Good morning. Welcome to the IAG market update with Managing Director and CEO, Nick Hawkins, and Chief Financial Officer, William McDonnell. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key, followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Nick Hawkins, Managing Director and Chief Executive Officer. Please go ahead. Good morning, everyone, and thanks for joining us at short notice, for today's market update. I'm joined here today by William McDonnell, and we're here in our Sydney offices on the land of the Gadigal people, and I pay my respects to elders past, present, and emerging. We're announcing today two materially strategic reinsurance transactions that continue our journey to create a stronger and a more resilient IAG. We also thought it was a good opportunity to provide a financial and strategic update, particularly on the successful rollout of our Enterprise Platform technology. In the pack that we also distributed today, if we go to page or slide four, you can see there that we've provided an update on our year-to-date financial performance. And we'll be reporting our FY 2024 results on 21st of August, and with a few days left of this financial year, it's pleasing to be able to report that we're on track to deliver around the upper end of our reported insurance guidance due to some slightly favorable perils experience. This will result in the insurance profit being around the upper end of the AUD 1.2 billion-AUD 1.45 billion guidance range that we provided last August. T hen within that, we have assumed, though, that our June perils costs are in line with our seasonal assumptions. If we sort of back out the favorable weather experience and other and our other normal adjustments, the underlying margin that we expect to report is around the midpoint of our guidance range. Although we do note that this does include some of the additional reinsurance expense for the adverse development cover that we're also announcing today, so on slide five, we have our normal sort of strategy page, and the pillars that sit behind that, so if we're just sort of stepping through that, you can see that within relation to our customers, we, we've successfully rationalized and repositioned our direct brands in both Australia and New Zealand. We're continuing that journey. We're also seeing benefits from the rollout of our new Enterprise Platform technology, and these include the option for customers to set their payment frequency or allow us to apply a reduction to customers who live in high-risk areas and take reasonable steps to mitigate against the risk that they're incurring. For an example, participating in resilience programs or installing cyclone shutters to their windows is where we're able to pass some relief. In terms of building our better businesses, three years ago, we set a target of an insurance profit of AUD 250 million for our underperforming commercial business. We established Intermediated Insurance Australia as a separate division, and we brought in a new leadership team. I think, as you know, over the past three years, the renewed focus on underwriting discipline and cost efficiency means we're well-placed to deliver an FY 2024 insurance profit for the IAA division, which we expect to be above the AUD 250 million target that we set at the time. In terms of creating value through digital, and I'll talk to the successful Enterprise Platform rollout in the coming slides, we've now commenced our Commercial Enablement Program, which aims to deliver an efficient technology platform for our CGU, NZI, and WFI businesses. T hen finally, managing our risk, the reinsurance transactions we're announcing today materially reduce our financial volatility over the next five years. T he transactions underscore our long-term innovative approach to managing volatility across our business, starting with the original quota share agreements with Berkshire Hathaway in 2015. They've also reinforced the confidence our global reinsurance partners have in our business and in fact, in the Australian and New Zealand markets. You'll see on slide six, I've just sort of set out how we're seeing IAG, and increasingly I'm seeing IAG in three components. Firstly, IAG as a retail business, which has great customer relationships, engaging through some of the best insurance and partner brands in the market. To support this proposition, we have, we have already in place a common claims technology and are now delivering a common policy, admin, and pricing platform that sits right across the retail business, Trans-Tasman, that we internally call our Enterprise Platform. Then secondly, we have a broker-intermediated business with brands that have been in Australia and New Zealand for up to 165 years. We've been turning this business to profitability over the last few years. Investment is still required on its core platform to support our broker networks and to deliver sustainable profits going forward. This is underway through the Commercial Enablement Program. Then third, the third piece of this story is our capital platform, where we continue to look at innovative solutions to firm up long-term supply of reinsurance capital, as well as solutions to optimize and reduce volatility for our equity capital owners. In terms of our Enterprise Platform delivery, we've got a slide there on page 7 that shows the progress we're making. We commenced this 8 years ago, and the program simplifies our technology, reducing operational risk, creates operational efficiencies as we migrate to one platform across the entire retail business, Trans- Tasman, and enable improved digital functionality for our customers. We've delivered a common claims platform, as I mentioned before, and our new policy and pricing technology started rolling out in WA and South Australia in FY 2022. We progressed through a full year of renewals to ensure we've de-risked the implementation of this platform. We're now in the renewal