Assicurazioni Generali Aktie

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Generali Group First Quarter 2026 Results Presentation. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Fabio Cleva, Head of Investor and Rating Agency Relations. Please go ahead, sir.

Hello, everyone, and thank you for joining our first quarter 2026 results call. Here with us today, we have the Deputy Group CEO, Giulio Terzariol; the Group General Manager, Marco Sesana; and the group's CFO, Cristiano Borean.

Before opening for Q&A, let me hand over to Giulio and Cristiano for some opening remarks.

Hello, everyone. Good morning, and thank you for being with us today. The first quarter 2026 results marked another step forward in the successful delivery of our lifetime partner 2027. We are now in the second year of our plan and our focus on excellence in core capabilities continues to deliver tangible value for our customers, employees and shareholders. We have reinforced all of the group centers in the implementation initiative, especially when it comes to technology and artificial intelligence. This approach allows us to scale best practices more effectively and read the benefit of our fully integrated group.

Overall, we have delivered strong growth in both operating and adjusted net results thanks to contribution from all segments. Let me highlight a few achievements from the first quarter that clearly demonstrate the success of our strategy. Start with P&C, gross insurance revenue grew by EUR 575 million or almost 7% year-on-year. This top line growth has a lot of quality needs while revenue growth continues to be mainly driven by price effect in both motor and non-motor, volume growth is increased positive contribution with volumes in written on motor growing 1.8% and we need even faster growth in accident health and disability at 3.4%. Let me also mention that Euro persistence has increased its consolidated gross turnover to EUR 1.2 billion in the first quarter marking almost 15% year-on-year growth.

Looking at Motor following 2 years of deep pruning and the recovery in profitability achieved in 2025, we saw positive development with risk in force growing about 1%. Let me tell you that we could have achieved a higher volume growth in motor by expanding the book through more aggressive pricing. However, as we have said previously, we are squarely focused on cycle management. Therefore, we deliberately have made a strategic decision not to grow the numbers of cars faster. At that time, where price is slowing down and without further clarity on the implication of the Middle East situation, the cost of claims. In this context, we are disciplined and continue to explore additional growth opportunity only in very selected markets. A quick comment on the next head load, which has been rather significant in this quarter. This was most related to the heavy storms that hit the Iberian Peninsula and particularly Portugal, which represented almost 70% of our gross net cat losses.

This is broadly aligned with the most recent insured industry losses for case reserve before IBNR that amount to approximately EUR 1.3 billion for Portugal only. In this context, our underlying performance was very healthy, with a more than 1 full percentage point improvement in the additional current year loss ratio, thanks to both motor and nonmotor. As highlighted in the press release, the amount of manmade losses was almost double that of last year at around EUR 65 million, amounting to 0 percentage points of the loss ratio. Therefore, the underlying improvement of the attritional current year loss ratio, excluding manmade, is close to 150 basis points year-on-year. As you know, our target for P&C efficiency is the GEX ratio, which improved by 60 basis points year-on-year to 13.7%.

This ratio represents a productivity improvement journey in a more targeted way than the full expense ratio, capturing what we are doing to transform our core function, including claims that customer operation underwriting. We have a strong focus to push forward the extensive deployment of AII agents that automate workflows augments employee decision-making, improved service quality and drive operational efficiency scale. Reported expense ratio of 29.3% is up 40 basis points, reflecting higher acquisition costs and also the business mix. If you look at the expense ratio, excluding Europe assistance, it will be basically flat year-on-year at 28.7%. Looking at acquisition costs in isolation. The reported 21.2% in the first quarter would be 20.3% excluding Europe assistance and the year-on-year change will be in the order of 20 basis points as opposed to the reported is point increase. As we mentioned previously, we are implementing actions that will enable us to achieve not only beta ratio, but also an improved expense ratio.

Let's move now to Life, where we have achieved very strong net inflow of EUR 4.3 billion, driven by contribution from all lines of business and benefiting from further improvement in less. Compared to the first quarter last year, recorded higher inflows in traditional savings. This is achieved with a strong level of new business margin and enabled us to record a very healthy growth in new business value. effort production is fully aligned with our underwriting discipline. The weight of non-guaranteed business is 75%. The overall guarantee is stable at 0.73% and the share of capital-light business is 83%. The overall development in new business value is clearly very satisfying. To be noted, the first quarter benefits from positive seasonality. So I would caution not to stipulate these numbers for the next quarters. But the key message here is that the light business continue to grow profitably and is growing without compromising of underwriting discipline.

I'm also very pleased that protection health and accident, one of our key strategic drivers of profitable growth showed a premium increase of 6% year-on-year, while recording also at profitability. In Asset & Wealth Management, you have already seen a few days ago, the very good numbers from Banca Generali, we will continue to deploy the joint insurer bank initiative with a positive initial development. In Asset Management, as we indicated in the press release, there is a positive contribution for nonrecurring fees of around EUR 15 million. They reflect the successful business positioning of our infrastructure business. Although transaction fees can be less regular in terms of frequency, the recurring management fees, they are indicative of some invest capabilities and also reflect the success of our infrastructure business in originating and executing deals.

Before I hand over to Cristiano, some closing remarks on the overall macro environment. Financial markets have been pricing in an increase in short-term inflation indicators due to higher oil prices. And while we are monitoring the situation very closely, we are confident in the strength of our business model. On the life front, the business is capital light and the high-quality investment portfolio, combined with disciplined ALM, ensure stability and resilience. Additionally, we have proven many times that we're capable to adjust to different cycles and match consumer needs in all kinds of environment, also thanks to our strong distribution footprint.

For P&C, we are very focused on preserving the excellent level of profitability, and we are watching very closely the development of severity and frequency. And in some cases, we are already preparing to take pricing actions. Also, please keep in mind that 2/3 of our P&C book is non-motor and of this 50% is inflation indexed. In addition, investment yields are higher than originally projected which also benefits the P&C operating results. Lastly, an environment of our inflation is also likely going to support the P&C pricing cycle towards a new hardening phase. And of course, these overall contract creates an even stronger reason to push ahead with our key initiative on digitalization and automation.

To summarize, the Lifetime Partner 27 plan execution is progressing very well and showed intangible results. Looking ahead, we remain fully committed to delivering on our plan objectives, maximizing profitable growth in P&C, leading life through quality production and expanding assets and wealth management. We are proactively managing the cycle to ensure a strong performance enabled by an effective center steering combined with disciplined local execution with a focus on technical excellence and productivity improvement.

Thank you for your attention, and let me now hand over to Cristiano.

Thank you, Giulio, and good morning, everyone. Thank you for joining us today. As Giulio mentioned, our first quarter 2026 results demonstrate continued strong momentum in the execution of our Lifetime Partner 27 plan. We are delivering robust growth across all segments with a clear focus on quality, resilience and profitability. This exemplifies our ability to navigate a complex environment while advancing our strategic priorities. Let me share some key highlights before we open the Q&A. .

Giulio spoke about the life new business production. Let me focus on the live CSM, which recorded a 1.4% normalized growth. The end of the first quarter, marked a peak in financial market volatility and the low in equity markets. As a result, the CSM recorded slightly more than EUR 900 million of economic variances. The key drivers of this EUR 900 million movement were the widening of sovereign and corporate bond spreads accounting for around EUR 400 million, the increase in interest rates by around EUR 200 million, which impacted in particularly Germany and Italy, the decline in equity markets around EUR 200 million. And finally, higher volatility, especially in the equity markets, with around EUR 100 million impact. Clearly, the economic variances in the quarter were also a reflection of the single measurement date. If we were to apply the disclosed sensitivities and use financial market level of May 15, the CSM would be around EUR 500 million higher than the EUR 33.2 billion shown in the press release.

Moving to P&C. Giulio has already mentioned the improvement in the attritional current year loss ratio. Let me emphasize that this improvement was achieved while maintaining the conservative booking of initial loss picks, which was a key feature of our 2025 results. Concerning nat cat, Storm Kristin exceeded our [indiscernible] protection set at around EUR 300 million, we this means that in the second quarter, we will book around EUR 19 million as rate statement premium, which will be recorded in the current year attritional loss ratio.

I would like to elaborate on the prior year development. Last year, the 9 months 2025 call, I emphasized how a dynamic interplay between nat cat and prior year developed is the sensible approach for managing the business over the long term. This is why I indicated we would calibrate our prior year development dynamically, always within the boundaries of the best estimate approach. This approach enhances earnings predictability and mitigates the year-on-year P&L volatility throughout the year. The first quarter has seen significant nat cat events and as a result, you saw a higher contribution from prior year development in our numbers. I feel very comfortable with our ability to manage a combination of nat cat and prior year development this way in the long term. This confidence stand in the very strong level of reserving from the ongoing conservative initial loss picks. It is also reinforced by the new reinsurance structure that we negotiated at the last renewals where we used the favorable market conditions to significantly strengthen the contractual features of our cat aggregate program.

Staying with P&C. Let me also highlight that the investment result growth was led by high quality factors and also thanks to the volume growth recorded last year. As you have read in the press release, this quarter is impacted by around EUR 50 million one-off tax component. This stems from the new French financial that extended 2026, the so-called surtax, which is based on the average taxable basis of 2025 and 2026. As such, the accounting rules requires us to recognize the 2026 tax in the first quarter 2026, considering the whole of the 2025 related so tax component. We expect that the residual component, the surtax will affect the group by less than EUR 10 million per quarter for the remainder of 2026.

Moving to cash and capital. As you know, we scheduled most of our remittance into parent company coffers ahead of the dividend payment. We have already received around EUR 4.5 billion of remittance so far 2026. And as a result, the cash at the holding company after the EUR 2.5 billion dividend payment we made yesterday stands above EUR 5 billion, of which slightly more than EUR 3 billion is available. Finally, a word on solvency. As I mentioned this morning during the press conference, the estimated Solvency II ratio increased around 2 percentage points as of May 15 compared to the end of March.

Let me provide you the moving parts during the first quarter. We benefited from healthy normalized capital generation, adding 4 percentage points. This is basically stable year-on-year as the higher contribution from life and financials is offset by the impact from nat cats. The noneconomic variances include both the prior year development effect as well as the solvency capital requirement increase from business growth and SAA optimization. The end of the grandfathering period reduced the own funds by EUR 1 billion with our 4 percentage points impact on the solvency ratio. Capital movements in the period shed 2 points, including both the accrued pro rata dividend and the subordinated debt operations. Finally, market variances impacted solvency for around 5 percentage points. This reflected, of course, the movement of equity markets and the widening of sovereign and corporate spreads as well as higher volatilities.

Similarly to the CM, the Solvency II ratio is also a reflection of the single measurement day. March 31 was closed bottom of financial markets during the recent bout of volatility. Looking ahead, during the second quarter, you should factor in 3 elements on top of the normalized capital generation and the dividend provision for the period. First of all, we expect to receive the regulatory approval for the EUR 500 million share buyback with a 2 percentage point impact. Secondly, as we indicated that full year 2025, factoring 2 points stemming from the higher SCR following the SAA optimization. And finally, please consider that the downgrade of the Belgium sovereign from AA to single A occurred in April and will have a 0.5 percentage point impact on our Solvency II ratio.

In summary, the quarter's performance highlights the strength of our diversified business model and our ability to generate profitable growth. I am particularly pleased by the quality that I see in the numbers when I look through the quarterly noise of nat cats and the financial market movements. This quality makes me very confident in the ongoing delivery of our plan. Thank you for your attention, and now we are happy to take all your questions.

[Operator Instructions] The first question comes from Andrew Baker with Goldman Sachs.

The first one, just on the Life Insurance Services result. Are you able to tell us how much of the 1Q result was from experience variances another? And then I guess, if possible, are you able to break that out by sort of the portion that you wouldn't necessarily project going forward and any items that you would expect to repeat because I believe the PAA business runs through this line. And then secondly, thank you for the additional detail on the higher acquisition costs in P&C. I guess, should we assume that there's a broadly offsetting impact from the higher acquisition costs in the current attritional loss ratio from the same mix effects? And any comments around that would be really helpful.

Thank you very much Andrew. The first question is for Cristiano and the second for Giulio.

So breaking down the operating insurance service resulted to the CSM release at EUR 828 million, which by EUR 55 million compared to the first quarter of '25, you should then have a couple of extra elements which create a movement. We had a slightly higher amount of loss components, EUR 31 million loss component with negative impact versus EUR 11 million last year, so EUR 20 million more which impact -- which reduced by EUR 20 million, the result as well as the experience variance and over technical results had a EUR 32 million positive contribution up going to the EUR 97 million amount in the operating insurance service result.

And in end, the other operating income and expenses decreased to positive sense at minus EUR 37 million, which is an improvement of EUR 17 million versus previous year. I would tell you that there are no particularly one-off in the first quarter '26 number apart from slightly higher sensitivity on some loss components of interest rate up coming from our country, Italy, but there is a very healthy contribution in the other operating income and expenses of the so-called contribution from the investment contract under IFRS 17 accounting. So I would say pretty much good quality as what I'm hinting in the initial speech.

And to your question, whether there is an offset in the loss ratio, [indiscernible] you look at the numbers, including Europe persistence. In that case, you see an increase in the expense ratio, and there is an offset in the loss ratio. When we remove Europe as it stands, actually, the expense ratio is relative at -- in that case, I will say there is not much of an offset. So it depends how you look at the numbers. .

The next question comes from Michael Huttner with Berenberg.

Congratulations. So 2 for me if I may. The first one is 90% of the new -- I think you have 94.5% as a discounted combined ratio target. It feels like you're there and you're protecting margins. So I would say, yes, but you're probably going to say no, but [indiscernible]. On the cash, thank you for the explanation, Cristiano. I just wanted to add the EUR 3.5 billion you've collected in [indiscernible] I've forgotten the figures from last year. I just wanted to ask if you could help me on that, that would be amazing. And then being greedy, the [indiscernible] cover, I'm really interested in that. I think you did mention it at the full year, but I can't remember the details and how much more [indiscernible]

Thank you very much, Michael. So the first question is for Giulio. The second one is for Cristiano. The third one is for Marco.

So Michael, your question whether we are better than 94.5%, yes, we are better than 94.5%. I would tell you that already at year-end 2025, we were better than that number. And what we see right now is still very strong performance. So from that point of view, we always say we want to run as fast as possible. Now we also that the environment is going to become more challenging moving forward. So from that point of view, we know that as we move forward, inflation and risk premium is going to be more aligned with the average premium. So from that point of view, we are very well positioned. And moving forward, we will try to get additional improvement coming from actions that we can take always, on the portfolio and also the productivity improvement that we can realize. But to your question, are we better than 94.5%, Yes, we are definitely well below the 94.5%. And I will tell you, we're also below the 94% level.

Michael, happy to give you some additional detail on the aggregate cover. So as you remember, our aggregate retention is at EUR 1.2 billion in the range of EUR 3.2 million points of combined ratio, and we have a capacity of EUR 550 million. So at the moment, what we have seen is just -- clearly, we are commenting the first quarter where there was one big event but I would say we still have a lot in -- as a coverage in the aggregate. So -- at the moment, we have just seen the first quarter. Clearly, it's a first quarter that is higher, significantly higher compared to the first quarter that we had in the last years. The first 2 years -- the first 2 months of the second quarter are in line with expectations. So I would say that at the moment, we are still fine with our aggregate cover.

Michael, regarding cash, if I just take the picture as of today, I think compared to last year, we have already remitted around EUR 200 million more compared to the same period of last year as of today. I think we are between 90% to 95% total remittance. So if you make some math, you should compared to last year, slightly more remittance contribution in the second half in 2026 than what we had in 2025. So I think it is good news for you. .

The next question comes from [indiscernible] with Banca Akros.

Could you please provide more detail on any changes in the scope of consolidation and that might have affected the volumes and light gross written premiums on a year-on-year basis, if any? When I divide the life [indiscernible] the first quarter of 2026 by dose of 2025, I obtain a growth rate of 6.2% compared with the reported growth of 7.5%. And second, even the first quarter -- strong fourth quarter results, do you see scope for an acceleration in the coming quarters that could lead to an upgrade of the full year guidance? .

Thank you, Gabriel. The first question is for Cristiano, while the second one is for Giulio.

So overall, the only perimeter consolidation change is related to the IFRS 5 allocation on our Irish activity, but it is as a branch. So you should not have any impact in the GWP, as you are trying to hint. So in my personal opinion, I don't really probably catch the point. It is a true like-for-like for what regards to the [indiscernible]. Maybe I kindly ask if you can follow up with the IR team to better maybe grasp what is your question because I just would like to confirm change of perimeter when you look at the GWP. There is no material effect in the consolidation.

To your question about expectation top line growth for the second part of the year, I would tell you the following -- if I look at volume, let's say, the high price increases, volume in, as I said, also in the introduction, the speech volume in motor was plus 1%. I don't expect this number to get stronger. Considering that we are prone to really manage technical profitability. This number will we stay at this level. Potentially, if we need to increase prices, we are even willing to lose a little bit of growth to protect profitability. When we look at non motor, we see a very strong development both in nonmotor without accident health and in Accident Health. So if you ask me, I would expect that we're going to see this momentum continuing we can accelerate a bit. But fundamentally, I don't expect a much different outcome.

Coming back to motor, we see what kind of rate increases might be needing maybe more towards the end of the year, and that might influence a little bit the trajectory of growth on the motor side. But fundamentally, the answer to your question is I would expect more of the same as we go into the second part of the year.

Gabriel and maybe just if I add on the first question, just to be sure, if you all ask, when we define like-for-like, our definition embeds as well a constant FX rate versus the quarter 2025. I don't know if that could help you in making your exercise, but is the standard approach.

Next question comes from Fahad Changazi with Kepler Cheuvreux.

So I was just wondering in terms of motor and the outlook. What was the price effect just for motor in Q1 and how you expect that to develop? And on the life business, could you possibly break out the impact on margin from the higher interest rates. And I'm sure it's in your comprehensive finance deep dive Investor Day. But could you remind us again when you strike the updated assumptions, is it H1? Or is it at full year?

Could you please repeat the first question? And just to make sure the second question is when we update interest rates in the new business margin of life?

Yes. When are you updating those market assumptions? Do they get updated H1 or the full year? And the first question was just looking at the price effect in motor in Q1.

Yes. Perfect. Perfect. So the first question on the price effect on motor is for Marco, while the other question is for Cristiano.

So as Giulio was saying, so we had still a positive development of motor on the price effect. So I would say, overall, we look at the growth that we are having on motor, mainly on price. But there is this time also around probably 1/3 of the growth would come also from volumes around that. So we are seeing these -- the more we go into the year, we see that this increase in average price are broadly in line with what we see on the risk premium development. So we are there. We don't see tailwinds. We don't see headwinds. We are more or less in line overall country by country, there are differences.

But overall, we see that the average premium is developing in line with the risk premium. So as Giulio was saying, looking forward, we will adjust our posture portfolio by portfolio, making sure we maintain the level of profitability that we like to have in every different market. So we will look at the sign of inflation, if they're going to appear, we're going to look at the different effect of frequency. So all the component of the risk premium. And we are going to decide portfolio by portfolio in the second part of the year, what is the posture that we need to take, making sure that -- and I want to reiterate that we manage each portfolio for technical margin and not for any component of it, so not for growth or not for premium.

I've had -- regarding the methodology, our new business value is calculated with the beginning of period assumptions. So the number reported for the first quarter '26 is the year-end 2025 actual number. Just for you to be aware, had we had the benefit which this first quarter reflected because of the improvement to market condition was 26 basis points in this quarter. But if I take the end of period of March 31, and we calculate the new business margin for first quarter, 26 backward, let's say, there will be another 15 basis points. So I hope this helps. Every quarter, we use the beginning of period. .

The next question comes from James Shuck with Citi.

Both my questions are kind of on AI technology related areas. The first one really was to -- I just wanted to get a bit more insight into the productivity of the agents. I know the acquisition costs are very high, including or excluding Europe assistance. Are you able to share any productivity metrics amongst those agents? And also what the pipeline is in terms of rolling out AI-related CRM tools and perhaps any expectations there? And my second question, forgive me if you just [indiscernible] revenue. I know you have digital investment plan of EUR 1.5 billion to EUR 1.7 billion over the plan. Can you just remind me what your total technology spend is in agree? But I'm not sure that [indiscernible] would be included in it. And if you're able to split that into kind of keeping the lights on versus other, that would be very helpful.

Thank you very much, James. Both questions are for Marco.

Yes. So maybe before going specifically into one part of the topic, I would remind the effort that we are making on AI is broad and deep on any area of the group. So we are working a lot on scaling our use cases what we have presented in our strategic plan, the 16 use cases, and that's a big effort because we want to make sure that we get scale. One big topic for one big topic for us is getting scale in everything we do. So this is an effort that we constantly do. At the moment, we -- I can say we are around 55%, 60% of implementation of those use cases, and we plan to go to more than 90%. So some of the use cases technically related to the productivity in the agency.

We want to make sure that we decreased the time spent by agents or by people in working for the agent, so inside the agency on back-office activity, our reconciliation, on discussing with us the different topic of a specific claim or something similar. And so what we are doing, we are also improving the productivity of the agency. Now -- some of this is going to be direct impact for the agencies. Some of these use cases are going to be inside our company. We are going to make sure that in the end of the year when we are planning to have a full deep dive on AI here in like in the whole group, we're going to discuss more in that also about this topic. One thing that is really promising, by the way, it's also all the development that we are having in -- on claims because this is actually helping the agency in managing the claims much, much better and therefore, talking to the client much better.

For the overall total technology budget for the plan I think this is one big topic that we are tackling. So we see a lot of potential for reducing the development activity, in particular, coding that we do inside the group. So we have -- this is one of the big items that we have in our cost base. So we are targeting an improvement -- significant improvement on this spending. And even here, probably we can give you more detail by the end of the year when we do the [indiscernible]

The next question comes from Gian Luca Ferrari with Mediobanca.

A couple of questions for me, please. One is on the EUR 4.3 billion inflows in Life. I think if it's not the best result ever for the quarter, it's very close. I was wondering if you can give us a bit of color on how Q2 is going if you're keeping the same pace or slightly lower than that. The second, I think Cristiano already gave a bit of an anticipation, but I was wondering if you can share with us a guidance for new business margin for full year '26, considering the current level of interest rates. .

