Ladies and gentlemen, welcome to the Zurich Q1 2024 results conference call. I'm Iruna, 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. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mr. Jon Hocking, Head of Investor Relations and Rating Agency Management. Please go ahead, sir. Thank you very much. Good afternoon, everybody, and welcome to Zurich Insurance Group's first quarter 2024 results Q&A call. On the call today is our Group CEO, Mario Greco, and our Group CFO, Claudia Cordioli. I will hand over to Claudia for some introductory remarks, and then Mario will lead the Q&A session. Just a reminder for Q&A, we'd ask you to keep to a maximum of two questions, please. Claudia? Thank you, Jon. Good afternoon, everyone. Thank you for joining us, also from my side. I'm Claudia Cordioli, Group CFO, and it is my pleasure to take you through our high-level results for the first quarter of 2024. I look forward to meeting you all over the coming weeks and months. Before Mario and I take your questions, I would like to share a few remarks. We made an excellent start to the year, with strong growth across all businesses. This is clear evidence to me of the strength of our unique, diversified business model and our relentless focus on execution to deliver on our commitments. Now, let's look at each of the businesses in turn, starting with P&C. Here, we continue to see robust top-line growth, with insurance revenue up 12% like for like on the prior year, supported by rate increases in both retail and commercial. Retail P&C showed double-digit growth in insurance revenue, which together with rate increases of 7% in motor and the impact of various non-rate actions, notably in some of our key European motor portfolios, gave us great confidence in the outlook for the rest of the year. In commercial, North America continues to see strong rate momentum, with overall rate increases of 8%, and commercial auto in particular, seeing rates up 14%. The dynamics in U.S. crop commodity prices, with corn and soybean prices down about 15%-20%, will drive a reduction in top line for this business for the year, which we expect, however, to be compensated by profitable growth in other lines. Margins in commercial insurance remain at very attractive levels, with a stable outlook as reinforced by the information we have from April renewals. Now, moving to our life business. We have delivered excellent growth, with revenues up 12% in the fee business and 11% in the protection-focused short-term business. Both these segments, as you know, have been very consistent sources of growth for us and account for a significant part of our life profits. For the CSM accounted business, new business premiums were broadly flat compared to a year ago, while a more attractive portfolio mix has delivered an increase in the margin. Last but not least, Farmers. Farmers had an excellent quarter, with Farmers Management Services seeing underlying fee income up 6% year-on-year. We are well on track to meet or exceed the guidance of mid-single-digit growth for the year. The management actions that were taken by the Farmers Exchanges have been very effective, as evidenced by the outstanding underwriting performance, with the second consecutive quarterly combined ratio below 90%, and the strong improvement in the surplus position, which is now in the middle of the target range. This is clear evidence that Farmers are on the right trajectory and are a true differentiator for Zurich. Our capital position remains very strong, with an SST ratio of 232%. As we announced in February, we will be undertaking a share buyback, which will start in the next few weeks. So in summary, an excellent start to 2024 and a great set of first results for me to share with you. With that, Mario and I will be happy to take your questions. Thank you. We'll now begin the question and answer session. 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've 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. Kindly limit yourself to two questions only. Anyone who has a question or a comment may press star and one at this time. The first question comes from Michael Huttner with Berenberg. Please go ahead, sir. ... Some of the two components are listed. Mr. Huttner, your line is open. You may ask your question. Excellent. So obviously, two numbers, really simple in industrial lines, which is, Once again, the next question comes from Michael Huttner with Berenberg. Sir, your line is open. Combined ratio, they published 91.8%, consensus 92%. Michael, we can't hear you. I think there's something wrong with your microphone. Hey, Michael. Michael, can you hear us? That was the number. Michael, can you hear us? Half of the year saying- Operator, I think we need to move on to another question then. The next question comes from Andrew Sinclair with Bank of America. Please go ahead. ... Thank you. Two for me, please. First, possibly a slightly different question on Farmers to what we've had over the last few years, but just given the pace of turnaround, looks like Farmers can potentially hit the high end of its surplus ratio target over the next year. What's the next step for Farmers at that point? Would you