Welcome, everybody. I see a lot of familiar faces. On behalf of Ageas and the Ageas IR team, welcome to this new Ageas Deep Dive session to all of you physically in the room, but also the ones following online. If I counted correctly, this is the sixth Deep Dive session that we are going to do. We started it back in December of 2021, with a very simple idea to also engage more meaningfully on other topics aside from the regular financial reporting on those topics we feel merit more attention or topics that we regularly discuss with all of you here, I think in the room, but also the ones following online. It is not a surprise that our first Deep Dive was around China, about how to correctly value China. I think we still have some way to go there.
In the meantime, we have done other Deep Dives. We have done a Deep Dive on the other Asian activities. We have done an interesting Deep Dive on the group business in Belgium. Last year, we did a Deep Dive on our reinsurance activities, which I think was very well received by the market, but also by the Ageas Re people. I know the CEO of Ageas Re is there. He is nodding, so that is good. Okay, enough of the history lesson. What are we going to talk about today? We will have three separate presentations. We will start with Hans, our Group CEO, that will talk about what has happened in this first year and a half into Elevate27.
We have been in the news quite a lot over this last year and a half, so we will talk about that and how we are progressing towards both financial targets as well as the strategic priorities. We will then have Ben Coumans, our Managing Director of our European activities, that will give you an overview, first of all, of the countries within Europe, but also stress the importance of Europe as a strategic pillar for Ageas. To then hand over to Ant Middle, the CEO of our U.K. operations, who will provide you, I think, with a highly anticipated update on the integration of esure and Saga and how we are faring towards the targets that we have set that we would reach by 2028. Afterwards, there will be a Q&A session where people in the room will be able to ask questions to the presenters.
That is a bit the program of the day. I hope you will find it interesting. With this, I will now pass the floor to Hans.
All right. Thank you, Arnaud, for the introduction. Also on my behalf, a very warm welcome here in London physically and also a warm welcome to the people behind the screen. Thank you for joining us today on what I think is going to be a very interesting Deep Dive session. When we launched Elevate27, we have set ourselves a very clear ambition. Building a more diversified and more cash generative Ageas. A group that combines growth with strong resilience while creating sustainable value for all the stakeholders. Halfway through that journey, I think we can now say that we have achieved a lot of progress, and we can show you what that ambition looks like in practice. We shaped our portfolio, but always with the same strategic logic in mind.
We have strengthened where we have already what I would call a competitive advantage, where we have a right to win. We consolidated where scale can unlock and bring us even greater value. We invested where we see attractive long-term growth to be. We have also crystallized some value, and then I refer to Malaysia, of course, when the opportunity is right. All that together makes a result that is stronger, a more balanced Ageas, increasingly focused on businesses that offer disciplined growth, sustainable returns, and the ability to turn those earnings into a recurring cash for the group. A lot of these elements came out of an investor's lens that we have run four years ago when the thinking on this transformation has started. Now you can see the discipline across the portfolio in Belgium.
Of course, we took full ownership of AG Insurance, and that deepens our exposure to this market-leading, very diversified franchise that we have in the country. At the same time, we strengthened the relationship with BNP Paribas. If I move to Europe and I come here in the U.K., of course, we have esure, and then the long-term agreement we made with Saga, which creates a scaled and a very differentiated U.K. personal lines platform, and we will talk a lot about this in the next session. If I move to Asia, we have Taiping Pension. That gives us an access to an attractive long-term growth segment, ageing population in a country like China. Then we had in Malaysia, the sale of Etiqa. You know a little bit my baby. I have been able to work and build on Etiqa for seven years in Kuala Lumpur.
Okay, we have sold that baby and it has crystallized some substantial value. Then we have the reinsurance. Remember, reinsurance, this optimization of diversification for us, and more and more, it has become a source for diversification and cash flow. Diversification with the rest of the group, but also within reinsurance itself. All these transactions, I think, are very consistent with the strategy we have set. They follow that same logic. Putting our capital where Ageas has the strongest position, the greatest potential to grow, and the ability to create sustainable shareholder value over the long term. As you can see on this slide, this geographically diversified footprint gives us a stronger platform for organic growth. Pro forma, meaning when all the transactions we have done are fully integrated in the results.
On a pro forma basis, it supports a 13% increase in net operating results and a 24% increase in recurring upstream. Equally important, the earnings mix, as you can see, has become a lot more balanced and better cash generative with a larger contribution from the control businesses in Belgium and Europe. Asia now represents less than one-third of the earnings, and that creates, I would say, new room for future growth in the region, taking into account the optimal mix of our businesses. Our dependency on the cash upstream from Asia at the moment is 11%. The result, again, a more balanced, diversified group with a strong, and I would say, more stable capacity to generate cash. Of course, I know that many of you are here to hear what we will do with that excess cash. I will come back to that shortly.
Let me first show you how we are driving the business growth before bringing it all together with our targets and also our capital allocation priorities. First, portfolio actions have been one part of the story, but let's not forget the other part, how we run and grow the business every single day. If I look at growth across the group, we see a broad range of growth engines, both on the life insurance side as well as the non-life side. In life, actually, we see strong, consistent growth across most of the markets where we operate. In Belgium, mainly coming from group life and the life investments, and the life investments, of course, stimulated by this renewed bancassurance agreement with BNP.
We also see excellent growth in Türkiye and a strong growth in Portugal also, by the way, a lot coming from the bancassurance relationship, supported by very successful sales campaigns, both in that Belgium model as well as in that Portuguese model. In China, the business is increasingly shifting towards the participating products. Shorter-term endowment and annuity products, and then of course, a pension savings book through Taiping Pension. Of course, all this happens with the low interest rate environment in China in mind. If I go to non-life. In non-life, the growth is driven in Belgium, consistently nice growth performance above market growth, but also in Portugal and in Asia. Of course, this is complemented by the plan that we have set for the growth in third-party reinsurance towards 2027.
Within reinsurance itself, and it's also, I think, a great achievement of Joachim and the team. The business itself is also becoming more diversified. We started, as you know, with a big block in property. Over the years, added casualty and specialty businesses, and we are almost on that optimal level of a third to third to third diversification within the third-party reinsurance. In the U.K., our focus is more deliberated on very selective, very targeted, but also profitable growth. So that's about the growth potential that we see coming up and unlocking around the world. This is what you have seen us presenting at the launch of Elevate27. We picked two focus areas for profitable growth that play directly to our strengths, and I would call them the areas where, as an organization, we have the right to win.
That's the area of longevity and the area of SMEs. We spoke about an important enabler, and I can only confirm that 18 months later, that would come from data and AI. I would say even now, the promising evolution of data and AI is even, I would say, way more advanced than I could have thought 18 months ago. It helps us to move faster, to price, and to underwrite more intelligently, and to make the customer experience simpler. Okay, let me take the first block. The first one of the first part of the first block is longevity, serving people through longer lives, a changing health need, and the transition into retirement. Because you have lifespan, you have also the health span and the wealth span, and all three have to evolve together to live happily into retirement.
The second one is the SMEs. This is all about helping entrepreneurs to protect their companies, their employees, and their own financial future. In both areas, the growth logic is the same. How can we better understand customer needs, broaden access and offer to those customers, and scale it with the strong distribution that we already have? Here you have a few examples on longevity. It is one of the most important structural growth opportunities that we have in our industry as a whole. As you know, as Ageas, I think we are relatively spoken, higher represented in these business segments than many of our peers. When we launched Elevate27, we set ourselves the ambition of generating more than EUR 2 billion additional life and pension liabilities by 2027, o n top of, I would say, the intrinsic underlying growth of our life business that we already saw before.
Today, we are very well on track to exceed that ambition, and we are capturing this opportunity in two ways. First, with product and pricing, adapting our propositions to the different stages in life. At Ageas, for instance, we have this life cycle supplementary pension solution, which automatically adjust the investment strategy as employees progress through their careers and as they move, of course, from accumulation phase towards more decumulation phase of their pension assets. As they approach this retirement, we have what we call the nearly retired program that turns the investments from a one-off transaction into an advised-led journey. So we accompany them so that at the end of the day, we can keep more assets in and service the customer also in the decumulation phase.
Through our privileged employee benefits advisors, but also of course, with the strengthened collaboration with BNP as a bank, more than EUR 100 million of maturing liabilities have already been retained since we have launched this program of nearly retirement. In Türkiye, Ageas, market leader in the private pensions business, supported by this diversified distribution network, a unique direct sales force, a smart lead generation engine, and strong customer retention, and this alongside a continued investment in the digital sales journey. You saw that in the first half of 2026, where the Turkish business grew with 48% compared to the year before. This strength in Türkiye is clearly reflected in the pensions, where assets under management have already or nearly doubled. The second block here is innovation, where we are looking beyond the traditional insurers to address the broader needs that come with longer lives.