Thank you Gian Luca, both questions are for Giulio.

Yes. So maybe I'll start to also give you some color on the first quarter. On the inflows [indiscernible] the inflow. So basically, we saw strong inflows in France, where we are up 45% compared to last year. Also, we see that in our unit linked. We've said a lot of unit link as part of the hybrid. We also outperformed in the market. So that's a nice development. We saw also from an inflow point of view, a good trajectory in Germany, where we have doubled the inflows of 2025, the first quarter. And then also CEE, Eastern Europe is not a major a contributor to the inflows, but we see positive inflows also there. And then clearly, Asia has always contributing to the growth being clearly a growth area.

So that's the picture that you see in first quarter, Italy has been relatively flat, a little bit negative, which is also the reflection clearly the strong quarter that we had at the end of the year. So there is always some sort of seasonality. If you ask me what we're going to see in the second quarter is similar, but clearly, there is some seasonality, as I said before. So usually, Asia [indiscernible] to be less strong as we go into the second quarter, France, I would expect to be more of the same, Germany, the same Italy, for the second quarter, I don't expect to see much of a different trajectory where we expect to see a different trajectory in Italy towards the end of the year.

So bottom line is you're going to see something similar, but clearly, you need to adjust a little bit for the inflows because of the seasonality coming from Asia. But overall, I would say we are very pleased with the development. I would like to point it out also to the growth in value of new business, which is 19% in the stronger business margin. So I will say that, once again, we delivered good results on aggregate in the life side. The other one is...

Guidance on new business margin.

Yes, sure. So our guidance is 5.5%. I will say based on where we are right now, it's not difficult to imagine we might be better than 5.5% by the end of the year. This said, look, it's really not important that we're going to be at 5.6% or even a 6%. I cannot even exclude that we are going to end up there. We are very much focused on growing the value of the business. So clearly, we want to keep a high level of business margin. Fundamentally, when we make our decision is about making sure that the value of the business is growing. You saw that this quarter, and when you look at the CSA normalized growth, we are north of 5% for 2026, if you do a sort of a run rate, and that's clearly a good level because eventually, this is what is sustaining the operating profit growth. So to your question, guidance, we feel very good about meeting or exceeding 5.5%, but the focus is on growing value of business in a consistent manner.

The next question comes from William Hawkins with KBW.

Expenses, please. KBW has been doing work on admin expense leverage across the European insurers. And one of the things I've noticed is that loss ratio component of your [indiscernible] ratio is only about EUR 800 million from the presentation you gave a bit earlier this year. And as I understand it, that is only claims handling expenses that are not allocated to specific claims. So my question from that is why would you take such a narrow measure because presumably allocated claims handling expense just as addressable, if not more so, as what is central. And then secondly, if you were to take an all-in claims handling expense ratio, consistent with the 7% or so admin that you've got in your normal expense ratio, what would that figure be, please? And then secondly, if I could ask a strategic question. Could you gauge for me Generali's long-term interest in London and Global Specialty business? So if it's a bit less field.

But at the moment, you're business there is negligible. And I've always assumed that it's completely off the agenda because your focus is more European personal lines and maybe Asia. I just wanted to make sure I'm not missing something in terms of your portfolio ambitions for that part of the business.

Thank you very much, William, both questions are for Giulio.

On the GEX ratio, I would tell you, it's pretty normal to allocate the unallocated loss expenses to the loss ratio. So anything which is different and will be totally to me, honestly speaking. So that's what usually is done in accounting. Now when we look at our GEX ratio, we include in the GEX ratio the unallocated part of expenses, and this is usually 2 to 3 percentage points of ratio will be there. So we are capturing the unallocated loss expenses in the trajectory ratio, which is going down. By the way, in this quarter, we had 20 basis points of improvement in the GEX ratio, which belongs to the loss ratio. But if you talk about normal accounting to the best of my knowledge, so I'm 100% confident without hesitation that you need to put a loss adjustment expenses in loss ratio, somebody is not doing that.

I don't know what to tell you, but that's what account has always been, by the way. So it's not even a new development. So that's on that problem on the question about the specialty business London. I would say, you said we have a negligible price would say we have 0 presence actually at the moment in the Lloyd's market. What is important for us, we have a company called GCC, which is basically virtual entities, but we are running a GCC operations. It's about EUR 3 billion of operations. They are delivering very good results. So we are very pleased with the performance that the company is getting we want clearly to spend the company, diversified this business, which means we are clearly going to low cost the opportunity.

They don't need to be in the Lloyd's market, but they could also potentially be in the lowest market knowing, However, the Deloitte market is a very peculiar market, which is very much prone to specialty, maybe complex specialty and also with a lot of U.S. business. definitely don't have appetite for the kind of business. So to your question is reality, it's more our intention to try to strengthen our commercial business to diversify that business, but it's not that we are targeting the Lloyd's market in a specific way.

The next question is from Iain Pearce with BNP Paribas.

The first one was just on Banca Generali. And they were flagging in the results that the Alleanza partnership has been performing very well. Could you just touch on what you're seeing from your side in terms of the Alleanza benefits, how that's impacting and how that is performing and if the run rate in Bank of Generali what you're seeing is sustainable. The second one was just on your comment on if you see higher inflation you expect or anticipate seeing a hardening of P&C markets again. I'm just trying to understand what you think -- what you're trying to say that. Do you mean that you expect to be able to price for that inflation? Or would you see -- expect that would lead to strengthen the market again and pricing ahead of inflation. I just want to understand those comments.

Thank you, Iain. Both questions are for Giulio.

I mean from Banca Generali Alleanza. I can tell you the [indiscernible] is going actually pretty well. We are very encouraged by the results that we're getting. And the target for 2026 are to achieve EUR 500 million of [indiscernible], which is the product is an Alleanza product, but sold through this platform of Banca Generali to achieve 15,000 current accounts. Right now, we are extremely confident that we're going to hit both targets. To your question, there was not a specific benefit for Alleanza because the benefits for Banca Generali are pretty clear. I would tell you the following. Of the EUR 500 million [indiscernible] we estimate that 40% is additional.

So because there is always an element of cannibalization. And if you ask us how much of this for [indiscernible] just replacing other solutions and how much is on top, we will say that 40% of what we sell in [indiscernible] is on top. And the second point, I was personally in the agency of Alleanza and I tell you that the conversation you can have with the clients are very different because they are really holistic. You can give more and more sort of 360-degree. I would tell you that, in my opinion, the midterm, this is going to create more of binding the customers even more. So it's a share of wallet kind of things because we can access a share of wallet that we don't have, and this is benefiting as Alleanza and then also I believe customer retention is going to be even stronger. And I saw that with my own eyes, and it was actually pretty impressive.

On the other one, on the inflation leading to the new [indiscernible]. So we will say that if inflation is going to increase, I would assume that the market is going to react. We cannot speak for others, but we can speak for us. And as Marco was saying before, our post is to always -- first is about technical profitability, making sure that we are achieving the marginality that we like to achieve. And we are even willing to a certain degree to forgive volume. And keep in mind that right now, on Motor, we have a positive balance. So from that point of view, we have even some cushion before we go into negative territory. So the bottom line is, yes, if we need to increase prices because inflation is going to go up, we are going to do that. And I tell you, that in some cases, we're already doing this, not necessarily on the motor side. I can tell you in Germany on the non-motor side, we're increasing prices in Eastern Europe. We are going to be more cautious. So we're already preparing that ratio, and then we are going to, as Marco was saying, watch the situation and act accordingly.

The next question comes from Andrea Lisi with Equita.

The first one is on P&C reserving, if you are already factoring in your reservation a level of inflation that is higher and consistent with the current market expectations. And the second question is on the rate effect that could have on the inflows in Life, we are observing that the curve is projecting a higher level of rates. So just wondering what are your expectations there? And if it is do you think that at some point, we will see a higher competition for example, govies. And very last question, if we have seen that when you [indiscernible] was quite vocal in referring to you as a potential partner and there are discussions -- potential discussions for developing partnership in both insurance and asset management, any indications that you could provide on this point on this topic would be super helpful.

Thank you, Andrea. The first question is for Cristiano. The second is for Marco, and the third one is for Giulio.

So regarding the higher infusions, so we are not seeing a specific spike in inflation versus the normal trend of serves so far. By the way, I recall you that our reserving technique embeds a prudent inflation. And as you know, the difference between inflation -- insurance inflation and CPI or CPI is different and usually, it is higher the insurance inflation. So we start already from a higher level in the spare parts, what we are monitoring most. We are not seeing it in the bodily injury -- the vast majority of the increase has happened already because of the change mainly because of judicial and tribunal rules [indiscernible] which were an inflationary factor.

So I would tell you that the huge prudence that we kept in 2025, and we are still keeping in 2026 on our current year number, coupled with the historical level of prudency in the insurance inflation projected in our reserves make us extremely confident to manage it. Our reserving level has never been so high and I think the proof of our interplay in the first quarter is a pretty much good demonstration out of that. So I can confirm you, this is pretty much stronger.

So in terms of the effects of higher rates on Life, I think it's interesting to go back to what happened a couple of years ago. So when higher rates were there and inflation then was there. We have seen that the overall portfolio of the group was pretty resilient in terms of development in that situation. So clearly, it might be that we see higher rates. And as we have seen in the past, there could be more competition, especially on the short term, investment from, for example, Italian Saver due to the issuing of more Italian debt on the short term. I would say unit linked is more linked to equity more than interest rate. And I would say protection has proven to be pretty resilient in different environment. And it's probably what is we have taken away that there is such a strong demand for protection product that this will continue to go and we'll keep on growing in a nice way. So in the way we are seeing developing in the last quarter, even in different conditions.

So I also have to say that the type of business that we do, which I remind you, it's typically multi-line. So it's traditional unit-linked protection is developed through mainly to proprietary distribution. And this is pretty resilient in different type of scenarios. We have seen that in low interest rate, we have seen in higher interest rates. So we are pretty confident that even after what happened in 2022, 2023, this is going to be the case. Consider also that until we don't see a significant increase in interest rate, what we have seen in 2023 already protect us from some of the lapses that already happened at that level of interest rate. So overall, I would say, we feel that our inflows and our life business, it's pretty, I would say, resilient in different conditions, external condition.

So your question about UniCredit, first of all, I would like also to say we're already working with UniCredit in Eastern Europe. So we have a very successful relationship there. Clearly, we have also, based on the collaboration that we have, clearly, we are always touch point with UniCredit. It's a great institution. I will say it's also if you say the metro in Milan, you are familiar between [indiscernible],. So it's easy to have a conversation with them. I think anyway, it's pretty common that the bank and the insurance companies have a conversation about what kind of cooperation we can do on the asset management side, the insurance side, but I will not read more than that it's normal that there is conversation going on. And this is not the only conversation we have.

Next question comes from Farquhar Murray of Autonomous Research.

Just 2 questions, if I may, both on Non-Life and actually mainly in elaboration on Iain's questions earlier. So you mentioned further potential pricing actions in Non-Life and you're at least partly linked them to the macro backdrop in the Middle East. So the first question is just to double check that the linkage there is predominantly coming from claims inflation. Or are there frequency perhaps even economic consequences you're keeping an eye out for there? And then second question, what are the triggers for moving to implement those pricing actions? It sounds like some [indiscernible] already gone through them.

Thank you, Farquhar. Both questions are for Giulio. .

Regarding the pricing actually because of the situation -- so we need to see first what is going to be the impact because of the land situation for the time being, we don't see inflation yet. Now according to some analysis, one might assume that default price stays up 25% or 30% over time, we might see an increase, let's say, in the loss ratio before we take any actions in motor 1% to 2%. So if this is going to happen, we're going to see this kind of increase we're going to react. But as we said before, right now, we don't see severity up. So for the time being, we are watching preparing. In some cases, we are taking actions, but because of other reasons, but we are not at the moment in a situation where claims inflation is going up.

Then I would like to highlight that on the Non-Motor side, a substantial part of our business is indexed. So from that point of view, there will be a natural, if you want, offset in the case inflation is going absolutely coming back to what we said before, we are monitoring the situation. We're going to take action case-by-case based on what we see since you're asking anywhere about the impact coming from the land situation on when because we saw some calls with other competitors. On the travel side, we don't see major impact so far. Actually, Europe persistence in total was up 15% on revenue, and this despite clearly softening, especially in Australia, but the business was very strong in America.

So for the time being, also, we have been able to more than offset the weakness in Australia because of the situation. We're going to continue to look at the evolvement on the revenue side. It's more the revenue side issue potentially on travel, but I can tell you, there may be a little bit of a headache but not anti change our delivery, not even for [indiscernible]. So bottom line for the time being, so good so far if I can add one topic, I think the phases that we went through in the last year of inflation made us learn a lot about where the first site of inflation comes up and show up. So we have a very good monitoring at the micro level of per and also going market-by-market portfolio for portfolio.

If you think about, for example, material damage, we are able to look at the different spare parts, brand by brand, portfolio by portfolio and also the aggregation of those effects into Paris. So I think this is also a good way of looking or leading indicators of where inflation might come up because, as you know, when we talk about inflation, one thing is to think about the general inflation, one thing is to think about the claims inflation, which is completely different.

The next question is a follow-up from Michael Huttner with Berenberg.

I had 2 -- you may have answered one, but I wasn't sure. So on the frequency, I think the past has been declining, but some the way you've been talking in sounds like it was flat. I just wondered if you can maybe comment. And then remind me [indiscernible], you gave us basically the kind of Q2 figure pro forma as of today. But what is the impact of Solvency II review, which comes early next year?

Thank you very much, Michael. First question is for Giulio and the second on solvency for [indiscernible]

So when we look at the efficacy in Motor, we need to adjust for Portugal because in Portugal, we are picking up some attritional -- [indiscernible] frequencies and frequency that for sure related to the weather event that we had over there. So with more Portugal, actually frequency across the portfolio is relatively stable. We see a little bit of a different one compared to last year. Last year, we saw frequency going down across the portfolio. And now we see countries where frequency is going down. But in Central Eastern Europe and Central Eastern Europe in close also Germany, we saw frequency going up. We think this is related to the winter because 2026 winter was called compared to the winter 2025. So we see a little bit of a different trajectory depending on the currency. But when we look at the total portfolio, frequency is adjusted for Portugal is basically in line with the prior period level and also consistent with our plan assumption.

Thank you, Michael. So I'm not commenting again that your already done valuation so far of the second quarter. But referring to the Solvency II review, we can confirm that we are around the 15 percentage points. The important thing is don't forget that it will come into practice at the end of January 2027. So any decision that has to be taken in beginning of 2027 will already embed this already at the end of January, which is also positive and conducive for resiliency environment and security of cash flow since I know that both of us cares a lot.

[Operator Instructions] Gentlemen, there are no more questions registered at this time.

Thank you very much for listening to our call. Of course, should you have any further follow-up questions, the Investor Relations team is at your full disposal. Have a great rest of the day. Bye-bye.

Ladies and gentlemen, thank you for joining the conference. It's now over. You may disconnect your telephones. Thank you.

Ladies and gentlemen, welcome, and good morning. Welcome to the Shareholders' Meeting of Assicurazioni Generali convened today as an ordinary and extraordinary meeting at the company's offices in Trieste Floor 7 of Balasoerlam in Piucabzi1. As provided for in the Articles of Association, I shall Chair the meeting. For the secretarial duties, I shall be assisted in accordance with Article 25 of the Articles of Association and 4 of the meeting regulations by Mr. Giuseppe Catalano, Secretary of the Board of Directors of the company. I also invite notary, Mrs. [indiscernible] to draw up the minutes of this meeting.

This year, unlike last year, the meeting is being held in a format that does not require the physical attendance of those entitled to attend. They may, therefore, participate in the meeting by granting a proxy to the designated representative, namely Computershare SAI represented here by Mr. Alberto Elia. The Board, which I Chair has, in fact, considered that the geopolitical tensions could have affected the orderly conduct of our meeting.

Furthermore, in keeping with tradition, even those who are not entitled to attend may follow the opening remarks of the Group CEO, Mr. Philippe Donnet; the Group CFO, Mr. Cristiano Borean and myself. I would, therefore, like to extend also on behalf of my colleagues who sit with me at this table, a greeting to all those who are following this event via streaming.

We believe that this is, as always, an important event in corporate communication, and we wish to enable a broad and inclusive audience of shareholders and stakeholders to follow it live. This approach is consistent with Generali's strategy, which focuses on digital development and the integration of technology into its business. It is also thanks to these tools that we seek to achieve greater engagement with the so-called retail shareholders to account for the largest segment of our shareholder base, comprising approximately 140,000 people.

The streaming service, which places Generali among the world's best in this regard, includes simultaneous translation into English, German, French and Spanish as well as Italian sign language and subtitles. At the end of our presentation, the formal part of the meeting will start. This can only be accessed by those entitled to vote who have granted the proxy to the designated representative. We will now proceed to the first part of the meeting of the preliminary formalities.

Today, 23rd of April, the meeting is held in ordinary and extraordinary session in one single call. Pursuant to Article 2369 of the Italian Civil Code, the Ordinary General Meeting is validly constituted in a single call regardless of the capital representative. And portion to the same article, the Extraordinary General Meeting is validly constituted in a single call when more than 1/5 of the share capital is represented.

In the light of the information provided to me by the designated representative, the latter holds proxies and voting instructions on all matters put to the vote for a quorum exceeding the minimum required by the applicable regulations with -- in both ordinary and extraordinary meetings as it is the 69.695% of the share capital is representative. The meeting is therefore validly constituted both in ordinary and extraordinary sessions.

We shall now move to the statements that I myself, Philippe Donnet, Cristiano Borean are addressing today to all those attending the first part of the meeting.

Dear shareholders, to me, it is a pleasure and honor to open this meeting, introducing together with the group CEO, Philippe Donnet; and CFO, Cristiano Borean, the main highlights of the latest fiscal year. These are -- there are excellent results set out in the financial statements we are presenting for your approval today. First of all, I'd like to express my sincere thanks to all the members of the Board of Directors and to our group's management team for their competence, responsibility and spirit of service.

Over the past years, their contribution has supported a period of significant growth for Generali grounded in a constructive dialogue and always focus in the interest of the company and its stakeholders. A special thanks to the Group CEO, Philippe Donnet, for his leadership in launching the Lifetime Partner 27 Driving Excellence strategy at the time of profound external change and complexity and for the significant contribution in combining industrial strength, financial discipline and long-term strategic vision.

I wish to sincerely thank all the people in Generali every day with professionalism, commitment and sense of belonging, they contribute to achieving the results of the Group and the execution of our plan. For several years, we've been operating in an environment marked by a profound shift away from the balances of the pre-pandemic period. Geopolitical tensions, which have been -- have made a dramatic return to the center of the international attention are fueling a climate of uncertainty that affects global security and the stability of supply chains and energy prices with repercussions for the real economy and daily lives of families and businesses.

Alongside challenges linked to the energy and commodities, we are equally facing significant challenges in social cohesion, climate change, demographics and technological advancement. Financial markets have so far shown a degree of resilience despite phases of marked volatility. However, instability and unpredictability remain structural factors calling for careful judgment and a long-term vision.

In this context, the very concept of resilience has taken on a deeper meaning. It is not simply a matter of withstanding difficult times, but of doing so with clarity, strategic consistency and the long-term outlook, providing reliable points of reference in an increasingly fragmented environment. Generali has once again proved that it possesses these qualities. The economic and financial results we are presenting today are the outcome of a solid and diversified business model, capable of generating value even in complex conditions such as those I have described and of playing a stabilizing role for our clients, shareholders and the communities in which we operate.

Philippe and Cristiano will explain in detail our main business development projects and the financial indicators that reflect their results. The strength of this progress has been widely and significantly recognized in the financial community.

Last September, Fitch Ratings upgraded its rating for Generali in its main subsidiaries from A+ to AA- level well above Italy's sovereign rating. This is complemented by the market's continued appreciation for the quality of our model, governance and leadership and our engagement with investors. Once again, this year, Generali ranked at the top of the Extel survey for the European insurance sector, reaffirming its leadership position in numerous categories, including Best CEO, Best CFO, Best ESG Program and Best Investor Relations Team, Best Investor Relations Professional. These achievements are part of the trajectory of a group, which by virtue of its history, scale and geographical footprint embodies a profoundly European identity.

Generali is Italy's leading insurance operator, holds top positions in the major Western European markets, and it has a significant and constantly growing presence in Central and Eastern Europe. In terms of territorial coverage and industrial solidity, this profile places the Group among the leaders of Europe's insurance sector. It is also from this European perspective that we approach our role as a financial actor fully aligned with the principles set out in the recent Letta and Draghi reports, which today serve as fundamental guidelines for the EU's economic agenda in addressing the structural loss of competitiveness by mobilizing resources, simplifying rules and strengthening market integration.

We believe, in particular, that the creation of a savings and investment union represents a crucial step towards resolving one of Europe's long-standing vulnerabilities. It's inability to retain and make full use of the vast volume of European private savings, which still largely flows to markets outside the continent. The aim is to challenge these resources into long-term productive investments that supports the real economy innovation and climate transition and the economic security of Europe. Within this framework, the European insurance sector plays a strategic role. Insurance companies are among the continent's largest institutional investors, managing around EUR 10,000 billion in assets with a natural location for long-term investment in support of the real economy.

Actually, the recently completed review of the Solvency II regulation is a move towards fully leveraging this role. The changes introduced make the prudential system more consistent with the long-term nature of the insurance sector, enabling the release of additional resources to be allocated for long-term investments from infrastructure to the energy and digital transitions and support for businesses without compromising capital strength and policyholder protection, which remain a core element of the system.

In this sense, the development of artificial intelligence is one of the most urgent priorities, representing an increasing decisive leverage for strengthening the competitiveness of the European economy. From our standpoint as insurers, AI is an essential enabler for improving productivity, service quality and risk management capabilities in line with Europe's need to bridge the technological gap and make full use of data and expertise.

Through the Lifetime Partner 27 Driving Excellence plan, Generali is investing in responsible people-centered AI across the entire value chain. From client relations to risk prevention, from claims handling to risk management with the aim of making its processes faster, more efficient and more personalized while protecting trust, transparency and the central role of human oversight.