expect it to re-accelerate volume growth in 2025? And is there any impact on that for ability to file for rate increases once you're at the top end of the surplus ratio? That's my first question. And the second one was just about the non-rate actions you were talking about that you've taken in P&C. Just wondered if you could give us a little bit more color on that. What's going... What are you doing there? What benefits should we expect to see from those actions? Thank you very much. Hi, Andrew. Thank you for the question. So I don't see any connection between the surplus situation and the rate increases, or no direct immediate correlation. Clearly, the rate increases will tend to be smoother and then less high over the next months, but this year we will continue finding pretty high rate increases, both in the homeowner and in motor. What to do with the surplus, I mean, I think, in higher surplus will also trigger a thorough rethinking of the capital generation of Farmers, including the reinsurance coverage that they want to have. We also changed pretty significantly the exposures that the exchanges are running on their books, and we reduced them by roughly billion. So I think the next step, maybe, at the end of this year or next year, will be to start rethinking about what kind of reinsurance coverage they want to have, and how big is the quota share that they want to have. But I don't think there is gonna be. I mean, the rates will moderate themselves slowly, with the market improvements in the profitability, especially after the end of this year results. On the non-rate actions, I mean, we've been protecting the portfolio with a number of changes in clauses and in conditions. The impact is on the claims cost, because there are claims sources that we don't accept anymore because they've been excluded, or there are limits, there are deductibles that influence, or better the claims cost. The next question from the phone comes from Peter Eliot with Kepler Cheuvreux. Please, go ahead. Thank you very much. Just another question on Farmers, actually. I mean, you highlighted the strong expense ratio improvements there. I think you were targeting four points of improvement, so I was just wondering if you could update us on, you know, where you are on that journey. And then the second one was on the SST modeling changes. Just interested if you could elaborate exactly what you've done there. I mean, I understand it was interest rate risk related, but yeah, just wondering if you can elaborate on that. Thank you very much. Yeah, Peter, thanks for the question. On Farmers expense ratio, yes, we took a number of actions on the expense ratio, and also on the commissions. The Q1 combined ratio of the exchanges are roughly 2 points of benefits for lower expense ratio. Some of the benefits, both on the expense and the commission ratio will come later, but this is already very significant and positive. On the SST, I mean, fundamentally, at the beginning of the year, in Q1, we always run a number of changes to the model. This year, what happened was that we also changed the provider that we use to calculate the assets for the risk of the assets of the underlying assets portfolio, and that created a different impact on the SST. We take this as simply a model one-off. It's not significant, and we saw that already in April, that the positive capital accumulation restarted as expected. The impact of these changes explains the gap to the consensus. So for us, this is just a non-event, but I do understand that it took attention on. Okay. Thanks very much. You're welcome. The next question from the phone comes from William Hardcastle with UBS. Please go ahead, sir. Thank you. The first one's on Farmers. This is another good quarter of sequential improvement here. Has the turnaround been much faster than you'd have imagined? And does the quarter's delivery accelerate when you'd imagine returning to more material volume growth in the exchanges? Secondly, okay, it looks like Berkshire Hathaway has taken a sizable stake in Chubb. I guess any initial thoughts from you on this, and if you anticipate it'll have any impact on commercial pricing trends in either direction? Thank you. So look, on turnaround, first of all, well, allow me to say that I don't like turnaround. I don't think that was a turnaround, but that was truly business transformation. The difference is that the turnaround is, for me, something that you do when you are back against the wall. For Farmers, there was really business transformation needed. It was executed fast and impeccably. Did we expect it? Well, let me put it this way: we hoped that it would go this way. The generation of the benefits has been fast and clean, and the market impact was strong because it probably happened also at the right moment in the market. By the way, also the loyalty, the retention is higher than we expected it to be, which means that probably the market was taking the same actions at the same time. I think this will further accelerate, and I think that this will continue through this year. I mean, we're still cleaning the books, so the, I would say the normal growth is higher than what we reported on, because