Hello and welcome to the UNIQA Group Preliminary Results 2023 conference call. My name is François and I'll be your coordinator during the call. Please note this conference is being recorded and for the duration of the call your lines will be on listen only. However, you'll have the opportunity to ask questions. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star one and you'll be connected to an operator. I will now hand you over to your hosts, Mr. Andreas Brandstetter and Mr. Kurt Svoboda, to begin today's conference. Thank you. Thank you. Hello, ladies and gentlemen. Welcome to our full year 2023 analyst call. Thank you for your time. What we're seeing this year is a continuity. I would say a solid continuity of the very good business development of the business year 2021 and 2022. If you look back what we told you in the previous calls, I think we see similar developments in a good way and similar progress in our most important business fields. If we head on to page number 5 and have a look at our P&L, you will see a growth as far as insurance revenue is concerned by more than 12%. If we basically step back to the way in which we monitor our business, and this is still the gross revenue premium parameter, we see a growth of almost 10%, mainly coming and quickly tackling it later from our international business, which has been growing in CE by 15%, and we have to exclude here Russia, and 5%, which is coming from the home market, Austria. So this shows once again a very vital sales power in basically all sales channels, and this is something that we're very happy about to inform you. Again, it's a continuity in the trends, same as we saw the last two years. If we then head on to slide 5 and move to the technical result, we see a very stable development despite and also basically tackled by Kurt later on some major claims hit in 2023 as well as hits by severe weather-related claims, which amount in our books roughly at around EUR 180 million. We have to include here also the one- off charge from a legal case in Austria, which also we'll mention afterwards by Kurt. However, the technical performance in the international field was excellent in the P&C field. We see combined ratios gross being at around 85%. This is altogether a very favorable development, which leads to a combined ratio gross of 89.4%. That's an improvement of almost two percentage points if you compare this number to the previous year. If we have a look on the net investment income, it's, of course, much stronger this year due to higher current income, and it's also different this year is different from the year 2022. We had no significant impairments. We had in the previous year negative impacts coming from impairments in Russian bonds, and also we saw in the year 2023 quite stable interest rates. All these very favorable developments lead to a profit before tax results of around EUR 426 million, which is a quite significant improvement towards the previous year on a like-to-like base, IFRS 17. Income tax, we might be surprised, but could be addressed a bit later. We have roughly 24-and-something%, which is quite high. We expect a kind of normalized tax rate in upcoming years, which should be somewhere between 20% and 22%. Having said this, profit after tax and minorities up to EUR 303 million. You know that we decided already last year to exit our Russian operation, and we see the effects from discontinued operations and the amount of roughly EUR 20 million below the earnings before tax. About our most important ratio, I think everything should be quite fine. We see quite, I would say, satisfying discipline as far as the cost ratio is concerned. You already mentioned the P&C combined ratio gross. Maybe one comment about the new investment yield, which we also hear tackled by Kurt in a couple of minutes. 4.7%, which is an improvement again compared to 2022. The amount of new money which we invested rates up to EUR 2.5 billion this year, which is roughly EUR 1 billion more than in the year 2022. And I think this also shows a very good and favorable development. Let me now tackle on slide 6 the CSM, which mainly our CSM is heavily driven, of course, by our strong health business, especially on the home market in Austria. What we see here is a slight decrease coming from something like EUR 5.4 billion down to 5.266, which means less than EUR 160 million+, predominantly coming from health. This is the amount also tackled 3.4 out of 5.3. Now, where does the decrease now come from? It's a result of the higher CSM release versus the new business in life. This is the most important trigger, as well as a certain amount coming from the reclassification of Russian business because of the effect I mentioned one minute ago because of the discontinued operation, this amounted up to EUR 60 million. Having said this, as a consequence, the group CSM release sustainability ratio is below 1, driven mainly or mainly only by the shortfall in life, whereas we see a very good development in health and P&C. The sustainability ratio in the health business, just for your information, is somewhere around 1.12. So this was a very short summary from my side. And if you then move on to slide number 7, I hand over to Kurt. Ladies and