Alongside the theme of investment is the challenge represented by the protection gap, which remains central. In many parts of the world, including Europe, there's a significant difference persists between the risks to which families, businesses and communities are vulnerable, notably climate change, health, catastrophic and social risks, and the level of available insurance cover. This gap is a structural vulnerability, which, if not addressed, could undermine the resilience of our economic systems and public finances.

In this context, the insurance plays an increasingly central role, not only in repairing damage, but above all, in risk prevention, strategic planning and strengthening of long-term economic stability, progress in big data management and AI applications. Now make it possible to develop more innovative and targeted solutions. However, this is not enough if it is not supported by public policies on prevention, territorial planning and health care protection.

This is a challenge that requires structured and ongoing collaborations between the public and private sectors. It is with this conviction that Generali has developed important partnerships over time with international organizations like UNDP and Insurance Development Forum, contributing to the development of insurance and risk finance solutions to strengthen the resilience of communities, businesses and production systems, especially in the countries that are most exposed to climate change and geopolitical crisis.

We also highlight our partnership with UNIDO launched with the EU Global Gateway program with the support of Italy aimed at strengthening climate resilience, supporting local value and promoting greater regulatory discipline in East African coffee supply chains, including parametric insurance solutions.

As it is clear from everything I have outlined so far, environmental and social sustainability is not a separate area of activity for Generali, but a strategic leverage fully integrated into the Group's industrial choices. Throughout 2025 too, this coherent approach fully aligned with our strategic objectives continue to earn strong appreciation from the market with important international recognition.

Another key pillar in our strategy is the devotion to our people in the belief that their professionalism, skills and engagement are essential drivers of resilience and in the longer-term sustainable and responsible growth, confirming Generali's commitment to its people. Over the year, we obtained top employer certification at European level and across 14 group companies. This achievement reflects a solid people strategy focused on constant upskilling, promotional diversity, equity and inclusion and adoption of increasingly flexible digital and people-oriented work models.

At the heart of the strategy lies in determination to support sustainable performance and generate benefits for all stakeholders. Investments in upskilling in the development of responsible leadership and in the digitalization of our internal processes supports the evolution of the Group and of our people, strengthening our ability to successfully navigate and embrace transformation in a rapidly changing world.

Meanwhile, Generali continues to act as a responsible actor in the communities in which it operates in this area. The Human Safety Net successfully continued its work in helping people in vulnerable situations and supporting the integration of refugees for whom it also organizes professional and business training programs. In 2025, the foundation's initiatives involved more than 515,000 people across 25 countries, bringing the total number of beneficiaries since -- to approximately 1.3 million since the beginning of the foundation 2027. This commitment reflects Generali's concrete vision of itself as a long-term partner for people and communities.

Dear shareholders, before I close, I would like to say a few words about the importance the company places on its relationship with you. This relationship has been built over time on trust, transparency and continuous engagement. It is one of the defining features of Generali's history, and the responsibility that guides our long-term decisions. In this framework, this Annual Shareholders' Meeting plays a central role in the life of the company. It is a primary forum for all shareholders to exercise their rights and dialogue with the company's governing bodies. And one of the pillars of our governance model founded on participation, balance of powers and protection of the interest of all our stakeholders.

This year, the meeting has been called upon to renew the Board of statutory auditors. It is an essential body in our governance structure and is entrusted with a key role in overseeing operations, ensuring legal compliance and guaranteeing the effectiveness and integrity of our administrative action in the interest of the company and its shareholders.

I would like to thank the outgoing Board for having carried out its duties with professionalism and integrity in accordance with the roles assigned to the various actors in corporate governance. I would like to emphasize that the attendance in the meeting in all forms provided, whether in person or through the proxy granted to the designated representatives, a mechanism we have strengthened in the last few years as a direct contribution to the soundness and credibility of the Group's governance system.

Once again, this year, participation is also supported, and I would like to express my appreciation for the success of the shareholders' club, and it is aimed to facilitate engagement with the private investors who have chosen to invest in our company, offering them access to many services that are often little known that a large group like Generali provides. The club has reached over 2,000 members in just over a year, and I hope it will continue to grow.

Lastly, let me say a few words about Trieste, a city deeply connected to Generali's identity, history and European vocation and traditionally the venue of our Annual Shareholders' Meeting. Trieste is where the Group was founded and where it continues to invest with a long-term vision combining grades in future. A clear example of this is the renovation of Palazzo Carciotti, the original headquarters of Assicurazioni Generali will be brought back to life as home of Agorai, the ecosystem promoted by Generali together with public and industrial and academic partners to develop a European hub of research, training and applied innovation in data science and AI, in line with the challenges I described earlier.

In conclusion, the journey I have described today demonstrates Generali's ability to respond to a complex and constantly evolving environment without losing its clarity of vision, discipline in execution and its sense of responsibility. In a time marked by a change in uncertainty, we believe that one of the roles of a major European insurance Group is to offer stability, reliability and a long-term perspective. We will continue to work with them on the basis of this approach, fully aware of the role Generali plays for its clients, its shareholders, its people, and the communities in which it operates. We will do so by valuing our risks and looking to the future with confidence and keeping at the heart of the principles of solidity, sustainability and dialogue that have always distinguished our group.

Thank you for your attention, for your participation to today's meeting and for your continued trust in Generali. I now give the floor to Group CEO, Philippe Donnet.

Thank you, Mr. Chairman. Dear shareholders, good morning, and thank you for attending this meeting also on my own behalf. Even when held virtually, the shareholders' meeting represents a key moment of good governance and transparency, offering you, our shareholders, the opportunity to exercise your voting rights. And it is always a great pleasure for me to be part of this. I would also like to thank Chairman Sironi for his kind words regarding myself and our entire management team. This theme is fully reciprocated, and we are truly grateful to him for the leadership and the balance he has shown in guiding our Board of Directors.

I begin this report by emphasizing that the year 2025 was once again a truly positive year for the Generali Group. In a highly complex global environment, we have successfully continued on our path of sustainable growth and value creation for you and for all of our stakeholders. I'm deeply proud of this, and I thank all of our colleagues and agents for making this possible through their hard work and their dedication.

As you know, last year, saw the launch of the Lifetime Partner 27 Driving Excellence strategic plan, which will guide our group until 2027. The plan has 3 priorities: excellence in customer relations, excellence in core competencies and excellence in the Group's operating model. It is also based on 3 fundamental elements: our people, artificial intelligence and data; and finally, sustainability.

In terms of targets, having achieved and exceeded all the objectives of the previous strategic cycles, we have set ourselves even more ambitious goals, a compound annual growth rate in earnings per share of between 8% and 10%, over EUR 11 billion in cumulative cash generation, a compound annual growth rate in the dividend per share of over 10%. The financial performance recorded in 2025 confirms that we had got off to a good start.

As always, our Group Chief Financial Officer, Cristiano Borean, will walk you through all of the figures in more detail, but I would like to give you a preview of the key highlights from the financial statements that you have been asked to approve today. Operating profit and normalized net profit at EUR 8 billion and EUR 4.3 billion, respectively, have once again reached record levels for the Group.

Also, the normalized earnings per share has seen a significant increase of 16.2% compared with the previous year, standing at EUR 2.85. This strong growth was driven by the excellent performance of the non-life business, characterized by a high technical profitability and a 20% increase in the segment's operating profit. This was made possible by our disciplined strategic focus and by the numerous technical measures that we have implemented in underwriting, in cost containment and risk and claims management.

We will, of course, continue along this path, focusing on portfolio quality and operational efficiency, not least through the increasingly widespread use of artificial intelligence, a topic I will discuss shortly.

In the Life business, net inflows of EUR 13.5 billion placed us at the top of the European sector, confirming our continental leadership in this line of business. I would like to emphasize that this strong inflow has been driven by the business lines, in which we are investing most heavily, pure risk and health, hybrid products and unit-linked. Over the past 10 years, we have transformed our Life portfolio to optimize it to make it less exposed to market volatility and in order to increase value creation. These results confirm the success of this process.

Finally, Asset Management has strengthened its growth trajectory. Thanks in part to the contribution of Conning and its affiliates, the segment's operating profit recorded a strong growth compared to the year 2024, with an increase by 7.5%, reaching EUR 662 million. The same applies to revenues, which exceeded EUR 1.6 billion with an increase of 12.6%. Assets under management at Generali Investments Holdings reached EUR 712 billion out of a total of EUR 900 billion managed at group level.

When 10 years ago, we decided to make asset management a strategic business for the long-term growth of our company, the total assets we managed on behalf of third-party clients were less than EUR 50 billion. Today, they stand at EUR 384 billion, of which EUR 273 billion is within the asset management scope alone. This figure, together with the more than EUR 16 billion in net inflows recorded last year testifies to the excellent quality and variety of the offering we are able to provide to our clients.

The performance recorded in 2025 was also made possible by the acquisitions made in recent years, and the contribution of all these companies is set to increase as their respective integration phases are completed. In the insurance business, the completion of the legal integration of Liberty Seguros, the Group's most significant acquisition of the past decade, enables us to further strengthen our leadership in Europe. Growth also continued in the main Asian markets.

In China, this resulted in the full acquisition of the P&C Generali China Insurance Company Limited. We were the first foreign insurer to acquire full control of a local non-life company. And this demonstrates our ambitions for growth in the world's second-largest market in terms of premiums.

The partnership with Central Bank of India will, in turn, allow us to consolidate the brand's positioning and distribution capabilities in another rapidly expanding market such as India. As regards asset management, I have already mentioned Conning, whose integration is proceeding according to plan. In addition to this, last October, we completed the acquisition of a 77% stake in the U.S. firm, MGG Investment Group, which is key to further expanding our investment expertise in private markets. These excellent results and our extremely solid financial position enable us to propose a dividend of EUR 1.64 per share, a significant increase of 14.7% compared with the previous financial year. We are also putting forward for your vote, a new EUR 500 million share buyback program to be launched later this year once all necessary authorizations have been obtained.

We are, therefore, continuing to demonstrate in concrete terms, our strong commitment to ensuring you receive a stable and growing return over time. As evidence of this, the dividend per share for the 2015 financial year, the last before I took up my post as Group CEO in March 2016 stood at EUR 0.72, less than half of the current figure. At the same time, our share price has almost tripled in value and is now very close to its all-time highs. In the year 2025, it recorded a 30% growth, enabling us to outperform the European insurance sector index. We are, of course, very proud of these figures, which are a testament to the quality of the work carried out and reflect the great confidence placed in us by the financial community and all of you, our shareholders.

As Chairman Sironi has already pointed out, this is reflected in the excellent ratings from the leading rating agencies, which highlight our strong capital base, our robust operational performance, our highly favorable business profile and our sound approach to risk management. We are equally pleased with the hard work carried out to improve our product offering in both business lines, also the effectiveness of our distribution channels and the overall customer experience. As you know, our commitment to them is summarized in our ambition to be their life partner. And we continue to work tirelessly to do that in the best possible way every day.

In 2025, we achieved a customer retention rate of almost 90%. Furthermore, we maintained our leading position compared to our main competitors in terms of the relationship Net Promoter Score, an index that measures their satisfaction, customer satisfaction. In an increasingly competitive sector such as today's insurance industry, it is absolutely vital to maintain customer trust and gain an ever deeper understanding of all their needs and desires.

Striving for excellence in customer relations means utilizing all the tools and technologies at our disposal, including artificial intelligence and data. As mentioned, this is one of the 3 strategic pillars of our plan, thanks to the opportunity that AI offers us in every area of our business. We are working tirelessly on this. And I'm truly impressed by the quality of the results our dedicated teams are already achieving.

To give you a few examples in the year 2024, we began a research collaboration with MIT in Boston aimed at studying practical applications where AI can offer us competitive advantages. The collaboration is progressing rapidly with 3 high-impact use cases now nearing completion and others already planned for the coming months. In addition to this, just 2 months ago, we announced Generali Cortech, the new software factory that will enable us to accelerate our technological transformation in the insurance sector by making extensive use of AI. AI is also fundamental to the optimization of our internal processes and is already transforming the way we manage claims and complaints.

Finally, given the excellent results already achieved, we have increased our estimates of the expected benefits from implementing AI from EUR 300 million to EUR 350 million by the end of 2027. I will conclude this overview by adding a brief comment on the Agorai Innovation Hub. Work with all the partners involved in this important initiative is progressing very positively and has the potential to make a truly significant contribution to the development of AI at both national and European level.

And for the other two cornerstones of our plan, I'll start with our commitment to our people. In 2025, we continue to invest in training initiatives, a hallmark of Generali to promote our employees' ongoing professional development to strengthen their key skills for the future, and thereby provide tangible support for the achievement of our strategic objectives. This commitment helps to strengthen Generali's position as an ideal employer and is also recognized through external certifications such as the top employer certification, which we achieved this year at European level and across 14 group companies. We are also particularly pleased with the exceptional response to the latest Global Pulse survey 2025, in which 89% of our colleagues worldwide took part.

The index measuring their level of motivation and active engagement with the group and its results reached 85%, the highest figure in the survey's history, well above the relevant market benchmark. These figures reflect our people's strong desire to shape Generali's future together.

Finally, I would also like to mention the great success of participation in We SHARE 2.0, the second edition of the share scheme reserved for Group employees. Launched in 2023, this initiative has seen the participation of over 23,000 colleagues in more than 30 countries and has also been recognized internationally for its innovation and originality. Through We SHARE, we promote our people's involvement in achieving the Group's strategic objectives by recognizing the value created. We considered it very important to continue along this shared path in the coming years, which is why we are today putting the approval of the third edition of the scheme to your vote.

Finally, looking at sustainability, we are very pleased with the progress made against the specific targets of our strategic plan. The results we achieved in 2025 confirm that promoting social resilience and supporting the green transition are not only the right choices, but also drivers of sustainable and profitable growth. It is particularly significant that our leadership continues to be recognized internationally. For the first time, we have been included in Time Magazine's ranking of companies that successfully integrate sustainability into their business model, whilst the Newsweek has recognized us as one of the greenest companies in the world.

At the same time, as the Chairman has already mentioned, we have continued our work as a responsible corporate citizen, playing an active role in public-private partnerships across numerous sectors. We remain convinced that these collaborations are a fundamental tool for tackling the major transformations of the present, and we will continue to support with our resources and our expertise, the development and resilience of communities and regions to build a more inclusive and sustainable future.

In conclusion, what we have achieved over the past year strengthens our confidence and fuels a solid sense of optimism regarding the challenges and opportunities that lie ahead. The strength and consistency of the results we have achieved confirmed -- confirm today that we are executing our plan with the utmost discipline, continuing to create sustainable value for you, our shareholders, and for all our stakeholders.

2026 is the pivotal year of the Lifetime Partner 27 Driving Excellence strategy. And we, therefore, mark a crucial turning point towards its completion and the achievement of all of our objectives. We will continue to deliver on our promise to be a lifetime partner for all our customers every day. And we will continue to operate in a world characterized by increasing uncertainty and geopolitical tensions. But it is precisely in the most critical moment that a great insurer and asset manager truly makes a difference. We feel the honor, and the responsibility that come from being part of a great Group with a history spanning 195 years. And this makes us even more motivated to do our work at best.

I would like to express once again my gratitude to our entire extraordinary management team and to all of our colleagues and agents who are the heart and soul of Generali and to you, our shareholders, for your trust and your active involvement, which are essential to the company's growth and development. Thank you for your attention.

I will now hand over to our Group Chief Financial Officer, Cristiano Borean.

Thank you, Chairman. Thank you, Philippe. Good morning, everyone. As usual, in this page, I'm presenting to you the main performance of the Group and the parent company, Generali. The financial statements we are submitted for your approval today. As already anticipated by Philippe, despite a complex global context, in 2025, Generali achieved excellent results, and it confirms the outstanding start of the Lifetime Partner 27 Driving Excellence strategic plan.

Gross premium written reached EUR 98.1 billion, increasing by 3.6%, thanks to the significant growth in P&C segment. Gross premium -- written premiums in Life grew to EUR 61.9 billion, plus 1.4%, driven by traditional savings and protection and earth lines. The traditional savings line recorded a strong increase, especially in Asia, while protection and earth line grew in most countries in which the Group operates. Hybrid and unit-linked products recorded a slight decrease, reflecting the comparisons with a strong financial year 2024 during which targeted commercial actions were implemented to support the inflows.

P&C gross premium -- written premiums grew significantly to EUR 36.2 billion, plus 7.6%, thanks to the positive performance of both business lines. Non-motor line rose by 7.3%, while motor line by 7.5%, achieving widespread growth across all the main areas in which the Group operates. Excluding the contribution from Argentina, a country affected by hyperinflation, the motor line premiums would have increased by 5.7%.

Best-in-class Life net inflows rising to EUR 13.5 billion, 42.5%, mainly driven by protection and airplane and unit-linked and hybrid lines recording positive net inflows, respectively, at EUR 4.5 billion and at EUR 6.6 billion, in line with the Group's strategy. Net inflows of traditional savings line rose to EUR 2.4 billion, minus EUR 312 million at the end of 2024, thanks to the development in Italy, Germany and Asia. The Group's total assets under management grew significantly to EUR 900 billion, 4.3% increase, thanks to positive inflows and the contribution of recent acquisitions.

Third-party assets under management reached a record level of EUR 384 billion. The results confirm the excellent group performance with a record operating results in continuous growth to EUR 8.804 billion (sic) [ EUR 8.004 million ], 9.7% increase, thanks to the positive development of Life, 4.3%; P&C, 20% and Asset and Wealth Management, 1.5% segment, reflecting the diversification of profit sources. The new business margin on present value of new business premiums stood at 5.66%, 0.25 percentage points, mainly reflecting more favorable product mix and features.

The undiscounted combined ratio continued its very positive development to 94.3%. It was 95.9% at the end of 2024. This benefited from the improved undiscounted current year attritional loss ratio and lower impact from natural catastrophe, partially offset by a lower contribution from prior year's development. The expense ratio increased to 29.4%, 0.6 percentage points. More than half of this increase was due to pure accounting effects, partly reflected in higher acquisition expenses despite lower administration expenses. The operating result of Asset and Wealth Management reached EUR 1.194 billion, mainly driven by the asset management result, which increased by 7.5% to EUR 662 million.

The contribution to the operating results of Banca Generali Group equal to EUR 532 million minus 5.1% over the previous year reflects a lower contribution from performance fees. The operating results of the holding and other businesses was minus EUR 610 million. It was minus EUR 536 million at the end of 2024, mainly resulting from the payment of a one-off excess tax related to the closure of a foreign entity. Lower intra-group dividends and increasing operating holding expenses, also due to costs related to projects defined in the new strategic plan.

The nonoperating results amounted to minus EUR 1.641 billion. It was minus EUR 1.255 billion at the end of 2024, mainly due to higher restructuring costs and a lower nonoperating investment results. The latter was mostly a reflection of the capital gain from the disposal of the key to Assicurazioni in 2024 and the exchange rate impact on certain U.S.-denominated investments. The net results amounted to EUR 4.172 billion. It was EUR 3.724 billion at the end of 2024. The adjusted net result reached an all-time high of EUR 4.315 billion, increasing by 14.5%. This was primarily thanks to the improved operating results, which benefited from increasingly diversified profit sources.

The earnings per share adjusted grew to EUR 2.85 with a 16.2% significant increase driven by the strong underlying business performance and the positive effect of the EUR 500 million share buyback executed over 2025. The Group confirmed its extremely sound capital position with the solvency ratio at 219%. It was 210% at the end of 2024, thanks to the sound contribution of normalized capital generation and the positive market variances. The Group's shareholders' equity increased to EUR 32.64 billion, plus 5.5%, attributable to the net result of the period and the issuance of the perpetual bond classified restricted Tier 1, EUR 5 billion considered equity instruments. This positive effect is partially offset by the 2024 dividend and the purchases of own shares in 2025.

Net holding cash flow was EUR 3.762 billion. It was EUR 3.761 billion in 2024, especially thanks to the growing remittance, primarily driven by recurring components. Emphasizing the solidity of our cash and capital contribution, both an increase in the dividend per share and a share buyback plan to be launched in 2024 will be submitted for your approval today, the latter also subjected to the relevant regulatory approvals.

In the second part of the speech, I'm going to outline the main economic and financial indicators of the parent company. The gross premium written amounted to EUR 7.223 billion, up by 15.4%. The increase was driven in particular by the significant growth in Life segment premiums, 53.1% attributable to the new reinsurance acceptance from the French subsidiary in Generali.

The gross premium -- written premium in the P&C segment also rose, supported primarily by the positive performance of direct business. The net profit for the period amounted to EUR 3.550 billion, down compared to the previous year, minus 4.7%. This performance is driven by the impact from the closing of certain derivative positions opened for group risk hedging purposes as well as the depreciation of certain balance sheet items due to exchange rate movements. We also recall that in 2024, a one-off gain was recorded from the disposal of Tua Assicurazioni.

The shareholders' equity stood at EUR 19.623 billion, up by 2.9% as a result of the profit for the period, partially offset by the 2024 dividend and the purchases of own shares in 2025. The total assets reached EUR 70.772 billion with a growth of 22.8%. Net technical reserves increased to EUR 24.288 billion, EUR 11.702 billion in 2024. In the life, this increase primarily reflects the new reinsurance acceptance from the Generali V, as I said before. The growth in the P&C segment reflects the development of reinsurance accepted directly by the parent company within the global corporate and commercial segment and the contribution of the Luxembourg branch.

External debt amounted to EUR 11.3 billion, plus 4.5%. The change accounts for a temporary effect resulting from debt refinancing activities.

Finally, the solvency position is confirmed as sound at 268.6%. It was 269.7% at the end of 2024. As Philippe already mentioned, the dividend we propose for your approval is EUR 1.64 per share, an increase by 14.7%, resulting in a total maximum paid out of EUR 2.480 billion. In addition, we are submitting today for your approval a share buyback of EUR 500 million, also subject to the relevant regulatory approvals. This confirms the Group's continuous focus on increasing shareholder remuneration, supported by very positive results and a strong cash and capital position.