process everywhere, for NRMA on the East Coast, together with AMI and State in New Zealand, and what we are seeing already is improved conversion across our digital channels. This Enterprise Platform is also a key enabler, allowing us to integrate with our partner brands. For example, when we took it on last year, we migrated our ANZ partner business directly onto the Enterprise Platform, so that they integrate directly into ANZ's digital technology. I'll now hand over to William, who's gonna discuss our strategic approach to capital management and provide some of the details of the reinsurance transactions that we're announcing today. Thank you, Nick. It's great to be joining you all on this teleconference today and discussing these transactions, which build on the strategic capital journey that IAG has been on. When I joined, Nick asked me to review our overall approach to capital and the balance sheet. As you can see on slide eight, I'm pleased to say that these transactions that we're announcing today are an extension of our approach to accessing global capital pools to allow us to diversify our capital funding sources. The two transactions ensure stability against two of the largest sources of insurance profit volatility: natural perils and prior year reserve deterioration. On slide nine, the major strategic transaction we're announcing today builds on our strong reinsurance partnerships. As far as we can tell, it's a unique transaction in terms of its size and the five-year term, and it is with Berkshire Hathaway and Canada Life Reinsurance. This reflects the significance of perils to the financial stability of Australian and New Zealand insurance companies, and its importance in pricing to customers. This is a long-term deal. It provides significant downside protection. In FY 25, it limits perils costs to AUD 1,283 million in over 90% of scenarios, and in future years, the annual attachment only increases relative to underlying aggregate exposure, so with pricing fixed over the term of the arrangement, this effectively reduces the impact of perils on any potential premium increases to customers overall, as illustrated in the chart on this slide. We've also negotiated a profit commission arrangement in the event of favorable perils experience. This operates over the life of the agreement, and based on our modeling, will deliver a partial premium offset in the majority of the 5 years. Slide 10 presents our more simplified approach to natural perils protection. You may be familiar with the reinsurance program structure on the left that has been shown in the past. It included a variety of drop-down covers and aggregate protection that were renewed each year. From the first of July, 2024, we will have a much simpler diagram that comprises the long-term quota share arrangements in orange, the annually renewed catastrophe program for 2 events over AUD 500 million, and now the new 5-year ground-up volatility protection of AUD 680 million. The white portion of the diagram represents our retention, which, after application of the quota shares, is AUD 1,283 million for FY 2025. Importantly, this long-term protection covers all natural perils from the ground up without having a retention per event that would be standard in aggregate protection. The second transaction we've announced today on slide 11, is an adverse development cover with Enstar for long-tail reserves across Australia, including liability, CTP, professional risks, and workers' compensation. While we are comfortable with our reserving position, this deal provides significant protection against potential deterioration due to the inherent uncertainty of long-tail insurance risks, such as adverse judicial developments or superimposed inflation. Similar to the perils volatility transaction, the ADC results in a reduction in regulatory capital requirements, and this deal lowers earnings volatility without any material impact on financial metrics. Finally, on slide 12, in terms of the capital implications of the two transactions, I've shown our pro forma CET1 position at 31st of December, 2023. This shows the expected benefit on the Prescribed Capital Amount reduction with a reduction of around AUD 350 million, which is subject to APRA approval. On that note, I'll hand back to Nick. Thanks, William, and I'll just finish off with on page 13 of the pack, so in terms of financial outcomes from the two transactions, we're also reconfirming today that the 15% margin through the cycle target is still the appropriate setting for our business. Additionally, given our recent top line growth and the reduction in our capital requirements, our ROE target has increased from 13%-14% to 14%-15% and we will be providing FY 2025 guidance in August, but there are a number of call-outs that we'd like to make today, firstly, the attachment point for perils volatility cover of AUD 1.283 billion will be the assumption in our FY 2025 guidance, and that's up 17% on this year's perils allowance. Secondly, we will have modest additional reinsurance costs from the ADC and the volatility protection. The cost of the volatility cover is flat over the 5-year agreement, so though there is a modest impact in the first year, the agreement is ROE positive over the 5 years and ROE neutral in the second year, being FY 2026, so to recap, our announcement today is an important milestone in our strategy around creating a stronger and a more resilient IAG. Our long-term relationships with leading global reinsurers have allowed us to secure an innovative reinsurance arrangement that benefits our customers and our shareholders. It will help stabilize overall perils costs for our customers, provide greater earning stability, and it does reduce our capital requirements. William and I are now happy to take any of your questions. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Kieren Chidgey with Jarden. Please go ahead. Morning, Nick and William. Couple of questions. Just want to understand the progressive financial benefits or implications through time, so the annual cost of the cat cover, the additional cat cover, you said is flat. I presume that's in a dollar perspective, not percentage of premium. Then you've said the cat budget will grow with exposures over the medium term, so just wondering if you can clarify sort of on the cost being flat in dollar terms, but also how we should think about that exposure growth. Is that simply sort of a percentage of short tail gross and premium through time? Yeah, Kieren, I mean, the first one is, I mean, maybe we should have used the word fixed price, so it's the same amount of cash every year, so that, that's the premium that we're paying. In relation to the assumption of growth, it's around the aggregate exposure of iag, so that's the, I mean, in theory, that'll be priced into premium as well, but it's sort of similar to how we've, you know, the way we buy reinsurance at the moment, the normal increase in aggregate exposure of the group. Just, that's obviously the aggregate exposures on the for the property risks. yes, so you know, the charts you've been putting up in recent years, the gross reinsurance and perils allowance as a percentage of gross written premium. I think on slide 9, you show that going up again in 2025 and then trending down over time so that, you know, we have a margin impact year one, but then sort of that unwinds gradually through time. Are you able to sort of give us some feeling for how significant the margin impact into year one is, all else equal? I know you're still saying 15% through cycle, but just keen to understand- Yeah The nearer term implications. Sure, it's Nick. I mean, a couple of thoughts. One, we are, we've also said we're increasing sort of the retained perils allowance by 17%. Yep. That'll be part of the, that'll be part of the assumption in FY 25. I mean, I also said that the cost of these covers is modest in relation to the impact in FY 25. I mean, and because it's flat, what we're also saying, yes, there's a modest impact in the first year, but the actual dollar premium number is flat over the 5-year period, so over time, that becomes, as I think we're saying, second year ROE, roughly neutral, and over the 5-year ROE, positive to IAG. You can sort of, I mean, the slide that you mentioned that sort of shows that the cost of our reinsurance, I mean, this is the key here: the cost of reinsurance and perils for us have gone from 13 cents on the dollar for every dollar of premium we collect, up to about 20 now or just over 20 and so you can see on that slide, that's gonna cap out with this deal. We've got an increase for 2025, because mainly driven by the increase in perils assumption to 17%. At sort of low 20s, maybe around 21, 22%, and then it sort of caps out. Okay. All right. And that, t he aim of this deal is sort of to take out that volatility, but you can see that's also helpful for customers because that sort of never-ending increase in cost of perils and reinsurance, we're providing some relief with the structure we've put in place. Yep. F inal question, so you touched on it just then, ROE neutral in the second year. You're freeing up, I think, AUD 350 million of reg cap, so clearly, and you've upgraded the medium-term ROE guidance, so I presume we will get capital management off the back of this, to, to actually deliver or support that ROE upgrade? So look, you're right that there's a capital reduction, and that links with our PCA, and that links through to the volatility reduction. Our dividend policy remains the same, our capital targets remain the same. Of course, as we work everything through the year-end balance sheet, we'll give you an update in August. The numbers we presented here are the pro forma based on December. Okay. Does it change your view around the target CET1 range? No, our range remains the same. Okay. All right. Thank you. Your next question comes from Andrew Buncombe with Macquarie. Please go ahead. Hi, guys. Thanks for taking my questions. Just the first one, can you give us some direction on the cost of the ADC, so we can think about the margin impact that that had in FY 2024? Thanks. So the guidance that we've given you today for FY 2024 includes the modest upfront components of the ADC cost. T hen there's a, you know, through time, again, there's just a modest earnings impact, and then there's the capital release that offsets that, so it's ROE neutral. Okay. T hen how should we be thinking about the timeframe for the AUD 350 million capital benefit from the ADC? Is that all upfront, or is that bled out over the life of the contract? Yeah, it's upfront. The AUD 350 million is the capital relief on the PCA from both transactions, but it's upfront. Yep. T hen just a final one from me, please. Is the ROE flat comment that you just made, is that before or after capital management? Thanks. The capital management impact on that is quite modest, but it's after. That's it for me. Thank you. Your next question comes from Julian Braganza, with Goldman Sachs. Please go ahead. Good morning, guys. Just a couple of questions from me. Just following on from the previous discussion, the cost of the ADC, is that effectively, I mean, if I think about it correctly, the size of the perils budget that you're booking in FY 2024 because you're maintaining just your reported margin guidance? Is that how we should be thinking about it, in terms of that upfront cost? Hey, Julian, I think we missed the beginning of that, so maybe you can have a, s orry, there was a problem with the audio at the beginning. Could you just repeat that one again? Yeah, sure, so I was just thinking, just following on from the previous question, the size of the ADC cost, just the upfront cost, is that fair to think about it as just probably the size of the perils benefit that you're booking in, in FY 2024, given your reported margins are landing in line with