Earnings Call: H1 2021

Aug 11, 2021

Welcome, everybody, to Admiral Ansia Results twenty twenty one. Unfortunately, we are virtual again. I'm Milena Mundini, Gruzzio, and I will start today with a reminder of our strategy, which remains unchanged, and some reflection on our strong first half results. I'm here today with Geraint Jones, Group CFO, who will talk to us about the financial results. Cristina Nestares, CEO of UK Insurance, will give us more detail on how UK business was the key driver of this outcome. Constantino Mareiti, Head of International, will talk about the continued evolution of our overseas business. I will then come back to share with you how our loans business is back to growth anchored on solid foundations and conclude with our ambition for the longer term sustainability of our business and the larger community. The key messages from us today are another set of strong results, with profit up 76, driven by a combination of high reserve releases on the back years with higher level of profit commissions and low claims frequency as people drop less for COVID restrictions. In addition, we will issue a record dividend of 161p per share that includes a first part of Penguin Quarter sales proceeds. We are very pleased with this performance, but there are some exceptional elements in it that we don't expect replicated in the second half. While operating in very competitive markets, we also delivered double digit growth in our customer base, both in UK and overseas. Finally, we made further progress against our strategy. We continue to strengthen our competence and infrastructure around agent technology and improve customer experience, and we made further progress and further steps in product diversification. More in general, despite the change and COVID disruption, we remain very admirable, focused on strong execution on data and on customers. The strategy we presented in March remains unchanged. In a world of fast acceleration, more demanding customers, new possibility unlocked by advanced data and technology, our aim is to build on our strengths and on our relationship with customers to further diversify our product offering while delivering on customer expectations faster. And you will hear more about progress in this area later today and year end. But when there is a disruption to the business as in recent months, this strategy is important, but not as much as good execution. And what really matters are the tactics and how you navigate the discontinuities. So we'll take a few minutes today to mention a few examples of good rational execution, both in bringing forward some of our strategic priorities, but also running the business as usual. Possibly the most notable example is how we navigated the cycle. As Cristina will show you later, we decreased price ahead of the market, reflect lower frequency, and once again increased price ahead of the market as claims started to inflate. And this helped us to deliver good growth and protect margin when it was more rational to do so. And this underwriting agility has been very typical of Admiral Insurance in the past, and it was good to see a similar story in loans, where we were faster than others in reacting to the pandemic with granular adjustments, both in our footprint and in our underwriting processes. And this resulted in some of the best loss outcome in the market. Risk selection remains our obsession. And similarly, the mindset was transferring loans as well, where we are adopting Open Banking data to improve underwriting and assess better customer affordability. That is another win win for the customer and for us. But we're also very conscious of the necessity to continue to improve operational efficiency and increase speed of service. And we made progress, for example, by tripling total loss claims settled online, almost halting the time to settle those, and decreasing the variable cost of customer service mainly through enhanced digital functionalities. It's also rewarding to see how some of the new best practice are now being piloted in our overseas business, as for example, Scale Agile in Italy, where we doubled the number of features released and reduced by more than 40% back sports release and days of cycle time. Moving beyond existing business in Admiral Pioneer, our new venture arm, we launched the first two pilot venture in less than six months each. One is Toolbox, providing coverage for tools for small business in The UK, and this is a small first step in the micro SME space where we see some potential for better servicing the customer. And the other one is Qualys, a small fleet insurance business in France. Interesting and is focused mainly on small, smart and green in the future rental fleets. They are both small trials, not expected to make any different our results this year and not in the next two or three. So why am I referring them here? Both as they could make a difference in the longer term, but more importantly, has they helped us to test the wheels for Pioneer and somehow get comfort on our ability to launch new business in such a short time. Solid execution and responsiveness to market conditions are two long lasting features of Admiral history, and they will continue to be particularly relevant in the current and next future context. We are all keen to go back to normality, but unfortunately, we are not there yet. There are still relevant change in our way, starting with long tail of COVID that continue to surprise us with further ways and make our job that is predicting risk as difficult as ever the FCA pricing reform that will force a strong rebalance between new business and renewal prices and inevitably will cause some price shocks and dislocation of portfolios. We are prepared for this change, and Cristina will talk more about this later. But overall, this will require from the market a mix of underwriting discipline, ability to read context and consumer reaction very fast and more complex rating. Another element that the market will need to manage will be the evolution in the way we work, how we embed the hybrid working, but also agile practices and the operating models. To adapt effectively to this change, I believe that a strong underlying culture and corporate corporate identity are key assets. At the core of our execution, it's not like two or three superstar tracking better or faster decision. It's our people and our culture. And our culture remains strong. We are among the best place to work worldwide. It's fun, a bit addictive, with engagement score very high, and our staff really feel looked after. And it is as simple as that. People like to work in Admiral, and that's why they give their best. And we aim for this to be true for everybody, no one excluded. So when people talk about diversity and inclusion, there's a lot of focus on representation of diversity. For us, historically, it has been entirely on inclusion, and inclusion naturally resulted in diversity. When I joined Admiral, Christine and myself were two out of four international CEOs, and three of us were women, and this was fifteen years ago. And now we have the fifty-fifty gender balance in the Executive Committee and in the group board. But we don't rest on our laurels. We're very conscious we continue to evolve, and we've been very focused on increasing talent in some critical areas. We've also decided to fully embrace smart working. Admiral staff will have the choice to work from home part of their time. And when in the office, they will find a space that will be redesigned to foster more collaboration and innovation. And in the end, going through the transformation, the glue that keeps everything together is the team spirit and the willingness to work together. And with that, let me hand over to my teammate, our CFO, Kieran Jones. Thanks, Milena. Hello, everyone. I'm going to talk about some of the main features from a very positive first half, a look at how the top line has grown, what's contributed to the significant increase in profit. And to finish, I'll go through the solvency position and cover the interim dividend or dividends. To start with, the highlights, with plenty of green on show here. Profit and earnings per share were both up very strongly. The pretax result was up by three quarters and was in the middle of the range we preannounced a few weeks back. Earnings per share was up by two thirds. Very decent top line figures for the first half, notably double digit growth in customers to move past the 8,000,000 mark. Solvency ratio remains healthy. And inevitably, with such an increase in profit, return on equity for the half was very strong, nearly 70%. There's a big increase in the interim dividend, and we've confirmed the plan for the proceeds from the comparison disposal. Let's get into some of the details, starting with revenue and customer numbers. A pretty pleasing set of figures here, and each of our segments has grown in the first half of twenty twenty one. The U. K. Motor business grew customer numbers by a very healthy 12%, over 5,000,000 new vehicles added over twelve