Good morning or good afternoon. Welcome to Swiss Re's annual results 2020 conference call. At this time, I would like to turn the conference over to Christian Mumenthaler, Group CEO. Please go ahead. Thank you very much. Good morning, good afternoon, everyone. Wherever you are, I hope you're safe and healthy. I'm here in the room together with the Group Chief Financial Officer, John Dacey, and the Group Chief Underwriting Officer, Thierry Léger, as well as Thomas Bohun of our investor relations team. Today we're going to talk about the 2020 results, some outlook. Before I go into Q&A, I'd just like to go through a few points I've noted down that are important to me and hopefully give a quick overview and maybe some points that I'm sure we'll come back later in the Q&A. The first, I want to talk about the pandemic, the underlying result, and the outlook. When it comes to the pandemic, you have seen we booked finally CHF 3.9 billion for the full year. This is probably relatively close to what we thought at half year, even though Q4 was worse than, I guess, most of us expected. Clearly, I guess in summer there was some hope of an easier Q4, in particular in the U.S., if you look at the mortality, there was, I think, 180,000 excess deaths in the U.S. This was quite catastrophic and worse than expected. Overall, I'm extremely happy with our claims team, how they were upfront early. Their assessment is astonishingly precise of what they did at half year. There remains a big uncertainty around business interruption. As you have probably seen in the slides, this is the one where it is really the most difficult to say, and the IBNRs are incredibly high. That's just something to be aware of. Also important to be aware of is the way we define the mortality, COVID-19 loss. There's two, I think, valid ways of doing that. One is to add up all the deaths with a death certificate that specifies that the person died of COVID-19, which is what most people have chosen to do. You can say all deviations from the norm of the last three years is probably due to COVID-19, and that's what we have done. That's a higher figure. We have both figures internally. That's a higher figure. It doesn't change the end result, just the attribution to what is COVID-19 and what is not. Keep that in mind when you compare. We also try to give an outlook 2021 of what's still up on the mortality side. We continue to believe it's better to just give you a sensitivity. You can follow the excess deaths on different websites. It's these $200 million for every 100,000 excess deaths in the U.S., since that's our biggest driver. On the P&C side, across Corporate Solutions and P&C Re, we came to conclusion that the 2021 year should be below $500 million of aggregated loss. That's of course, based on, I guess, the scenario that is dominating right now, which is that we have lockdowns or strong restrictions everywhere in the Western world. The vaccine is being rolled out. We all watch Israel with great interest since that's the only country that is actually through now with vaccinating the older population, including the second jab, and where we see significant falls in new cases and new hospitalization of the older people. This gives a lot of hopes. Obviously, there's some doubts around various variations and all of that, but the main scenario is clearly that we'll get through that and that the second half of the year will be maybe not completely back to normal, but much more normal. If we see a third wave, it will be much smaller and probably limited to the people who haven't taken the jab. That's a bit the outlook on the pandemic. I'm sure you're aware of the uncertainty around that, but we try to give you our best estimate opinion. Then you turn to the underlying results of CHF 2.2 billion excluding COVID. I'd just like to highlight a few points here. If you go one year back, the biggest worries in the community and investors and analysts were around Corporate Solutions and reserve development. I have to say I am extremely pleased with Corporate Solutions and where they are. They've executed on everything they had promised. They were helped by a stronger than expected market turn, with very significant price increases last year and the year before, and it continues. There's a very good momentum here. Their combined ratio without COVID in Q4 was way too good. We think there's a lot of good luck also in that or that due to COVID, maybe there's less losses. We don't take this 85% as anything to predict the future. If you look at the normalized, including man-made normalized combined ratio, of course, for the full year, it's more around 101%, which is ahead of the 105 we had hoped. There's still a bit of way to go for the new 97 or low we had announced for 2021. Everything I see in CorSo, every element is positive. I'm very pleased. They were early. They recognized things early. They worked on stuff, and I think now they're reaping some of the benefits of that. The second point on PYD, I know this is always a big worry of the community. We saw much less activity in the second half of the year. There are, as usual, as we'd expect, a huge amount of reserves, some positives and negatives, but they're basically canceling out each other. This is not a prediction of the future, as usual, you know this is always best estimate of where we are, but certainly just what we observe, the patterns and everything, gives me hope for the future in terms of PYD. These were the two biggest items, and then I would say the third is probably P&C Re, which is extremely important for the whole group. In January of last year, we said we're going to have an underlying combined ratio of 97, which was achieved last year. As you have seen with the renewal we had, we now believe we can go 95 or below with the new portfolio. This is also very positive. In the slides, you can see that the last time we were somewhere there is 2014. It's a long time ago. The whole soft cycle has been painful. I would also highlight that we executed on ReAssure. I know this is