Ladies and gentlemen, welcome to the Zurich Insurance Group Investor Day 2021 Q&A session. I'm Andre, the Chorus Call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. Anyone who wishes to ask a question or make a comment may press star and one on their touchtone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. In the interest of time, please limit yourself to two questions only. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. The first question comes from the line of Will Hardcastle from UBS. Please go ahead. Afternoon, all. First of all, thanks for providing more color on the potential life portfolio transaction. Sorry for being slow on this. I think it is me being slow, and it's probably obvious, but when you say the first priority is the elimination of the earnings dilution, then it's about the growth in regular earnings and dividend. Should I be reading that as a buyback or simply deployment for growth to offset the earnings dilution? Clearly, if you're deploying at 15% return on capital, this would be accretive utilizing the same capital. The second one is on the deductibles. Really interesting slide on that EMEA liability. The question, has the facultative reinsurance deductible increased in line with this, or is the spread of risk narrowed? Also just to get some flavor, 'cause this is showing 2020 versus 2021. Presumably a lot of this hasn't even begun to be factored into the reported combined ratio improvement. I guess, is this happening in some shorter tail lines as well, where we might see this benefit sooner? Thanks. Hey, Will, it's George. Why don't I start with the first question, which of course I've tried to avoid answering in the presentation. I'm gonna ask Sierra to take the second one. I mean, the obvious reason why I've differentiated between growth and earnings dilution, and I guess what I'm trying to do is give a clear signal that we're not really prepared to tolerate earnings dilution for any lengthy period, which means that organic growth supported by the capital, at least won't do it. It requires some direct action. Hopefully that's clear enough. Sierra, do you want to talk about the deductible topic? For retentions, I believe your question was specific to retentions and liabilities. Did I get that correct? No, I can explain because it was a chart I used in my presentation, where I had the chart on the increase in deductibles in EMEA liability. Now, as I tried to, I think to say in my speech, this is just an example. We have similar examples on property book. You ask about the FAC. Yeah, I mean, the situation of reinsurance hasn't changed much over the past three years, not significantly. FAC is a complicated question to ask because there is no policy in FAC. I mean, they are policy specific or customer specific. I can't really answer you on FAC in particular. You know, the purpose of this was to show what the significance of the improvements in the quality of the book and your guess that this hasn't been yet fully manifested itself in the combined ratio is fairly correct. Not only because this is like the example is in liability, but even in the property book, it's gonna take a while to really see that because you know, just the first couple of years are not enough to judge what is the improvement in the quality of the books. Really clear. Thanks. Thanks, Will. Welcome. The next question comes from the line of Andrew Ritchie from Autonomous. Please go ahead. Oh, hi there. Sorry to dwell on the topic of the life buybacks, but I guess you provided more information. George, I think I'm also being a bit dense. You talk about on slide 41 a reduction in target capital and there's liquidity impact. I think you mentioned in your comments the liquidity impact is sort of academic to some degree because of the capital is at group center already. What matters and how do I relate the you know resources that you might be freed up? Is it the liquidity that matters or is it the target capital reduction that matters? Which is the sort of relevant one in terms of the resources you'd have to use to neutralize the earnings impact? Second question is for Ericson. Your predecessor talked about an aspiration to use automation. This was in his presentation, Christophe 's presentation in 2019, that ultimately automation could reduce claims handling expenses and admin expenses in non-life by at least 15%, in time. Is that a kind of quantum you also recognize? I'm getting an impression that you're trying to implement an additional step change in the group in use of technology. Do you think that ambition is possibly too low? Thanks. Thanks, Andrew. On the first one, I mean, I wish it was a really simple answer that covered all of the different permutations. I think the easy thing to realize is liquidity. I mean, we talked before about the fact that I mean, in general, the challenge that we create is actually the group overlay and the group requirements for capital to back the risk that we're taking locally. Which means that in most cases, the cash is not sitting locally, it's sitting at the center. The cash side of it is not a particularly reliable indicator to the flexibility that we have. The capital is generally