In China, we have Taiping's Enjoy Home program that combines insurance with senior living, medical rehabilitation, and care services, creating an integrated ecosystem that supports the Chinese elderly population throughout their later life. We also combine financial protection with practical care support that helps people to age with greater dignity and security and easing the burden on their families. As you know, in a country like China, many of aging pensions and care is a family-related activity, that's where we can help. If I move to Portugal, you know we have a leading position with Médis in Portugal. There we make health and protection more accessible also with targeted and innovative solutions. Médis Vintage is an example, specifically designed for people aged 55- 75. I'm already part of that community. Providing health insurance tailored to the more complex needs of this older population.
We have another product version, which is Médis Light, and that is a simple and affordable way to access healthcare. With Médis Light, we have tapped into a new attractive customer segment, with already more than 50,000 policies sold since its launch, and 25% are people aged above 65. Then we have the Médis Active app, where we are reaching new audiences and more than half of users not yet being Médis health insurance customers, but already use our app for one or another type in service for their medical care or related to prevention. The strategic point is that this turns a financial relationship into a broader ongoing service relationship, accompanying this generation into later life. That helps us to remain relevant to customers and deepen engagement over time. It goes without saying that this is a growing customer segment for the years to come.
That's ultimately how we see longevity opportunity. It's not just a product, it's a connected ecosystem of savings, of protection, of health, of care, and the related services. Supporting people and our customers throughout longer lives, we will create greater value for them, and that gives us sustainable and profitable growth opportunities as a group. If I move to SMEs, I can apply here the same logic. They are the backbone of our economies and their insurance needs next to their business, their employees, and their personal financial future. They are still served in a quite fragmented way. To me, our SME business already accounts for around 25% of our non-life insurance. That's a material progress compared with the past, where in many countries, we were mainly seen as a retail player.
Of course, SME is valid for all the non-life businesses except in the U.K., where we have this targeted focus on personal lines. Based on our performance since the beginning of 2025, we continue to believe that SME business will outgrow and continue to outgrow our broader non-life business. So we see a clear opportunity to bring these needs together of the SME manager and his employees and to develop SME into that dedicated growth engine. Three levers: bringing growth, bringing efficiency, and using innovation. Again, here I can talk about products and pricing. Even in mature markets such as Belgium, we see significant potential to grow by deepening existing customer relationship. Modulys is a bundled SME proposition that runs already for many years, in Belgium.
It's a very strong example, and we have seen the average number of products by SME customers growing from 1.2 a few years ago to 2.7 products today. Since 2022, Modulys production has grown with more than 12% year on year. Digital adoption is also going first. Modulys easy files have increased by around 30% per year, tripling over the period. Let's not forget, also in Belgium, here the bancassurance relationship with BNP has also an impact. A few years ago, BNP has put SME non-life as a target growth segment for the bank as well. Our SME in banca with BNP Paribas Fortis, and we have also the project, and that's still in early stages.
You have seen that AG entered into the Dutch MGA market, and that's more a learning how to work in a world where you delegate authority to MGAs, and that are an additional specialist route, and I believe a growing specialty specialist route to the SME market in the future. The MGA business in the Netherlands is of a promising start. We have already 15 of these MGA partners on board today, and the growth of the business is underway. The second block here is innovation. Let me take the example of India here. We have opened a completely new avenue for growth with AFLIC, our life company in India for an SME life proposition. Early signs, again, are very promising. After just one year after the launch, we have already more than 20% of AFLIC's life business coming from those SMEs.
In Portugal, also there, we make it easier, more efficient to serve SMEs. Combining, again, that reach of bancassurance, like we have that in Belgium, with simpler digital onboarding. Here in Portugal, SMEs are now more or less one-fifth of our non-life new business production. Fire insurance in this segment growing by 12%. Together, these examples show how we are turning our conviction in SMEs again into execution and into tangible results. Growing in markets that we always claim are already mature, improving efficiency and scalability, and innovating to address new customer needs. By bringing together this relevant protection, simpler underwriting, trusted distribution, we can build more on this broadened customer relationship, eventually bring better service to him. With AI, also more personalized service to him, and eventually create profitable growth at scale. Let me move to distribution. Distribution is another area where we continue to strengthen.
Here, the key word for the years to come is future-proofing our business, future-proofing our access to customers in a world that is changing rapidly. We have already a well-diversified distribution footprint. You see the proportions here on screen. Broadly, of course, balanced with the three key areas we always had, banca, brokers, and agencies. We also see a growing activity in the direct channels. In Elevate27, we will continue to build further on that strength. We will continue to invest in the capabilities that will shape the distribution going forward. In all the countries where we are, we want to have all the potential ways to access to the customer base to keep on delivering our products and our services. Making tangible process here as well, to share with you again a little of insights.
First of all, bank insurance. Belgium, I already told you, we have extended that long-term partnership between AG and BNP Paribas Fortis for another 15 years. Look at the U.K., where with esure, we have now access to a solid direct distribution, supported by strong existing digital capabilities in what we could say today, one of Europe's most advanced digital insurance markets. We are also accelerating digital bank insurance across markets like Türkiye, another market that is very advanced in digital capabilities toward end customers, but also in Portugal, also in Belgium, and also in China. Another example in the U.K., the partnership with Connells in the U.K. has been announced. You could see it as some kind of embedded insurance project. In China, there we are transforming our agency models. We see a shift from growth into quality. Quality of distribution, quality of businesses.
We are absolutely developing the capabilities of our agents in this vast country. Direction is clear. We want to continue with a diversified distribution model and to show you that in the U.K. of the top players, we will have the most diversified distribution model in the country, supported by stronger digital and direct capabilities and a system that is fit how customers, of course, will increasingly buy insurance in the future. That's an easy bridge to the next topic, the key enabler, data and AI. It's everywhere. It's also in distribution. Data and AI is the connective tissue across all these ambitions, and it's becoming an integral part of the Ageas value chain, and we have a clear link to how it will also help our financial performance.
At the moment, we have 300, approximately, a little bit more even today, than 300 AI use cases running, and this is the sum of all the countries. This is not something running at headquarters in Brussels. This is the sum of AI projects around the countries. 40 of them, we have seen them as being impactful and shareable across multiple businesses. To give you an idea on the split, today we are approximately 20% of the AI initiatives are in the area of underwriting. 20% focus on direct customer experience, 35% of them focus on the area of claims and fraud managers, and then the rest is covering transversal areas, including also a sizable proportion into IT. We have given there some numbers. I can tell you that at this stage, halfway Elevate27, these initiatives have generated approximately EUR 54 million of financial benefits to the group.
Just to be clear, do not assume that this EUR 54 million will automatically flow in bottom line. Because part of this, of course, will be reinvested in this rapid changing environment so that we can continue to strengthen our competitiveness and also, and that's the ambition we have given each and every entity around the world, to preserve and to secure our market-leading cost positions that we have in the market. All this puts us quite well on track on what we have announced at the launch of the strategy, EUR 75 million- EUR 100 million insurance results coming from these initiatives. Let me highlight you how this is translating into action into the businesses.
Let me take the first block, AI in IT. It's probably at this moment, I would say, the biggest opportunity and the area where AI is deployed the fastest. It is for a very clear reason, because the output of AI is still a code, and we are comfortable to work with code. That is why AI can be deployed rapidly and improve productivity across the business in IT. It will fundamentally change the way we work, the way we design our architecture, the way we deliver, and we operate our technology. In Portugal, we are still transforming the core legacy system of the business. We have seen that there, the use of AI in coding can give us efficiency gains of more than 75% on the segment of coding. We can rapidly speed up the process of transformation.
At group level, there we see more the opportunity of AI partnerships. Not inventing everything ourselves, but making partnerships with successful AI developers, and that can help us to scale successful solutions and capture rapidly synergies that are available across our businesses. That is in IT. The second block, where we see it getting good tracking is everything related to underwriting and pricing. AG Insurance case, smart offer intake reduces the administrative burden, for instance, for brokers and bank agents. This is by suggesting and pre-filling all the relevant information, which we can get from all sources where AI taps its insights from. We provide all that information so that the interaction with the customer to complete an application can be significantly reduced in time and in complexity. This improves data quality, it speeds up the processes, and of course, it simplifies materially the collaboration with underwriters.
