Welcome, everyone, to our annual media conference featuring Allianz's 2023 results. Thank you for joining us today. My name is Lauren Day, Group Head of Communications, and I'm here at our headquarters in Munich with our Chief Executive Officer Oliver Bäte and our Chief Financial Officer Claire-Marie Coste-Lepoutre. Today's conference call is scheduled for 90 minutes. Oliver and Claire-Marie will present our results and our outlook, and afterwards we will have approximately 45 minutes to answer your questions on the topics that are of interest to you. I want to mention we will answer all questions in English, but if you are more comfortable asking your question in German, please feel free to do so, and we will repeat it back in English for everyone else on the call to understand. I want to mention this now.
If you are going to ask a question during the Q&A session, press the Talk Request button in the webcast and star five in the telephone conference. If you're on an IP-based telephone, this may cause technical problems for you if it's your turn to ask a question. So if this is the case, please email media.contact@allianz.com and we can assist you with your setup or take your question and introduce it into the conversation on your behalf. I now have the pleasure of handing over to Oliver.
Yeah, good morning, everybody. First of all, thank you very much for participating in our call for the annual results. It's always an exciting time for us. I was just reminded by Lauren that since we do it in English for a few times, we have increased participation by more than 40% since we switched to the global language. Welcome to the large group of listeners. Now, what I'm going to do is a little bit put things into context because before Claire-Marie and the usual Allianz quality will explain to you the financial numbers and what they mean because they are all very complicated, particularly with the new accounting regime. The first one is just let's sit back for a second and remind ourselves in 2023 and as it continues, what kind of a world are we living in?
On page A2, since we're in a call, I'm always going to call out the page that I'm speaking about. You have just five of the most important things that drive massive changes, challenges in our world. In the middle, we have geopolitical tension. You know, I was born in 1965. If you had told me we would have war very close to our border, that you would have a reemergence of a Cold War between two superpowers, China and America in particular, I would have not thought this to be possible. If you'd asked me just three years ago, would we have decade-high inflation that we're almost getting used to? It's coming down now. I would have not thought this to be possible. Would you have thought that you would have rising polarization in societies, not just in the United States?
It's coming to our home country, Germany, too, where people are getting more and more upset about the failure of our administration and political leadership to provide very basic services. I would have not thought this to be possible. And if you'd asked me, could we have seen the power that generative AI is going to deliver to our world potentially, I would have not thought it to be possible. So many things that were unimaginable just a while ago. Now, we have been pointing out because of climate change that the fifth one, frequent natural catastrophe, are on the rise for a long time. And we are surprised that society is surprised that it's now coming with real costs.
Making the transition into a low-carbon world, which we've been talking about for many years, remains and is even more important on the forefront of what we need to do. Against this environment, Allianz had a very, very successful year in 2023. Let me say again, now, page A3 gives you a little bit of an overview of what I'm going to talk about because the strong results are not by accident, but they follow a deliberate and resilient strategy. We have a very clear plan that we call Value Capture Program that we systematically execute. It has five elements that we laid out in our Capital Market Day in 2021, and we're going to refresh that at the end of the year. But it's all about systematic execution against this program.
The second thing that is often most underevaluated, and we are very grateful that our competitors are consistently copying us now, is that you cannot have healthy financial performance without a healthy organization. Again, in 2023, we strengthened customer satisfaction. We have now achieved world benchmark status on employee motivation. That's very important. We have by far the strongest brand in our industry, and we're widening the gap to our competitors. There are many other elements, like on diversity and others, that set us apart from the rest and that make us strong. Again, financials, strong financials come from a strong organization. Now, capital management is for us, is what our investors always look at, very important. For a long time, we have been managing this very, very carefully, and particularly in this environment, managing risk and return are very important.
What you see in our numbers, we are record high levels of return on equity. Across all segments, that's very important. Property casualty can probably do a little bit better, and we'll talk about that. But we are very confident that in 2024, you're also going to see that in property casualty as we are dealing very, very consequentially with the inflation and claims. So that leads then to consistent delivery and confidence into the future that I'm going to talk about in a second. Now, one thing that's very important that's why I put page A4 in. Allianz is different from many of our peers. Why? We are not a property casualty company only.
It's a little bit of a problem because many analysts, many people look at us as one of the top P&C companies in the world, which we are, but we are also one of the world's leading life and health insurance companies and one of the leading active asset management companies in the world. As you can see on the page, in every single segment, we have been growing earnings. This three-cylinder world is super important. Why? Because at the moment, for example, in corporate insurance and in reinsurance, you have real boom markets. So it's no surprise that the industry, and you see it in our results, produces very strong profits. But we have a balance across the portfolio if and when one of these cylinders starts to be more under stress.
So we are much more diversified and much stronger in resilience because we don't depend on super cycles in any one segment. So let me just go through that. In property casualty, we had double-digit internal growth. What does that mean? Our definition of internal growth, it is without foreign exchange effects, or M&A. And we need to say that on revenues, Claire-Marie is going to talk about it, it's not just price increases, which is the problem that mature industries have. They don't grow customer base anymore. We had 4% of customer growth, and that's a very good number. And we want to increase that number going forward. So Allianz is not a run-off company. And that's why the yardstick of pure cash distribution is utterly wrong. We are growing our business.
Second, and that's very important, we do not run one-off layoff programs and cost cutting at their sizes, like you see them now in industry. We believe it's actually very bad discipline, but we really want to do continued improvements on our expense ratio on P&C. It's a six-year running. It's not going to be always in one row. You will have one year that will be stronger than another one. But again, the question was, in 2023, can we continue to do so? We did 30 basis points on expense ratio again, and we plan to do that also this year. And we had, despite enormous volatility, a very good investment result.
Now, on life and health, we are actually very happy about the new accounting regime because for the first time, it really shows the strong resilience and the predictable cash flows coming out of our very, very strong life business. And when you look at the underlying cash flow generation, it's super strong. Our new business margin is super strong. But what is more important, particularly for investors, is that our new business, on average, doesn't consume capital anymore. So we can, over time, now grow this business. And because it's so value creative, we will not consume capital for it. We've been working on this for a long, long time. It's now finally happening. And over time, it will help our solvency ratio very strongly.
Asset management has been under severe stress in 2022 and in the beginning of 2023 because of the very fast rising interest rates when the vast majority of what we do is managing fixed income. That means a lot of pressure on asset value and on performance. I'm very happy that PIMCO had a stunning year on investment performance last year. Inflows have come back. In fact, we had only one month that caused outflows significantly was October. The rest was really good. In the first couple of weeks of this year, we already had EUR 20 billion net inflows. Our cost-income ratio remains very strong, which is very important. People are very worried about pressure on margins. Indeed, there is pressure on margins, but we are managing our cost base and managing to scale very effectively.
And we have recorded record performance fee because of outstanding investment performance. So looking at the total picture, remember, Allianz is not a property casualty insurer. It's the partner for everything that's important for you. We protect everything that's important for you. We are not a P&C shop. Now, let me talk about in the next page about the Value Capture Program. Just at a very high level, we'll review that in more detail as we get to the Capital Market Day. We basically had five levers from transforming our life and health asset management franchise into more of a symbiotic relationship that is really working very, very nicely. I'll show you some numbers. Expanding our P&C leadership, the market has helped a lot, but our commercial performance has been very, very strong. I'll give you some data later.
Boosting the platform business, you should really look at Allianz Partners as an enormous success. We are now the world leader in travel insurance, one of the most important products people need to have. And we're going from strength to strength. How to drive verticalization and execution agility, it was very important for us over the last three years to improve on claims because that's the moment of truth for our people. And I'm very proud to say, to give you an example, you have many German listeners here. 2023 was the year where we became the service leader in Germany, again, which is super important. To have the highest satisfaction in claims service was a key driver for that. And last but not least, reinforce resilience and capital productivity. I mentioned it before. You see it also on the extremely strong ROE on the life side.
Life is now self-funding. So we are going to push the growth button now, and it will help us to really strengthen the company. Now, let me get into a couple of details because we shouldn't be talking only about numbers, but how does it actually work? A significant part of our assets under management, we invest in-house. And again, we are the third largest life insurance company globally. A lot of people said, "you don't want to be in life insurance." Well, you don't want to be in life insurance if you don't know what you're doing. We know exactly what we're doing. And our core ROE is north of 16% now, which is a very, very strong number. And we are continuously working, as I said, now the new business is self-financing. We still have, as every company thinks, to work on.