Finally, the results achieved in 2025 confirmed Generali's excellent performance with further growth in premiums, thanks to the significant growth in our P&C segment and best-in-class life net inflows, record operating and adjusted net results, an extremely sound capital position and growing cash generation.

Thanks to all this and confirming the Group's commitment to continued growth in shareholder remuneration, we are submitting for your approval a proposal for a double-digit growth in dividend per share and a share buyback of EUR 500 million. These excellent results increase our confidence in achieving our strategic targets. We continued a strong focus on the implementation of our ambitious Lifetime Partner 27 Driving Excellence strategic plan.

Finally, I also want to address all our people for the commitment, dedication and heart shown again in 2025 today, who are the true strength of our Lion and their families. I express my most sincere thanks. Thanks for your attention. I will now give the floor to Chairman Sironi.

I would like to thank my colleagues for their contribution. This brings the first part of the assembly to a close. I would like now to thank everyone who has been following our meeting via live stream. Before moving on to the second part of the meeting, which is reserved for authorized participants only, I would like to share a video with you about the one tree per shareholder program launched in 2022. This program combines participation in the general meeting with a concrete act of sustainability, the planting of the tree for each participant.

Since then, almost 14,000 trees have been planted, thanks to the shareholders, who year after year, have turned their voice into tangible gesture. This year, too, a tree will once again be planted for every shareholder, every shareholder present at the general meeting, of course, transforming a small individual gesture into a great collective act of environmental regeneration. Thank you for your attention, and goodbye.

[Presentation]

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Generali Group Full Year 2025 Results Presentation. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Fabio Cleva, Head of Investor and Rating Agency Relations. Please go ahead, sir.

Hello, everyone, and thank you for joining our Full Year 2025 results call. Here with us today, we have the Group CEO, Philippe Donnet; the Deputy Group CEO, Giulio Terzariol; the Group General Manager, Marco Sesana, the CEO of General Investments, Woody Bradford; and our Group CFO, Cristiano Borean.

Before opening for Q&A, let me hand it over to Philippe for some opening remarks.

Thank you, Fabio. Good afternoon to all of you, and thank you for joining us today. These results mark a successful first year of our strategic plan, Lifetime Partner 27: Driving Excellence. I'm very pleased by the strength and consistency of our performance. This clearly demonstrates that we have the right strategy, that we are executing it with total conviction, and that we are generating value for our stakeholders. We are also continuing to reinforce our already strong balance sheet, and this is going to be even more important in a world of greater geopolitical uncertainty. Furthermore, these numbers reflect the key initiatives being rolled out by our expert teams across business lines and geographies with hands-on guidance from head office and from the fantastic management team that presented the plan with me last year and that is here with me today, Cristiano, Giulio, Marco, and Woody.

I would like to share with you five key messages which underline the strength, quality, and momentum of our results. First, the group has delivered a very strong performance in 2025. We achieved a record operating result of EUR 8 billion with a 9.7% increase year on year. Our adjusted net result exceeded EUR 4.3 billion, also reaching a new record high. This translated into adjusted earnings per share growth of 16.2%, well ahead of our 8% to 10% compound annual growth rate target. Thanks to this strong performance, we will propose a dividend of EUR 1.64 per share at our upcoming Annual General Meeting on the April 23rd.

This is almost 15% higher than last year and fully in line with our commitment to grow the dividend per share by more than 10% per year over the planned horizon. When I took the role of Group CFO, the dividend per share of Generali was EUR 0.80 EUR, and I'm very proud that we more than doubled it since then. We will also propose a EUR 500 million share buyback, reflecting our strong capital position. We will implement it this year once we receive the relevant approvals. All of these highlights our clear commitment to profitable growth, disciplined capital management, and increasing shareholder remuneration. My second message is about the excellent performance of our property and casualty business. Excellence in our core capabilities is one of our three key strategic priorities, and it translated into a 20% increase in property casualty operating result.

Such strong growth clearly demonstrates the positive effect of our disciplined strategic focus and of the many technical actions we have implemented in the last 18 months across pricing, risk selection, pruning, and claims management optimization. These actions enabled us to achieve a very strong underlying technical profitability with a 1.6 percentage point improvement in our undiscounted combined ratio. This was achieved together with very prudent reserving. Going forward, we have three key priorities in property casualty. One, we will further grow our non-motor book to shift our mix towards products and business lines with higher underlying profitability. Our franchise is very well positioned to capture growth opportunities in the countries in which we operate. Two, we will concentrate on preserving our excellent loss ratio in our key geographies, ensuring it is resilient across the cycle.

We will also continue to execute the turnaround in Switzerland and Genertel in Italy, as well as the successful integration of Liberty Seguros, which is proceeding very well. And three, we will improve the expense ratio through efficiency and productivity, supported by our widespread implementation of AI and automation across the insurance value chain. My third key message is on Life. Net inflows rose to EUR 13.5 billion, the highest level seen across the European insurance industry. This reflects the attractiveness of our product offering, the effectiveness of our distribution, and the significant investments we have made to improve customer experience. Our retention rate in 2025 was close to 90%. We have extremely loyal customers because they trust us, and they like the services and products we provide.

Our preferred business lines drove most of these inflows, with EUR 4.5 billion coming from Protection & Health and EUR 6.6 billion from Hybrid & Unit-Linked. We achieved this while fully maintaining our underwriting discipline with the share of capital light products in our new business production at a very high 84.5%. The new business margin improved throughout the year from 4.75% in the first quarter to 6.88% in the fourth quarter. This led to a full-year new business margin of 5.66%, close to our 6% target for 2027. The interest rate environment is currently very favorable for the Life business, and our product offering clearly appeals to customers.

This gives us confidence in our ability to continue to deliver growth in new business value, leading to a higher contractual service margin and a growing life operating result. It is worth underlining the depth of the transformation we delivered in our live book. 10 years ago, this was primarily a spread business with high guarantees, exposure to capital market fluctuations, and high capital intensity. Today, almost 80% of Life new business comes from Protection and Unit-Linked activities that are most closely aligned to property, casualty, and asset management in terms of profit signature. When it comes to traditional life, we now have a running yield on our portfolio that is 220 basis points above our guarantees.

This translates into a profitability that comes more and more from fees and underwriting, and a business that is capital light, less reliant on financial markets, and much faster in converting results into cash. I'm very proud of this transformation and the structural and sustainable improvement in the quality of our earnings. My fourth key message is on asset management and wealth management. Today, the group has EUR 900 billion of assets under management. We manage around EUR 385 billion of those on behalf of third-party clients. A decade ago, this figure accounted for less than EUR 50 billion. In 2025, Asset and Wealth management generated 15% of our overall operating result, meaning the contribution has more than doubled since 2016.

I'm particularly pleased with the strong performance results we have delivered for our clients and the underlying trend in net flows for asset management, which rose to over EUR 16 billion last year, the highest figure we have ever recorded. Asset management generated over EUR 1.6 billion of revenues, of which over EUR 600 million came from external clients. Its operating result is up 7.5% on a year-on-year basis. This also reflects strong performance fees generated across a range of different asset classes, which in turn reflect our expanding and solid investment capabilities. We are very positive about our prospects for 2026 and beyond, boosted by several new initiatives, including the acquisition of MGG, which we concluded last October. We also continue to benefit from the synergistic relationship between our life and asset management businesses.

As evidence of 2/3 of 2025 Unit-Linked inflows are managed by our internal teams. In Wealth management, Banca Generali once again recorded very strong flows of EUR 6.8 billion, surpassing EUR 110 billion of total assets. These results are excellent, and you can expect additional performance in 2026 from the integration of Intermonte and the Insurbanking initiative with Alleanza Assicurazioni. My fifth and last message is about our strong progress across the three strategic foundation of our plan. These are people, artificial intelligence and data, and sustainability. Capturing the opportunities that AI, digitalization, and automation offer, including agent productivity and enhanced customer experience, is a key priority. We are working relentlessly on this, and I'm truly impressed by the results our AI team is bringing.

The research collaboration we begin in 2024 with MIT is advancing rapidly with three high impact use cases nearing delivery and new streams already on track for this year. Another proof of our strong focus on innovation and technological transformation is Generali Core Tech, a new AI-powered software factory for our insurance activities that we announced last month. At the same time, we are continuing to optimize our internal processes. For example, our AI initiatives are truly transforming the way we manage claims. This gives Generali the strongest possible foundations for the years ahead, while already delivering tangible financial benefits today. When we developed our Lifetime Partner 27: Driving Excellence plan, we targeted around EUR 300 million of efficiency gains, thanks to AI implementation.

Execution is progressing ahead of our original assumption, giving us the confidence to raise our 2027 ambition to more than EUR 350 million. Our significant investment in AI across the entire insurance value chain will benefit Generali beyond our current plan horizon. In fact, we see clear upside potential to grow the top line, designing better products, delivering them faster, growing our customer base, increasing agents' productivity and gaining further efficiency.

Moving to sustainability, we set very ambitious targets as part of our current plan, and we are very pleased with the progress achieved in 2025. Our results confirm that championing societal resilience and supporting the green transition are not only the right choices, they are also drivers of sustainable and profitable growth. We are proud that our leadership continues to be recognized, and we remain fully committed to sustainability-driven excellence and long-term value creation.

In conclusion, these results confirm the excellent start of our ambitious strategy. We are well on track against the planned trajectory, and we see clear growth opportunities for our businesses. We are fully focused on creating even greater value for all our customers as their lifetime partner and for our shareholders. We also continue to reinforce our balance sheet as an important area of strength for the group with prudent reserving, conservative asset allocation, low leverage and focus on cash generation. We closed 2025 with an extremely solid Solvency II ratio, and this will go up by 15 additional percentage points with the upcoming Solvency II review. I believe this is very important also considering the current macro environment.

We are fully focused on delivering and potentially exceeding our Lifetime Partner 27: Driving Excellence targets, and we are confident in our ability to do it once more, just as we have done for our three previous strategic cycles under the leadership of this management team, which I thank for the outstanding work. Thank you for your attention and for your interest in Generali, and we are now happy to take all your questions.

[Operator Instructions] The first question is from David Barma of Bank of America.

First two questions are on P&C, please, and somewhat related, one on more top line and one on expenses. On the expense ratio, we've seen a tick up in the acquisition cost, I suppose due to a stronger growth in non-motor. You're now, I believe, almost 100 basis points above your planned starting points. So can you explain how you see the bridge from here to your 2027 targets of a flat expense ratio, please?

And then secondly, on the underwriting, you've already pretty much reached your underlying loss ratio targets. So can you talk about how you plan to balance further pricing versus volume growth in 2026, please, and whether in motor particularly you wish to further improve margins?

And then lastly, on cash, could you give us the level of free cash at the end of the year, please, and what the underlying level of remittances was in '25?

Thank you very much, David. The first 2 questions on the P&C expense ratio and on the loss ratio moving forward are for Giulio, while the third one on the cash is for Cristiano.

Thank you, David. On your first question about the expense ratio, I would say the following. First of all, we didn't have a target for the expense ratio. Actually, we had a target for the GEX ratio and then for the cost income ratio. When we look at the GEX ratio, the improvement that we wanted to achieve in the plan over the three years was 150 basis point. I think you can see that in the comments, there is an improvement, let's say of about 50 basis point in the GEX ratio. So from that point of view, things are going in the right direction. What we see, however, is an increase of the other acquisition expenses.

This is part due to mix, but that's also part due to the point that, the incentives over the premiums are going up. Part of it is a consequence also of the fact that the profitability of the business getting better. To this point, there are incentives related to the profitability of the business. This said, we are not 100% happy, honestly speaking, with the development. So as we discussed already a few times, we're going to put more focus moving forward also to the development of the expense ratio overall. We are very confident that we are going to get the GEX ratio down as we discuss. I can tell you we see that also in the plan for the next two years.

Now we're going to put more focus on making sure that also on the acquisition expense ratio, we're going to see stability. So once we get stability on that part of the expense ratio, and we have the improvement on the operational expenses, then we should see in the future a picture where you're going to see a decrease of the overall expense ratio. That's something where we're going to put some more emphasis moving forward, because so far our point of attention was more on the GEX, and on that we are delivering definitely according to what we said last year.

On the other point about the underwriting and how we see the development in 2026, I can tell you that, starting from non-motor where we have a very good combined ratio, we see stability somehow. So we are going to continue to have a pricing, which is following inflation. We know that a lot of business has indexation. So from that point of view, you can expect stability. As always, we are going to do pruning. We see portfolios where we need to do some pruning, so that's a normal activity that we do. You can imagine that we are going to produce high quality results in non-motor.

When we come to the motor side, on the one side, clearly we are going to see an increase in average premium, which is lower compared to what we saw in 2025. But we still expect to see an average increase in premium, which is ahead of inflation. So just to give you an idea, we expect the average premium to increase by 4% to 5% in 2026. The inflation or the risk premium this year was 1.6% increase. Even if you assume lower frequency, and maybe we see something higher frequency compared to what we saw this year, and you look at our risk premium evolution in 2024, then you get to 3%.

So even if you take a situation in 2026 similar to 2024, we still have a spread of about 1 to 2 percentage points that we can realize on the motor side. So from that point of view, we would expect to see still some improvement in the motor combined ratio compared to what we have right now. We should not forget that the motor profitability is now very strong. So when you normalize the combined ratio motor for, you know, Nat Cat and, you know, a more, let's say, higher level prior period, we are getting to a combined ratio on discounting motor, which is slightly below 96% already. From that point of view, I would say very strong results and there is still some room for improvement as we go into 2026.

Hi, David, it's Cristiano. So on the cash at year-end '25, the stock of cash in all the accounts is EUR 5.1 billion, but don't forget that there are elements of treasury, which we don't account because they're part of the cash pooling. So the real available cash is EUR 2.9 billion, which should entail both capabilities to do M&A on one side, as well as the amount to be refinance of debt, which was a prefinanced. It is also part of this number together with a usual precautionary cash buffer that we want to take in order to manage any potential unexpected level. The underlying remittance trend. I would say that the recurring component is likely a growth of the remittance from '25 to '24.

When I speak about from '25 to '24, I'm always referring to the cash view, which means that you need to go one year behind, when you look at what is the actual dividend or remittance stemming from is slightly above 4% on the recurring component. So in 2025, we collected the dividend from the results of 2024, which we're having such level of growth. Going forward, there is good level of growth, which is expected, which is consistent with on one side the business as well as the confidence on getting above our minimum level of EUR 11 billion of accumulated net holding cash flow, that we announced last year. So on that we are for sure confident because the first year start is ahead of it and the momentum is keeping.

Next question, please.

The next question is from Will Hardcastle of UBS.

The first one is just on the solvency and debt leverage. It's a bit of a conundrum, essentially. It's exceptionally strong. It's a good one to have, and there's low debt leverage. I'm assuming that's not at the most capital efficient level at the moment. I guess, can you sort of think about some of the dynamics that you might be thinking about in that regard? That'd be helpful.

The second one is big picture. Can you discuss if you've thought about or thought into how credible the recently discussed large language model distribution models could be? And could you see this changing distribution in European marketplaces essentially becoming a bit more price comparison website like, and how you think Generali would be positioned if that's a major impact?

Thank you very much, Will. The first question, of course, is for Cristiano, while the second one is for Marco.

Hi, Will. Yes, I think that not only the level of solvency is high, what matters a lot to me is the sensitivity of solvency getting really, really down. And I give you just proactively an example. You remember in 2018, when we presented 2019-2021 plan, we were showing some stress tests we were making on our group solvency. On those same level of hypothesis, now we basically halved the sensitivity of the group, which is getting to a very good level of confidence in the capability to project and diversify both the profit and the capability to have the remittance.

Why I'm saying this, because clearly, as Philippe was mentioning, the 15 to 16 percentage points of improvement of solvency from the Solvency II review clearly upon regulators' approval, we will give further leeway about that. For sure the question is and has been tackled. We have a very low level of leverage, which is giving us strategic flexibility in capturing all possible opportunities on one side, and on the other side, gives a lot of leeway also to manage down the cost of debt, because not necessarily you need to put subordinated debt going forward. So we have this level of flexibility. We are pretty pleased, in any case, by the level of spread that we can achieve on our issuance because of this very low level. We are managing this balance.

But for sure, as you correctly pointed out, we are pretty much in a very good sweet spot on flexibility and cost of future debt, also on funding, for future growth, which is there. The solvency will also be put at work through, on one side, investments, as well as business growth. So with this level, we can also internally fund the solvency -- through solvency our business growth, which is good. And you have seen it is already happening in our capital generation, which has some strength in solvency capital requirements. It is really a growing recurring investment and business result going forward, coupled with strategic flexibility.

I will give you an overview starting from the speech that Philippe just gave. So we are really working on artificial intelligence use cases. We are working to introduce new way of using artificial intelligence through agentic AI. So we are working on every part of our value chain or in particular also on distribution. So this is really important because I think it's always very important to give a context to what we are doing, as the technology that we talk about is at the early stage, and we don't see completely all the usage that can come up.

So it's important to stay in the game and experiment and see what are the potential development of the technology using several provider, and I would say making sure that we have an intelligent application in terms of process review and efficiency gains. Now, when we talk in particular of LLM and distribution, I would go back to what we discussed during our strategic plan. And there are a couple of points that are super important. So the first is, we do see application in artificial intelligence and LLM that can boost the productivity of our distribution. So we see a huge potential for our distribution to do more, to be better, to increase the time spent with the client.

So really reduce the back-office activity and improve the quality and the amount of time spent with the client. The second point that it's always important to mention is that we are working to make sure to give the client all the choices on how to interact with Generali. So there are many different channels that we have available to the customer, and I think we are working on our customer experience to make sure that the customer has the free of choice on how to interact. We strongly believe, as we said, that the agent is going to be part of the picture of this interaction in a way, if you want, a three-way interaction. So the agents, the company, our customer center. So there are many ways in which we can interact with the customer.

The customer has the choice on how to do this. I think this has been very visible, so for the one of us who participated in the deep dive in Majorca, how we are transforming the distribution, how we are leveraging this tool to make sure that our distribution is way more effective and way more present into the client face time. The last point that I want to add is that clearly we are doing a number of initiatives because we realize we have to own much better the digital space compared to the past, because the LLM can clearly influence the steering of the new business. So we are working to, I would say, occupy and own more of the digital space.

Next question, please.

The next question is from Farquhar Murray of Autonomous.

Well, just two questions, if I may. Firstly, a slightly geeky question, but could you explain to me the yield curve sensitivities of the CSM to me, and in particular, why they seem to have switched sign and moderated over the year? That might obviously take us back to the question answer you had to Will on sensitivities.

And then secondly, a more open question on AI. I was very interested in the long run potential outlined on claims management on slide 19, namely the 40% productivity gain. So my simple question is really how far away is that kind of long run potential? Perhaps the more complex parts that are, what are the key steps to there? What are the bottlenecks potentially? And in particular, how difficult will it be to scale out those into the businesses?

Thank you very much, Farquhar. The first question, of course, is for Cristiano, while the second one is for Marco.

Hi, Farquhar. For the inversion of the sign, it is pretty much a driven effect from two large countries, which are Italy and Germany. As you have seen, the sharp interest rates increase of 2025, very much concentrated in the long end part of the curve, so much more in 20-year swap than in 10-year swap, affected the portfolio, which are mainly fixed fee product part. As correctly Philippe in the introduction was mentioning, with the huge transformation of the Life portfolio now is getting more on the fee-based component, which is getting on such portfolio a much better, a lower dependency from the market.

Clearly, in such situation, when you are able to extract a certain fixed amount of fees, when interest rates goes up, you are a little bit sensitive on the opposite side, which is happening both for the traditional and the hybrid products in Italy, for the structure of the liabilities that we're explaining, as well as for the Unit-Linked increased weight in Germany. As you know, we are the largest collector of Unit-Linked in Germany on that point, especially also in the mix. So this is the underlying effect, and this is even more also combined with the larger weight of the protection business in the VFA part. By the way, I think this could be an interesting topic that we can deep dive on the 19th of March in our Exploring Generali session on finance.

But I think you exactly got it, and I hope I gave you vision.

Hi. Let me give you. Interesting question. Claims management is actually one of the top potential area that we see in term of benefit and productivity gains. Just to mention the other one is really software development, where we see a huge potential at the moment. So just to go on your specific question. So it all depends from what do we mean by long term and short term. So if long term, we mean like 10 years. No, it's going to be much shorter than that. We do see with the current technology that we have on our hand, potential to gain significant efficiency much before that.

So I would say even in the range of the 3-5 year, this is going to be something that you might see coming up in our disclosure. So what is going to take a little bit more, it's probably scaling. What do I mean? So clearly one of the most advanced application that we are developing, which is Agentic AI in claims, we are starting from material damage, means going and building algorithm and agentic, I would say, orchestration and flow for a specific country. Clearly, we are doing more than one experiment at a time, and so it's gonna take some time to generalize and give a common tool to all the business you need to implement and transform.

Some of these benefit you will see clearly in this plan, much more you will see probably in the next plan. So we do have a huge sense of urgency in doing this application. Also, if I can highlight one topic, probably a little bit lateral. So in all the managerial transformation, technology and technical part is one component of the transformation. There is change management on the people. There is learning new tool. There is getting used to variability in the outcome that are there already at the moment with the human component, but it's gonna be different with the AI component. And I would say we're going to see -- lastly, I would say, so this is a transformation that for the whole group is going to take some time, but not a super long time.

Probably the last part of your question, okay, it's the benefit when we're going to see the benefits, I would say, probably between this plan and the next plan. That's it. So probably the overview.

The next question please -- yes, please, Farquhar, go ahead.

Sorry. Just as a follow-up there, I mean, in terms of the scaling discussion, what are the bottlenecks that slowed that down, just to understand?

No, like it's -- there is no bottleneck. It's really developing AI algorithms that are good for one situation and can be reused for other situations. It's really a natural development of the technology, so there is no really bottleneck. By the way, the pilot that we are doing are really nicely developing. We are doing a couple in Eastern Europe and a couple in Iberia in Spain and Portugal. It's very nice what we are doing, and I don't see any different bottleneck than any other application that we are doing across the group.

Next question, please.

The next question is from Farooq Hanif of JPMorgan.

