Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Uniper Group First Half twenty twenty five Results Conference Call. As a reminder, all participants are in listen only mode. After the presentation, there will be an opportunity to ask questions.
At this time, I would like to turn the conference over Marcelo Paesa, CEO of Unipo. Please go ahead, sir.
Good morning to everyone, and thank you for participating to this call. Before opening the floor to the question, let me make some remarks on the number that we disclosed this morning. They were very solid numbers above all in terms of top line revenues and in terms of improving technical profitability. Starting from P and C, we achieved a premium growth at 4.5% driven by all the line of business, above all, as usual, helped with a growth of 12% and bank assurance above 17%. Also, in terms of technical profitability, the improvement was quite consistent with the combined ratio at 92.7% driven by above all by Motor.
But also on Motor, even if the comparison versus the first half of twenty four was negative because of a very tough comparison. We are on target compared to the numbers that we disclose in the industrial plan. In life, also very solid premium growth, '22 more than 22%, also due to some very important contract that we achieved in the second course in the 2025. But also normalizing this number, the growth was above 88% that is a very good number in terms of top line growth. Also, in terms of technical profitability, the numbers were very solid with a very high and consistent CSM release in the 2025.
Concerning investment, investment, the first quarter was, as you remember, very strong due to an a repeatable positive effect of some assets that we mark to market through p and l. In the second half, in the second quarter, in the p and c area, we had on the contrary some negative effect that not repeatable as well coming from the same category But nevertheless, the number overall is above the target that we have in our industrial plan. And so also in terms of contribution coming from investment, we are on track on delivering our our target. Finally, in terms of solvency, the number is 222% driven by organic capital generation that was quite consistent in the in the 2025.
And also in this case, on track compared to the number that we disclosed in our industrial industrial plan. Be before opening the floor to the question, let me say that with me, there is Alberto Zoya that Smith Lassmann is in charge of investor later. He takes the place of Adriano Donati. Adriano was investor later for a very long time. He did a very a wonderful job in promoting the equity story of Uniphone.
And if the result in terms of right performance are the one that we have is also due to the effort that that he dedicated to this to this job. I asked Adriano to take another very important role in our organization. I hope that Alberto will be in the position to continue the heritage of of Adriano and hopefully to do better in his job. Having said that, I am here with Rico Santietro, and I open the floor for the question. Thank you very much.
Thank you. This is the Chorus Call conference operator. We will now begin the question and answer session. First question is from Tomazo Nieto, Kepler Cheuvreux.
I have three. The first one, maybe I missed, would be on the Non Life net financial results. I was a bit surprised to see those numbers in realized losses in the quarter. So perhaps you can help us on this. My second question is on CSM.
In the quarter, you had quite a strong release, but at the same time, a bit softer new business. So how do you how do you see this evolving over the full year? And then do you expect CSM to grow as new business picks up in h two? And then still on that, is the pace of CFM release in line with your expectations? And then the last one is on the other segment in Q2. Can you help us understand the strong performance there? Also, still in the segment, some color on the breakdown from Unautel, Uniportrak and Airscarrak would be great.
Thank you to you. Just to be more precise on the contribution coming from investment in P and C, I talked about the negative assets coming from some mass letters that are mark to market through p T and L. In this case, you remember in in the call for the first quarter, I announced a a formal fee transaction on b per share as a consequence of the possible results of the share tender offer. And so on one side, the b per share performed very well in the last few months, fortunately. And so on one side, we have generalized gains in the stock price that are not mark to market on the on on one side.
And on the other side, we have the derivative forward sale And this loss has been marked at p and l after the June 30. And the net the net effect after tax is more or less €70,000,000. In the third quarter, when we will disclose the third quarter numbers, you will see the positive assets coming from the tender offer of Banco Popular de Sandrio, after which we realized a net gain as a consequence of the fact that we exchanged each Banco Popularis Sandro share with 1.45 shares of BIPER and €1 on top of that. And as a consequence of this transaction, we estimate a net positive effect in the consolidated balance sheet in the whereabout of 170,000,000 that you will see in the 2025.