There are markets that are more attractive than others, but we will continuously drive value creation here. One way by doing that is actually having our asset managers perform a key part of the asset management function for us. That gives value to customers because they get the best investment products in-house. By the way, we only give assets to our asset managers that really strongly perform. More importantly, we also, for our shareholders, create massive value because we get margin both in the life company and in the asset management world. The combined operating profit, if you think about us as a wealth management firm, just to give you an analogy, we already make more than EUR 8 billion in profit. That makes us one of the top 10 companies in the world in terms of wealth management.
We're going to strengthen that message as we move forward. Just to, by the way, repeat, our core ROE in asset management is north of 20%. Now, and again, end of the year, we'll talk more about the synergy. And again, here, the idea is grow. Now, the second step is to talk about commercial insurance. And as you know, particularly in COVID, we had a lot of things, like many people, a lot of things to do. The cycle has, again, been very beneficial. On page A7, we show you both what happened in our MidCorp business and what happened in Allianz Corporate Specialty, which was particularly challenged in COVID for a lot of good reasons, by the way. We are the leading entertainment insurer. And if in COVID nobody is going to outside entertainment, there is a loss to be paid, and that's fine.
But we've had it really turned around extremely well. We are doing extremely well in mid-corp, including in the renewable energy sector. But most importantly, we are forming what we call Allianz Commercial. We've integrated the businesses. I expect significant synergies in the business, both on the go-to-market side that's already happening, but in the future, also on productivity. We need to bring the cost down because we have a lot of parallel cost synergies. So we're not at the end of the productivity journey, in my opinion. In some areas, we're just starting. Now, talking about platform businesses, Allianz Partners is just one example. A lot of people are trying to emulate what we're doing here.
This is the total business volume that I've just shown you between 2021, which was right the emergence out of COVID to where we are today, growing the business by more than EUR 3 billion. It's very important to see, it's not just that we are the number one travel insurers. Outside of the U.S., we're the largest international health insurers. We have 40 partnerships with Global OEMs. The most important thing that many of you know that I've been trying to communicate since 2015 is it only grows if you are the best in customer service. We have by far the best net promoter score. This is what NPS, by the way, made on page A8. We're best in class. That's the prerequisite. You see the sources of growth on the side.
So it's not just travel that is very strong, but also health and mobility and assistance. Now, when we talk about health of an organization, I cannot get sort of enough of page A9. That gives you our top three indicators of how we measure corporate health. There may be many, many others. The first and most important, because they ensure our job, our customers. We still measure with the Net Promoter Score. Now we do it digitally in order to be statistically even be relevant. And we measure two things. One, where are we better than the market and where we are the loyalty leader, the company with the highest customer satisfaction. What you can see to the left-hand side, that we have now 75% of our businesses, we measure P&C, life and health separately across the world, and we have almost 60% being really the best.
The ambition over time is to be outperforming in every market because we cannot be in a business where we are mediocre. Ideally, to drive loyalty leadership to 75% over the next few years. We are clearly on track to achieve that, again, including in our home market, Germany. You see some of the scores that we have below. There are many, many more below the chart. The other one is the far right-hand side, ladies and gentlemen, and that is employee motivation. We measure that, by the way; this is not a self-declared number. We measure and audit that number because it's part of the remuneration. We call that IMIX. That's the Inclusive Meritocracy Index at Allianz. That is out of a survey of 74 questions we do, like many other companies in the world.
Kincentric provides the basis where we measure how satisfied are our people with leadership. We have a very long track record of measuring this number. 2023 was the year where we reached best-in-class benchmark and also on what we call Work Well Index, i.e., the physical and psychological well-being of our people. We've made a lot of progress, again, by the way, in an environment that is becoming really, really tough. And you see below there are many other things. Number one in Refinitiv, Great Place to Work. 43 of our entities have been certified, and seven of them are on national best lists. So there are many things that drive that. Now, these things together, the financials, the customer net promoter score, the employee satisfaction, drive the value of our brand, which is all about trust. And we are now the most trusted insurance company in the world.
We're not just number one in Interbrand that you see on this page, by the way, growing brand value in the top of the world, but also on Brand Finance. So that makes me really proud, not just dividend, that we are going to get to. Now, let's move on to something that you know is very dear to Allianz and myself. And I have to, again, call out our great team under the leadership of Günther Thallinger that is doing relentless work. We have mentioned to you on page A10 a number of things that we do. So for us, it's not just about getting scores and rating that you see on the right-hand side. And we have the third highest score, by the way, amongst our peers. We are, again, the leader.
The key thing is we are the first company that has really launched a net-zero transition plan that is really credible. And we are front-running even a publication for CSRD. We are ahead at least one year. And we have dramatically reduced the carbon footprint of our operations. We measure that in tons of CO2 per employee. It's already down 62%. Now, there are some one-off effects because we, like many last year, had to stop heating our buildings in the middle of the winter for Fridays and the weekend. And some of that is going to normalize. But we are unwavering in our journey on addressing climate change with a very clear and science-based plan. So I would also like to say it doesn't help to continuously panic. We just need to have consistent walkthrough and execution. Financial strength is also uncompromised. You see that page 11.
A lot of people, you know, is our solvency ratio really good enough? I always remind themselves, we have more capital consumption because we are a large life insurance company. We feel very comfortable with the solvency ratio that we have. That's also backed up with very strong ratings. Very few of our competitors have a double A rating. Many have much lower ratings than we have. So this is at the set. We are very comfortable with what we do. Now, let's turn to our shareholders. One thing that I'd like to do, you find on page A12. You know, there's a lot of debate also today. Again, you know who pays out more to shareholders on a daily basis. Allianz is not addressing day traders, just to be very clear. We have a very long strategy for our shareholders.
And by the way, many of them being retail, individuals that rely on Allianz for their pensions. That's one of the explanations why we have consistently increased dividend payout. I'm going to show that to you in a second. And buybacks are and will remain a supplement to that, to giving strong, recurring, and predictable cash flows to our shareholders. We are not going to fall over each other because somebody else is offering more payout. It's very important. The second thing is we need and want to retain money to invest in our future. That's why we have a very clear payout ratio. There was about 78%.
I think 75 is about what feels right at this point in time in terms of organically generated cash that has resulted in EUR 45 billion payout to shareholders over the last so many years because we want to grow organically and inorganically. Why? When the world gets to become a tough place, there are huge opportunities for growth that are strong and that are trusted, and Allianz is one of them. If you pay out almost 100% of your cash, you're putting your company into runoff. And people say, "Yeah, but you can go to shareholders, raise capital." Nobody does that. It's pure theoretical. So you need to have a proper base. And I think we have the right base between really serving our investors. By the way, I think Allianz is now the number one company in Germany in terms of retail investor trust and holdings.
Maybe another interesting fact for you, we started six years ago with having 15% of our employees being shareholders of Allianz. Ladies and gentlemen, today it's over 70% of Allianz employees are owners of Allianz stock. Particularly last year, that has helped a lot. We really recovered strongly from the Structured Alpha, you know, distrust element. And, you know, that's why I look at very long years based on very strong numbers. And you already see now a glimpse into what we're going to do. We are moving the dividend up to 13.8. That is a 21% increase in dividend per share. And we have had already executed last year EUR 1.5 billion. We're going to do another one this year to supplement that. Now, let me talk about dividend that's on page A14. And that's very important. The dividend policy, we have already announced.
We have the ratchet on prior years. And again, if we have excess capital, we are going to use that for share buybacks. But again, we'll also look at growth and differently to some other companies. We'll carefully look for growing, ideally organically, but also through bolt- on M&A, if and when that strengthens our market position. And that's very important. So the right-hand side, ladies and gentlemen, tells you a simple and very clear fact. We have increased dividends in seven out of the last eight years. In seven out of the last eight years, and only a small sort of sidestep. And even when earnings were under pressure, we were unwavering on our dividend commitment. And again, this year it's 21% up. Last slide before, second to last slide is outlook.
