated that, yes, you are enjoying some benign operating conditions throughout this year so far. How should we look at your payout ratio with regards to the DPS? Are you looking for a sustainably growing DPS? Or are you more looking to have a flattish payout ratio going forward? Thank you. Those are my questions. Yes. Robin, thank you. On your ROE question on Page 25, the ROE of 17.4 percent is the annualized figure of the half year figure. So it's a mathematical effort to annualize that number. It's not a forecast. In terms of where is the business running, we don't do earnings guidance. It's a matter of principle to not give earnings guidance. However, we do we can give you some calculatory assistance in terms of where is the year. In the first half of the year, we ran a profit operating profit of SEK 385,000,000 over SEK 119,000,000 in each of the first two quarters. In the Q1 call, we indicated the underlying profitability of Q1 was around SEK 175 1,000,000. Although we booked, we realized we created actually more. If you look at the results for Q2 and take the broader half in perspective, I mean the first half year we had a $17,170,000,000 benefit of no storms. We tend to budget storms, which is with us, but that's how you plan. And the fact that there were no storms added $17,000,000 to our profits. Also in the first half of the year, this dividend season is and dividends add to our operating results. And the 3rd component is our project spend tends to be a bit bigger in H2 and H1 when projects come on steam. On the flip side, the summer appears to be very stable, although Q3 is certainly not yet done. There is no indication of any large storms in the past. And secondly, the rerisking impact starts to speed in into our earnings. So with that in mind, you should be able to calculate the number. I would not multiply the $385,000,000 times 2. We can only be sure 100 years over. But the $175,000,000 of underlying result in Q1 is probably a pretty safe and solid estimate for how the business is running operationally with potential upside from no storms or no fires. In terms of our long term investment margin, I think we communicated those in the last year. We will keep them stable. If you think about the different elements between the operational bucket and the market return bucket, just some giving and taking between the 2. Our spreads, sovereigns, non core sovereigns and credits, the LTV spreads are a bit that we assume are a bit higher than what we actually realize. So in the bond field, the OCC borrows a bit from bucket number market price about $8,000,000 in the first half year. In the mortgage field were flat, a small contribution towards the operating environment bucket and equities and real estate, we plan for 300 and to 330 basis points spreads. Depending on where you think the TRS I've seen in terms of companies plan for 7% TRS and equities, we think that is reasonably aggressive. We do obviously do something else. But if you add 1 percentage points higher returns, we've got about $5,500,000,000 to $6,000,000,000 of equities in real estate, in 1 percentage point, 100 bps is already $50,000,000 $60,000,000 So we think the OCC that we produce is a replicable sustainable number across the cycle, even the bond side borrows a bit from market variances. The equity and real estate lends and adds some market variances. Furthermore, this is based on a long term VA, a VA of 20 basis points. So we use it we have 20 basis points to accrue interest on our liabilities, which also is a reasonably conservative factor given the VA today is about 9 points. So if you put a gun to my head and said, I think it's probably between $50,000,000 and $100,000,000 in the first half year that is in bucket 4, which some more frivolous insurance companies could have added to bucket 1 OCC, something we do not do because it's not something you can bank on. But net net, I think it's fair to issue within the long run, bucket 4 will have a tend to be a positive number rather than a negative number. Now we appreciate that the market doesn't usually pay a multiple for that, but that's the price and pace for a very predictable and solid OCC and that's what we feel very comfortable with. And Robin on your last question on the payout ratio in dividends, our communicated dividend policy is actually between 45 percent 55% of the net operating profit after hybrid cost. We in our philosophy, we think it would be difficult to come up with a message that dividend is it has gone down over time. So our philosophy is that it needs to go up on a year by year basis. I think the last 3 years, we have proven to be able to grow our dividend. So as long as we are able to grow our dividend on a year by year basis based on the dividend per share, I think the 45% is a good starting point for our dividend policy going forward. And a check we always have a double check on what part of our organic created capital is returned to shareholders. And if you would recalculate the dividend payment ratio based on the organic capital created, then