That pilot was successful, and we have now, halfway Elevate27, rolled it out to 100 brokers already in the Belgian market. If I go to the U.K. where we have dynamic pricing, it is another one of those examples. AI allows us to respond faster to these market developments to optimize pricing with even better agility. You know we have been investing in pricing agility for the last five to six years. With AI, we can bring it again to the next level. That helps us to balance the profitability, the competitiveness, and the brand, and I would say brands' positioning in the U.K. market. Again, to give you some direction of numbers, this impact is quite tangible. At this moment, we are at around GBP 10 million in recurring annual benefits coming from these dynamic pricing capabilities.
At Ageas, we, there we have an AI-enabled KYC, and that frees up time for the underwriters on what matters most. Their job is to do expert assessment and not to collect all the data which is needed for administrative reasons. Automating manual data gathering, contextual assessment time has been reduced from approximately three hours before to now around five minutes. The third block is on the far right, where it needs more training, where it needs to have more confidence before you let an AI agent go up to the end customer. It is different like in IT. You get a code, and you can still check and correct. Once you bring it to the end customer, I think you have to be more sensitive to quality.
But also there we are using AI to improve customer experience, reducing, of course, the average handling time, and that's all over the board. It's in claims. It's in complaints management. It's quite materially already in fraud management. It happens in document processing. It happens in call centers. It's everywhere. The objective is clear: making interactions easier, more personalized for our customers, and doing so, improving operational efficiency. If I take esure in the U.K. here as an example, better customer journeys will eventually bring us better service and economics on the business. We move demand that can be avoided. We simplify journeys. And by doing so, in the esure case, we have seen that calls have dropped from 20,000 to 3,200. So material benefits here in the customer journey.
At the same time, digital engagement has reached 93%, self-service satisfaction, 95%, complaints have fallen by 50%, and the customer appreciation scores are at record levels. These are not isolated applications. We are embedding data and AI across the insurance value chain on all aspects of the chain. How to help customers better, how to support our people in making better decisions, and then by doing so, of course, bottom line, improve the economics of the business. It's also a lever for revenue growth. It's not only about efficiency. It's also about revenue growth. And then, of course, I link the technology to distribution. LLMs will and shall fundamentally reshape also how retail customers discover how they will approach us, how they will compare, how they will receive advice on insurance products.
We measure already today the AI visibility of 13 Ageas brands across five countries so that we make sure that if an LLM gives a response, that our company comes up first. And we continue monitoring. That monitoring system is in place, so we are ready. Even if you work with an intermediary distribution channel, we are ready to also impact the changing behavior of customers on the way an opportunity or a lead can arrive with us. So longevity, SMEs, data, and AI are very clear examples with tangible results, how Elevate27 is translating these strategic priorities into execution and is giving us real sources for profitable and scalable growth.
Now, this is a chart that will look familiar to you. Because everything that I have spoken about, the inorganic moves we are doing, plus the organic performance of our businesses, have allowed us to raise the ambition that we have set under Elevate27 already twice in the first half of the cycle. And that is our growing confidence of the strength of the group and also the confidence on the full delivery of our Elevate27 strategy by the end of next year. The progress is clear. We are on track to deliver this earnings per share of EUR 8- EUR 8.5 by 2027, while holding free cash flow is already above EUR 1.9 billion today, and the shareholder remuneration is already above EUR 1.4 billion today. So it puts us in this strong position to fully deliver on the ambitions we have set.
This, on the shorter-term horizon, goes together with that upgraded 2026 net operating result guidance of above EUR 1.95 billion. That means we are entering, or we have already entered in the second half of Elevate27 with a very strong momentum. The environment around us is changing faster than ever. We have seen inflation, we see evolving customer needs. We see the rapid development of AI. You see credit spreads in Europe. You see low interest rates in environment in China. All this requires agility. It requires, for our company, the ability to anticipate in different scenarios. But I am convinced that the model that we operate, and you know that is a model with a strong local autonomy, is very well-suited to be successful in this type of volatile environment.
Our businesses, they have the autonomy to act quickly, to innovate locally where the customer are, while the group provides them that scale so that we can easily replicate what works into other businesses around the world. When an initiative, and you have seen many of the AI initiatives I have just shown, when initiatives prove successful, and we can confirm it is value accretive in one business, we can bring that expertise to other businesses and scale then the benefits across Ageas.
It is a bit different for many of our peers who develop maybe a group and then go and test whether it works in specific markets. We work differently. We develop it in a market. We rapidly confirm it works, it brings benefits, or we abandon because there are quite a few of AI initiatives we cancel very early in the process because we do not feel it. But once we see it and we feel it, we can scale it rapidly. That is for those who follow us already a longer time, I am sure that will sound familiar to you.
I promise to come back a little bit on this excess cash. Going forward, we see four main ways to deploy this excess cash. First of all, and for those who know me now for a few years, you know it will be my preferred scenario. That is to further invest this money in organic growth and growth of the business. Opportunities remain attractive across the group. Continued profitable growth in external reinsurance. As we have set the ambition we have set for 2027 will be achieved, and at this moment, there is no need to exceed on that ambition. But we will redefine a new ambition, of course, towards 2030.
We have then, what I have shown you, the operating companies outgrowing in the local markets, in the active segments, the SME business, the longevity propositions. We see that strong growth both in non-life and in life. But I think that is also important to know that the current commercial momentum that we see with a very strong profitability linked to it. We mean that most of this growth, almost all of this growth, can be achieved without significant additional capital deployment from the group in those entities. But the growth organically alone is not enough. Capital productivity, of course, remains at the heart of Elevate27. That means we want to grow where we can do so profitably in a capital efficient way. Return on capital has improved despite a broadly stable return on equity, which is already at a very high level.
Many of our businesses are today generating returns that are above their minimum required return. So that growth, it is not only profitable, it is also value accretive, even in an increasing way. That is the first block. Organic growth, strong commercial momentum, but almost all businesses are self-reliant to tap into that growth from a capital perspective with very attractive capital ratios. Then, of course, we can also potentially invest in inorganic growth. That is the second, I would say, preferred scenario. In a disciplined way, and you have seen us acting in a disciplined way in the area of M&A over the last 18 months. That means an opportunity needs to make sense. It needs to make sense both strategically and financially in line with the strategy of the group. Strengthening existing businesses is the first one.
Reinforcing market positions in markets where we are is the second one, or expanding our capabilities in markets where we are can be a third one. If we see still cash available, we also look, of course, at the balance sheet, and we can also use part of that cash to manage our financial leverage and make sure that we keep a balance sheet that is strong. So balancing these priorities, the allocation of capital is something that continuously evolve, but we will always look what is the area where we can create most value. Then you might be waiting for that. If we do not see sufficiently attractive opportunities to deploy the excess capital at the right returns, then we can still consider to return capital to the shareholders via, for instance, a share buyback.
It remains an important part of our capital allocation toolkit, but it will also not be a surprise that our priority would go, how can we further grow the profile of Ageas as a group in a disciplined way? This feeds in my final part. That is the EPS growth ambition. This one looks familiar to you as well. We have said we have three areas for the EPS growth ambition. The first one is coming from the growth, still the main one. The second one is coming from margin expansion. The third one, capital redeployment. Business growth, as I said, is still the largest one, an ambition of 4%-6%. I already spoke a lot about this organic ambition.
And we believe now if we cascade the EPS composition, we believe that the business growth element will come close to the upper end of this range and that it will come close to the 6%. And this despite a challenging economic environment, but supported by the strength of the underlying business and the progress that I have just shown you with concrete numbers on all the growth initiatives that are running, that gives us the confidence on that ambition. The second one was margin expansion, where we have said it should be 2%-3% of the EPS growth. We are also very well on track. Also expect to land here within the range by 2027. Of course, always with the footnote excluding extreme weather volatility, but I think that is normal. Here we talk about technical insurance excellence and operational excellence to deliver these technological capabilities to the end customer.
It's a technicality of the business and the operational delivery of that technical capability. If I break it up in life, in life, we see the margins, we expect them to remain broadly stable. But we see non-life still room for further improvement, thanks to this disciplined pricing, underwriting, the efficiency gains, and further simplification. Again, here, of course, what data and AI can bring to this topic. Non-life insurance result, we have said we should improve that with EUR 75 million- EUR 100 million. We talk about 1- 1.2 percentage point of combined ratio improvement. That means that we have that ambition to reach the discounted combined ratio of around 92% by 2027. Again, with that footnote, assuming no exceptional impact from adverse weather. This is technicality, so it's good technical results, pricing performance, lower expense ratio, further digitization and simplification.