a much better indicator. There are a few things that you need to keep in mind. I think I would start with capital. In some cases, even capital won't be necessarily the best indicator. It'll depend on how we then feed that into the target levels we set for the group. For example, if you look at the examples I've given on slide 40, I mean, the first life portfolio that I've highlighted, that's a pretty traditional one. I think the capital side of it is a pretty good gauge for the flexibility we expect the group to generate. Number two, which I covered in the pre-recorded remarks, is much more complex. If you look at it from a local perspective, I mean, the local perspective is actually quite. It doesn't have high capital requirements. The returns are actually not great, but okay. When you look at this one, again, it's actually the group's requirements. In particular, the thing we're trying to solve for in Life Two is the volatility that it brings as a metric. So you do get a very substantial capital release. More importantly, we take out those huge swings that we're exposed to. In fact, we saw it last year in the early response of the financial markets to the pandemic. There we get a capital release that will allow us to use the cash more freely at the center. We get a significant reduction in volatility or reduction in sensitivities, and that would also allow us to rethink where we think we need to operate on average through a cycle. Those things in combination drive, in the case of Life Two, a very material capital or additional capital flexibility for the group. Great. Yeah. Thanks for the question. If I get the question right, it's like if we are continuing with this automation journey or if there is a further we can do, if I get the question right. Is that right? Yeah. I guess I'm looking for is it a continuity or step change relative to some of the aspirations that Christophe set out, back in, I guess it was 2019. He also made some specific aspirations around things like the cost benefits to claims handling, in particular from automation, but also broader OpEx. Yeah. Definitely. Thanks for the question. We have not been at a standstill. We have been continuing with this journey. What is the step change right now? It is we are increasing the pace by doing things even a little bit differently. I would say, continuing what Christophe has done and it is almost you can look at it as 1.0 and 2.0 now. What is the difference is the ways of how we are doing automation these days is, because of the technological advances, and we can take advantage of some of the latest advances in technology I mentioned earlier today, like the process mining as an example. We structure ourselves slightly differently going forward, which I mentioned also about the three structural changes. This is also part of a continuing effort, but then we will bring more capabilities in-house, and we'll also make sure we are focusing on productivity. That is one is about the approach. We are stepping up on the approach to give ourselves even do the automation a bit more. The second is also, while we are doing automation, we also want to focus on the customer experience, how while we are doing automation, while we get more efficiency, how we can serve our customer better. I think that is the key. Can I just ask, is the transition to the cloud that you talked about as a key initiative for 2022, was that always the plan or has that been accelerated as well? I think. Well, everybody do talk about cloud. Put it this way, I think we are now mature in the way that it is time to step up. Because what is the difference? It's before we have done all we have done since 2016, streamline of our IT infrastructure like data center network. If before we have done that, it will be very difficult. But now we have just completed the whole streamlining. It's natural for us now at this juncture to move to cloud. And then we have been using it. It's not completely new, but now we will do it at pace starting next year. Okay. Andrew, that was not in the plans. Okay, great. Answering your question to the point, that was not in the plan. What now Ericson launch is above and beyond the plans we had before. Great. Thanks very much. The next question comes from the line of Peter Eliot from Kepler Cheuvreux. Please go ahead. Thank you very much. The first one was on slide six, please, on the GWP growth by driver. I guess, when looking at net new business, I mean, we often hear that one person's new business is somebody else's unwanted business. I'm just wondering if you're able to give us some comfort that that new business is not going to result in any sort of deterioration of the quality of the portfolio. Looking at the rate range bars, I guess just doing the math would suggest a sort of 5.5% growth from that rate change, which obviously is a bit lower than the 8% we've been talking about before. I mean, is the delta explained by the terms and conditions, or am I missing something else there? Secondly, George, thank you for confirming the dividend policy earlier, and you know, the fact that you will look through earnings volatility. Maybe a cheeky question, but I'm just wondering if you're