it would be close to 70%. So we return a large part of our generated capital to shareholders and that's possible because of our well capitalized balance sheet. Okay. Thank you. These are very clear answers. The next question comes from Mr. Darshan Mistry, Citi. Go ahead please. Hi, there. Darshan Mistry from Citi. Thank you for taking my questions. My first question is regarding the Non Life business. I noticed there was quite a significant decline in reinsurance premiums that were paid in the first half of twenty seventeen. So just wondering if there's been any kind of stunt change in reinsurance policy. And secondly, regarding the low level of large claims that you're experiencing within P&C, are all of the lower levels of large claims coming from benign weather conditions? Or are there any other kind of structural changes happening in the market that could drive down large claim levels? Thank you. On the reinsurance side, Darcyn, no major trend in our reinsurance. We have we've eliminated some older reinsurance programs in the disability side, but we used to have a disability program, a reinsurance program disability, which we felt did not provide sufficient return on capital or at least the cost of capital after insurance program was not sufficiently attractive. So that was being terminated. And secondly, the reinsurance market was still reasonably soft. So pricing was relatively favorable to us. So reinsurance side, termination of disability reinsurance contracts simply from a cost of capital perspective. And generally speaking, we were benefiting from relatively soft software insurance markets. In terms of our claims, if you look at our claims, of course benefit from no large claims, no large, no bad weather, but also we call bulk claims. So the majority of lots of small claims, bulk claims frequency is also running below the level of last year, Somewhat affected by the water damage and water storms that were last year, that's hard to gauge target, artificial intelligence and bulk frequency regular claims are below last year. The bulk claim ratio in our group has below 50 below 55% for the last 14 quarters. So I always look at the bulk claims, large claims and calamities and the both claims ratio would be below 55% for the last 14 quarters. So generally speaking, it's not just the absence of large claims, not just the absence of storms, but also underlying claims frequency is running a bit better than what it used to be. Perfect. Could I just follow-up? So you made reference to the underlying claim rate being below 96%, but I mean, if you say that part of that is driven by the lack of large storms and poor weather that you've seen in previous years, There seems to be there still seems to be some improvement on your guidance. So at what level should we take as the kind of current underlying on a normalized weather basis, but take into account the lower levels of bulk claims that you just mentioned? That Darjeon, that would be somewhere between 95% 96% at the moment. As already explained before, if we would normalize our claims ratio taking into account Chris' story, then it would be up roughly 2% compared to what we've done over the first half year. Perfect. Thank you very much. The next question comes from Mr. Ashik Musaddi, JPMorgan. Go ahead please. Hi, good morning, Chris. I have a couple of questions. First of all, can you give us some color about UK Life earnings? So how should we think about that going forward? Because I mean, UK Life earnings have gone up by 50% over the past 2 years. Going forward, you're suggesting that you're more or less done with the asset re risking. And if I look at Slide number 31 or something, I mean, 40% of your business, which is Individual Life linked and nominal is shrinking in nature per se, I mean structurally. So whereas pension DB market should be tough to grow at the moment or even maintain at a flat pace because of low interest rates. So how should we think about the growth in Life earnings? Will this amortization of realized gains reserve keep on moving those numbers higher? Or will it be more or less flat shrinking? So any thoughts on those things would be really helpful. The second, Chris, you mentioned that you basically borrow from the in terms of capital generation, when I think about the sovereign spread, you're using over the cycle sovereign spread. So you mentioned that you actually borrow from the market bucket. Is it possible to quantify how much you borrow from the market bucket every year? Because this is something that I think is already embedded in your portfolio, I. E. We know what is the market consistent spread you should be earning. We know what over the cycle assumptions you're using. So what is the difference between the 2? Because see, in terms of equity return, we don't know what equities will give you. It will depend on equity market. But in terms of bond, we know what the spreads are. So any thoughts on these two questions would be great. Thank you. You were referring to UK Life earnings or what I didn't really