guidance? No, because we're, you know, what we've indicated is, assuming we have a normal June, which I think is around AUD 70 million, you know, we anticipate being about AUD 1 billion for the perils cost for FY 2024. That's slightly under AUD 100 million benefit. I mean, I think if you're saying is that sort of counter the cost of the ADC for the year? No, because the cost of the ADC is modest, so. T hat number of AUD 100 million, I wouldn't call modest. okay, so then, so there are other small benefits there that are offset, that there are other small impacts that they're offsetting, that allow you to maintain that reported margin guidance, so that, that's not perils and not ADC. Sorry, that's, so I think, you know, the underlying performance of the company, we're tracking roughly in line with the midpoint of guidance, call it 14.5. The reason we're at the top end, around the top end of guidance, is because of that slightly beneficial, perils, number that I mentioned before. T hat's the bridge between midpoint of underlying, underlying being at midpoint, and reported being around the top end. T he bridge there is driven by the favorable perils experience that we're having in FY 2024. Okay, understand. T hen just, just secondly, in terms of just the, the perils, the perils budget, just interested in any color here. There's a, I mean, a fairly big drop, 17% into, into FY 2025. Is that, is that, can you maybe comment just on differences in views between, I guess, the reinsurers views of, of your own perils versus, versus your, your perils budget? Then, is that something that contributed to some of the increases, the increase into FY 2025 as a starting point as to when, the reinsurance protection kicks in? I mean, it may be a step back comment on that, which is, you know, what we've experienced, and not just in Australia and New Zealand, but right around the world over the last couple of years, we've seen inflationary pressure, obviously across our claims costs, and we've seen just increased frequency and severity of perils events a nd, you know what, you know, most likely driven by climate change, but are part of, partly cyclical as well. Right around the world, reinsurers have repriced, you know, perils risk, and I think in this part of the world, you know, that's been that I think we've had favorable pricing because of the correlation between, or lack of correlation between Australia and New Zealand and other parts of the world. And reinsurers have sort of reviewed that, and there's been a structural change in the cost of reinsurance into Australia and New Zealand. W e've seen that flowing through to us, and that's been really challenging for our customers over the last 2 or 3 years. I n fact, it's been happening in many other markets. I mean, so your question then is from here, I mean, we still see, you know, over time, increased frequency and severity of events. I mean, we've lifted our perils allowance again by 17%, but if I look over the last 3 or 4 years, we've had material uplift in that, and we've had material uplift in the, in the cost of reinsurance. I would say industry and reinsurers are pretty aligned on the outlook, which is the outlook's pretty tough. What we have done today with this transaction is try to get ahead of that, and to look at putting in place some longer dated protection at a fixed price, where we're sort of reducing sort of the volatility, creating some stability around pricing, which is obviously good for shareholders, but it's importantly for us, it's good for customers. 'Cause what that means is we sort of know where that's heading, and we can help mitigate some of the fairly material pricing that our customers have been receiving in the property classes over the last number of years. I mean, that's our thinking here. Okay, understand. T hen just in terms of the pricing cycle from here, I mean, you've maintained your target there 15% through this cycle, but given the step up in costs, just how are you thinking about the rate cycle for your portfolios from here, and just the ongoing strength and from the rate that syncs through? Yeah, I mean, there's two parts to our company. There's sort of the retail, the retail side, so the motor and home portfolios across the retail businesses in Australia and New Zealand, and then there's the sort of commercial markets. You know, we are definitely seeing inflation. On the retail side, we're seeing inflation come back. We're still seeing a bit of it in property, less so in motor. S o that sort of pricing outlook is, from a customer point of view, slightly better than it was 12, 18 months ago. W e're seeing the slowing down of increases, so let me call it that. Where everything was double-digit 6-12 months ago in relation to pricing, that's definitely slowing down, and we're seeing a more moderate, sort of, high single-digit averages and maybe less, slightly lower in motor and more in property, as sort of the outlook on retail. On commercial, you know, we are seeing sort of, i f I sort of step back and say: What's happening in the overall global commercial capital markets, reinsurance markets? That is slightly more favorable for us as a buyer of reinsurance, but we're definitely also as a seller of insurance through our commercial business, we're definitely seeing a slowing down of that sort of hardening market. It's still favorable, but it's definitely just slowing down a little bit. Okay, great. Thank you, sorry, just one last question on just the structure of just the profit commissions. It seems to suggest that it can offset some of the premiums and just wanted to understand how that would play out, just the profit commissions. I s it annual or over five years? Just how that's structured. Thanks. Well, look, without going into all the details, the profit commission is across the life of the transaction, and yeah, in the way that we described. I mean, in simple terms, that's Nick. You know, in a good year, we'll