able to quantify, you know, the items that you would sort of want to look through in terms of the 2021 earnings, or, I mean, you know, you probably can't give us numbers but, you know, what sort of things you look through would be very helpful. Thank you. I'll start on the premiums, and then I'll pass it to George. First of all, let me divide the answer between retail and commercial. I'll start with commercial, which is definitely the most interesting or the more complicated one. Retail it's easier. On commercial, it can be true in general what you say that the business that somebody acquires is the business somebody let it go. Remember what happened over the past two years. The market has fundamentally changed, because a number of players left the market. Capital has been taken back. The hardening of the rates has brought back to markets risks that haven't been there for 20 years. In the softening markets, we haven't been seeing these risks for a long, long time. Companies like ourselves had a chance to pick and choose, because we were in the markets, we had no capital constraints, and we could really dictate conditions. Which meant that very often the business we have been taking over the past two years, and Sierra can expand on that, has been on our terms and conditions, which is a lesson that we learned again last year on pandemic conditions. On cyber, definitely the case. Sierra's moved more than 90% of our portfolio on cyber to the Zurich conditions. So I would not, you know, consider the business we acquire in commercial as risky or business that others have canceled. And this was just taking advantage of the hardening. I don't know, Sierra, if you want to expand on this or. I think you've summarized it quite well. I mean, there was opportunity also because as we covered earlier today, I mean, certain lines of business, we've reduced our line sizes, so have some of our competitors, and so there's more business in the market to take a look at. Remember, again, the example that we discussed before about what business we've been writing on in the liability. As I said, same kind of examples we can make it for property, for cyber. Again, remember that, we've been writing on our terms and conditions. We generally have held very well in the markets, even in the tougher situations. On the rates, a couple of comments. I mean, you cannot really reconstruct precisely the math of this. First of all, because there is the reduction in exposures. On one side you have the rate increases, but on the other side, the customers are buying less because they have less money. The second thing, of course, is that the portfolio develops, and this is the picture of the premiums, as they were at half year, but the rates will continue to expand themselves for the remaining months of their year coverage. The numbers are not too distant, but they're not precisely the same number. On the theme of what the customers buy, one thing is the exposure, but the other thing also are these deductibles and other conditions which again influence what is the final price of it. This is what makes the calculation not precisely matching each other. Retail is an easier story. You know, we are all of us all insurance companies are in the markets where our customers have relationship with other four or five insurance companies at the same time. They might have had contracts or relationship with us at a point in time, but then they move to others. We've been reactivating relationships. We've been using the new partnerships that I think you have on the next page of my presentation. Both these things. The growth comes from these new partnerships that you see mentioned there. It comes from the bills which have been reactivating. The customers that they got in touch before, and it comes from better penetration of the existing customers. There, I would say that it's an easy case to conclude that these are not customers of which have been thrown away, sent back to the market by competitors. These are just customers who do not have a strong relationship with anybody else, and they were interested in starting a relationship with us. What you will see next year, probably at the next Investor Day, is we will present you all the work that we have been doing on segmentation of customers, on tailoring the offer to the needs of the customers. You'll find, I think, that that work interesting and also the results of that work very promising also for the future. Excuse me. Dividends. I've just lost my voice at the crucial point. You'll appreciate that I can't walk you through the process we're going to run through for this year end or rather the outcome of the process for this year end. I can easily describe the process we've been through or what we go through. Excuse me. It must be psychological. It must be psychological. I mean, I've done it 17 x, so you think I would know the whole thing off by heart. I mean, we prepare a memo for the board, which is the recommendation from the Executive Committee on the dividend topic. We look at the earnings for this year. We typically look at it from what we see as underlying results, and there are typically three or four major topics that we regularly