gentlemen, welcome to the presentation of third quarter in 2023, starting with the key financial indicators. That is the share above EUR 1 with the new accounting scheme of IFRS 17, talking about earnings here, the net base earnings, and we had about the tax situation. We had in 2023 less losses carried forward to be taken, and we had some increases of tax in two or three countries, which led to this situation of 24% tax rate. But as already mentioned, we believe we plan on a sustainable basis back to that tax rate what we had in the previous years between 21%-22% percentage points. One also I have already mentioned is accordingly communicated on the capital market. It's what about the legal case, and the second one is Signa, which I will explain in a couple of minutes. Return on equity, our 14.1 percentage points was a nice development. Shareholders' equity went up by EUR 800 million, so it's about EUR 2.7 billion by the end of the year 2023. Increase comes from the development of the interest rates, and this is partly coming from the OCI movement. Capital position was 225%, very favorable for UNIQA. On the growth side, page number 8, here we show the insurance revenue per business line. I give you also flavor on how does this link to the premium growth on a gross written premium basis. So property and casualty, the premium growth was 14.4%, coming into a very good development from the retail business, but we are heavily growing also in the corporate lines in both segments, Austria and international business. Health, 8.8% on a gross written premium basis. Indexation is a component which has to be considered here, but also heavily new business in both in stationary, inpatient, and outpatient carriers, and also in the international business, a growing demand on health services. Life, 14.2% on an insurance revenue basis, minus 0.4% on a gross written premium basis. So what's the big difference? The big difference is the CSM development on the one hand, and the second thing is that we really have from an accruing portfolios resulting from the contracts being written 10, 15 years ago, high single premium volumes, but the outflows are at the moment higher than the inflows, and this leads to these minus 0.4 percentage points on the life side on premium basis. Page nine, the cost development. So on the one hand, we are showing here the group cost ratio based on the one hand insurance revenue in relation to the costs in the composition of commissions and administration costs. So the EUR 1.9 billion has a roughly EUR 1 billion component of administration expenses. Both segments, Austria and the business units internationalized, about EUR 817 million coming from commission. And in that case, we are leading to this EUR 1.9 billion on cost. We have a composition between direct and indirect costs between 86%-14%. And we speak to them as a report that on the administration side, yes, we are still working on the IT program of UNIQA. We're also working on new front ends that we are doing here. We have regulatory impacts from the new DORA regulation, Artificial Intelligence Act, and things like that, which lead to a cost increase in comparison to 2022. But we are still in line with our budget, and we're also in line with our investment strategy. P&C, page 10, we see a very good development of the combined ratio. We also report for the first time the combined ratio was split between discounted and undiscounted. You can read the discounting effect in the last line of the comments. So for us, important to say, "Okay, what does this mean for the business, and how do we steer it?" And we can report on that that UNIQA is steering its business on the undiscounted method so that here we have no impact also on the pricing figures for our customers and for our clients. We see a very favorable development of the technical result, having a plus of EUR 31 million driven by the international business with an extraordinary goods development. And on the other hand, we have negative impacts from NatCat and then weather-related claims, which we can also read out from the comments in the Austrian portfolio, which is a mix between climate-related events and also portfolio-specific topics in Austria. Coming to the life business in detail on page 11, I would like to highlight on the CSM development a couple of things. A, as I mentioned in the growth, we have high outflows from maturing portfolio, which leads to an entire CSM release in the period. Then the new business, which is still favorable, and we show a little bit later also our profitability on that side, but we cannot compensate the high outflows with the new business. By the way, UNIQA is releasing its CSM by 7 percentage points, which means 14 years from the existing business. Important to say is that we have a look on the right-hand side on the table that by using with a high majority of the so-called Variable Fee Approach, the net financial result is rather low in comparison to the net investment income. This has to do with the underlying item effect. Health in Austria, same story on the next page. We have a very good new business, which is also from a volume and from a profitability basis extremely good. Yes, we have indication topics, indexation