Linea Directa Aseguradora Aktie

Good morning, everyone, and thank you for joining us today. Welcome to Línea Directa's First Quarter 2026 Results Conference Call. My name is Beatriz Izard, Head of Investor Relations. Joining me today is our CFO, Carlos Rodriguez Ugarte, who will lead this presentation. This will be followed by a Q&A session.

With that, I will now turn the call over to Carlos.

Thank you very much, Beatriz, and good morning to everyone on the call. We are very pleased to report another excellent set of results.

Please let me guide you through the financial highlights presented on the first slide of the deck. We delivered top line growth of 10.2%, nearly 2x the non-life market growth of 5.36%. This solid momentum was achieved while maintaining an excellent combined ratio at 91.7%. Our customer portfolio reached 3.8 million clients, adding 72,000 in the first quarter in 2026, representing a 9.9% quarter-on-quarter increase. Net income grew by 12.3% to EUR 23.4 million, reflecting a strong combination of growth and profitability. Return on equity stood at 22.5%, underscoring the efficiency of our business model. And finally, solvency ratio was very strong, reaching 190.6%.

Now let's move on to a more detailed review of the quarterly results. As shown on Page 7, the message remains consistent with prior quarters, a strong top line growth of 10.2%, supported by high retention, reflecting increased customer loyalty and continued new customer acquisition. Technical result was up 20.1% to EUR 22.9 million. The combined ratio was very solid for the first quarter at 91.7% with an exceptional expense ratio. The financial result was affected by mark-to-market movements in equity mutual funds in a volatile market environment, although the overall impact was limited to less than EUR 1 million. And all of this resulted in a profit after taxes of EUR 23.4 million, up 12.3%.

In terms of business volumes and customers, all lines of businesses reported significant growth by adding 72,000 new clients in the quarter. Motor and Health, together with the developing new business lines stood out during the period. Moving to Page 9. The combined ratio remained very solid. On the loss ratio side, results were influenced by a temporary increase in the windshield replacement frequency, reflecting the impact of poor road conditions following the first quarter storms. On the expense ratio, continued improvements were driven by greater scale and enhanced operating productivity, demonstrating disciplined efficiency rather than cost reduction. That said, some seasonality benefits this ratio in the first quarter, which should be taken into account when interpreting the performance.

From 2026 to 2028, we will continue to invest in technology capabilities that will improve both operational efficiency and customer experience. The expense ratio remains a key source of competitive advantage and a central pillar of our operational strategy. Now I would like to move on to a more detailed breakdown by line of business. In Motor, the year delivered excellent results with premium increasing 10.6%. We outperformed the market by 3.2 percentage points. We added more than 60,000 clients in the quarter, reflecting continued growth momentum. The combined ratio improved by 0.5 point, well ahead of the latest industry figure of 99.3% in the last quarter of 2025. The Home line of business delivered a steady growth with premiums increasing by 2.6%. Performance in this segment remains exceptional with the combined ratio at 89.4% in the quarter, an improvement of 0.5 percentage points.

Moving to Page 12. The Health line delivered a strong growth of 20.1%. The portfolio increased by 8.7% with particularly strong momentum in the more comprehensive coverage, which grew by 9.6%. From a technical perspective, performance improved significantly with the combined ratio down 9 percentage points year-on-year. Underwriting discipline remains strong and loss ratio continues to be well contained. Moving to the next page. Financial results declined by 7.2%, primarily reflecting mark-to-market movements in investment funds accounted for through the P&L. Excluding this market-related volatility, financial results will have increased by 3.4%. Turning to Page 14. The composition of the investment portfolio remained largely stable during the first quarter with the exception of a slight reduction in equity exposure. The portfolio, excluding cash, increased to EUR 1.2 billion, supported by continued business growth. Average portfolio return stood at 278 basis points, while the average reinvestment yield of the fixed income portfolio reached 258 basis points. Portfolio duration remains well balanced at 3.79 years.

Turning to our solvency position. The solvency ratio remained very strong at 191% despite the negative impact from fair value movements in the available-for-sale portfolio during the quarter. In addition, higher average premiums on passive renewals provide support to the premium best estimate liability, complemented by the increase in the risk-free discounting curve during the period. Moving to the next page. The SCR is primarily driven by underwriting risk, which is almost fully offset by a reduction in market risk. This reduction reflects lower equity exposure and a decline in the regulatory symmetric adjustment.

To conclude, first quarter results continue the momentum seen throughout the year 2025, delivering exceptional growth and strong profitability. As we progress through 2026, our focus remains on delivering future growth that is both profitable and efficiency driven.

I will now hand the call over to Beatriz to begin the Q&A session.

Thank you, Carlos. Our line is now open for questions.

[Operator Instructions]

Our first question comes from Maks Mishyn from JB Capital.

Two from my side. The first one is on the expense ratio of Motor, as you mentioned, it was exceptional. Can you please walk us through what drove the year-on-year decline? Do you expect it to decline further in the year? And also, you mentioned the seasonality impacting the combined ratio in the first quarter. Could you just give us a bit more color of this seasonality?

And the second question is also on Motor and on pricing. Some surveys suggest that average premiums started to decline year-on-year in February. Can you kindly discuss pricing trends you see in the market competition? And what are your expectations in terms of pricing and growth for the remainder of the year?

Thank you very much, Maks. Well, the expense ratio of the Motor business is true that has been exceptional in the first quarter, I think it was in the neighborhood of 17% which should be like that throughout the entire year. I mean I do look for a target in that number, but I think it's too soon still to be in those levels. I mean digital -- our digital proposition is working very well. The number of clients that they interact with the company without human interaction is very high, almost 12% of the policies that we sign are fully online. But again, I mean, we have to look at the expense ratio on a yearly basis more than on a quarterly basis.

My intention is that we have always said that the company is very focused on efficiency. But again, I think it's only 1 quarter, we'll see where we go. Having said that, I mean, we are very happy about that expense ratio, not only on the motor business, but also on the company as a whole that I think we posted a 19%, which is a very good number. In terms of the combined ratio, well, combined ratio was very good in all the businesses, that 91.4% that we have on the Motor business is very good. It is true that if you look at a little bit of the loss ratio, we have some windshield impacts because of the road situation in terms of -- after all the rains and so on. But very comfortable on the combined ratio, very comfortable on the loss ratio. I mean, the risk profile of our clients is very much in line with last year. I mean, so you should expect a strong combined ratio.

Again, I mean, we have always said that we should be a company in the low 90s, and we are there. So happy about that. Regarding average premium, well, the market, I think it closed last year in the neighborhood of 6% increase. I expect that the market will keep on rising average premiums as a general strategy. I mean, at the beginning of the year, I was expecting in the neighborhood of 4%. We'll see what happens with all the -- all these geopolitical situations that we are having, and that has an impact also on inflation.

So we monitor very much inflation. We monitor very much our average premiums. Just in case the situation in terms of inflation comes worse, probably we have to take action.

Our next question comes from Francisco Riquel from Alantra.

I wanted to start with a follow-up on expenses. If you can please share more details on this performance, for example, what's acquisition costs, marketing expenses versus overheads and IT spending. So what is driving the reduction in the expense ratio?

Second question is also a follow-up on the average premium, which in Motor for you is growing less than 2%, so below inflation. We have recent memories from the Ukraine war and the impact in your company and in the sector of the spike in inflation that we might now see after the Iran war. So I wonder if you are planning to update the tariffs or to adapt to a higher inflation environment or you will continue to prioritize market share gains in the coming quarters?