I go to the third block. That's capital redeployment, 0%- 1% EPS growth. That's where we deploy capital. For instance, the share buyback that was still running is part of this block. Also, the debt of esure. The repayment of the debt of esure is also a part of this block. Also there we are in the range to deliver an EPS impact between 0% and 1%. These are three drivers where you feel that one reinforces the other. Business growth expands the earnings base. Margin expansion improves the profitability of that growth that we are seeing. Then the disciplined capital redeployment allows us then to reinvest that in new activities, new business where we can generate attractive returns.
There we can say now, halfway Elevate27, with confidence, that we expect to reach the upper end of EUR 8- EUR 8.50 earnings per share range by the end of 2027. We, I would say, increase not our ambition in the numbers, but we can say we believe that we can end, and we are comfortable to end in the upper end of that range. That, taking into account, of course, that we do not have Malaysia anymore in these results. The Malaysia effect is already compensated by the rest of the business. That's what I wanted to share with you now, and I know there was a lot of information how Elevate27 comes alive.
You feel how excited we are about this, and I hope you're also excited how this is eventually turning into numbers as well as in the ambition and the commitments we have given to you under Elevate27. With this strong message, I now would like to hand over to Ben, who is our Managing Director for Europe. Thank you.
Thank you, Hans, and good afternoon, everybody. Before I will hand over later to Ant, who will update everybody on our integration activities in the U.K. after the esure and Saga transactions of last year, we thought it was maybe useful to provide some elements of context on the Europe segment as a whole. When we take the picture end of 2025, you see that Europe contributes more or less 22% of inflows, 20% of the net operating profit, and around about 22% of the cash upstreamed to the group. If you take into account the M&A activity of last year, then that contribution will further grow to round about 25% going forward. When you take a historical lens, you see an impressive CAGR of 49% if you go back to 2022.
That performance reflects a range of country-specific trends, developments that show that this segment has quite a diversified profile. Unlike the Belgian segment and the Asian segment, Europe in Ageas is more a non-life segment. So two-thirds of our activity comes from non-life activities. When we look at the U.K. more specifically, you see that the net operating result before capital management increased from an exceptional low GBP 5 million in 2022 to approximately GBP 100 million in 2025. That reflected a successful transformation that the team has executed and was also helped by a favorable pricing cycle in 2024 and 2025. When we look at this year, there we see that the profitability is being affected by a less supportive pricing environment. We have integration costs in relation to the integration of the two transactions, and also in the summer, we were confronted with subsidence-related weather events.
Ant will provide further detail later on all these aspects. If we look at Türkiye. In Türkiye, that's a distinct growth story. In 2022, actually, the result contribution of Türkiye was round about zero, reflecting a loss that we were making there in the non-life business. Since then, a transformation took place, and in 2025, the country contributed EUR 75 million to the group result. 2/3 of that EUR 75 million comes from the life business. Finally, Portugal. There, the net operating result before capital management remained broadly stable in the 2022- 2024 period at around about EUR 85 million. Then last year, we increased that to EUR 116 million. That's EUR 116 million to avoid confusion. In the current year, we are confronted in February with storm events. Those weigh on the results. But the underlying trends are quite favorable.
We actually see quite a good outlook for life, health, and non-life business, except for that storm event from the month of February. Strategically, Portugal is a leading bancassurance franchise. When we entered the country in 2005 in a partnership with Millennium bcp. Since then, we have transformed the business into the largest pension player of the country, the second largest life and health insurer, and the number three in the non-life market. As of today, we see quite good volume dynamics in life. They are supported by the interest rate environment, of course, but also an excellent alignment with our banking partner. We're building and investing in transforming our health insurer into a more holistic healthcare companion proposition. Finally, we're also investing in a technology modernization that will support primarily our non-life businesses and our agency force.
If we take a more strategic view on Türkiye, there we are in partnership with the Sabancı Group, and we have established a business which is a leading player in life and pension businesses. Whereas on the non-life side, we have a challenger position. The outlook for Türkiye will always be impacted by macroeconomic factors, including interest rates, local interest rates, and foreign exchange movements. Our strategic position, however, is quite strong in life and pensions. We are also in partnership there with a leading bank in the country, being Akbank. We also benefit from a direct sales force, which is a unique proposition we have in that market, as well as a tight agency network. On the non-life side, the portfolio is a mix of corporate lines, a rapidly growing bancassurance business, and an agency channel where we continue to operate with disciplined pricing and underwriting.
Finally turning to the other topic of the day, that is the U.K. So after last year's M&A activity, we have now transformed our presence in the market in the third largest personal lines insurers. We have a balanced profile across distribution channels. We have a balanced profile across customer segments. With that introduction, I am sure Ant will shed more light on this.
Thank you, Ben. Thank you, Hans, and good to see you all this afternoon. It has been a year since we completed the acquisition of Acromas, and we also established the 20-year partnership with Saga as well. About a year ago, we completed our acquisition of the esure Group. Today does seem like a pretty timely point just to bring our progress on the U.K. to life. What I hope you will be able to take from this presentation are our four key messages. The first is that in a relatively short timeframe, we have become a scaled player in this consolidating industry. Second, I will illustrate how we are converting that scale into differentiated capability and creating a personal lines insurer like no other with an exciting opportunity to build on our momentum of the last few years.
Third, I will talk you through our positive progress with our integration, which is progressing at pace, and in particular, how we have moved quickly from transaction to practical delivery while creating solid early synergy value nine months into the integration process. Finally, that together all this progress has increased our confidence in our long term outlook. Confidence that we are building a business that will serve millions of U.K. customers brilliantly, and confidence in the value that our U.K. business can create for the Ageas group. Let me start with the first of those points, the scale we have created and the shape of the new Ageas UK that we now have here. Here is a snapshot of our business as of today, bringing together Ageas, Acromas and esure. We are significantly larger as a business, 70% larger in premium terms at the half year.
And this combination means that we now got more than 7 million motor and home customer policies. That's from a position of around 4 million prior to the acquisitions. This scale is spread across a very strong portfolio of retail, broker, and partnership brands. Each one with a really clear role, a distinct customer segment and market position, while benefiting from common technology, data, and operational capabilities. And the numbers, a t the half year, we delivered more than GBP 1.2 billion in gross written premiums and a combined ratio of 93.8%. Just as important as our growing profitable scale is the really key data powerhouse that sits behind those numbers. We now bring together around 35 million customer profiles across our business with approximately 25,000 events processed in every single minute.
An event being every customer interaction we capture across our digital journey from website visits to clicks. So that's 25,000 every minute. Those figures really matter because success in personal lines is undoubtedly data driven. Greater volumes of data enable a really granular understanding of how customers engage with us, which we then can turn into deep insight into how we can improve, simplify and refine quotes or enhance our customer journeys. So the transformation of our business here in the U.K. isn't simply that we are just bigger. We are much bigger, but importantly, we're also data and insight led. We're also solely focused on personal lines, a dedication to this market that's led us to being named Personal Lines Insurer of the Year for each of the last six years. And with the breadth to serve customers through direct price comparison, broker, and partner routes.
As I'm going to mention later, we're very well-placed to adapt as customer buying behavior evolves. That evolution is going to happen through the use of LLM search, agentic assistance, embedded insurance, and the range of insurance propositions of the future. The strategic importance of that change becomes even clearer when we look at the market. Just three years ago, the five largest players represented less than half of the U.K. home and motor market. Today, our analysis indicates that the top five players control more than 70% of the market, and Ageas UK has moved from seventh position to number three across U.K. motor and home, and that's a really important shift in our competitive position. The direction of travel in the industry reflects a changing reality. Insurers need sustained investment in technical and technology capabilities and customer experience to win.
Our objective is to combine scale with focus, agility, insight, and unrivaled technical capability. All of that underpinned by an operating model with leading efficiency built around the customer. All of that helping us to manage market cycles effectively and deliver sustainable returns. So I'll now turn to how we're leveraging that position to create differentiated capabilities and to drive sustainable value in our market. There are some really key elements here. Our pure personal lines focus and technical expertise, our balanced distribution enabling maximum market reach, our technology and data advantage, and our ability to efficiently scale AI. All of those factors reinforce one another. They're creating a more resilient, agile, and efficient business, which is capable of serving customers in a way that we can be proud of and deliver profitable growth.
To get into each of those, our first really key differentiator is our 100% focus on personal lines and our technical excellence. That focus concentrates our management attention and our investment into the motor and home markets, where we have an incredibly strong track record, rich data, and deep expertise. Before our acquisitions, our distribution was weighted towards brokers and partners, where we hold a leading position and where we are one of the only personal lines focused insurers in that particular channel. In esure, the distribution is purely direct to consumer through digital channels and price comparison. Together, the business is now incredibly well balanced, half broker and partnerships, half direct. That is a really powerful combination that gives us two complementary growth engines with three really key advantages. The first is that we have greater resilience.