We have established a policy in Allianz that in an environment like this, that is very, very critical and challenging, we want to have a conservative outlook. A lot of people think that is a lack of optimism. Trust me, ladies and gentlemen, we have a very ambitious plan. We want to be at the upper end of the outlook, but we need to achieve that first. So we go into the year with a lot of confidence, but we have to be cautious because there may be challengers from outside of Allianz that will really make things very difficult for the world at large. So in summary, page 16 is we have an outlook for the year.
More importantly, that is, in my opinion, very conservative, a payout ratio of 60% that allows us to pay something that investors, particularly with an aging society where people really now need reliable dividends and additional share buyback on top of the 1.5 that we've announced, together with a very clear strategy and best-in-class corporate health, a very resound organization. Let me use this opportunity to thank our almost 150,000 people out there that are also listening for an amazing job they have done last year and they're still doing. Thank you very much.
So thanks a lot, Oliver. Good morning, everyone. I'm very happy to share with you all our 2023 results today. So if you look at page B3, in 2023, we deliver our strongest operating profit ever at EUR 14.7 billion. This is building on our very strong operating profit already in 2021 and 2022.
So this is confirming our trajectory. And all of that has been delivered while, as mentioned by Oliver, 2023 has seen very high inflation, volatile financial markets, and high frequency of nat cat. You can also see that our operating profit has grown by 7% versus last year. And so did as well our shareholder net income. If you adjust 2022 for the negative one-offs that did impact that year, we emerge at an excellent EUR 9.1 billion shareholder net income and a very good 16% ROE. What you can also, actually, what you cannot see on that page is our core EPS, which is at 22.61, which is up 33% compared to last year. And that's made of both net income and also the share buyback we have delivered, which is helping that number.
Definitely, together with all the colleagues from the Allianz Group, we are very proud of this value that is being created for our shareholders. Beyond profitability, you can also have a look at our top line, total business volume, which is as well up compared to last year. This growth is actually stemming from all our segments, which is also a very good sign, I would say, for 2024 and forwards. Now, let's move into P&C. Here you can see directly, if you have a look within the combined ratio at the NatC at impact, that we have had in 2023 a higher than normalized cat load for EUR 600 million. Still, we are almost at the level of our outlook for the P&C segment. We are slightly up compared to last year.
In terms of growth in the P&C segments, you can see a very nice double-digit growth. That's fueled by both our pricing actions for approximately 7% out of that number, but also 4% related to volume, which is a very important aspect as well of our strategy. If you go into life and health, you can as well see the very good growth we have achieved in the 2023 environment. We have achieved that growth at an excellent level of new business margin at 5.9, which allows us to deliver a value of new business of EUR 4 billion. Our operating profit is very good at EUR 5.2 billion. That's ahead of our outlook. That's supported by our CSM release at EUR 5 billion and strong operating investment results in 2023 as well. Our asset management segment is also ahead of our outlook in terms of operating profit.
Both our asset managers have second quarter in 2023. It is up 17% compared to last year. Our shareholder net income is actually also up 17% by more than 17%, actually. So almost in line. If you adjust for the negative effect associated to the disposal of our recent operation, that impacted the shareholder net income in 2022. In the property and casualty segment, you can see that our operating profit is at EUR 1.6 billion. That's better compared to the third quarter. But that's not as good as the first half of the year. The main driver for this one is a continuation of higher frequency. And the main driver for this one is a continuation of higher frequency of natural catastrophes. And that's mainly coming from Germany. So the overall net cat load above normalized is actually EUR 300 million for the fourth quarter.
What you continue to see in the property and casualty segment in the fourth quarter is definitely the very strong growth that is related to the price increase that we continue to have into our top line as we are addressing the inflationary effect that are emerging into the claim side. The share of the price increase into that total internal growth is actually 8%, which is strong. If you look at our life and health business in the fourth quarter, you see here as well strong new business overall within particular Allianz Life. Our U.S. entity and Italy performing particularly strong in that number. That new business is also delivered at a very good new business margin that is in line with the year. Our CSM release is at EUR 1.3 billion for the quarter. That's in line with our expectations.
And together with good investment results, this is leading to a strong operating profit at EUR 1.4 billion. Our operating profit for the asset management segment is excellent in the fourth quarter. That's supported by our third-party asset under management, which are up 3%. Excellent performance fees coming from PIMCO. And both asset managers are actually delivering better compared to our same quarter last year. You can see as well that we had small single-digit outflows in the fourth quarter, which have stabilized after October. And as mentioned by Oliver, I can just strengthen again that we have seen after six weeks into 2024 the same level of inflows compared to the entire year 2023, stemming from both asset managers. So that's definitely good news.
If we move to page B7, and here you can see clearly that both our comprehensive shareholder capital and our Solvency II ratio have developed positively in 2023. We have a strong solvency ratio at 206, which has benefited from 9 percentage points of net operating earnings during the year with a slight offset of the new dividend policy, which has been reflected already into that solvency ratio. For those of you who are looking at the quarter-to-quarter development of the solvency ratio, which personally, I think, is less of a relevant indicator versus the yearly view, you will see that we had a sharper drop than expected. This is linked to three effects, I would say. First, the interest rate convexity. Secondly, the fact that we had a reevaluation of our real estate. And thirdly, that we have reflected our new dividend policy, obviously, into that number.
On the sensitivity side, we have a slightly higher sensitivities on the equity market side. That's purely technical. That's linked to the interest rate convexity again. But in the underlying and some model changes, but in the underlying, there is no change in terms of economic exposure. What I find particularly interesting in terms of sensitivities development, if you look at it year-on-year, I would say, starting from 2021, typically, our combined shocks have actually decreased in sensitivities quite structurally. And you see that as well in the 2022 to 2023 comparison. If you move to page B9, you will see here that we had a very strong gross operating Solvency II earning at 27 points in terms of S olvency II capitalization.
This is mainly offset by 16% of capital management actions, which are reflecting the new dividend policy and the EUR 1.5 billion of share buyback that we have performed in 2023. The new EUR 1 billion share buyback that we have announced today will be reflected in Q1, but will be as well, obviously, offset by the operating solvency to earnings that we are going to generate at that point in time. What is particularly interesting also on that work, I would say, is the fact that, as mentioned by Oliver too, our life business growth is fully self-funded into the 2023 development. And you can as well see that as we have taken the right steps structurally during the year in terms of fair value reevaluation of our real estate portfolio, we emerge with a market impact of -1% as well.
We had other positive effects coming into this market impact. So overall, if you step back and you look at this trajectory, our solvency development is strong and is improving further compared to 2022. Let's move now into P&C. Let's have a look at page B11. This page B11, from my perspective, is a very good page. Here, you can see that across our entire portfolio, we see growth that is stemming from both pricing and volume. And what you cannot see on this page, but I really think is super important, is that if you look at our quarter-to-quarter price increase development into the retail segment, you really see this steady upward momentum that we are going to earn into 2024 and beyond. So that's also a very strong reinforcing message in terms of expectations for 2024.
If we move to page B13, here, you can see our strong operating profit at EUR 6.9 billion for the P&C segment. If you look a little bit closer at the development work compared to 2022, you can see that in terms of underwriting result, we are slightly lower compared to last year. That's mainly linked to the EUR 500 million additional net cut load that we have experienced in 2023 compared to 2022. We have a very good operating investment results, which is supported in particular by the higher interest rate we are earning into the portfolios. You have quite some noise into these other operating results for which you have more details between 2023 and 2022 at the bottom of the page. In a nutshell, I really consider it's noise because we had some positive one-offs in 2022. We had some negative one-offs in 2023.
So in absolute, you should expect a number that is close to zero. Definitely, you should not expect 2023 to repeat itself going forward. If you go towards the right-hand side of this slide and you start from the bottom, I have already mentioned the good growth trajectory that is reflecting itself into the insurance revenues. If you go to our expense ratio, you can see here the steady development of our improvement of our expense ratio by 30 basis points, which is in line with our expectation and reflecting the productivity actions we are pushing into our expense ratio. But what you can also observe is that the expense ratio has normalized versus the third quarter. We mentioned to you that it was to be expected. What does that mean?
It means that we had quite some noise in the fourth quarter in terms of effects between the loss ratio and the expense ratio. As such, I really think that the quarter slice for the fourth quarter on a standalone basis, there is not so much to read into it due to that noise. For me, the right reference, if you want to look at the performance development, is really to look at the full year developments into our P&C segment. If you look at our combined ratio overall, you can see a very good combined ratio for commercial at 90.5 like last year. On the retail side, we are at 95.8, which is higher than expected, obviously. That's linked to the nat cat environment and the inflationary environment we have experienced in 2023. Definitely, we expect this combined ratio to improve in 2024.