So in the numbers of investment income, just to sum up, you have embedded in the numbers, the 70,000,000 after tax concerning only the forward sale of the share price and all the positive component of the transaction will be seen in the third quarter twenty twenty five. And this is the main explanation of the soft number in the P and C investment income that we achieved in the 2025 and overall in the 2025. Concerning the CSM, yes, the the CSM really really is a little bit above the new the the the what we produced in the 2025. If you see the representation, the economic variance is quite consistent as a consequence of the fact that financial markets performed overall very well. And it is quite normal that in this context, the aspect of the CSM release incorporate the part of this positive component in the overall number.
But it is I consider this a a technical effect that depends on the contribution coming, the economic variance quarter by quarter. So I don't think it's material in the in in the consideration of the quality of the CSM that we produce in the same time period. Concerning the other segment, they performed very well because of the positive performance of some investment and assets that we have in the what we call the Beyond Insurance, in particular, Gentry Medici, San Agostino, and some other asset that we account in the in the other business. And we have also a positive f yeah. And then we have this this explain the thirteen million positive versus five million negative in the 2024.
And this is the main the main explanation of of of the difference.
Okay. Thank you. Very clear.
Next question is from Elena Perini from San Paulo.
Yes. Good afternoon, and thank you for taking my questions. I've got three questions. The first one is on the life business because with the 180,000,000 prepaid in the first half, it seems that you are doing better than it was in your in your mind even with the with the plan.
So I don't know if you can update us with the with the guidance for the the second half of the the of the year and on the main on the main drivers. The second question is for a follow-up to the previous one on the financial income for the the P and C. And in particular, a a clarification about the 170,000,000 you you mentioned that the positive impact from the the offer on Banco Macro Polar and Esposondro. Is it only a balance sheet item or are we going to see something in the the p and l two? And then the third question on Bitter, through the for the for sale agreement, we you downsized your your position again below 20%, but you still have a another derivative for potential other, I think, four or 4.5% of the of the capital. And can you can you elaborate a bit on on this? Thank you very much.
Thank you. Thank you, Elena. Concerning the first question, the good result in Life is in part due to the quality of an improvement of technical profitability. Above all concerning the investment product component of of of our portfolio. And a part is due to the contribution coming from investment in the financial portfolio that is not covered in in the segregated accounts, mister Niseparate.
And this second item is not is not repeatable in the same in the second half unless also the second half of the year will be as positive as the first half has been. So at the moment, it is not prudent on my point of view to multiply by two the net result in in life, it it will depends on, above all, on financial market performance in the second half of of the up up to now, the performance of financial market, as you have seen, is quite is quite positive, but we never know what what will happen until until until the end the end of the year. The second question, again, the 170,000,000 is the positive impact that we will book in the p and l of of of the company in the third quarter. That represent positive effect in concerning the tender offer of the Bank of Polarity, Sandro shares in exchange of BPA shares and the one the €1 of the bank that was was disclosed by BPA few weeks ago. And the concerning the derivative, of course, the 170,000,000 plus takes in consideration also the mark to market of the derivative as it was a couple of days ago.
So it is a updated number. Concerning the long position that we have, if I understood well the question, the long position is booked in the life portfolio. And so it is completely mirrored by in in the P and L. So you will not you will never see neither the positive contribution nor the negative contribution of the share price because there is a the mirrored ring that can allow us to rebate the positive or the negative to the policy holder, of course, and and until the the coverage of the guarantee that we give to to the to the policy holder. But it will not be a number that we mark to market to p and l as we did in the forward in the forward phase.
And I I forgot the the third question. There was not a third question. Okay.
Thank you.
Thank you.
Next question is from Michael Huttner, Berenberg.
Thank you very much. And I I actually one is on the what I actually said about the acquisition of Primo. They they seem to think that this would be a real disruptor. I think 10% market share in in motor in Italy, really strong margins. AXA was implying in their comments in their presentation last week that effectively the incumbents moving out here.