months. Good retention throughout that period and a very strong H2 last year were key factors. Turnover in the comparative period was impacted by the £100,000,000 rebate, and so the 9% growth reported here is somewhat flattered. Continued good momentum in U. K. Household, 15% more customers and turnover up 20%. And our international insurers grew their customer numbers by 14%. There's some currency movement and pressure on average premiums spent. Turnover growth was a bit lower. La Libya in France continues to grow particularly strongly. Customers from the non U. K. Motor businesses now account for 40% of the group's total, and that measure continues to increase despite the continued strong growth in The U. K. Motor business. And although the loans business is showing balances down year on year, as we'll see later, since we restarted writing loans in H2 last year, the business has grown quite nicely. All in all, happy with the H1 top line figures. Let's start to look now into the big profit increase. This slide shows the group income statement H1 versus H1. And as you see, The UK business was the main driver of the change. That UK result was up by £230,000,000 with a strong increase in household profit driven by higher premiums and a better combined ratio, but particularly a very large increase in motor profit, which I'll give a bit more detail on shortly. Our international insurers were basically at breakeven in the first half, a slightly worse result compared to last year, the loss ratio in the comparative period being more positively impacted by COVID. European insurers reported a lower profit, partly on the back of investments in growth, whilst the loss in The U. S. Was broadly flat. On the loans front, a big drop in the credit loss provision charge led to an improved results half year on half year. That provision though remained prudent. And in the other items, an increased share scheme charge was one of the big drivers and there were also some nonrecurring costs for some of the regulatory projects and other matters. But clearly, the big story here is The UK motor results, so let's talk a bit more about that. This slide shows The UK motor income statement. And as you can see, profit increased from around EUR310 million to EUR530 million, and we've highlighted the main drivers of the change. Points one and four, higher premiums and lower current period loss ratio, which is positively impacted by lockdown earlier in the year, are important factors but clearly points two and three, the higher reserve releases and much higher profit commission revenue, are the key items. And this slide explains a bit more about what's happening there. On the top, we show the book loss ratios at the end of the current half year along with the changes in the ratios since the end of twenty twenty. So for example, the 2019 underwriting year is now booked at 73%, down 3% from the end of twenty twenty. And on the bottom, we show reserve releases and profit commission split by underwriting year for H1 this year and H1 last year. What's happened in the first half of this year is, firstly, somewhat bigger reductions in the book loss ratios across a number of years and secondly, quite a few of those years are now very profitable, as you can see with book loss ratios in the high 60s, low 70s. And those two factors combined to lead, firstly, to bigger reserve releases, notably on the commuted share of the business and secondly, because of the greater profitability to much higher profit commission, as you can see in the green on the bottom charts. So in summary, there are more points of book loss ratio movement, and each point of movement is generating more profit. Movements on the back years, as always, predominantly relate to improved projections for bodily injury claims, as Cristina will touch on later. The 2020 underwriting year is particularly notable, very positive given its relatively early stage of development, and the low book loss ratio is already leading to very significant profit commission being recognized. COVID has obviously had a fairly notable impact there. There's been no change to the relative level of conservatism overall in the booked reserves compared to the best estimate nor the margin held on the most recent period. As we noted in the trading update a few weeks back, it's extremely unlikely that this level of reserve release and profit commission will be repeated in the second half of this year. And we also fully expect that our current period loss ratio for the second half will be higher than the first half. Obviously, we are very happy to get into more detail on The U. K. Result with anyone who needs to. Moving on now from profits to look at the half year capital position. The top chart here shows the capital position in terms of the requirement, the surplus and the solvency ratio. And just to note that these figures don't include the capital from the comparison disposal. We see a £55,000,000 increase in the level of surplus, moving the solvency ratio up to over 200. On the waterfall on the bottom of this slide, we set out the factors that contribute to the change. The fairly notable reduction in the capital requirements is partly an unwind of the increase we saw at the end of twenty twenty related to higher profit commission risk. A brief update on the internal model. As we spoke about back in March, we've taken some time to review various aspects of the model, and this has changed the timing of our application for approval. We'll continue to use the current basis of calculating the capital requirement, and we'll provide updates on progress in due course, but not necessarily with every results presentation. We're declaring a large increase in the interim dividend, so let's take a look at that. As you see here, the current period interim dividend is made up of two parts: the regular dividend on the first half earnings and then the element related to the comparison disposal proceeds. The regular part is 115p per share, just over 60% higher than twenty twenty's interim, and that increase is broadly consistent with the change in earnings per share. The payout ratio is 87%, and that's in line with the 2020 full year. And then the second part relates to the proceeds from the disposal of the comparison businesses, which completed earlier in the year. As you can see, we're planning to pay the large majority of the net proceeds to shareholders of special dividends. The total is £400,000,000 and we'll phase the return over three dividends. This interim 2020 is final and the 2022 interim dividend. And so the final payment will be a year after the first. We're expecting three payments of €0.46 per share. The reason for the phasing is to smooth the return and the associated bonuses over 2021 and 2022 rather than pay the whole amount out at once. Before I wrap up, I would just point you to the reinsurance slide in the back of the presentation. We are in the process of contracting a new long term agreement with Munich Re on reinsurance for The U. K. Business. There'll be a change in the mix between coinsurance and quota share and improved terms for Admiral. Some high level details are included there and more to follow with our full year results in March 2022. A quick summary from me of the financials. Decent growth across the group, notably but not just in The U. Business, a very large increase in the first half profit driven by bigger reserve releases, much higher profit commission and a better current period loss ratio and a very large interim dividend with a healthy capital position maintained. I'll pass you now to Kristina to talk about The UK. Over to you, Kristina. Good morning, everybody. It's been a solid half year for The UK insurance business. Key highlights: strong growth in our motor book of 12% very good loss ratios, both for recent and past years, as you saw in the numbers referred to by Garant. This is a testimony of our strong underwriting capabilities as we continue to outperform the market in claims outcomes. During the period, we have seen in claims an increase in frequency and a continuation of the underlying inflation trends. And in household, we have experienced good growth and record profits. The outlook for the future, well, we expect firstly, market prices to increase in the second half of this year. And from next year, due to the FCA pricing reform, we expect high price increases in new business in motor and even higher in household. Also, as Milena said, we continue to be a great company to work for, and we have achieved several awards in this year in our UK insurance business. This include being voted best company to work for in terms of staff well-being, second best company to work for for women, and top five for all staff. Let's start with the strong growth in our motor book. In the market, we saw new business prices decreasing across the period even though frequency started to increase several months ago. Admiral reduced new business prices during the lockdown period by double digits, and we started increasing prices in March. So far, we have increased new