Good day. Thank you for standing by. Welcome to the QBE 2022 full year results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Andrew Horton, Group Chief Executive Officer. Please go ahead. Good morning. Thank you for joining us today for QBE's 2022 full year result presentation. Before we begin, I'd like to acknowledge the traditional owners of the many lands on which we meet today and recognize their continuing connection to land, waters, and culture. I pay my respects to the elders past, present, and emerging, and extend this respect to any First Nations people joining us today. For today's briefing, I'll start with an update on our strategic priorities. After which I'll discuss the key features of the result before handing over to Inder to talk through the detail of our financials. Before Q&A, I'll provide some more detail around our portfolio optimization strategy and focus on volatility. After which I'll conclude with some comments on our outlook. Let's move to Slide three. I wanted to open with a handful of key messages about the result, our strategy, and outlook. We've delivered a combined operating ratio for the year of 93.7%. This is better than 94% as we originally intended and highlights improved resilience, noting the numerous challenges we've had to navigate, including the record inflation, the Ukraine conflict, elevated catastrophe activity, and a difficult crop season. Our strategy continues to come to life. 2022 has been about laying the foundations and embedding our new purpose, vision, and strategic priorities. I think we've achieved a lot this year. Momentum is building, and our people are more engaged. As we move into 2023, benefits for our business, customers, and partners will build if we can maintain this energy. Key to our strategy, QBE is working more effectively as an enterprise. Bringing the enterprise together is the strategic priority which I personally lead, and in my mind, our greatest opportunity. We ultimately need to better leverage our global footprint, diversity, and scale. Today, we've announced a reinsurance transaction for reserves of roughly $1.9 billion. Capital efficiency and returns optimization were the primary motivation for the deal that will also reduce reserve risk and create bandwidth to focus on growth. The sharp increase in global interest rates through 2022 will materially benefit QBE. We exited the year with a running yield of 4.1%, which supports a much broader and more diversified earnings base. In the year ahead, we expect GWP growth in the mid to high single digits, and within our plan, expect a combined ratio of around 93.5%. Alongside current investment set earnings, this collective equation would support a mid-teens ROE for the business in 2023. Moving to our strategic priorities in more detail. It's now been roughly 12 months since we launched our new purpose, vision, and strategic priorities, and we'll enter 2023 with the same strategy and a consistent set of strategic priorities. Attached to each priority is a coherent set of near and medium-term goals, and as I've said before, I want to keep you informed of progress. We've had another productive 6 months. Under portfolio optimization, we've focused on developing multi-year enterprise portfolio mix targets, which would be embedded into our planning process. These targets have been calibrated to our ambition for sustainable growth and to be a less volatile business. Secondly, we continue to make progress in bringing the enterprise together. The CUO role, which is still relatively new for QBE, is driving more collaboration and consistency across classes of business where we have a global footprint. Our cell reviews are pivoting more towards action-orientated underwriting discussion, where we're making more decisions around growth, mix, and investment as an enterprise. Finally, we're seeing the output of all strategic initiatives manifest through better outcomes in our Voice People Surveys. We've seen steadily improving results across employee wellbeing, sense of belonging, and employee engagement. Leadership stability has also improved. There's been no change on the Group Executive Committee and very limited change in our new leadership cohorts. On the people front, I wanted to announce a new addition to our Group Executive Committee. We've appointed Julie Wood as Group Head of Distribution. Julie joins us, having held various senior roles at Zurich and most recently Marsh, and will work closely with me, our divisional CEOs, our CUO, and our distribution teams. I see a great opportunity in being more strategic, consistent, and aligned around how we manage distribution relationships. As we look forward, I think we have the right foundations in place, the right team, and importantly, strong enterprise-wide engagement around a clear and consistent strategy. I think the opportunity ahead of us is exciting. Let's move on to Slide five. We recently refreshed our sustainability strategy, which is resonating well with our people, customers, and partners. We continue to integrate sustainability across each of our strategic priorities. I want QBE to be a successful, sustainable insurer, and I'm proud of the progress we've made this year. We'll continue our focus on partnering for growth through innovative, sustainable, and impactful solutions. In 2022, our impact and responsible investments grew with our Premiums4Good investment portfolio reaching $1.6 billion. We supported over 400,000 people through our QBE Foundation and have won a number of awards recognizing our progress on culture and workplace equality. We've also played a key role in the Net-Zero Insurance Alliance over the past 18 months. The NZIA, as a reminder, is the key insurance industry group working toward establishing a consistent framework to measure underwriting emissions across the insurance industry. With this methodology now finalized, our focus from here will center around improving the depth and quality of our underwriting emissions data while work is progressing to set targets in accordance with the NZIA target-setting protocol. We'll engage with you more around this topic over the course of the year. As you might imagine, measuring emissions across an underwriting portfolio comes with a number of challenges, particularly as our business deals predominantly with small to medium-sized businesses. Nonetheless, this is an important and exciting process for the industry, and environmental and social considerations continue to play a large part in our planning and underwriting. We see great opportunity around ahead surrounding QBE's role in supporting an orderly and inclusive transition towards net zero. Moving now to the result on Slide six. As I said, we've had plenty of challenges to navigate this year, and I think we've delivered a good result in that context. The thing I'm most pleased about is the improved consistency we're demonstrating. Both combined ratio and ROE improved, and being able to report a second consecutive double-digit ROE is excellent. We see scope for further improvement in both metrics in 2023. Premium growth was a highlight. Group-wide renewal rate increases average around 8%, which combined with ex-cat growth of 8%, resulted in group constant currency GWP growth of 13%. Let's unpack some of the key drivers of the underwriting result. Catastrophe costs were in line with the revised budget we gave you in November at $1.06 billion and include our allowance for the Russia-Ukraine conflict. It was another elevated catastrophe year for the industry, likely to settle at around $130 billion in insured losses. Our expense result was excellent, while we benefited from a considerable amount of positive operating leverage and displayed good discipline in a high inflation environment. Following a number of favorable business interruption rulings, the result includes a favorable risk margin release of $160 million, representing the remainder of the group's risk margin held for COVID uncertainty. Finally, on inflation, I'm pleased with the preparedness and response this year. While inflation's had a material impact on our business, I think we reacted quickly, have pushed rating where needed, and have done a good job capturing inflation exposures. Our experience remains fairly consistent to comments made at the half year. Across most short tail classes, we experienced significant increase in inflation this year that have tended to see rate respond and remain at or above inflation. Across our casualty classes, evidence of any step change in inflation is yet to emerge, though we remain focused around the risk of both latency and persistency of inflation. To reflect these concerns, in 2022, we've strengthened reserves by $141 million, with the majority of adverse prior year development relating to proactive adjustments to back book inflation assumptions to effectively bring them in line with the front book assumptions. Inder will cover both our investment portfolio and balance sheet in more detail shortly, though both themes are a great story for us, particularly in light of the volatility this year. Turning to Slide seven. We had a great year for premium growth with a global and well-diversified premium base, which has now surpassed $20 billion. Constant currency GWP growth of 13% was slightly above the outlook we gave you. Importantly, represents another year of compound rate increases for the group. Over the past three years, we've delivered group GWP growth of almost 40%, with rate increases accounting for roughly 70% of the growth when excluding our North American crop business. Net written premium growth has kept pace with GWP growth now at $15 