Nonetheless, when I look at the environment we had to face in 2023, from my perspective, this combined ratio is demonstrating the technical strengths of our experts around the globe. So if you move to page B15 and you have a closer look at our operating entities in terms of P&C delivery, first of all, you can see that all our operating entities are emerging with a combined ratio that is below 100%. And that's demonstrating also the strengths of the global portfolio and the diversification effect into that portfolio. The second thing is that you can clearly see the effect of NatCat, in particular on Germany, on Switzerland, and Australia.
And then if you look at the favorable combined ratio at which some of those operating entities are emerging, like Germany, like France, like Italy, like CEE, like Switzerland, clearly, they are performing well in their local markets as I am currently looking also at the publication of some of the peers in their local markets. So really, they are doing a good job in that environment. What you see as well on this page is that for UK and Spain, as an example, we see clear improving patterns after 2022 in a very competitive environment. So also, again, very good signs in terms of development into those operating entities. If you look at Australia, clearly, Australia is not really where we want it to be.
They have also, in addition to the net cat load, they also experience quite some negative runoff coming from the late net cat that happened in 2022. And also, I've seen very high level of inflation. But really, more fundamentally on Australia, we have a really good team here. They are working super hard. And what we see in the underlying are improvements which are in line with our expectations. So there, it's also a good, I mean, good signs for 2024 and forward. On the commercial side, you can also see on this page that both AGCS and Allianz Trade are performing extremely well with excellent combined ratio and double-digit operating profit growth too. If you move to page B17 and you have a look at the investment results for the P&C segment, they are actually excellent as we are earning the higher yields.
Our reinvestment yield is 1 percentage point higher versus the current yield. What you see as well is that our interest accretion for the year is at -EUR 700 million for the year, which is in line with our expectations for 2023. In 2024, you should expect this interest accretion to be around EUR 1.2 billion as we are going to pay for the higher discounting we have experienced in 2023. So overall, I would think that for 2024, you should expect our operating investment result to be almost stable. So overall, what do we see for P&C? We see an excellent performance on the commercial side. On the retail side, we see a strong price-driven growth with quarter-to-quarter momentum that we expect to earn into 2024 and beyond. Despite an elevated level of net cat and very strong inflationary trends, we have a solid technical results.
We also see structured improvements into our underperforming entities. So all of this makes us confident for 2024. Let's now move into life. Let's have a look at page B19. On the overview page, I mentioned to you our solid growth patterns. These solid growth patterns translate itself into a slightly lower growth in terms of PVN BP that's due to the discounting effect that applied to these metrics. You see growth mainly stemming from Allianz Life. Allianz Leben had a little bit less single premium business this year in 2023 given the competition with the banking products. But what we see as well in the underlying is actually higher recurring business versus 2022, which is very good. Also the fact that Allianz Leben is gaining market share in that environment. Our new business margin is stable at 5.9%.
What we see in the underlying of that metric is a positive impact from economics and that's stemming from all OEs. We have a slight negative effect coming from the spread decrease on Allianz Life side and some adjustment of our non-economic assumption into that number. We have a value of new business that is actually up 4% if you FX-adjust that number. And that's coming from both volume and economics with positive contribution across the portfolio. So let's now move into our CSM development on page B21. And here, you can see that the solid picture on the VNB is actually confirmed by our normalized CSM growth, which is at 4.9%. That's in the higher range of our 4%-5% expectations. So that's a very good outcome.
You can see as well on this page the strong CSM release we have had in 2023 of EUR 5 billion. That's in line with our expectation. What you see as well on this page is the high non-economic variance, which is at minus EUR 2.7 billion. You have a lot of noise in that number. That's mainly due to the fact that 2023 has been a transitionary year into IFRS 17. We had a lot of one-offs or model changes, which actually have no or very limited impact into our future profitability. You should expect much less movement in the future into that bucket. I can also tell you that in that negative 2.7, I estimate minus EUR 800 million being the real number in terms of non-economic variance for the year.
Beyond the strong normalized growth and the CSM release, you can as well see on this page on the sensitivity side that they are particularly small on the CSM side. They are further reduced compared to last year. This is giving a very good sense in terms of stability of that CSM also for the future. That's a very good element to highlight, I think. If you move to page B23, you can see that the strong CSM release of EUR 5 billion translates itself into EUR 5.2 billion of operating profit. That's mainly supported by good operating investment result during this year. By the way, I want to use this opportunity, as we are on the investment result, to highlight for you that we have enhanced our backup. I really hope you like it.
In particular, we are now displaying our assets at fair value while before we were mentioning them at book value so that you don't do a year-on-year comparison and you think we have changed a lot in terms of underlying portfolio. If we move to page B25 and we have a closer look at our operating entities, you can see that all our operating entities contribute well to our normalized CSM growth with the exception of France. That's mainly linked to the lapses we have experienced at the beginning of the year related to our Luxembourg business and to a lower extent CEE that is lower but broadly in line with our expectations. On the OP side, I just would like to mention Allianz Life where you can see a very high growth. But this high growth is due to the transitory effect associated to IFRS 17.
So if you correct for this, actually, Allianz Life has experienced mid-single-digit growth during the year. What I see as well when you reflect back a bit over the last couple of pages is that we have much less volatility now in our life numbers as we have transitioned to IFRS 17. I really see this as a plus. I really think this is giving transparency and clarity into the movements of our life value creation. So let me recap on life and health. In a challenging environment, both when it comes to our investment product and the inflationary effects on the health and protection side, we have well mitigated those effects. We have solid growth around 5% both in terms of top line and CSM that is to be earned in the future. Our operating profit is well above our expectations.
This makes us confident in our ability to deliver in 2024. On the assets under management on the asset management side, if you move to page B27, you can see that our total assets under management move up by 4 percentage points to EUR 2.2 trillion. If you move into page B29 and you look in a bit more details to our third-party assets under management, you can see that those are up by 5%. This is clearly at a lower level compared to our expectations at the beginning of 2023. I think it's a good job given the volatility of the markets. We see clearly positive net flows of approximately EUR 22 billion stemming from PIMCO. The markets have been supportive towards the end of the year while we see a negative FX effect that has impacted the developments overall.
So I think we are confident when it comes to our expectations in terms of forward-looking development of our third-party assets under management, as mentioned by Oliver already, as we expect a stabilization of the yield curves that will support definitely 2024. So let's move to page B31 and have a look at our revenues. You can see that our yearly revenues are actually up by EUR 200 million if you FX-adjust them. We have benefited from higher performance fees at PIMCO. And that's fully to the credit of the performance of our portfolio managers. And this is partially offset by lower revenues driven by the level of assets under management. As an average, we had less assets under management in 2023 compared to 2022. In terms of margin, PIMCO is slightly up. And AGI is in line with our expectations post the Voya transaction.
Let's now have a look at our operating profit on the asset management segment on page B33. Overall, our operating profit is actually slightly down compared to last year. But that's entirely due to FX effect. Our cost-income ratio is almost stable at 61.3 and supports the delivery. For 2024, we aim at a cost-income ratio closer to 61 with AGI to continue to improve, in particular, towards 65. So overall, our asset management business did deliver above our operating profit expectation in a volatile market. And we expect steady improvement on the fundamentals for 2024. I'm going to skip page B35 as we are doing better compared to our expectation. And that's mainly coming from the banking segment. If you look at our cash remittances on page B37, here, you can see the strength of our cash remittances at group level.
In 2023, our remittances reached EUR 8 billion and a ratio of 124%, which is very high as we had some dedicated capital actions during the year and also because the denominator was lower in 2023. Going forward, we expect to deliver above 80% of net remittances. I really think this is a right order of magnitude to have in mind for the future. Maybe an extra point on this page, you can clearly see that this three-cylinder strategy we are aiming is also confirmed in terms of cash remittances as we see that on a year-on-year basis, we have different types of contributions depending on where the performance of our segments is standing in terms of cash remittances as well. Let's move to page B39. Following our operating profit, we deliver an excellent net income for the year.