business prices by mid single digits. This means we remain significantly cheaper than before the pandemic. You can see in our time stop graph that we became very competitive during the last part of last year, but we have decreased our time stop strongly since March. This suggests that we're putting prices ahead of the market. Now some of you might be wondering how we managed to grow by 12% if we're putting prices up. Well, to explain this, we need to realize that most of the growth came from the second half of last year and that during this year, the growth has mostly come from our renewals. Also, we continue to improve our operational capabilities, and during these periods, we have especially improved our digital offering to our customers. For the second half of the year, we expect limited growth as we continue to put prices up ahead of the market, reflecting increases in frequency. Now let's move to look at rates. Frequency is the main feature during this period and is a feature that has had more impact on price changes, and I think it will be the one that has more impact also going forward. As lockdown measures have been relaxing, we have seen frequency increasing. The good news is that actually frequency has increased less than road usage. The main reason for this is change in driving behaviors. The most significant one is that we have seen fewer peak hour accidents. In terms of claims inflation, we see a continuation of the underlying trends. And in this period, we have seen higher par costs due to advances in vehicle technology and also an increase in the cost of used cars. At Admiral, we have also seen slightly higher inflation due to COVID. A couple of examples include waiving excess to care workers and cleanest fees at garages. In terms of large bodily injury claims, we have seen positive development, higher than in other periods. As Kevin shared with you, the main rationale for this include more positive outcomes on some large settlement and faster speed of settlement as we have had more capacity to do fewer claims during COVID. If we take a step back and look at Admiral claims capabilities, I'm very proud to say that Admiral continues to outperform the market in claims outcomes. As you can see in the graph, our total claims cost is more than 10 percent better than the average. Some of the reasons that I would like to highlight for this are the very experienced staff that we have in our claims department, also our faster capabilities, both at settling claims but capturing third parties, and this is still continuing to improve due to our changes in digital capabilities. And quite important is that we adapt quickly to market changes. An example of this is that we have been able to improve our fraud savings by 50% following a legal change a few years ago. And while some may think that improving claim cost actually has a negative impact on customer satisfaction, that's not the case with Admiral, as 93% of our customers are likely to renew after a claim. Also, Admiral is particularly strong in the management of bodily injury claims, where we have lots of very skilled staff. This cost represents for Admiral a higher proportion than for the market because we have lower extra loss protection, and we target higher risk. Moving on to household. We have also had very strong growth in this business, and this has been helped by strong time stock performance, that is, we have been decreasing prices. Also strong retention, we have managed to increase the gap between Admiral retention and the market average, and MultiCover. The cross sell of Admiral household to new and existing Admiral Motor customers continue to play a significant part in our household business. And our profits have also increased in the last twelve months. This is due to the absence of any significant weather event, improvements in our claims capabilities, and also due to COVID as changes in customer behavior and has affected our claims mix. When people are staying more at home, we see fewer theft claims and also fewer big escape of water claims. To conclude, I would like to talk about our expectations for the next eighteen months. But a disclaimer, it's very hard to make predictions as there is a lot of uncertainty and many moving parts. Let's try. When we look at Motor, for the second half of the year, I would expect prices to increase. We have seen strong decreases in the market in q one, but much more timid in q two. The ABI highlights quarter on quarter minus 1% reduction in q two. This might suggest prices would be flat going forward or will start to increase. In any case, we think market prices are going to lag in terms of frequency increases and in terms of what increase the market will need to compensate for this. Also, we think we will see limited additional impact from Whiplash because it has already been priced to some extent. And also because it's still uncertain, it's still difficult to know what the actual impact is going to be on claims cost. For next year, we expect strong increase in new business prices after the implementation of the FCA reform. We also expect in retention that there will be a reduction in prices, which will push retention up. However, the reform also makes cancellations much easier, which we think might push retention down. And then it's hard to tell how price comparison websites are going to react to this reform. In terms of household, during the second quarter of the year, the market has become more competitive, and we think this is going to continue during the second half as some companies might want to grow their book ahead of the implementation of the FCA pricing reform. And next year, we expect increases in market new business prices to be even higher than in motor, as household books tend to have higher tenure. That's it for The UK insurance results. It's been a solid half year with double digit growth, both in our motor and our household book and very good loss ratios underpinned by a strong claims management and a strong execution as preferred by Milena. And now over to Constantino to hear more about the international results. Thanks, Cristina, and good morning, everyone. Before diving into the financial results, I'd like to thank our people who have continued to serve our customers with professionalism, passion, and smiles even in a remote environment. In this slide, some pictures that celebrate our culture and successes, such as great place to work, including admiral Seguros ranking number one in Spain. Now let's start looking at the sets of results of our European businesses. The key message is that we have achieved a double digit growth in turnover and in customers despite challenging markets, and we have delivered a profit on a combined basis, renovating our commitment to build long term sustainable businesses. I'd like to expand a bit on the different geographies. In France, we are facing a very good momentum, and we consciously invested more to achieve our remarkable high double digit growth year on year, both in turnover and inactive customers. This is a combined result of a strong performance in direct acquisition, supported by the investments in digital, brand, promotions, and the softer market, which is less cyclical and overall less exposed to premium fluctuations. In Spain and Italy, we have also achieved a significant 15% customers growth, although lower than in France. But we have delivered good underwriting results comparable to a year ago despite more challenging markets with average premium fell due to less demand and high competition, both driven by COVID. Stepping back from the details of the various countries and looking again at the big picture, if we compare these results with the 02/2020, removing the majority of COVID impact, we see a combined ratio that is slightly improved with an overall customer's growth close to 30%. To wrap up on the European businesses, a positive set of results in a context of continued investments in growth in competitive markets. We remain confident on the long term trajectory and ensure the focus on risk selection, digital services, and expanding distribution will continue to offer significant opportunities. Moving on to Elephant and to The United States market now. The key message is that Elephant continues to strengthen the business fundamentals and therefore to focus on prioritizing bottom line improvements against top line growth. Comparing these half term results with the twenty nineteen one, we see a clear improvement with a 30% loss reduction, although turnover has been pretty flat as a consequence of a prudent approach to growth, expensive acquisition market where costs increased by 30% in the equivalent period, and softer COVID impact with the claims frequency returned at close to normal level since several months. I'd like to briefly touch on the six months policy. It is now a while we have rolled out this product, and we have already seen some clear benefit on conversion and lifetime value. The six months policy gives us clearly more agility to respond to claims frequency and inflation changes