billion. Turning now to premium growth in a little more detail on Slide eight. Group-wide premium rate increases remained strong through the second half at 7.7%, resulting in a rate increase for the year of almost 8%. We've seen some further gradual moderation in rate increases. This continues to be a feature across a number of liability classes, which in general have experienced a material improvement in rate adequacy in recent years. Across liability, we think the market remains rational and disciplined. However, having seen rating soften more materially than anticipated in a couple of pockets, most notably in U.S. management liability, we have adjusted our appetite accordingly. Across most property classes, rating remains strong, and particularly following recent developments in the reinsurance marketplace, should remain very firm this year. I thought I'd take a moment to talk about our property focus into the year ahead. This is one of the hardest property markets in many years, and our capacity is in high demand. We've completed a full review and reassessment of our property exposed classes. At around 25%-30% of the group and given consideration to volatility and returns, we see property broadly around our long-term portfolio mix target and don't intend to actively grow into this market. Our focus this year will be to hold exposure broadly steady, albeit continue to drive improvement in quality. We still have a little too much standalone property exposure in each region. This is where we might be writing property which isn't part of a package product and aren't leveraging the exposure into a broader customer relationship. I think we can capitalize on market dislocation this year to shed more of this exposure and replace it with higher quality relationships while embedding further rate and better terms. One brief data point on our international division, where a lot of property exposure renews on January 1st. Through recent renewals, we saw strong property rate increases across all segments to support growth and margin. Our reinsurance business, QBE Re, experienced one rate increases on catastrophe exposed property classes of around 40%. Group X- rate growth was 8% or around 4% if the 30% growth in crop is excluded. This includes strong new business growth, further inflation related exposure growth, and another year of strong retention. Internationals had a very strong year where we've achieved growth across all focus areas, while performance in North America and Auspac was also good, albeit impacted by program terminations in the U.S. and lower domestic mortgage volumes for LMI. Brief comment on North America. Since providing the update in August, we've seen continued momentum in our middle market retail business closing out the year with GWP of around $500 million. We've executed on the majority of planned program terminations and are working toward better outcomes on the remaining partnerships. We've added to U.S. leadership with the appointment of a new divisional CEO, Laura Coppola. Since joining, wanted to ensure strong capability in this function, and I think we now have great people in our group CEO and three divisional CEO roles. Finally, we've had good early progress with our new commercial casualty team and otherwise our message around product, people, and appetite consistency is getting greater notice. Achieving an appropriate risk adjusted return on capital in North America remains a key priority for us, and it's encouraging to see the return to underwriting profitability this year. With that, I'll pass to Inder. Thank you, Andrew. Good morning all. As Andrew said, the operating environment in 2022 was quite challenging. I'm pleased that we were able to navigate many of these challenges and deliver a strong financial result for the year. This is the second year in a row where we've delivered a double-digit return on equity. The business is now on a much stronger earnings footing. With this result, we've taken an important step forward in terms of consistency of our financial performance. Before I step through the 2022 result, I would note that 2023 has started well. We've got good organic growth momentum across all of our key markets. Our people are more motivated, engaged, and aligned than I've seen during my time at QBE. On to our 2022 results. I'll start with the P&L on Slide 10. Premium growth was really one of the key highlights for the year. We reported GWP of $20.1 billion, representing a 13% increase over the prior period and comfortably ahead of our guidance of around 10% growth. Our statutory combined ratio for the year was 94.2%, which as outlined in August, includes the impact of the Australian pricing review and the ENS reinsurance transaction. Consistent with the half year, we have adjusted out the impacts of these items to give you a better basis for year-on-year comparison of our business. Our adjusted combined ratio was 93.7%, which was consistent with the revised outlook we provided in November. This equates to an underwriting profit of $933 million, excluding the significant $1.2 billion benefit from the increase in risk-free rates over the period. The investment result for the year was a loss of around $800 million. This included the adverse impact of $1.3 billion from the sharp move up in risk-free rates. Excluding this risk-free rate impact, the investment return was around $570 million. It's just worth referencing that our income tax rate for the year was 15%. This was lower than the low to mid 20% guidance we normally provide and included a $95 million benefit from bringing to account some carry forward tax losses in North America. This benefit is primarily driven by the higher running yield on our investment assets going forward. Adjusted cash profit of $847 million was around 5% higher than 2021 and supported a group return on equity of 10.5%. This is the strongest return that QBE has reported in over a decade. Our capital position has strengthened over the course of the year with the PCA multiple moving up from 1.75 times to 1.79 times, and is now at the upper end of our target range of 1.6-1.8 times. This includes a small headwind associated with the 2023 reinsurance renewal and is before any incremental benefit from the reserve transaction we're announcing today. The board has declared a final dividend of AUD 0.30 per share, which brings our full year dividend to AUD 0.39. This equates to a headline payout ratio of around 48% or 45% if you exclude the impact of the Australian pricing review. I'll now step you through some of the key drivers of the group result on Slide 11. The chart across the bottom of the screen walks through the key movements in the combined ratio versus the prior period. Our ex-cat claims ratio deteriorated by 80 basis points or around 20 basis points if we exclude the impact of a difficult crop year. Premium rate increases were at or above inflation, but these were offset by slightly higher claims frequency with economic activity returning to more normal levels, higher non-CAT weather claims here in Australia, and a higher frequency of larger property claims in North America. The net cost of catastrophe claims for the period was in line with our revised guidance provided in November at $1.06 billion. This is around $100 million higher than our original full year allowance, largely reflecting the estimated claims cost related to the Russia-Ukraine conflict. Adverse prior year development was around $140 million or 1% of net earned premium. This was primarily driven by an adverse COVID-19 business interruption judgment in the U.K. and higher inflation assumptions across many lines. Further strengthening in financial lines and discontinued programs was offset by releases from Lenders' Mortgage Insurance, trade credit, and CTP. Just to reconcile back to the comments we made around prior risk in November, we referenced that we would be increasing inflation allowances in our long tail classes by around $130 million in the second half. As we closed out the year, some of this inflation uplift was better attributed to the current accident year, and the remaining prior year element was partly offset by reserve releases in some of the lines I just referenced earlier. This reduced the net second half prior year development to around $70 million. As flagged in November, we released the remaining COVID risk margin totaling $160 million. This followed a series of business interruption court rulings in the U.K. and the favorable High Court ruling here in October. The risk margin release resulted in the group's probability of adequacy on outstanding claims reserves returning to 90%. Operating efficiency has been a real highlight. Our ex- group expense ratio improved by around 100 basis points in 2022, and this was on top of the 100 basis point improvement in 2021. We are clearly tracking ahead of schedule relative to our guidance of a 13% expense ratio by 2023. While our efficiency agenda has delivered material technology and operating cost savings, positive operating leverage has been more material than we had anticipated when we first established the targets. This improvement in operating leverage now affords us greater flexibility to increase investment in the business. In 2023, we have announced a series of projects to accelerate modernization and support our healthy pipeline of long-term growth opportunities. Our modernization agenda is primarily focused on improving connectivity and ease of doing business with our customers and partners, supporting the digitization and efficiency of our underwriting and claims processes, better leveraging data across our organization, and providing better