adjust. CAT is the one that typically stands out. If you look at it over the course of the last several years, I think 2017 is the standard example of a year where we've made a significant adjustment for CAT, given the progress that we saw in the firm, and in particular, what we saw coming in the plan in the following year. That continues to be the, I mean, the second and most important topic. We not only look at the underlying performance of this year, we look at the plan for next year to determine whether or not that underlying number is viewed as sustainable. The adjustments tend to be in that CAT. I mean, again, I commented when we had the call last week on Q3 that I don't expect us to change our view on how much CAT risk we're going to carry. In fact, I think you saw in the, uh, the earlier comments that we're actually doing a number of things to actually reduce, uh, the capacity that's absorbed by CAT across the group. I don't expect that particular process to change. We will take out what we view as the temporary volatility on CAT versus our view of the current attritional load we expect to see, say, for next year. The other two adjustments that we frequently make, I mean, realized gains are not entirely random, but they can be a bit up and down. We tend to take a more long-term view of realized gains so that we don't claim too much or too little. Then finally, restructuring. It's less of a topic today, but we've had quite a bit of restructuring in the group, particularly in the 2017 through 2019 period. Again, we would adjust that back to a level that we would think is more consistent with the run rate. I think the long story short is, I think as you're thinking about what we'll look at at the year end, I mean, we would adjust the CAT burden back to the level that we have previously guided you for, because that's currently what I expect the CAT burden and the plan to be for next year. Very helpful. Thank you very much. Thank you. The next question comes from the line of James Shuck from Citi. Please go ahead. Thank you. Good afternoon, good morning. So my two questions. Firstly, on the empowering of commercial, I just wondered if you could spend a little bit more time elaborating on kind of the re-engineering of the relationship that's happening there. I guess we're on a kind of journey, and trying to get into risk prevention and risk assessment and all these types of things. I'm just keen to know where we are in that journey, where you see it going. Ultimately, are we seeing more business that's gonna come direct rather than through brokers, and are you actually competing more with the brokers? The second question, I'm coming back to the back book deals, just to simplify my kind of thoughts, I suppose. You've got 10 points being released from portfolio two. The other one might even be bigger than that. And then you're saying that reduced volatility means that you reassess what capital you need to hold on an ongoing basis, which might be 10 points or so, I guess. If you add those up, you kind of get about 30 points of solvency. Is that the right way of thinking about what's available for deployment? Thank you. To take the question on risk engineering, we see just an increased demand from customers in helping reduce the risks. We've done risk engineering for over 80 years at this point. We have broad capabilities in this space. Through the needs that we see primarily focused on climate change, we see supply chain and cyber being key areas for our customers. We are looking to support them with capabilities in this space in addition to their traditional needs that we've always supported them on. But with an eye to reduce risk and to keep certain types of risks, such as CAT, insurable over time. As for brokers, I mean, the vast majority of our business still goes through brokers. The risk engineering business is a bit different, as it's a business that we do for a fee that's direct with our customers. There is some competition in that space for some of that business. It doesn't hinder us from expanding our offering in that space. James, on the back book topic, I think the logic is absolutely fine. I think the concept. I mean, I guess you're making assumptions about what they are. Of course, I've been rehearsing to try and avoid that I tell you exactly what they are. I think the logic's good though. We've been pretty clear about what we see from Life One. I think the assumptions that you make about the structure for Life Two, there's more than simply a capital release. Back to the answer to Andrew earlier. I mean, I'm gonna avoid commenting on the quantum at this point because we haven't done any of them, and we need to get some done, and then it's easy to talk about exactly what the impact is t he logic is good for me. That's great. Thank you very much. The next question comes from the line of Thomas Fossard from HSBC. Please go ahead. Oh, yes. Good afternoon. A quick question, just one for me. On commercial lines, I was quite interested to see and to understand how you were already reshaping or transforming your book to be, I would say, more resilient and to be better positioned to a softening of the market when it comes. Can