while offering a compelling product widely appreciated by The US customers. Expanding now on the expense ratio, notably, we are seeing investments in digital and automation are paying off the efforts with operational costs per customers going down double digit year on year. Finally, it is worth mentioning the new initiatives on distribution like agencies and partnerships that are delivering healthy and cost efficient growth, although still at a small scale. To conclude an elephant, while recognizing that the growth is becoming more expensive, raising the bar of the challenges in the future, I feel confident on the direction of travel and the progress made in the last semester. Thanks. I pass over back to Milena to talk about our loans business. Thanks, Kosty. We are very pleased that during this period, the loans book has returned to growth while strengthening underlying fundamentals with no significant change in defaults over the period. The graph at the top show new business evolution by quarter. As mentioned before, you can see that the business reacted quickly to the pandemic, but in the last quarter, we were back at pre COVID levels. We had a modest loss of £1,900,000 and a better back book performance than initially anticipated. Scott and his team increased provisions as economic uncertainty peaked and reduced provisions as certainty improved, as you can see on the chart on the right. And the loans business will maintain a conservative provisioning approach as we look ahead, in line with our prudent culture. Another important element to note here is that our strategy remains the same as it was pre COVID, but the fundamentals of the business are stronger today. Over the last year or so, we have built on our competitive advantage, improved digital capability and product for our customers. Our risk selection is also refined, and we use more data and a new pricing engine. We also continue to build scale to achieve expense efficiency, ensuring that the business is a highly scalable operation for the future. Our guidance for loans balance remains on track for GBP 500,000,000, GBP 5 50 million in 2021. And if no further shock in the macroeconomic environment, we expect an improved loan loss for the full year in the range of £3,000,000 to £6,000,000 and our loan business to become a significant and sustainable contributor to group profit over the longer term. Speaking about long term, sustainability and ESG are, very rightly so, recently taking more and more space in corporate strategies and boards. We are strongly committed, and we're adapting and adopting new best practices. But it's fair to say that this has been always in Admiral DNA from the day Admiral was set up by Henry and David. The customer and the people metrics that you see on this slide are metrics that we always leave every day. The best value we can create for our customer indeed is to offer more affordable options for more people and with good experience. And looking back, we've been the most competitive motor insurer in The U. K. And one of the most inclusive with a large footprint. And we did provide, on average, a great service, also in the moment of through the claim, as Cristina noted before. This focus on doing what is right for the long term over the short term is embedded in our culture, and it is reinforced by our remuneration system, where we diffuse staff shareholding across all the group at every level that ensures strong alignment of interest also with our investors. And recently, it has been recognized with good ESG rating as well. We're also very committed to play a positive role in our community through charitable initiatives, and we understand our responsibility on climate change. We are already using renewable energy and offsetting carbon footprint as well as supporting projects such as the size of Wales or stand up for trees to protect forests in Kenya or plant new tree in Reco Beacon. We're conscious that climate change is an area where we all need to step up and do more. Our ambition is to be net zero by '24 at latest. And to achieve that, in the next ten years, we aim to reduce emission by 50% and be net zero across scope one and two. There are many initiatives in place across our operations and investments, and we'll talk more about this at year end. But beyond the three scopes, we can have where we can have a very truly positive impact is the evolution of our product and services. We're rating and writing more electric vehicles than our pro rata market share, and we're growing this portfolio at very fast pace in the last year and offering features as battery and charging equipment cover. Becoming better service providers and underwriters of greener assets is where we can have the greatest impact to support our community to make better, greener choices. In summary, a strong set of results and continued growth across the businesses, a reflection of good execution and strong foundations and a commitment to continue to do what is right for the future for our customers, our employees and our communities. Thank you very much for listening, and we're now happy to answer your questions, for which we will be joined by Scott Cargill, our loan's CEO. Thank you. Good morning. We have three questions on the webcast from Alex Evans. The first question is, from your reserve releases, it seems like you've been quite conservative for releasing from the 2020 year compared to what you reported in the first half of twenty twenty. Is that a fair assessment? And is it down to a slower claim settlement at the moment? The second question, you mentioned retention remains high, but we've seen you put through price increases higher than the market. What is driving this? And the third question, as the revenue per vehicle continues to decline, is it possible to get some color on what would be organic and what is COVID related? I'll hand over to Milena. Thank you, Marisha, and good morning again, everybody. Garen, do you want to take the first question and Christina the following two? Yes, will do. Thanks, Valena. So I think the first question actually relates to COVID. And so what we saw in the first half of twenty twenty was that we moved the minus one year, so the 2019 underwriting year, down by 10 points. And in the first half of twenty one, we've moved the 2020 year, the minus one year, down by three points. So obviously, at the end of 2019, that was sort of pre pandemic loss ratio time. And when we were updating the loss ratio for 2019 at the end of the first half of twenty twenty, obviously, we were into the pandemic. And so the big reduction there was really quite a lot of that was related to COVID. So I think that's probably more of a COVID impact. We've seen generally big moves, as you see in the presentation, the book loss ratios in the first half of this year. But the overall reserve margin, as I say, remains flat. There is a prudent margin on 2020, that kind of minus one year as we would normally expect at this point. And we also see room for the best estimate for 2022 to improve as well. That's me, Thanks, Karen. The second question was related to retention and price increases. And Alex, important to note that, so far, we have been increasing prices, only focusing on new business. And therefore, Retenium continues partly because of prices, but also partly because of improvements in our operations and digital capabilities. In terms of other revenue, there are two key factors that explained the decrease. One is related to COVID, which is, a reduction in the income at claim stage proportional to the reduction in the number of claims. The second impact is, the reduction in the margin of the motor legal protection product, and this is explained by an increase in the cost due to the whiplash reform. Thank you. We can now move on to the next question. The next question is a telephone question from the line of Priya Kong with Bank of America. Please go ahead. I have three questions, please. So firstly, on the favorable prior year development in bodily injury, you said that you don't currently expect this to be repeated in second half. What has driven the more positive outcomes in BI settlements in H1? Is there any observable trend here? And in terms of greater capacity for your team to accelerate settlements, do you think we could see more of this in H2? My second question is that you raised prices ahead of peers in H1, which saw some slowdown in growth this year. Do you think that market pricing has turned now? And do you think your relative competitiveness could improve again in H2, Or will you continue to hike prices ahead of the market? And my third question is just on claims inflation. Could you please comment on your outlook for severity from here? How much of this has been COVID specific? And how much is underlying and is underlying tracking in line with your expectations? Thanks. Thank you very much. And I think, Christina, those are all yours. Yes. Thank you. In terms of our bodily injury claims, we have seen higher releases than in previous periods coming from positive settlements. Two two