tools for our employees to meet customer needs. Many of these initiatives will require a level of upfront investment. Over recent years, we have funded some large upfront technology investment and related rationalization costs through restructuring charges. Going forward, we'll be supporting the modernization initiatives I just referenced through an expanded change envelope, which is included in our operating expense line, and all our plans have been calibrated to an expense ratio of around 13%. Turning now to Slide 12 and the very topical discussion around reinsurance. Many of you are aware of the dynamics that played out through the 2023 reinsurance renewal across the market. On the one hand, you had many insurers looking for additional capacity following a number of years of elevated cat losses and significant exposure growth due to rising inflation. On the other hand, you had reinsurers trying to address profitability challenges and capacity constraints due to significant mark-to-market losses on their investment portfolios. This led to a hard pricing environment through one-one and a challenging renewal process. In our half year briefing, we referenced the fact that we were conducting a review of our reinsurance program for 2023. The early and active dialogue with the market through this RFP proved to be important in helping us prepare for and manage the challenging renewal cycle, allowing us adequate lead time to work through with our partners and brokers and share our perspectives around inflation and exposure management. Based on where we've landed with the 2023 program, the dollar spent on our group cat and risk covers will be broadly flat year- on- year. For reference, while our reported reinsurance expense in 2022 was around $4.3 billion, only around $800 million of this related to the group cat and risk covers. The remainder related to crop, specific business line quota shares, and other statutory schemes. The two main pillars of our program have remained consistent year-on-year. We've held a $400 million attachment on our main cat tower and also placed the 50% whole account Equator Re quota share. We will, however, have a higher cat retention as certain dropdown covers were not renewed and divisional retentions were increased. This higher retention, combined with inflation-related growth in property exposure, will result in our cat allowance increasing from $962 million in the prior period to $1.175 billion in 2023. Collectively, the increase in allowance and the slightly lower spend amount to around $200 million headwind to our planned underwriting profit versus the prior period. The high cat retention has also resulted in a capital headwind of around 3 basis points, and this is captured within the 1.79 PCA we have reported today. A quick comment on our aggregate cover. As many of you are aware, the economics of these covers have been increasingly challenged in recent years. We entered this renewal with the benefit of our 2022 aggregate being placed well out of the money. We've opted to place only a small order on our aggregate cover for 2023, and we'll reassess its role in our 2024 program based on prevailing market conditions. This decision impacted our cat allowance by around $20 million. I'll now turn to Slide 13 and provide some context on the reserve transaction. We've announced today that we've signed terms with Enstar to reinsure our portfolio reserves totaling $1.9 billion. This portfolio includes reserves primarily relating to North America and international financial lines, discontinued programs, and our inwards reinsurance business, QBE Re. Almost all of these reserves relate to business underwritten between 2010 and 2018. We currently hold around $1.9 billion of undiscounted central estimate reserves against this portfolio. Under the terms of the transaction, we will effectively be ceding these reserves at a price slightly lower than the undiscounted central estimate. The transaction provides coverage against any deterioration of these reserves up to a limit of around $900 million. The upfront P&L impact is around $100 million, which is basically the difference between the premium we pay Enstar and the release of reserves and risk margin we currently hold against this portfolio. As you can see on the chart at the top of the page, you start with a premium of $1.9 billion, and from this you deduct the reserves, which we hold on our balance sheet at a discounted central estimate of $1.7 billion, and the risk margin of around $130 million. This gets you to the net impact of around $100 million. There is limit-limited impact on forward earnings. While our investment assets will reduce by around $1.9 billion, we will lose, and we will lose the related investment income. Our future underwriting earnings will improve by a similar amount as we will no longer have the discount unwind associated with these reserves. Our key objective here is to reduce earnings volatility. While our overall reserving position has improved significantly in recent years, this portfolio has accounted for around $600 million or 100% of our net adverse prior year development over the last five years. The $900 million reinsurance limit we have secured through this transaction de-risks against further adverse development, particularly as some of these reserve classes carry outsized exposure to social inflation. This transaction will free up around $400 million of capital, which will improve our reported piece year-end PCA by around six basis points. The capital supporting these reserves is effectively generating a marginal return, reallocating this capital to support growth and other initiatives will help us optimize returns. I will now provide some further color on our divisional performance, starting first with North America on Slide 14. Gross written premium for North America increased by 16%, supported by rate increases of 9% and crop premium growth of 31%. Excluding crop, premium growth was around 4%, with X- rate growth down 1%. As flagged earlier in the year, we commenced terminating programs representing GWP of around $400 million this year. North America reported a combined ratio of 98.9%, which, while representing an underwriting profit and an improvement from 103% reported in the prior period, is still too high in the context of the group. We remain very focused on our strategy to ensure North America trends sustainably into the group's target combined ratio range. The ex-cat claims ratio deteriorated by around three points or 1.5 points if you exclude the underperformance of the crop business. This broadly reflects the impact of higher inflation and the increase in larger commercial property claims we called out at the half. We expect this ratio to improve as some of the terminated program business rolls off. In crop, the combined ratio of 95.5% was broadly in line with the 96% we flagged in November. We were disappointed with the late season deterioration we experienced in crop, which related to a poorer than expected harvest across a small number of states impacted by drought. We remain focused on managing the volatility in this business, and we are working on initiatives to achieve a better portfolio balance. For reference, we have maintained the external quota share on the same terms we placed in 2022. I'll now turn to our international division on Slide 15. Gross written premium was up an impressive 14% on the prior period. This was supported by rate increases of around 7% and X- rate growth of around 9%. Each of our key insurance segments, including the UK, international markets, and Europe, delivered double-digit premium growth, while our inwards reinsurance business, QBE Re, reported premium growth of 25%. As Andrew noted, early indications from 1/1 renewals have been very encouraging for rate, growth, and margin. The international division reported a combined ratio of 92.5%, a deterioration from the 90.6% reported in the prior period. This was primarily driven by reserve strengthening, which included the impact of an adverse COVID-19 business interruption judgment, higher inflation assumptions across the business, and elevated catastrophe costs. This included our allowance for the ongoing Russia-Ukraine conflict. The performance of QBE Re was impacted by a number of significant catastrophe losses, including Hurricane Ian. We're focused on building a more balanced portfolio in this business, and given the hard market conditions through the one-one renewal, we were able to leverage our CAT capacity to broaden our relationships and gain access to attractive new business opportunities across casualty and specialty lines. In property, the growth in premium through strong rate increases will be partly offset by the non-renewal of a number of lines and our shift to higher attachment points across the book. Our Asian business delivered another improved result with a combined ratio of 92% following the 98% recorded in the prior period. Moving now to our home market of Australia Pacific on Slide 16. Gross written premium increased by 9%, supported by strong premium rate increases of 9.5% and stable retention. X- rate growth was modest at around 2%, though it was impacted by a 40% reduction in LMI volumes alongside lower volume in general liability classes. If you exclude these lines, the X- rate growth was closer to 6%. The combined ratio improved by roughly 1.5 points to 90.1% with favorable prior year development and an improvement in the expense ratio offsetting elevated catastrophe costs and deterioration in the ex-cat claims ratio. The prolonged period of wet weather and the rapid acceleration in inflation during the year were the