Welcome to the Allianz conference call on the financial results of 2021. Before we start the call, let me remind you that this conference call is being streamed live on allianz.com and YouTube, and that a recording will be made available shortly after the call. If you want to ask a question after the presentations, here is how you raise your virtual hand. If you join us via web call, please click on the Talk Request button, at the upper right-hand side of your screen. If you join us via telephone, please press star five. All right. That was all from my side for now, and with that, I turn the call over to our CEO, Oliver Bäte. Yeah, good afternoon and good morning, wherever you are, maybe good evening in Asia. Thanks for joining today. We had quite some movement, yesterday on a few items that, by the way, we are very happy about. We're gonna spend some time on it. For those of you that have not been able to listen to our press call early in the morning, I wanted to make sure that we understand we have read out and are publishing a statement with regard to Structured Alpha, and we can't really comment on that as we said there, except for a few facts. Be aware that if and when you have questions, we need to really stick to what we have said. I think that's the first comment I'd like to make. The other one that was more procedural is to actually go quickly only through the presentation, that I have because I think you're all very eager to talk and listen to Giulio, to ask what was the attritional loss ratio in Brazil and all of these really interesting things. I will be very quick in terms of where we are. Three messages we have. Allianz delivery is stronger and stronger and stronger. Yes, we may have people that believe there's an overshadow, some people that wanna take advantage of the situation. The underlying message we have, the cash and capital generation of power of the group is continuously growing, and I'm gonna show you that in a second. The second thing is we are accelerating the speed of our transformation, particular in terms of making our balance sheet lighter, more capital efficient and less volatile. The vast majority of that pertains obviously to the life insurance segment, but unnoticed by many people, we've also become one of the strongest asset managers in the world, and that is no coincidence. It's also no luck. It is really systematic work, as we believe we have a unique value proposition at the intersection between what used to be called life insurance and asset management, and that's something I would like to highlight. I'm gonna talk about confidence, confidence in the future. As you will see in our numbers, even if there is occasionally something we need to wrestle with, we move on because we are able to absorb shocks in a way that very few others can, and we obviously wanna make sure, there is going to be less and less volatility going forward as we deal with various items out there. These are the three chapters. Let me just turn your attention to page A three now. Revenue's up 6% in an environment where very few people were growing, almost EUR 150 billion in revenues. Our operating profit up 25%, from the last COVID year. Remember, 2021 was still COVID, and we are very proud of that. Shareholders' net income is slightly down because of the EUR 2.8 billion net, income hit that we had to take in order to address the vast majority of litigation exposure and Structured Alpha. This is really important, so we are very happy that we can finally book and take care of the investors in the Structured Alpha fund, and make them whole. We are increasing our dividend per share by 13%. That's exactly in line with the guidance that we gave in 2018. Last year we all benefited from the weather despite the fact that the year was very tough. Our solvency ratio for 2021 is 209 even after Structured Alpha, and that is also super important. Now, in terms of return on equity, it is after the Structured Alpha booking at 10.6. That is, by the way, higher than most insurers have. It's important to notice before the Structured Alpha, it would have been at 14.9%, so an extremely high number, and that is obviously to be normalized, and Giulio will talk a little bit about the way we have to think about net income and ROE going forward, particularly also when, if and when accounting changes, because net income is always volatile. We have announced EUR 1 billion of share buyback. You will ask very soon, I can guess, can we do more in this year? We obviously have to be always very cautious, but I'll always answer the same way. We have every incentive to not sit on excess capital, but distribute it back to shareholders if and when we see the opportunity because everybody in Allianz has an incentive to produce significant returns on invested capital, and do that very well and grow. We are always trying to get the balance right between returning capital and growing the earnings and over the last few years, I think we've struck the right balance. If and when we have excess capital accumulating, we will not have it sit idle. That's the comment I would like to make at this point in time. Now, when you look at what we've been able to deliver as the CEO, I'd like to point out great financial KPIs are an outcome of a healthy organization. A healthy organization starts with two very simple observations. If you have the happiest customers in your industry, you will also do well. If you have highly motivated people, you're also gonna do well. Ideally, if you have both, you're gonna really win. We have been focusing on driving our Net Promoter Score, that's the willingness of our customers to recommend our services and products to their friends and