reasons behind this. One is, a few positive, settlements in in some very large claims, which have a significant impact. The other one is an acceleration. We might see, some of these continue in the future, but not to the same extent. That is, our view. Second one was related to new business increasing in the market, and you ask how the market churn. Well, if you look at the ABI quarter on quarter, price increases or, sorry, price decreases for q one and q two, in the first quarter, the ABI was talking about minus five. In the second, they were talking about minus one. Sorry. Minus seven and minus one. This is an indication of, that we might see price increases in the second half of the year. Hard to predict as there have been, very different behaviors by different players. In the case of Admiral, we will, continue monitor the trends in frequency, in claims inflation, our own loss ratio evolution, and then decide what to do with prices. But so far, we have increased prices, and we think that will be the or we will see that in the second half too. And the third question was related to claims inflation, the underlying trends around severity. We have talked about three to 5% in the past, and we continue with that expectation in the future. There were some press on inflation and COVID specific areas, for example, on credit higher because claims took longer to settle or around waiving excesses for care workers. Some of those or most of those are now coming down. So in the future, would you suspect a continuation of the three to five severity inflation? Thank you. The next question comes from the line of Thomas Bateman with Berenberg. Please go ahead. Hi, good morning. I guess the first question is on growth. You've continued to perform really excellently in The UK motor market and have signed the market well. But I guess where do you see opportunities to continue to grow, I. E, sort of what parts of the market? And would there be any headwinds to you continuing to grow your market share? And the second question is on diversification of earnings. So U. K. Motors side, I'm just trying to think what the operating profit makeup of the company looks like in five years' time, I. E. How big does Home International and loans look in terms of contribution to earnings? I know that when you built The UK Motor business, there was a period when you really built up reserving strength there. Is that something that you're looking that you're doing currently in the international business? Thank you. Thank you very much. I think your first question was on growth. I'm going to just have a general comment that we are committed to continue to grow our business in the different geography and insurance as well as investing more in diversification as you mentioned. But the impact of COVID has been different in different part and made a bit more complicated to sustain the growth rate of last year in international. But despite that, we still very very healthy growth in Europe has been a bit more complicated in US. Christina, do you want to expand a bit more on growth in The UK and then I come back on diversification? Yes. I'm gonna focus on UK motor. Yes. Two parts. In the second half of this year, we expect limited growth. However, the rate of growth is gonna depend a lot on what the rest of the market does to prices. You have seen in our graph how our time stop has really come down very quickly in just a few months. So from now on, it will depend on what the market does, but overall limited. From next year, we expect high increases coming from January continuing during the year, And and it it's it's hard to predict how the different players are gonna respond, but maybe there is an opportunity further down the line to continue growing. And on the diversification, the reason that we are our diversification strategy is partially changed in Mobility in the future and to increasing resilience to our business and diversifying to make sure that we remain a very we will continue to grow in the future. There is an element of building on our strength and what we can deliver to customer that usually is a good competitive and solid product. But also, and I would say possibly more important is to provide better proposition to customers. So give them more product where we can provide good service at good price, engage with customer and force our relationship with them. So with that in mind, our priority remain expanding the product proposition to our existing customer and existing geography. And that's the main angle we take at that. And if we think about this, there are 12 and there are some of our existing diversification that are performing well that we are accelerating like for example, housing and loans. We're pleased with the progress. We think we can create something special for the future and therefore we're willing to grow them faster and to continue to and to make sure they become a material part of our business in the future even more material than today. And then there is an element of testing new product and new proposition and with that in mind that we set up an incubator of new venture pioneer in The UK last year. And as mentioned before, we are starting now to test the wheel and we launched the first couple of initial product. Another angle to diversification of product is of course also try to understand this change in mobility and site, try to be to understand where customers are going, how the cabinets are changing. For example, we have VEGO this company that looks after non standard insurance and make sure that we continue to evolve our motor insurance proposition as well as people change the way they move around. That makes sense. I guess if I had to push you a little bit, five years down the line, what portion of your operating profit is made up of UK Motor and what is from kind of other revenue channels? Yes. It is a good question. The way we look at the business is we look at them in a relatively independent way and try to optimize the rate of growth and the margin as we go depending on the phase of the cycle and the potential of the business. If we look at the next five years, the part of the business that may have a more material impact will have a more material impact are likely to be international insurance and household and loans. Everything else I discussed before is more likely to have an impact in a different time horizon, so more in the five to ten year horizon. How much international household loans are going to be? I think we gave some indication about our ambition in international insurance and we made some progress aligned with that expectation. And it's difficult to say for loans because there are some external factors as well. But as I mentioned before, we are very positive about both loans and household and we are growing at pace. And so you may expect it to be a more material part of the top line and bottom line. Thank you very much. The next question comes from the line of James Struck with Citi. Please go ahead. Hi, good morning, everybody. Three questions from me. Firstly, on the commutations, which were up quite materially year on year. I noticed that in relation to the reserves that were actually commuted, the level of commutations has gone up so, quite significantly. So I think at €350,000,000 of reserves, and you've seen €118,000,000 of commutations. Could just explain that difference to me, please? That'd be helpful. Second question is around the 2021 book to loss ratio, which is coming in at 77%. You usually provide a bridge between the book loss ratios over time, year on year. So I think, could you provide a bridge between the sixty nine percent to the seventy seven percent, 2020 and 2021 in terms of frequency and severity, please? And then final question, you mentioned that you were seeing, larger book loss ratio development across recent years than usual, and that's been driven by the BI, side of things, but we're not seeing that on the ultimate. So if you could just explain the differential between the two, please. Thank you. Geraint, are you happy to answer the first one? And then, Geraint, and then the second one as well. James, do want repeat that one? The first one is about conversations. Firstly, the size of the release on the share of the business that was originally reinsured. And then secondly, good spotting in the detail of the size of the reserve that we assumed as a result of the commutations in the first half of this year is larger. The second one is slightly easier. So the commutations that we executed in the first half of this year were kind of in line with expectation. They were the sorts of contracts that came up for commutations in the first half. The reason it's a bigger number is because the years and the reserves are just bigger. So more recently, we've been bigger in size and the reserves that we've assumed as a result of those commutations have therefore been larger. So there's nothing really more material to it than growth. And the first question, which is the bigger contribution to profit in the current period from reserve releases