key drivers of the Ex-Cat deterioration. With higher rate now earning through in property classes, we expect this ratio to improve through the course of 2023. Our Lenders' Mortgage Insurance business delivered a strong performance and credit quality continues to remain resilient. With the outlook for the housing market likely to remain topical this year, I wanted to re-emphasize that we remain focused on LMI tail risk. We continue to actively review and manage our risk scenarios and relative to our current plan, our three-year claims delta in both the 1 in 20 and a 1 in 40 stress scenario is now around $80 million and $130 million respectively. Both these numbers equate to a relatively modest earnings impact for the company. We have retained our 50% quota share for the 2023 underwriting year. Turning to the investment result on Slide 17. Further to our Q3 update in November, I am pleased to report that we delivered strong investment performance in the last 3 months to close out what was a very volatile year. Excluding mark-to-market losses associated with higher risk-free rates, the investment return for the year was $570 million. The running yield from the book was partially offset by adverse credit spread marks of around $130 million. Risk assets delivered a return of 1%, well below our long-run expectation. Our fixed income running yield increased by more than five-fold over the course of the year to an exit of 4.1%. This is now providing a meaningful earnings tailwind for the group into 2023. Given the recalibration across asset classes and the extreme volatility, we did ease our pace of re-risking in the second half of the year. We continue to target a long-term strategic asset allocation of 85% fixed income and 15% risk assets, and we will continue to selectively reposition our portfolio over the coming months. I'll now move to balance sheet and capital on Slide 18. This slide really does paint a very strong picture for QBE. Our registry capital position improved from 1.75 times to 1.79 times and now stands towards the upper end of our target range. Adjusting for the impact of the reserve transaction and also the final dividend, our capital position would be around 1.8 times. While the sale of the Westwood Insurance Agency bolstered capital by 5 points, we are very pleased to be at the top of our target range given the premium growth we've achieved, the gradual re-risking of our investment portfolio, and the headwind from our recent reinsurance renewal. Debt to total capital improved 70 basis points and is around the midpoint of our target range. I'll now make some comments around our transition to IFRS 17 on Slide 19. In 2023, the insurance sector in a number of geographies will move to the new IFRS 17 accounting standard. We're in a relatively good position due to the similarities between our current accounting standard and IFRS 17. In fact, all of the key accounting concepts behind the new standard are very comparable to what we do today. The hopefully welcome news for you is that there won't be a great deal of change for QBE, both in the mechanics of our accounting and in the presentation of our results. Commercial impacts are expected to be limited. Group profitability, plus both the shape and recognition of profit will remain broadly unchanged. We don't see the new standard driving any difference in relative profitability across our regions or sales, nor do we expect any solvency or dividend impacts. In short, our fundamentals should remain unchanged. Moving to Slide 20. As we transition to IFRS 17, we are required to retrospectively apply the new standard to our 2022 result. Any change to our net asset position as a result will be booked as a transition adjustment to our 2023 opening equity balance. Based on our preliminary exercise, which retrospectively applied the standard to our 2021 balance sheet, transition adjustments were limited and contained to a 2% impact on net assets. This impact includes some changes around discounting, our LMI earnings pattern, and onerous contracts. This is the IFRS 17 version of the liability adequacy test. There's more detail on these impacts in our annual report. The second item I wanted to address is our approach to reserving. Our approach to the central estimate under IFRS 17 will remain consistent with what we do today. Hence, there will be no change in our central estimate nor any transition impact. Turning to the risk margin, IFRS 17 requires a version of the risk margin called a risk adjustment. The underlying concepts are very similar, albeit the calculation of each is quite different. The risk adjustment is defined as the compensation required for bearing the uncertainty that arises from non-financial risk, and the balance is calibrated to provide a high degree of certainty that we can fulfill our contracts with reference to our cost of capital. Rather than a POA range, the risk adjustment will operate within a target range, which we've set at 6%-8% of the central estimate. We enter 2023 with our risk adjustment balance at 8%, which is at the top end of this range. This means that the absolute balance from risk margin to risk adjustment will not change. I'll finish on IFRS 17 here. We intend to hold an IFRS 17 investor update in May, where we'll have more time to work through some of these concepts plus provide prior year re-restatements so you can start to adjust your models well ahead of our first half result in August. With that, I'll hand back to Andrew. Great. Thanks, Inder. Let's turn to Slide 22 for an update on portfolio optimization and volatility. We've spoken to you a lot through the year around our focus on both improving returns but also reducing volatility. Many of you have asked what we mean by reducing volatility and how we're going about it. Our goal here is to ultimately reduce volatility at low return periods and increase the confidence level around achieving our financial plan. Insurers tend to put a lot of energy into calculating the impact associated with higher return periods, like 1 in 100, 1 in 200 year events, as this ultimately informs a number of regulatory capital considerations. I'll hopefully not endure one of those years over my tenure at QBE, but could quite feasibly see a 1 in 5, 10, or 20 downside year. This is where I want the business to be better prepared and more resilient. We've done a lot of work to refine our view of earnings at risk these lower return periods. We've a good economic capital modeling team and have made a lot of progress to better integrate ECM modeling into our planning. Over the coming year, we'll push this further down into our cell review process. Across our three sources of potential volatility being current accident year underwriting, prior year, and investment returns, we've looked to benchmark the potential for volatility versus the outlook for returns and completed a volatility appetite reassessment across many parts of the business. We'll ultimately look to manage the business around a volatility framework, where at a high level, we're calibrating our appetite volatility at these lower return periods to thresholds around our cost of capital and also our through cycle combined ratio target range. This framework should ultimately reshape the distribution of potential outcomes around our plan, reducing both the probability of a missed plan and the size of a potential missed plan. This slide outlines some of the actions we've taken, plus initiatives being explored to better manage volatility. More measured planning and business settings are a key input. Striving for greater balance in the portfolio is also important. Finally, we need to continue improving our underwriting tools. Our framework has been an important factor in a number of portfolio optimization decisions we've made this year. For instance, the recent decision to exit QBE Re's small retro book and the program terminations in North America. This has helped to reduce our catastrophe risk and improve returns. I'll finish here by noting this is, of course, unfortunately not a perfect science, but I do believe organizing a business around a framework like this is important. It will drive better underwriting decisions and discipline, inform how we shape the portfolio, and drive cultural change. Hopefully, this gives you a bit more context around how we're looking to drive greater consistency. Let's move finally to outlook. We're excited about the year ahead. The market remains firm, and we see good opportunity for further targeted growth. We currently expect group constant currency GWP growth in the mid to high single digits. We expect net and premium growth should broadly keep pace with GWP growth. For our combined ratio, this year we've opted to provide you with our plan rather than the range. As things stand, we're expecting a group combined ratio of 93.5%. The year is somewhat complicated by the move to IFRS 17. Our current expectation is that there should be limited change to the basis or calculation of our combined ratio. We've effectively given you our planned combined ratio on AASB 1023 basis, and in May, when we provide more detail on our transition to IFRS 17, we'll amend our guidance to the new standard. If you think about the high level drivers of the bridge to our 2023 guidance, we expect the benefit from earned rate and normalization crop will more than offset the 2 headwinds we've spoken about today, being a slightly higher expense ratio and the higher catastrophe allowance. Finally, on investment returns, while we can't predict where financial markets will end the year, we've again provided you with a view of our exit running yield. Collectively, our planned combined ratio and current investment settings should support a mid-teen ROE in 2023, which is great. With respect to the reserve transaction we've announced today, our teams have worked extremely hard in recent weeks, and we've just bedded things down in time for the result today. To this end, we've not yet included the transaction impacts in the planned combined ratio provided today. We expect an upfront cost for the transaction of around $100 million or around half a point on the combined ratio. Though as Inder suggested, there should also be some benefits from the deal. We'll incorporate the transaction into the plan following our Q1 re-forecast. I'll close on outlook there. Hopefully, you've appreciated some lift in transparency from us this year, particularly around our two quarterly trading updates. I like the process. Going forward, we'll continue providing these updates in May and November. You can diarize May the twelfth, the same day as our AGM, for our Q1 update this year. Over one year into the business now, I'm really pleased with how we're tracking. We have genuine momentum behind us, returns are improving, and we're building a more consistent business. Our confidence in the medium-term outlook for QBE is high and has been building progressively over the year. With that, I want to thank you for joining us. I'll pass back to the operator for Q&A. Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Kieren Chidgey of Jarden. Please proceed with your question. Morning, Andrew and Inder. A few questions. I might just start on reinsurance. Just wondering if you can give us an indication of sort of forward reinsurance costs, ex the one-off transaction of $100 million, you know, considering risk retentions have gone up, obviously we've seen very significant rate online increases across the market. The crop quota share, you're saying is similar. Relative to the $4.4 billion of reinsurance costs in 2022, any guidance on how we can expect that to move into the 2023 year? Sure. I think in terms of the dollar spend, Kieren, putting aside this reserve transaction we're talking about, if you look at the cat risk, the cat and risk program, assume that's broadly flat, which is $800 million. The terms of the crop quota share are not changing. However, you know, the ultimate cost we end up booking on reinsurance for crop depends on where we end up on GWP, et cetera, and how much we end up ceding to the fed funds. That's a very difficult one to guide on. At the moment, prices are holding up in crop commodities. Volatility factors are holding up, we'd like to think that there should be some level of modest growth in the crop business, that'll probably feed through in higher reinsurance spend on that. Most of the other quota shares, we're not changing terms. LMI, we're not. MLPL, the quota share we have in North America, we're not changing terms. We'd probably see some modest increase, mainly driven by crop in that number, in terms of the dollar spend. It's a difficult one for us to be precise on. The key things that go to margin, though, I think we've called out, which is really the impact on the cat allowance. Yep. Okay. That's clear. Fairly flat with a bit of uncertainty around where crop lands. On the reinsurance transaction, sort of the. Clearly with $400 million capital release assets are moving off balance sheets, so you lose the investment income. And I understand you also don't have the discount rate unwind on those reserves going forward. Are you suggesting that's profit neutral, ex the $100 million cost one-off, into outer years? Is there also sort of a loss of some of the additional yield benefit you'd get through credit spreads and growth assets? Kieren, you've done well to kind of process all of that this morning. Pretty spot on. AUD 100 million up front, right? Then forward earnings, because we discount our reserves at risk-free. In essence, the unwind at risk-free comes out, clearly we earn a small margin above risk-free in our investment income. That's why we sort of said marginal. It's the delta above risk-free, which isn't going to be that material on that level of assets, given our total pool of profitability. Yes, we do lose that slight excess return above risk-free net-net. All right. Thanks. Second question, just sort of around the pricing backdrop. The Q4 premium rate trend edged down to 7.1% from 8.4% in Q3. There was some commentary, I think from both yourself and Andrew Horton, around the 1 January renewal, perhaps being a little bit more solid, particularly in the international business. Just wondering if you can give us an idea for what you have seen year to date. I know we're very early in the year and there's mixed issues for the March quarter, how are you feeling about the premium rate backdrop, particularly after a very tough global reinsurance renewal at 1 Jan? Sure. I think you're right. I mean, what we've seen most, which we touched on is a reason that a property insurance and reinsurance renews in the Q1, but almost everything else is spread over the year. We do believe the increase in reinsurance costs, particularly on property programs, is gonna maintain those rates. We see property insurance and reinsurance maintaining high rate increases. Where we saw things fall off last year, particularly international, was more on the professional negligence liability lines, and we expect that sort of rating to hold this year. It may fall a bit further. I mean, it was a surprise to us that capacity came pouring back in. Those lines had seen heavy rate increases over the previous three years, and at some point it has to come to an end. The market obviously believes at this point in time for D&O and other lines such as that, the rating is okay at this point to come back. It's hard to say on other casualty lines in 2023 because we haven't written that much of them yet. It's not a one renewal line of business. Yep, appreciate that. Andrew, with the $400 million sort of capital released, your PCA goes up to the top end of your 1.8, sort of top end of your PCA target range. What areas are you looking to deploy capital and grow organically? Can you just highlight sort of what classes of business look interesting for you globally? Sure. Andrew Andrew and I were talking about this before. I mean, the great beauty I think about the 2023 plan is we're growing across a spread of businesses, we're seeing growth across the three divisions into this year. It's not as though we've all of a sudden got $400 million and we're going to put it down on a particular line, 'cause we've also got our plan set for 2023. The issue is it's now at the top end of the range, which is still within our range. I think we'd look at capital again when we get towards the end of this year, when we have a view of what the 2024 outlook's gonna be. It's always very hard to determine what the two years ahead is gonna be. We have a good idea of what 2023 is gonna be. It's hard to say what's gonna happen in 2024. When we have the plan set for 2024, we know what the profitability for 2023 is, then we look to see whether the capital is still within the range or not. At the moment, I'm just comfortable with the company running at the top end of the range. It's a good place to be because if there are more growth opportunities this year, we can deploy it. Great. I'll leave it there. Thank you. One moment for our next question. Our next question comes from the line of Siddharth Parameswaran of JP Morgan. Please proceed with your question. Hi there, gentlemen. A couple of questions, if I can. The first one is just around just inflation. If you could just provide some color around. I see the update earlier that you gave in November last year. I think you mentioned that rates are still tracking ahead of inflation. I was wondering if you could just give some comfort on what you're thinking inflation is doing at the moment, in the different parts of your portfolio and how that's comparing against rate. I do a general view. I don't know if you've got some numbers. It's always hard to share numbers on inflation because it's just not one number because, of course, as we've discussed before, various lines of business have different inflation assumptions in there. I think, on the property classes, we believe the rate is holding up against inflation, and it's sort of easy to talk about those cause claims get settled in relatively short order. It's the casualty classes we've got to keep an eye on because it's hard to say definitively rate is above inflation for the future. We believe at the moment rate is above inflation on the casualty classes cause we're not seeing more social inflation come into them. We need to keep an eye on that, and if we do see it, we need to move rate really quickly. Our aim is to be as prudent, cautious, sensible as possible on the casualty classes while keeping rate ahead of inflation on the short tail lines. I mean, I don't know whether you have any numbers. I mean, our view is inflation is gonna hold up for longer. General inflation is gonna be holding up longer. Yeah. I think just to give you a sense of what we booked in 2022, we broadly came into the year. This is across the portfolio, right? We came to the year planning 5.5%-ish inflation, and we've ended up booking probably something closer to 7, Sid, all in. Clearly, there's a big difference between property, motor. Motor has been big, very topical, clearly. I mean, we've seen a spike up in inflation as we've gone through the second half into this year. We're not a big player in the motor space, whether it here in Australia, or in the U.K. in particular. We've got some commercial motor