And and obviously, you, you know, you you're not so big that that could probably include you in not directionally in their thinking, what I mean, but but clearly, there there's margin and and market share going away. So I just wondered how you see that. And the second is is it was still on motor. Maybe you can give us a little bit of an update on the pricing of of premiums versus the claims inflation versus frequency? Where where is the margin moving to?
What what what kind of outlook we we have? And and the final one is is really on the still in terms of combined ratio and I'm I'm really sorry. It's the only number I can think of. And so q one, remember most of 92%, half year, 94.4. So kind of mathematically, the the the q two is about, like, 6.8, I guess.
I I just wondered, is is this the normal volatility or or is there something here that that's changing? Maybe you're being more prudent on reserving or something. Thank you.
Thank you to you, Mark. Before leaving the floor to Eric for the question on on Motor in general, concerning the three month division, it's quite early to to see how and if the the market context in motor will will will change or or or not. Of course, to me, the positive news is that in this case, Prima, the the the the the manufacturing agency has been acquired by an insurance company with as a prior target, the remuneration of the shareholder capital. And so they will pay I expect that they they will pay attention to the total profitability of the business, not only in the manufacturing agency, but also in the underwriting result. But as I said before, it's quite early to make a a forecast or a provision on how the motor business will change if it will change in the next future.
We will see going forward if there will be some change in the market context in Moto. Having said that, I I leave the floor to Rico for all the question on on Moto. Thank you.
Good morning, Michael. So as far as motor third party liability is concerned, things are evolving well. So, basically, the market is still in a market phase in which prices are increasing. The last data from the control authority related to the first quarter of the year report above 4% of the average growth of the of the other premium. We are in the condition to have a little less increase in premium since we have done our own work before the other competitors.
And now we can enjoy a situation in which, basically, we have the average customer claim perfectly under under control and also a slight improvement in loss frequency. And so, basically, everything is fine. There is, of course, as you noticed, a difference between the first quarter and the second quarter result, but it depends on how much we release on the prior year reserves. And so, basically, the underlying trend remain positive, remains in line with our targets.
Next question is from Gianluca Ferrari, Mediobanca.
Yes. Hi. Good afternoon, and welcome to Alberto. Three for me, please. On the P and C financial income, but I'm referring here more to coupons and dividends.
There is a decline year on year at at perimeter. Last year was a 176,000,000. This year is a 159,000,000. Can you explain the decline considering that the investment portfolio went up significantly over the same period? Is the reason because last year you probably had some very high yield corporate bonds for some inflation links or stuff like that?
The second question is on what you just said, Matteo, on the financial income of the life segment that was particularly strong in q two. You said it is not repeatable, but I was wondering if you can give us more detail on which asset class or investment drove this very strong performance in the life financial income. And the third and final one is you reported a pretty high above 7%, if I am right, large losses in nonmotor. Can you tell us a bit more what are those last losses? I think it's not NASCAR, but really last losses.
If you can elaborate a bit more what are these components. Thank you.
Thank you to you, Gianluca. And as as I said that during the presentation of the industrial plan, the our assumption in 2025, '26, and '27 that the is that the the investment is lower compared to the number that we had in the past just because there is a quite even if it's quite smooth, but there is a a reduction of interest rate going forward. A part of our investment that are in runoff that have are very high yield investment are related to the fiscal credit that we bought over time after the release of 110% tax credit. This is a portfolio that is in runoff and the contribution of the yield of this asset that is in the whereabout of six to 7% is reducing, of course, quarter by quarter. And so the contribution is is lower and we cannot invest, as you can imagine, at at this yield in in the government fixed income government area or in the in the in the corporate.
And so there is a very small decrease. I I have to say that it is much lower than what we expected in the context of the industrial plan. You have seen in the number that the current yield is still in the whereabouts of $4.44.0.5 percent. And so it is it is quite resilient to this trend of reduction of of interest rate. Concerning the life financial portfolio, the contribution come overall by the from the a fixed income portfolio and, again, in this case, the corporate in particular and also from the contribution coming from the dividend component of the equity portfolio in the free financial assets portfolio of of life.