on the share of the business that was originally reinsured. That's largely because firstly, bigger loss ratio movements in the first half, as I said on Slide 13. And secondly, those bigger loss ratio movements are coming on more recent years where we've committed the reinsurance. And so the four points on 2018, the three points on 2017, the reinsurance largely being commuted on those years. And so we're seeing quite a big contribution from releases on that part of the business. Those would be the reasons there. James, can you repeat the second question? Sorry, I missed that one. Yes, sure. So it's the book to loss ratio for H1 twenty twenty one, which is, you you you've opened at 77%. You you normally provide a bridge between, the book loss ratio in a year on year, whether you wanna do that with the opening one or the or the most recent one. But I I think normally, you do it from from the most recent one. So it was a 69% book loss ratio for 2020, and you're opening now for 2021 at 77. Could you just provide the bridge between that in terms of frequency and severity, please? I'm not sure we normally do. We normally well, we often or sometimes provide a bridge of the accident year ultimate loss ratio, but we don't normally bridge the the book loss ratio. The the reasons will be the same, I think. So we should obviously increase in frequency and underlying increased severity as well. I don't have the numbers off the top of my top of my head. Sorry, James. We don't normally bridge the book a lot. I'm afraid it's slightly differently then. Just could could you give more insight into the '77 opening, loss book in 2021 versus what it was in 2020? Well, I think on 2021, we'd expect that the end final ultimate loss ratio for 2021, which, of course, will include the second half of 2021, is likely to be notably higher than 2020, which is an underwriting year that's going to benefit very materially from COVID and reduced frequency. So the start the initial pick on 2021, I think, reflects our view that 2021 ultimately will be higher loss ratio year than 2020. Sure. Okay. No, that's helpful. And then just on the other question was just on the larger book loss ratio development, which we don't see that same pattern coming through in the ultimates, which haven't been revised down to a greater extent than previously. Yes. Think that's a fair observation. What you actually see, if we extended that the ultimate loss ratio chart back over all the years, you do see somewhat greater improvement in the overall best estimate reserve in the first half. I agree with you, James, not that apparent from the loss from the chart, partly masked by rounding. And we haven't shown all the years as well. So there's some development on older years, which Christina referred to earlier, which you normally see in the kind of the so late on after the after those years. But it's it's quite subtle, but there is a bigger improvement in best estimates in the first half than usual. Yeah. Okay. Thank you very much. The next question comes from the line of Rishat with Deutsche Bank. Please go ahead. Hi. Thank you for taking my questions. I've got two. So the first one is on UK Car. You mentioned that much of the growth in customers in the first half came from renewals rather than new business. Are you able to provide a split between the renewal and new business growth? And how do you expect that growth to develop over the remainder of the year? And the second one is on International Car. You mentioned seeing strong customer growth in Spain and Italy of 15% year on year despite the competitive market conditions. What's driving that growth? And how are you thinking about the outlook for the rest of 'twenty one and then going into next year as well? Thank you. We don't normally provide the precise split, but Cristina, maybe you want to add some color around it on the first question and then Kosty answer on the second one. Yes. As you said, Milena, we don't give this split, but I think we're gonna see the second half of the year a continuation of what we saw in the first in the sense that we don't expect new business sales to grow versus last year. Actually, we think it's gonna be a very competitive market with some players trying to gain share ahead of the interaction of the FCA reform. So no growth, at all coming from new business and, you know, possibly continue to have very good, retention. Good morning, everyone, again. So in Spain and Italy, there are similar stories. So the strong growth has been primarily driven by good performance in direct acquisition and expansion towards more traditional channels, so distribution through brokers and agents. And about the future outlook, I think it will depend also on the price level. As as I commented, there is high competition in in those markets. So far, we have been able to beat the competition and to deliver a good growth. And we will continue to with the same focus we have had so far. And but it will also depend on the market decisions on prices. The next question comes from the line of Nick Johnson with Numis. Please go ahead. Hi. Can you hear me? Yes, we can. Great. Thanks. So the first question is on the decrease in UK motor ancillary revenue. As you mentioned, more businesses being completed digitally and that's had an impact. To what extent will this be an ongoing trend if digital sales continue to increase? Are you seeing opportunities to improve add on take up rate, as your digital sales journey is refined? That's the first question. And then the second question is on, UK vehicle growth. Just wondered how much of, vehicle growth is due to an increasing proportion of customers with multicar? What is the underlying customer growth rate? And is there still a significant opportunity for multicar growth within the existing customer base? Thank you. Thank you. Given both UK insurance, Christina, do you want to take them? Yes. On additional income, as you said, there is pressure when these sales are done online. It's something that we have been seeing for a number of years. We launched a few months ago, our tier proposition because we think this is a better way for customers to understand our product, and it's an easier it's also easier for them, the customer journey and buying ancillaries. So we launched this, which is still on on a test mode, but the the initial data is very positive, and we think that is the best way to continue, selling ancillaries online. However, we think there there might still be pressure in the future. The second question around vehicle growth and what percentage is multicar, we don't tend to we don't get this this split, but we're very we're doing well on our multicar and multicover proposition. It's an area that we continue to enhance and improve, and our customers react very well to it because we provide very strong discounts and a much easier journey. Okay. That's helpful. Thank you very much. The next question comes from line of Will Hartcastle with UBS. Please go ahead. Hey, good morning, everyone. Two questions. The first one is, how is the dynamic between the retention and the new business volume changed from, say, January to June as the six month period progressed? And in the latest months, are you still seeing a net benefit in volumes from higher retention in high new business? Or has this reversed somewhat? And the second question is regarding the large BI settlements and the favorable outcome. I guess what would be the counter to suggesting that if you had a higher number of staff in claims management, then this could actually result in further claims settling quicker? I'm trying to think whether this could, in fact, be maybe a bit more than just a one off or is this just a one off? Thanks. Christina, do you want to take that? Yes, of course. So when we look at the first half of the year, what has happened is that when we compare our growth in new business sales versus the previous period, it's been very flat. Remember that in q two last year, especially around May, June, we took the opportunity of strong growth. Whereas when it comes to renewals, we come from a larger base. So when you look at the number of, customers that have renewed in total versus the previous period, there has been, growth. You ask how do we see this continue in the second half of the year. Again, as mentioned, I don't think we're gonna see growth in new business sales. It will depend not just on what we do, but what the market does. But in in our view, the market might still be very competitive. I think we might see price increases in the market, but possibly not to the extent that, they should be in our view, and therefore, we might still not be very competitive. Your last question was around bodily injury settlements and whether having more staff might help. What has happened during this period is that we had much fewer number of large VA claims coming in. So, yes, it did allow the team to maybe close faster some of the pending claims. We have reviewed our staffing levels, and we're comfortable at, where we are. That means that we might, do things with a