We are now less dependent on any one particular route to market, and we can deploy capital and capacity selectively as channel economics and customer behaviors change. The second advantage is that we enjoy broader customer reach at scale. We serve customers who buy directly, use comparison sites, or value the support of brokers and partners. Our brands will allow us to address different customer segments and different life stages. Just to bring that to life a little bit, we have Sheilas’ Wheels for younger profiles. We have esure for families, right the way through to Saga and RIAS for experienced drivers and homeowners. Thirdly, we simply have much richer and deeper insights. Every channel adds a different perspective on customer behavior, conversion, retention, and risk. Both of our growth engines retain very clear accountability and focus through dedicated leadership in our business.
The real value comes from sharing the capabilities across our enterprise. Here we show the breadth of that opportunity, combining our focus with the most extensive reach to customers. Our market for motor and home insurance is just over GBP 23 billion in size, and our two distribution engines connect us to customers across all the major routes into that market. This breadth, I think, really matters today, but really importantly, it gives us the adaptability for tomorrow. Customer behavior and technology is going to continue to evolve. Embedded insurance, car manufacturer propositions, subscription models, AI-enabled research and assistance, they will all influence how customers find, assess, buy, manage their insurance protection. We have the architecture, we have the brands, and the distribution capabilities to evolve at speed.
Really importantly, that creates for us optionality. We will invest where there is a clear customer need and a credible route to profitable scale. The third differentiator to me is a really, really exciting one, our technology and our data platform. We are combining the scale of the new Ageas UK business with the agility of a digital insurer. Our target architecture is built with data right at its core. It is enabled by a unique modern technology ecosystem, selecting the very best of our combined technology assets. There are a few features that I do think are worth particularly highlighting. Being cloud-based, it gives us the capacity that we can expand with demand. It is designed with plug-and-play connectivity, so we can add propositions, add partners without having to recreate large parts of the estate.
But I think the real magic here is in the fact that it is event-driven, allowing every single customer interaction, click, message to be understood right the way across the business, right as it happens. This is so powerful because it allows us to really understand customers and continually optimize how we serve and how we manage them. In the end state, it is lean, reducing the drag created by maintaining multiple legacy environments. Really importantly, we are not beginning with a theoretical blueprint here. Products and customer journeys are already running on the target platform, and now we are extending that capability across our enlarged business. Embracing this technology leads to real strategic value, accelerating proposition delivery more broadly and at lower cost. There are a few dimensions to that advantage. It enables faster delivery. Our architecture gives us much shorter, faster routes from idea to market.
It brings a critical intelligence advantage, scale, data. Modern architecture means greater value from real-time insight from every single interaction. As a critical advantage, we can deploy analytics and AI widely across our enterprise, a constraint that so many businesses struggle with. It also enables a lower cost to scale. By using the common components we have, rather than rebuilding them for different brands and different products, we can reduce duplication across our technology and across our operations. If we simplify the environment, the ongoing cost and risk of change also falls. Finally, look, ultimately, the customer is a real beneficiary here. We can rapidly create more personalized experiences driven by connected customer data, enhancing our ability to win and to keep customers over the long term.
AI, already has been covered by Hans earlier. I think AI is a natural extension of the platform and the data capabilities that we are building through our transformation. We believe that we are particularly well-placed for the next phase of AI adoption. Our advantage comes from those things I have already pointed to, rich data, modern technology, and the agility to deploy that at scale. Really importantly, as has already been alluded to, AI is already improving our claims, our servicing, our fraud detection, and our operational efficiency, and we are seeing measurable benefits from all of those initiatives being rolled out at scale. These are described here on the slide. But I really believe that the real strategic value here in AI is our ability to identify opportunities, prove outcomes, and scale successful solutions right the way across our whole enterprise.
As Ageas, esure, and Saga come together, every successful use case can be leveraged across more customers, more brands across all of our channels. We are making sure, in addition to that we are in a position to understand how customer behavior is evolving as well through their use of LLMs. Developed in-house, we will be launching a plugin on one of the major LLMs this month, and that is going to help us learn how our customers will use these tools to help search for motor insurance, which will be the first development of this type by a motor insurer in the U.K. Our teams have been able to rapidly develop it and, more importantly, develop the links to our esure buying journey in only four weeks.
Once live, that is going to be another rich source of insight as we ensure we are prepared for customer behavior shifting in the months and years to come. Now if I move on to integration. Here, look, the ambition is really straightforward. We are about creating one new, simpler, highly competitive business supported by a single modern digital insurance and data platform with efficiency and simplification translating into strong cost synergies. From the outset, we have created one combined U.K. executive team, drawing leaders from Ageas and from esure at day one. We have got a strong balance of skills, experience, and heritage. Combined, the team has around 200 years of insurance experience, most of that in U.K. personal lines, and that also includes extensive integration, transformation, and cycle management expertise with a strong track record of delivery.
This clear, unified leadership team from day one has also provided the clarity right from the outset, ensuring aligned organizational priorities and effective decision-making at pace. The broader leadership population is also well-balanced across the business as is described there. This is not one organization being consumed by another. We are building one new business and integrating the best capability from across the combined group with a unified leadership team driving the business forward. We are moving quickly. We are moving quickly towards our single modern technology estate. Moving at pace to deliver value, lower complexity, and reducing execution risk. Because we are extending proven capabilities rather than building from scratch. We are live on Saga for motor and home new business, and we are on the cusp of launching our first products transition from our old platform to the new.
Our RIAS motor product will be live on the new platform this month, and the Ageas Direct business will also be live by the end of the year. All achieved from a standing start in January. Beyond customer journeys, we are simplifying the foundations of the business. We have implemented a common information security capability across the organization, and we are continuing the retirement of legacy infrastructure and applications. We are also moving towards a single workplace environment. The next phase focuses on scaling our capabilities across the enlarged group. Every system we retire reduces complexity. Every capability we move onto the single platform increases our ability to reuse technology, data, and automation across the group. Every step takes us closer to a single view of the customer with real-time decision making and increasingly, AI-enabled journeys across our whole enterprise.
This simplification is translating into greater confidence on cost synergies. At the time of the transaction, we set an ambition to achieve more than GBP 100 million of annualized cost synergies by the end of 2028. Based on the progress we have already made and the opportunities that we have now validated, we can be even clearer on this ambition. That is that we will deliver more than GBP 130 million of annualized cost synergies in that same timeframe.
The sources for those synergies are broad-based. Around 10% relates to leveraging scale efficiencies, about 70% to operational excellence, and 20% to technology. I will give you some specifics sitting behind those numbers. We are rationalizing our property footprint. We are in the process of selling our Reigate offices, and we are consolidating our two Manchester offices into one. Operationally, we are improving performance and cost management right the way across the business.
Here I think claims is a fantastic example. Leveraging greater purchasing power, optimizing our supply chain relationships, and managing this across a much larger portfolio is creating significant opportunity that we're beginning to take to lower claims costs without detriment to customer outcomes. In technology, as I've said, the common platform allows us to reduce duplicated systems, which is a clear advantage. We're carefully reshaping our organizational design as well through the closure of vacancies, attrition, redeployment, and restructuring. As we've announced previously, our workforce is expected to move from 3,800 at the end of last year to approximately 2,000 by 2029, with a reduction of at least 400 roles expected by the end of this year. We're also increasing our use of selected outsourced capability where that makes sense to improve operational resilience and efficiency.
These are significant changes, and we're implementing them with responsibility and with real care for our people. Whilst it's always challenging, our people engagement remains strong, which is really encouraging as we manage through a significant colleague transformation. As you'd expect, we're making sure that we protect the capabilities required to serve customers, manage risk, and deliver the integration as we move through this process. As we've previously guided as well, we expect cost to achieve to be around GBP 130 million, accommodating the clearer expectation of synergy delivery I've just talked to at about a pound for pound rate. Overall, our progress has only increased our confidence in delivering the synergies that I've headlined here while creating a structurally simpler and more efficient organization fit for the future.
Okay. I now just want to look ahead, and I'll give some thoughts on the market and the market outlook, a summary of what I believe to be our execution advantage, and an update on our financial ambition for the end of 2028. The near-term market definitely continues to require technical discipline. Claims inflation remains influenced by geopolitical, macroeconomic, and environmental factors. At the same time, competitive pricing has persisted despite weather volatility, increasing claims severity, and, as Ben referenced, subsidence pressures following the extended period of dry hot weather in the U.K. this summer. Market indicators from the ABI and other sources show the soft market conditions, although I have to say there have been signs of modest hardening in motor in recent weeks. Against that backdrop, we've continued our disciplined approach to pricing management.