Thank you very much, Paco. I mean on the expense ratio, it is true that the number is very good, but it's nothing different as what we have seen from the company in the many, many years. It is true that probably this quarter, we have a little bit less marketing expenditure. Our acquisition cost is historical lows nowadays. We have a little bit less on investment on media and so on. And then on IT, the evolution, I mean, you should expect the increase on expenses more than decreases. I mean we are in a very transformational process on the company. And what you should expect looking forward is that technology expenses will rise.

Again, I mean, a little bit less of investment this quarter, but nothing I mean we manage marketing expenditure when we see an opportunity, when we increase our expenses, then we retrench a little bit. It's an evolution of the strategy of the company. But we haven't done anything just to have that 17% expense ratio. I mean you should expect the company to be below 20s for sure for the year, and that's going to happen. In terms of the inflation, I think we learned quite a bit, not only in but in the market of the impact of inflation in our business 2, 3 years ago. We monitor inflation evolution on a daily basis. We monitor what happens in Iran and all these places because it does have -- it will have an impact on inflation for sure, not on the short term, but in the medium term, it will come out with higher inflation.

And in the case of Línea Directa, we tend to price policy by policy on an individual basis, and we will do so. I mean, at the end, we have always said that our intention is to be an efficient company with a very competitive combined ratio. And if the situation comes to a point that we need to do something on pricing, we will do so. I think so far, our average premium increase has been in the neighborhood of 2% more or less, both in the new book and in the portfolio. And again, if we need to do it because inflation comes wrong, we'll do it. What we do is on an individual basis. I mean, I remember when inflation was 8%, we had some clients that we didn't increase their average premiums. And we have some clients that we have increased average premiums above that. It depends very much on the risk premium.

Our next question comes from the line of David Barma from Bank of America.

Firstly, on solvency, the ratio is supported by some reversal of the premium reserving done, I guess, last year. The typically happens later in the year. So can you give us some context on your reserving level and what gives you the confidence to have released that in Q1? And then on capital return on the dividend, you've paid a little over 50% in 2025. Going forward, how should we think about your dividend paying capacity considering that new business strain will likely remain quite high in 2026? And linked to that, do you aim to move to a more structured time line for dividend announcements?

And then lastly, on kind of AI threats and distribution. So with the improvement in AI and automation, the cost of operating omnichannel networks at your competitors is likely to go down materially in the future and perhaps close some of the expense gap you have with the market. How do you think about these changes in distribution? And can you give us some examples of things that Línea Directa is doing to ensure it stays ahead of the pack on this topic?

Well, thank you very much. Beginning with the last question, I think if there is any company that is going to be really, really a winner in terms of using artificial intelligence, I think that is Línea Directa. I mean it fits very well in our model. We don't have any legacy in terms of direct distribution. So I think it works very well for the company. We are already putting in place some strategies on artificial intelligence on the side of the -- claims side of the business, I mean, we are working very much on chats with artificial intelligence. We are working in all the claim management of the business is starting to work on the front side of the business, I think we have a lot of opportunities in unifying information and making the process at the telephone much more efficient, and that means much better expense ratio.

And then, of course, on the pricing, there's always opportunities to gather more data and the way we analyze the data. So again, I mean, we are in the beginning of using artificial intelligence. But clearly, I think it's a big, big opportunity for Línea Directa because it fits very well with the business model that we have. In terms of dividends, well, it's true that last year, I think we paid in the neighborhood of 60%, 56% of dividends. I mean, again, our objective now is to grow as much as we can. That double-digit growth in the business is very good for Línea Directa, and we are continuing on that front. That means that the consumption in terms of capital requirements is higher and probably is much more difficult to be on the 90s in terms of dividend payout.

Again, we are a company that have always had that spirit of being a dividend payer, and we will do so as far as we are able to maintain that 180% solvency ratio. And regarding the solvency ratio, no voluntary releases. That's clear. I mean it's basically the risk premium, the evolution of the risk premium that at the beginning of the year, it is a little bit better than on the last part of the year. And if you take out prior years, you will see that first quarter, second quarter, the performance of the risk premium, which at the end is your expected claim cost looking forward is a little bit better than on the third quarter and fourth quarter, and you have some adjustments on the third quarter, especially. So -- but again, I mean, we are in 190%. We have always said that we have to be in 180%, and that's the idea of the company. Sometimes it's a little bit better, sometimes a little bit worse.

Yes. David, I just would like to clarify that the premium reserve is a reserve looking forward. It's not something about releasing anything from prior years. This is a forward-looking provision and contains premiums minus losses and expenses. So it's encompassing the increase in average premiums for renewals, and this is what you have over there, but it has nothing to do. This is a forward-looking reserve. It's not backward looking.

Yes. Again, I mean, we are -- we have always said that we don't use our reserving to help the P&L. I mean we manage our reserve based on our claim costs and the runoff or releases on the reserves come because of the closing of claims. I mean that's clear.

Our last question comes from Carlos Peixoto from Caixa Banco BPI.

So just a follow-up on the combined ratio for the group. So basically, in the previous call, if I remember, you had mentioned between 93% to 93% -- sorry, 92% to 93% guidance for the full year. The first quarter came already below those levels. you had an exceptionally good quarter in the expense side, but also there was some one-off on the loss ratio side. So I was just wondering whether you see this as too early to lower the guidance that you had given before or indeed, you can beat the 92%, 93% ratio guidance that you had mentioned? And then the second question would be regarding the insurance -- health insurance, sorry. Basically, you see -- when do you expect to reach technical breakeven on this segment?

Thank you, Carlos. I mean, regarding the combined ratio, I maintain what I said at the end of last year. I mean, we should be a company in those levels of 93s, 94s. First quarter numbers are very good. I mean there's a lot of year to come, but I feel very comfortable that the company is doing the right thing in terms of risk profiling and in terms of expense management. And if we keep on doing that and gathering clients with good profile, gathering clients with a price accordingly to the risk and managing our digital proposition, evolving our digital proposition that will put the combined ratio in the levels that I said in the past. So I'm very confident on that.

And then in terms of the health business, Well, first of all, I think the health business is performing very, very well. I mean it is true that it's still a loss-making business, but the evolution of the business in terms of loss ratio, in terms of number of clients, in terms of growth in the upper lines is very, very good. I think we are very close to breakeven. I cannot put a date there, but I think we are doing the right things in all the levels of the business, in all the aspects of the business. And I think it's very short term to make that breakeven.

There are no further questions at this time. I will now hand it back to Beatriz Izard, Head of Investor Relations. Beatriz.

Thank you. We have also received questions through the platform. We have some questions coming from Will Hardcastle from UBS. Okay. So the first one is how sustainable is your lower expense ratio this quarter?

Well, looking forward, medium, long term, it should be better than the number we posted in this quarter. Again, I mean, the company is embracing a digital transformation, trying to move towards less human interactions in the management of our clients. And that if we do the homework that we need to do, we will put that expense ratio even better than that. It is true that on the first quarter at 17% in motor or 19% in the company is very good. I mean, but we feel that the company needs to keep on improving the expense ratio looking forward.

The second question is whether you can give us an idea of how your fixed income reinvestment yield has changed quarter-on-quarter? And how sensitive is your P&L to a 50 basis points rise in fixed income yields?