bit more staff, but we don't expect significant changes in the future. The next question comes from line of Faizaan Lakhani with HSBC. Please go ahead. Hi. Can you hear me? Yes. We can. Yep. Perfect. A few questions for me. Well, first, congratulations on a good set of results. The first question was on the Italian probe on the pricing comparison website on motor insurance. What is the implication? And do you have any update on that front? The second question is on the household insurance book. My understanding is that, you know, you benefited from, you know, from COVID, you know, the fact that people, you know, staying more at home and, you know, claims are lower on that front and also, you know, relatively benign weather. Stripping that out, what is the underlying profitability in the household book? And the third question is on the change in the reinsurance structure. My understanding is that the quota share reinsurance tends to be more profitable. But given the fact that the book loss ratios in recent years have been fairly low, is that benefit more muted? Or could we see a sizable improvement in profitability going forward? And the last question, if I may, is just on large BI. Your peers have mentioned similar trends on large BI. How much of this is due to the change in the type of actions you are having versus your own sort of idiosyncratic improvement on your own book? Thank you. Thank you for your question. On the investigation that you referred to in Italy is the market wise phenomenon involving a lot of company and price comparison side. It is ongoing, but there is no conclusion and it's really, really early to comment. Of course, we are fully collaborative with authority, but it's really early stage. The second question, think, Christina, for you. Yes, indeed. Thank you for the congrats. You were asking about the underlying profitability of the household book. It's a bit too early to comment. This is still a relatively young business, and it's it's growing a lot. Some of the key trends that we will say is first, when you look at the size of the renewals book versus new business, we see that it's growing every year, and that definitely helps profitability in household. Given the cost of acquisition versus the premium, it's very expensive to grow. So the bigger the renewal book, the bigger our profitability. Second, we have been, every year, we have been improving our data and our claims capability, and that translates into better loss ratios. So improving underlying trends, we're positive about the future, but, too early to comment what is the, you know, the stable combined ratio at this stage. Thank you, Christina. Sorry. Can you remind me the third question? It was regarding to the reinsurance structure and the possibility of the change in the structure of Vectibig right now. Great. Thanks. Geraint, do you want to take this one? Yes. There's some details in the back of the pack. The main impact I think to talk about now is the change in the mix between coinsurance and quota shares. The 30% that's Munich Re underwrites currently as coinsurance will split from twenty twenty two to 20% coinsurance and 10% quota share. That quota share will be operated like the rest of our quota share contracts, the current 38%. And there are some details on that at the back of the pack. So that's fairly noticeable change. The terms on the coinsurance will also improve, and we'll try and disclose as much as we can on that with our full year results in March. But overall, it's quite a notable improvement in profitability to Admiral. Would would the would the improvement possibly to be, you know, as significant given that, you know, book loss ratios are quite low right now and that the coinsurance should be quite profitable itself as well or in the short term? Yeah. That's what you're looking less noticeable here than maybe there's an acceleration longer term? I think the outlook for the near term is that the some of the recent years, as you can see, the book loss ratios are very low. They're into the top tranches of the profit commission structure on that coinsurance. And so they'll continue to be profitable as those years release their loss ratios down to the ultimate position. And so the kind of near term outlook for profitability on those open years is still positive. And then as that contract changes, which only takes effect from 2022 underwriting year, that obviously changes the share of the profit that we take from that underwriting year onwards. Obviously, there's a bit uncertain at this point to comment on how that will feed through, but that will impact the years post 2022 in the accounts. Okay. The last question was around large BIs and whether we're seeing a fundamental change in the type of accident. Yes. There have been some changes, especially during lockdown periods. For example, we saw less, last VIs coming from, drink driving on a late Friday or Saturday, night. We saw also, especially in the lockdown last year when the weather was excellent, we saw many more, people being injured, motorists or pedestrians or people, know, when they were, with a bike. And, also, we saw less number of passengers in a car, so you didn't see as many accidents with five, even six people, on a car. But those are changes that, impacted long term periods mostly, and we don't see a change in the underwriting trends for the future. Neither we see a fundamental change on the cost of these PIs. It's just different causes for the claim. Perfect. Thank you very much. We have two questions from Anthony Yang. The first one, both are related to U. K. Motor pricing. The first one is what is the biggest risk in your view to prevent pricing momentum in the second half? And the second one is, Christina, you mentioned there may be some pricing volatility post implementation of FDA pricing remedies. Could you elaborate? And what would prevent you from increasing higher new business prices after January 2022? Thank you, Marisha. Christina? Yes. The first question around pricing momentum in the second half. Two main ones. One external, if we have a third wave of or sorry, third or fourth lockdown period or any significant market changes that will definitely have an impact on prices. But the second more likely one is, basically competitors' appetite for growth. I think there are some companies that might take the opportunity to grow ahead of the implementation of the FCA pricing reform or other companies that, might look at the the reserves and how they have strengthened in the previous period and might take the opportunity to grow. In the case of Admiral, we tend to, look at our or look at our prices trying to optimize what we think are gonna be a trend in the next following months, sorry, in the next twelve months following, and that's what we're gonna, be looking at. Your second question was around volatility price in prices, from next year. First, I think it's important to highlight that, in Admiral, we as things stand today, we were planning to increase prices at new business and, reduce, prices at renewals. That I think is gonna be the trend in every company in the market. Different volatilities because some companies might have different strategies. For example, they might launch products at new business or at renewals, which have different feature. They might use different challenge sorry, different channels because the FCA reform looks at products and channel, as different. You might also have companies, especially in the household arena, where new business prices need to increase a lot to compensate for a big back book, and also to to look at, compensate for the relative difference between new business and renewal terms. So as you can see, it's really going to depend on the strategies of the different players. But just to reiterate, in the case of Admiral, we will be rational, and, we will increase prices at new business and reduce in renewals. Thank you. The next question from the web chat is from Henry Heathfield. There are two questions. What has been and what is the appetite going forward to acquire customers on price comparison sites versus direct to yourself? And the second question, has the sale of Penguin Portal had an impact on your ability to acquire customers? If not, why not? Thank you, Marisha. So in terms of appetite and distribution channel, price comparison site are by far our dominant channel in almost every market in which we operate, maybe U. S. Included. And we expect this to continue to be the case. The vast majority of private car insurance pass through price comparison site in The UK is a different situation in international, is a less extent, but still a predominant channel for the direct player. And we like them because they are a great proposition to customer, but also because they highlight good pricing, both competitive but also surprising sophistication and we think that play well our skill. So and yes, we don't see difference in results if you know when you are not owning price comparison site also because also when we own them, also manage the business very