As always, we've applied highly segmented approaches to pricing management and pricing deployment across our portfolio, balancing profitability and volume very carefully. In motor, we've applied high single-digit pricing while the market changes have been more modest. In household, we've deployed low to mid-single-digit increases more recently in a market that's been relatively flat. In terms of inflation, this is running within our expectations in the mid-single digit range. Whilst we manage the pricing cycle, it's always important to ensure that customer retention remains strong, and it is. In our direct channel, as an example, we're seeing motor retention exceed 70%, and in home it's above 80%. As market pricing continues to adjust, we believe we're very well positioned to benefit through the combination of underwriting discipline, sophisticated rate action, and a strong balance sheet backed by the Ageas Group.
Overall, we're creating a solid platform to deliver performance through the next phase of the market cycle. As I've already said, the market continues to consolidate. I think we can expect that concentration to increase further over time, whilst regulatory requirements, technology, data investment, claims expertise, all require greater scale and ongoing investment. I think those demands just become harder for smaller players to absorb. I believe the industry is going to increasingly favor insurers that combine scale and execution capability. Against that backdrop, again, I believe we're well-positioned because we've got the capabilities to convert scale into sustainable returns. When considering the external environment this year, our focus is very much on managing through the current market conditions and delivering the integration well.
Next year, repricing actions need to earn through the market, and by 2028, we expect scale to be an even greater source of competitive advantage. In November 2023, the standalone Ageas UK ambition for 2027 was more than GBP 1.5 billion in premiums and a combined ratio below 94% on an undiscounted basis, and a net operating result above GBP 100 million before capital management. Following the transactions, in April 2025, we set a higher ambition for 2028. We anticipated doubling our income and trebling our profit. Today, we're retaining the ambition of GBP 3.25 billion gross written premium and a discounted combined ratio of 92%. We're also sharpening two important components of that ambition.
On cost synergies, as I've said, we're clearer on achieving more than GBP 130 million by the end of 2028, and our ambition for net operating result moves prudently from around GBP 300 million to more than GBP 300 million. That change in language is clearly deliberate. It reflects greater confidence generated by the actions within our control. It clearly can't be independent of market conditions. Our plan assumes an environment where pricing regains ground and then keeps pace with claims inflation and insurers maintain underwriting discipline over the cycle. We're building a strong platform for growth. The task now is to achieve the long-term sustained return we point to in our guidance. I'd just like to finish my slot with four summary points. The first is that in a consolidating market, Ageas UK now has the scaled top three player that we set out to be.
Secondly, our personal lines focus and technical expertise and our balanced distribution give us resilience and growth optionality while allowing us to serve customers through the channel that best meets their needs today and tomorrow. Thirdly, our unique modern platform, our rich data assets, and proven internal AI capability mean we're really well-positioned to capture benefits of the next wave of AI adoption. Finally, in a well-behaved market, our integration progress gives us even clearer confidence in our 2028 ambition and in our ability to make the growing contribution to Ageas as the third largest profit contributor in line with that ambition. Thank you very much for listening to our Ageas UK story. That brings my presentation to a close. I think we're now going to move to the Q&A. I think, Hans, you're going to join me up here.
All right. It is your time for questions. Go ahead.
Thank you very much for the presentation. Cor Kluis from ABN AMRO - ODDO. A couple of questions, maybe first about consolidation. It is good, of course, that you also helped yourself to consolidate the U.K. non-life market. It is more consolidated, but are you already convinced that it is consolidated enough? Would you have enough capabilities and willingness, and do you see opportunities to consolidate further in the U.K. market? You have a lot of experience now with that. Are there opportunities? That is the first question. On the operational side, combined ratio targeting below 92% for the U.K. Could you elaborate a little bit more about specifically the motor line and the home line, basically? What are the differences, and do you really see a structural difference in competitive environment in each of those?
Last question is about retention. You showed, I think, retention of 70% in motor and 80% in home. How did that develop? From which levels are we coming, and what do you think that that will be in the future? Also on U.K. retention. Maybe a last question about the group, because I know we talk about Europe and the U.K., but Ethias is also a relatively important subject. Can you give us an update on the latest of Ethias and what the Belgian government have been saying, et cetera? That is from my side.
Ant, I would say go ahead.
Yeah. On the first of those questions, the consolidating market, I think I said I wouldn't be surprised to continue to see consolidating activity in the U.K. But I have to say, our focus here is very much on making what I've just talked about come to life. That is very much our focus for the next little while. That will be where we do focus. That's where we have our attention here in the U.K. Get that done. I'm sure there'll be a conversation, but that is very much the focus of the business. In terms of the development of our product lines. We do, as again, I alluded to there. Yeah, 92% is the very clear target. That's a couple of years away.
I made some comments there in terms of how we're seeing the market development and the fact we do need to see the market regain a bit of ground and make sure that we maintain discipline in terms of inflation, pricing for inflation, and making sure that there's a discipline management over the cycle. We see more movement more recently in the motor market. We've got more to do, I think, in the home market. But that is something that we expect to see develop over the coming weeks and months. On retention, pretty consistent actually, in terms of the baseline. We haven't seen rapid movements. We've had strong retention, actually, through the last period of time, and that is continuing into this year. In both of our channels, I referenced direct our broker retention strong, too.
I see two M&A questions. The first one is on the U.K. itself, and already focused on it. One of the first M&A opportunities we always look at. We believe strongly in market-leading positions. If a market consolidates, then we are definitely looking on how can it help us to strengthen that position. That's no different for the U.K., huh? I would just make one caveat to the U.K. As Ant said, we are at the moment very busy with this integration, with a very clear ambition. But you follow already a very long time. So you know we came already a long way, I think, in the quality and the performance of the business. If this is confirmed, and I think roughly, I would say second half next year, we will have a very clear view on that one.
I would say until then, probably do not expect us on the U.K. market specifically. But for the longer-term future, we do not exclude that option if market consolidation would continue. So that's one. Then of course, the main one on the table or not on the table, it depends how you look at it is Ethias. Well, I think the industrial project rationale for us is strong. We have been very clear on that one. Despite the market-leading position we have with AG, it is complementary business to us. It's complementary from a distribution view. It's the direct, well, actually the main, if not even I would say the only real direct player in Belgium. There is a lot of public sector business. Also in the pension business, it's complementary, where we play in the second and the third pillar, where Ethias is playing in the first pillar.
There is a lot of strategic rationale, and there is, I think, an interesting industrial project for us as a group. But personally, and I've said that already a few times, I think also for Belgium as a country, to have that leading insurance group that I would say in Europe can play at the top league of the table.
Concretely today, we talk about three public authorities who have to decide on this transaction. So it is very hard to say. I think at this moment it's a wait and see position. Of course, a potential divestment of Ethias by the government is looked into from the perspective of government deficit and government budget, and now we are exactly in the season that those discussions are ongoing. The Flanders government has more or less concluded that exercise for next year. But the trigger, of course, of this whole story will or will not come from the federal level. And there, the discussions are still fully ongoing. But our strategic appetite in the project has not changed.
Yeah.
Okay.
Thank you very much. Farooq Hanif from JP Morgan. Just going to AI. I find sometimes it's very easy for companies to say, "Yeah, we're engaging with AI." But what are the economics of it? So obviously you have to invest a lot, to use that infrastructure, which is expensive. You already have economics with PCW in the U.K., so the direct channel. How does it compare with that? And then how do you protect your data? Because isn't the worry that these things are just a lot smarter than PCW because they're not mechanistic, they learn and people's lives eventually get embedded with them. Isn't there a risk there that somehow you lose that control of the customer? You send them a renewal quote, but AI is there before you. So I'm kind of wondering why you're so happy about it in a way.
Question two, you exited SME in the U.K. and you sold that, and I can understand why, because it was underperforming portfolio. But it's clearly a focus for the group and the U.K. is a big SME market, and I would argue in certain areas like fleet, for example, you probably do have a right to win. So I'm just wondering why not that and also the reverse question direct in Europe and Belgium, with or without Ethias.
My kind of third question, sorry to ask so many, but what buffers do you feel that you have in your business to deliver that less than 92%? So we've heard other companies talking about heavy nat cat allowance or ability to release reserves, discounting benefit, all of the above. If you could just talk about what confidence you can give us to deliver what is really quite a low combined ratio. Thank you.