My first question, hopefully, is for Philippe. So the commentary that you made about partnerships in Italy, you talked about the UniCredit partnership working well and expanding it and then maybe, you know, expanding into other partnerships. Could you give some of your thoughts around this and what would make this attractive, and what potentially upfront costs, qualitatively would be involved?

My second question is on the non-operating cost. So you obviously put quite a lot of costs very much forward into 2025 to accelerate your plans. But what does this mean for 2026 and 2027? Because, obviously, you know, we talk a lot about operating, but a large part of your target is the non-operating, and that's been very noisy for the last decade.

My last question is on the investment margin outlook in both Life and P&C. You make some comments in the slides and in your presentation around reinvestment rates and slower growth in [ IFI ]. Are we to expect a wider margin in P&C and maybe the same in Life over a longer timescale?

Thank you very much, Farooq. Of course, the first question is for Philippe, the second one for Cristiano, the third one are for both Marco and Cristiano, as there is the reinvestment yield, but also the [ IFI ] trajectory going forward.

Hello, Farooq. I will not be too specific on answering your first question. Definitely, we have an existing cooperation with UniCredit, both in Bancassurance in Central and Eastern Europe and also already in asset management. Definitely, we would be available to investigate other cooperation -- industrial cooperation opportunity with them, as long as they create value for all stakeholders. But there may be also in Italy other business opportunities, Bancassurance agreements, asset management agreements as well. So we are looking at all attractive opportunities for us.

We have a wide range of products in the insurance field, but also in the asset management field, where we have extended significantly our area of competencies. We are definitely a good candidate for partnerships in Italy and out of Italy.

Hi, Farooq. For the non-operating component, so first of all, yes, got it. We are accelerating. There was the room, the capabilities, the speed, especially of execution, which allowed us to get there. What does this mean? First of all, for '26 and '27, I think something we will comment also again next week, but, small spoiler of staying around EUR 100 million running restructuring charges also, IAS 19 definition of, severances, which are sometimes individual negotiation, not only large restructuring. This is the rate. What does it mean on profit?

On profit, for sure, the restructuring we did in 2025 book on the balance sheet will materialize in Italy, in Germany, in Spain and Portugal, especially the latter, related to the Liberty integration. The speed is slightly different, while in Germany is a much faster conversion of the payback, slightly longer in Liberty and for Spain and for the integration, and the slightly longest one is in Italy, in any case, accretive for our profit. Overall, I would say that if you sum all of them from 2028 onwards, these should contribute slightly more than EUR 100 million pre-tax benefit. So it's more creating the room also for the future and the future speed and efficiency.

We are pretty much focused, and your comment on the jittering non-operating is very well known and [indiscernible]. This year was taken this opportunity, but the focus you have seen in reducing it, materially reducing the negative non-investment and non-operating result, materially reducing the net other non-operating expenses, putting much higher discipline, putting up EUR 80 million starting from this year from non-operating, putting back into operating, affecting both the Life and the P&C ratios, it is the trajectory we are taking. And this is pretty much a very bigger commitment to reduce the so-called evaporation from operating to earnings before taxes. So this is part of what we discuss also next week.

I hand over to Marco for the investment margin.

Yes. So again, I would start going back to what Philippe said, at the moment we see a good -- very favorable interest rate environment. So this is interesting because we see the spread between our average book yield and the reinvestment yield being positive, both in Life and in P&C. Probably we see more in P&C at the moment than in Life. We expect a 30 -- 20 to 30 basis points improvement next year in Life and more up to 120 basis points in P&C. For the non-VFA, so Life non-VFA investment result, I would expect more in line with this year, while I would probably expect higher P&C investment result for 2026. I don't know, Cristiano, if...

Yes. If I can comment also on the [ EC ] and in general giving some guidance on the trajectory. On the P&C [ EC ] we are guiding for around EUR 600 million 2026 effect. But all in all, I think what matters most is if we look at the life operating investment result guidance on 2026, we will keep a EUR 900 million guidance while -- for Life. For P&C, we are going to the EUR 1.1 billion guidance for 2026 in the P&C investment operating result, which I think could give you some hints for your projections.

Next question, please.

The next question is from James Shuck of Citi.

I had the first question on the P&C general expense ratio. So thank you for the new disclosure, which shows 14.4% falling down to 13.9%. I guess my question is kind of, is there a kind of view of admin expenses and admin expense ratio? The reason why I ask is because I think Alleanza shows a number that's about 6%. You've got about 14% on that number. Obviously, that shows a lot more potential to drive it down over time. So just curious what's included in that. Then I just wanted to try another question on the AI topic.

So I can clearly see some of the potential efficiency gains as you start implementing Agentic AI and ultimately kind of through to orchestration of those, Agentic AIs. I'd like to focus a little bit more on the hyper-personalization journey. So if you kind of think about a typical Italian retail customer, how will the service of that customer kind of evolve? Up to now we've had pretty basic kind of implementation of AI. Over the next kind of couple of years, that's going to gather pace and orchestration is going to take hold, and then probably we're going to get to artificial general intelligence by about 2030, which is only a few years away from now. If you can just help me understand that hyper-personalization journey, that'd be really helpful.

Then just one final one if I may. I'm just curious about the remittance ratio from other. That seems it's 400 -- actually, I don't have the number in -- yes, EUR 457 million in '25. It just seems very low if I think about what's included in those other businesses.

That seems it's 457 in 2025. It just seems very low if I think about what's included in those other businesses. So the Asset and Wealth management, Group Holdings, Europ Assistance, et cetera. So the remittance ratio on whatever you want to assume for the op profit just seems very low, and therefore the potential to grow that seems quite significant. Perhaps you could help me understand that a bit better.

Thank you very much, James. Let's start with Marco on the hyper-personalization journey. And then Cristiano will take the question on the administrative expenses as well as on the remittance from other.

Very interesting. So James, I'm not sure I know a lot about what is going to happen in 2030 on this topic as I see news coming up every month. So It's not easy to understand how this is going to evolve. Also for ourselves, I think we need to make sure that we are very pragmatic and structured in applying the technology that we have at the moment in our end and be ready to do more with the news that we see and that are available to ourselves. Just a word on the hyper-personalization journey. So I think it's an interesting topic, especially for a retail and SME.

So for a group like ourselves, that has most of the business in retail and SME. So I do see a journey of personalization, especially in the service and in the way the customer use and research for our services. So the overall topic of the customer experience, I think is going to be -- it's going to evolve in a really personalized journey, where every customer is different and can approach ourselves in a very different way and use our services in a very different way. Also, I have to say, when we talk about more technical condition, typically in our product you can have pricing, but also technical condition. There I think that the pricing is typically, like, already very personalized.

If you think about the motor pricing algorithm that we have at the moment is very much personalized. That doesn't mean they can further be selective and probably even more technical than we see today. On the other side, on the condition of the product, we'll see, so I'm not sure that all the condition are there to be sliced and taken because some of them are based also on a principle of mutualization. So it's interesting if they stay slightly large and not flexible to make sure that there is also some mutualization across the different risk.

But I agree with you that in terms of service, the way the client is going to use the service or our product is we are going to see a lot more than we compared to what we are seeing at the moment. That's why -- and I want to reconnect with one of the question that I've been asked at the beginning. We are a lot into implementing also this technology in distribution because we see a great value for distribution and client to upgrade to this tool.

Thank you, James. Going to the so-called GEX over general insurance revenues, gross insurance revenues in general expense ratio. Let's start from the expense ratio number. Our expense ratio, admin contribution within admin expense ratio within the expense ratio is 7.2%, decreasing by 0.3 percentage points from previous year. If I look within this number, how much of this is general expenses, which is part of our GEX ratio, 5.1% of the GEX ratio, 5.1% of the 7.2% goes also in our GEX ratio.

Then there are other element outside the admin in other expenses, which accounts for another 3%, which is explaining not a very different level, if you just look and compare on the structure. I hope this gave clarity. I think you were mentioning Alleanza if I'm not wrong, they have 6% around as a number. Getting to the next topic of the remittance ratio from other, it is low. It is -- in 2024, there was one-off capital management action that we did in Malaysia from the integration and the excess capital repatriation after the acquisition, which is non-repeatable and accounts through something around EUR 35 million. What is it on top?

The major contribution on this is clearly the asset management component, which, if I look in total, considering not only the Generali Investments Holding component, but as well the other component, it is slightly decreased by EUR 9 million. Then we have the effect of consolidation where we present it because as you can imagine, since especially the Generali Investments Holding shares are not all held into Assicurazioni Generali, some of them are held in the perimeter of other countries. And this is accounted as a result for the countries, but then it is netted out as a consolidation. So there is a negative number, which netted out to give you the fully consolidated view and avoid any form of double counting, to be extremely precise.

I hope this gave you some clarity. The consolidation went down accordingly to this lower amount of dividend paid by Generali Investments Holding, which is also reflected in the other holding result of the operating result we were mentioning.

Thank you, James. Next question please.

The next question is from Iain Pearce of BNP Paribas.

A couple on P&C. Firstly, on the attritional loss ratio in Q4, there was quite a big improvement in the Q4 number versus the nine-month number. Just wondering if we need to normalize for anything in particular in Q4 or that should be a good starting point for 2026 combined loss ratio. Second one is just on the capital generation number from P&C, which again is very, very strong. I'm just trying to understand the moving parts, particularly in relation to how you treat Nat Cat and PYD in that capital generation number. I think PYD isn't in that number, and that's why you're benefiting, and it's not in the non-operating, but if you could just give me some clarification there, that would be very useful.

And then on the -- just a quick third one. It's just on the comments on motor versus non-motor and the desire to sort of prioritize growth in the non-motor segment. If I look at the combined ratios that you're delivering in motor and think about normalizing for Nat Cat and then the pricing sort of expectations that you've given for 2026, the motor and non-motor combined ratios are going to be pretty close to one another. So I'm just wondering why you continue to want to prioritize the non-motor segment versus the motor segment if they're delivering similar levels of profitability.

Thank you, Iain. The first and the third question are for Giulio, while the second one on capital generation is for Cristiano.

No, thank you, Iain. I would always suggest that, you don't put too much emphasis on a quarterly slice, so I would always state the information year to date as the most relevant information. So to your point, when you look at the combined ratio, 94.3%, that's in my opinion good guidance. What is the status quo, considering that there is a lot of quality in this figure. So if you ask me what is the point of reference, is this combined ratio for the 12 months and consider that, as we said a few times, that's proved based on prudent assumptions. So that's on your first question. On the difference between motor, non-motor, I would tell you the following, yes, the combined ratio in motor is getting closer to the combined ratio in non-motor.

So from that point of view, you could say why you have a different set of priorities. The point is the motor market tends to be a little bit more competitive. So from that point of view, at the end of the day, the reality is that right now we might have, let's say, less push on like we had in the prior years on pushing up the prices, and we were also willing to lose volume. So now this balance is changing, but we need to be realistic with the dynamics that we have on the motor side. We will expect that our risks in force will not go down, but we will not have a substantial increase in risks in force. On the non-motor side, the competitive environment is different.

So from that point of view, we think that there is more space for growth. That's also due to the fact that there is more demand also for the solution that we offer on the non-motor side. So it's a reflection of the competitive environment as opposed to be a reflection of us having a different appetite for one area versus the other.

Iain, so with regard to capital generation, this allows me to explain a couple of topics. First one is the treatment of prior year development. As we told you, the best estimate movement of the prior year is taken off from the capital generation. So this year, when we applied what we told you already the nine months, which is a kind of interplay between the natural catastrophes and a lower prior year, lower natural catastrophes, lower prior year development for the best estimate, we have an asymmetric view in the capital generation. You are showing a benefit of lower Nat Cat without showing the reduction that is seen in the non-operating variances related to the solvency component.

All in all, the two put together created a net effect, which is around [ zero ] positive EUR 0.1 billion. It says it creates something in the order of EUR 0.4 billion of higher capital generation. This is why you should not, in such specific case, I think it is a drawback of the choice, projecting the cash conversion, the full benefit of this EUR 400 million, because part of it is erased from a lower prior year development. And this is, I think, something I wanted to hint. It is the net effect between the benefit of lower Nat Cat and the lower prior year development is in reality a 0.1. Please also take this into account.

Next question, please.

The next question is from William Hawkins of KBW.

Longer term, how do you feel about the 8% to 10% EPS CAGR? I think for some people there's a fear that this is the best you can do and this is a cyclical industry, so at some point you may even have an earnings dip, not just lower growth. You know, on the other hand, you know, even though you say you're managing your earnings, you've just blown through that 8% to 10% with 16% growth. So I'm kind of wondering, is 8% to 10% still achievable from the 2025 base? And how do you think about the long-term glide path of how you can be growing your earnings over time, please?

Secondly, how should we now think about the outlook for the new business margin? You've just done that 5.7%, which in rounding terms is already around the 6% that you're targeting for 2027. So on the margin side, is the goal to improve further, or are you roughly where you are on the margin and it's now all about growth? Around that, I'm still not quite sure how you think about the glide path growth in new business volume for Generali. Is it a 5% anchor, a 10% or what?

And then lastly, please, you've already touched on this slightly, but I did just want to come back on the non-operating investment income, which was the minus EUR 214 this year. I've got in mind that number over time should be a more sustainable, larger positive figure 'cause you get fair value items earning through and you get realized gains coming through. So there may be a question about the size, but I would assume that it should be a net positive over time. Am I right in that, or have I totally misunderstood how the accounting works below the line?

Thank you very much, William. The first and third question are for Cristiano, while the second one on the new business margin is for Giulio.

Hi, William. I think this is pretty much a fundamental point because clearly, if you ask us, are you going to be repeating 2025, it is not feasible in a sustainable way. We were before answering to Iain, saying that in the end, we took a EUR 100 million net benefit from lower Nat Cat versus higher prudence in prior years. So there is already this effect to be taken into account. There is also an effect of some positive tax things, which were shown in the fourth quarter. You have seen the taxation of fourth quarter, which are potentially positive. So for sure, this is not the number which can be sustained.

In the 8% to 10%, don't forget that the reason why we got to this number was because at least 1% contribution was coming from the integration of Liberty. Clearly, the more you are able to redeploy capital for M&A and the more you have strategic flexibility from your combination of cash, capital, debt in order to do it, that could be potentially managed. Let's say that we take it out, that would have been a 7% to 9% without Liberty. What does this mean?

In a capability for us to create a net holding cash flow growing with higher cash conversion, recurringly at a level where we have spare cash on top of the dividend to have always a buyback, which is a form of remuneration, you have, in any case, a support which could be from capital management of 1.5 [ point ], let's say. So if you are able to produce slightly more than 4% operating result growth, knowing that you will work to try to anticipate also the second question on the non-operating component, you can reach a 6% run rate of earnings growth as well as EPS, adding 1.5. So there is a component of M&A. Without it, you should decrease one point.

But clearly, this is also the objective that we need to be able to sustain in order also to exploit all what Philippe, Giulio and especially Marco were telling you about the coming of AI and also what I was telling you before about the coming of the profit benefit from the restructuring charge we had. On the non-operating investment income, you are perfectly spotted on, on the discussion that I'm having with the team, because for sure, the accounting non-operating investment income is impacted by fair value through profit and loss effect.

Some of them, for example, if you see the difference from the reported net result and the adjusted net result, where fair value profit and loss movement stemming from FX exchange, for example, on our private equity and other non-euro-denominated asset, but we can have. So there is some of this effect in this year. On average, you should stay around zero out of this fair value movement. And in general, we have realized gains that we can manage to compensate versus normal level of, let's say, run rate impairments, which is part of normal good and bad, which happen.

So for sure, targeting that, I would say, net of some ECL benefit, which could jitter in case of, let's say, change in the muted macroeconomic situation, going closer to the zero on a run rate, it is something which should be achieved on average over the term, over the cycle, with some, let's say, small potentially negative bias for some small cleanup of impairments, but it is not far from that. Hope I gave you the vision.

No, thank you, William. First of all, I agree with your math. For me, too, 5.7% is very close to 6%. So from that point of view, we are at the level of new business margin that we like to have. Moving forward, our priority is not necessarily to improve the new business margin to get exactly to 6% also, because if you think about that, the implication doing that will be that any opportunity of a product with a new business margin, even of 5%, will be diluted. So from that point of view, that will clearly exclude a lot of possibilities. So our focus is in reality maintaining this kind of marginality. If there is an improvement in marginality, that would come from mix rather than improving the margin of a specific segment. Yeah, the idea is to grow the new business value. Actually, our emphasis is to try to get growth in new business value.

And that's the bathtub of Cristiano needs some valuable business to get into the bathtub to make the profit run. That's the focus. Keep in mind also that our marginality is pretty strong across all the different lines of business. Also, on the savings, you see now a marginality which is not far away from the marginality we had on hybrid. So from that point of view, the capital efficiency that Philippe was referring to and also Cristiano before, is now also present in most of the savings business that we have. Bottom line is marginality is at the place where we like to see, and so we are going to push on profitable and capital efficiency growth.

Next question, please?

We have time for a last question. That comes from Michael Huttner of Berenberg.

Sure. I just made it. Thank you so much. I've got three if I may. I'm being a bit greedy. Philippo -- Philippe, sorry, not Philippo. Philippe, you mentioned sort of payback period in life. I just wondered if you could expand and give us. I know you're not a big fan of figures, but maybe give us a kind of timeline to when we might see it in measurable numbers.

The second is for Cristiano. It's always, you know, money for money -- money back for money, I think, from Switzerland. When will that be? Basically I'm thinking that you've understated your over EUR 11 billion target because this was excluding the one-off you got this year, which was from Switzerland. So my guess, you've already understated by maybe 15%.

The last one is for Philippe, and I don't know how to ask it politely, but, you know, you own a big asset in Italy in kind of Asset management. Your colleagues have been talking about benefits of M&A. Is this something you're thinking about?

Thank you very much, Michael, before we answer the question, can you please repeat and clarify a bit the first and the third question for Philippe because we really didn't catch it from the line.

So Philippe, when you spoke -- sorry, hang on let me see. Is this better?

It is much better, Michael.

Yes. Sorry about that. So benefit of a shorter payback period in life, when would we see it noticeably in the numbers? I'm guessing it'll come through acceleration of the, or rise of the, release rate out of the CSM, but who knows? The second and the third one is, basically I wanted to know about your, the Asset Management or the Wealth Management business you partly own. Given that you are integrating it more and more with the groups, you know, with the Alleanza kind of cross-selling thing, would this be something you'd be thinking about in more strategic terms?

Thank you very much. It's clear now. Maybe, Cristiano, would you like to start with Switzerland and then Philippe will answer the other 2.

Absolutely. I confirm you that 2026 entail remittance from Switzerland. Money are coming back from [ Mama ], and this is part also of the component of the plan that we are getting. For sure, the better the situation will be, the more we can get. Especially, I'm referring to the good start of the restructuring that we are observing in Switzerland, with a high level of prudence also in the way we have seen so far the P&C number, which is allowing to further benefit. So yes, it is underway. Money are coming. It will be progressive, starting from a certain amount in 2026, below EUR 100 million, but then getting faster as the company will complete the turnaround.

Namely on Banca Generali, we announced recently the Insurbanking initiative, which means that Banca Generali will cooperate more with the Italian insurance companies, both Generali Italia and Alleanza. This is going to create additional value for both Banca Generali and Italian life insurance companies. This is good for the group as overall, I would say.

And on the payback?

The first one? Well, we said that we are further increasing the share of Protection & Health business in our new business mix, which obviously accelerate the cash conversion compared to the traditional savings business.

No, thanks to you, Michael. Thanks for the question. I think we have finished the time for today. So thank you very much to everyone for dialing into today's call. If there is any follow-up, please feel free to reach out to IR and enjoy the rest of your day.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Generali Group 9 Month 2025 Results Presentation. [Operator Instructions]

At this time, I would like to turn the conference over to Mr. Fabio Cleva, Head of Investor and Rating Agency Relations. Please go ahead, sir.

Hello, everyone, and thank you for joining our call. Here with us today, we have the Group General Manager, Marco Sesana, the CEO of Insurance, Giulio Terzariol; and the Group CFO, Cristiano Borean.

Before opening for the Q&A. Let me hand it over to Marco and Cristiano for some opening remarks.

Hello, everyone, and good morning, and thanks for being with us today. So today, this set of results confirm the Lifetime Partner 27 driving excellence plan is starting on a very strong footing, thanks to, in particular, to the excellent performance of our P&C business. implementation of the strategy and of its work stream is the key focus of the entire group. One of the most relevant changes that we made in this strategic plan is reinforcing the role of the center in orchestrating more organically strategic business initiatives. Each management -- each group management committee member is sponsoring one of the planned strategic initiatives with the key head office function working in close cooperation with our business unit. We are reaping the benefits of being a group.

As part of this approach, the whole GMC is very focused in sharing best practices and scaling up local initiatives. I could list many exciting developments I've seen over the past 9 months as part of this interaction, but let me just highlight 3 that I found particularly compelling. First, sophisticated Nat Cat modeling in major countries such as Italy, France and Czech Republic. So we developed a machine learning model for wind storm, severe convective storm combining internal claims data with external weather data through machine learning systems. And this approach will be soon be scaled to other countries. Second, claims automation in Austria. A great example of automation and speed of automated health claims reimbursement, which have now reached 56% of automation for invoice processing, and pharmacy invoices are settled in just 18 seconds.

And finally, our group Geospatial platform. This provides advanced geospatial capabilities for underwriting purposes. This is already live in Italy, France, Spain and across the world in our global corporate and commercial business with further expansion in other business units planned for 2026. When I see this initiative on the ground, delivering tangible results, I'm very confident in our journey of delivering excellence.

So let's now focus on our 9 months results. P&C continues to show positive momentum in terms of both top line up over 7% and margin expansion with the undiscounted combined ratio improving by over 2 percentage points compared to last year. At the beginning of the year, we told you that we were very confident about our development, thanks to the combination of larger volume coming through and sharp portfolio repricing in an environment where frequency is declining and claims inflation is under control. As you can see, we are very much on the right track to achieve our undiscounted combined ratio target well ahead of schedule. The top management team is thinking strategically about cycle management to ensure a continued improvement in the combined ratio, supported by our historical and reinforced technical excellence and to make today's underwriting margin resilient in the future.