exposure. In those books, we have seen higher inflation, and we've booked that. As Andrew said, I think the expectation coming into this year, more generally across the market is inflation should come down. We're not really baking in a significant moderation, right? Because we see the risk of persistency. Whilst we are seeing some relief in supply chains, et cetera, you know, we do have a mix that is across property, materials, goods, and also services, right? Where wages inflation could be a little bit sticky going into this year. We remain, as we were this time last year, somewhat cautious around the outlook and, you know, how much in real terms will inflation actually moderate is to be seen. Can I just clarify that 7% or so that you said that you'd seen this year, is that, is that per claim? Because I think your rates are quoted per dollar sum insured. Your rate movements of 7.9%, et cetera. I mean, effectively, quite a gap between those two. Would that be... Am I reading that correctly? The way we calculate rate is on the exposure rate. There's a bit of inflation built into the sums insured, and then we get the rate on that. Then the calculation of the claims inflation is in effect, you know, the severity driver, right? Looking at that and sort of baking in higher assumptions on cost, particularly for property and motor. Look, Sid, I think it's not a perfect science 'cause you've got deltas between written and earned in any particular year. I think generally we feel that rate is tracking at least in line, if not slightly ahead of where we see inflation coming through the book. Thank you. Just one more question from me, just around the volatility framework slide on... I think it's Slide 22. Andrew, I was hoping you could just provide an update of how far you are through this journey. I mean, are we likely to see more action stemming from this? You know, you're basically flagging that this has led to some, you know, some increases in assumptions. Is there a next stage? It seems like there's certainly been more conservatism that's been built in applying this framework to some of your trends. Yeah, obviously it'll result in more stable profits going forward. Just how far are you through this journey and, you know, what should we see more actions? What kind of actions would those be? Okay. That's quite a broad question to have a go at it. I think we're moving through the journey relatively quickly. As I mentioned, we've got a good economic capital model, which in effect, models every line of business and estimates the volatility. We've always got to appreciate there's a model, and generally, it's based on history. We do try and put a view of, is the future going to be different to it? Within our planning process, we are now trying to look at, can we come up with a portfolio that gives us more chance of a higher return with less volatility. Of course, particularly focusing on the downside volatility. We want to try and avoid the downside volatility. I was just touching on, we're very conscious that we've got to deliver at least our cost of capital. What chance do we have of achieving greater than our cost of capital, and can we manage to a portfolio that does that? During this year, I mean, that's one of the reasons we're not growing property exposure in what some see as one of the hardest markets, 'cause property historically, although achieving our hurdle rate of return, has had almost the most volatility around it. We're not exactly sure whether we're gonna continue to see increased catastrophe claims as we've seen over the past few years. It's difficult to determine, as the market has seen for the past 5 years, that the property rates are okay. We're comfortable with where we are with property at this point, and therefore let's look at growing other lines of business around it. That's sort of an active management of looking at our portfolio optimization to ideally give us a good return with less volatility. It's very difficult to be precise on exactly how these things will settle, but we're building that more into the planning process. It definitely came to the fore for the 3 divisions planning process in 2023, and I expect it to become more embedded in the planning process as the years go by. Specific numbers on it, but they're sort of model numbers, and I'm not sure they would necessarily mean anything at this point. We want to continue to talk about it, so we will give you examples of where what we've actually looked at has delivered action. I mean, talk about the program business in the U.S., where it's definitely driving too much volatility around the U.S. combined, the U.S. combined ratio. This small retro book, that came to the fore under Hurricane Ian and caused a reasonable amount of volatility in the QBE Re. You didn't mention LMI or trade credit. I mean, those are prime effects that would have thought would be the ones that would cause the most concern. The reason I don't mention LMI is it's become a relatively small part of our total. We're talking about $200 million and $20 billion, and it tends to have different drivers of volatility compared with everything else. Even if it did become volatile, other classes of business should be able to absorb it within the overall group's volatility. Although we're looking at volatility by individual product, we're obviously interested in how the group's volatility works. That's the idea of the property cat. We should be able to manage a more challenging year on the property cat by the profitability of everything else. If we can't, we've got too much of it and we need to look at that. LMI just doesn't drive that much volatility for the group. Yeah. Just on that, on LMI, I think, Sid, you got to remember that we have been increasing quota shares, right? We've gone from 0 to 20 to 25 to 30 to 50, right? Particularly in the more recent underwriting years, we've had decent levels of quota share on it. Plus the top line shrunk significantly just given market dynamics. You know, we remain focused on it, but it's just not the biggest driver anymore at a group level of volatility. Thank you very much. One moment for our next question. Our next question comes from the line of Nigel Pittaway at Citi. Please proceed with your question. Good morning, guys. Just first of all wanted to explore sort of your reticence to grow too strongly in this hard property market. I mean, I take what you say about cat exposure and volatility, but you're sort of saying, you know, it's the strongest property market for a while, and yet sort of in casualty, you're not you're surprised at how quickly capital's come back in, and you're not convinced that you can actually say that rates are above inflation. Can you just sort of maybe expand a little bit as to, you know, why why you're sort of so reticent to, you know, increase exposure in what does seem to be a pretty strong market? Nigel, I think it's the issue of balance. I mean, I would say that people said at the beginning of last year there was a relatively strong property market, and it didn't prove to be the case because sadly, the catastrophe levels just kept with the rate increase. I completely agree this year it could be stronger because the reinsurance, reinsurers have responded to three or four years of tough markets for them. I think what we're trying to do is be more thoughtful about how we deploy our property capacity rather than just have too much standalone, both in QBE Re and in our property insurance business. We may end up growing in certain areas, we may end up pulling back in some areas, which is what we're aiming for, and overall have relatively neutral exposure. I think it's being more thoughtful about how we use the capacity and see if we can increase the quality of the property portfolio to deliver a better return, again, ideally with less volatility. It's not as though we're just doing nothing and gonna renew the 2022. We're gonna be very thoughtful about how we deploy it. I think if it proves to be a great year to grow, there's gonna be plenty of opportunity to grow property in 2024 and beyond. Because if anything, there is getting to a shortage of capacity with the fact that exposures have increased over the years, on the planet in more challenging areas. I don't think it's gonna be an issue of missing the boat. We can do as well as we can this year at optimizing the portfolio to give the best returns possible. If we wanna grow more into property in 2024, we can use some of that extra capital we've generated to grow in 2024. Okay, that's clear. Thank you. Then maybe just turning to crop. I mean, I think Inder said that, expecting a little bit of GWP growth. I'm just wondering, can you sort of confirm what normalized level you're now assuming in terms of COR? At what stage would you consider unwinding the quota share in that business? I mean, on 2023, Nigel, the way to think about the business is, you know, we probably ended up with around $1.3-ish billion of net earned premium, 'cause that's really the big driver. I mean, the gross obviously is helpful, but net drives the economics. We think we'll see a bit of growth in that, maybe call it $1.5 billion, and we're assuming around a 93% combined. The way we think about that is a $100 million or so underwriting profit in current settings. Okay. I guess would the unwind of the quota share be driven by sort of growth considerations or? Volatility issue, Nigel. I mean, just recap on 2022. If we hadn't had the quota share, the combined ratio would have been significantly higher, right? It's just about making sure that we can manage through slightly more challenging years and sort of balance the return