get UK Life, sorry. No, no, Dutch Life. So we get a UK Life earnings to be pretty stable. Not growing much actually, but no. Yes, sorry. I mean the Individual Life earnings, yes, our book is shrinking. The actual asset base that we're in today is still very stable. So I see no reason to forecast immediate decline in our life earnings although the book itself is shrinking. It's speeding up capital or reinvesting, but the asset base itself is a little bit the claims payable for the book is going up because there's a funeral business which is naturally still accreting in terms of volume. The pension book is accretive in terms of volume. And if I look at the asset base that we're running, it's still holding up pretty stable. So I don't But a higher asset base should not really mean higher earnings or is it because it is just mark to market, you have locked in the spreads on day 1? Given the higher asset base will allow you to actually make money on those assets. I mean, of course, you've locked them in, but we find that reinvest some of the retail results actually towards the floor to your assets. The capital gains reserve is now SEK 3,500,000,000 at group, SEK 3 point 4,000,000,000 in the Life business. It has remained stable. So we've actually it has amortized over time. It's something that goes very pretty mechanical, if you wish. I think the fact that we added more capital gains reserve release to our P and L, the total amount has remained stable, meaning at least our life earnings are well supported by this capital gains release. So I see no immediate reason for this to decline. And there's some room for the rerisking to further kick in. In the first half of the year, the rerisking happened during the year. So, the first half results contain Q1 numbers where the rerisking had not been fully booked in. In terms of the spread, the bookkeeping between OCC and the actual bucket decently, organic capital generation and the market capital generation as I said, it's my estimate that the government side borrows about $8,000,000 in the first half year, cost of various categories. The mortgage side actually contributes. It depends a bit how you look at the pricing, but we write mortgages at 2.51 basis points. Swaps are 80 basis points today. So, there's a spread of 160 basis points on mortgages where we bucket, we credit ourselves 110. So, there's a 50, 60 basis points spread on mortgages. The actual credit losses, the losses of foreclosure are running less than 1 basis point on a half year basis, probably 1.5 basis points in the full year. So you get about 50 to 60 basis points of additional compensation. Part of that is for options that we grant to our customers. So, a early redemption option, a moving option, a pipeline option, But those are not always actually bucketed. So, I believe that indeed the bond side borrows a bit from market variances. The mortgage side actually contributes to market variances. The VA assumption across the cycle contributes to market variances. So I'd like to we're giving you clarity, but deflect the notion that our OCC will be overstated simply because there's more giving to the market variance bucket than there is taking. As you see, whereas common bonds and yields and spreads are moving, actually that part is the borrowing is actually declining significantly. So we think the $193,000,000 or the OCC across the cycle is a reasonable assumption what we can make across the cycle. But the very feature of an across the cycle figure is that there are across the cycle differences between realities. In practice, we see today that the market variance is actually a positive number. Yes, that's great. Thank you. The next question comes from Mr. Abhinav Bator, Kepler Cheuvreux. Go ahead please. Yes, good morning. I got two questions from my side. First one will be on the combined ratio target of less than 97%. Clearly, H1 confirmed that you are well below the upper level. Are you planning to review these targets? We have seen very good pricing and underwriting environment. Also commission and cost ratio add on, I think, one such point versus last year. I think you've commented also on the P and C combined ratio of 96. While I think you still have a target of less than 98%. So are you planning to kind of review your combined ratio targets at group but also at segment level? That would be the first question. 