Well, on the last part of the question, I think it's much more affected our unrealized gains on the portfolio and the impact on the P&L. The reinvestment that we have this year is not very high. So it won't have a lot of impact. And in terms of the evolution of the yields, I think we -- last quarter, we were in [ 280 ], something like [ 280 ] plus, and we are almost in [ 280 ]. There is not that very negative evolution nor a positive evolution. Keep in mind that our book is very prudent. I mean 80% of our book are fixed income instruments, of which around 50% of that is government. We tend to sit on the investment and rely on coupons and dividends. I mean we don't do a lot of trading. So you should expect very much in line with what we have seen in this quarter in that neighborhood of [ 280 ]. We are trying to decrease a little bit the duration. I mean we are in below [ 4%.] We used to be in [ 4% ] by the end of last year, but very, very prudent investment phases and very stable throughout the year.

And the last question from Will is, I saw that a large mutual competitor recently raised its targeted combined ratio in order to be more competitive. Have you already seen this in action? What is your response to combat this?

Well, from Línea Directa point of view, I mean, your combined ratio has to be competitive through the expense ratio. We feel very comfortable in our loss ratio. Even if the loss ratio deteriorates a little bit more, we can manage that with a much better expense ratio. So the idea of the company is not to deteriorate the combined ratio in favor of growth, volume growth or retention of clients. We have been able with a combined ratio in the neighborhood of 92% to grow more than 60,000 clients in our Motor business to being able to retain our portfolio very, very well with a churn rate very close to 14% on the book.

So I don't think you need to deteriorate your combined ratio to grow. I think you need to manage your combined ratio in terms of efficiency to be able to provide a very competitive price to clients while maintaining the combined ratio.

So thank you. Thank you, Carlos, and thank you all for joining us today and for your questions. As always, the Investor Relations team remains available should you require any additional information.

Thank you very much.

Good morning to all of you, and thank you for joining us today. Welcome to Linea Directa's Full Year 2025 Results Conference Call. My name is Beatriz Izard, and I'm Head of Investor Relations. Presenting today will be our CFO, Carlos Rodriguez Ugarte. After the presentation, we will open the call for a Q&A session. I will now hand the floor over to Carlos.

Thank you very much, Beatriz, and good morning to all of you. 2025 has been an exceptional year for Linea Directa. Please let me guide you through the financial highlights presented on the first slide of the deck. Net income increased by 33.5%, reaching EUR 86 million. This strong result reflects a combination of growth and profitability. We delivered top line growth of 11.3%, an improvement of 2.1 percentage points in the combined ratio compared with last year, that is a combined ratio of 92.6%. Our customer portfolio increased by a superb 8.5%, reaching 3.73 million clients. We added more than 290,000 clients to our portfolio, making the highest annual growth in our history. Return on equity rose to 22.9%, underscoring the efficiency of our business model.

Finally, the strong results and solid solvency position have led the Board to propose a complementary dividend of EUR 50 million to the upcoming AGM. After accounting for this dividend, the solvency ratio stands at 182.6%. Now if we move to the next slide, we consistently emphasize the importance of efficiency in our business model. It enables us to offer more competitive prices to our customers to operate with healthy combined ratios. And lastly, efficiency is a critical driver of service quality. The digitalization of service continued to deliver outstanding results with all indicators surpassing the levels achieved at the end of last year. This includes strong growth in digital roadside assistance requests, online claims submissions in both Motor and Home and the use of digital supplements.

Another key KPI is the traffic generated through our app and website, which increased by 17%. Digital interactions now represent 2.7x more contacts than traditional telephone calls. The digital chat launched in 2024 has grown by 68% and AI now resolves more than 64% of incoming inquiries. Digital sales have grown exponentially, reaching 9% of all new business at the end of 2025. It is important to highlight that these sales are fully digital and complete without any human intervention. These results differ from digital origination, which represents more than 2/3 of our overall portfolio. Finally, 91% of our customers interact with us digitally at least once a year. This journey is also driven a broader transformation to unlock the full potential of our direct model. We continue to strengthen our multiproduct offering while keeping the customer firmly at the center, delivering quality, service, transparency and competitive pricing. Through simple, user-friendly and comprehensive new digital assets, we aim to make our customers' life easier and to reinforce Linea Directa as the brand people choose and want to stay with.

Now let's move on to a more detailed review of the 2025 results. On Page 9, the message remains fully aligned with what we have been highlighting in previous quarters. We continue to deliver excellent top line growth complemented by strong retention levels. This performance reflects our increased customer loyalty and our ability to attract new clients to the brand. The combined ratio was very solid for the full year at 92.6% and exceptionally strong in the fourth quarter at 19.4%. Financial result was up 5.4% with higher income from the bond portfolio and the revaluation of investment funds. And all of this resulted in a profit after tax of EUR 85.7 million, an increase of 33.5% compared with 2024. In terms of business volumes and customers, all line of businesses reported significant growth with Motor standing out by adding more than 215,000 new clients during the year. Growth was solid across the board, and our newer products also expanded considerably.

Moving to Page 11. The evolution of the combined ratio remains solid. The loss ratio improved by 1 point, supported by prudent risk underwriting. At the same time, we continue to enhance operational efficiency through digitalization leading to a further 1.1 point reduction in the expense ratio. We continue to invest in data and technology capabilities that enhance both efficiency and customer experience. We view the expense ratio as a key competitive advantage, and it remains a central focus of our operational strategy.

Now I would like to move on to a more detailed breakdown by line of businesses. In Motor, the year delivered excellent results, with premiums increasing 11.8% year-on-year and 12% in the quarter. We outperformed the market by 3.5 percentage points. The combined ratio improved by 2 points, supported by a notable correction in the fourth quarter. The sector, however, deteriorated its combined ratio to 98.2%, 99.3 % on a stand-alone basis in the fourth quarter. For its part, the Home line of business delivered a steady growth with premiums increasing by 6.3%. In 2025, the line achieved an all-time high profitability, posting combined ratios below 90% in every quarter, including an exceptional 84% in the last quarter of the year. Moving to Page 14. The Health line delivered a strong growth of 14.7%. We continue to make steady progress in improving the product mix with specialists and comprehensive products now accounting for 67% of the business compared with 62% in December 2024.

On the technical side, we saw a very strong improvement in the combined ratio, down 14.6 percentage points, bringing it closer to target levels. Underwriting remains prudent with claims frequency well contained. The loss ratio for the year was 79.6%, broadly in line with the sector average of 79.7%. The financial result increased by 5.4%, supported, as I mentioned before, by higher income from bonds and a positive mark-to-market performance of our investment funds. Regarding the investment portfolio, its composition remained largely stable throughout the year with the portfolio, excluding cash, increasing to EUR 1.2 billion, supported by business growth. Average return stood at 312 basis points, while the average investment yield of the fixed income portfolio reached 241 basis points. Portfolio duration is 3.86 years.

On our solvency position, the solvency margin stood at EUR 183 million, taking into account the complementary dividend that the Board will propose to the upcoming AGM. Moving to the next page. The SCR is mainly driven by underwriting risk, which increased in line with business growth by market risk reflecting interest rate and spread movements. And finally, by the significant rise in the symmetrical adjustment during the year. To conclude, the 2025 results reflect exceptional growth and strong profitability. We entered 2026 from a very robust position, fully focused on driving future growth in a profitable and sustainable manner. I will now hand the call over to Beatriz to begin the Q&A session. Thank you very much.

Thank you, Carlos. We are now making with the questions received from the conference call.

[Operator Instructions]

Our first question comes from the line of Maks Mishyn from JB Capital.