be recognizing, i n a year where perils are below sort of the where the cover comes in, we'll be receiving some form of profit commission. Okay, great. Thanks so much for that, guys. The next question comes from Nigel Pittaway with Citi. Please go ahead. Good morning, guys. A lot of my questions have been answered, but just to, just sort of following up maybe from that last question, first of all, on the pricing. I mean, it sounds like you're not fully pricing for that 17% increase in allowance into next year. Is that a correct assumption? Yeah. Hey, Nigel. Yeah, we are. Yeah. yeah, so I mean that- Yeah, so I mean, that's, h ey, remember that we're, we're working off different numbers, aren't we? That's a 17% increase on the perils allowance. What I, what I was talking about, the overall premium pool of the company, across all portfolios, Okay. We are factoring in the perils allowance into our pricing assumptions for FY 2025, definitely, and have been for a while. Yeah, okay. That's clear. Thank you. Secondly, just, I mean, just on the cost of this ADC, you said it has actually had an impact on the 24 underlying margin, so does it have an incremental impact in 25, or is that basically now a constant? So you've taken a full hit in 2024. No, the sort of accounting for it, and William, you come in, too, here. Yeah. is sort of in line with the duration of the liabilities that it's covering. Yeah. That's what the accounting for it. That's right. A ctually, the FY 2025 impact, which we said is modest, is slightly smaller than the upfront FY 2024 impact, so, the FY 2024 impact, as we said, is already included in the numbers here, or the guidance. Okay. Okay, that's clear, too. Thank you. T hen maybe just, I mean, it's probably a pretty obvious question. I think, just in terms of the if you get favorable weather, so basically what you're saying is you get the benefit of both the favorable variance on the weather- Yeah Plus some reduction in the reinsurance premium you're having to pay, in terms of that overall cover, so, you know, you're getting the full benefit of the favorable weather plus the reduction in premium. That, that's correct? Yeah. Yeah. Yeah. That's right. That's right. Yeah. I mean, that's how we structured the deal. I mean, both. I'll just make a comment here, so that both these deals sort of sit on top of either our allowance for the perils, or it sits on top, the ADC sits on top of our reserves, as they sit at the moment, so they sort of sit above our allowance for perils, and they sit above what's in our balance sheet at the moment. T hey both and what we've aimed to do is put both covers right up against either the allowance, so a dollar, you know, the next dollar after the allowance, and for the ADC on the reserves, it's sitting right up against where our balance sheet is positioned, as we've actually picked it, the as at 31 December 2023. Because, you know, sort of that's where we've signed it off at. It's sort of right on, right on the current reserves, so the aim, as you can tell, is to sort of remove that downside volatility. T hat's why we get the AUD 350 million capital relief straight away. Because there are no gaps between our allowances and reserves and where the cover comes in. And, Nigel, just one other comment is that it's because of the strength of the reserves that we already have for long-tail liabilities that the cost of the ADC that I mentioned earlier is modest. Yeah. Yeah. Okay, great. Thanks very much. Next question comes from Andrei Stadnik with Morgan Stanley. Please go ahead. Good morning. Can I ask my first question, just to check in terms of the long-term perils cover, what types of events actually qualify? Is it anything below AUD 500 million qualifies for that protection? Yeah. Yeah, all perils. On slide 10, on slide 10, we had a list of those on the right-hand side as well. But I mean, sort of to keep it simple, it's the way we've currently reported natural perils, and the way our current reinsurance program works when we have a larger peril, all the definitions are the same. Effectively, all perils, all territories. Thank you. Can I follow-on question, just staying on slide 10, so is it, you know, is, is it, is it fair to say that, you know, the sideways covers, you know, the second, the third, fourth, and then drop downs, you know, they are removed, and they're replaced with volatility cover. Which is effectively saying that, you know, you could potentially get to your catastrophe allowance faster, but, once you get there, you now have, you know, almost three times, the aggregate cover that you had previously. Yeah. I mean, that just, the way we approach that, and the way we've funded that, this whole transaction, is exactly what you've just said. Which is, what, what, what do we have? And, and, you know, this is a simplified diagram. There's sort of behind these diagrams, there's a bit more complexity in the old world. O ur hypothesis was, what about if we didn't have any of that, and we just went and bought something along the lines of what we've done? How does the economics of that work? And, and our very strong view was, that we could replace all of that with what we've got for a modest cost, and a lot more protection a nd so, you know, that, that, that's, that's effectively the way we've constructed this deal. and so on the right-hand side on that page, I mean, that's it. When we essentially have our perils allowance, then we have this fairly significant dollar for dollar cover above our perils allowance, with all perils included from dollar up in the definition and so we end up having, for a modest cost, better protection in a way, simplified version. Thank you. Can I ask just a final question just around the ADC? So you've called out AUD 650 million protection, but it sounds like there's a sub-limit of AUD 50 million for asbestosis and silicosis. C an you give us a feel for why that sub-limit is there? And, you know, in terms