we're still canceling books of businesses, and then we will gradually shift into the growth model and how to restart growing the PIF. On Berkshire, I think, I mean, I don't know much about it. I mean, I read it in the newspaper, as you probably all did it. I would say that this is a vote of confidence on the commercial business, and I like that. I am optimistic on where the commercial business is going. We see stable margins, and we think actually that the margins will be improved. They can be improved. We don't think that the market is gonna turn soft. I think that's a wrong reading of the market. I think property will remain hard, and then we can debate how hard it would remain, but it will remain hard because everybody understands the volatility of the property results with this climate situation, and the supply remains pretty much rationed. I think on the casualty side, everybody understands the risks or the presence of claims inflation, and the prices are already reflecting that. So, I expect the profitability of commercial to stay high and possibly even to move higher, and I... And maybe that, that was the reason behind the investment. The next question from the phone comes from James Shuck with Citi. Please go ahead. Hello there. Good afternoon, Mario, welcome, Claudia. My two questions to you is, firstly, I'm just keen to understand in North America Commercial, I mean, the GWP growth, I mean, actually declined on a like-for-like basis. You're putting through rate increase of 8% or so. I understand that the crop is gonna be a drag on that, but I'm just intrigued to hear you talk about exposure growth, particularly in North America Commercial. But when you also talk about your SST outlook, you are indicating that there won't really be much capital requirement from growth of the business. And makes me think that most of your growth at the moment really is coming from rate and nothing from exposure. So just keen to get your thoughts on where that exposure growth might come from, at what stage you start returning to growth. And then secondly, on Farmers, so again, great result for Farmers. It's still interesting to see that 8.6 points from nat cats in the first quarter. Obviously, you know, you rejig the risk exposures and the reinsurance program, it still seems a high number to me. What would you view as a normal level going through into 2024, please? Thank you. Okay, James. Let me start from the second one, because it's easier to answer. I don't know what's the normal level. I mean, what we know is that we eliminated $1 billion of cat exposures at Farmers over the last 12 months. And as we did it at Zurich, if that is not sufficient, we will eliminate more. I mean, we had experience at Zurich how to do it, because we have been reducing cat exposures in our own businesses in our own portfolios over the past years. And this is a, you know, try, do it and try it kind of game, where you land eventually where you feel comfortable with. So we will see that. I don't think anybody can predict and forecast cats. So far seems good, and if not, we will take further actions and we'll further adjust it. On NAC growth, I mean, you're right, this is a complicated story, so give me a second to explain it. But let me start again from the simple thing. I mean, the SST impact on growth is pretty low because of diversification. Whatever growth we have, this is not gonna consume much capital. And this is something that we often refer to about our SST level, that actually, you know, capital deployment into growth is minimal. We don't need much capital. Because of the diversification of the business, the way the model functions, it will not consume much capital. On the NAC growth situation, okay, there are a couple of things to consider. Crop is clearly a drag on growth. I mean, price reduction was around, was between 15%-21% negative for different goods, and this is commodity prices coming down. And that's, that's the only market, the only industry impacted. The second thing to consider is that we have been acting very aggressively on the commercial motor portfolio. We canceled roughly 29% of cars insured in the national accounts portfolio, in the mid-market portfolios already by the end of Q1. We eliminated the single auto programs that we had in the books, and we acted already on all the sections of the books which were above 110 combined ratio. Then we earn a very strong rate increases, and they are growing by months. I think the April number is higher than the quarterly number that we disclosed, and we see now that the rate increases are well above the claims cost. But this has clearly an impact. And then the third thing to consider is that, we had some seasonal accounting seasonality, if I may say so, because we saw a much stronger accounting of the premiums in April. And that's quite normal because the three months are kind of special at the beginning of the year. So I don't see... I'm not concerned. I mean, NAC growth is there. There's growth in exposures, and there's growth in rates, but in Q1 we had a number of special things that influenced this number. But you will see that in, by the end of Q2, the NAC growth will be visible and back