sort of done and dusted, but there's a lot of work this year to get this done, to get this over the finishing line. We're very happy with how Phoenix has taken that. I think this was a genuine win-win transaction. Very happy for both shareholder base that this could happen. Phoenix is doing a tremendous job at integrating it in their own business. Fifth point around asset management. You have heard at Investor Day that all the work that was done underneath the surface, also to scrub the different portfolios to look at the sectors that would be particularly touched and to position ourselves correctly already in February has really paid off. The performance of asset management was a very good one and has supported last year's results. Finally, iptiQ, obviously our startup still small, maybe not that relevant for you at this stage, but we're very pleased. We see part of the future in that. It will grow more than 70% in terms of premium of the core business they have. Even within the pandemic, they were able to onboard many different partners. They're now at 40 partners, that's a pleasant, good development. I come to the outlook part. Renewal. I acknowledge that some people might have been astonished that we are shrinking the portfolio. In the Investor Day, we were all together. I think I said to a question that was asked that we would focus on margins, which is precisely what we've done. We don't give premium targets to people. It's really more the orders were around pruning casualty in a strong way, getting lower exposure to these nat cat aggregates, while we increase the models, still feel there's an influence of climate change and uncertainty. They executed, and the -11% you could see is the result of that execution. As you can imagine, John and I looked in depth into all the data. We have all the data available to us, and we're extremely satisfied with it. There's always a question. There's always a big part of business that's sitting around 100-plus% combined ratio, which is a business that, as you would expect, is transacted in a very efficient way, low volatility, low margin, low capital usage. It's marginal business. We don't say this is really bad business. It's just business that is above 100%. The teams this year have decided not to write some of that, and we're perfectly fine with that. It has extremely little impact on our economics, actually the outcome is very much in line with what we had hoped in terms of economic profit. Very happy with this portfolio. It's a much as Thierry Léger would say, a much better portfolio than what we had previously. This makes us very confident going into this year and allowed us to lower this combined ratio estimate for this year to 95 or below. Corporate Solutions, as I said before, we continue the very good momentum, continues this year. We haven't disclosed yet any figures it's really positive. With the Life Capital divestment, and basically the transfer of ReAssure to Phoenix, we have improved the risk return profile of the group, which should benefit us in the future. With that, I think we can start the Q&A session, and I hand over to Thomas. Thank you, Christian. Before we start, if I could just remind you to restrict yourself to two questions and then rejoin the queue if you have any additional questions. With that, operator, can we take the first question, please? The first question comes from the line of Andrew Ritchie with Autonomous. Please go ahead. Oh, hi there. Thanks for the opportunity. Could I just get a bit more detail on your decision to cut back on the aggregate business at one one? I guess this is business you were happy to write last year. I'm just curious to understand what your view of risk has done over the last year. What particular insights have you gained on loss frequency? I guess I'm trying to balance your decision to cut it back versus being happy to write it last year and what this tells me about your sort of cat load modeling. The second question, don't want to open a whole can of worms, but you did mention, John, in your prepared remarks, that the SST assumption on inflation was changed in Q4. Could you give us a bit more detail on what that is? That would suggest that's a forward-looking indicator of expected higher losses that then may accrue in GAAP, or is that not the way to think about it? Thanks. Thank you, Andrew. Thierry, if you would start with the question on the aggregate. Maybe I'll start because it is a bit of a longer history. This predates the time of Thierry as our Chief Underwriting Officer. Overall, the nat cat has performed extremely well over the last few years, including the aggregates. When you split it into more detail and we do this more in-depth analysis, it's clear that the one underperforming part the last few years have been these aggregates. In that analysis, you can imagine there's always a strong confidence of Swiss Re in writing nat cat, but these analyses, as we went through them, we think, one, there is more and more signs pointing in the direction that climate change is influencing these so-called secondary perils like floods, hail, wildfires, droughts, et cetera. As you know, we remember we adapted our models last year to that. Even when you do that, we felt that we certainly don't want to be overweight in this segment. The pricing uncertainty there remains much higher because these aggregates, over the aggregate, all the small losses the clients have over the whole year, and our model certainty is much higher when it comes to hurricanes or earthquakes, which are the much bigger events where we have much more data. We don't XA, we don't say they're all bad, and prices have increased quite significantly in the aggregates. Yeah, we have these reflections during the year that even at increased rates, it's more a market positioning, how big you want to be. You might remember actually two or three times the last few years, we don't talk about the good ones, but there were a few bad ones in Australia or so where we stuck out, that's not something we want to do in the