you say a word on what you need to do in terms of reserving in order to sustain the next phase of the cycle? I mean, maybe at the group level, I mean, can you mention where you currently stand in terms of, you know, excess over best estimate and what needs to be added on top in order to reach a point beyond which you would believe that you have all the necessary firepower to offset the next net cycle? I mean, really to understand, because the point is that you're already pointing to a different source of strains in the reserve already. I mean, the point you made on the liability and workers' compensation was interesting, but how much do you need to put aside in the current up phase of the cycle in order to be sustainable for the next phase? Thank you. Hi, Thomas. This is George. I'll take that question. I mean, for a moment, I thought it was gonna be Sierra's question, but then you took that turn towards the reserving topic. I mean, the question applies a level of precision and science that I don't think exists in terms of how we think about the level of reserve strength that we have. I mean, we actually have formal policies with the audit committee around how far we are allowed to move and the confidence interval which confidence interval we want to work in. I mean, I think if you think of the logic we've applied, our chief actuary was actually in the ExCo. It must be more than a year ago now. I'm just reflecting on the fact that, I mean, we don't believe we have weaknesses in the reserves. I tried to make the point in the earlier remarks that we have significant strength. To maintain a consistent position, I mean, through a cycle, you want to build as much reserve strength as you can, particularly in this hard market phase that we're in today. Having said, I mean, there are limits. Of course, I mean, back to that point that, I think Peter asked earlier about understanding the walk around the dynamics on growth and profitability, I mean, we can't take all of that and put it into reserves. I mean, we've long had a policy around something we've referred to as reserve strength. I mean, it's unlikely that that would be more than a point in the result in any given year. Depends partly on the risk factors. If you look at this year, and you look at the dynamics of earlier years, we've been, I mean, somewhat fortunate that the position we've taken on workers' comp has turned out to be more prudent than we expected. That's allowed us to add to reserves, also to cover some of the social inflation topics that we've talked about before. That benefit we've had from workers' comp on top of what we've seen from the market move has given the ability to strengthen the reserves, to allow for those factors that are not in the past mathematical trends. I mean, I'd be surprised if we would push that to over a point. I'm trying to be as precise as I can be, but there is no hard and fast rule. The next question comes from the line of Dominic O'Mahony from BNP Paribas Exane. Please go ahead. Hello. Thank you for taking questions. First, I'm afraid just one more question on the back book piece. Thanks also from me for the color on this. If I look at page 39, it looks like in an ideal world, you'd be extracting about three quarters of the capital from the life portfolio. I just want to get a sense of whether, you know, portfolios one and two that you mentioned, are they, you know, the vast majority of that, or actually does that leave quite a lot else? When it comes to sort of the balance. Do you have plans to release capital from the balance, or is there gonna be a substantial chunk where frankly, you just don't have as many options, and you have to sort of let that run off as efficiently as you can, but sort of in the shape that they are? Second question on CAT. I just wanted to clarify the extent to which you're stepping away a bit from CAT as a function of sort of pure financials. The return on equity on the allocated capital versus philosophy. It sounds from what you're saying, like actually it's more about the sort of earnings profile you want this business to have and not wanting that to be too influenced by the level of CAT. I think George, at one point you said if rates, you know, pricing goes up, that doesn't mean you're just gonna step back into CAT. Does this constrain your ability to write business with your customers? One thing we sometimes hear is that customers, you know, they require a broad suite. Actually, if you are trying not to underwrite as much CAT, does that mean you're less able to serve your customers? I'm interested in your thoughts on that. Thank you. Yeah, thanks. On the first one, if we get what we show on the following page on page 40, Life One and Life Two done, you make a very significant difference to the picture that you see on 39. It's not just, I mean the characteristics of the life book, it's the asset risk that some of these life books carry. I mean, you see a very significant change. I think if we were presenting it here today, and we've been through that process to deal with the earnings dilution, and still have room for growth, I think we would be far more comfortable with the overall capital allocation