This is well supported by our tax rate, which has been benefiting from a positive mix effect and as well some one-offs. On a normalized basis, we expect our tax rate to be closer to 25%. Here, on this page, you can see our core earnings per share at 22.61, which is a record level. That's made of both our very strong shareholder core net income and the share buyback we have done this year, which is definitely supporting this number up by 33%. Again, we are really proud of this delivery to our shareholders. Let's move to page B41. Let's have a look at our outlook. Here, you can see that we have set our outlook at EUR 14.8 billion ± EUR 1 billion. That's up 4 percentage points compared to last year.
Here, actually, we have kept the tradition of fixing our outlook at the actual level. This year, we have done a slight roundup of our operating profit because today, it is at EUR 14.746 billion. So we felt a little bit adventurous on the Allianz side. And we have decided to put it at EUR 14.8 billion. So joke apart, if you go to our P&C segments, you can see that we are increasing our midpoint compared to last year by EUR 300 million. And this is to reflect, first of all, our growth that we expect to see around 5% in terms of insurance revenue.
We have set for this midpoint a combined ratio that is between 93 and 94 while we have increased slightly our expected nat cat load to 3 percentage points where we will definitely continue to focus on pricing really well for nat cat as we do already today. But we thought also looking at the last couple of years and the climate change, we were in the need to reflect a slightly higher nat cat load. We also expect 1 percentage point less discounting in 2024 and an operating profit on the investment side that is actually fairly stable. On the life and health side, we have used the tradition of using the same level as our actual in terms of midpoint.
I think this is to recognize, first of all, the growth that we expect to see in 2024 but as well the fact that we had some positive one-offs that came into the result into 2023, in particular, on the investment operating side. On the asset management, we are also fixing it in line with the actual. Last year, we were quite bullish on our expectation on the asset management side associated with the reversion of the shape of the yield curve. We have decided not to reflect that into our outlook for 2024. But clearly, if you discuss with our PIMCO CEO, he's extremely bullish on 2024 and expecting a wall of money to come our way. Clearly, we would benefit very strongly on the financial side if that would materialize. On the corporate segment, we have set this number, as always, quite conservatively.
So overall, this is a confident outlook. We feel strong about. But at the same time, this is definitely recognizing the fact that the macro environment we are operating into is not an easy one. And we don't know exactly how it may unfold. And in addition to that one, clearly, we have a range around the midpoint of our outlook. And it gives ample leeway for overperformance too in 2024. With that, I'd like, like Oliver did, to also thank all our employees for excellent results into 2023. And I hand over back to you, Lauren, for questions.
Thank you, Claire-Marie. Now it is time for the interactive portion of our conference call. We want to take as many questions as possible. Please take your time in asking them. You can ask several questions at once. We'll batch them. We will not rush you off the phone. We'll take as many as we can. To take a question or to ask a question, just press the talk request button in the webcast or star five in the telephone conference. If you're following on YouTube, just be sure that you mute the application. That will avoid an echo for everyone. If you're not able to ask a question for some reason, technical or otherwise, please write an email to mediacontact@allianz.com now or after the call. We now take the first question from Alexander Hübner from Reuters. Alexander, your line is open.
Hello. Good morning. Do you hear me?
Yes.
Sounds great.
Good. Thank you. I've got just one rather specialized question regarding real estate. There's much noise and much talk about real estate. We have seen your real estate portfolio has shrunk a bit. Can you elaborate a bit about how that happens, just a revaluation or having sold some real estate pieces? And what's your opinion about the development of this segment of alternatives? Thank you.
Thank you very much for your question. So you know that on the real estate side, as we are in general for our entire alternative portfolio, we are investing longer term. And that's basically the approach we continue to follow on that side. So as such, we have some movements into the valuation of our real estate portfolio that is linked to the fair value assessment we perform on a continuous basis, I would say. So that's linked to the slight reduction you are mentioning is also related to some of the reevaluation we have performed on the real estate portfolio in 2023, definitely. There is also always movements into the real estate portfolio as deemed necessary by our managers. Actually, a very large share of our real estate portfolio is managed by PIMCO.
We have a very long history in terms of management of such real estate portfolios. What you need to know as well is that our real estate portfolio is of extremely good quality. We feel quite really happy with that portfolio in general. Maybe one last item I wanted to highlight for you on the real estate portfolio is associated to the fact that as this is really long-term investment, it's also usually backing our life and health portfolios where we have a very high level of profit sharing with our policyholders. That's really bringing quality into the performance of our deliveries to our life policyholders as we have delivered very high return over quite a long period of time.
Last but not least, this environment, as you are mentioning, where there is also quite some movements and reflection on the value of the real estate assets, is also bringing opportunities very clearly. There are assets we would definitely consider acquiring in this environment.
OK, thank you.
Thanks, Alex. Any other questions? All good? Thank you. The next call we will take or the next question we will take will be from Thomas Magenheim-Hörmann from RND. Go ahead, Thomas. Your line is open.
OK, do you hear me now?
Yes, we hear you.
OK. You've mentioned that you raised your prices, property and casualty, by 7% last year. So that's a mixed temperature. Can you tell me where prices went up most? Was that car or climate change-related insurances? Can you give me an idea there? And also, what will happen in 2024? Will there be another increase? Where? And will it be more or less than 2023 probably? And the personnel, can you tell me how that developed globally and in Germany last year and how it will develop this year if there are any changes at all? And the third one is on society. There are quite some companies now who are protesting in Germany against extremist demonstrations in the streets like Volkswagen, for example. Mr. Bäte, I also would like to ask you personally, are there any plans for Allianz to participate in there?
Could you give me an idea how?
Yeah, so let me start then with this question while we're getting the numbers ready that you asked. Thank you for your questions. As you may have seen, we are an active part of the communication you were talking about. We are not rushing every weekend to some new statement. We have a very stable policy. It's totally clear that Allianz cannot support any time and any type of racism, any type of excluding certain parts of society. That's totally clear. That's very important. Now, we need to ask ourselves, however, an important question. That is why very ordinary people are contemplating to vote for radical parties, be they on the right or on the left.
I think that's the key question to ask, not just to say it's unacceptable to have radical parties because we all would probably agree that Germans or French where you see that or Dutch citizens suddenly didn't become racist. My personal opinion is that this goes much deeper. It goes into a lot of dissatisfaction with the working class that goes to job every day. The trains and the airports are not working. The schools are not functioning. The digitalization of our service is not working as promised. We have not addressed very difficult questions. So how do we deal with mass immigration without lowering the standards of education in our schools? I think it's very important that we address that. I totally encourage your career; we don't accept anti-Islam or anti-Semitic comments. But we need, particularly our political leaders, to wake up.
They need to address the concerns. We do that every day. When you look at employee motivation at Allianz, we have the conversations every day. We try to support our people with cribs in kindergartens as much as we can. We'll probably do even more. We're addressing the issues with health care and health care access. There's another question that is massively important. Everybody talks about it. But nobody does anything about it. That is the cost of affordable housing. We've had huge programs. We throw money. Then we're surprised that nothing happens because we have regulation of the rental markets that are so absurd that nobody invests in building apartments. My personal opinion is very important to support that.
But much more important, if we want to stabilize democracy across Europe, we need to fix the problems that our citizens are facing every day. And the continuous wild strikes on infrastructure, the totally loose labor regulations on what is critical infrastructure that we are held hostage by a few train drivers, I don't think is the proper answer. So we need to get together across the spectrum and fix the infrastructure. So, Claire-Marie?
Yeah. Thanks a lot. So maybe on your first question when it comes to price action, it's a bit difficult to answer that question super broadly because obviously, the inflationary effects are quite different on a market-to-market basis. And also, when it comes to motor versus non-motor and retail versus commercial. But if you step back overall, where we have seen in 2023 the highest level of price increase are definitely on both UK and Australia where the markets have been most challenged in terms of inflationary effect. And overall, for our global retail portfolio, where we have seen the highest level of price increase is coming through on the motor retail side. On motor retail, we have seen post-COVID actually now really a normalization when it comes to frequency in general. But we see definitely the effect of the inflationary trend into the severity of the claims.