2nd question will be on the market impact, especially on the kind of real estate side. So how much positive reversion you've booked in H1 on the real estate? I think you've kind of review your real estate portfolio every year, but is that fair to assume that you've only reviewed part of your portfolio? And can we expect kind of a more positive contribution from revaluations in H2 on that book? Thank you. Benoit, on your first question, we just have started our budget season for the upcoming 3 years. Within that budgeting process, we, of course, will discuss the sustainability of all of our businesses and also of the combined ratio targets communicated to the market. And it's always a challenge to combine on the one hand growth of the portfolio and on the other hand remaining in the right area of delivering lower combined ratios than projected. So the outcome of that will be part of our full year numbers communication. We're discussing it right now, and it's waiting the balance between, on the other hand, remaining competitive and using a part of the combined ratio to gain market share, to gain healthy market share and on the other hand, delivering the results as we have done over the last few years. So hopefully that answers your question. And in the meantime, Chris is ready to answer your second question. In the meantime, I've revalued our real estate portfolio. How does real estate revaluation process work? Let me see a few bits how this works in practice. Every object, everything we own is reviewed every quarter. So 4 times a year we do a revaluation where every quarter has a physical external taxation once a year. So 4 times a review, once actually somebody goes in, an external evaluator goes and visits the building and three times a year we do a desk revaluation. In the first half of the year, the unrealized revaluation of real estate was SEK 24,000,000 in the first half year growth before taxes. So SEK 24,000,000 unrealized revaluation, mostly in the housing, retail and commercial offices space, not the land. The land actually effectively only is revalued in Q4. So SEK 24,000,000 pre tax revaluation in H1. Will there be more to come? That would be amount of earnings guidance that we don't want to give here. But rest assured, we do taxation every quarter. So there will be locations that will be revisited physically every quarter and the land book is done in Q4. So that gives you some color on the real estate contribution to the capital gains. Great. Thank you. The next question comes from Mr. Matthias David, KBC Securities. Go ahead please. Yes, good morning. A few small questions left. First is on the Solvency II ratio. Since the start of the quarter, there have been important movements. So just wondering if you could update us on the main impacts we've seen quarter to date. And secondly, it's on capital generation. If I understood you correctly, your current guidance is based on a volatility adjusted of 20 basis points. Could you quantify the impact if you would use the current 9 basis points? And just to small follow-up on capital generation. Yes, the release of the risk margin in EOF and also the SER release continue to contribute materially. Should we expect any changes from these components going forward? Or is that quite stable for many years into the future? Thank you. Matthias, the last question. I didn't quite get your last question, what you were trying to ask. Yes. It's on the SCR release and the release of the risk margin in EOS. How should we think about these components going forward because they contribute materially to the organic capital generation. And just wonder, yes, whether you could say anything on the pattern of these the release pattern of these two components? On the quarter to date solvency, hard to say. It fluctuates probably small drag in the quarter to date given where equity markets are. But again within reasonable fluctuations. So depends a bit on how geopolitical risks evolve. We'll see how markets do, probably a small drag is my estimate, but again within the normal volatility that we have. In terms of the volatility impact, I think it's a couple of million, you talk about probably €4,000,000 to €5,000,000 impact on the OCC in those numbers. We can look up in more detail with my estimate it is. It's about SEK 4,000,000 to SEK 5,000,000 of contribution to the operations, the non operating elements factor in our solvency generation. In terms of risk margin SCR release, reasonably stable over time. I think you'll see in those 2, the risk margin release probably is higher in the early days of our book decline, SCR higher in the back end of our book decline. Some of the 2 is likely to say really stable in the foreseeable future. Okay. And if I could just briefly follow-up that SEK 370,000,000 guidance you provided in Q1, including that rerisking impact. If I understand correctly, it's based on a 97% combined ratio target. Could you just confirm that, please? Yes. Okay. Very good. Thank you. The next question comes from Mr. Bart Holsten, Kempen and Co. Go ahead please. Yes, good morning. A few follow-up questions from my side as well. First on the buyback, you linked it to the sell down by NOVY before the end of the year. What if there's no sell down this year? Would you then postpone it to next year? Or could it also be possible that you will buy shares in the market in that situation? And just a confirmation on your guidance on the Banking and Asset Management numbers. I'm not sure whether you said it will be around €20,000,000 this year or that it's a midterm target. So could you confirm on that? And lastly, every underlying business unit performs very well. You have a very strong capital position. I was wondering