topics, which are also embedded in the new business, but generally, the volume and the profitability is very, very good. Here, we released our CSM from the existing portfolio by 2.8 percentage points or 35 years. We also used an indexation pattern in our cash flows. So see here also on the same slide for the future. Now is page number 13, country overview on the one hand, Austria with a result of EUR 299 million. Please note that in this result, also standalone results from the international unit are included, and the international business with a result of 229.7, so roughly EUR 230 million, which is the best result in the international business ever. We have taken out three countries: Poland, Czech Republic, and Slovakia, and Southeastern Europe, SEE. This is a new project that we launched one and a half years ago, and which led us to the situation that the countries that are stated in the footnote act like one artificial company. We can use synergies here on the administration side, on the IT side, and especially on the product side. And what this leads to is that these countries are developing prospectively by a result of EUR 19 million in 2023 to become more and more better and also be then in the future a dividend stream for UNIQA. You see excellent combined ratios by those three countries, 87.5%-84.6% in SEE 5. And as I stated before, a good technical result, which please note is the composition of life health and P&C, and not only the P&C technical result. New business value on the next page, page 14. We show you in the light blue bars the old new business margin calculation by MCEV, and in the dark blue, the composition with CSM. Lots of different tax effects, risk adjustment, and cost effects, and some other topics, but generally, the message is that in our personal lines, the new business margin is extremely good. Yes, we know that the present value is higher in the health business than in the life business because of the two different topics I explained in the growth. So with this, we end up on a new business value based on IFRS 17 of EUR 199 million. The respective number for the old scheme in embedded value terms is EUR 160 million. This leads me to the investment portfolio. Investment portfolio, I stated around EUR 800 million improvement in the OCI, other comprehensive income, which is predominantly coming from the movements in the interest rates. You see below that the interest rates between 2022 and 2023 had an impact of 52 basis points, and this reflects in our portfolio, which is predominantly coming from bonds of EUR 800 million. Expected gross loss development with a EUR 30 million impact, and within this, we have also the impact of Signa. We are here to state UNIQA has a portfolio of roughly EUR 80 million nominal value invested in Signa Prime bonds. With this, we made an impairment down to 30%. Accordingly to the accounting principles from IFRS 9 in combination with IFRS 17, the P&L effect was on gross level EUR 8 million in 2023. Last slide before, we are happy to take your questions and your discussion points. If the investment activity and estimation result was explained by the interest rate drop by 52 basis points, new money here, 4.7 was also mentioned. Please also be aware that we traded EUR 1 billion more in 2023 than in 2022, so EUR 2.5 billion trade volume in 2023. Using the opportunity on the interest side and on the other hand, also the used opportunity to invest in more ESG-related investments, the portfolio of UNIQA is on average A minus rated. Last but not least, a very good development also on our real estate portfolio. Negligible are EUR 30 million on impairments that we have to take. On the contrary, we have EUR 26 million on write-ups in the real estate portfolio. Stable position here in Austria, but also in the international countries where we have real estate portfolios. With this, I want to close the presentation, and now we are happy to take the questions. Thank you. Oh, sorry. Sorry, give us one second. A few comments on the outlook slide 18. Well, despite the macroeconomic and geopolitical uncertainties and despite the weather-related claims, which we expect to remain high due to the ongoing climate change, we are quite positive as far as our outlook for the running year 2024 is concerned. Let me just briefly tell you why this is the case. So first of all, we expect a further improvement as far as our profitability is concerned of our core business, and this means both core markets, CE and Austria. Why? Because we mentioned at the very beginning, and you heard it from Kurt, that the overall productivity, which we have, and it's just not a kind of flash in the pan from 2023, but also from the last years, the overall productivity in our sales unit is high, and we expect this to remain despite everything around inflation for, again, both core markets, also in 2024. Plus, don't forget that a large part of our book, especially in P&C and in health in Austria, is protected by price indexation. So we see no lapse ratio in our portfolio, nothing which should keep us or which should make us worry. And P&C, but especially health, is basically completely covered and protected by the price indexation. This goes now for Austria. We have quite