Two questions from me. The first is on Motor insurance. We observed a slowdown in average premium growth for the sector. Do you think this means companies are back to the levels of profitability they want to be? What do you expect for 2026 in terms of competition? And do you think you can keep the growth momentum into the next couple of years? The second question is on health insurance. It's surprised with the growth of new customers. I was wondering if you have changed something in your commercial approach. And do you see you think we can reach a breakeven soon in this segment?

Thank you very much, Maks. Well, I mean, if we look at the market in the Motor business, I mean the market is still, I think, adjusting its combined ratio. The last number that we have from the market is that on the last quarter, the combined ratio was close to 99%. So I think they still need to do some homework on the average premium. Average premium for the sector, I think, for the year was in the neighborhood of 6% increase. And my expectations looking forward is that next year, they should need to keep on increasing average premium to adjust the profitability of the portfolio.

In Linea Directa, my expectation for this year is that we should keep on growing. Difficult to give you rates or numbers. But the idea is that we have an opportunity to grow, and I think the company should keep on growing. I mean, once we have a very competitive combined ratio. We have a very competitive business proposal to our clients. So I think you should expect growth for 2026.

And regarding the Health business, I mean, more I think is evolution of many, many things that we have been doing throughout the years. I mean, we have focused very much on cross-selling the health business to our clients. We have focused very much on changing the portfolio mix of the products that we were selling, trying to sell products much more sticky. We keep on being very prudent on the underwriting. And I think all things together have put the Health business in the pipeline to break even. The question on when it's going to come to breakeven, it's difficult to say, but I think we are very close to it.

The next question comes from the line of Francisco Riquel from Alantra.

Yes. So my first question is about digital sales that you have increased to 9% of the total in '25. If you can comment on the loss experience with digital-only clients? And how does it compare to the group average? And my second question is on the expense ratio in Motor, which has fallen to 16% in '25 under IFRS 4. My question is how low can it go in '26 and over the medium term?

And then related to all these digital issues, just a follow-up on the artificial intelligence that you have been mentioning during your presentation, your views you have commenting about the opportunities, but also about the potential threat if you see any?

Thank you very much, Paco. On the digital front, well, I think it's too soon to give a message on the behavior of our digital clients, pure digital clients. I think so far so good. I mean, in terms of profitability, in terms of risk profiling, they are very similar to the clients that they come to the telephone. So we are very happy about the evolution. I think it's too soon to give numbers on that. I mean we are talking about 9% of customers purely, purely digital with no human interaction that is in the neighborhood of 80,000, 90,000 clients. So I think it's too soon to give a profile of those clients.

Some surprises from this approach is that the risk profile of this client was even better than some of the clients that we have in the portfolio, which is good. Other learnings that we have is that in terms of average premium is very similar to the telephone clients. So I think so far, so good. I mean, very positive on that. The second question was on the expense ratio. While the expense ratio is true that it has reached almost 16% in the Motor business, well, I mean, I tried to explain this through the call. I mean our focus on efficiency and our focus on being the most efficient company in terms of operational is there. It's always a target. And I think it's key for a company like Linea Directa, and I think it's key for the sector. I mean I think the winners in the sector in the short term or long term, sorry, will be those that they are most efficient, and that's the way we do it.

Of course, the business model that we have, I mean, being direct, being digital and so on helps very much. So where I see the efficient expense ratio looking forward, I don't have a number, but if I were to improve my combined ratio probably will be more on the expense side of the combined ratio than on the loss ratio. That's how we see things.

And finally, in terms of artificial intelligence, which is the million-dollar question nowadays. Well, I think it's an opportunity for Linea Directa. Clearly, I think using this technology in a direct business model as Linea Directa is clearly an opportunity. We are working on that. We want to be prudent on that as well. I mean, I think it's too soon to give numbers the evolution of artificial intelligence on the P&L of the company. But clearly, I think it's an opportunity for Linea Directa. We are using already artificial intelligence in chats, in the operation. But again, we are working on that. But what I want to be very clear is that I think it's adjust very well to the business proposal of Linea Directa being sold direct.

The next question comes from the line of David Barma from Bank of America.

Firstly, coming back on the combined ratio. So you published a combined ratio in Q4 that's the level that not so long ago, you were saying was too good to be true. So can you please give us some color on the quarterly performance? And to what extent weather and frequency might have supported Q4 and how you see that developing in '26, please?

Secondly, on solvency, I was expecting the solvency ratio to be supported in the quarter by a reversal of some of the premium reserving done early in the year, but it doesn't seem to have come through. So can you comment on that, please? And whether it's something we should expect in coming quarters?

And then lastly, on capital return, we've paid a little over 50% in '25. Going forward, how should we think about your dividend paying capacity considering that new business strain is likely to remain high in '26 as you were alluding to earlier?

Well, in terms of combined ratio, it is true that the combined ratio in the last quarter has been exceptional. I mean it has been very good. I think it has been on the 90s. Probably that has been driven by the expense ratio who has improved, as I explained before, but also because of the frequency in our business. I mean frequency was lower than in the third quarter, and that helped the combined ratio going to those 90s%. Where do I see the combined ratio of the company? I think we -- I mean, last year, I think we put a target of getting close to 94% by the end of the year. We've reached that. So we delivered the numbers, I would say.

Looking forward, I'm not very much concerned about improving more my combined rates. I think my combined ratio in the neighborhood of 92s, 93s, it's a very good combined ratio. Again, if I were to improve my combined ratio, it would come from the expense ratio more than the loss ratio. But in the levels that we are nowadays in terms of 92%, 93%, I think the company feels very, very comfortable. Your second question was on solvency. Well, solvency is above 180%, which is very good. It is true that on the third quarter, we have this hike in the premium reserve.

The problem is that we keep on growing very, very much. And when you grow very much your SCR amongst quite a capital, and that's the thing with the solvency ratio at the end of the year. Very comfortable if we are able to maintain that 180%, which is really the target of the company, always on those 180%. And then on the dividend payout, we don't have a payout policy. As you know, we have a solvency policy, which has been around 180% as far as we are there, then the Board will decide.

But it is true that when you grow your revenue side by 11%, 12%, SCR demands quite a bit of capital, and that has some pressure on the dividend. I mean -- but I think we -- with this EUR 50 million complementary dividend, our payout is 56%, I think, which is quite high.

The next question comes from Carlos Peixoto from Caixa Bank.

Just a quick follow-up from my side. So just going back to the fourth quarter combined ratio. I was just wondering whether there was any release of provisions in the quarter. I'm not sure you answered to that before. Then the second part -- sorry, second question would actually be on premium growth. So for this year, how do you see evolving? Do you expect to see any sort of slowdown or actually an acceleration in the pace of growth? And also, I saw that the expectation for the [indiscernible] is a 2.7% increase. Do you expect to fully pass on that clients through prices? So basically, this will be the main points that I was looking for?

Well, I'm going to try to answer because I have some difficulties in understanding your questions. Regarding the combined ratio Carlos, no reserve releases. I mean the reserve releases that we put on the quarter are the ones the ones with -- on the managing on the claims. I mean we don't do reserve releases, voluntary reserve releases. I mean we manage the business and more or less it's the same. So nothing extraordinary on the combined ratio in the fourth quarter, even though it's a very good combined ratio. I mean it's business as usual.

Regarding premiums, well, we don't have a target in what should be the growth for the premiums in 2026. Probably the only target that we have is trying to grow more than the market. I think we have reached that goal in 2025, and that should be the goal for next year growing more than the market. We are very confident in the opportunity that we have. We have put more than 200,000 new clients on the company, on the Motor business. We are looking at the market, and we still see that the market is having some trouble with the combined ratio. So I think there's an opportunity for Linea Directa, and we will take that opportunity.