there. Does that help? Thank you. Okay. Yeah, absolutely. Thank you. The next question from the phone comes from Michael Huttner with Berenberg. Please go ahead, sir. Thank you very much for giving me this second time. Michael, now we hear you. Good. Yeah, sorry about that. No, no, don't worry. Thank you very, very much. My questions you may have answered, because the one is obviously on reserving, and the other one is on the timing of the policy count in Farmers. So on reserving, you gave us a little bit of insight, saying the guidance for PYD is in the normal range, 1%-2%. But maybe you can talk a little bit, given you've given us so much already, about, you know, your peers have added, and maybe you've rejigged reserves. Any insight would be really helpful and reassuring. And then on policy count, you talked, you know, at some stage your shift to growth. Maybe the impression I had from the capital markets day in November was that this was a hope or an ambition for Q4 2024. But given the speed of the business transformation at Farmers, can you give us a hope that maybe it'll already be starting in July? Yeah, those are my two questions. Thank you. I'll start on Farmers, Michael, and then I'll pass it to Claudia to talk about reserves, because she started looking into that and assessing them. On Farmers, look, I mean, we need, how can I say, not to be schizophrenic. So, since last year to today, we've been working to transform the business to a really healthy business that generates profit for the exchanges, on a steady basis. And we still have work to finish on that. And so, we do not expect to grow the policy count this year. We, however, target that, and we have already that in mind. Raul and his team are already working on how to generate policy growth, as soon as possible, but this will come next year. The other thing to flag, you probably have seen in our press release that we indicated a very strong growth in the broking business, in the brokerage companies that we bought from the exchanges last year. Now, this also must be considered because we should evolve at Farmers, as we have done at Zurich, at the customer count and on the customer loyalty and customer retention and customer value count. Because the purpose of that acquisition that we made was to remain in control of the customers, if possible, providing the customers with the Farmers solution. But if not possible, maintaining the control by giving the customers another solution, which still comes from us, so that we keep on managing the customers. That will change a little bit, the logic and the metric of policy in force and customer counts over the next years. So be prepared, because we will explain more on that. We're currently working on zero-basing all this. But bear in mind that that acquisition was important and is not a transitory part of how we run the business. It's, it's an important part of the business transformation that we had in mind to have a full control on the customer relationship with through the Farmers' agents. If that is clear, I pass it to Claudia to talk about how she sees the reserve situation at the moment. Thank you. Thank you very much. Hi, Michael. Pleasure to meet you. Thank you. So, on the reserving side, as you know, we guided for an impact between 1% and 2% positive. This quarter is in fact exactly in the middle, so it's absolutely in line with the guidance. As you know, we are performing our larger reserve reviews in the second and the third quarter in particular, but. For what we are seeing so far, both on the commercial heritage side, there's no indication that the full year will be outside of the guided range, Michael. That's very helpful. That's very reassuring. Any more you can add to reassure us more, maybe? Well, we haven't performed, as I mentioned, a thorough review on all lines of business in the first quarter. As you know, we have a general philosophy of recognizing bad news as soon as possible and be less quick, maybe, with good news. That's what we adopted also in the first quarter. But in terms of composition, nothing different than what you've seen happening in the past with respect to PYD. There are no visible leakages in our claims story, neither there is any visible leakage in our reserve pattern at the moment, and we don't expect it, honestly. You see the usual suspects, Michael. Fantastic. That's very helpful. Thank you so much. Thank you. The next question from the phone comes from Vinit Malhotra with Mediobanca. Please go ahead. Yes, good afternoon, so welcome, Claudia, as well. So one question is on commercial profitability, which, Mario, you said some great things about when you mentioned the Berkshire element. But just, you know, from the outside, it looks like there is a slight slowdown in the commercial pricing. And is there also a similar slowdown or reduction in the inflation that you're seeing, which gives you this confidence on the pricing or, the profit margin continuation? So that is the first question on pricing and inflation in commercial. Second thing is, so crop, you know, we've heard about this commodity price reduction. Can you just please, help me square this to how good, bad, or indifferent