significant progress as far as cost discipline is made. So I think we are fine on this side, and underwriting discipline in the new business, especially on the corporate book side, is at the moment for us satisfying, right? So as I said, this all together, everything or the most part of that that we can influence, we think we leave under our own control. This makes us happy, and we cannot guarantee that we can reduce impacts from weather-related claims or from, I don't know, anything else, executing factors. But this is the reason why we are positive as far as the further development in 2024 is concerned. The package, the result, and dividend, EUR 0.57 per share, is the proposal in June to the AGM. According to what Kurt always said also in the last calls, our overall aim, and please have in mind that we will give an update on our strategy as far as 2025 and all that is concerned in the own capital markets days somewhere by year-end, that a progressive dividend policy also after this year is something which would characterize, I think, our investor strategy. So having said this, thank you for listening to Kurt and to me. And now we are finally happy to take all your questions. Thank you. As a reminder, if you would like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. If you change your mind and want to withdraw your question, please press star two. Please ensure your lines are unmuted locally as you'll be prompted when to ask your question. The first question comes from a line of Rok Stibric from Raiffeisen Bank International. Please go ahead. Good afternoon, gentlemen, and thanks a lot for taking my questions. I would just have a few ones, maybe starting with the CSM release. Would it be possible to provide some guidance of what level of CSM release to expect in 2024? Maybe briefly looking at it, I would say it's kind of to be lower in 2024 than it was in 2023, but anything that you might be able to share on this topic would be extremely helpful. Next question I have is related to the outlook. Just to be on the same page here, the profitability that you're mentioning is something that you are referring on profit before taxes level or net income level? And the last question that I have is related to the solvency ratio. At the moment, it's very high level and above your internal targets of 170%. While it's understood that on one hand, you're keeping some buffer in anticipation of rate cuts, could you maybe share some light on this if you plan to consider some M&A opportunities after a successful AXA deal, or would you rather allocate more attention to change your dividend policy? That would be helpful on my side. Thank you. Thank you. So starting with the first question, CSM level for 2024, depending on, we're assuming that the interest rates are on the same level as we have seen by the end of the year. So we see roughly around EUR 300 million as a CSM release for this year. This is something that is in line with the on the one-year existing business and on the other hand, the new business that comes in, including the cost development on that level. The second topic is about outlook. This is reflected by the EBT. The third topic is about Solvency II. We always say that 255 percentage points, yes, it's above the level that we fixed as a target line, 170%. But bear in mind that three topics, and they are also to be taken into consideration. A, we are ahead of the solvency review, which we don't know what is the outcome, and therefore we take a buffer which we see between 20%-30% can go in both directions depending on the outcome which the discussion is here for. Second topic is we always carry with us a buffer between 30%-40% for M&A transactions coming along with some good news or some topics that we have to cover. And the third topic is, yes, to be ready for also activities in terms of along the dividend, along extraordinary topics we have to cover. And this for us is the position to say, "Okay, we are fine with 250 basis points, percentage points, and do not see at the moment any actions to take no matter in terms of share payback or increase of the dividends." Possibility is given, but it's a question if and when you take it. Thank you very much for your answers. Before proceeding to the next question, as a reminder, if you'd like to ask a question, please press star one. The next question comes from the line of Thomas Unger from Erste Group. Please go ahead. Yes. Well, thank you very much also for taking my questions. I would have two or three of them. Firstly, on Russia, what is the progress that you're making on your exit plans? Do you have any time scheduled for the next months? How much longer do you think it will take to get the new transactions through? And then secondly, also related to Russia, on Strabag, and what are your thoughts on the potential changes in the shareholder structure? If you could share those with us, I'd really appreciate that. And then thirdly, if you could just tell us your net combined ratio for 2023 and also 2022. Thank you. Thank you, Thomas. For 2023, 2022, and Kurt is about the combined ratio net. Yeah. Sorry. I was just to get a refreshment here. Russia, well, we are in a quite, I would say, decent and serious dialogue with the Russian