If if financial market, we perform will perform in the same extent in which they have performed in the first half, of course, we can say that it could be repeatable in the second half. But we are still in the August, and so it is not prudent to make a forecast on how this performance can be.
But but sorry, myself. But this is still a lot. You know? So this is a, in theory, running income regardless of equity market.
Is it is coupon and and and dividend also. And the dividend component is not is not
Yeah. So this is this should be structural. No?
Yeah. It depends on the disclose of the dividend that the company will do in the second Of course.
Of course.
But yeah. There is not a very high volatility indeed.
You have some component of financial assets that are mark to market through the p and l. And in this case, you have you you had a positive contribution in the first half of the year. But if financial markets perform bad or very bad, then you can have also a negative component, you know.
Yeah. Yeah. The mark to market. Yes. Mhmm.
And then I I guess there was a a question on the large losses in the motor. I I leave the floor to Enrico.
Yes. Hi, Gianluca. As you have seen, there is a on on the overall portfolio, a figure that is not that different. It's little better in motor and a little worse in non motor.
And in the motor, it depends on a couple of medium sized claims that affects around 20,000,000, the overall result, but nothing to be particularly concerned about.
Very clear. Thank you so much.
Next question is from August Marcon, UBS.
Hi. Thanks for taking my question. First one's on P and C. Can you talk about the expense ratio? It seems to have picked picked up a bit year over year.
And second question is just taking a step back from the results. From Uniphos perspective, what do you see as as potential operational benefits or synergies from the BIPA and Stondra deal apart from the profits and diligence, of course, you get from the entity? Thank you.
Okay. I will I will answer on on Bipa and Saundra, and then I will leave the floor to to to Enrico. There are two two main source of of synergies we can take advantage of. The first one is as shareholders of the combined entity, we will be we are 20% shareholder of of an entity whose mass market cap is $7,017,000,000,000 and with a earning power combined above $2.02 2,000,000,000.
There are a lot of synergies that are have been disclosed possible synergies that they've been disclosed by Peter in his tender offer document. I think that there is a possibility to take advantage of all these synergies, and we will take advantage of it as a shareholder of the new entity at 20%. But we are much more interested to the second kind of synergies as a distributor of insurance product to BIPER and Banco Popular de Saundrill. With BIPER, we did in the last he has a very good job in terms of increasing the the productivity of the BIPER branches over time. And today, BPAT has a productivity that is state of the art in terms of new production in p and c compared to the to the industry.
And I think that by merging the two entities, there is a lot of room for improvement in terms of productivity of the Bank of Alessandro branches in terms of distribution of Bank Assurance product. Through this channel that is also one of the most important driver of profitability of the bank. We can take advantage in order to enhance further what is for us a very strategic distribution channel of our product that is BankAssurance. I think that the next few years, the effort of BIPER will be on all the items that they disclose in terms of synergies, but above all, in in in in in bank assurance. I I leave the floor to Rico for the expense ratio.
Hi. Have you noticed our expense ratio has increased? And the main reason is about the commissions to our agents. Agent compensation scheme is related to technical profitability. So this is, for us, very, very important.
And some of those incentives are related to a two year average. So for instance, when we discuss about motor third party liability, last year, the result was based on the average of 2,023 that was very bad. And 02/2024, that was very good. This year, we expect to have an average that is much better because '24 was good and '25 we hope, and so far is good too. So this means that there are some relevant impacts on our commission, our incentive.
And this is the explanation both for motor and also for non motor.
Can I just follow-up on that quickly? So if the technical profitability remains, let's say, as is or gets better, is this expense ratio that you print as a good kind of base base line for going forward?
Oh, yeah. I I I think that is is correct.
Since, of course, the the most important schemes are related to those two years. So if you combine two good years, you probably have a good estimation of a level of commission related to a good profitability period for us.
Thank you.
Next question is from Algerto Villa, Intermontecin.