family, up. Now we have 84% of our businesses, that's the life insurance businesses, the P&C insurance businesses, the health insurance businesses, 84% are above market average in terms of NPS. Actually almost 60% are loyalty leaders, i.e., have the highest customer satisfaction. As of next year, we are really lifting the ambition and are going to focus on loyalty leadership as the aspiration and target for all our businesses. the same time, despite COVID, we have been able to bring employee motivation up. By the way, we measure that in many ways. Here's the most important one that measures leadership equality in the eyes of our people. We call that IMIX. But you can also look at engagement numbers or what we call Work Well. All these indicators have improved more strongly than we were hoping for. Particularly in light of COVID, that was no small achievement. In particular, relative to competition, we can measure that. In 2021, a number of companies saw employee engagement actually go down, and we have been able to remain super strong. The management team is very proud of this achievement. Very strong operating performance and very strong health indicators. That can be measured in many different ways that you can see on page H five, whether that's on customer. I would like to point out the importance, particularly in the digital age, of having a strong brand. We have been now the number one brand for Interbrand for a number of years, and we are very happy with that and we keep on investing. But also now on Brand Finance, we are the undisputed number one. The brand is super important and the value that it comes with, and we are investing heavily in order to make sure that translates into higher customer acquisition, lower acquisition cost, and much better flow than others can achieve. The second one I'd like to mention is not just about having highly motivated staff, but also driving diversity and inclusion. Now, unthinkable just six years ago, 30% of our operating profit are managed by female CEOs. Just last year, we promoted three senior women to run our most important life businesses, Allianz Life of America, Allianz Leben in Stuttgart, and our Asian business, all highly competent women. We're making a lot of progress there as we are on many other items that reflect diversity and inclusion. Last but certainly not least, we remain fully committed to the topic of climate change. You know that particularly Günther Thallinger and his team are spending a lot of time to make our investment side to fully compliant with net zero. We're doing it in a way that doesn't claim something for in thirty years, but we're really having targets that are short-term credible, and we are moving, and we are continuously moving in this one. There are many other items that we are driving into the core of our business over the next few years. Think about the claims networks that really can be greened and other items. Therefore, we have established last year a dedicated function at the center of the group to drive that, including a committee that is dedicated to the ESG issue at the supervisory board. Again, lots of investments across stakeholders to deliver a better outcomes. Now, better outcomes, what are we talking about? Some of you will say, "Well, that is not something I can put in a spreadsheet." It's true, but it's very important. For us, it's very important to think about what role do we play in society for our clients. We have spent years now on developing our purpose with thousands of employees, and We Secure Your Future is super important. I'm gonna mention that when we get to asset management in a while. Now, you can only be successful if you have the trust of the various stakeholders. The real aspiration is, to be the trusted partner for protecting and growing your most valuable assets. That may not be just your house, your car, or your investment, but it also is your health and your mental wellbeing. That is what really we are focusing on, and that is we are trying to take care of the things that are most important for our clients. In order to achieve that, we need to make three promises and deliver on them. Number one, I mentioned that before, to strike a careful balance across stakeholders. In difference to many companies, we've hardwired this in all of our incentives. It's not just a slogan. We need to deliver benchmark results at scale. This is at scale we're gonna talk about more the next few years because as we are driving forward, we need to take our size and not make it a problem of complexity, but make it an advantage that we can get because we have the scale that very few others have. Last but not least, we need to show strong resilience in a fundamentally transforming world. You know, we may have, you know, warlike activities around the corner, tensions between the superpowers. In the world that we're in, volatility will be abundant, and people need to be sure that We Secure Your Future means Allianz is there even if the going gets tough. We're gonna talk about that in more detail. It means that tail risks need to be managed very, very carefully. Structured Alpha, again, for us, has been a reminder of the necessity to look into every corner of what we do and to make sure that something like that cannot ever happen again. Now, if we think about value creation over the next few years, it's pretty simple conceptually. It's around driving growth, and I'm always amazed when I look at the spreadsheet of the analysts, and it only focuses on two years, not, you know, the long term, and then growth forecast at, like, 2%. How can that ever be when you look at the last 10 years we've been growing very well. That is important. We're going