this might be for the profitability element? Because that's, that was one of the topics, apart from detailed motor, in the last call about how the price and the profitability of crop should get better. So, and just very last, maybe a follow-up on the large losses. So you commented something about the Baltimore tragedy, where, you know, probably there could be some exposure from various elements and comment on it, and any thoughts you might have. Thank you. So, the third one is the easiest one. We have no material exposure to Baltimore Bridge collapse. I mean, it doesn't really matter for us. On your first question, look, the pattern is quite different. So you say that prices are slowing down. I would say not really, it depends. I mean, prices in commercial auto are strongly accelerating. Property may be slowing down by a couple of points, but it remains still quite visible, the hardening, so prices are still high. Casualty, there are, you know, broadly speaking, also casualty is increasing, it's not decreasing. But inside casualties, there are some lines which are particularly light, and these are lines where we are traditionally very careful or absent from. In general, what we see today is that the claims pattern is below the rate pattern, and so margins are still building. So that's why we maintain a very confident stance on commercial, especially we don't see a deterioration in the trend of commercial. And we expect that this will pretty much continue for the reason I said before. Everybody will remain very careful on property because everybody understand the volatility and the risks the property has. And on casualty, I think everybody sees the potential for claims inflation or the impact of claims inflation, and so price tends to go higher, not lower. On crop, look, I mean, the issues we had last year on crop were. I think I said they were self-made, self-inflicted. We went wrong on the private portfolios, so especially hail and livestock, which we already had an issue the year before. The plan was to reduce the exposures or exit, and instead, we ended up with the higher exposures. We took management actions. We completely changed the leadership of crop. That has nothing to do with the commodity prices that we're seeing these days. The commodity price story reflects or belongs to the part of the business, which is reinsured to the reinsurance public scheme. And so from that standpoint, I would say that these commodity price movements are neutral. It's not possible to predict from these movements if crop will have a better year or worse year. For us, it will have a better year. I mean, we definitely don't want to repeat the performance of last year, but we are acting fundamentally on the private, the known public reinsured part of the portfolios, because those were the loss-making parts last year. Is that clear? Because crop is quite complicated. If not, please ask me more questions on that. ... No, it's great. Thank you, Mario, for the clarification. Thank you. Okay. Thank you, Vic. The next question comes from William Hawkins with KBW. Please go ahead. Hi, Mario and Claudia. Thank you. I'm slightly going over comments you've already made, so thanks in advance for your patience. In the SST ratio, could you just be a bit clearer, please, about the market impact that was offset by the model change? I mean, I think consensus was looking for about a 10-point positive market impact, and therefore, the model change is negative 10. But obviously, we don't know that, so that would be helpful. And is most of this volatility happening down in the required capital for both markets, and I'm pretty sure model changes, or is there anything happening up in available capital as well, please? And then secondly, sorry, you've already had loads of great commentary about farmers, but I would like you to talk a little bit more about your feeling around the below 100% combined ratio target for the full year. You know, clearly, because you're now already below 90%, you could get away with a quarter of 110 or have three more quarters of 103 and still hit your target. So I'm not sure if the fact that the first quarter is so low is a sign that you're gonna be well below 100, or whether there could still be some volatility we need to take account of in future quarters. Thank you. Yeah. I mean, as usual, I start from the end. Sorry for that, William. So, Farmers, of course, there will be volatility. Come on, of course. There will be cats, there will be unexpected weather events, and they will have an influence. You know, continuing in the observation with April and May so far, the numbers remain very, very healthy, strong, if not better. But there will be volatility. I still believe that the below 100 is a very safe target for this year, and which means that there will be significant surplus accumulation for the exchanges by year-end. But of course, we'll watch this quarter by quarter and month by month, and we will see what happens, and if necessary, we will take further actions. But I think the indication so far is that our actions have been pretty impactful and successful. Remember also that there is a component which is created by expenses and