that we have in the book. I mean, that sector is not gonna entirely disappear, so there may still be some part of it left, and maybe that's a topic we come back to later. I think for now, I think if we get Life One and Life Two done, we'll have made a material change to the characteristics, not just of the life business and its performance and the growth trend that you also see in my presentation elsewhere, but also, I mean, we create the facility for the group elsewhere to benefit from some of the stronger trends we see in other markets currently. You'd see a very material change. On the second topic, I wouldn't characterize it as us stepping away from CAT. I think we're trying to manage the exposure to CAT. I talked in the yellow comments about the fact that we've seen in particular a very strong rise in frequency, and it's very hard to predict in any twelve-month period, I mean, what we should really expect to see from CAT. It seems clear to me that there are some trends here, and we'll see this rise over time. If you write the same nominal level of CAT tomorrow that you wrote today, you would expect the claims cost of that to be a larger proportion of it. I think the point I was trying to make is that that's just not consistent with, I mean, what we do as an insurer or what we have as an investor proposition. It's not about stepping away, but it's trying to manage some of the frequency that we see around the CAT topic, and that's likely to continue. Does that constrain our ability to write business with clients? I don't think so. I think again, it's like, I mean, it's like most scarce resources, we need to allocate it to the places that make most sense. I mean, it's clear that if we have a client, and we simply say to the client, "We'll take the things we really like, but we're not gonna take the other things," that doesn't function. I mean, we're nowhere near that on what we're proposing today. What I'm really saying here is that we're looking to manage this into the future to avoid that we see this become an ever larger part of the group's financial outcomes with all of the volatility that brings. I don't think it fundamentally changes the customer proposition. That's really helpful. Thank you. The next question comes from the line of William Hawkins from KBW. Please go ahead. Hello. Thank you very much, and thanks for some interesting presentations today. George, back onto the CAT load. You've been very clear that you don't expect to change your view of how much CAT risk Zurich is gonna carry in the future. Given that I live in spreadsheet land, you know, for me that says keep plugging in the 3.5% load that you've guided us to in the past. I can imagine in the real world there can be a difference between the real world and spreadsheet land. Is that what you're telling us? Specifically, if that is what you're telling us, I'm a bit confused by the language on slide 46. 'Cause you were saying a lot of interesting stuff around that slide, but the actual text on the slide says that for part of your portfolio, U.S. large commercial, the improvement in pro forma loss ratio is expected to be offset by the current trend to higher cat frequency. What I infer from that sentence is that it's saying attritional goes down, but the cat losses do actually go up. I'm not sure if that's just like some kind of exception or if I've misunderstood the text or what. If you could just help me understand that point, that would be great, please. Secondly, when you were talking about cost efficiency, I'm one of those people I think in the past that's kind of asked you about the balance of priority between just getting costs down and investing in good digital and other stuff. When you were talking about slide 43, you made this reference to transformational efficiency, and that sounded really good, but I don't actually know what it means. Are you telling us something quite, you know, important with transformational efficiency? And if so, what does it mean? 'Cause it sounds good. Thank you. Let me deal with the last, well, the second last part first. On the cat side, it is a misunderstanding. What I'm really saying on 46 is not that we're changing the attritional and somehow the cat expands to fill that in. We're controlling the cat capacity that we deploy, so that when you look at the outcome at the end of it, and you plug the number into your spreadsheet, it's the same as the number that it was to begin with. Despite the fact there may be more frequency in future. I mean, I'm telling you, we're not looking to change that number. But it's not an offset between two different components of the loss ratio. On the cost efficiency topic, I said to John before we started this, that hopefully we wouldn't trail too much of next year's Investor Day, 'cause that would be the bigger update, obviously, with the new ambitions that we have. Mario's already started with the customer topic earlier. I guess I hinted at something that will be equally important to us next year in my comments. I mean, you look at the industry in general, and you look at the cost of the production of the product, it's really high. I think if we then look at Zurich and what we do, and you