versus the risk that we're taking on. We think the 2023 quota share on the same terms makes sense. We'll obviously continue to look at that every year, depending on the economics and depending on where we think the outlook for the business is. Maybe just finally, I mean, obviously you've quit out of a number of programs this year. You know, normally that does bring with it the risk of anti-selection. Are you pretty convinced that's all clear and that's not a risk? Or how should we think about that? So the risk of- Anti-selection. Are you terminating programs? No, I think it's fine. On the programs we terminated, you mean the ones we're actually shutting down? No, I think we're gonna be fine. Most of them have got extra capacity, one hasn't. We still stay close to them as we withdraw, so I don't think we have anti-selection. On the programs we're keeping, I think they're keen on keeping us on, which is good. We have the opportunity of having more input into what they are selecting. I feel more confident we'll have more input into what they are selecting than we have done previously. Okay. Actually, sorry, I do actually have one more, which is just if you're obviously saying you're assuming no sort of benefits from inflation moderating. If inflation were, however, to moderate, you know, do you expect those benefits would be relatively immediate, particularly on the short tail business? Would there be a delay in terms of seeing that come through the P&L? I guess there'll be a bit of a delay as it earns through and we truly recognize it has. I think that's the challenge. In the property side, you should feel it relatively quickly. It'd be interesting to see whether rates track down with it. The casualty classes, it's a bit different, isn't it? Because it doesn't actually go in line with any sort of CPI, and you don't see inflation necessarily moderating casualty classes immediately. Yes, there will be a benefit probably on the property classes reasonably quickly. Other classes would take time. Yeah. Just to clarify what I said earlier. We are expecting a small bit of moderation, Nigel. We're not assuming zero moderation. Right. Okay. Yeah. All right. Thank you very much. One moment for our next question. Our next question comes from a line of Andrei Stadnik on Morgan Stanley. Please proceed with your question. Good morning. I I wanted to ask 2 questions, please. Firstly, just around, you know, having a more service-led proposition in North America. You know, you've given some industry commentary as well, some interviews along those lines. How far progressed are you in terms of actually enhancing your service offering in North America or having, you know, less of a price-led proposition? Can you start first? Service offering in North America. It's, for what particular... I wasn't actually sure what you were talking about particularly. Look at some of the recent interviews in your prior commentary, you basically said you have to, you know, service your customers better in North America, because it could be right now seems like a price take in that market. You know, how are you progressing in that journey? Okay. I mean, I think I hope I'm gonna try and answer the question. A bit about the U.S., which we tried to explain at the half year, was it's now focused on a few business lines. If we take crop to one side, which is about half of what we do, we're then in financial lines, A&H, aviation, this mid-market business, which is probably in casualty for mid-market customers, and this large commercial casualty team. Our focus is on dealing with those lines of P&C insurance as well as possible. I think the quality of the teams we've got is very good. The focus on our appetite is very good. Our message out to our distribution partners has been incredibly positive. I was slightly concerned that because they've seen volatility in which classes we've been in or not been in over the past 10 years, they would be slightly skeptical that we've actually steadied things down. The response to our distribution partners, the big brokers in the world, is really positive. I'm not sure I'm answering the question about service, though. I think it's a focus on those lines, underwriting them as well as possible, and backing it up with a good claim service. I'm maybe missing something in your question. Yeah. I think the other thing I'd say is, you know, on... There's consistency of appetite, consistency of product, targeting of certain broker cohorts. You know, the systems kind of upgrades coming in have enabled us to be a bit more responsive, right? Able to get through quotes a little bit quicker, be a bit more responsive. It's a series of things, Andrei, rather than sort of, here's the one thing that we've done during the course of the year. You know, we continue to build on that into 2023. Sorry, if I was missing the point, the technology has definitely improved. Yeah. You're exactly right in the fact we can get through more quotes than we could before, that is a positive for us, and that was starting to go online in 2022 and really impacted in 2023. Thank you. My second question, just around the balance sheet. The debt equity is just over 30%. You know, we do get pushback from some investors around the hybrid, suggesting the debt equity potentially in a more comparable metric with other companies closer to 35%. How you think about the balance sheet may have the opportunity to, you know, further strengthen or simplify the balance sheet, you know, given some of the strong earnings and the reinsurance transactions coming through? Andrei, the capital position's probably the strongest it's ever been in a long time. The debt load for the company has been the lowest it's been for a long time. The debt to capital ratio is within targets. Now, obviously, we can talk about, you know, the AT1, you know, or the level of Tier 2, et cetera, et cetera. We'll continue to be sensible about running, you know, what we think are fairly prudent, conservative balance sheet settings. We don't get any of those concerns that you're talking about from any of our rating agencies, right? Where we do get credit for some of those hybrid instruments. Look, you know, we'll continue to look at it. It's obviously the strong capital generation, the capital being at the top end of the range, just gives a bit of flexibility to look at different options, you know, as we go forward. Thank you. One moment for our next question. Our next question comes from the line of Julian Braganza of Goldman Sachs. Please proceed with your question. Good morning, guys. Thanks for your time. Can I just quickly just ask about the just in terms of the guidance for FY23 around GWP growth. Can you just unpack in terms of expectations around what you're sort of seeing in terms of rates and also in terms of X- rate growth and just volume growth over FY23, just in terms of that mid to high single digits? Yeah. Do you want to have a go? I mean, you've got the numbers. I mean, it's a real mixture in there, isn't it? I was slightly concerned that we kept talking about 10% last year and then achieved 13% because we saw more inflation in 2022. I guess the X- rate growth is 2 or 3 points in that overall position. Yeah. I'd be suggesting. I mean, I think what we're just sort of expecting some level of moderation, right, around rate, a little bit of moderation, as a reference around inflation. The relationship between those remains, you know, broadly consistent. We're thinking the big delta here really is gonna be where we end up on the crop business. We're in the pricing season today, and over the next few days, you know, prices move around, so do volatility factors. We still think there will there'll be a little bit of organic growth in that business. Mid to high feels like the right place in terms of where we're seeing it. We also ended up with 2022 being a little bit higher at the end, right, than we had anticipated. It's the kinda we're building off a higher base. You know, we've got this uncertainty around the crop business, but we, you know, see good growth opportunities in terms of X- rate across the business. You know, some of these lag effects on these terminated programs will continue to flow through as well. There's a few items to balance, and I think mid to high feels like the right place. The key point is the program. There's going to be a reasonable amount of program runoff this year because we're terminating during 2022. Okay, great. Thanks so much for that. Just in terms of your plan, in terms of your combined ratio plan number, You've provided a high level bridge in terms of how you're thinking about in terms of earned rate, normalization of PULP, et cetera. Does it also include all these benefits that you're expecting on the North American business that you're driving strategically? Is that something that can in the mix with that specific number that you've provided? Yeah. I mean, look, I think that's the real medium-term opportunity for us, right? Is to get that business within 90%-95%. I mean, do we think we can get there in 2023? Probably not. You know, given the way we're trying to be thoughtful about growing in the right places and, you know, some of the impacts from these terminated programs flowing through. Yes, over the medium term, and hopefully we'll see an improvement from 98.9% that we've printed in 2022 into 2023. You know, I think that's very much the medium-term opportunity for the company. I mean, it's definitely the case that U.S. business has got to get under 95%. It's not. I don't think it's gonna achieve it in 2023, sadly. That's the aim. That will bring the group's combined ratio down. Okay, great. Thanks