Okay. The AI question is a really interesting one, isn't it? We're seeing that evolve really rapidly, and actually the returns on investment thus far we're seeing on our AI capability are really quite strong. Multiples above 15x- 20x . That may be early gains to be made. But in terms of the benefits we are seeing in customer service, in our technical capabilities, in claims fraud management, they are real, they're tangible and measurable because the really clear AB testing that we're doing to make sure that they are real, they are tangible, and therefore they can be measured and declared. The point around why we might be happy around the AI developments, and I think what you're pointing to there is the potential disruption to distribution, disaggregation, who owns the customer, who's owning those journeys. I think that's the heart of the question.
I think we don't yet know precisely what that is going to look like. We can see the developments thus far, with things being embedded within the LLMs. Now more recently, Muse and what that is potentially going to bring to the market. What we are positioning ourselves to do is make sure that we are present in all of those arenas to make sure that we can learn rapidly in a really safe way. So make sure that we've got a stake on the table, make sure we're present to learn, understand customer behavior, work with those counterparties to make sure that we've got carefully constructed risk frameworks to make sure that those are managed well. But make sure we're present so that we can learn rapidly and adapt and make our choices.
We'll have to make choices around where we want to invest and develop and where we may not want to. But I think we're at such an early stage at the moment. The right strategy is for us to be present safely and learn. So hopefully that's as good an answer as I can give at this stage of development. Now I've got to remind myself of your Oh, SME. SME in the U.K. I think, yeah, we made a really clear choice. One of the toughest choices in strategy, I always think isn't what you're going to do, it's what you're not going to do. Back in 2020, looking at where we were with our business in the U.K., we did have to make some really tough choices.
We wanted to make sure we could deliver a return with consistency and build a business we could be proud of, would give sustainable returns and would have a future. I think we've got to that point, and I think we've really benefited, actually. Whilst it's always going to be a tough choice to exit a product line, we've really benefited from the focus we've been able to apply to the markets that we are in. As we go through this next phase, I think whilst there are the opportunities that you point to, I think net-net we still benefit from the laser focus, the 100% focus of our management attention, the investment, the management of our business in this market.
I do retain that having that focus, not getting distracted, is the right choice for our business. You're right. Motor, fleets, those things are quite proximate to where we are at the moment. When we look at the evolution of EVs on the roads in the U.K. market. What is there now? 3.5% of the U.K. car park are EVs. That's going to grow rapidly. Through price comparison and direct, you can only get to just more than half of that. The other half are tied up in fleets and salary sacrifice schemes. We can get to salary sacrifice because of our distribution. Commercial fleet clearly isn't somewhere that we will be able to operate in right now. That's something we need to think about for the future.
But I think for the next little while, that focus is a real benefit for our business being able to deliver over the long term.
The underlying drivers to go to 92%?
Yeah. I think I'd probably come back to the comments I've made. I think we're really confident in terms of our business evolution, the things that are in our control in terms of our technical management, our efficiency management, and the synergy benefits we are being able to drive, and the progress we're making there already. What I didn't say in the presentation is that by the end of this year, we expect to have captured around GBP 50 million of those synergy benefits by the end of this year. We are moving rapidly, and we've got real confidence. So in terms of technical management, our expense management and synergies, I think we can be confident in that regard, and that gives us the confidence I've talked to. We do, though, need the market conditions to be sensible as well. I just repeat what I said earlier.
I maybe can add a little bit on the data and AI. Data and AI is not a project. Data and AI is a tool, and a tool that is transforming the way you service, the way you underwrite risk, you price risk, you fight fraud, and so on. That means you do not only look at this out of economics. Not using it and not deploying it cannot be an option because you will not remain relevant, whether it's for customers or for what aspect of the business. That's the first point. It's a tool to further improve all the areas in your value chain going forward. Your second part is, of course, the security around data and data security. Yes, of course, we will deploy this, which we already do today.
There is in the company, no means that company data and information used by the internally used AI is mixed with external AI engines and so on. That's fully separated. So we will respect the highest level of security, which you also see is one of the entries of Microsoft in the world of AI. It's not so much about developing the AI engines, but bringing these engines in an environment where you can use them securely as a company. That's something, of course, we will follow closely. On your economics, I think it's a very fair question. How do I see that today? There is a lot of economics to be made, but as I said, we measure these economics to see from a financial perspective is the project we are running relevant.
The only thing I say is, do not assume that one for one, these economics will flow into the bottom line. For instance, to operate that AI, part of that revenue gain will have to go through the cost of tokens and the use of tokens to operate those engines. That has to be a healthy balance. We are now running the budget cycle, which is one of the key questions. How is your operating cost evolving versus the cost of tokens? Because if the cost of tokens just comes on top of it and all the other costs remain, you do not have an economically feasible project. So we have to turn that into a gain on all the others, but that the cost of tokens and the cost to the suppliers of these AI engines will go up.
There is no doubt about it. We see what the evolution is. Do not forget the multi-billions going into these data centers and infrastructures will one day have to create cash flow. For me, the important trade-off is, if it is coming on top with not sufficient gains, we will all put the brakes on. We will say, okay, we will use it, but probably slower that we can keep the two more or less in balance. That is option one. That means that you have a very reasonable evolution, how employment will go or might be absorbed in growth or other areas. If it goes very aggressive, then you have another problem. Then a lot of money is going to the big tech companies for the detriment of employment and the other use. Then I think you have another problem that we need to face.
I believe we are going to land somewhere in between. What we do not do today is by saying, you know what? You have AI, use it unlimited, whatever you like. It does not matter what it costs. That is not a feasible scenario. So the driver is not only economics, because if you do not do it, you really will lose relevance rapidly. You look at economics, but do not assume that the economics is the key KPI of your AI. You have to have economics, but there will be a balancing act. We will see to what speed this will develop.
Thank you. It is Andrew Baker, Goldman Sachs. Thank you for taking my questions, both from the U.K. First one, can you just help me with the bridge to get from the greater than GBP 1.2 billion GWP that you delivered at the first half to your GBP 3.25 for 2028? It still feels like quite a jump. So just anything in sort of underlying assumptions, how you get there would be really helpful. Secondly, just on the subsidence risk that you highlight. Are you actually seeing claims come through yet? Or are you provisioning for expected claims there? Are you able just to help us with how big or how concerned we should be or shouldn't be with that, just given how dry it has been? Thank you.
[inaudible] On the growth trajectory, you can see where we are and where we need to get to. It will be achieved through the combination of premium and policy growth. There is some pricing action in there. Strong retention, a continuation of the strong retention that we are really focused on. The roll-in of the business from our Saga Affinity and the business which is still to be rolled into the business from the acquisitions. Also we are opening up new B2B distribution as well. Whilst all of the development there largely falls on our direct side of our business, this year we have continued to build on the real strength of our B2B distribution. We have announced new deals in Affinity, in retail with John Lewis opening up distribution there.
We have expanded our relationship with Connells, which gives us access to customers through the home buying and the mortgage journey as well. With Wrisk, one of our intermediary partners where we are looking at embedded motor insurance with motor manufacturers. Whilst the comments around the market stand in terms of that trajectory, it is the combination of all of those things that are in the plan to enable us to get to the GBP 3.25 billion, s ubsidence. Your first question was, are we seeing the claims come in yet? I think there has been some market commentary about the claims beginning to arrive. They have started to be reported through July and August. I think there was some market commentary around the scale of those increases. I think we are broadly in line with that market commentary. We have seen reported numbers begin to tail off in September.
But whilst we can see the notifications at this point and the frequency, we need to understand really what the severity is going to look like. That is going to take us a little while to get to that point of understanding. So it is going to take us a little while yet to be able to really think through the numbers, and we will deal with that as we go through our reserving exercise in the final quarter of the year.
Thank you. You were first. Next to Jason.
Hi there. Thanks for taking my question. It's Abid Hussain from Panmure Liberum. I've got two. The first one is on pricing. I'm just wondering how much do you think prices need to increase to hit that less than 92% combined ratio? You must have some number in mind on that. The second one is on the market size. How do you see the market size for motor evolving given the AVs are likely to be a larger part of the car park down the line?
I don't think we can be specific around the pricing specifics over the cycle to get us to that point at this stage. I think there's a lot of trade-offs that we're going to have to work through in terms of the pricing elements, and obviously there's a whole P&L to work through there in terms of achieving the combined operating ratio. I don't think we'd want to be specific at this point in terms of our particular pricing demand.
[inaudible]
No, we cannot give these type of numbers because we are not allowed to sit here and say we're going to give a direction where the market has to go. That's something we cannot do. Of course we have our own view where we would hope the market see evolving or what we would do, but we cannot plant a number here in public what we feel that the U.K. market should do. Because that would be manipulation of the market, which is not allowed.