The last question is from the line of August Marcan from UBS.

Just 2 for me. One, your Home combined ratios seem very strong throughout the whole of 2025. I was just wondering if we kind of normalize for weather and everything, what is your expected normalized level for that segment? And second, for the Motor you touched on it at the start of the call, I think. But if you could expand a bit further, how do you see pricing and inflation trends in Spain year-to-date in 2026 so far?

Thank you. Well, it is true that the Home combined ratio has been superb this year, I mean, in the low 90s, even below 90s, some quarters. It has also been very good for the market as a whole. So it's difficult to say where do I see the combined ratio home insurance looking forward. I think it should be in the neighborhood of 91%, 90%, something like that. I don't see the combined rate below 90s. I think it has been a very, very good year. It depends very much on atmospheric vents. I mean, for example, the first 2 months of the year has been terrible in terms of rains in Spain. So it depends so much on atmospheric events, the evolution of the combined ratio that it's very difficult to give you a target.

Having said that, I mean, we are a company with very competitive combined ratios. The Home insurance should be a business with a very competitive combine ratio compared to the market. Maybe below 90s is too good to be true. And the second question on pricing and inflation. I think the market closed with our average increase of 6% premiums more or less, which I think 5% is increasing premiums and the other one is on new cars. I think the market will keep on rising average premiums above inflation. I think they should because they are very close to 100% combined ratio. In the case of Linea Directa, you should expect individual prices, you should expect always adjusting our average premiums to CPI increases more or less.

There are no further questions at this time. I will now hand back over to Beatriz Izard, Head of Investor Relations.

Thank you and thank you, Carlos, and thank you all for joining us today and for your questions. As always, the Investor Relations team is here to support you should you need any additional information.

Thank you very much. Have a nice day.

Good morning to all of you, and thank you for joining the call today. Welcome to Línea Directa's Third Quarter Results Conference Call. My name is Beatriz Izard, and I'm Head of Investor Relations. Presenting today is Carlos Rodriguez Ugarte, our CFO. And as usual, after the presentation, we'll open up the call to Q&A.

And with these words, over to you, Carlos.

Thanks a lot, Beatriz, and good morning to all of you. I will start, as always, on the first slide by commenting on the financial highlights for the quarter. We are reporting premiums of EUR 844 million, which is an exceptional growth of 11.4%. By line of business, Motor grew by 11.8%; Home, 7.3%; and Health, 13.9%. The portfolio of customers recorded an outstanding growth of 8.1%, reaching 3.65 million clients as of September 2025.

Despite a few high severity claims experienced in the quarter, combined ratio was a solid 93.4%. Our highly efficient capital model translated into return of equity of 22.3%, and solvency stood at 189%, which is supportive, of course, of future capital distributions.

Moving to Page 6. Here, the message I would like to convey is consistent with what we said in previous quarter, further acceleration in the top line and sound retention levels by increasing the loyalty of our customers and attracting new ones to our brand.

We accelerated commercial digital initiatives, aiming at improving top line development and efficiency in the coming years. It is always important to remember that growth can easily be achieved in our industry, but disciplined growth is a different story, and we only seek the latter.

We posted a worse underwriting result in the third quarter from a few high severity claims and still, combined ratio was a sound 93.4% for the first 9 months of the year. Expense ratio posted a further improvement. Financial result was up 18.9% with higher income from the bond and equity portfolio and the revaluation of investment funds. And all of this led us to a profit after tax of EUR 60 million, up 46% over the 9 months of 2024.

As with regard to business volumes and clients, all line of businesses reported significant growth, particularly in the Motor line of business with more than 53,000 new clients in the quarter. We are very pleased with this progress.

In Health, we resumed growth, even considering the extraordinary dental campaigns of 2024. Excluding this effect, clients will have grown by 9.8%.

Moving to Page 8. The evolution on the combined ratio was solid despite a seasonable adverse quarter with a handful of high severity claims. We continue to invest in data and tech capabilities that will improve efficiency and customer experience. We consider the expense ratio to be a key competitive advantage and remain very focused on this.

Now I would like to move to a more detailed explanation by line of business. In Motor, we further accelerate growth with premiums up 11.8% year-on-year and 13.3% in the quarter stand-alone. We were able to see the market growth by more than 3 percentage points. The combined ratio stood at a solid 93.4% for the 9 months. For the quarter stand-alone, a handful of high severity claims in the summer months added 2.3 percentage points. Excluding this effect, the underlying combined ratio stands at 94%.

For its part, the Home line of business posted significant growth with premiums up 7.3%. Profitability for the year continues to be remarkable with combined ratios below 90s. The quarter stand-alone stood at 87%.

Moving to Page 11. Health posted growth of 13.9%. The figures are benefiting from more comprehensive products, specialists and complete products now account for more than 65% of the portfolio. Very importantly, we will also resume customer growth. On the technical side, combined ratio posted a further improvement.

Moving to the financial results. We posted higher income on bonds and equity instruments. The mark-to-market of investment funds was very positive in the year, particularly in the first half and less in the third quarter. The investment property result declined due to the temporary loss of rental income from a building under renovation at the city center. Completion is expected by the end of 2026, after which, an updated rental income will resume.

As with regard to the investment portfolio, its composition remained pretty much stable in the third quarter with the portfolio, excluding cash, increasing by EUR 1.2 billion on the back of business growth. The underlying return stood at 313 basis points. Average reinvestment yield for the fixed income portfolio was 249 basis points. Its duration is currently 4 years.

On our solvency position, solvency margin stood at 189%. As we anticipated last quarter, a more consistent calculation has been performed in parallel with the development of our internal model for premium risk. Given the quarterly volatility, while we calibrate the tool, it is more appropriate to look at it on a yearly basis.

Moving to the next page. SCR is mainly driven by underwriting risk, increasing as a result of business growth, and market risk on the back of interest and spread risk and a significant increase in the year of the symmetric adjustment. The second dividend, if the Board decides to do so, is expected to be announced before year-end.

To conclude, September results posted exceptional growth. Underwriting remains very prudent. Combined ratio was also solid in the quarter despite headwinds from a few severe accidents. We continue developing the necessary basis for our future ambitions and remain very focused on efficiency.

I will now hand the call over to Beatriz to begin the Q&A questions.

Thank you, Carlos. We'll begin with the questions received from the conference call.

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

Firstly, on the Motor profitability in the quarter, the 94% underlying you flagged is still deteriorating a bit compared to the last several quarters. Can you talk about that level and what you're seeing in terms of underlying frequency and severity?

And then secondly, on the reserve adjustments and solvency that you talked about. Can you please come back on what you did there? And whether that's mostly a model change one-off, taking back part of what you had done in the previous quarter?

And then lastly, on average premium growth. It seems like it's starting to slow a little bit in Q3, both in Motor and in Property. So if you could give us an update on pricing trends.

Thank you very much, David. In terms of the Motor business profitability, which is very much linked to the combined ratio, it is true that our combined ratio on the stand-alone quarter is in the neighborhood of 96.2%, I think. But I think we need to take the picture on the entire year, which is very close to 94%.

What happened on the third quarter, which is something that happened usually historically, if you take a look at the history of our combined ratio, I think almost all the third quarters were 1 or 2, I mean, our combined ratio is worse than the second quarter.