commission reductions, and that is quite significant. But volatility, absolutely, it will come back. On the SST impact and model changes impact, I will leave it to Claudia. The numbers are not precisely correct, so I'll allow Claudia to give you the precise numbers of the different components of it. Thank you, Mario. So, William, in terms of market movements, it's approximately 8% that we estimated for the first quarter. Model and assumption, including the model of market risk, that Mario hinted at before, is roughly 6 percentage points negative. And then there's a just short of 3 percentage points update on the replicating portfolio, which is the aspect that, you know, reflects the growth both on life and PNC side. So if you sum it up, those will be the three key drivers, and it sums up to -1.5%, Against December. Against December. So, really material on the big scheme of things, but a few pluses and minuses going into that number. Hope that helps. Really helpful. Thank you very much. The next question from the phone comes from Dom O'Mahony with BNP Paribas. Please go ahead. Hello, Mario, Claudia. Thank you for taking our questions. So a lot of my questions have been answered, but just two things. First, just on exposure growth in commercial, Mario, you've been very clear that the impact on SST is very limited because of the diversification. I wonder if you might just give us a little bit of an insight into whether that's also true at a local capital and S&P model basis. My understanding, but I may have got it wrong, is that's what's more important for your remittance capacity. So any views on whether actually a pivot to slightly more exposure growth might have any implications on what's been a fabulous conversion of cash in the last several years? Then the second question is just on a detail on EMEA, EMEA rates. I think at the end of last year, you gave us 5% rate change for EMEA with an outlook that was increasing, and it's 4% in today's release. Well, should I read this as actually the rate has not been quite as strong as you were hoping or expecting, or is there a seasonality or other factor which I might have missed? Thank you. Okay. On capital, and growth impact on capital, even at the local level, there is honestly no constraints, especially if you consider North America. Really there, we have no impact, no constraints. And, also be mindful that, we have, quite a significant amount of capital, excess capital, locked there, which we, every year we tend to repatriate if possible, and growth doesn't have any impact on that. I mean, it's totally irrelevant. So trust me, growth is not the way in which we can use our excess capital. We do have it, and growth doesn't have any impact on. We can grow the business, freely, without capital restrictions, and without actually changing our capital position. But, but, you know, ask me, ask me anything more, if you need to. Your second question was on the rates in EMEA. Look, again, I don't see anything different in EMEA rates. Just bear in mind that the commercial motor issue in EMEA is not as severe as it is or it was in the U.S., so we did not need to raise the commercial motor rates as we did in the U.S. That explains why there is a difference in the reaction. The rest of it is purely seasonality. We see similar developments. Property is probably a couple of points lighter at the moment in EMEA than in U.S., but without this being a difference in the market. The markets are very open to each other, and if there were significant differences, you know, the policies, the customers would move from one market to another. There aren't. It's just a different business composition and then seasonality. That's really helpful. Thank you, Mario. The next question comes from Kamran Hossain with JP Morgan. Please go ahead. Hi. Two questions from me. The first one, just on Farmers is, clearly it's been two excellent quarters, Q4, Q1, and the trajectory in profits is probably upwards. Just thinking about Farmers strategically, you know, given this upswing in profits, do you expect to participate in this upside perhaps longer than just 2024? So looking to keep the 10% quota share into 2025, too. The second question is on the German back book. I think there were, there were comments earlier this morning alluding to the German back book solution, being found, perhaps. From the way I understand it, there was an impact on the SST, when you separated the assets. Will you bring these back in-house if you do think a solution isn't gonna happen in the ASM? Or will you just kind of allow them to continue to be segregated and maybe have a slight drag on the SST? Thank you. Okay, on Farmers', quota share. Look, I mean, the quota share last year was profitable for us, and this year so far is even more profitable. So do we plan to reduce it? The answer is yes, because, I think, I think there is a, how can I say, transparency and alignment issue with the exchanges. We can make money, you know, from too many sources with them. We have the management fee, and that is supposed to be our remuneration. You know, we support them through the reinsurance, when it is needed, but we cannot profit too much. So, as soon as