independently. Historically, we like to have price comparison site because we create the distribution channel in some cases. And that was as I mentioned before, a distribution channel that was great to us and also because we had a good understanding of our main distribution channel. But in terms of specific results and quote and conversion that doesn't make any difference. In UK in particular, the market is very mature. There are several large player and the business is quite stable. As Christina mentioned, there may be some change in terms of the different roles given from the FCA pricing reform, but that's a bit early to comment. Of course, try to track customer directly and making sure that we have a good direction is what's important. But price comparison site by far dominant, a bit less the case for and also sorry, multi is very important. So we do have a different product and we do invest a lot and try to sell and to have more product with our existing customer. It's a bit less predominant in international insurance. Kostya, I don't know if you want to add something some color on international. Yes, Milena. I echo what you have said are less predominant than in The UK, but are still very a very important source of business for us, in particular in Europe. That being said, I think that we do have an appetite to continue to grow our businesses as we need more scale. And so we have decided to differentiate the sorts of growth for our businesses in particular in the more stagnant market like Italy and Spain. So still a very dominant, a very important channel for us, but we are also keen to open more opportunities for growth for us. The next question is a follow-up from the line of Will Hardcastle with UBS. Please go ahead. Thanks for the follow-up. It's a quick one on solvency. If I look at the half year last year and the half year this year, the SCR is the same despite very sizable growth in UK Motor, household, international business. Just really trying to understand what the moving parts here, what the offsets here were in order to maintain that flat? Thanks. Yes. There's a couple of things going on, Will, in the total STR, which means that it appears where it's flat half year on half year, is down, obviously, from the end of the full year to the half year 'twenty one. What we see is that the insurance business has grown, so the top line is a bit higher, not dramatically higher. Premiums are not up as much as customers. That's driven an increase. The loans business is down half year on half year, so that's brought it back down a bit. And as I think as we talked about before, the outlook for profitability, which impacts the capital requirement, is lower looking forward to the next twelve months at the June '21 than it was when we looked forward twelve months at the June '20. So that means a bit of an offset as well. So all all those things kind of taken into account means basically a flat position half year on half year and then down from full year to half year. There's quite a few moving parts in it, Will. Brilliant. Thanks. The next question is a follow-up from the line of James Shuck with Citi. Please go ahead. Hi. Thanks for taking my follow-up. Apologies for this one. But IFRS 17, great. Just interested to know what implications that might have for you because you've historically reserved very conservatively, and IFRS 17 should know you're booked much closer to best estimate, which has all sorts of implications in terms of earnings volatility and potentially solvency needs. So just elaborate on any thoughts on that would helpful. Secondly, on the FCA pricing reforms, as the new business increases pricing in order to generate the same returns. So as we flush through the market impact from the FCA reforms, then it will back out the kind of renewal rate increases of the past. Are you able to give any insight into what the potential earnings impacts might be for you, as we move into 2022, and whether there's any offsetting impacts on the profit commission and perhaps commutations? And the final question on the third question was just around the ultimate development. So, historically, they've developed very favorably in the past. I think linked to my question before, we're not seeing quite the same positive development at this point. Do you still develop expect the ultimates to develop favorably? And if so, will it be less than they have done in the past? Thank you. Garen, do you want to start to take the first one? Yeah. I have PROS 17. A lot of work going on, obviously, in the background. Big team on that on the implementation of that. We'll talk, more to the market, I think, in 2022 on the on the likely implications of that. However, it's not likely to look under that new standard, which obviously takes effect from 2023. There's nothing in the standard that prevents the company from taking a prudent and cautious approach to reserving in the accounts, and I'd expect us to keep on doing that. We think that works well for us and well for the shareholders as well. I think what you definitely will see is more transparency on the book's position in the accounting relative to the best estimates, percentiles and uplifts and things like that. And I think it's it's very clear or becoming very clear that the the way that the accounts look and then the way that profit flows will obviously be quite different. KPIs will be different and so so we'll, need to spend a bit of time getting used to how our how how our results will get reported from there on. But more on that, I think, in 2022 in advance of that coming into effect. Sorry, yes, Cristina, do you want to answer the second one? Yes. The question was around the impact of the FCA reforms on our earnings, and related, KPIs. I think it's important to highlight that, the market in general tends to be very rational and tends to pass, any of these changes in the market, especially profitability to customers. A few years ago, we had a change in the opt in discount rate, and, there was a very clear movement by all the markets passing everything to customers. So I think it will take some time to fully understand the impact of the FCA reforms, but I expect the market to be rational and pass this to customers to keep with a similar level of overall profitability. I think it's definitely too early to comment on any impact beyond this. Thank you, Christine. And Garam, you want to comment on the ultimate evolution? Yeah. What we typically see is that the most recent year is on the ultimate loss ratio charts will tend to improve over time. But some of the conservatism that we build into those numbers early on obviously comes out over time as we get more certain over the outcome. There's nothing I think that particularly changes our view that that should continue into the future. Christina talked about we mentioned some acceleration of settlement of big injury claims during the first half. But I think we've been pretty cautious in recognizing that in our patterns going forward. So I don't expect a material change. I think we'd still expect those more recent years to continue to improve. No big change. Great. That's very helpful. If I can just circle back on the FCA earnings impact, just conceptually. I mean, do you agree that there should be some earnings headwinds to you know, as the the new products start to start to price through, and you just need to assess those at at this stage. I I understand what you're saying about a rational market, but just mathematically, one might expect some earnings headwinds from that. This is a cyclical market. We think 2020 and the first half of twenty one are particularly good years. So possibly, we're looking at a 2022 year that is gonna be more challenging because of the, unwinding all the discounts due to COVID claims inflation and also because of the SCA. So, yes, I overall think that 2022 is gonna be a more difficult year that we will all learn and understand more what the impacts are. So do I believe there's gonna be headwinds because of the FCA? I think it's in this market, what really matters is how every player is in relation to the other players. I'm a bit of an optimistic, and I think we're in a in a good position because we have a healthy book. We have customers that shop on a very regular basis, and we have one of the of the largest renewals book. So I'm confident that we are in a strong position. We have a strong underwriting capabilities, which are gonna be more important. But are there gonna be headwinds in 2022? Yes, for a number of reasons. And unless the market acts rational and increased prices, there might be even bigger headwinds. And gentlemen, Sorry, just before we close, I just would like to take a second to thank all the staff for incredible work during a year that was was definitely challenging. They've done a fantastic job, and it's great really to be able to share record dividend with all our staff in this half year. So thank you, everybody. Ladies and gentlemen, this concludes today's conference. Thank you for joining. You may now disconnect. Goodbye. Goodbye, everybody.