future. It's a mixture of considerations. I don't know, Thierry, you want to add something maybe to that? Just a few words. First of all, as Christian said, the frequency is a lot about secondary perils. It's a lot about unmodeled risks, and we obviously prefer modeled risks to unmodeled risk, as you well understand. The aggregates have had the tendency over the last, say, five years to move more and more into the frequency. They are frequency covers, but they moved even more there. Our aim was to move more out of those unmodeled risks. If you look at the loss impact we had, the contribution from secondary perils to the overall losses over the last few years, the impacts from these secondary perils have actually increased to around 50% in 2020. That trend we had to break as well. All of that pointed to a reduction in the aggregates, but also in the attempt to move some of the aggregates away again from the money where they are. Unfortunately, at this renewal, we have seen an attempt from clients to go the other way. There's obviously a desire because they've seen them working pretty well to go even closer to the money. John on the SST. Thanks, Andrew, and I'll be careful about keeping my prepared remarks as short as possible in the future if they're going to prompt questions here, but let me give it a try. We've got a series of parameters in the SST calculation that we routinely evaluate and recalibrate. As I mentioned, one of the things that we've recalibrated for the January one number, which we'll release next month, is in fact the parameters related to long-term inflation. This is done a little bit on some of the more extreme shock inflation scenarios, where a combination of a potential reversal of globalization on supply chains, the unwinding of the giant monetary easing that's occurred in the context of the pandemic takes us into territory that otherwise was not necessarily foreseen a year ago. You should assume that the potential impact here on a probability basis is also brought back into the reserve positions, and some of the reserving actions taken, frankly, in the last couple of years have reflected this impact of social inflation. Here the question is whether a more fundamental CPI change would be catching up, frankly, to some of the claims inflation parameters which we've already adjusted. I don't think you should expect any particularly knock-on effect on claims reserve positions as a result of this. It will have some reduction in the reported SST number, and we'll give you more details about that when we show up in March. Thank you, Andrew. Could we have the next question, please? The next question comes from the line of James Shuck with Citi. Please go ahead. Hi. Thank you. Good morning. Good afternoon, everybody. Two questions from me. John, again, on your prepared comments, you talked about deploying capital in the business. I think through the January yields, we haven't really seen that. I mean, the nat cat exposure's gone down, the P&C volume's down. The last SST update you gave at 1 July, I think you indicated that there's target capital growth of CHF 700 million in P&C Re, CHF 1.5 billion in Life and Health Re. Because the SST is forward-looking, I just want to get an idea of, is that capital that you indicated at 1st of July, is that still valid now? When you do talk about deploying capital, where is it likely to come through? Is it the financial market segment as you take on more investment risk? The second question was around the investment income side of things. I'm just looking for a little bit more clarity and a little bit more specificity here, if you like. The running yield is 2.4%, you've got CHF 2.0 billion of investment income. I know the reinvestment rates are coming down, and I know you have a relative de-long duration, but there's a number of things pulling in different directions because you've got increased de-risking potential, you've got growth in the underlying business. Really, I'm looking for that absolute number at the group level of 2.0. How should we expect that to trend over the next two to three years, please? Thank you. James, let me try and answer in the order you've asked. With respect to deploying capital, I think one of the things we didn't want to leave is any confusion about the actions we took on renewal versus our appetite for writing correctly priced business in various pieces. On the renewal, we're focused on margins. We're focused on further reductions in our U.S. liability exposures, and we are focused on the terms and conditions of the policies we wrote, Christian mentioned specifically on some of the property exposures vis-a-vis the aggregates. That led to a reduction. Actually, I think the total premiums of nat cat is flat year on year on premiums written as of January 1. There's a lot of business which will come through in the rest of the year. Our whole transactions books, which typically is not part of the one-one renewals, the renewals in Japan and North America come in in June and July after the April renewal. I think the messaging is where we've got adequate pricing, correctly worded terms, we're prepared to write more P&C business in our reinsurance book in the first case. Corporate Solutions, which has been able to grow some of the better price lines of business consistent with the new portfolio that they're moving forward with, and we showed a slide, I think, in the deck, will continue to catch up some ground. We were down 3% on premiums year-on-year. I would expect that to reverse to a positive increase in premiums in 2021. Our life and health business, which was up six or seven% in 2020, I think should continue to grow again. We've seen opportunities there with our life and health clients, some of which are doing some fairly significant restructurings of their own portfolio, providing us opportunities, particularly on some of the protection business, which is what we like, to help them in managing these restructurings. I think overall, I'm fairly optimistic that we'll find those buckets on the liability