regulator. So we fulfilled all their requirements as far as the divestment and transfer of the shares are concerned. We expect the closing of the deal in the first half of 2024. But of course, we cannot guarantee this because we have not, let's say, this kind of influence. But we are quite positive that we can close the transaction within the next five months. This is about the first question. Our second question, I think this is a kind of transaction which took place between two parties to whom we have no closer relation. So this is not something that we'd like to comment. Of course, as a shareholder of Strabag, having around 15%, we are quite interested in a stable development of the company. Also, of course, that the operational business, the daily business of the construction company in all parts of the world where Strabag is active is not hindered by, I would say, a kind of not really favorable shareholder structure, right? So please understand, Thomas, that we do not want to make any further comments on this year. But we, of course, observe quite carefully what's happening as far as Strabag is concerned. It's the participation itself and the development of this for us really big and relevant and crucial participation. So the operational development, we are at the moment quite happy as you know. About the last question, Kurt, combined net. Net combined ratio, Thomas, is in both years 92.8%. Why in both, you're saying? We have different reinsurance impacts. So the reinsurance impact in the year 2022 was 1.1 percentage points and in 2023, 3.4. This has to do with, on the one hand, higher prices for reinsurance coverages. So take just have in mind that from 2022 to 2023, there was an increase at UNIQA, which 18% of the premium. And this is driving this 3.4%. So net combined ratio, 92.8%. Thank you very much for your answer. I really appreciate it. Just staying with the combined ratio, do you plan to make any changes to your reinsurance policy, to your reinsurance strategy for 2024 or beyond? Not at the moment, Thomas. Okay. Super. Thank you very much. The next question comes from the line of Thomas Neuhold from Kepler Cheuvreux. Please go ahead. Good afternoon. Thank you very much for your presentation and taking my questions. I also have three, and I think the best is to take them one by one. Firstly, on the cost development, can you tell us what the total amount of one-off expenses was in 2023 and what the cost inflation would have been without the one-offs? And can you also please provide an outlook for the cost development in 2024? Okay. So the overall inflation impact on the cost side was in 2023 around 7 percentage points, Austrian international average 2023, January to December. Second topic is the one-offs that we had in our cost development. So I talked about around EUR 1 billion on administration expenses on UNIQA. And we have one-offs defined as A, investments in our IT system, one-offs defined in investments or cost expenditures for transformation, SEE 5, for example, and one-offs defined also as costs or expenditures for regulatory projects. Why this definition? Because we see this is going for one or two years, but not for the next 10 years. This impact is around 10%-12% from the level of the administration effect. Outlook is that we see these one-offs on a very stable position. A regulatory person and regulatory topics do not come down. IT investments are on a stable position. UNIQA, the insurance platform, is not down so far. This is what we believe is stable. On the other hand, we are working on a new strategy program, which is also part of an efficiency. And we will come by autumn this year with more information on that and also what we expect on the cost side for 2025 and the upcoming years. Okay. Thank you. The next question is on the position equity. There's a quite large positive change coming from measurement of equity and debt instruments. Can you provide more color on this position and especially give us also some sensitivities to changes in interest rates and the yield curve? Yes. This is the pure market development coming from the bond side. And you know that our sensitivity is heavily impacted from the duration. So nothing new to that but you already know. Thank you. And the last question is you mentioned that the value of the real estate portfolio was roughly unchanged. I mean, if I look at the underlying real estate markets in Central Europe, prices have been under pressure almost everywhere. So I was wondering if you can provide some color on the composition of the real estate portfolio in terms of segments and countries and also give us an indication when was the last time that the whole portfolio was valued by an independent valuer. Yeah. The valuation, we have on a regular basis. So we have a two-year turnover. That means 50% is valued each year. We have allocation of the real estate on living, 22%, retail, 80%, 6% hotel, and the rest is offices. Thank you. As a final reminder, if you would like to raise a question, please press star one on your telephone keypad. The next question comes from the line of Michael Huttner from Berenberg. Please go ahead. Thank you very much. And I'm sorry I'm jumping in late. My questions may have already been