to drive that based on our strength, even more strongly than in the past. By the way, you see that in the 2021 numbers already, whether that is revenues, whether that is net flows, whether that is value of new business, all these numbers are growing double-digit and have been, and we're gonna grow that even farther. The second thing is margin expansion. There's still a lot of upside in terms of productivity that we have, and we've shown that across the business that we are highly resilient despite commoditization. Think about asset management, the move to passive. Our margins are not declining the way they have been forecasted, and we keep on growing with record flows. The last but certainly not least is capital efficiency. I know we've worked a lot, and Project Lucy, which we announced in December on the 3rd and have closed on December 30th on U.S. Life, that's basically moving ROE of this business up from 11% to 19%, and that's a cautious assessment based on this one movement, is showing the power of leveraging private markets to drive capital efficiency. The move from warehousing risk and re-housing tail risks in large balance sheets to having more efficient balance sheet is very much at the core of our strategy. While others talk, we deliver. Just to think about the $3.6 billion in capital that we were able to lift out of Allianz Life, and it's not the end of the story. We have five levers which we delineated in the Capital Markets Day. Many of you participated and gave us feedback, so I'm not gonna dwell on that for a long time and repeat that because that would bore you. Let me just, reiterate the point around life and asset management because it is still not well understood that the vast majority of our profit now and the growth is coming from life and asset management, and that's a good thing. We're having very strong flows, much improved productivity, very high customer satisfaction. By the way, AGI has done a phenomenal job last year. Think about the fact that they had Structured Alpha, and there was the highly motivated staff. Productivity is approaching the levels of PIMCO now at the same time, and they had more than EUR 40 billion in net flows. Everything at the same time with strengthened investment performance. Given the very difficult legal environment, that is no small achievement. Now, what I think and also our reporting doesn't highlight properly is that the fact we have many competitive advantages, because we can combine the know-how we have in our asset managers in AIM with the power we have in the life insurance company. As the world didn't know what to do in terms of life products, we could leverage into new products very quickly that combine the best of life insurance and asset management and by the way, also on the health side, in order to both create more value for consumers because we can offer much higher risk-adjusted returns, and that also means we have higher margins as we bring in alternative assets in other more stable and higher margin products. We have a true win-win. If you think about 100,000 EUR invested through this vehicle into Allianz, we have two times benefits for the clients because they get a better product in the life side, a better asset management product inside of it, and we make the margin twice because we make it on the life product and as long as we perform, of course, also in asset management. No other competitor can do it the way we can do that, and I think that is totally underappreciated in terms of earnings power and earnings resilience, and also the way we can be flexible. Now, we talked about the transformation of the U.S. Life business. I don't think it's fully understood yet. I just like to mention that Allianz Life of America is one of the best businesses we have, and somebody here in Europe suggested we sort of think about a run-off. The opposite is true. We're trying to use this transaction not just to drive profitability, but massively increase growth, because this new access to other sources of capital allows us to be more competitive in many areas. I think we have a call coming in between. Sorry for that. Maybe it's our U.S. colleagues. They're very happy. What is really, really important, and by the way, Allianz Life of America was in absolute terms, the biggest capital consumer in the group, and now we have been able to lift EUR 3.6 billion out, 9% of solvency. That also means that we are able to withstand, special requirements like on Structured Alpha unabated. Our solvency ratio was 209. After Structured Alpha is super strong. By the way, volatility of Solvency II numbers are also going to continue to go down. That's another thing I'd like to mention. 2022, is an extremely important year for us because for the first time, our strongly growing new business value is so large that we do not consume net new capital for our new business. We've been working on that for a number of years, Giulio, myself, and others in order to make sure we make our new business capital light. Because of what happened in the past, it was declining interest rates artificially low, was delayed about two years. As of this year, we are going to have net capital generation even out of our new business, at least no new capital strain out of the new life business. This is a watershed moment for us. In addition to the work we're doing on the in-force, our life business will move much more quickly in creating a lot more value than in the past. Now, one thing I wanted to mention is this one. We didn't have that in the Capital Markets Day, but given the current environment, I wanted to talk about that for a few minutes before I go back to numbers. The most important thing that we are thinking