side. With respect to asset side, what you did see when we've shown the comparison of our portfolio, X ReAssure together with where we stood at year-end. There you did see a bit of a modest increase of some of the credit risk. I think you've seen that we've maintained some of our hedging into the year-end on our asset side, both equities and investments that was related to the uncertainties in the political world, frankly, both in the U.S. and U.K. As that has resolved itself largely, we continue to de-risk or de-hedge, sorry, I guess, increase, again, in modest steps, the risk of our asset portfolio, and we'll take advantage of the situations where Guido and the team in asset management sees the opportunity. You're specifically asking about investment income. I mean, you're right. We've got a six-year duration on assets, plus or minus. We've got a lot of long-dated bonds in the portfolio on fixed income, which are relatively stable and providing that the reinvestment yield of 1.3% will bring us down. I'm not going to overstate what's happened between December 31st and now, but at least we do see some positive moves on interest rates, and if that continues, it's going to cushion whatever blow of the reinvestment that we see in front of us. I think the most important thing is the pricing of our P&C contracts in particular, but also our life business reflects the current interest rate environment. If we find ourselves having to reinvest at 1.3 for a longer period of time, we're prepared to do that because of the price we can get on our portfolios in P&C and life and health. Thank you, James. If we could have the next question, please. The next question comes from the line of Kamran Hossain with RBC. Please go ahead. Hi, everyone. A couple of questions from me. The first one is on dividend. I guess in a very difficult year for the industry, the good news is you've paid the dividend again. What scenarios would stop you paying it? It feels like we've kind of pretty much stress tested paying the dividend or not. So that's the first question. How much flexibility do you have around that going forward? The second question is on, I guess, pandemic losses versus what you've booked. It looks like if you total up total COVID losses, they seem to be well below your view of the pandemic, which I assume reflects your losses for the year plus next year. Do you think the rest of the industry has taken as cautious a view? Therefore, where does it go from here, really? Yeah, any thoughts on those two would be really helpful. Thank you. John, would you like to take the first question on dividends? Sure. On dividends, we've shown, and I think there was even a slide that Christian referenced earlier today, our capital management framework. The maintenance of this dividend is an important piece of what we think is appropriate. It comes second after the first one, was to be sure that we're adequately capitalized as a company to run our business. I think to answer your question, yes, the dividend was stable in CHF, actually, for the people that are interested in the U.S. dollar return, it's probably up 9% compared to a year ago. I think, like any company, we look at the source of earnings and, most importantly for Swiss Re, the economic earnings, which form the basis of our ability to be able to sustain this dividend. 2020 was a tough year, both on our U.S. GAAP and on our EVM basis because of the large amount of losses that we've incurred, both from pandemic and frankly from some of our normal business. Had it been a normal U.S. GAAP year of making CHF 2.2 billion, which is the ex-COVID number, and the EVM been adjusted similarly, I think this would be even easier. It wasn't a difficult decision this year in maintaining this dividend. I think it also wasn't necessarily difficult to say that 2021 is not going to be a year of share buybacks. We'll continue to build capital. We look to remain one of the best capitalized insurance groups in the world. That dividend, at the moment, looks pretty secure to me. Maybe I take the difficult one on pandemic losses, Kamran. My feeling talking to peers is that we, the more immediate peers, we have a very similar view at this stage. It got much more similar over time of how big this is going to be. Some have, obviously, some protection. The biggest gap there or different views probably exist in the business interruption, which we all acknowledge is very uncertain. It could be that we're more cautious there, and only time will tell who's right. We don't have more information than others to guess what this should be. When it comes to the wider industry, I think one thing that became clear to us, because it's not affecting us that much, is that while there's big negatives, there's also going to be some very, very big and significant positives for some insurance companies, which obviously is not necessarily something they want to talk about. I think in particular on the motor side, you can imagine that while they gave back some premium and there's different mechanism, there's still some very high positives. When companies give out their numbers, it's always the net of both numbers, the negatives and positives, and it will be very hard to keep it apart or take it apart and see how it looks like. We still think that the negatives will be a very severe loss. I think it's dampened in the overall aggregate you're hearing by some of these lower frequencies, which are, I guess, most important where you had lockdowns and where people have a lot of motor business. Thank you, Kamran. Could we have the next question, please? The next question comes from the line of Ivan Bokhmat. Sorry, Mr. Bokhmat just retrieved his question. We take the next question, which comes from the line of Iain Pearce with Credit Suisse. Please go ahead. Hi, thanks for taking my questions. My first one, I guess, was sort of following on from the point you just made on capital. I'm just wondering if you could discuss the economic framework and the capital framework around the new solvency guidance. Should we