go back to some of the things that I mean, Ericson has indicated are priorities. I mean, we still believe there's an opportunity to really significantly change the cost basis of the firm. If you look at slide 43. I guess the point I'm making is that we're nowhere near the end of that journey. I mean, we started from a place that we didn't like. We worked really hard to correct it, in the run-up or the run through the last strategic cycle. We haven't given up on that. Again, the point I was trying to make here is that you have a combination of growth and continued expense, outright expense reduction to get to where we are today. But there's much more room in this, we believe. I mean, some of the early things that I mean, Ericson's focus, and he talked about some of the more transformational things we're gonna do on the technology side. I mean, it not only produces funding for some of the things that will be a high priority for us, and actually, I mean, allow us to serve our customers better in future. It's also producing savings already. I mean, it's a bit coy. I'm just trying to signal that, when we come back to this topic again next year, just don't be surprised if expenses continues to be a key theme for us. Got it. Thank you very much. Thank you. The next question comes from the line of Michael Huttner from Berenberg. Please go ahead. Fantastic. Thank you very much. Yeah, I have two questions, please. The first one is on the workers' comp. It's on slide 45, I think. They're all lovely slides. Thank you. You show something which I thought was lovely, which is the chart continues to go down, which for me means improving. I remember the start of the year when we were discussing reserves. You said we don't look too much at 2020 reserves. Here it looks like, oh, 2020 reserves, we could begin to include them. That's the. I just wondered if that's maybe a kind of a positive I could take away here. Going back to the 30% James calculated and kind of said, "Yeah, maybe." That's CHF 8 billion roughly, give or take. If I take CHF 27 billion as your required capital base. I know the math is not quite that straightforward, but just give or take. Assuming that there's some earnings and earnings dilution done, it's a huge amount. What are you going to do with that money? 'Cause it changes the group. It's not. You can't just let it lie there, and your ROE would literally go. It would go down significantly. Where's. I haven't seen here anything which suggests you're willing to or you're potentially considering reallocating. It's not CHF 8 billion. CHF 8 billion is a required capital base. In terms of deal value, y ou know, it's multiple of that. I'm just curious what that could be. Thank you. Thank you, Michael. So on the workers' comp topic. I mean, I tried to be really careful in the earlier remarks. I mean, you've been around for a long time. I've been around for a long time, so we've seen this business over the years. I'm not necessarily convinced that the kind of experience that we see in the business is something that you can count on to be the case for every year for the future. I mean, actually, the point I was trying to make here was that we actually have a significant resilience to inflation. It comes not only from the structure of the product, but it also comes from the fact that we've taken a relatively long look-back period, and one that in general predates some of the very positive runoffs that we've seen from workers' comp. Now, it's pretty clear that, I mean, if you take that five-year average line, you move it forward, let's ignore the COVID impact. I mean, you're likely to see it drop. That apparent prudency in the short term, I think it's likely to increase. I don't see that as a principal source of earnings. I see that as a significant source of comfort around reserving risk. One of the things that gives us confidence that we can be pretty consistent around the outcomes that you should expect to see from the back book. I think that combined with the discussion earlier around the point that Thomas made around, I mean, what are you trying to do in the current year? It's a measure of protection that allows us to be consistent and reliable rather than we're gonna come back and take that gap, because that gap is obviously a very, very large number. On the second question, I When you paraphrase me, it doesn't sound like me speaking to me. I'm not Scottish. The way I heard you say it was you said, "Well, I follow James. His logic is 30 point." I think you said, "Maybe." Therefore, it's a ton of money. I think the way I remember it was, James said it's several components, and he has a view of what the numbers for those components would be. I tried to be really careful to say to James that I think the logic that James has is just about spot on as far as I'm concerned, but I make no comment on the number because we haven't done anything at this stage. I mean, as far as I'm prepared to go today is to say that the number one priority, I guess, is what we started the conversation with well, which is that removal of earnings dilution and not through organic growth. Direct removal of earnings dilution is the priority. We would prefer to grow