Good afternoon. A couple of questions from my side. The first one is if you can provide us some more granularity on your underwriting stance going forward that you mentioned in the past, and you are doing a lot of selection on the on the property lines. And I was wondering if you are done with that, what what you are seeing and what you are, let's say, doing to address the your intention to reduce the exposure to some kind of risk if we can expect that, let's say, review to continue or you completed it? And on the other lines as well, if you can provide some color on what is your what are your expectations?
Also, on the health that has been growing double digit, if you expect it to continue this trend also in the in in the future quarters. The second one is on the contribution you are getting in the third quarter from the bid of people on popularity. So under the the 170,000,000, Is that gonna be included in the calculation of the dividend payout for 2025? Thank you.
Thank you, Alberto. And it it would be a positive component of the of the net result of of the company even if it is an extraordinary item. So in terms of contribution to the net profit, of course, it it could be part of the net profit and so consequently also part of the of the of the possible thought that we will use in in in the in the in the payment of the dividend. But we have to consider that is not an item that is repeatable over time. And so, of course, it is it is very supportive, but it is not an ordinary an ordinary item.
And in fact, that we are still in August. So talking about today, the dividend of 2025 is is is is very early up to now. Enrico.
Hi, Alberto. Okay. Basically, on property, we we have done the the hardest part of of the homework, pruning portfolio, reducing our exposures and our concentration. Now we are careful not to fall again in the same situation, but we are growing prudently as you can see by the figures. We have a 2.3% increase in the first half.
And, of course, we are going on to look very carefully to the development of this line. On the other side, as you mentioned, we have very good growth and very good profitability coming from health. Market is growing double digit. We are market leader. We have different channels to rely on.
And in particularly, we are very confident to be able to continue to grow double digit on agent and market share channel.
Thank you.
Next question is from Andrea Lizzie, Equita.
Honestly, most have been answered, just some clarification. I'm referring to the slide 22 of the presentation. Just understand in Non Life, the line above the pretax result, the other revenues and costs that was $17,000,000 In the first half, it was minus $14,000,000 in the first quarter. So just understand what drove the progression, the development of this line. And the second one, I think the question was made before, but I did not understand what the answer.
If you can provide visibility on, yeah, on the other revenue component of the other segment that accounted for 42,000,000 in in the in the first half. They remain drivers of of that. Thank you.
Thank you to you, Andrea. And, they are they are they they they there is a positive contribution coming from the positive result that some assets of the Beyond Insurance area released in the '25. But in 2024, there were also the cost of the merger between Uniphol and Unipholtai that, of course, are not repeatable in 2025. So the combined effect of the two contribute to the positive contribution to other to other revenues in the in the life.
And regarding the the other segment, if you can repeat
the The other the other the other segment, there are also there are some assets that are are locate in Beyond, that are located in in no life like Uniper Rental, for instance. But there are other assets like twenty Medici Santagostino and other investment that we we we have that are located in in in the others. And so there are two components of the so called Beyond Insurance that are in 2025, finally contributing positively to the P and L ending the 2024 where giving a negative contribution that are supporting the profitability of the business both in the life and in the other sector. Don't ask me why one some assets are in no life and some in others because it's an issue that is covered by the guys of accounting and so it's quite complicated to give you an answer about this.
Thank you. Just just a follow-up. If there is some other business with exception of una where we know there is a strong seasonality where we can find a seasonality, let's say, for strong in some quarters versus the others. So so that's remaining that something is not is not repeatable. Just understand that.
Yeah. No. UNA UNA released a net profit of more than €8,000,000. And more or less is a number that is in the middle concerning the the full year the full year results. So there are not so many seasonality between the first and second half overall of the Bayonne Insurance asset.
Thank you.
Welcome.
Next question is from Michael Huttner, Berenberg.