What I want to highlight in particular is the fact that we have done in the underlying a lot of actions also to mitigate the effect of inflation into our claims by taking a lot of actions which are also related to what Oliver was highlighting in his introduction in terms of platform actions on our side. We are really proud of the delivery we have achieved there because it has also allowed us to reduce some of our pricing actions for our customers because we realize that the very high price increase that some of them had to face was not easy to digest as well. For 2024, first of all, we think that our current pricing is either at or ahead of inflation. That being said, we don't have a crystal ball.
We see that some of the inflationary trends are still higher compared to expectation from a market perspective, I would say. Where we will continue to see the highest level of pricing actions in 2024 will continue to be the U.K. and Australia for us overall. Maybe you had another question, I think, on the number of employees. We had.
You were asking specifically, Thomas, about the employees in Germany. It went from 39,198 last year to 39,287, so less than 100 employees more, difference and more. But I wanted to note that in the coming weeks around March 7th, our sustainability report will be published. And that will include our People Factbook with all of that information. So we'll follow up with you then. Any further questions from you, Thomas?
Just one more to make clear. Do you think that the price increase will be, that's what I understood, that the price increase 2024 will probably be less than 2023?
So we had a certain momentum into the price increase that basically is emerging into our top line. We have taken further price increase actions towards the end of the year. We are going to see that effect coming into the 2024 numbers. So maybe the profile is going to be further continuation of price development into the first half of 2024 as we are going to see potentially a reduction of that effect coming into our numbers.
But what it will depend on, I think that's what you're really asking, is we need to look at claims inflation and how it continues. It looks like it's slowing down now a little bit. But it's different by lines of business. So let's talk about auto insurance that everybody talks about and home. And then it's different. Auto insurance, we have had ridiculous increases in spare part and repair cost prices. We have some repair shops that are now charging EUR 300 per hour to repair an electric vehicle. And that is what's really driving prices, not the profits of insurer. Actually, in most European markets, the auto insurance, particularly MTPL, is making losses. So it's not like the insurance industry is raking up prices to huge profits. In fact, we are still catching up with claims inflation to a part.
That's why we had to take very, very serious pricing actions. We are actually hoping for the benefit of our customers that this inflation will decline. Now, hope is not good enough. We are also offering, and this is a very important point, services to our customers that help them to contain the inflation and premium. And I'll give you an example. When you are with Allianz in Germany and you have a special tariff for Casco where we help you to file the claim, to arrange for the repair, and manage the repair process on a consistent basis, we on average are already saving EUR 1,000 per claim for our customers. So it's very important that we convince our customers to trust us, to ask to help them in the claims journey, and to contain the enormous inflation in spare parts and repair costs.
And that is the value proposition that we really, really need to bring home to people to manage really their expenses. Otherwise, inflation of their costs will happen. And we could have continuous inflation and pressure on their livelihoods. It's a bit different in terms of home and home content because there there's an increase in frequency, partially in motor too, but an increase in natural catastrophes and big and small ones like we saw the small sort of cyclones we saw in Germany last year, which happened both, by the way, affected motor CASCO and the homes and have big, big problems with hail that damage not only but destroy cars and destroy roofs. And there we have to just spend more time on protection and resilience of our houses. So it's not just important to prepare for climate change and put some panels on top of the house.
You need to put the right panels on top of the house that you continuously not get damages. So there's a lot to be discussed that we don't have time for today to make our society more resilient to the consequences of climate change. And therefore, as a practical example, by the way, on solar panels, it is not good enough to support that with a tax break but to support the ones that are actually resilient against storms. So just a practical example to add to the numbers.
Thank you very much.
Thank you. Next question will be from Olaf Storbeck from The Financial Times. Go ahead, Olaf. We can hear you.
Hello. Can you hear me?
Loud and clear.
Brilliant. Yeah, thanks for taking my question. I have, I think, three areas of questions, if I may. The first one is a relatively specific one on Signa and the Signa insolvency. We understand that Allianz had this EUR 300 million exposure against Signa based on a Berlin construction project. Are you expecting any losses from this? And what's your view on the wider insurance exposure to Signa? Some of your peers have built really high levels of exposure, some even uncollateralized. Do you think this could be turned into a wider problem for the insurance industry? And which lessons could or should be learned from this? My second question is on kind of insurability of natural catastrophes. There has been a kind of growing discussion about this. What's your view on how the industry can cope? And yeah, how should the industry deal with the situation?
My third question is kind of, in a way, a follow-up question to one asked earlier on your view on extremism and the wider political situation. There's this growing sentiment that Germany has turned kind of the sick man of Europe again with international investors kind of shunning the country and the industrial base being in decline. What's your view on this? And do you think that kind of policymakers have, well, found the right answers already? And which answers should they find if you share this view? Thanks.
So maybe Claire-Marie starts with the details of the loan. But our exposure to Signa is very low. It's only loans. And it's highly collateralized and on a prime real estate and a single object. But the data Claire-Marie can give you in a second. Let me just hit the insurability point because it's a really serious topic for humanity, not just for Germany. And I'll give you an example from the U.S. because I came first to the U.S. in 1993 when we had Hurricane Andrew. And it was for a company that had all of exposure there. If that storm would happen today and our colleague Chris Townsend had mentioned it, the loss would be eight times bigger, north of $20 billion. And why is that? Because people continue to build buildings where they shouldn't build buildings, i.e., where there are massive storms.
So the increase in losses by and large, by the way, are not yet from climate change. It's just through a massive increase of insured assets in the wrong places of the world. So the humans continue to build buildings where the earth shakes and where the wind blows. And they shouldn't be there. So one of the key things to insurability is to actually change government policy. And it's really important. By the way, that's why we're spending so much time on climate change and decarbonization in order to help, hopefully, reduce the effect of climate change. And at some point, hopefully, for the benefit at least of my children and your children, to reduce the effect. So it's a real problem. When you think about Europe, we have the same issues. When you look at the flood that we had.
We are the strongest company in terms of supporting claimants. But if you look beyond helping them, they will build a lot of houses in the Ahr if you've done proper risk modeling that should have been built next to the river. So the most important thing is to think about building resilience by putting away houses and adapting building codes and differentiating that. When you look in the building codes of many countries, there are very few that really systematically do it. And by the way, my role model is Switzerland. Have a look at that also in terms of how they finance it. The U.K. has some very good programs. And on very large nat cat, my role model is France. Actually, they have a very good way for a public-private partnership. So outside of Germany, there are many good models.
Again, like many things in Germany, stop talking. Do something about it. That leads me to your point. I don't think we are the sick man or the sick woman of Europe because to be en vogue. The issue is we have enjoyed, I think, too long a period where everything went hunky-dory. We have benefited from the fact that the United States were paying for our security, that China was providing us with excessive and strong profits relative to margins that we had at home. And it's very important we had very cheap energy from Russia, by the way, not as cheap as it could have been and as it relates to our neighbors. Please remember, in France, people have on average 40% lower energy prices than we have today, not to speak about that. All of that has changed post-COVID and with the war.
The thing that we need now to recognize, as we did sort of at the end of the '90s and I think is more serious, that the foundations have changed, that it's now stopping. We have to stop distributing money. We have to focus on earning money sustainably because you can only support a great social system. I'm very proud of the German social system if you have enough value generated so you can distribute it. So that's the problem. The problem that politicians are in, you never win elections if you tell people they're going to get less money rather than more. So we need to wait for somebody who has the courage, he or she, to say, guys, we can only spend the euro once.
Here's the clear plan to bring this country back to balance between doling out money, by the way, also for the rest on the planet. There's a small analogy. If you are in an airplane, they typically tell you if there is a loss of oxygen in the plane, you put on your own mask first and fix your problems before you put on the mask on other people. That would be my advice to the political leaders. All right?
On the Ahr remark you made, are you basically saying that there are a lot of houses currently being rebuilt in the Ahr Valley, which shouldn't be rebuilt at the place where they are being rebuilt?
It's not about the R in general. The point is we need to have building codes that support resilience. And that's not about the R. We also have that in other parts of Germany close to rivers where we still do not have a proper adaption of building codes to stronger storms. It's also, by the way, about how we build and reinforce roofs. So in France, they had big storms. They immediately changed the building codes and said, we need to refortify the roofs. You need to have different buildings that have to be fit for wind speeds that are north of 240 km. So that translation of scientific insight into reality is important. And by the way, we are, as we all know, not short of bureaucracy. It would be great if we focused the bureaucracy on where it actually helps.