possible, we want to reduce it and exit, because otherwise this will create some bad blood with, with the exchanges. But, I mean, I'm happy that we made money last year, and I'm happy to make money this year. On the back book, I think... I don't know where you got the impression, because I think we said the opposite this morning, and together with Claudia, we tried just to, on the opposite side, say that there is not gonna be any solution, any news this year. We are working to first of all, now, rebalance these two different life books we have in Germany, and we want to first reacquire a decent asset composition in these two books that was not achieved through the separation. Then we will also pause and look at the alternatives available in the market, and we'll make a decision on what is best for us, and this will likely take us until next year. And maybe if I may add, Kamran, so, you're right in the sense that the situation we've got now is slightly inefficient. So having two entities from an SST perspective is not ideal. You lose some of the diversification benefit, and you need, as Mario said, to recalibrate the two entities from an asset allocation perspective. That said, it's also operationally much better to have a platform that we can, at any point in time, dispose of with any type of solution. So that's great work that has been done already, and it's ready, you know, to assess options. And the second point, we're not in a hurry, right? So the interest rate situation today is very different than it was in 2020, when the whole project came into life. So we are not in a hurry. As Mario said, we're taking time to evaluate our options. We believe that we have more options open to us today than we did two years ago, and that most likely it will take a few more quarters to crystallize the best, financially more interesting option for the group. Also, Kamran, let me take the opportunity to clarify again, what was the purpose of this transaction? Because if we were doing this transaction today, we would lose some BOP and some cash, and it will be almost neutral for SST. The benefits of this transaction will be on the sensitivity of SST to tail risks event. So in the today, not considered, not forecasted possibility of a tail event in the financial markets, our capital sensitivity to interest rates movements and spread movements will be substantially reduced. But it's only in that case that you're gonna see the benefits of such a transaction. And we were never thinking of doing this transaction for SST improvements or for cash improvements, because actually in cash, the transaction will be negative and on SST will be neutral. I just want to clarify that because the fact that the transaction did not happen didn't change anything. Actually, it was better off for us on BOP and cash, but we remain with a higher sensitivity than we want to have to tail events. Got it. That's very clear. I, I don't know if, I'm probably toward the end of the queue. I don't know if I can ask a follow-up on Farmers. I'm sure Jon will tell me. You can. You can. Um- Jon, John is nodding. Jon's nodding. Thanks, Jon. nodding. Thanks, Jon. I appreciate that. I just wondered, is there any reason why the Farmers' top line guidance, kind of hasn't changed? Obviously it's been, you know, great trajectory, kind of really good start to the year. Just wondering why, if, you know, you're just being a bit cautious on this or if there's anything else to, just to think about in the background. Look, I mean, you know that we, we don't like to change guidance. We like to meet, exceed, or miss the guidance. You know, changing the guidance, I think it's not, it's not good practice. So yeah, I mean, the guidance that we gave back in 2022 was of 5% growth. We're exceeding, we're, we, we, we're confident that we continue to exceed, but we never change guidance on anything. I mean, we just report on the results. I think we're hinting at meet or exceed. Yeah. Um, so. Got it. That's the message. Yeah. Yeah, I mean, it's a principle position. We don't want ever to change guidance, because if you do it upward, then you're also allowed to do it downward, and then it becomes a game. We just keep it always. That's very clear. Thank you very much. The next question comes from Ismail Belhachmi with Morgan Stanley. Please go ahead. Hi, good morning. Oh, good afternoon. Cameron actually took my, one of my questions in his follow-up question, unfortunately, but, I guess I'll try to ask it a different way. So basically, you know, the Farmers is coming in, profitability is coming in better than your 99% that you hinted to at the investor day. I think in, early on the call, you said you wouldn't increase exposures, and I'm... I guess, in terms of ex- in terms of the exposure growth, if everything was going well, if everything was going well, why would you not increase the exposure, in the Farmers? And my second question is, I just wonder on the crop business, just really quickly, can you explain how quickly that book of business can return to profitability? Thank you. Yeah. So, I wasn't clear on Farmers. Sorry. We are decreasing. We took away $1 billion of exposure to net cats exposed