answered. I have three. The first one is on pricing and motor insurance in your two key markets, that's Poland and Austria. The second one is to the extent of the like, CSM is shrinking, so the like backbook is shrinking, maybe not very fast. It's still shrinking a little bit. How much capital are you releasing every year and then basically available for reinvestments elsewhere? And then I know you said you talked about it in the fall, but I think you I think, maybe I'm mistaken, that you mentioned in your first release a kind of more lumpy investment. I remember reading about health, but I'm not 100% here. Can you please, I know you'll get to this in September, but maybe give us an outline of your thinking or the magnitude, any kind of indication on the value of health. Thank you. Mike, hey. It's Andreas speaking. Thank you for dialing in. So I think we didn't really understand just from an acoustic point your last. Oh, sorry. You said health insurance or health investments. Did we get it right, the message? Yes, but maybe I'm mistaken. Thomas, remember from the press release and thanks to remember if you still remember me, Andreas. It's a more lumpy investment in infrastructure to help the health business. But it may be maybe. Oh, yeah, yeah, yeah. I got it. Yeah, yeah. I got it. Right. So thank you for this. What we told you is that we have major investment in the upcoming years or largely budgeted in our hospitals. So we are going to invest roughly EUR 250 million, more or less, in the renewal and expansion of the services in two of our hospitals. Both of them are located in Vienna. And we started this program already last year. And it will still go on for another few years. But the total amount is up to EUR 215 million of those. This is one thing. And then a second thing, which is maybe more relevant, is that we acquired by the end of last year the major Polish telemedicine provider who has in Poland a market share of something like 25%, servicing there roughly 500,000 patients per year. Why we do this? Because we want to expand with this company, and its name is Telemedi, in other countries in CE in the next years, but also one day in Austria as soon as regulators here allow it. So this is everything around investment in health infrastructure. Is this okay for you, Mikey? That's very clear. Thank you, Andreas. Yeah, sure. And then before Kurt comes back to your second question about the first your first question, did we tackle the issue of motor pricing and profitability indirectly when we talked about the outlook? So the overall outlook, we expect for this year to be in target with the profitability of last year as far as profit before tax is concerned, right? What we said is just that despite uncertainties on the geopolitical and macroeconomic side, that despite this, we think that a further or we're confident that a further improvement of our insurance technical result is highly possible. And this means that we keep on our high profitability in the P&C business. That's mainly driven or driven in a strong way by the motor business. You mentioned, I think, even Poland. You know that we made significant progress there by the acquisition of AXA three years ago in our capabilities as far as the proper pricing is concerned. Of course, we run out now those capabilities which we acquired in Poland to other markets. If you have a look on the Combined Ratio overall in non-life book international, which is somewhere at around 85% gross, this shows that we have still a very high underwriting discipline. I also mentioned this, that we have, I think, relevant capabilities and skills in the pricing and that we are also able to tell you how to get the prices. So we see not a situation at the moment that we are somewhere in danger not to get the prices that we asked for. I hope this answered your question, Mike. Yeah. I love the discipline. Thank you. Thank you. Yeah. Topic number two, it's about CSM release and also the life book that is shrinking. Michael, the calculation on a very, very rough basis. So assuming on a safe reciprocal levels that interest rates stay flat over the time, I would say the effect is rather negligible because on the one hand, we lose underwriting risk because the policies are expiring and maturing and are out of the UNIQA Group. On the other hand, we also lose cash and in that case, also the possibility to invest because also in that case, money goes out of the company. So I would say the big impact does not come because also here, the volumes of these and the products that are expiring are a big mix of single premiums and coming from index and unit-linked, which do not have that high impact on our solvency ratio or on the risk capital. So I would not calculate more than 2% a year. Okay. That's very clear. Super. Thank you so much. Thank you. There are no further questions. So I hand you back to your host to conclude today's conference. Thank you for your time and your interest in the full results 2023 of UNIQA. Stay healthy, safe, and looking forward to seeing you or hearing you at least quite soon. All the best. Bye-bye. Thank you for joining today's call. You may now disconnect your lines. Hosts, please stay on the line and await further instructions.