Let me take the question on Signa. Please note that, in general, by principle, we don't provide individual information on single name. What I can tell you on the insurance side is that we have low, really well-manageable exposure to Signa. They have already been reflected in our fourth quarter results. On the investment side, as you mentioned already, we have some exposure on the commercial real estate lending side, which are really well collateralized. And indeed, as you mentioned, we have a EUR 300 million loan to a very high-quality building in Berlin with a loan-to-value ratio of actually 59.5%. We feel really comfortable with.
So when you say.
Yeah. And on the industry, please allow we don't comment on colleagues and peers. That would not be appropriate.
One follow-up on Signa, please. Claire-Marie, as you said, it was reflected in the fourth quarter results. So did you take write-downs in the fourth quarter results on Signa? And if so, how much were they?
No, let me I will not comment in details on what has been done. What we have done is that because we had some exposure to Signa into our commercial portfolio, as we normally do, we have reacted in terms of case reserving in the case of Signa. But as mentioned, it was low and really well-manageable.
OK. Thanks.
Thanks, Olaf. We'll take our next questions from Stephan Kahl from Bloomberg. Stephan, your line is open.
I hope you can hear me. I have a couple of questions. The first one also on real estate. According to your presentation, you have $58.4 billion in real estate. That's equity. I was wondering how much you have in commercial mortgages. I can only see total mortgages. But I don't see a breakdown for commercial mortgages. Maybe you can provide that number. Second question is on your new dividend policy. I'm just wondering, are you actually constraining yourself in terms of pursuing M&A opportunities by promising higher payouts to investors? And then also, yesterday, you announced an investment in AlTi Tiedemann Global. And I was wondering what's behind this investment? And how does this fit with your asset managers, PIMCO and AGI? Is there going to be some sort of collaboration? Or yeah, what's behind this move?
Yeah. Let me start with this one. Then I hand over to Claire-Marie. The AlTi partnership is actually very important. Out of the 450, we're going to do a significant part of that. It's not in the company per se. It's about helping AlTi Tiedemann and I'll talk about them in a second to enter Europe and to provide their distinctive advisory services for discerning clients. And by the way, they come out of impact investing, which is very close to our sustainable investing agenda for discerning clients to Europe. So it's to enable them to open and grow Europe specifically. That's why we're investing. And it has a significant connection, as you said. So the question was really good to what we do on the asset management side.
For our investors, we do expect strong collaboration with our asset managers and then subsequently also flows into asset management by being sort of closer to the front line, to speak. In Europe, there are huge opportunities because the market for advice is highly fragmented. There is a lot of room for professionalization. Tiedemann, we believe, is one of the best coming out of impact investing to be partnering up with. It's one important aspect of growing our wealth management business over the next few years, which relates a little bit to the first question that I'm going to hand over to Claire-Marie in a second but very, very important. There is a tendency in the property-casualty insurance industry to basically pay almost 100% of free cash flow out to shareholders. We are different from that because that's only one part of what we do.
We are growing the company systematically across the enterprise. So we are not trying to pay out all cash and put us factually into runoff. We want to grow the business over time because between the different cylinders, property-casualty insurance, life insurance, and asset management, we have three cylinders that we want to push for growth in the future. So we are trying to keep the right balance between recurring, predictable income. That's why we increase the dividend share rather than moving from share buyback to share buyback. And you see that there is mostly day traders that are reacting to that versus really supporting long-term investors. Remember, we're the number one stock now in Germany as a first choice by retail investors. I mentioned that earlier. We have more than 70% of our employees invested. We're having a strong program. So that's one message.
The other one is really to grow. It's really, really important. OK? Claire-Marie?
Let me maybe clarify a little bit because I think you have slightly misread the backup. On the real estate side overall, we have indeed this $58.4 billion, which is directly old real estate equity. On the commercial real estate side, in terms of mortgage loans, we have a total exposure of $35 billion, which is actually really a very good quality portfolio that is well diversified across sectors and geographies.
OK. So $35 billion in commercial mortgages.
Exactly. Yeah.
OK. Thank you.
Then, on your question on the dividend policy, I think it's an excellent question. Clearly, we have decided to increase our expected payout from 50%-60%. That's really related also to the fact that given the price, the value of our share, there is an arbitrage between share buyback and dividend. And also given the structure of our shareholders, as mentioned by Oliver, we have a lot of retail shareholders that value very much also the increased dividend yield that we are bringing forward also in the context of inflation. So what we have done definitely is to decide on the right level of our new dividend policy. We have stress-tested this dividend policy against different types of developments and as well against the type of inorganic growth but also organic growth we would like to do going forward.
Basically, that came out at the right level for us. So clearly, if there is a need, we will not hesitate to come back to the market as well to support a bigger move if we were to decide to do a bigger move. But at this point in time, we are more interested by smart add-ons that we are injecting into our three segments to really fuel in a really good and healthy way the upward trajectory of the Allianz Group.
Thank you both.
Thanks, Stephan. So we have five more journalists in the queue. We're going to take all of your questions. So we'll extend the call a little bit to make sure we get to you because you've been waiting patiently. I'd like to ask Ben Dyson to be our next questioner from S&P Global Market Intelligence. Ben, your line is open.
Hi. Thanks very much. Yes. A couple of questions, just one on natural catastrophe expectations. I think your normal expectation is now 3% for 2024. First of all, I was wondering if you could remind me what that's increased from because I think you mentioned that it increased. And secondly, just what the expectation is. I mean, what's the likelihood of that continuing to increase given the claims trends we're seeing on the natural catastrophe side relating to climate change and other things? And then the second question, I just have a quick one around mergers and acquisitions as well. I think, Oliver, you mentioned that you're looking at a bolt-on M&A as part of or consider that as part of your growth strategy because you're looking at both inorganic and organic growth.
But I'm just wondering if you could give a bit more detail on what you might consider there and also whether you're ruling out large M&A or whether you will also consider larger deals? Thank you very much.
So I can indeed add, Dyson. Large M&A, we know, is always very dangerous and very risky. And we have really shunned away from that. The largest thing we ever did was the acquisition in Poland of a great protection franchise. And that was $2.8 billion, that relative to our market cap is small if I look at industry. So we are looking really, as you said correctly, to bolt on. Remember, our industry, particularly in P&C, is highly fragmented still. There is lots of room for efficiency improvements. And like in Italy, where we take a number of small portfolios, add that to the strengths of our franchise. That's what we really like. They're available sometimes, not all of the time. So sometimes we do a little more. Sometimes we do a less. But what we don't want to do is stop investing.
We want to grow not just through price. We want to grow customers. For that, we need to access new distribution channels. We may need to access new formats. We may need to invest in new products. And that's why we are open to innovation. By the way, we are also increasing investment in technology systematically. Very soon, it will be over $6 billion sort of to drive and prepare Allianz for the future. I'm always very worried when people don't know what to do with their money.
So to answer your question, so indeed, we did move up from 2.5%-3%. So 0.5 percentage point loss ratio increase associated to NATCAT. And we will not expect this number to continuously continue to develop itself. What I think is really super important, and that's what we are doing very actively and we start from a very strong basis already, is to have very high-quality NATCAT pricing, really very high-quality modeling of the NATCAT pricing. But what we have seen in 2023 and clearly, when you look at the developments, is that we have a higher frequency of the so-called secondary perils, which are way more difficult also to model. And they come with a higher level of volatility. So that's why we felt it's right, actually, to reflect a little bit more that effect into our loss ratio expectations.
OK. Thank you very much.
Thanks, Ben. All set? Questions answered?
Yes. Thank you.
Thanks very much. Our next question will come from Herbert Fromme from the Versicherungsmonitor. Hi, Herbert. Your line is open.
Thank you very much. I wonder if you could give us the combined ratio for German Motor and Motor Overall for Allianz. Mr. Bäte, you lost some key managers. Mr. Terzariol, your CFO, left. Joachim Müller, the boss of AGCS, left, I think, rather surprisingly. What's happening? Is there a problem in the leadership? My third question would be, you created Allianz Commercial by combining AGCS with commercial risk from country companies like Allianz Versicherung. Do you plan to do a full merger? Will you carve out the commercial part from the national companies and merge them effectively with AGCS? Because right now, AGCS is doing business and acquiring business, which the country heads then have to take responsibility for on a balance sheet basis. Finally, not finally, one more. AI is a big topic.