You can see this in the discipline we apply to underwriting. You can see this in our country-specific pricing approach and you will increasingly see this in the benefit we expect to generate across the P&C value chain from new digitalization and automation. In this quarter, as Cristiano will later explain, you can also see this in an even more conservative approach to initial loss peaks and clearly even more visible in the prior year development. What we see is an insurance sector that has been disciplined and continues to be disciplined. I want to reassure you that as part of the sector, Generali will be a force of discipline as the cycle progresses. Our P&C top line is continuing to grow and is mostly driven by the price effect, which we measure as the improvement of the average annual premium for the retail and SME segment. This pricing effect remained very significant at 9 months at plus 6.4% for motor and plus 5.2% for non-motor retail and SME.

Looking at the technical margin. We achieved continued improvement in the average earned premium in comparison with that of the risk premium resulting from the combination of claim frequency and claim severity. In Motor, which represents around 1/3 of our P&C portfolio, the average earned premium increase for our top 10 market exceeded 10% at 9 months while the risk premium rose around 1%, thanks to decreasing claims frequency in most of the countries, coupled with well-contained claims inflation. In non-motor, the industrial KPIs point to a movement in the current year attritional loss ratio of around 1.2 percentage points very much spread across the majority of the business unit. At 9 months '25, the non-motor combined ratio is at 91.4%. These dynamics are at the core of a significant improvement in our P&C profitability and will continue to drive the improvement in the combined ratio.

I thought it was helpful to provide you this context, and we are happy to help you bridge the P&C industrial KPI with our reported combined ratio in the Q&A.

Now moving to Life. Let me remind you of our target together between EUR 25 billion and EUR 30 billion of cumulative Life net inflow in our Lifetime Partner 27 plan. We have exceeded EUR 10 billion at 9 months with a very good result for Protection & Health with EUR 3.7 billion and hybrid and unit-linked with EUR 4.7 billion. The improvement in the Life net inflow is a function of both the effectiveness of our distribution and the evolution of our product offering. Life net inflow also improved, thanks to the reduction of surrenders. Just to give you a sense, surrenders at 9 months compared to the same period of last year, were down by almost EUR 2.6 billion in Italy and by over EUR 500 million in France, consistent with our previous comments on the improvement in lapses.

In the first quarter call, we gave you a new business margin guidance for the remainder of the year between 5.25% and 5.75%. In the second quarter, we had 5.64 new business margin. And in this quarter, we recorded a 5.74 new business margin. This demonstrates we have done quite well, not only in terms of volume but also in terms of margin. You will have noticed that at 9 months, the growth of new business value has also turned positive year-on-year. In addition to volume and marginality, let me also confirm the underwriting discipline of this new business with some key data points on the quality. Over 73% of our new production has no guarantees compared to 66.4% in the same period of last year. The share of new production coming from capitalized products is close to 85%.

So to summarize, we continue to have a strong net flows with improving margin and confirming our underwriting discipline to ensure long-term resilience of our in-force book also thanks to the ongoing quality of the new business. Now moving investment portfolio. As you know, we have an allocation to private market, there is more limited that one of our main peers is around 18%. We do see value in a diversified portfolio. And therefore, we continue to aim at increasing our allocation to alternatives in a disciplined way. Our portfolio of alternative is balanced with strong safeguard to ensure it meets our strict criteria. When you look at the private debt portfolio of around EUR 19 billion, almost half of it is in real estate debt and infrastructure debt, both having a high-grade credit quality. Around 3/4 of our private debt portfolio is secured by collateral and our exposure to single borrowers is very limited.

The allocation to direct lending, which has been the focus of the market recently is around half of our private credit portfolio and is therefore less than 3% of our general account. Also, the vast majority sit in Life portfolio with policyholder participation and very low guarantees. Only 23% of our private debt portfolio is in the U.S. And thanks to our strict investment guideline, we have had hardly any exposure to credits, which have been in the news recently. Given this strong framework, we are very comfortable with our portfolio. We continue to believe that there is value in gradually diversifying our government bond exposure into credit as I explained to our Investor Day in January.

Our strategic asset allocation move is also well informed by the trends we are seeing in the government debt market, where there were also some downgrades recently. So to summarize, a very strong start of our strategic plan, coupled with the prudence we are exercising across the board, provide us with confidence that this trajectory will be maintained and will prove its resilience to a volatile external context.

Thank you for your attention. And let me now hand over to Cristiano.

Thank you, Marco, and hello, everyone. Let me provide you some additional color on our financial performance as well as some indications about the direction of travel in the fourth quarter. Let me start with P&C. As Marco described, the business performance has been very good and we are working to make sure that the strong margins you see in the current attritional combined ratio today will continue to improve in the future.

In the last couple of years, the insurance industry and Generali have had a severe Nat Cat experience. Our 2023 and 2024 Nat Cat impact before insurance were well above the expected yearly losses. As you have seen, historically, the second and the third quarters are the most relevant in the terms of Nat Cat seasonality in our portfolio. So far, 2025 has been quite benign and well below our ex ante 2.8 percentage points Nat Cat budget. In light of this, we thought it appropriate to exercise an even stronger prudence on our reserving, always within the range of reasonable best estimate. This translated in a much lower prior year development as well as even more prudential -- prudent initial loss peaks for both the attritional and the Nat Cat component. Therefore, we further strengthened our balance sheet, making Generali very resilient in future years. Together with the accelerated trajectory observed in our P&C performance compared to the plan.

This approach increases our confidence to exceed the Lifetime Partner 27 driving excellence key financial target. There is an old saying in financial markets. The income statement is your past, the balance sheet is your future. Having a balance sheet with a low debt solid solvency, high quality of capital and reserving makes me very comfortable that Generali is well positioned to prove its resilience. The fourth quarter Nat Cat experience has been benign so far, too.

If this continues until the end of the year, in the fourth quarter, you should expect a prior year development pattern similar to this quarter. This would imply a full year 2025 P&C operating results of around EUR 3.6 billion. A more dynamic interplay between Nat Cat and prior year development is in our mind, the sensible thing to do when managing the business for the long term. Therefore, looking ahead in 2026 and beyond, we will calibrate our prior year development dynamically, always within the boundaries of the best estimate approach. I hope this clarifies the very low prior year development contribution this quarter and provide you a perspective on our thought process, which will always prioritize long-term sustainability of results versus short-term impacts from volatile components. This approach also enhances earnings predictability and mitigate P&L volatility.

Let me now move briefly to the Life business. When looking at the 9 months 2025 results compared to last year, the 1.8 percentage point growth of the operating result should be read as a 4 percentage points of growth after accounting for the stricter discipline on cost allocation from nonoperating to operating result for around EUR 30 million. And excluding the lower investment income from Argentina. As of the end of September 2025, the group enjoyed strong new business volumes and positive economic variances, both supporting our CSM development. This was only partially offset by some operating variances in the region of EUR 200 million due to a tax regulation change in Germany affecting health business profit sharing and some model refinements.

Looking ahead, as I've mentioned to you previously, during the fourth quarter, we performed the full annual review of all actuarial assumptions on longevity, morbidity, lapses, expenses as well as model refinements. The discussion on these are ongoing and will be finalized by year-end. Just to give you an indication, I would expect negative operating variances for less than 1% of our reported Life system stock.

Moving to nonoperating results. Let me anticipate to you that we expect additional restructuring charges in the fourth quarter, and we may also see some impairments on real estate portfolio. This will be partially compensated by a lower tax rate as we have some positive tax one-off expected in the fourth quarter. When you take all these one-off effects into account, I think that with the information available as of today, an adjusted net result projection for year-end '25 of around EUR 4.25 billion would probably be a good ballpark.

Moving to our capital position. The group solvency ratio remains solid at 214%, thanks to our healthy normalized capital generation and already fully embedded the EUR 500 million share buyback program. Looking ahead, let me share with you some of the key factors that we expect to impact our solvency in the fourth quarter. In addition to the standard review of the actuarial model assumption, First, the acquisition of MGG is expected to have a minus 2 percentage point of solvency impact. Furthermore, as we stated in our half year presentation, and should already known that in the fourth quarter, there will be a temporary effect related to the loss of the internal model application for Spain as part of the Liberty integration, which is a reverse merger, as we said with an impact of around minus 4 percentage points. This is expected to revert in 2027 being completely temporary.

In the fourth quarter, you should also factor in noneconomic variances of around minus 1% or minus 2 percentage points impact on solvency, mainly stemming from the ongoing implementation of the SAA optimization, which Marco was referring. In addition, the rating downgrade of the Republic of France that occurred in October is expected to reduce our group solvency ratio by almost 1 percentage point. Regarding subordinated debt movements, the EUR 500 million redemption in November will be offset by 500-ish million issuance of our inaugural restricted Tier 1 bond.

Before closing, let me summarize. We manage the business for the long term with a focus on sustainable value creation for our investors, also reflected in an EPS that is growing 16% year-on-year. The Lifetime Partner 27 driving excellence plan has started very well and the whole management team is focused on building on this momentum with a clear objective to do our best to exceed all our key financial targets. Thank you for your attention.

[Operator Instructions] The first question is from David Barma, Bank of America.

Firstly, on P&C, could you come back, please, on the average gap between written premium growth and loss trends? I'm not quite sure I got the numbers that you gave in the opening remarks, Marco, and if you could highlight the main country drivers within that, it would be great. And then staying on P&C, on the expense side and particularly on the administration expenses. Could you give some color on how that developed in the quarter and whether you expect some of the measures that Marco, you discussed in the intro to already benefit the expense ratio in 2026, please?

And then lastly, on the Life business. So sales were obviously really strong and the mix too, you're getting close to your 2027 new business margin target already. Are expenses, the main piece missing to get you to bridge that to 6%?

Thank you very much, David. The first question, of course, is for Marco. The second one is for Giulio, and the third one is for Cristiano.

I go back to what I said during the speech. So what I mentioned was the growth of nonmotor average premium at 7%. And the growth of the risk premium was at 1%. So let me just give a word to clarify what we mean when we say when we give these measures. So we are measuring in motor, what we see coming through as the average premium of the single risk, right? So that's the -- that's what we see showing up and we measure the risk that we have in the portfolio. So when we give these 2 measures, what is important is to see that there is a margin gap between how much the risk is growing and how much the average earned premium is growing.

In this case, 6% is very significant in terms of spread and in terms of margin. That means that in the portfolio that we have in the different business unit, there is an underlying potential to deliver more improvement in the loss ratio. So where do we see this? I would say we can go into the different details. But I would say that this is very spread across the top geographies. In some cases, it's more I would say, it's more pronounced. In other cases, it's less pronounced, but I hardly see any cases where we are not in this situation. So I could mention 2 geographies that I think are interesting. One is Germany because we focus -- like in the last 3 years, we really focused during this call in showing how much we were repricing the portfolio and the effort done by the German business unit is really significant, which, by the way, I want to thank the colleague for this.

So we have done 3 consecutive years of double-digit price increase and I think the results are showing up, and we do see a significant improvement in the portfolio. The other geographies, clearly, Italy, which is going really well in terms of repricing versus the increase in risk. And also there, we see a margin into the portfolio that is really significant. So if you want, then we can go on more detail. But this is the picture that we see for motor. And I think this is what I mentioned. And I think it's a really positive news for the future.

Thank you, David. On the question regarding the expenses. Maybe let's start from the expense ratio. The expense ratio for the 9 months is going up 50 basis points. Here, we need to keep in mind that we have the impact of the purchase price allocation coming from the Liberty acquisition and also that we made some reclassification of expenses from nonoperating to operating. So if you adjust the expense ratio basically the expense for these impacts. The expense ratio is flat.

Now to your question about the admin expense ratio, we are measuring the GEX ratio, which is basically the component of the expense ratio, which are not commissioned or incentive and that number is going down by 50 basis points. So that's an improvement. We don't see the same improvement in the expense ratio because of a little bit of mix, but also there is some conservative provisioning from the business units. So moving forward, we'd like to see clearly a better alignment between the improvement of the admin expense ratio. And also the end of the year anyway, we are going to report also the admin expense ratio so that you can see the development of the KPI.

And then clearly, we are going to provide you also some more transparency about the movement or the other line items going into there. But from an efficiency point of view, we are definitely improving, there's going to be also a driver of improvement as we think about 2026 and 2027.

David, regarding the Life sales and the driver. I would say, at the first 9 months already, higher growth compared to the acquisition cost is impacting 16 basis points onto this improvement. But the further way to project forward should embed also the focus on our protection business, which is something running at almost double-digit present value new business margin, and this is supporting a much better marginality. And this together with product features where you can even simply improve the features adding extra value not only managing on the part of the cost is driving it. But we are already on that trajectory. There will be also an extra focus on this topic, but it will not be the only driver to get there.

The next question is from Michael Huttner, Berenberg.

I just had 2. One is on the solvency, there are so many negative numbers. I came away with the conclusion, which I didn't add them up, but clearly, it will be down quite a bit. So let's say it's down 10 points. I mean, just rounding it. And I just wanted to hear, can you remind us are there any positive offsets? So clearly, operating capital generation, probably 5 points a quarter. And then I have no idea maybe you can say whether some of this resiliency or prudency you're building in, whether that's in the -- included in the operating capital ratio or not?

And then, of course, the Solvency II review. So just a little bit would be lovely. Then on cash, I always like cash in here. Everything is doing so nicely, I'm just wondering whether Switzerland is returning your EUR 400 million now. And then the final one is on net inflows, which is an outstanding number, even [ Poste ] doesn't have such a good number. I just wonder whether you can talk a little bit about what's driving this and what it could mean for earnings growth going forward? Because clearly, this isn't in earnings, it's in OCG, but not in earnings.

Thank you very much, Michael. The first question on the solvency movements and the one on the Switzerland remittance are for Cristiano while the one on net inflows is for Giulio.

So first of all, I think I start from a point. What happened already is the Spain from October 1, 2025, has lost temporary I already said, up to 2027, the internal model eligibility. It is a 4 percentage point solvency group impact, which was already signaled at half year so it's not new. And I see also the projection by all of you for the year-end are pretty much embedding all what I already said. I think the 2 points of MGG were already signaled also in the press release is something known. I don't -- I think the only point, which I repeat in 2027, Spain will reverse this 4 points. Probably the downgrade of France, which is slightly less than 1 percentage point is something not in. But this has already happened.

And if I just look at November 10 solvency ratio, which was the last updated number, we are basically 210%, and this is already embedding both the MGG acquisition, both the France downgrade and the 4 points of Spain. Clearly, what I was highlighting is you need to take 1 to 2 points on the SAA for the asset allocation improvement for the year to come. So it's not a huge number, and I think you are perfectly in line, and I think given the November is giving you. Let me speak a little bit about the Solvency II also review going forward. And one of the things which I think it is relevant for the Solvency II review, as we always said, is that we were between the 10 to 15 percentage points of benefit.

I would say that the latest version of the delegated act, which has been approved and still needs in any case, a discussion with the college of supervisors on very minor topic, which has some uncertainty bring us I would say, on the top end of this range of the 10% to 15%, which is, I would say, positive also to allow us implementing our EPS accretion investment. Speaking about cash for Switzerland. For Switzerland, we both are extremely focused, you and me and not only you and me and many people in our company on this, I can confirm you that in the plan, we are going to start seeing a repatriation of excess capital, including remittances and capital support done, it will be gradual. And I think you should see this more coming in the end of the plan from 2027 onwards. There will be some positive 2026 potential expectations supporting our cash flow, but it is a gradual process. The company is fully focused now to increase the business results, and that will be further supportive out of this.

No. Thank you, Michael. Your question about the net inflows. Yes. Actually, the development is pretty good, and it's better compared to our plan because we were not planning to cross the EUR 10 billion threshold this year. But now, as you see in the 9 months, we're already about EUR 10 billion, so you can imagine also that we are going to have positive inflows in the last quarter. From a composition and inflows point of view, we see basically growth across all the different lines of business. From a geographical point of view, I can tell you, Italy is up EUR 1.3 billion, EUR 1.4 billion compared to last year. What we see in Italy actually is not so much the premium up. It's more than the surrender down significantly.

In France, we are about EUR 300 million better. Also here, we have a similar situation. So from a premium point of view, we are relatively flat, but surrender much down. And in Germany, we're also up here, we have growth in premium and less surrender. So we see a similar dynamic in the different markets. If you look at the last quarter also, there was a good dynamic on the inflows. So quarter-over-quarter, you can see also that the present value in the business premium in the third quarter was ahead compared to last year. So we went from negative growth in present value new business premium to positive growth.

Also the new business value is going into positive number. So really working in the right direction. From a profit point of view, you know the concept of the tab of Cristiano that if you feel the tab, you're going to get more profit. So basically, this is going -- this is reflecting anyway in a better composition between the release of the CSM and what can be the increase of the CSM due to new business also how the lapses are going down. Remember that last year, we had negative variation, negative experience variances due to lapses and this year, the negative variances due to lapses are nonexistent. So that's a positive that translates into better CSM release eventually.

Just one thing. I love the explanation. France, what was the figure? You said something lower 300 or 900?

France is about EUR 300 million plus of inflows, EUR 300 million plus of the inflows coming from hybrid and unit-linked products. That's what we say basically in France and protection is also a nice contributor.

The next question is from Iain Pearce of BNP Paribas.

Just one for me. I think in the introductory remarks, you mentioned some benefits from frequency, I was just wondering if you could elaborate what you're seeing on frequency sort of if you're seeing some different trends by market and also if you are viewing this as a long-term lower frequency trend or if there's anything abnormal in what you're seeing in frequency at the moment.

Thank you very much, Iain. The question, of course, is for Marco.

So let's start with the general picture. We do see the decrease in frequency very broad in the different markets. So we -- I couldn't pick one single market that is an outlier. So this is really showing off in every single market. So whether this is a trend that we are going to see in the future, it's a different question. So let me elaborate. So I do think that we are going to see this again in the future, but let me explain you why. So we have 2 set of drivers, I would say. So the first is frequency is historically coming down in every market.

So we are seeing a long-term trend of decreasing frequency in all the Western European markets. And I would say it's also Eastern European market. So it's consistent. And so therefore, I think this is going to happen in the future. There is a second driver, which I think is really important to mention because sometimes we always think that frequency is an external factor, but we have worked a lot on the quality of the portfolio. We have worked a lot on a few initiatives. One is loss prevention. So we are trying to put on the ground tools to make sure that we evaluate correctly every single risk that we take.

The second one is pruning. So we have cleaned the portfolio from all the tail part of the portfolio that were unprofitable or as a prediction would look unprofitable. So this is something that we have driven that we think is going to give us benefit in the future in terms of frequency. And so when we think about frequency, you should always think a long-term trend, but also the type of active work that we have been doing over the past month in the quality. By the way, if you want a proof point of this, you could look at the trend of the man-made losses that really came down in the last quarter, thanks to all the initiatives we have done. That's it.

If I could just quickly follow up. Do you have a view of how much the combined ratio is benefited at 9 months from lower frequency versus your expectations?

So I would say in terms of industrial KPIs. So as we said, it's always -- there is always a link between the industrial KPI and the financial KPI. But clearly, then we -- you need to look at the different prudence that has been taken and everything, probably in the risk premium that we have, this has been the main factor of benefit that we see in the risk premium.

The next question is from William Hawkins of KBW.

I've got 3 questions. I hope I can be brief. Thank you already, Cristiano, for what you said about the conservatism in your loss picks. I get the idea of what you're saying. I'm still not quite clear in the 9 months attritional combined ratio, how much -- how many percentage points of conservatism was there in that pick? Because before PYD, obviously, that ratio improved. It just would have improved more if you haven't been prudent. So I'm not quite sure the percentage point drag from the prudence.

Secondly, please, now that you're very clear that you're managing your combined ratio, I think it is a reasonable question to ask, therefore, how many -- how much is it expected to improve per year because you're clearly managing so as you said, it will improve per year? And I don't know if we're talking 20, 50 or unlikely 100 basis points? And adjunct to that, how are we ever going to know when the underlying environment is making that improvement less sustainable because it's great that you're now managing the number, but I'm not quite clear how I'm going to know when you're losing the capacity to manage the number in the future.

And then thirdly, please, the -- you've already talked a lot about the great Life new business results. I'm still not quite clear the thing that stands out to me is the present value of new business premiums seemed seasonally very, very strong in the third quarter. Normally, everyone is on holiday so that number dips 10% or even 20%. This time, it only dipped about 5% from the second quarter. And that can't be anything to do with surrenders because it's PVNBP. So what was the explanation for that? And is this the new normal? Is 3Q now going to be a lot stronger than it's been in the past few years? Or should we go back to seasonal dips in the future?

Thank you very much, William. The first question on the conservative business is for Cristiano. The second one is for Giulio, while the third one on the levy business again for Cristiano.

Thank you, William. So clearly, as we didn't exactly mathematically disclose the conservativeness of the prior year, but you can reverse back it yourself in any case. I try to answer with a different angle. The industrial development that Marco is seeing has an improvement, which is 0.4 percentage points better than the one you see in the accounts, which is a way to try to second guess your question, I think, to help you extracting at this point. I go to the second one, Giulio.

Thank you, William. Your question about the improvement in the combined ratio, first of all, from a price environment point of view, we think that next year, clearly, the gap between the price change and what we call the risk premium is going to narrow but is not going to vanish completely. So we might still have a little bit of room in Motor, potentially also in Motor, where we see also that the frequency tends to go lower, which is a consequence also of the action they were taking. So we might still have a benefit there, which is not going to be as strong, clearly, as what we are seeing right now. But let's say, there is still a little bit of way to go.

Then the other improvement should come over time from the initiative that we have on the claims side. You remember, we discussed that also in January that we have initiative on the efficiency and the effectiveness in claims. And here, we have all the work we do on the network's theory, on anti-fraud, all these kind of elements. Price sophistication might help also to get more granular on some pricing. And then one driver moving forward of improvement in the combined ratio, that's going to be definitely something where we need to focus is the space ratio. So we go back to the improvement of the expense ratio that we are already seeing from an admin point of view, and we want this improvement to continue in the next years and reflect also in the total expense ratio that you see.