not be expecting share buybacks unless you're above that 250 target range? Similarly, do you now view 200 as sort of an absolute lower bound in terms of the solvency ratio? My second question is just on casualty, sort of similar to what Andrew was asking on the nat cat book. What has changed on your view of casualty business in the last year that's led to the pullback in those areas? Thanks. John, would you like to take the first question? Sure. On the range we put in, we replaced what we thought was an inappropriate utilization of a point estimate, originally which was, I think, misunderstood or miscommunicated as a limit, and then understood later to be a target around which we would move. We think the CHF 250-CHF 200 is more reflective of a range which, at some places, the board and management certainly will be comfortable in the lower part of, given especially macroeconomic conditions, and in some places, we're going to feel more comfortable being in the upper end of this range. To your specific question, no, we do not necessarily have to be above CHF 250 to launch a share buyback. The stars are aligned, we're in a strong capital position, and we don't foresee the utilization for writing lots of new risk or taking material additional asset risk, then yes, we'll be happy to return capital. Similarly, I don't think 200 is an absolute limit, obviously, with respect to the regulators, it's certainly not. What I think it means is, were we to go below 200, we would be moving aggressively to get ourselves back into the range. I think this is a range which allows a certain level of flexibility for us to maneuver and reflects, frankly, a little bit of what we saw in 2020, which says a number of exogenous variables can move us around a bit, without causing concern about the overall level of the capital or strength of the capital that we have. I know or we anticipated that some of you won't necessarily be pleased with this kind of a range, but I'd also suggest it's probably coherent with what most of our competitors are utilizing for their own capital management. I'd simply note that our numbers seem relatively conservative. Thierry, on casualty? On casualty. When we looked back at the last few years and what actually has driven the reserve strengthening, we have realized that the social inflation that is not a new phenomenon, has increased to particular strategies of the plaintiffs' bar that we've observed. Obviously, this is U.S., this is U.S. general liability, and we've also found that it is particularly the large companies that are impacted by these. The first out of three steps in casualty that we have decided to implement was to reduce our exposure from these large corporate risks in the U.S. Again, general liability targeted. The second target I've mentioned at the Investor Day, which is that we will focus more than ever on technical results in this low yield environment, which is what Christian mentioned already. Those deals that you would write above the 100% combined ratio, were less desirable. Typically, those deals are those that have higher volumes as well, but not necessarily high profit expectations. Technical result was the other area or second area of focus. The last one I wanted to mention are the reinsurance structures. When you see improvements on the original side of the business, that doesn't necessarily mean it comes through the reinsurance structures one to one for us. We've been very clear on which reinsurance structures we like and which we don't like. We have exited, typically, those structures that don't allow us to recover or profit in the same way our clients do from the improvements on the original rate side. Thank you. Iain, if we could have the next question, please. The next question comes from the line of Vinit Malhotra with Mediobanca. Please go ahead. Yes. Good afternoon. Thank you. Just the first question is on slide 12 today, please. The CHF 4 billion, which was up for renewal for casualty against which there was 17% fall. I just noted this number is significantly different from what was renewed last year, the same slide 12 of last year, which was CHF 5.2 billion. Usually I understand from earlier years in our conversations that it could be multi-year treaties and all that, but it just suggests that for casualty in particular, there is a CHF billion plus of treaties which are multi-year contracts or something else which has driven this. That's really the question then. Are you comfortable with what you have now on this casualty book, considering that there was already a sizable portion which was not renewed, and you probably could not negotiate around it? That's really just the question on casualty. Second question is just on Corporate Solutions reserve movements. Fourth quarter seems to be quite a strong reserve relief, close to 10 points, I think. Is there a comment on that which we could use? Any detail or any help. Thank you very much. Question on casualty, Thierry? It's well observed, Vinit. The reduction from the $5.2 billion to $4 billion as a starting point. The main drivers of this are what you mentioned, the multi-year deals that we did not need to renew, so they didn't come up for renewal this time. The other one is as well that we had some deals that were coming through as premium deals previously, and now due to some structural changes, actually has changed to be accounted for without premium. That was it accounted. Both of these effects have actually reduced the renewable casualty premium. The second question, John, on Corporate Solutions reserves. Vinit, you're right. Corporate Solutions did release a prior year reserve in the fourth quarter. It's probably about half of the total that they've done for the year. This was a judgment made at the end of the year when they actually had the four quarters. I'd say that 2020 has been a challenging year for understanding claims patterns, both in terms of what's been notified during the course of the year, but also how some of the claims have either resolved themselves or have not arrived in