of current reserving pool, like how big, you know, is asbestosis and silicosis as a, you know,% of the current reserving? yeah, so for molestation and silicosis, we already have significant, you know, risk adjustments, the sort of what used to be called risk margins a nd then on top of that, we're pleased that we've got a AUD 50 million sub-limit in this transaction for them as well. In terms of the proportion of the reserves overall, I mean, it's single-digit%. Thank you. Just maybe a comment. Next question- Can I? Just a comment from me on that? It was pretty common. We talked to a number of reinsurers around this transaction. It wasn't an IAG specific issue, it was, it's very common to have sub-limits around that topic a nd we don't have sub-limits on other topics, so that, that wasn't an IAG specific sub-limit. I think that's just generally how these deals are constructed across the industry, on against that particular class of business or risk. Thank you. Next question comes from Siddharth Parameswaran with JP Morgan. Please go ahead. Good morning, gentlemen. A couple of questions, if I can. Firstly, just on the comment that you made about the 15% insurance margin target through the cycle. The last few years have been a reasonable amount below that, so just to clarify, your comment on through the cycle would suggest upside in the near term. Would that be fair, if you, if you think through the cycle, you'd average it out? This, you know, it's not unreasonable to think upside on this, on the 15% going forward? Yeah, I mean, and Sid, obviously, part of that is what we've seen with perils volatility and the challenges we've had driven by that, so in a way, what we've done today is we've capped out the downside or substantially capped out the downside of that story. We've got pretty high perils allowance, and then we've got protection that sits above that, so the q uality, s ort of part of this is also the quality of what we mean by 15%. We're saying 15% with the perils protection, with the perils allowance and the perils protection in it. Obviously, I mean, in a previous question, we talked about what happens in the situation where perils are lower, I mean, that's, it's gonna be the scenario that you're talking about, where there's opportunity to earn greater than that 15%. I mean, I was saying that, you know, through the cycle is an average over a period, so the last few years have been quite a bit below, so presumably, is the aim to do more than that in the near term? I mean, as we said, right? We've got substantially increased perils assumptions a nd then we've got protection that sits above that, to manage our downside, but our upside still exists there, obviously. Okay. Yeah, fair enough. Okay, if I could just clarify a couple of things on the reinsurance side as well. I think, Nick, you said that the cost of the ADC is substantially below AUD 100 million. I mean, what is substantially below? Like is AUD 50 million, you know, substantially below? The reason I'm asking is because when we look at margins or try and calculate, you know, the impact of that one-off on the second half margins, even AUD 50 million is a significant number, so I was just, you know, keen, if you could just give us a little bit more clarity on where, where that number, where that number might be. Yeah. I mean, I won't, I, I'll just give it a little bit, Sid, if that's all right. Hey, not the cost of the ADC, the-- we, we maybe we should say the an- the annual, 'cause we're sort of amortizing it in line with the run-off of the, liabilities that it supports, so it's the annual cost, not the, the overall cost. Yeah, the annual cost is, is below that. The, the what, you know, what we're calling modest is, is below AUD 50 million. Okay. Okay, fair enough. Okay, and then I just wanted to clarify the cost also of just the long-term perils arrangement, arrangement. Just I mean, you make, you make it clear, I think it's ROE beneficial from FY 2027 onwards. Could you give us some idea of the expected impact on insurance profit from this? So I think your words are, are a little bit difficult to interpret. I think you say the financial benefits of of this is all weighted to the upside, and I just I just wasn't clear exactly what what that meant, so if we just talk about the expected cost of of the contract versus the the expected benefits from from you know from from the on the perils side from from having this cover. Just what is the net cost in the PNL? Yeah. Okay. I mean, I think we're probably slightly over the ROE. The AUD 350 million capital benefit from this transaction is not that material to our ROE sort of profile, so therefore, we've talked in the language of ROE, but we could have probably also talked in the language of insurance profits a nd this doesn't, I mean, if your question is, what does this do to insurance margins in sort of 2027, 2028, it's sort of aligned to the ROE comment. It's neutral or slightly favorable to that in those time periods, and has a small modest impact in FY 2025, roughly neutral in 2026, and favorable in 2027, 2028, 2029. That's the profile of it. Look, I think the key is on this page 10. Yes, it's a very large transaction we're announcing today, but we already spent a lot of money on the left-hand side, and so that, so this is replacing something that costs a lot in the first place a nd so what our hypothesis was, could we, for a modest impact, get more protection in a more efficient structure, put it long dated, so we have certainty of supply, helps with volatility for our shareholders, helps with affordability for our customers, and essentially we're by migrating from that structure on page ten, which, as I said, that's the simple version of it. Behind that is even a bit more complexity to what really is quite a simple structure, and the way we've described it now, in itself was efficient, we found. And so that's why the P&L treatment is the way we've described, because