You will get me in trouble. I am sorry. Now I have forgotten the second part of the question. The market growth. Yeah. Well, I guess again, that would be linked to your first question. I do not think we can probably be particularly specific on that. But we do see, therefore, the influence as the proportion of EVs becoming greater. I think the new vehicle sales of EVs is now something like a quarter, maybe slightly bigger in terms of new vehicle sales of the total. Premiums for those vehicles are slightly higher.
Sorry, I was asking for autonomous cars. Sorry, not EVs.
Oh, sorry.
Sorry. Let me be clear. Autonomous cars.
Okay. We are not engaged in autonomous vehicles at the moment. Clearly, there is some autonomous functionality in vehicles on the road. They are not with us yet. We expect them to come at some point, I guess, in the nearer term, the next two or three years that we are talking about here. We do not expect a huge influence from pure autonomous vehicles.
Jason?
Jason Kalamboussis, ING. Some questions on the U.K. and one on Asia. On the U.K., when do you think the platform will be ready for M&A? We can see that it is not probably a relevant question now, but when do you think will you be ready in 2028? Or is it going to be even 2027? Second question is the data platform on which you put a lot of emphasis. If you could give us a flavor on how do you think you are compared to your two largest peers, that would be great. A quick third one is a follow-up on the AVs. I know it is far out, but does not that give you a sense that motor at some stage should be a bit de-emphasized or should be combined with a move towards the commercial lines in order to get the other side of the equation?
And on Asia, it is interesting because it is coming back, and I think that the 29%, the reduction 29, is great because the group is rebalanced, but there is that sense that it can grow back to a third. So there is some space. Do you find that that space is more of a space to leave for the growth of Asia that you expect? Or do you actually have in mind that M&A could come a bit more imminent in a certain way? Also a side issue on Asia. In India, is there anything that you are thinking about, or are you happy with the operations as they are? Thank you.
Well, I gave Ant a break, so let us start with the last question, and then you can. No, on Asia specific, if in a few years' time, we see the growth that we see in Europe today, and Asia would become again 1/3 of the group, that would be fantastic. Because that means that we have massive and very profitable growth both in Asia and Europe. That would be great. What we have seen is balancing. Balancing between the regions, balancing between controlled and non-controlled participations, and we will keep on monitoring that. Do not turn the question around. That does not mean that we would like Asia not to grow. As you know, we are predominantly a life player in Asia. You have seen the growth first half of the year being around 4%, but the liabilities under management, they are still growing with 10% and more.
Because, of course, in Belgium, if your life book grows on a big historic volume of liabilities, the impact on liability growth is relatively small. In Asia, the volume of the business you write versus the historic liabilities you have is very different. So actually without significant premium growth, that mechanism of building up liabilities, which eventually is driving the profit, because it is the operating margin on those liabilities that is bringing the profit, is still there. So the intrinsic growth of that business is there, even if top line might be, I would say, for the time being, single digit and not any more top digit than it was in the past. As we said, specifically in longevity and life, it is a promising market which we would like to grow, which we would like to further develop.
Malaysia was an isolated case where we could crystallize value at a very attractive valuation, and that is why we took that option. This is by no means any indication that we do not believe in the interest of Asia and the great diversification, by the way, which it brings to the group. So let me be very clear on that one. On India specifically, well, as we say, it is everywhere the case. If we can do attractive market consolidation to strengthen our position in that market, we will look into that at the right timing.
Today, I think the multiples in the markets are still very, very high. So I do not see a straightforward acquisition at those multiples, I think is definitely not easy to explain today. But in principle, on the longer run, we have a great partnership with Federal that is evolving well on the life side. If later that could be widened with a better market penetration, these are files we could potentially look into.
On our platform, the platform is there and operating today, and we're clearly moving business to scale it out to have even more impact across our business. What we are expecting is the substantive amount of that work to be done by the end of 2027. There is going to be some work to complete in 2028. So that's the timeframe to get the business into the shape that we are expecting. In terms of the data platform, and how it compares, I won't talk about our competitors' data platforms. But what I can say is I think we are uniquely positioned in terms of the way that our data architecture is in place today.
I think not only have we got that single data platform that we are building out, the fact that we've got the real time, not only is that broad-ranging single database in place, the fact that we can deal with things in real-time across the whole of the business, I think is incredibly rare. I don't think there are too many businesses that have got that as a core data capability, and I think that is one of our real advantages that we want to build out from. In terms of EVs and commercial, look, we will be able to get access to the vast majority of EVs on the road through our open distribution, through things like salary sacrifice. They are absolutely within our gift.
Fleet, as was spoken about earlier, in terms of a closely adjacent area for us to get into, that is opportunity for us. That is opportunity that we can, at the right time, step into.
Okay, I can give the one opportunity for questions. Then I propose we go for a drink. Okay, I have two, but then the last two. Okay.
I will just do a quick one. Carl Lofthagen from Berenberg. Thank you for taking the question. It is on the U.K., where you mentioned deploying capital across attractive channels. I am just wondering if you can expand on which subsegments of the market, particularly in U.K. motor market, it is you are seeing those kind of strong growth opportunities. I am kind of thinking here on the risk spectrum, whether they are sort of high average policy premiums or lower, sort of more mass market, non-standard market. Thank you.
We are looking pretty broadly, actually. We have, as Ageas, been relatively skewed towards, I am going to call it lower risk, older vehicles, more experienced drivers. We are through the acquisition of esure. We have drawn in a much broader data capability. Now by looking at the data we now have available to us from the Acromas acquisition, our historic data, and the data we draw in from esure, we have got a much wider view with a real legacy of data against a much broader profile across the market. So actually now, what we have got is an opportunity to really fine-tune that given we have got much broader coverage. So I do not think whilst we are incredibly selective in terms of our underwriting, pricing, and management of the market, we have now got such broad access to the whole of the U.K. market.
Now we are assimilating all of that new information. The opportunities for us to expand are pretty extensive. I don't think I'd want to actually isolate particular pockets of the market. I think we've actually got, because of the new scale that we've achieved, opportunity in many places.
Okay. Farquhar, you had the last question, and then we close the session.
[inaudible]
Yeah, it must be on now, I think.
Yeah.
Is that better?
Yeah.
Okay, apologies for dragging everything out very quickly. Maybe just coming back to the earlier question with regards to the U.K. industry and how much it maybe needs to improve without giving a kind of pricing guidance that would be inappropriate. Could you maybe frame how much you think the industry combined ratio maybe needs to improve to just get somewhere slightly more appropriate and kind of maybe sustainable?
We cannot comment on industry statistics that we would like to see. We cannot comment on it.
That's all that--
I mean, that is not allowed. We cannot give here messages to anybody on what the industry should do.
You shouldn't drop coins on pricing. That's definitely true. But the combined ratio, maybe you could say.
No, we cannot.
Second question then. Just in terms of the 30, the kind of cost synergies being GBP 30 million higher, could you elaborate on how much of that's just taking some conservatism out or actually things coming through genuinely better in terms of what you're seeing on the ground?
Yeah. I think that is very much born of, I guess we set the original ambition, and we always said more than GBP 100 million. That was a number that we were confident in at the time of the acquisitions. But to some degree, we weren't under the bonnet by then. What we've now had the opportunity of is really going through the finer detail, operating in practice, dealing with the synergies, and it's the real experience and the real benefits that we are being able to drive and can see for the future that's just increased our confidence. Therefore, we can be more certain and more precise in terms of what we can expect, hence the GBP 30 million improvement.
Thank you, Ant. Ladies and gentlemen, let me then close this deep dive, which I think I have one simple closing message to you. We are halfway Elevate27. I think with confidence we can say that Ageas is even stronger than when we started this strategic cycle. You have seen how we transformed our portfolio of businesses with a lot of discipline, how we advanced organically and inorganically with these growth engines that fit our capabilities, and how we, day after day, translate execution into growing ambitions on earnings, on cash, and then of course, eventually, what is important for all of you, shareholder remuneration. We are very proud of this progress. We remain focused, dedicated on the work that is ahead of us. We still have half a cycle to go.
Integrating while scaling the proven initiatives and maintaining, as I said, this capital discipline that I hope by now you recognize us for. It should bring us to an EPS of EUR 8.5 by 2027, which is, and there we strengthen our commitment at the upper end of our initial target range. I want to thank you for your attention, both here present in the room, but also for the people online. Now only for the people present in the room, I can invite you all for the closing drinks and to continue the conversation. Thank you very much.