What happened on this third quarter, frequency was more or less in line with what we expected. Average cost was also very much in line, although average cost has been increased by a handful of severe claims, especially bodily injury claims, which I must say is sometimes they come, sometimes they go. What we did is we took a look at these claims, whether they are very much impacted by the new business or not. And we see that basically those severe claims, most of them are on the portfolio, so very comfortable in terms of how we are gathering clients in terms of risk profiling. But again, I mean, when you have a handful of severe claims in the neighborhood of EUR 5 million, it has an impact of 2 points on our combined ratio.

Looking forward, our expectation is still that we are doing things on the track we wanted, gathering clients with good risk profile. Frequency is still very much in line with our expectations. And if the last quarter of the year performs well in terms of severity, we should be shooting for a combined ratio, which is more close to low mid-95s than above 95%. That's my expectations.

In terms of solvency, it is true that we've been calibrating a new platform, which is not a change in the model. I mean, it's basically calibrating the model. I think it's a one-off. Of course, you also have to take a look to the premium provision, which has a lot of seasonability throughout the year. It's very positive on the second quarter, and then it's a little bit worse on the third quarter.

Looking forward on the year-to-date picture, I mean, that premium provision is very positive for the capital, and it should be that the case for the end of the year. Again, I mean, we are talking about a company which still has 190% solvency ratio, which is very good. And third quarter solvency is a little bit of a seasonal effect. And I think we need to look at the solvency risk on a daily basis, more or less.

And on the average premium, well, there is not a change on the strategy. I think the evolution of the company in terms of pricing is very much linked to the premium risk, and we focus on that. I mean so we adjust premiums on that. If we take a look at the year, our average premium for the new business and for the portfolio are very much in line in the core business in the bulk of our business, individuals is very much into the 2% to 2.2% increase and it's adjusted on an individual basis. So it's not a strategy that we will start to lower average premiums.

Indeed, if you take a look at the CPI increase in Spain, it's picking up a little bit, now it's in the neighborhood of 3%, 2.3% on the underlying CPI. And we will adjust premiums on that ground looking forward next year, again, on an individual basis. But still, I think we need to keep on adjusting our premiums to CPI increases.

The next question comes from Francisco Riquel from Alantra.

My first one is a follow-up on this Motor combined ratio. So you printed 92% combined ratio in the first half of the year in Motor. So excluding the large loss claims that you mentioned and also the adverse seasonality in the Q3 due to the summer season, shall we expect a combined ratio in Motor back down to 92% in the fourth quarter? If not, how can you reassure us that the fast growth in Motor policies is not coming at the expense of underwriting risk?

And my second question is, I wonder if you can also share the weight of digital in the Motor business, both in terms of the total revenues and in the new business. I understand you are not using the sector database for claims in the digital business. So I wonder if that is having an impact in the risk that you are taking through the digital channels and if you plan any change at all in the digital strategy?

Thank you very much, Paco. Since you follow our numbers on a quarterly basis, probably you can go back to my script on June, and I was saying that 92% on a quarterly basis was too good to be true. I mean we are a company, with that, we should be more in line to that 94% or something like that.

My expectations looking forward for the year is that we should stand in that level. I mean it's kind of difficult to give you a number, but I always said that 92% was very good, and we are very happy to be on 92%, but I think the company should maneuver in the neighborhood of 94%, especially in an industry that, as you know, combined ratio is still on 99% as of June, 98.7%. So our positive gap is still there.

And looking to the third quarter, Well, I tried to explain that. I think we have like 2 points, 2.3 points on the combined ratio on the third quarter that are basically due to severe claims that are very difficult to manage. Again, it's very important to say that we do look at the short frequency of the new business. We look at the 30-day, 60-day and 90 days frequency of the business, and that is performing quite well.

Second of all, the main severe claims that we have on the third quarter are assigned to the portfolio and the 2 business. So the combination of those 2 things tell us that we are gathering clients with the risk profiling that we like. We will keep on monitoring that, but there's no concern on the company on those grounds.

So looking forward, fourth quarter, things should perform quite well on the portfolio. Things should perform quite well on the new business. My aim is that we should be in the neighborhood of those mid-90s that I always said should be the target for this year for the company.

The second question, I think, was on the digital side of the business. Well, the digital side, the pure digital side, and when I say pure digital side, I say the online real-time digital business, which is opening the interaction with the company and closing the deal without human interaction is still small. I mean we are talking about 10% of the gathering of new clients, I mean, in the neighborhood of 70,000 clients. So the impact of and not using SINCO, which is what you are saying, is not very important.

I must say that, of course, we follow very much not using that database. And really -- and surprisingly, the risk profiling of the pure online clients is much better than the -- well, I wouldn't say much better. It's better than the risk profiling of the clients that they use our call center. So we are very happy on that. I don't think that is an area to be worried. I mean we will keep on fostering our digital proposition to clients. We have more than 3 million transactions on a monthly basis of our clients. Almost 100% of our clients are direct. And I think for us, that is key and it's nonnegotiable. I mean, of course, we do look at the risk profiling, and we are very happy on the profile of those 70,000 clients that we have got on the year through our digital proposition.

The next question comes from Carlos Peixoto from CaixaBank.

A follow-up actually from my side. So you mentioned an expectation of combined ratio around 94% for 2025, if I understood correctly. I was just wondering if you could clarify whether this is for the Motor business standalone for the company?

And then on the second part of the question, looking into 2026 and beyond, do you see the 94% as a combined ratio as, let's say, a normalized level for Línea Directa? Or how do you -- where do you see it over the coming years basically?

On the combined ratio by the end of the year, again, I mean our expectation is to be in those mid-90s, below mid-90s. Of course, I don't have a crystal ball. I mean it depends on a lot of many things. I mean what we have to do is to manage our risk profile as we do, and that should put the company in those rounds.

In terms of company, overall company combined ratio, well, it's very much driven still by the motor business. I mean, indeed, I mean, our combined ratio year-to-date is very similar, 93.4% in both Motor and overall company should -- I mean, overall company is very still -- is driven by the motor business.

Of course, if we take a look at the other 2 main business that we have. Home insurance performed superb throughout the year with a combined ratio below 90%. Of course, we are very happy about that, and we look forward to maintain those levels by the end of the year. We will see what happened with the atmospheric events. I mean the year has been kind of mild throughout the year, and we'll see what happened, but very happy with that business, growing almost 8% in the gross written premium, and we have a very good combined ratio.

Health business, also the combined ratios keep on improving. Again, we still are a loss-making business, but we are very happy with the growth on the upper lines, growing above the market quarter-on-quarter. So very happy on that. But combined ratio should be very much in line with the motor industry if we take a look at the company.

And looking forward on 2026, I don't have a target on the combined ratio. Currently involved in my budget for next year, so I don't have still numbers for that. I think the company is always -- has always said that we should be a company with the best combined ratio in the sector and one of the best on a pan-European picture. And that should mean that we have to be on those grounds, on 94s, 95s.

It depends very much also on the evolution of our expense ratio. Expense ratio has improved, again, almost 100 basis points, which is a very good number for the quarter, should keep on improving with our digital proposition. And that in the medium term should keep on putting pressure downwards on the combined ratio for the company.

The next question comes from Maksym Mishyn from JB Capital.

I have two. It's on the new production, given the strong numbers you are posting in Motor, I was wondering, what's your ambition for the market share in the segment in the long term?

And then the second question is, if you could share a bit of more color on what kind of customers you are adding? Are there mainly first-time buyers that come from other companies? And what type of coverage do you sell the most? That would be super helpful.

Thank you very much. Going on the last, our portfolio mix is very much similar to what we have. I mean, we are a company more focused on third parties than in fully comprehensive. And that is more or less the trend with the new gathering of clients.