this has only been a sort of a modest additional cost for what we see as quite material improvement in protection and the lowering of the volatility of our earnings profile. Okay. Okay, thanks. J st one last question, just BI. You haven't made any mention about this at all. I think there was some expectation that we may get an update on that. I don't know if you could talk about that, Will? Business interruption. Yeah, I don't, I mean, Sid, I'll pass to William. I mean, there is no update on that. There's no new news. Yeah, and I mean, look, there was a BI class action declassing application, but that's been adjourned for a little while and so, you know, we continue to maintain conservativeness in the provision that we have. Okay, thank you. It's clear. Your next question comes from Andrew Adams with Barrenjoey. Please go ahead. Hey, guys. I just wanted to clarify the impact on 2025. I kind of got some mixed messages from some of those recent answers, so just the 15%, I think you said, Nick, you know, confusing ROE with insurance margin. Is the message we can hit that 15%, you know, through the cycle including 2025? But you're doing a second half of 2024 underlying margin of 16.5%. You just called out the perils impact and a modest reinsurance impact, so let's call it 200 basis points, but then you're getting the earn through from the premium rate increases. So I got the message in that there was no reason we'd be, you know, much below 15% in 2025, but then in the answer to other questions, I've kind of got the message that 2025 was not a chance of hitting that 15%, so can I just be clear, is 2025 around that 15% or are you thinking we're, you know, we're below that? I mean, we're not, we're not providing guidance today, but I mean, sort of the narrative is really, you know, the under-- let's, let's call the underlying margin for the full year of 14.5, and to your point, that's sort of, i f we look at our reported also underlying margin for the first half, that sort of looks like a second half at the low 15s. You know, we have, you know, we have increased allowance by another 17%, but to your point, we've, you know, we're starting to factor that in pricing already. We've got a little bit of headwind as well from some of these additional costs. It's gonna be roughly in that order, with a little bit of strain in the first year, but around what - with around what you said and we're not providing guidance today, so, you know, we'll update you- There's no big headwind that I'm missing, and I'm not gonna argue about 50 basis points here or there, but there's no- Yeah. big headwind, which maybe in some of the answers to questions suggested a step down, but No. We're on track to get 15 or slightly below. Yeah. -25, and then we should hold back thereafter or slightly above? Yes. Okay, great. Thanks, guys. Your next question comes from Scott Russell with UBS. Please go ahead. Morning, Nick. Morning, William. These reinsurance deals make a lot of sense. Can I ask you about the timing of them? Why now? Why for IAG? Does this reflect maybe a step change in global reinsurance appetite, either globally or for Australian risk? I mean, there's probably a few parts to it, so if I sort of step back and look at the overall thinking on reinsurance, and I'll ask William to talk about the particular transactions. I mean, we are a big user of reinsurance. I like the low vol, capital light sort of approach to thinking about how we run IAG. I also like the idea of having different structures and different counterparties that are part of how we run our company, so I think now for IAG, this is a big picture, we've got a third of our reinsurance, roughly, on long dated quota shares, that aren't subject to any annual pricing cycle comment, and then we're sort of locked away and sort of follow your fortunes. We've got, you know, a chunk that's still about the main cat tower, that's predominantly renewed 1 January, that is often on a 1-year deal, or, you know, some of them we have on multi-year deals, but 1 January is a pretty important date and then what we sort of, that's sort of roughly a third, roughly a third on quota and then, so something like what we're doing today, we're locking away with another group of counterparties. We're introducing Enstar in. We haven't done a lot with them in the past. Canada Life, we know, have done a little bit with, and we're increasing our relationship with them, and Berkshire is obviously well known and we're sort of putting that in a 5-year deal. So we're kind of, y ou can see what we're trying to do here, a profile of different structures, different counterparties, different dates, to get a sort of a package of capital, that allows us to sort of, sort of understand and not be subject to some of these quite dramatic changes we've seen in the market over the last couple of years, and help us sort of smooth all of that, and have sort of a, a very strategic view around how we see reinsurance. On these particular deals, and sort of answering the timing and the particulars of it, William, you want to make comment? Yeah. Yeah, a couple of things, so, I mean, as I mentioned, when I joined, Nick asked me to take a look at the capital and reinsurance structures and we've been looking hard at this, exactly as Nick described. You know, rather than the range of covers that we spent quite a lot on below the main cat tower, was there something more comprehensive we can do? Clearly, for that, we were very targeted on seeking to see if we could build that transaction ahead of 1 July renewal, because that'd be a natural point at which to do make that substitution. And I mean, you know, the capacity here, obviously, this is very substantial capacity that we've managed to tap into with the AUD 2.8 billion of limit over 5 years, so that's what we've been working hard on. We're pleased to have, you know, two major counterparties on that part of the transaction and then, I mean, on