times that you might have thought that they would. We think we've taken a fairly conservative view on Corporate Solutions, both for the current year and for prior year. This release appeared appropriate for us, and we just remain very comfortable. Obviously, the underlying result, ex-COVID-19, did not need this. This wasn't any attempt to make that number look better. It was just, frankly, a challenge not to release it given the evidence that was in front of us. Thank you, Vinit. Could we have the next question, please? The next question comes from the line of William Hardcastle with UBS. Please go ahead. Hi there, everyone. First one is, you talked about the gross premium reduction around the 11%, at the January renewals, can we discuss what actions are being taken on the reinsurance retro protections? How we should see that coming through on a net basis. I know you touched on this at the capital markets day, but just wanted to get some clarification from January. The second question is thinking about the SST ratio. It's maybe prodding a bit on what James was asking you earlier. It's regarding the exposure reduction. Has that already been reflected as such, or will it be when you give the SST ratio next month in terms of the exposure reductions that you've already taken? Presumably that has this exposure growth assumption going forwards. If you can give any sort of quantification for that and expectations for the remainder of the year, that would be helpful. Thank you. Sure, Will. I think I've got both of these. On the first one, you're right. In Investor Day, we gave you some detail about the alternative capital partners team and the actions they're taking and the retro programs that they expanded in 2020, and continue to 2021. We expect to continue to be an important player here, and so we're unlikely to dial back the retro activities of the group. That might lead to a little bit of a squeeze on the net exposure if the gross doesn't quite renew. Frankly, that renewal was not that far off of plan. As I said, January one's important for us, but we've got the rest of the year, especially the summer renewals in North America with respect to CNA and other U.S. exposures. I think it's premature to think that exposure overall will shrink in any dramatic ways. The SST exposure, we do try to include some adjustments for the renewed portfolio in the January one estimate of SST. It's one of the reasons why this takes some extra time along with our EVM results. Having said that, the majority of our capital is based on the in-force book, and permutations around renewals probably don't have a big impact on what to expect. The other thing I'd just reiterate in the SST number on January one will be the expected cost of the dividend, which I think moved up to CHF 1.9 billion for us, as well as the expected loss for the COVID-19 claims in 2021. One difference between what we disclose here and what's in that calculation, the P&C Re numbers will be very clear with what we've got and released today. On life and health, we had to make an estimate of what the life and health loss might be for the year, whereas we've provided the calculation for you to work with your own view on where ultimate deaths might come up to. Those two will also be in the calculation for the SST. Thank you, Will. Could we have the next question, please? The next question comes from the line of Ashik Musaddi with JPMorgan. Please go ahead. Yeah. Hi, thank you. This is Ashik Musaddi from JPMorgan. Just a couple of questions. First of all, as you mentioned earlier in the call as well, that the climate change, it looks like a bit real, and it is impacting some of the losses which you see. You still haven't changed the climate change seven percentage point, if I'm not wrong, the nat cat budget. How do we think about that? Because it continue to bring in risk to your earnings expectation, I would say. The second question would be, you mentioned that with the increase in pricing. You are comfortable in guiding for less than 95% combined ratio for P&C Re, that includes a lot of conservative loss assumptions. Can you give us some clarity of how that compares, like that conservative assumption this year compares with what was baked in in, say, 97%? As to just assess how better could it be versus 95%? Just last question, it's a simple clarification. 2021 COVID losses that you are suggesting of less than CHF 500 million, is it based on the current information, or is it based on some future expectation as well, for example, cancellation of Olympics, et cetera? Yeah, that would be great. Thank you. Thierry, would you like to take the first on that CAT budget? Yep. Climate change is a big topic, as you rightly say. Christian mentioned it already. We've looked into this in detail and we found that, as Christian said, that urbanization, so more and more people moving to areas exposed to climate risks. That's actually the primary driver of the increase in losses over the last two decades by far. That is one of the reasons why actually climate change has not been really detected if you go back. We feel that over the last few years, and I think I made the point already, we see that in terms of the load to secondary perils, so not the main perils, we've actually seen a real impact. We, for the first time, actually see that beyond urbanization, there is an impact that we think is coming from climate change. We have updated all the models that we have. As I said before, we cannot model, and we do not model every secondary peril. That's one of the reasons why we actually want to move away from these secondary perils that we expect will surprise us on the negative side, even more so in going forward. Maybe also from my side as a clarification. We were close to the climate science and all the scientists in the world, and the consensus at this stage is that climate change is visible in the secondary perils, not yet proven in the very big ones. The way it finds its way into the budget is through the expected loss. Last year, we increased some of