so much for that, guys. One moment for our next question. Our next question comes from the line of Andrew Duncan of Macquarie. Please proceed with your question. Hi, guys. Thanks for taking my question. Just the first one is a question about Australia. When are you planning on going into the cyclone reinsurance pool? Thanks. I think it's the second half, isn't it? Around the half year, we go into the cyclone reinsurance pool. Okay, sure. Then given that plan, how are you thinking about your net exposure in the Australian strata business? Thanks. Well, Troy, think about it like everything else. We're trying to manage our net exposure in the Australian strata business because it comes in a number of ways for us. We have quite a lot of it. And we need to ensure we have the right amount of it. I mean, that sounds such a bland comment, that's how we think about it. We need to ensure we've not got too much of it. Of course, some will go with that. It's similar to my comment earlier on. We're trying to manage our overall property cap exposed portfolio across the QBE world. That's just part of it. Yeah. The main thing really, Andrew, for us has been to get that portfolio in the right place. It still isn't there in terms of rate adequacy, right? I mean, look, the cyclone pool may be at the margin, you know, a contributing factor here, but really the big focus for us with our distribution partners on this business is to make sure we keep getting the rate, we keep looking at the terms and conditions in terms of deductibles, et cetera, that go into it, so we can get, you know, the business to a sustainably, you know, sensible sort of return on equity profile, given it is capital consumptive, right? It does carry a level of cat exposure within that business, which we're very conscious of. So it remains a work in progress. Understood. The second one is just in relation to the expectations for the combined ratio for U.S. crop. You mentioned in response to an earlier question, you're expecting 93% for FY 2023. My understanding is that in previous years, that was expected to be 94%-95%. Is that 93 as the new through the cycle number, or is there something unusual coming in 2023? Thanks. No, I mean, there's a couple of things we're trying to make sure we reflect properly. One is the business is a bit bigger in terms of size, right? We've got the natural operating leverage, we've got through that business. We've also got this quota share, which gives us some decent economics into 2023. We're just, you know, telling you like we see it, that the plan for 2023 is 93%. You know, and the reality, Andrew, in this business will never print exactly what we plan for. You know, it'll either be a bit higher or hopefully, a bit lower. You know, but that's in essence how we construct the plan for the business is taking into account the scale we've now got, the current reinsurance arrangements we've got, and the current outlook and settings around price volatility factors, et cetera, which is, you know, which is the equation we're looking at. Yeah. Then just the final question from me, please. Given the increased attachment points across the reinsurance covers, do you feel like you've moved your catastrophe allowance by enough? Thanks. I mean, obviously, the answer is yes. Yes, I mean, we've obviously modeled what we think the catastrophe allowance should be with the increased deductible $400 million. Yes, I mean, that's exactly what we've done. We've modeled what it should be with the increased allowance, also taking into the experience of 2022. Yes, we believe we have. I mean, it's a great challenge, isn't it? Because catastrophe costs continue to rise irrespective of what we've done. We think, yeah, we think we've started from a good point. The great beauty, we debated this last year, I think the market thought we were being relatively cautious with our catastrophe allowance movement last year explaining the great beauty about moving the allowance is that then the underwriters have to look for the rate to cover the allowance. I think moving it by quite a large amount this year is a good thing to do. We've seen reinsurance costs go up. We've had to put more capital up to actually support the extra retention. Yeah, I do think we've moved it to the right amount. Andrew, we are trying to share, you know, some of the analysis that we look at, right? For example, if you look at the, as if analysis, which we've, transposed the current reinsurance structure, and we've given you the look back on how that would have held up in the last few years, and you can see that's going into our thinking in terms of the sufficiency of the allowance. Now, what I must caution is that the last number of years are not adjusted for exposure changes, right? We have made a series of exposure changes, which means when you look at the 1,253 or 1,208 for the last couple of years, those numbers would be lower had we, you know, put back some of the changes we've made around QBE Re retro, et cetera, et cetera. I think in the round, looking at the modeled view, looking at the as if view, looking at underlying, you know, exposure inflation changes, looking at the reinsurance attachments, we think that's the right level. Clearly this remains very topical for us and for the industry. That's it from me. Thank you. One moment for our next question. Our next question comes from the line of Matthew Dinh of Bank of America. Please proceed with your question. Yeah, good morning and thank you. Just wondering if I could follow up on that catastrophe budget question. Can you talk us through divisionally how the catastrophe budget is moving, noting the North American program's termination? Are we expecting to see a bit of movement around divisionally where you're allocating the cat allowance? I mean, that's really getting into a level of detail. I mean, we could talk at length about how each of the divisional retentions have moved. We have put those on the page, so you can have a reference. The reason we've done that is so you can. You know, when an event actually happens, you can look at what the divisional retention is and then how that plays through the whole account quota share. The two main pillars of our program, you've got the overall group retention at $400 million, and then you've got the divisional retentions that sit below that, and then you've got the whole account quota share. So we've given you some of the math here to sort of figure out when there is an event, what the net impact on QBE might be, and we've given you peak and non-peak events as examples of that. Getting into how each of the individual divisional allowances have moved versus prior year, I'm not sure it's a really constructive discussion, nor is it gonna give you really any more insight. I think the key thing is which to the question earlier is the allowance gonna be sufficient? We are, you know, very focused on that in terms of trying to plan for a sensible level. Last year, we planned, you know, what we thought was a sensible level at $962 million, and we ended up exceeding it. That was mainly because of the Russia-Ukraine conflict, but it was set at a 75th centile on a modeled basis, right? You know, it's something we remain focused on. I think the group allowance is the right number to focus on. Yeah. The divisional allowance, I'm not sure really adds much to the debate. I mean, the group allowance. The group categories are volatile, and therefore, the individual three would be too volatile. There'd be I think it'd be sort of meaningless because there'd be diversification between those three and the group. Okay. Fair enough. Thank you. If I could just ask on the fixed income running yield, you know, calling out the improving spreads contribution? Do you have any expectations around what spreads are going to contribute going forward? Just also on the asset allocation, if you could talk to where you're, you know, where you're gonna look to in the risk assets to allocate further in growth versus enhanced fixed income? Yeah. Look, I think the risk settings are very, very consistent with the long-term SAA, which we've talked about. There is no change in terms of where we're looking to allocate assets. The growth assets for us really are anchored around unlisted property and infrastructure. We have a very small proportion of holding in equity, whether it's developed market or emerging. We continue to be probably cautious on equity and outlook for that. Enhanced fixed income, we do probably see a bit more in terms of opportunity set, but there's no material change to the settings that we're looking at in terms of high yield debt, emerging market debt, and some component of private credit. The only thing I'd say is, you know, at the margin, maybe we favor a bit more enhanced fixed income versus equities, but that's at the margin. I'm talking ±1%. In terms of spreads, your guess is as good as ours, right? I mean, it's been such an incredibly volatile year last year. We're not expecting a lot of that volatility to abate. We're giving you what we're seeing as the exit running yield. Where we actually end up for the year, you know, will depend on kind of market volatility from here really. We're not changing portfolio settings responding to that. They remain very consistent. Obviously, the running yield gives us a very decent, healthy base of earnings when we look at the ROE outlook for the company going forward. Understood. Thank you very much. At this time, I would now like to turn back to management for closing remarks. Thank you very much. All I would like to say is thank you for those questions, and thank you for joining us today.