the ADC and, starkly, you know, they are a specialist leading global player in that regard. They also, you know, they have capacity for substantial transactions as well and when I was at Royal & Sun Alliance, we, well, I put together a AUD 2 billion deal on long tail reserves with Enstar just a few years ago. William, on the ADC, how comprehensive is the long tail cover? I mean, what sort of scenarios in future might give rise to a future top-up across those Australian portfolios you've called out? Are there any? Oh, no, it's quite. Okay, this is comprehensive. It's all accident years up till the end of the last year. It is, you know, it covers all of the types of risks in the long tail. You know, subject to the comments earlier on the silicosis and molestation, which are also included up to that limit and it's a very substantial amount of cover that's embedded in the transaction, so it's extremely remote that we would exhaust that. And if there were to be a release, that IAG benefits- Okay Fully from any release, or is that shared? The any release is for us, so this attaches. As Nick described, the attachment point for the ADC is at the level that our reserves are now. Because our reserves are strong, that's why the cost of the ADC is moderate and then, over time, if the reserves run off favorably, then that benefit comes to us. And the life of the contract? It's not the life of the liability, presumably. Yeah, no, it's through to expiry of the last claim. Although- It's Nick, it's Nick here. Although I think common practice with these types of arrangements after sort of five or six years, there's some sort of review and, and often some sort of settlement at the end of it, but in theory, this stays for until the last dollar of our reserves is paid. Okay. That's clear. Thanks. Thanks, guys. Cheers. Your next question is a follow-up question from Andre Stadnik. Please go ahead. Yeah, good morning, sorry. It is - look, it is a very innovative, interesting transaction, so, I had a couple of quick follow-ups. In terms of the AUD 350 million capital release, can you give us a sense how that's split between the ADC and the long-term perils protection? Yeah, and look, similar magnitude for each. Thank you. That's helpful and look, I think the five-year feature is probably the highlight because it gives, you know, investors an opportunity to capitalize on that, you know, for the long-term perils. Can you give us a feel for, you know, do you have, like, an option to then, you know, a guaranteed option maybe to renew this further? Or would this, you know, at the end of five years, would this be, you know, subject to, you know, completely fresh renegotiation? So on, I mean, as you know, on the whole account, quota shares that we have, which we had those previously, those have been renewed. They also, there's, we can then extend them by a further three years. This one is a five-year deal, like some of the other components we've had in our program. Of course, you know, as we're getting through the life of this, we'll be looking at what would follow, but also it sets, we think, a good precedent for the program structure. Thank you. Next question is a follow-up question from Siddharth Parameswaran. Please go ahead. Just a question, Nick and Will, about just about inflation. You made some points about pricing. I was just wondering if you could comment on what's happening with inflation for key classes so far this half, and also what you're expecting going forward. Yeah, Sid, it's Nick. I mean, it's definitely getting better, so you know, I mean, across the sort of the two big things that we often talk about, motor and home, motor's coming down, and, you know, where that, I mean, as you know, everything was sort of double digit for various reasons. For motor, that's coming down, parts, labor costs, you know, some of the changes we've made and so, you know, where that was double digit, I'm sort of thinking on outlook now, sort of 12 to 18 months, that sort of high single digit, let's call it 5%-10%. Property's still there. I mean, still, we're still, I mean, we've still got reinsurance costs, we got claims inflation, we got increased frequency and severity, all those things. Obviously, the protection we're putting in place today helps with some of that story, but property is still sort of low double digit, but directionally, you know, compared to 6, 12, 18 months ago, they're coming down and then, there's sort of slight variances between Australia and New Zealand, but that theme applies to both. Yep. Okay, thanks very much. Thank you. There are no further questions at this time. I'll now hand back to Mr. Hawkins for closing remarks. Hey, thanks everyone, for joining us, at very short notice. As you can tell, this is an important milestone in our strategy, and we, we're super focused on creating a, a sort of a stronger, more resilient IAG. As you can see, the group's financial position is strong, and we're on track to deliver our FY 2024 insurance result, the top end of guidance that we set at the beginning of the year. Operationally, we didn't talk about it much, but actually we're really proud of what we're delivering on our Enterprise Platform. That's actually quite a big change in how we run IAG, and it simplifies a lot of the processes that sit within our company. And then just lastly, is what we've been talking about, mainly is, we secured this innovative arrangement with leading global reinsurers, that we genuinely believe benefit both our customers and our shareholders, help stabilize our perils costs for our customers, provide greater earning stability, and reduce our capital requirements, which really does, help with increasing that sort of ROE through the cycle target, that we've increased today to 14%-15%. I thank you all for attending at short notice, and, enjoy the rest of your day. This does conclude our conference for today. Thank you for participating. You may now disconnect.