the models of these secondary perils, which means that at costing and everything, in the end, you see it in our budget. Thankfully, we don't take multi-year trend risk in climate change because it's a certainty. It's not a risk. What we take is just the yearly volatility, and the middle point of that is just moving up with updates of our models. This is how it's captured in the models. Maybe I'll come in on the question on the combined ratio. I think both for Corporate Solutions at less than 97 and for P&C Re at less than 95. We've adapted in 2019 and 2020, our loss picks by line of business across the world to get to what we think is a correctly costed book, which will not require us to do any further reserve adjustments in future years. The conservatism that we might have alluded to is, I think, systematically learning from some of the actions that we had to take in 2018 and 2019 on reserving and P&C Re, actually, even in the first quarter of 2020, to be sure that on a going forward basis, we're starting off on the right foot. Unfortunately, I don't think that allows you to make any real assumptions about where we're going to land, other than better than 95. I can only say that we don't view 95 as a particularly round number. If we were confident that we were going to be better than 94, we might have said that, but we didn't. For now, I think that's the right guidance to work with. Obviously, as we go through quarters one and quarter two, you'll get a view of how we're developing during the course of the year. With respect to the COVID-19 losses, which was your third question, I guess I'd encourage you to go back to page six, where we give a little bit of detail around the three buckets. Specifically with respect to event cancellation, you see the second bullet point says, "This ultimate loss anticipates larger sporting events will take place, maybe without spectators, in 2021, and certainly in the second half of 2021." A difference that I mentioned earlier today, as we speak, the Australian Tennis Open is going on successfully, even with fans. Very different than during the summer of 2020, when Wimbledon was canceled with real consequence for the insurance industry, which had to pay up for some of the lost revenue. We're anticipating some return to normalcy. We've seen evidence that people can travel, that they can manage these kinds of events. It won't be the same as it was, in the case of the Olympics five years ago, but it should be okay as our current hypothesis. If it's not, we'll adjust. The other thing which I'd just reiterate on the COVID P&C reserves that we've got set up. 70% of these reserves remain IBNRs. We believe that these will come through, but it's not as though there's no room for a little adaptation as actual losses get reported in here. I think we're in good shape. We're comfortable that the reserves we have are appropriate at best estimate at year-end, and our view is that these three numbers on page six reflect ongoing exposures that we've got as a best estimate. Thank you, Ashik. If we could have the next question, please. The next question comes from the line of Thomas Fossard with HSBC. Please go ahead. Yes. Good afternoon. Two remaining questions. The first one will be on mortality. You're providing an unchanged sensitivity, but I was wondering if there were any offsetting positives that could play into the year or into H1 in order to offset higher potential mortality claims coming from the U.S. The second question would be related to IBNR, if you could disclose the IBNR for the BI line of business. Thank you. Thierry, would you like to take the question on mortality? Happy to do so. Hi, Thomas. The offsetting, we've communicated on this already a little bit. We have the longevity line of business with some offset. That's also one of the reasons why we write longevity, and we have seen that offset. The other line of business where we have seen better than expected results was in medical. As you all know that simply been less people going for surgery and that had quite an impact on those lines of business. Other than that, there were no particular offsets observable in our portfolio. I think Thomas thinks about whether, as we progress, the people would have died anyway, and therefore we're going to have that. That's a big question we're debating internally. As you can imagine, unless there is strong evidence for that, there's a reluctance to recognize that. I think some effect will be seen. As you know, I think half of the people or so in Europe who died were in aging homes, where usually the life expectancy is low. Equally, there is also quite a bit of people who have died who had many years to live otherwise. I don't think we see at this moment a big upside in that sense, in the portfolio. Some, yes, but we're cautious, and very little is included in the EVM. Yeah. Thank you, Christian. Sorry, Thomas, for having misunderstood the question. We have obviously launched a whole project around this to monitor these potential negative or positive impacts because they can go both ways, and so far we are neutral. Maybe, Thomas, with respect to the IBNRs, I'm not sure that we're releasing by line of business, but I can give you a little more detail by business unit. You won't be surprised that the lowest level of IBNR is around our life and health Re business, where 75% of the claims are related to, actually received and reported claims on that business. The IBNR sits at 25%. For CorSo, it sits at 52%, and that's a mix of probably higher IBNRs in the business interruption and lower amongst event cancellation and credit and surety. For P&C Re, the IBNR is for the reserves, the $1.9 billion of reserves we have is at 80%. Again, I think it's safe to say that the event cancellation probably is below that, and the other lines and business interruption are likely above that. Thomas, and on slide five, you see that at least visually on BI, that it's a very significant amount. Thank you, Thomas, for the questions. If we could have the next question, please. The next