the business. That would be kind of step two for us. The whole point of doing this, of course, is if we show you this chart again a bit further down the line, the balance and the performance are just much better than we see today. But I'm not gonna qualify either James' estimate of the number or yours at this stage. Maybe we'll cross that bridge when we come to that. Brilliant. Thank you very much. Thank you. The last question for today's call comes from Vinit Malhotra from Mediobanca. Please go ahead. Oh, thank you for the opportunity. My first question is on the bancassurance slide, and I'm just looking for the slide number, slide nine. Mario, is there any feedback, I mean, we've heard about banking regulations changing, making insurance a bit more attractive to banks in Basel IV. Is there any sense you're getting, early sense that some of the banking partnerships could be reviewed or tested in the near future? Just a very quick feedback from you on what you think would be helpful. Second question, just towards a very quick clarification. The slide 42, it's a very popular slide, I'm sure. Why did we start the HY 2021 with 15%? Because that was sort of the stated ex-CAT both at ROE. If we did start with 15, would the 22 look higher, or would this be still included somewhere in the shareholder quality, et cetera? Thank you. O n bancassurance, frankly, as it looks like also in the page, we're very pleased with the success we had in renewing the agreements and actually expanding the one with Deutsche Bank to Postbank. The agreement with UBS is focused on SME business that we plan to develop together, and we'll see if we could then be able to expand it to something else. Sidian Bank is a relationship like Deutsche Bank that we had over a number of years, and we're very happy that was renewed. Nothing has changed the quality of this relationship, and we look forward to further successes. I'm quite optimistic on the results of these businesses over the next months and years. I don't think that the capital decisions will move banks into the territory of taking the insurance business back into their fields, because I think at least what happened with our partners is that they understood what's the benefit of a competent and specialized player working with them. We bring them products as I tried to demonstrate later on in the pages on the protection business that they were not able to introduce themselves. Our solutions are packaged into the banking solutions. The systems are very much working together. Our solutions are embedded into their systems. This is very smooth for the banks. It gives them very high commissions and profits. It's not just based on capital or on kind of arbitrage or optimization of capital rules. They really sell much more than they would have done before or that they did before. Thanks, Mario. Vinit. Can you hear me? Vinit, I'm gonna answer the second part of the question. It's an excellent question. I mean, essentially the approach we've taken here is to start from the actuals rather than to go back to the historic numbers. I guess the question would be, when we talked about the underlying performance at the half year, we were already very close to the level that we had indicated we believe we could achieve by the end of next year. I mean, that would suggest there is some upside around the ROE topic. I think what we tried to lay out here, at least in terms of the steps without normalization, is how we see things developing over the course over the next... well, I was gonna say the next 18 months, but the 18 months from the half year point. I guess if I was gonna summarize your question, I mean, the company's already performing relatively close to this benchmark. I think we have a very strong return on capital. I don't see that reversing, and potentially we have some upside around the ROE. Great. Thanks, George. Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Mario Greco for the closing remarks. Thank you all for participating. Hopefully next year we'll be able to see each other in person, and it will be a much nicer event and meeting, I'm sure. As closing remarks, guys, I mean, over the last five, six years, we have always been more ambitious than you were yourself. I still remember the discussions with many of you on the combined ratio, where you guys didn't believe that we were able to achieve 97 or below 97 combined ratio. We've been much better than that. I remember the discussion on growth, where you guys were telling us you guys are not gonna grow the business. We have been growing the business even during the pandemic. We're working now for our next plan, the one that will cover 2023 to 2025. As usual, as we did in the past, we will come with relevant significant ambitions to continue improving our business and to make this company very strong. It's a privilege to be able to run such a strong franchise business, such a strong machine producing profits and being so balanced to produce shareholder returns. We're committed to deliver 2022, but also to come next year with a stronger plan for the next three years. I wish you very good health and final part of the year, and hope to see you soon in person.