business, and there is reason to do that, which is to reduce the volatility. So cats will happen. There will be volatility, and we want to have a lower impact on the Farmers' combined ratio and on the surplus of the exchanges. This is the exposure that we reduce. Every other exposure, we're super happy to take and to grow, but we want to be very careful in the net cat exposures. Does that make sense? Am I clear now? Yes, you are. Thank you very much. Okay. And then your second question was on the crop business. Now, on the crop business- Yeah. How do we improve it? As I said, I mean, last year, we grew exposures in two businesses, hail and livestock, where we knew already that the year before, they haven't been profitable for us. So we're simply reducing exposures, you know, as aggressively and as quickly as we can do it. And with the new management, it is clear that they have to do it, because they have seen what happened to the previous management, was not executed on the plan and the targets. The rest, you know, can be done. We need to work on expense reduction. We're changing also the business organization, trying to make the crop business, you know, isolated from the rest of the business, and then working at a lower cost expense ratio than the rest of the business. But the fundamental action that we're taking is restructuring the book of business and concentrating on the book of business, which is profit-making and eliminating the loss-making part of the book of business. Great. Thank you very much. You're welcome. We have a follow-up question from Andrew Sinclair. Please go ahead, sir. ... Thanks. I just wanted to speak a little bit about the life business, which I was really impressed by the- Thank you! -protection and unit linked performance. And just really wondered if there's anything one-off in there, anything that you can give in terms of color for the rest of the year on those product lines? And then second, just jumping back to P&C, it's any color you can give us on discounting guidance with what's happened with rates year to date? Thank you very much. No, life does not have any one-off at the moment. The one-off, if they exist, they will be balance sheet movements, and they will go later in the year into the profits directly. The growth is very good. It's very refreshing for us and it give us confidence that we can continue with this. But there is no special one-off at the moment. I mean, maybe we'll mention the savings in Spain. I mean, the- Yeah. the premium, but that's, you know, near. That's more a one-off in terms of the competitive period of last year, Andrew. Yeah. What happened, let me, let me explain better. Last year, we had a significant contribution in the first quarter by a Plan Ahorro sale of guaranteed products to Bank Sabadell customers in Spain. That's a sale that generates very little margin for us. So in terms of value, it doesn't change anything. This year, considering the situation in the market, Sabadell did not request it anymore. And so that changed a little bit the interest of Sabadell, and then consequently, we did not issue that anymore. But for protection and unit links, nothing unusual and still to expect continued growth from here? Yeah. Exactly. And also in terms of CSM, what we expect to be and what we guided for in, you know, for the remaining of the year, the expectation is still on Andrew. So nothing changes. We're growing nicely on our preferred segments, and that's even improving the margins as we noted, so. Okay. And on the discounting for P&C? Sorry. On discount, I mean, you can predict pretty much yourself looking at the yields movements. It pretty much follows what the yields do in the market, and so it is quite easy to get a prediction from that. I think that the guidance that we get... Well, guidance, what we had in the slides, at year-end, Andrew, that's still holding basically on the discounting impact. Great stuff. Thank you very much! The last- Thank you Question for today is a follow-up one from Peter Eliot. Please go ahead, sir. Thank you very much. I actually tried to lower my hand, because my questions have pretty much been answered. Sorry, I failed to get that right. Sorry. Perhaps if I have got the mic, I can just ask one small follow-up. Just on the claims experience in Q2 to date, you mentioned the Baltimore Bridge, very helpful. I just wondering if there's any other sort of material claims events that we should be aware of? I'm aware of like some, you know, costly tornadoes- No. For example, et cetera, but no, nothing. Okay. No. Thank you very much. Not yet. Not yet. I mean, the situation as of today is pretty normal, and it's pretty continuing the same pattern that we discussed, except that we have a stronger accounting development out of North America, as I said before. But other than that, there is nothing else to indicate. Great. Thanks very much. Thank you, Peter. Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Mr. Hocking for any closing remarks. Thank you all very much for your questions. If you have anything outstanding that didn't get answered, please feel free to reach out to me or one of the team in the next minutes, few minutes. Thank you very much.