So it's a combination of still some way to go some additional -- I think also about, by the way, the work that we are doing in Switzerland, Switzerland is, at the moment, having a combined ratio of 100% is not going to be the future. So also, we're going to have some improvement on some turnaround, some improvement coming from claims initiative than the expense ratio. So let's say that's our journey to improve our marginality, which is already very strong, is not finished.

Just to clarify, I was speaking about the basis, not the delta, the basis before the 2 in order that you get that we increase this basis to answer to your first question. The question on the PVNBP. First of all, the third quarter is still compared to other quarters. I know that in the third, as you said, people should stay on vacation on the summer component. But I would say still weaker than the previous quarter. I've seen 3 major drivers of improvement, which are geographically aligned in especially France, where you had a very strong third quarter, and I think it is related to the very positive and stable return you can get from the saving component of our hybrid products, and that was clearly also linked not attractive anymore [ levy ] return given to the, let's say, low afferent to retail.

On top of this, we had a small kickup from a new distribution agreement, which is opening up in Portugal with our postal partner Bank CTT. Together with the strong growth, which you've seen our basically all over the board and it's not generally specific, but we are seeing in both Hong Kong and Mainland China, which is a kind of market trend.

The next question is from Farooq Hanif at JPMorgan.

First question, you kind of partially answered that, but you gave the average premium versus risk premium numbers for full year -- sorry, for 9 months, what is it in 3Q? We are already seeing a closing? That's my first question. Secondly, given everything that's gone in Italy, are you willing or able to talk about the bancassurance opportunity for you now in your Life business? You've been very quiet about that. Obviously, stuff happened -- stuff could have happened and didn't happen, just wondering whatever you feel like you can say about that?

And the last question on nonoperating. So you're indicating a slightly higher restructuring cost, which will limit your adjusted net result. But I remember back at the CMD, you talked about how the nonoperating kind of holding expenses line is too high and will come down over time. How should we think about that going forward? Because it's obviously a big component of your adjusted net result. And I think we don't -- all of us especially me, spent a lot of time thinking about it.

Thank you very much, Farooq. The first question is for Marco. The second is for Giulio while the third one is for Cristiano.

Yes. So let me say that, yes, we have disclosed the number for the 9 months. What we see in the third quarter is broadly in line with what we see in the 9 months. Clearly, again, we could go in much bigger detail on the different geographies. So there are some specific. So for example, when we -- I can tell you about Germany, where you have renewal of the portfolio that is clearly in the first part of the year, the third quarter looks a little bit how can I say, weaker in terms of development, and that is fine. So historically, that is the case. So I would say we tend to give the 9 months result because we think over the year are more stable and are more indicative of the different development so that's about it.

So Italy is still very strong. Probably in France, we had to do some pruning. So the average premium, it's probably weaker, but overall in line with the development of the year. So I couldn't spot in the third quarter, anything that is like normal or it's diverging from the trend that we have shown on the 9 months.

So your question about bancassurance. First of all, as you know, we are very proud of our footprint from a tight agency point of view. So that's clearly the bread and butter, but this does not mean that we don't do bancassurance. So we have a few cases Cristiano was just referring to the new agreement in Portugal. We have a joint venture now in India with the bank.

So we are going to push bancassurance also in India, we have a successful relationship with bancassurance in Spain, and you should not forget Banca Generali, which is also a bancassurance relationship. And clearly, if there are other opportunities in Italy, we're going to look at that. So there is -- our belief is if you have a business model centered around bancassurance that can be a little bit tricky. But if bancassurance is clearly selectively use it can enhance the franchise value and also the scaled operations. So from that point of view, if we find the right partner, we are very happy to engage with these business partners.

So going to the nonoperating part. First of all, I confirm you that by year-end 2025 versus year-end 2024, EUR 80 million of nonoperating costs will be -- there has been already 60 because it's pretty linear throughout the year, evenly split between Life and P&C will be booked in the operating and have already been booked into operating result from the nonoperating like it was last year. So -- and this is done and is going already to reduce the expected project, the nonoperating charge going forward from the next years. In this quarter specifically, there has been one effect, and as Giulio was referring to Portugal, I'm referring back to India where probably you read, we set up a joint venture with our partner, and the cost of this setup was having a one-off charge related also to set up the marketing effect of around EUR 60 million, which is clearly related to a specific business development.

Having said that, speaking about the restructuring costs. And by the way, this is a PV take. So it's one for now and not anymore what I was referring in India because it's taking the full charge projected in PV. So with regards to the restructuring charges, we are in a year where we have already exploited Germany restructuring, which will allow to better improve the GEX ratio, general expenses ratio for the future years and allow the improvement and digitalization of the company with the relative efficiencies. On top of that, we are in the process of implementing the Liberty integration, and we are in advance towards that.

So that's why we can see something more in the fourth quarter, together with other countries where we are accelerating potential restructuring. That's why I was mentioning the fourth quarter with further restructuring charges, clearly, these will be counterbalanced by a much better tax rate because of some one-offs. So I would say there are 2 kind of form of one-offs, but the first one is forward-looking projecting the restructuring acceleration to have a better trajectory, and I confirm you that the nonoperating charges are materially going down for the next year.

The next question is a follow-up from Michael Huttner, Berenberg.

It's -- so here is my difficulty or my challenge. So your earnings are -- I look at your consensus sheets and look at what you're saying it's like it's the same number, right? Or I mean, there are small variances but it's -- there's a lot of accuracy here. But listening to you guys, it's like you're bubbling with excitement and stuff. And for me, the difference is, I think with Giulio you were trying to explain to remind me of is there's a difference between IFRS, which is CSM, which is incredibly slow. You have to fill the bathtub and wait for ages for the tap -- the water to come out. And then local GAAP, which is not IFRS. Now the reason I ask this is always cash. So is there more upside potentially in the cash than we're seeing in these numbers at the moment?

So Michael, of course, this question is for Cristiano.

So Michael, let me say, related to the CSM bathtub point that you were mentioning, not necessarily a higher life production materializes in a better CSM versus a local GAAP because, as you know -- sorry, a better local GAAP versus CSM because CSM sometimes has a revenue recognition and this revenue recognition is a pro rata temporary, sometimes in the new approach, you forget about the acquisition cost when you do many business and you have them immediately to be paid on the cash side. So clearly, on the CSM, this is amortized for the revenue recognition. This is called contractual service margin because you amortize it for the time of the service you give to the client.

So the point is the CSM is a present value, while the local GAAP takes into account of the actual amount that you are usually paying. So it's a slightly more prudent in the Life. What -- so there is a gap usually negative between the service -- contractor service margin result and cash in a growing business. Clearly, if you are just making a company to run off, which is not the case of Generali, you can have the opposite but that is a different business model, especially for other integrators or run offers, let's call them. But what regards the cash element, the positive trend should come, in my opinion, you should read it from the acceleration of the P&C trajectory versus what we were projecting in the plan.

And that because one thing I always report to the Board is the exactly almost equivalence between finance expenses discounting at this level, these 2 noncash item of the operating results, P&C, P&L, are canceling each other. So the results you are seeing is cash. That will be a better driver together with the improvement on some, let's say, cash trap as our favorite Switzerland topic.

[Operator Instructions] We do have a follow-up question from Michael Huttner, Berenberg.

Really sorry, it's a tiny question. In the past, you've always mentioned Argentina as a kind of negative adjustment as it were. And I think this morning, I don't think -- I'm not sure you mentioned it in your introductory remarks but when I was speaking to your wonderful IR, really wonderful IR. They did mention, and it sounds like Argentina is now turning to be a positive. Is there something there?

Michael, I think in the third quarter, you observed a fluctuation. There was a positive contribution from, I think you are referring to the P&C component for Argentina. And instead of having a negative delta in the investment result, you had a small EUR 7 million positive in this quarter. Be mindful that Argentina is extremely, let's say, volatile in nature because of the way it does not follow the basic financial textbook rules but we know last year.

First of all, when you manage Argentina P&C business, you have basically, in your investments, all inflation-linked because you need to be able to carry up -- catch up with the cost of your liabilities. And so the investment are mainly inflation linked in that environment. Last year, we had a huge spike of inflation, huge -- materially huge. I'm talking about something in the order of 200%. And that was getting to a point where the exchange rate was not following the international official party. So we were having massive positive contribution of inflation-linked component in the investment result without having a deep equivalent depreciation that basic finance should tell you should be followed.

That's why we had this push up, okay? When you look at this topic into isolation and you isolate investment results versus the other part of the P&C, you can get things which could be completely offsetting, but you are seeing a very huge number on one side and on the other. If I take the P&C operating result at 9 months of Argentina, it's EUR 14 million. So I hope this helps for you to better understand. But last year was a very, very peculiar year because of that effect. By the way, the movement of the excess capital from Life in Argentina in the fourth quarter '24 that we made is affecting us in the Life investment operating result EUR 39 million this year on a like-for-like basis. So it was not an immaterial effect due to this, let's say, paradox or nonrational movement between inflation and FX rate.

The next question is from Elena Perini, Intesa Sanpaolo.

Yes. I've got only one actually. Considering that you are improving your P&C trajectory, and you mentioned that some further cash can come from this improvement. Are you going to use part of it to make other, I don't know, bolt-on acquisitions to strengthen your presence in some markets? And then can you elaborate a bit on what could be the potential targets?

Thank you very much, Elena. Giulio, would you like to take one?

First of all, really the good thing is to add the capital, to add the liquidity from an M&A point of view, I'll just tell you, right now we don't see much in the pipeline. So from that point of view, clearly, we can find a good target. We would definitely look into that. As you know, our preference is to do acquisition where we can realize cost synergies. We can strengthen the franchise. Tell you, Liberty is a great example of an acquisition where we can really create value. As of now as of the moment, I tell you there is not really much happening. On the question between then, clearly, every time we do an M&A, we are measuring the M&A against the buyback. And when we say we are measuring the M&A against the buyback, it's not just a comparison of the IRR because, as you know, the IRR can be very dependent on the terminal value but that's really about the EPS accretion that we get 3 or 4 years, let's say, 4 or 5 down the road. So if we find anything which is interesting, we're going to go for that, making sure that we can create real value. But at the moment, there is not much.

There are no more questions registered at this time.

So thank you very much for dialing into today's call. Should you need any follow-up, please feel free to reach out to Investor Relations. Have a nice day. Bye-bye.

Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.

Good afternoon, this is the Chorus Call conference operator. Welcome, and thank you for joining the Generali Group First Half 2025 Results Presentation. [Operator Instructions]

At this time, I would like to turn the conference over to Mr. Fabio Cleva, Head of Investor and Rating Agency Relations. Please go ahead, sir.

Hello, everyone, and thank you for joining our first half 2025 results call.

Here with us today, we have the Group CEO, Philippe Donnet; the Group General Manager, Marco Sesana, the CEO of Insurance, Giulio Terzariol; and the Group CFO, Cristiano Borean.

Before opening up for Q&A, let me hand it over to Philippe for some opening remarks.

Thank you, Fabio. Good afternoon to all of you, and thank you for joining this call. Our excellent performance for the first half of 2025 shows a strong start to our new 3-year strategic plan, Lifetime Partner 27: Driving Excellence. These results demonstrate that this is the right strategy to continue to create further value for our investors and for all stakeholders in a consistent and disciplined way.

I would like to draw your attention to 5 key messages. First, Generali once again recorded significant and continued growth in operating results, exceeding EUR 4 billion. The 8.7% year-on-year increase is underpinned by the positive contributions of Property & Casualty, Life and Asset Management, highlighting the power of our diversified and integrated business model.

Adjusted net results exceeded EUR 2.2 billion, growing by 10.4%, while adjusting earnings per share rose even more sharply by 12.5% year-on-year. This performance underscores our relentless focus on value creation for our shareholders, further reinforced by the now approved EUR 500 million share buyback we announced today. This is the proof that we are delivering on the clear and transparent capital management framework we presented to you at our Investor Day in January.

My second message is about Property & Casualty. As you know, this is a key element as we strive for excellence in our core capabilities, 1 of the 3 pillars of our current plan. The Strong growth in the P&C operating result shows our disciplined focus on the delivery of our strategy. Healthy top line growth, coupled with margin expansion, is at the heart of the strong growth in the P&C operating result, up by over 18% year-on-year despite a lower benefit from discounting. The 170 basis point improvement in the current year's attritional undiscounted loss ratio is the proof of a very successful delivery on the action plan we designed 2 years ago to reassert technical excellence. So let me thank all our colleagues for their commitment and efforts.

Third, the Life business is coming back strongly thanks to our efforts to address lapses, which are now mostly resolved, thanks to the new products we designed and the effectiveness of the commercial efforts made on the distribution side. In fact, lapses have fully normalized in France and improved materially in Italy as reflected in the positive operating variances in our CSM in the first 6 months of the year. Life net inflows exceeded EUR 6.3 billion, driven by our preferred business lines. We have further increased the share of capital-light products in our new business production to almost 88%, a very high level with the share of new business without guarantees increasing to 77%, up from 67% a year ago. The new business margin is also improving, reaching 5.6% in the second quarter. We are confident that this will be maintained in the second half, well on track to reach our 6% target in 2027.

Achieving strong volumes of net inflows without compromising underwriting discipline is something Generali will continue to deliver on, thanks to the very effective work done by our agents and advisers.

As a fourth point, I would like to highlight the importance of our strategic focus on protection, health and accident, an area of compelling long-term profitable growth potential. It is growing strongly with high margins, low capital consumption and fast cash conversion. As of June 30, it accounted for 20% of overall gross written premiums at group level with a 7.1% year-to-year increase. We will continue to update you on the performance of the strategic business segment that is at the center of our plan.

Finally, Asset Management delivered an 11.7% increase in terms of operating result. This reflects both the contribution of Conning and the organic growth of the business. It was a very high-quality result with almost no performances booked in the period.

Net inflows from third parties were positive to the tune of EUR 3.6 billion, a good result given the significant volatility of financial markets in the first half of the year.

In conclusion, these results confirm the strong start of the execution of our ambitious Lifetime Partner 27: Driving Excellence plan, which will deliver even greater value for all our stakeholders. Our achievements against our 3 strategic priorities: excellence in customer relationships, excellence in our core capabilities and excellence in our operating model prove we are on the right track. In customer relationships, we further improved our relationship Net Promoter Score, maintaining the #1 position in our peer group, while also improving customer retention levels. For our core capabilities, the year-on-year increase in the operating result, both in Property & Casualty and in Life further confirms the great work we have been doing over the past years. As far as our operating model, we are continuing to invest in artificial intelligence and technology while centralizing distinctive capabilities and shared services at scale. By the end of this year, we will have invested a total of EUR 500 million. These achievements were enabled by our continuous focus on the plan's 3 key foundations: our people who are Generali's most potent strength; AI and data, which are vital to our success today and in the future; and sustainability as we continue to support a green and just transition while actively fostering societal resilience. We are firmly committed and focused on executing Lifetime Partner 27: Driving Excellence, as you can also clearly see in the slides provided today, and I am very confident that we will deliver it as successfully as we did with all our previous plans.

Before we open on Q&A session, let me share some brief closing remarks on the topic of M&A. We are proud of the rigorous process we have established for M&A here at Generali with strict criteria to assess the financial and strategic fit of any potential transaction within the best-in-class governance and legal framework. This process has served us very well so far, which also means we have the right toolkit to analyze Mediobanca's offer for Banca Generali. As far as this, it is our duty to examine in full detail opportunities, such as the potential future industrial relationship with a leader in Italian Wealth Management determining whether they would fit with our strategy and could generate value for our stakeholders. The management team has been working hard to provide the best possible support to our Board of Directors as it continues to evaluate and discuss the potential merits of the offer in full compliance with the group's processes and schedules. This is necessary to ensure our directors confirm a definitive view and ultimately reach a decision that is in the best interest of all our stakeholders. This sum ups the -- this sums up the current status of our deliberations regarding Banca Generali. We will continue to update the market and our key stakeholders whenever relevant.

Thank you again for your attention and for your interest in our group. And we are now happy with my colleagues to take all your questions. Thank you.

[Operator Instructions] The first question is from Michael Huttner of Berenberg.

Congratulations on another set of lovely results. I had 3, if I may. First one is on the solvency ratio, I think the only number which was a little bit under consensus. Can you -- the moving part I thought might be the kind of thing which might have diluted things a bit was the rerisking. And I just wondered if you can say how much that was, and how much more than maybe the market thought and whether there is more to come?

Then on cash remittances, my favorite topic. I just wonder if you can give us a number. I remember -- and maybe I'm wrong that the expectation given that there was so much last year EUR 4.4 billion in a bit that this year might be a little bit lower, mainly due to fewer one-offs, but the higher tax rate in Q2 versus Q2 last year makes me think maybe we're lucky.

And then my last question, and I'm sorry, I'm a bit greedy here is on -- so one of your peers said they bought the best thing they could have ever bought in Italy, which makes me think, well, if they bought the best, does that mean the Generali is second best, I'm asking it in a funny way, but the real question is, if [ PMO ] is making so much money, who's losing money? There we are, that's it.

Thank you very much, Michael. The first and second question are for Cristiano, while, the third one is for Marco.

Michael. So first of all, starting on the solvency requirement and in general, the solvency ratio, the moving parts on the rerisking are mainly related to around EUR 0.3 billion increase of the SCR from the investment risk-adjusted optimization, SAA that we are making. And EUR 50 million around on the growth of P&C and another EUR 100 million related more to the growth outside European Union, where Solvency II rules applies on different local solvency, which are -- have a higher intensity in Solvency II versus the local, I'm referring especially to Asia. So it is hampering a little bit more on the group contrary to what is seen on the locally because of the nonequivalence of the Solvency II. This is a little bit of the pieces. How much more to come. We were signaling in the slide commentary something in the order of almost 3 percentage points to be expected from 2 to 3 in the second half of the year on the continuation of this program of re-risking and a little bit related also on the growth I was mentioning, which is bringing you closer to the 3. I think this ends the first question.

The second question, which is mainly related to your and my favorite topic, which is cash. I confirm you that as of today, the remittance, which is slightly more than 95% is EUR 4.2 billion, and it is in line with our objective. I would say that in the second half, we can get a slightly higher [ kink up ], and you were correct in spotting up the capabilities from Central Eastern Europe that we will gather in in the second half.

So Michael, I would clearly comment this on our site. So we also have been investing into the direct channel. You know that we have rebuild, completed the technological platform of the [ Generative ] business. We are counting a lot on this evolution to make sure we serve better our client and having an organic growth. With an eye on the top line, but also in a sustainable way also to the bottom line. So you know that lately, the direct market, especially in Italy, was less profitable than in the past. So we are really looking to turn around these and, and make this bottom line win for the group. Plus you know that under the [ Red Click ] umbrella, we are also opening other operations across Europe. So we really believe that the direct business can be a growth opportunity for the group, and we are counting a lot on organic growth on our side.

Our next question is from Andrew Baker, Goldman Sachs.

So first one, the second quarter current year attritional loss ratio looks really strong, especially relative to where consensus was. And I guess, expenses were running a little bit higher. So are there any mix effects that we need to consider? And then also how are you expecting that attritional loss ratio to develop for the rest of '25 and '26. And then again, in P&C, is there any change to your EUR 950 million operating investment result guidance for full year '25. And I appreciate the disclosure around the average coupon on the bond redemptions, which are still below the reinvestment yield. But if reinvestment yields stay where they are currently, when should we expect the coupon on the redeemed bonds to be higher than the current reinvestment rate?

Thank you very much, Andrew. The first and the second question are both for Cristiano and then, of course, Giulio if you want to integrate on the evolution of the loss ratio going forward for Q3.

Yes. Hello, Andrew. So the second quarter, attritional, I -- you correctly spotted an improvement of a couple of points, 2.5 points versus the same quarter last year. If I take the attritional and discounted current year loss ratio, which is a 0.8% improvement versus the previous quarter. Clearly, you have to also take into account that there are one effect, which is talking to the second part also of the answer on the expense ratio. Last year, we had the integration of Liberty into the group. For specific price allocation, PPA, purchase price allocation processes, since we were not paying in the expense ratio, the commission, we had to account for that effect as a negative impact in the loss ratio, which is creating a different repetition out of that, which means that you have in the order of 2 to 3 -- 20 to 30 basis points out of this impact when you try to have a like-for-like movement and which is also reflecting in the expense ratio. On top of that, the higher growth of the business that we are having should have a little bit of improvement, but the growth was also tilted particularly in some lines, and I'm talking about especially the travel lines, which our unit Europe Assistance is developing, which is the 1 with the highest amount of commissions. So the highest acquisition cost ratio that we have. The evolution that we are going to expect going forward is if you just check the delta on a quarter-to-quarter basis, you need to start factoring in the kicking in of the full benefit of the improvement done on the tariffs in the previous quarters, which was not there in the first half of 2024. So in the second half of 2025, you should see a speed of the delta, which is different compared to the one we observed so far, which is giving on that. The guidance overall on the undiscounted combined ratio below 95 is even more confirmed with the view that we have and which is giving a lot of leeway for the management of the second half. I recall that the second half of the year, especially the third quarter is the highest loading quarter on natural catastrophe that the group is usually experiencing on top of this. Don't forget that whenever we have this kind of leeway and advance, we were still keeping and potentially even more keeping our prudential -- prudent initial loss [ peaks ], but is approved also but slightly higher prior year that you've observed in half year of 2.3%, which was reflected already in the first quarter from some closed high reserves. I would like to hand over to Giulio, if you want to integrate.

Absolutely. So thank you, Andrew, for the question. First of all, we are very pleased with the results that we see on the P&C side. This said, we are also very clearly very focused. When I look at the numbers, I can also tell you, there is a lot of quality numbers, and we see a lot of quality across geography. When we look at the spreads between the rates that we get in motor and what is the risk premium we see basically a positive spread everywhere. There are a couple of geographies where we might be behind on the motor side, like Spain and Portugal, but also there, we are working very actively and get into a better outcome. So as we move forward, I would expect that premium are going to moderate a bit. But we will still try to keep an increase in premium, which is ahead of the risk premium, that is our intention. Some markets might be easing, some markets might be more challenging, depending on what the level of profitability is already. But this is one driver. The other drivers of potential improvement in performance is all what we said that we want to do on the sophistication of pricing. Also, we talked in January about the initiative on the claims side that can be also supporting our bottom line, even if there is a strong moderation of premium and then also you were referring to the expense ratio also in the Spain side, especially on the admin expense ratio, we should see an improvement moving forward. So we have a strong position, as you see in the numbers today. We have quality in the numbers. And also clearly, we will continue to work to make sure that we get to a very good outcome moving forward.