What type of clients are we gathering? Well, we are very strong on the new business, on new buyers of cars and secondhand cars. I mean we have always been very, very powerful on those grounds. I mean our market share there is well above our natural market share, which is in the neighborhood of 7%. I think our share of new business, new cars is in the neighborhood of 10%. So we are there, and we are gathering clients from there. But then we are gathering clients from the competition. I mean if you take a look at competition, and I know you do, I mean, they are losing portfolio and some of those portfolios is coming to the company.

The second you were asking -- the first question you were asking is, well, in terms of gathering of clients, my ambition, no targets on that. I think our ambition is being able to grow more than the market, and it's something that we are doing in terms of gross written premium. Our gross written premium is well above 11%. Market is in the neighborhood of 8.98%, and that is a trend. I mean what we want is to be a company that we are able to grow more than the market, and that growth will realize in gathering a good number of clients. We have been gathering 50,000 clients more or less on a quarterly basis, and it's something that you should expect by the end of the year.

The next question comes from Juan Pablo Lopez Cobo from Santander.

My questions were already answered.

There are no further questions at this time. I will now hand back to Beatriz Izard, Head of Investor Relations. Beatriz, now your line is open.

Thank you. Thank you, Carlos, and thank you all for joining us today and for your questions. And as always, Investor Relations team is here to help you should you have any further needs.

Thank you very much and have a nice day. Thank you.

Good morning to all of you, and thank you for joining the call today. Welcome to Línea Directa's First Half Results Conference Call. Presenting today is Carlos Rodriguez Ugarte, our CFO. And after the presentation, as usual, we'll open up the call to Q&A.

And with these words, over to you, Carlos.

Thank you very much, Beatriz, and good morning to everybody on the call. We are very pleased to deliver an excellent set of results for the first half of the year. As always, I would like to start by commenting the key figures on Page #5.

In a nutshell, we are delivering high organic growth and profitability, excellent return on equity and a strong balance sheet. Business growth accelerated to 10.8% with Motor at 11%, Home at 7.5% and Health at 13.6%. The portfolio of customers grew in more than 241,000 policies to 3.58 million. Combined ratio stood at 92.3%, down 3.2 percentage points. Net income rose to EUR 43.8 million. Return on average equity rose to 23%. And finally, solvency increased to 193.2%.

Moving to Page #6. Here, the message I would like to convey is consistent with what we said in 2024, further acceleration in the top line and sound retention levels by increasing the loyalty of our customers and attracting new ones to our brand. We posted a better underwriting result from a strong revenue growth and sound 6 months combined ratio with further improvement in claims and expenses.

The evolution of the financial result was remarkable, up 33.9% with higher income from the bond and equity portfolio and the significant revaluation of investment funds. And all things together led us to a profit after taxes of EUR 43.8 million, up 72% over the 6 months of 2024.

As with regard business volumes and clients, all line of businesses reported significant growth, worthwhile to mention the Motor segment with 62,000 new clients in the second quarter stand-alone. In Health, our more comprehensive products grew by 13.6%.

Moving to Page #8. The positive evolution on the combined ratio was very solid from 95.5% in the first half of 2024 to 92.3% as of June 2025, down 3.2 percentage points. Once again, I would like to reinforce key messages, careful subscription and tight cost control. We are continuously working towards automatic processing and streamlining the business in general as well as improving our digital setup. We consider the expense ratio to be a key competitive advantage.

Now I would like to move to a more detailed explanation by line of businesses. In Motor, we further accelerated growth in the second quarter with premiums up 11% on the back of improved sales and retention. We were able to exceed the market growth in more than 2 percentage points. The combined ratio stood at an excellent 92%, down 3.6 percentage points as compared to the first half of 2024.

Also, the Home line of business posted significant growth with premiums up 7.5% in the first half of the year. The combined ratio continues to be exceptional at 88.9%.

In Page #11, Health posted growth of 13.6%. The figures are benefiting from more comprehensive products. Specialist and complete products now account for more than 64% of the portfolio, which compares to 57% as of last year. On the technical side, loss ratio was driven by the increase in hospital scales. Conversely, frequencies are declining.

Moving to Page #12. Financial result was up 33.9%, driven mainly by the increase in the mark-to-market of mutual funds. We also posted an increase in income in the bond and equity portfolios. Also, let's remind, last year, we had an impairment of EUR 1.3 million in the corporate bond French company Atos.

As with regard to the composition of the investment portfolio, government bonds gained further weight in the second quarter with longer duration, which rose to 4 years. The underlying return of the portfolio stands at 322 basis points, and average reinvestment yield stood at 261 basis points in the quarter.

On our solvency position, solvency margin rose to 193.2%, which compares to 180.2% in the first 3 months of the year. The latter has been already adjusted for the first interim dividend of 2025 of EUR 50 million. Own funds were driven by the result of the quarter, the positive development in the available-for-sale portfolio and the best estimate of premiums. SCR increase was a function of market risk on the back of deterioration of the symmetrical adjustment and spread risk. Underwriting risk grew reflecting business growth.

To conclude, June results were strong. We delivered very consistent results. We are also developing the necessary basis for our future ambitions and much is expected from us in the upcoming years.

I will now hand the call over to Beatriz to begin the Q&A session.

Thank you, Carlos. We'll begin with the questions received from the conference call.

[Operator Instructions] The first question comes from Maksym Mishyn from JB Capital.

I have 2. The first one is on the Motor insurance. You're capturing new customers strongly, and I was wondering if you could share more color on what type of coverage the new customers choose. Also, are they mainly new car buyers or customers coming from other companies?

And then the second question is on Home Insurance. Any chance you could walk us through the combined ratio in the quarter? Were there any extraordinary impacts? And what are your expectations for the rest of the year?

Thank you very much, Maks. Regarding the Motor insurance, I mean, those are 62,000 clients that we gathered in the second half of the year in the second quarter. And those are almost 50,000 that we got in the first quarter. I mean, they come from competition, and they come from new car sales. I mean, Línea Directa is a player in the new car sales, but it's a player in any of the transaction. So, I mean, we are gathering from the market, and we are gathering also from the new business.

And regard to the type of clients that we are gathering in terms of mix of portfolio, very similar to what we have. I mean, we are a company very much focused on third parties' insurance. We have also some fully comprehensive, but basically, it's very similar to the mix of products that we have. So gathering from the market, getting new clients that they are buying new cars. As you know, cars are -- sales are increasing in Spain in the neighborhood of 800,000 a year, 900,000. So we are gathering. And then in terms of mix of the portfolio, very similar to what we have.

Regarding the Home business and the combined ratio, the combined ratio is good. I mean it's in the neighborhood of 89%. I mean...

The next question comes from David Barma from Bank of America.

Two questions on Motor, please. To start with, it seems the average premium growth accelerated a bit in Q2, which is a bit at odds with what we discussed last quarter. Can you talk about new business pricing, please, and how it has evolved since Q1? And then staying on Motor, the loss ratio ticked up a little bit by 2 percentage points compared to Q1. Can you explain what's going on there? Is it frequency or a little bit more of weather? Can you just discuss that, please?

Thank you very much. Let me first try to answer Maks because we were missing one of the questions in the combined ratio of the Home business. The Home business, well, combined ratio is very healthy, I mean, in the neighborhood of 89%. Nothing weird there, very much in line what we have been posting in the last quarter since the end of last year. So while we'll see the latest rains and how they impact the business, we'll see what happens on the autumn where rain comes into play. Very confident that our levels of the combined ratio will be in those rounds throughout the year in the neighborhood of those 90%.