what's keeping you awake right now? And I mean, obviously, on the business level. So could you give some guidance on what's your biggest, well, worry, if that's the right word? Thank you. On your first question, Bart, if and when NLFI would decide not to do the sell down this year, it's difficult to answer that. It's going to depend on how solvency developments and market developments are. It's our clear intention to support the final sell down of the government. And we don't know when it will take place. That's up to the Minister of Finance. So even when it wouldn't take place this year, we are not considering to buy back shares in the market. That was your first question. Your second question was about the Guidance on the banking? Yes. On the Banking, we have explicitly mentioned Banking and Asset Management is moving towards the 20%, but that's definitely not the number we will reach this year. We will reach that number probably in the area of distribution there. The $20,000,000 will be feasible this year, but Banking and Asset Management, we're still investing in the Asset Management business. So that could take up to 2 or maybe 2.5 years. The last question will come from Mr. Ediardo Zinka, Deutsche Bank. Go ahead please. On what if the sell down does take place this year and next year? I'm just working on something else. Hi, there. It's Adena from the credit side at Deutsche Bank. A follow-up question regarding the beautiful girls, please. Just wondering about your thoughts regarding the consolidation in the Dutch insurance market in general and would appreciate if you could provide some color at least where do you see opportunities and what size you would consider? As I see you have about 750 room in the Tier 2, Tier 3 bucket and you could issue easily senior given that you're a 30% leverage target. So any color would be appreciated. Thank you. Okay, Adena. Thanks. Well, we have always said in different statements that we are in favor of consolidation of the Dutch market. We have to be honest, the Dutch market is not a fast growing market. And in such a market, it's normal that there is consolidation. Our preference has always been small bolt on because we think they are we can integrate them in a very short time, so the market sees the results of such a consolidation. We also have always commented on a larger consolidation if and when there are opportunities, we always will look at them, but all but we've also commented that we will do that within our strict financial criteria, a consolidation because of consolidation is not on our mind, it has to make sense in terms of our business, it has to make sense in terms of what we have promised to our shareholders. So if and when there would be an opportunity, we definitely would look at it. Okay. Thank you. Well, I think we forgot one question of Bart and he asked what business wise keeps us awake overnight. Well, I think a few remarks. We our ongoing business definitely does not keep us awake. A few things are at least on our minds. Still the interest rate environment and market movements do keep us awake because we can't influence them, but they definitely will influence our business. Secondly, we see a change in customer behavior over time in the way how customers buy insurance. We're on that. We've invested in all kind of new developments in IT, but we don't have a glass ball where we can see where the market is going to and that is definitely one of the things that is on the Board table. And lastly, ASR is doing well. And everybody within our ASR is aware of that. And keeping everybody sharp that we not only deliver this year, but also over time is one of the things that us as a Board keeps awake because it's easy to look at the results and then to come up with, well, we don't need to save any cost anymore because we're doing quite well. So keeping everybody within ASR sharp on the delivery of the results as we have done until now is one of the things that is at least every week on the Board's table. So thanks for attending this call. Thanks for all your questions. If there are any more questions, please address them to IR. And to wrap it up again, we are very happy with the strong operating performance we have shown over the first half year, especially because this was driven by the solid performance in all of our business segments, Underwriting and claims handling skills combined with financial discipline drive market leading and profitable combined ratio. And as said, each product line ahead of targets, life continues to represent an important part of earnings and organic capital generation, robust solvency asset on 194 based on the standard formula and absorbing our rerisking and the share buybacks, strong balance sheet enables us to pursue profitable growth organically and inorganically, and we still see opportunities there. And as said to finalize, we are considering an extra share buyback of $100,000,000 in a possible final placement of NLFI in the second half of the year. Having said that, I all wish you a very nice day.