And continuing to the second question you asked, Andrew, we confirm the guidance of EUR 950 million. And I would like to recall you that we got an important reduction of the Argentina investment contribution because of the massive reduction of inflation there. And all our investments are inflation linked, and we moved from 220 to a kind of 20% inflation rate with FX that was not moving materially last year. I would like to remind you that the investment yield versus the component and current return, usually invest on a stock basis, 10% of the portfolio. We slightly increased the duration of the portfolio. So you should expect something slightly more than 6, I would say, closer to the 6.5 years to wait for a kind of a convergence on the actual investment rate versus the reinvestment of portfolio.

The next question is from Iain Pearce, Exane.

The first one is just on the attritional loss ratio again. So if you look at the current year attritional and discounting loss ratio for H1, and sort of normalizing for nat cat and even just taking the expense ratio, as it looks like you're running ahead of the strategic plan target. And clearly, you outlined a lot of areas where you expect attritional to continue to improve. So I'm just trying to see if you think there are potential other headwinds to that attritional going forward, whether that be mix or some benefits in that H1 number that -- around the [ May side ], that should stop us from moving quite a bit ahead of the strategic plan, the combined ratio guidance.

And then the second one was just on the Italian government debt exposure. That looks like it's increased significantly in H1. Is that part of the strategic asset allocation plan changes that you've been discussing? And should we expect that number to continue to increase in H2 and over the plan period?

Perfect. Thank you very much, Iain, the first question is for Giulio. The second question is for Marco.

No, thank you for the question, Iain. So when I look at the 6 months, there are no one-offs. As I was saying before, the numbers have a good degree of quality. So from that point of view, there is really the underlying performance is coming this way. I don't see specific headwinds as we move forward. So as I was saying before, sure, pricing is going to moderate. but we still believe we can stay ahead of the risk premium. We have the initiative that I was saying before that should support our numbers, we know that on the industrial side, corporate side, the market might be a little bit softer. But also there, we are not necessarily the biggest player in that space, and we are starting from a very strong level of profitability and also from a very strong quality of the balance sheet. So fundamentally, there is no one-off. There is quality in the results, as I was saying before. And also I don't see no specific headwinds as we move into the future.

So on my side on the BTP topic, I think I think we discussed the topic in light of the development of our liability in Italy, I think we are fine. We are comfortable with the level where we are in terms of BTP exposure as long as the liability improve and evolve, so then we will follow with the same logic also on the BTP. So there is no plan to increase significantly the exposure and the SAA allocation to BTP. As you remember, in January, when we discussed the topic of SAA during the strategic plan, we discussed the topic of that we were like prudent in a way on overall government bond, remixing a little bit in light of the development of the liabilities. So that's the approach we have. And I can reiterate that we have a strict discipline on ALM. So everything is based on this metric for our decision.

Next question is from James Shuck at Citi.

I wanted to ask about the -- firstly, the life operating profit because there's a few, it's called volatile items in the in the first half. In particular, the onerous contracts, which I think past couple of years have been EUR 200 million or so negative. 1H was much better. So just keen to get a view on kind of how you view that number going forward? And kind of linked to that is the other operating income where it kind of ticked up quite a lot in 1H to EUR 93 million. I know there's been a EUR 20 million reclassification from nonoperating, but it's still running at a much higher level than it was last year. So again, just keen to get line of sight into how that is looking in upcoming years, so that kind of normal run rate, if you like.

Secondly, just returning to kind of Genertel really. Can you tell me what the premium income is of Genertel and the current combined ratio? I think kind of an answer to 1 of the questions earlier. I'm just keen to understand what it is about [ Proama ] that made it so successful. It was clearly a big disruptive -- disruptor, but you've been active in the direct space for some time, you've had reasonable scale. What is it that they've been doing that you haven't? And you mentioned a kind of technological overhaul, so keen to hear a bit more about that.

And then just finally, a small point, but the attritional combined ratio is undiscounted at the country level. The commentary on the slides that you gave, they indicate that kind of everywhere is really improving on the motor side, excluding PYD, so the current year attritional loss ratio ex discounting. It just struck me that France was 1 where that wasn't the case. And I think I asked 1 of the questions earlier, you didn't mention that more pricing was needed. So I'm just surprised that France Motor is improving on an underlying basis.

The first question is for Cristiano, while the second and the third are for Giulio.

Yes. So regarding the loss component in the first half, I think that there are a couple of effects which are important as a delta improvement because last year, we had components stemming from accepted reinsurance business, which is not present anymore. And so this is creating a positive delta compared to that adjustment made last year. And there are some positive movement also from an improved situation of the quality of the portfolio in the loss ratio in our Asian business. On top of this, talking going forward is very difficult for me to give you a guidance because it's really depending on the movement of the market, as you can understand. But what is important for you to be aware is that the positive momentum of the economic variances that we have seen so far are giving better value in the specific unit of account, which are helping also to get further out of the money touching on this point of loss component. Looking in the other operating income, you are perfectly right because like we did for P&C with a slightly negative effect on -- also on the expense ratio on the admin component. We are reallocating cost from nonoperating to operating due to our far stricter guidance on the definition of them. This is accounting over the EUR 78 million decline that you are highlighting on this topic, EUR 20 million for this effect. There is another EUR 10 million related to specific strategic project that we are doing in Switzerland and a positive one-off that Switzerland had last year as well as some few effect in Central and Eastern Europe due to some lower performance fees from some Czech Pension Fund and some other effect on spread on geographies. This is basically it. I think I hand over to Giulio for the second question.

So regarding Genertel just said that the premium volume when you look at the 12 months is about EUR 0.5 billion. And when you look then at the combined ratio where we stand right now, undiscounted is 105%. There was a big improvement compared to last year because we improved basically by 8 to 9 percentage points compared to last year. We put a lot of price increases. We are doing pruning, so from that point of view, we are going in the right direction. We expect also clearly as we go into 2026 to be below the 100% level. Regarding [ Proama ], I could refer to what Marco said before, I would say there is nothing that we cannot do that's [ Proama ] is doing. So from that point of view, we have a lot of capabilities, both in Italy. We have direct capabilities also in Germany. We have Cosmos, which is doing fine. We did a review of our direct operation even in Portugal, where the direct operation, very small, we have really interesting capabilities. So from that point of view, we are confident about our ability clearly to run direct operation in a very effective way. And we should not forget that anyway, our biggest asset is on the agency side, that's there we clearly continue to put the most effort from a strategic point of view.

On the France, there is nothing happening in France. It's not good things. Honestly speaking, the numbers in France are very good. We have a discounting combined ratio 91.5%. And this was not a number without significant nat cat in France. So from that point of view, the performance in our business in France, in my opinion, is really, really good. You know what kind of outcome you get usually in the French market. So we are running very good, both on the non-motor side and motor size, so all good.

Next question is from Farooq Hanif at JPMorgan.

Just a question firstly following up on James' question. There's also an increase in the experience variance in 1H '25. if you could comment on that. Plus there's a positive operating variance in the CSM after years of negative because of assumption changes. So if you could just explain how to think about that going forward. Secondly, going back to the attritional loss ratio. I mean at the beginning of -- I mean after full year results, you said you're going for a 95% or less undiscounted combined ratio by the -- FY '25, what do you know now that you didn't know then but is going better since you said that. When you talk, for example, about the gap between pricing and risk premium, is that better than you thought when you made that statement? And my last very quick clarification point is I noticed some commentary about a high tax rate in 2Q. Can you tell us what that was, what the effect was and what you expect for the second half?

Thank you very much, Farooq. The question is on the Life operating result and on the tax rate for Cristiano, while the 1 on the attritional loss ratio are for Giulio.

So speaking about the overall experience variance and other technical results that you were commenting we are having a slightly positive improvement on 1 side on some accepted business of our [indiscernible] business. The rest is spread around the countries with a specificity with a kind of positive one-off in France from some improvement of the accepted and shared business on the protection and health line. For what regards, the movement of the operating -- positive operating variance DSM, what Philippe told you was important. We are observing lapses, which are much more in line, and what happened is basically, if you sum some niches and pieces, a smaller positive effect on the different pieces of the geography that was adding up onto this. There were some point. On -- if you were asking going forward also about this, I would like just to remind that in the second half, usually as a procedural process, we update our actuarial hypothesis and I was already signaling to the market that still we did almost all the changes, but due to our internal model approach to the modeling also of the lapses, we could still have some modeling, not experience change to be expected, but of a very minor level, so meaning very low triple digit. Having said that, I hand over to Giulio.

Yes. So on the 94%, -- okay, what we said is we're going to be below 94%. In Q1, we were at 94.5% normalized. Right now, if you look at the numbers, 94.2%, normalized for net cat. So we are definitely below the 95%. There is always some element of prudence, if you want, as we set the guidance. And I think the prudent is always a very good thing. And also keeping maybe the prudence in the balance sheet is also something very good. Something has changed. I would say not really, but we continue to get the confirmation that the actions that we have put in place are paying off. So from that point of view, every time we look at the numbers, in Q1 now that we look at the numbers again in Q2, we see really strength, and we see strength across the different businesses. And also -- and that's what is very important for me in the businesses, on lines of business where we might be behind, we are very forceful putting action through. So the machine is running. So we constantly see a confirmation of the good work that the business units are doing.

And to go on the last question on the tax rate in the second quarter. First of all, I would like to highlight that in this quarter, we had a higher amount of infra group dividend compared to the last quarter, which some of the effect were done through other form of remittance. And as you remember, the dividend have participation exemption treatment, but on 5% of the amount, there is a taxation. So this is having a peak in the second quarter because it is the quarter where we are receiving the dividends from our controlled entities. Looking forward for the second half of the 2025, I would like to guide you and highlight the fact that we are expecting a lower tax rate, lower than 30% for other reasons, including some potentially positive tax litigation closing.

The next question is from William Hawkins, KBW.

I just got 1 really slightly technical. But am I right that your EUR 29.7 billion IFRS shareholders' funds is still including last year's 500 million share buyback? And if so, when are you going to remove it, which I suppose is another way of saying, when are you going to cancel the shares that you bought back last year. I suppose related to that, put the other way, it looks like your EPS figure is still including the treasury shares that you've bought back. I may have done the maths wrong. I'm just trying to get a view of how you're accounting for it? And given that the treasury shares seem to be hanging around for quite a long time, is there a risk that you're going to issue them again for whatever reason? There are some other companies when they do buybacks, they say very clearly that these shares will be bought back for cancellation and they get taken out straight away. You don't seem to be doing that. So I'm just trying to understand what's going on.

Thank you very much, William. Of course, this question is for Cristiano.

Thank you very much, William. So for what regards the share buyback approach, when the shares are bought, they are already deducted from the shareholder equity because I'm taking out cash and reducing the amount of total shareholder equity to get the shares which are not part of the amount. When they are canceled, you are simply moving from a reserve of the shareholder equity to another one, which is the 1 -- which canceled out at 0 effect on the shareholder equity. In general, we have a very simple effect when you do a share buyback. The cash which is exiting is already reducing the shareholder equity. The shares both are already taken out from the weighted average shares that are to be used to make the EPS calculation. And the same happens when you do the long-term incentive plan purchase even without cancellation because when they are not disposed, they stay out of the denominator of the earnings per share and you spend money to get them taking this up. When you are reverting the long-term incentive and you are paying out, you are then increasing it into the market. This is the way it is calculated. On the Solvency II impact the moment you declare it, it is already deducted from the own funds and which is what has been presented already in the half year number since we declared that from tomorrow, we started the EUR 500 million. And for your information, the EUR 500 million share buyback that we executed last year has already been canceled with a permanent reduction of the outstanding share the group right after, I think, the -- or right before the general shareholder meeting. This is going to continue on the recurring way according to the strategic shareholder buyback we are making.

The next question is from Farquhar Murray, Autonomous.

Just 2 questions, if I may. Firstly, on Mediobanca offer Banca Generali. Would you be able to give any color around the industrial relationship under consideration and where the points of discussion are there? And additionally, would generally have any preferences on when to conclude those discussions?

And then secondly, on the JV tie-up with Natixis, where are we in terms of the time line for definitive agreements by around the middle of this year, regulatory aspects and then also possibly closing early in 2026.

Thank you very much, Farquhar. Both questions on the Mediobanca offer and the update on the Natixis joint venture are for Philippe.

So on Mediobanca, Banca Generali potential deal. We will start. As we said today, we are interested in going on with discussion with Mediobanca. This is an interesting option for us to be the industrial partner of leading wealth management company in Italy. The existing agreements between Banca Generali and Generali are something in the new situation, potentially they would need to be redefined and to be in line with the potential business. We want -- we are at the beginning of those discussions. There is no time frame. Of course, we are aware of the time of the offer. In the same time, we need to comply with governance processes. As you know, it's a complex transaction involving related parties, listed companies. So we will fully comply with necessary governance and regulatory steps. So this define the time frame. But we want to take the necessary time to seriously work on it. On Natixis, we are still discussing with the counterpart with BPCE. You remember that we signed, in January, a momentum of understanding, which was not binding. We are now working to reach an agreement on the binding contract. If we are successful in reaching this agreement, we may submit the signing of the contract to Board of Directors after the summer.

The next question is from Elena Perini, Intesa Sanpaolo.

The first 1 is on your very good trend in P&C. And in particular, we see from your Slide #6 that the pricing environment is still quite good, very good in motor, also good in non-motor, while we see acceleration in accident, health and disability. Could you please elaborate on this? And tell us something about the trend in the 3 different segments.

The second question is on Life. It seems that your inflows are going very, very well. I would like to know where do you expect most important growth going forward? And also in terms of margins you are doing quite well. So if you can elaborate a bit on the trend in this.

Thank you very much, Elena. The first question is for Marco, while the second one is for Giulio.

Elena. So yes, I think overall, you -- when you say that the cycle is still good. I think you're right. So we are seeing still a good environment for motor. I would recall what Giulio was saying. So there are some geographies where we're happy, other geographies where we still need to push to get to the level of loss ratio that we like. But overall, we do see still the opportunity to increase prices. I just want to remind you that overall, not only in motor, but in non-motor accident and health, what is driving us is the risk premium that we see. So it's claims inflation and the frequency that we see geography by geography and line of business by line of business. So what we aim as we stated like today, but also previously in previous quarter calls, it's really to get spread on risk premium with our increase in prices. So as we said, motor is still conducive. I think we are doing really well in non-motor given the fact that as consumer inflation is slowing down, we are putting additional effort to keep up the increase in prices in non-motor, and we see a really good environment, especially in [indiscernible]. We did have a deceleration on accident and health, this is mainly driven by 2 drivers. One is a different mix. So we had the opportunity to underwrite some large contracts, and we did it. And the second is the slowdown of the medical inflation that we that we have seen. And overall, I think it's still fine. So it's a good effect. We are still underwriting above the risk premium. The other comment is probably on corporate and commercial. So there is -- we do see the start of a softer cycle, but combined ratio that we see in global corporate and commercial is still very good. I remind you that the number that we see is on top of inflation. So overall, we are still growing on prices. And the overall book of Global corporate and commercial is less than 10%. So overall, the pricing cycle is still very good, and we are still pushing to get combined ratio that we want in every geography.

Thank you, Elena, for your question. On the flows, yes, we are seeing good momentum. I will say we see good momentum across the board when we can also give you a good news when we look at Italy and we look at the numbers as of end of July, the flows are -- inflows are already EUR 800 million. So definitely, we're going to move north of EUR 1 billion in Italy. Generally, we're going to have good momentum across the board from a line -- from business point of view, clearly it's a lot about protection, health and accident and also on the hybrid and unit linked. And if we could give the split between the saving part and the unit linked part on the hybrid, you're going to see there is more momentum on the unit linked part as opposed to the, let's say, savings side. From a new business margin point of view, Marco last quarter gave a guidance 5.25% to 5.75%. So we are going to be in the guidance. When you look at the second quarter stand-alone, the new business margin was 5.6%. So we expect clearly also in the second half to move at this kind of level, if not even slightly higher. So when you put the numbers altogether, we're going to be comfortably in the range that Marco gave you last quarter. So also on the Life side, we see good momentum, both on the flows and also strong marginality coming through.

Next question is from Hadley Cohen at Morgan Stanley.

Apologies if I missed this. I -- my communication has been on and off. First question on -- or both on P&C. Firstly, can you talk a little bit about frequency trends please, I think frequency was lower in the first half of the year. Is there something specific driving that or do you think that's a more sustainable trend we should think about going forward?

And then secondly, you've given a lot of color around the likes of France and Portugal and Spain, what have you think you for that? Is it possible to talk about Switzerland as well, please. I noticed that the -- you're still going through the sort of portfolio pruning, the combined ratio has improved a lot year-on-year. Is that purely from the management actions that you've taken, and how much more pruning and further improvement is there to go in the profitability of Switzerland?

Thank you very much, Hadley. The first question is for Marco, while the second one on Switzerland is for Giulio.

Yes. So indeed, we are seeing a very good improvement of frequency overall in the different geographies. So there are -- I can say that there are a couple of trends that we see. So first, if you look at the frequency in a long series, so in -- across -- so in different years, we have seen the frequency going down, and it's a consistent trend on the different geographies. And so I think this is part of what we should expect going forward in next quarters. On the other side, when we look back at the action that we put in place on our portfolio, especially on motor last year, there was also a better discipline on underwriting. And also there was pruning of some part of the portfolio. So for example, in France, then maybe -- this is referring to what Giulio discussed in France, for example, we have a re-underwritten part of the portfolio, and we also canceled some of the portfolio. So you can see the benefit of this, discipline of this pruning that is coming through also in terms of frequency. So I would give you these 2 effects. So 1 is I would say, a structural effect that we see overall and the other 1 is mainly due to our action. So we could go geography by geography. But I would say, this is consistent across the different geography. I would say that in some geographies where we have done most pruning, for example, France, for example, some of the things we are doing in -- we have done in Italy last year. You could see probably better improvement. But overall, I think you could -- I would say, at least in the top geography where we are present, the trend is very consistent.

Regarding Switzerland, first of all, if you look at the numbers of Switzerland, it seems there is a substantial improvement in the combined ratio. But I tell you that has more to do with the loss component treatment. So there is a little bit of a -- we had a loss component last year. This year, we don't have the same impact. But by the end of the year, you're not going to see the same improvement compared to 2024. What we see in the motor side, we are getting better. On the other side, there were some negative development on the non-motor side, especially on the accident business. Switzerland is a turnaround case. I'm going to be very clear. We have a new management team, and we are really turning our stones in Switzerland, both from a pricing point of view, and this is a motor, non-motor or so, we are doing pruning. And also clearly, since we need to consider that the premium level most likely is going to use. We are going to take also a look at the expenses. But as a turnaround case, I am encouraged, but it's the fact that I see that there is a clear plan of initiative. Now we need to go into the execution. The execution mode is going to start basically in the -- after the summer break.

Next question is from Fahad Changazi of Kepler Cheuvreux.

Could I try 1 more on the attritional P&C loss ratio. I understand the plan assumes that there will be support from pricing in '25, but after that, '26, '27, initiatives and big business mix that will drive improvement. Is this still the view? And if not, when can you update the market on how you see this particular assumption in the plan?

And the second question, just on Solvency II capital generation, is the Life in-force SCR release, which was -- as you're guiding was supposed to come down. Is the H1 number now a good steady state to build to full year? And also I appreciate your comments on the Life side in terms of capital intensity in Asia. But given H1 growth was so high, could you sort of guide towards the -- where the new business SCI is going to go in terms of plans for Asia and in terms of the mix in the products, for example, protection.

Thank you very much, Fahad. The first question is for Giulio, while the second one is for Cristiano.

No, no. What you said is exactly what we said in January. So when we look at the improvement in the expense ratio over the plan period, we said [indiscernible] the improvement in the combined ratio is going to be driven first by the pricing changes. And then as we go into the second part of the plan is going to be driven by the expense ratio improvement and also by other actions that we put beside the pricing action. So from that point of view, that's exactly what we expect. We are running right now really within our expectation, maybe I would say, comfortably within our expectation. We will continue to work to make sure that we will get to very solid results like the 1 we are showing today.

Yes. Fahad, so for what regards the different capital intensity, which I recall you is just a Solvency II group reporting because it's not the one which is the real capital that you have to allocate locally to operate. I would say that it is, for sure, improving from the point of view of the -- I'm talking in euro terms, clearly, because we need to present the CR in euro. So in euro term, it is improving, and has an impact, which I would say in the first half, as I was telling you was something in the order of EUR 100 million, EUR 150 million. So in the second, you should expect a lower effect because the production is totally concentrated in the first part. And by the way, there are also regulatory actions, which are further reducing the capital intensity going forward, which is at least a very positive note.

The next question is the last question from Michael Huttner, Berenberg.

It was -- just on Switzerland, I remember you said money for money. I just wondered when is that starting? And can you remind us the amount?

And this is, of course, for Cristiano.

Talking about cash, Michael. So we have completed the full ALM alignment on the solvency test for Life operating company in Switzerland. This allows us now to start a final phase where we are just closing the last step of the change in the local internal model for SST to have a full clarity by the end of this year. And then we are starting, and we have already planned and discussed with our regulatory authority, some increases from the actual lower level of remittance, which could be progressive. So in 2026, you will start seeing something of mid-to-high double-digit million euro. And then you will see a progressive one going forward from 2017 onwards, and that will potentially fully unleash a lot of trapped capital. I would say so, don't project larger number in '26, slightly higher in '27 and then we will have a closure for another good cash capital management for the next rolling 3-year plan.

Mr. Cleva, there are no more questions registered at this time. The floor is back to you for any closing remarks.

Thank you, operator. This concludes our first half 2025 results call. Thanks, everyone, for dialing in. Of course, the Investor Relations team remains such a full disposal for any follow-up. Enjoy the rest of your day. Bye-bye.

Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.