And then on the average premium on the Motor insurance, it is true that probably in the last quarter, we have increased a little bit our average premium on the business -- on the new business. Well, at the end, as I always said, I mean, we try to individualize prices on our clients and trying to adjust pricing to risk premiums. So at the end, it's a matter of risk premiums and adjusting prices. The market is increasing average premiums above 7%. In our case, I think our new business is still below that. So we are taking advantage of that, and we are taking advantage of the homework we did in the past.

And regarding the loss ratio in the combined ratio of the Motor insurance, well, I think it's very similar. I think that there is no major changes. I mean, it could be some seasonable impacts, but at the end, very, very happy with the loss ratio of the Motor insurance, especially gathering more than 100,000 new clients to the business.

Can you just share on your -- from your view, the what the new business pricing was on average in Q1 and Q2, please?

Well, the -- I don't know what you mean by the average you mean the average pricing of that. I think the average price for the new business is in the neighborhood of an increase of 6%, something like that. That's the evolution of the new business. I mean, average premium is going on the rise, I think, in the neighborhood of that 5%, 6%, I mean.

And that was lower in Q1, right?

Yes, it was lower in Q1. Yes. Yes. But I mean, it's -- we don't have a year strategy on average premium. I mean, we tend to adjust pricing according to how we see the situation and according to the risk premiums of the clients. I think one of the beauties of Línea Directa is that our capacity to change the strategies in terms of pricing and in terms of gathering clients is much more faster than traditional companies, as they have more difficulties on that. So basically, it's a strategy that is an ongoing always.

Next question comes from Carlos Peixoto from Caixa Bank.

A couple of questions from my side as well. So on the Motor segment, maybe if you could discuss a bit how you expect the evolution of gross premiums throughout the year? What type of growth should we see at year-end? Should we expect it to be at double digits? And how that breaks down a bit into policy growth and price increases?

Still within the Motor segment, your expectations on the cost -- on the combined ratio evolution for the second half of the year, whether you still expect it to remain at low 90s in the year as a whole?

And then if I may, just a third question on the Home insurance business. We've seen this quarter 2 percentage points improvement in the combined ratio. I just wanted to see whether there was here any specific items driving this improvement, whether you see these levels as sustainable or perhaps if you could give us some range on where you think the combined ratio will be throughout the year?

Thank you much, Carlos. On the Motor segment, well, I mean, the evolution of the gross written premium for the company, I think it's been excellent since last year. I mean, almost 1.5 years ago, our growth was in the neighborhood of 2%, 3%, and now, we are on a stand-alone basis on the 12%. Our -- the evolution of sales and especially the evolution of retention has been very, very positive throughout the year. My expectation is that we will be able to maintain those levels of extraordinary retention and those levels of sales. So I hope that we will be able to be in those levels of double-digit growth.

The most important thing is that we have been able to overcome the market growth by far. Market growth was, as of June, in the neighborhood of 9%. And as stand-alone in the second quarter was on 8.7%, whereas in our case, stand-alone, the second quarter is 12%. So very, very good news, very good news there.

In terms of the combined ratio, well, we posted 92%, which is basically the same as we did in the first quarter. I mean, we feel very comfortable on those grounds. Of course, it depends very much on frequency. It depends very much on average cost. We'll see what happens throughout the year. We have summertime now that people go out with the car. We'll see what happens with frequency and severity. But again, I mean, being on those levels close to 90s, where the company feels comfortable, we should be there in the medium to long term.

And regarding the Home Insurance business, well, it's a matter of more than frequency than average cost. Average cost is more difficult to manage in the Home business. Evolution of the frequency has been good. It is true that we have some rain and some throughout the semester. But again, I mean, frequency is performing quite well, and also, the earned premium is performing quite well, which is the other part of the equation. So, again, as I said in the previous question, my expectation is that we should be in those rounds, 90s, low 90s.

The next question comes from Francisco Riquel from Alantra.

My first one is if you can please elaborate on the bill for premiums and claims in the second quarter, what is driving the increase in EUR 15 million during the quarter? And connected to this, how can you reassure on the underwriting risk of the new business that you are taking?

And then my second question is the growth in policies is remarkable, but it comes mainly from the Motor business, which is the growth engine. You mentioned in the past that you were trying to focus on cross-selling, but Home and Health Insurance, the growth in policies is lagging behind. So if you have any plans to reverse this trend and improve cross-selling?

Thank you very much, Paco. Well, the evolution of the best estimate of premiums throughout the solvency ratio is very similar as other years. It has some seasonability sometimes, and it's true that it posted, I think, EUR 70 million in funds available for solvency. We see the evolution of that. But no concerns in terms of the risk profiling of customers that we are gathering. I mean, we follow very much the evolution of this 150,000 new clients that we put into the company. We look at the frequencies on the short term, which means 3 months, 6 months. And the evolution of the risk profiling, it's very good. I mean, so at the end, it's not a matter that we are gathering clients with a worse risk profile than the rest of the portfolio. So we'll see what happens on the best estimate of premium because it has some seasonability, always that. But again, I mean, it's no concerns of that.

And on the growth in policies, I think we put 20,000 new clients on the Home Insurance, which, of course, is not the 150,000 clients that we put on Motor Insurance, but we are happy with the evolution. We are gathering clients, which I think is a good sign. We have to keep on working on that on the Home Insurance.

And then on the Health Insurance, we came from a first quarter where we lost around 5,000 clients and now more or less we are in breakeven. What we decided last year after making all the changes in terms of organization on selling distribution is to focus more on more sticky products such as specialist such as complete. I think it's working. The evolution there, the growth there is 13.6%, which is very good, but we need a little bit more time to see that in the total number of clients of Health.

So again, very good in Motor Insurance, very happy with Motor Insurance and the growth there. Happy with the Home Insurance. We need a little bit more, but 20,000 clients are 20,000 clients. And in the Health Insurance, you should expect on the last part of the year that the portfolio will keep on improving.

And just to add about how can we reassure about the underwriting risk regarding the best estimate for premiums. This is a very positive message. It's on the contrary. I mean, this is -- in Solvency II, this provision is a margin of future premiums, of premiums that you haven't earned on the P&L. So precisely, we are reassuring about the subscription that we are doing and the pricing that we are doing. So this is, yes, on the contrary, very, very reassuring.

There are no further questions at this time. I will now hand back to Beatriz Izard, Head of Investor Relations. Beatriz, now your line is open.

Thank you. So we now proceed with the questions received through the webcast. We have one question coming from Marisa Mazo. She's asking about other insurance businesses, whether what is the key driver of specific insurance businesses that is driving growth? Why the acquisition costs are so high in the second quarter?

Well, thank you very much, Marisa. Starting from the last part of your question, why acquisition cost is higher than on the previous quarter, because we have launched our retail business. We put some effort in acquisition costs there. I think the evolution of the new products, we basically are all packing that other caption of the information. I mean, it's -- they are performing quite well. Keep in mind that in the last few years we launched anti-occupancy insurance. We launched the pet insurance. We have launched since April the retail insurance. And all things together, our technical result is already in breakeven or almost in breakeven. So very happy. Acquisition costs, well, basically doing some effort in terms of marketing, brand awareness and so on in the new type of products that we have.

Thank you, Carlos. We have no further questions on our webcast. So thank you, and thanks a lot for joining us today and for your questions. As always, the Investor Relations team is here to help you should you have any further queries.

Thank you very much, and you have a nice summer, all of you.