Looking at cyber, in cyber, the industry, including Allianz, made sure that all risk from cyber were excluded from standard industrial policies. Customers were pointed to special policies. Do you plan AI exclusions from standard policies? Or are you able to carry them in your standard policies? Now the final question. Allianz has, in a number of countries, reduced its capital needs by selling life portfolios. Are you planning a sale or a reinsurance solution for the German legacy portfolio, which is quite big?
As usual, very, very good questions. Thank you very much. I start with the last question. We have no intention to sell a life insurance policy in Germany. We don't need to because we are running it at 30% ROE or something like that. And it's super profitable. I wish it would grow a little bit more. But given the bank crediting rates at the moment and we're going to bring that back, it's really, really attractive. We do not have the problems that other people have. Maybe if you say it's a problem, our market share may be a bit on the high side now. So we need to watch that. Second, I don't know about the AI exclusion. It's a really serious topic that we are looking at every single day. Cyber insurance is super important to us.
As you know, we have a strategic partnership established with a U.S. company called Coalition, where I'm also on the board. That is a clear leader in the segment. We are partnering to bring that out. The key part there is not just to insure but to actually manage the cyber risk on a continuous basis. We can, at some point, maybe do a deep dive on that with the team of Coalition. We are preparing the launch in Germany also. In terms of commercial, that's a very, very good question. The key deficiencies that we needed to address are threefold. The first one, a separate go-to-market strategy. So that was the first focus, Mr. Fromme, because you would have AGCS show up in the morning and then the local unit in the afternoon and basically talk to the same brokers and says, no, no, no.
In this segment and this size of a company, the cover is slightly different. We would end up with problems. The first one was to harmonize go-to-market. Therefore, we also have rebranded the segment, have one integrated go-to-market strategy. That was number one. The second one is on the underwriting side to make sure that we have fully consistent underwriting and pricing and claims tools and also manage aggregation properly because against certain perils, against certain industries, unfortunately, despite very strong work from Allianz Re, we were sometimes finding we had sort of a mismatch in appetite. In some countries, we were long certain lines of business in AGCS and then short in the local and the other way around. Harmonizing the risk appetite was number two. Number three is actually to get synergies in the infrastructure.
The question of what we do in terms of merger of balance sheets is the real question is around what are the net benefits in terms of capital consumptions. We are complicated in terms of steering. I cannot tell you what the long-term picture is. But we are focusing now on one, two, three. And then we'll look at the issue. The problem in the past is actually that we always looked at mergers. And we created lots of internal coordination and problems. You remember the reorganization in 2005, 2006, 2007 before we think about the economic benefits first. And this is we're starting with the customers. And then we go through the tools. And then we end up with organization.
On the people side, yeah, it's always said when you lose top managers, by the way, you could also have Clarisse Kopff that we donated to Munich Re to help them with their diversity quota. So we always lose strong people. And I'm very sorry. Giulio was a great part of the team. But he wanted to go home. Who can bear that and have a great opportunity closer to home? I don't know what Joe is going to do. But he was a great member and contributor of our management team. And Clarisse had loved to have kept. But if you can become a board member of a great company, that's a great opportunity. We are actually happy to be net contributors to the talent pool of this industry.
We are also very, very, very happy with the strong talent that we can have in-house to replace them, like Claire-Marie, who is in the call today. Thank you for your question.
Thanks a lot. Maybe I take just briefly the question on the combined ratio for Motor. Actually, the combined ratio for Motor overall for 2023 was at 97.9%. And for Germany, we usually don't comment in details into the market. But I can tell you that we estimate that we are more than 10 percentage points better compared to the rest of the market.
We are growing faster.
We are growing faster, indeed.
Thank you very much. Our next question is from Joshua Geer from Insurance Insider. Go ahead, Josh. Your line is open. Your line is open. OK. Next question is from Michael Flämig from Börsen-Zeitung. Go ahead, Michael. Your line is open.
Hello, Mr. Bäte. And Mrs. Coste-Lepoutre. I have one question left, please. The combined ratio of commercial lines rose sharply in the fourth quarter. Is the business with large corporates weakening now? Thank you.
Yes. Well, good question. As I mentioned, there has been quite some noise in the quarter slice. So definitely, no is the short answer to your question. So we had really some technical effects. And the teams can explain that in details to you, in particular, coming from Trade into this number. And for both, I will say, AGCS and Trade in particular, there has been also some year-end conservatism, if I may put it this way, also into the quarter slice in addition. But you should really not read anything in particular into these quarter slices for the commercial business.
OK. Thank you very much.
Two more questions. Maximilian Volz from Platow Brief, are you still on the line? Your line is open. OK. Final question of this morning is going to be from Alex Hübner, again from Reuters. Alex, your line is open.
I forgot one question before. Sorry for that. It's just on the dependence of dividend and share buyback. Do I get you right that the overall payment proportion won't change so much? But you just prefer to pay more dividends rather than to buy back shares as you did in the last few years? Or will this be a Nullsummenspiel, as we say in German? Or will the outflow with dividend and share buyback be bigger than in the past?
So that's exactly the right question, exactly the right question. So the answer is, we want to keep the total level of payouts. Over the last few years, we're around 75%, almost at the same level. Exactly as you see, we prefer and we see actually long-term investor preference who are the investors we are catering to.
We are not catering to hedge funds to prefer more stable dividend forecasts. So when you look at what we had in retrospect, then the minimum 5% growth, what we are basically saying, with the increase of 21% to EUR 13.80, you're getting 3 1/2 or three years of dividends now. We're going to increase that, as we said, over the next few years. Now, there's always this mathematical trick. If you do the share buyback, the number of shares reduced. The earnings per share growth then looks sort of bookkeeping-wise higher. That's why people, for certain metrics, prefer that. I still am a believer that what really matters is growing the net cash flows of the company stronger over time and have a significant spread over cost of capital.
So when you look at particularly there, the new accounting helps because you get a much better view on the life and health business that has a lot of the capital consumption. You see how enormously strong the cash contribution, the ROEs are. So very soon, we need to do some more work on P&C for sure. Mr. Fromme has also mentioned this on retail. The auto markets are really suffering. But we're doing much better is to grow the company stronger, not to just distribute. And for that, we will need capital. But we are very capital efficient. Let me repeat that. Life, we on average don't need more capital. So it is for growing the P&C business profitably. And as we improve the profitability, we want to push more on growth and not just pay out the money. This is what creates long-term value.
So reducing cost of capital, having a proper spread over cost of capital. But then it is about growing the business. And that's what's often forgotten. Thank you.
Thank you. We do one emailed one question per email, Kimin, which we've committed to answering. The question for Oliver is, how is Allianz positioning how are you positioning Allianz for an era of heightened geopolitical tension, both on the insurance side and the investment side?
Again, an excellent question. It's a very hard one to answer. We continuously run stress tests and stress scenarios, just not on cyber and others. But also, what do political tensions mean between the U.S. and China? What does it mean in the Middle East? Because the one thing is, people trust us to be resilient. So we need to be unwavering to make sure that the not just financial but organizational resilience of Allianz is strong. That's why the way we sometimes exit markets, if we don't feel that the proper balance between return and risk is there, but overall is to be there. Most important thing, the reaction is to be there even more for our clients because people fear our employees, for example, are so happy now that they work for a company that is resilient.
We need to have the same value proposition for our customers. That eventually will make shareholders rich, nothing else.
Great finish. Thank you, everyone, so, so much for your thoughtful, intelligent questions and for the chance for us to spend time with you today. In case of any other follow-up questions that you might have, you know who your contacts are. We're here to help. We always are media.contact@allianz.com. We're always here to support you. But speaking of team, I would like to acknowledge that this is the last earnings call and the last day at Allianz for Holger Klotz, who will now depart for a very well-deserved retirement. He has been a tremendous colleague, partner, and teacher to us but also to many of you participating today. I know you will join me in wishing him all the best. I'm also very pleased to introduce you all to Frank Stoffel, who is our new head of financial communications and valuation.
You know him and have already been working with him for the past few weeks. We will continue together to help provide you with the most complete picture of Allianz as well as the work that we do in the world. Thank you again so much for your participation and your interest. Have a wonderful weekend. Thank you. Cheers.