question comes from line of Michael Hyde with Commerzbank. Please go ahead. Thank you very much. Good afternoon to everyone. First question on asset management. Apparently, you have hedges in place, some hedges on credit risk, which you put on in the fourth quarter, and then you have also some hedges on your PIA portfolio. Are the credit hedges still in place, and why do you have FX hedges on your PIA portfolio? Second question on the renewals. As we discussed, you reduced your exposure to nat cat aggregate covers, which exposes you to secondary perils, which suggests that pricing of these risks are still too low. The conclusion is that prices have to rise further. Can you put a price tag on this, or it's just a portfolio decision just to reduce your previously overweight position to a normal position? The first question to John. Sure. Michael, yes, we have had some hedges in place vis-a-vis the credit portfolio. As I mentioned at year-end, the uncertainty around some political situations in major economies made us a little more cautious than hindsight suggested that we should have been. We don't regret that. I think we're comfortable with them on. I think you should anticipate at least some modest increase in our credit exposures in the asset portfolio. With respect to PIA, I'm not quite sure the source of the information, but we don't hedge the individual investments. In a couple cases, we'll hedge a little bit some of the currency exposures we might have. The actual investments are typically strategic, and we are comfortable with what we own there. There really isn't much logic to hedge anything that we've got there. I'd say lastly, the one somewhat chunky investment that we have is the Phoenix shares. Again, that creates a certain volatility which will play itself out on a quarterly basis, but it's easier, I think, for everybody to understand what that is and why we have it. Since we've taken those shares, they've performed very well. The company, as Christian said, has done a very good job on the integration of ReAssure, and we're fine. Thierry, the second question. Michael, on your question around the aggregates. Historically, we've been a leader in these aggregates. We have more than a decade of experience in the space. I think we understand these covers quite well. I have elaborated already on the issue around secondary perils and the impact of climate change. I think what needs to happen first for us is really to move the aggregates further away from frequency. That's the first move that has to happen. Once we have achieved that one, obviously we need also a price increase to achieve satisfactory returns. Thank you, Michael. If we could have the last question, please. The last question for today comes from the line of Paris Hadjiantonis with Exane BNP Paribas. Please go ahead. Yes. Hi, everyone from my side. I hope you're doing well. Two questions remaining. Just going back to BI, where a lot of the uncertainty around the ultimate cost of COVID-19 lies. You have added almost CHF 400 million of reserves here in Q4. I'm just trying to understand what is driving that. Relating to that, has the U.K. BI decision by the Supreme Court changed your view of what should be covered under aggregate catastrophe treaties? I understand that some people are talking about potential arbitration on aggregate catastrophe treaties going forwards. The second question is on portfolio pruning and the reduction in aggregate covers and casualty. Is there more to come over 2021? I think from your comments, you are basically saying don't annualize that 11% premium reduction. You could give us some better color on what is yet to come, that would be helpful. Thank you. First question to John. Yes. Paris, thank you. You're exactly right. We did increase with some significance the BI covers both in Corporate Solutions and in P&C Re in the fourth quarter. Two main reasons for that. One was the court decisions in Australia especially, but also the reaffirmations in the U.K., which we view as having some marginal increase in our exposure, maybe a somewhat larger increase in the exposure of the industry, as a result of those decisions. We've added that. The second was in the context of the second wave of lockdowns in Q4, there probably will be some new claims coming from disrupted businesses. That's probably smaller than the issue of the interpretations of liability coming out of the court decisions. The combination of that led us to a more prudential view, I think, and that's why we've got $1.4 billion up between the two business units. Second question to Thierry. Yeah. To the second question, I'd love to know the answer, and be able to see the future today. Your question, too, is there more to come in pruning on the aggregates and on the casualty side? It's obviously difficult as we are actually really focused on the quality of the business, quality of margins, very much so. Obviously very actively in discussions with our clients to get the structures and the treaties in a spot that we like. What I certainly wouldn't advise to do is to just read through this 11% reduction now for the rest of the year. That is certainly not something I would say. As John also pointed out, we see still a lot of opportunities throughout the years. John mentioned transactions. Typically, one month is not necessarily the moment where we do all those transactions. There's a lot still out there in that field. I'm personally very confident that with this portfolio that we have achieved on one month, which is a very solid portfolio. Christian mentioned it, better mix, and also much better terms that on the basis of such a portfolio, we will be very confident, in looking at further opportunities throughout the year. With that, thank you all for joining today's call. As always, if you have further questions, please get in touch with any member of the investor relations team. With that, we wish you all a nice weekend. Thank you. Thank you, operator. Thank you for your participation, ladies and gentlemen. You may now disconnect.