It's my lucky day. Thank you so much. Just two questions of the numbers. One is the you talked here, I think, about the operating capital generation. I I I'm really I'm really sorry. I don't have that metric in my model. I I I wonder if you can give us remind us of of the number both in h one and maybe the the guidance you've discussed in the past. I I I I don't have it. And then the second question is, you know, following Sandro and Beaker, etcetera. For June, what what is the total cash you will get which will be released out of all this?
And and and obviously, what will you do with it? I mean, it's it's obviously more than a 170,000,000 gain, but I can't figure it. Thank you.
Thank you to you to you, Michael. The the in terms of operating capital generation, as I said, our solvency is at 222%. So there is an increase of four percentage points compared to the number in the in the the q in the q one. Overall, concerning the capital generation, we produced normalized capital generation in the first half in the whereabout of 700,000,000. But be aware, don't multiply by two the number because here there is seasonality.
We had some economic variances of more or less 350,000,000. And we, of course, net of the capital movement at the end, the the the organic capital generation net of capital movement is being 350,000,000 area. As you remember, during the presentation of the industrial plan, disclosed a target of 1,000,000,000 in the three years net of dividend of capital generation, and we are on track in order to get this this this number. Concerning the the public tender offer, the only cash that we got is the €1 for share that was offered by Deeper on top of the 1.45 Deeper shares. And so at the end, we the cash the cash remittance has been in the whereabouts of €90,000,000.
Brilliant. Very clear. Thank you so much.
Thank you.
Next question is from Elena Perini in Tresa San Paolo.
Yes. Thank you for taking my follow-up questions. They are all about slide number 10. I would like if you can elaborate a bit on the improvement of the undiscounted attritional loss ratio, which is quite significant in the in the first half, 2.7 percentage points compared to to last year, which are the main drivers of this improvement.
Second question is about discount effect, which was down to 2.4 from 3.8 last year. So if you can give us guidance for the the full year. And third point is about the unwinding effect, how much was it in first half and potential guidance for the full year?
Okay.
And I'll give you final one, and then I will leave Rico to elaborate on the attritional. The unwinding in the first half of the year was in the whereabouts of 90,000,000 versus 110,000,000 of the discount FX. And so that is quite difficult to make a forecast of the discount rate in the all the year because it will depend on the trend of interest rates in the second half of the year. The reason why they are it is lower than in the 2024 is because the yield curve went smoothly down in the in in the time frame between the two first half. But, of course, I'm not aware on on where the interest rate will be at the end of the year.
So up to now, there are no main changes compared to this number, but I'm not sure that I can confirm it at the end of at the end of the year. Then concerning the attritional, I I leave Enrico to to elaborate.
Okay. So we have two different aspects on attritional loss ratio in motor and motor. Motor is improving. So motor property liability particularly is improving. The improvement is significant both because we have back a normal level of reserve release priority reserve release.
And last year, we had the impact of the Milan Court team on bodily injury compensation that reduces a lot this effect. And we also have an improvement in the current year attritional loss ratio in motor since, of course, the increase of premiums that we discussed last year finally arrived to have the full aspect on on earned premium. And so since the average cost of a claim is under control, loss frequency is likely declining. And also on the motor other damages, results are good. This is the part in which the attritional loss ratio is improving.
On the other side, in no no motor, we have a negative effect. Last year, we had a significant positive preorder development coming from our reserve related to the summer twenty twenty three atmospherical events that prove it to be more than sufficient. And this is the main reason because when you look at the motor, there are attritional results that are a little worse. On the overall aspect, as you can see, we have a good result and still we are confident to be on track on what are the the the the target of our plan that I remember are around 95% of combined ratio motor and around 90% for the motor.
For any further questions, please press star and one on your telephone. Mister Latterson, gentlemen, there are no more questions registered at this time.
Okay. Thank you very much. Let me say that, again, we did a very solid quarter. I listened in the past few days some of my colleague CEOs making some remarks on these numbers as the best of their history, the most important in their history. We are not in the condition to say this, but just because for us, the the the best numbers in our history is yet is yet to come.
And if you trust in in us as you did in the past, you will see it. Thank you very much, and have a good vacation for all of you who will do it.
Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.