about every day and now is how to think about tail risk. A lot of the models, including the one that we employ, think about diversification. As I said this morning with Mr. Taleb, that's the thing that is never there when you need it. The point I'm trying to make is this is not about mathematical models, and capital requirements. This is about the front line of the business constantly thinking about what are exposures to our business. In the past, it used to be purely financial risk. Like what is our interest rate exposure? What is our equity exposure? What is our net cat exposure? I think that makes it, and a lot of people are talking about it now. We have worked extensively, also learning from COVID, on understanding we need to simplify and particularly manage tail risk. Reputation risk is super important, as is cyber, as are sales practices. We're focusing along the value chain from sales and underwriting through the in-force and operations IT and turning every stone and trying to find out whether we are having risk that we were not aware of, and we how do we contain them and eliminate them? Now, there will always be risk in financial institutions. We have to, however, make sure we get the risks out that are not consistent with our risk appetite and the ones that we deem consistent, we need to make sure we get paid for properly or we get out of them. There has been a lot of improvements. Let's think about AGCS. Everybody talks about the combined ratio. That's one very important aspect. The volatility of the earnings is another very important measure. The team around Joe, Clement, everybody has worked diligently to massively reduce the volatility of the expected profit, not just improve the profitability. We're trying to do this for each and every business. Now, confidence. Here's a really interesting chart that's A 14 that shows you the operating profit development over the last few years. Now you see how we are really driving the operating earnings up EUR 13.4 billion this year. Now people ask, "Why is the outlook still EUR 1 billion?" Again, we live in a very volatile world, and it's just a much higher level. When we established the EUR 500 million range, that was I was the CFO, 2012, we were at a much lower level of profitability than we are today. So there's just an order of magnitude effect that's inside there, and we want to grow EPS by 5%-7%, over the next few years, getting to north of 14.5 billion OP by the year 2024, at least. So that's what we're gonna do. Because we are so confident, we have revised, as you know, our dividend policy. We want to grow the dividends per share at least 5% every year, or have a 50% payout. I should have started with that. We are keeping the ratchet plus bringing it up because we know that is what really drives valuation is the growth of the dividends, and we are very optimistic about that. As I said before, we have zero interest to sit on excess capital. If and when we can't invest in the organic growth of our business profitably, we can't do highly profitable investments inorganically, we are going to go out and give the money back. By the way, let me reiterate, we have no appetite for super large M&A. We maintain a string of pearls acquisition strategy in order to make sure we strengthen our market positions across markets. Think about what we've been able to do in the United Kingdom, in Poland, or let me give you the last one, which is Greece. It looks like a small thing, but with this acquisition, which is just a little bit over EUR 200 million, we are becoming the number one Property & Casualty insurer in Greece, getting to scale that we really need. The number of number one or number two position that Allianz has in our industry is constantly growing, and that's what we're trying to do. I do thank you for your trust and your support. Then now Giulio in the usual quality will give you all the details. Thank you, Oliver, and good afternoon or good morning to everybody. As Oliver said before, 2021, underlying performance has been very, very strong. You can see this reflected in several KPIs. Revenue was up 6%, and this is driven by all segments. When you look at the operating profit, EUR 13.4 billion operating profit, which is significantly higher than the level of 2020. Clearly in 2020, we had impact coming from COVID. But even if you adjust the numbers for that, we have a double-digit increase in operating profit in 2021 versus 2020. All segments have at least achieved the outlook that we gave ourselves for 2021. When you look at the property casualty side, you see a combined ratio 93.8%, which is higher than the target of 93%. As you see also, the net cat load was definitely more significant than the normal expectation. On the other side, the capital, the investment income has been exceeding our expectation. That's the reason why, we were able to overachieve the outlook of EUR 5.6 billion with an operating profit of EUR 5.7 billion for property casualty. The life segment has also developed very nicely with an operating profit of EUR 5 billion. You can also see a very strong development of the value of new business and of the new business margin. Then in asset management, also very strong results with an operating profit of EUR 3.5 billion, a strong reduction of the cost-income ratio and also very positive flow. From an underlying performance, really good, a good delivery. Then when you look at the shareholder net income here, you see six point six billion of net income. Clearly, that's the consequence of the after-tax charge of EUR 2.8 billion that we took because of the Structured Alpha matter. That said, still capable to achieve a double-digit ROE despite this significant impact. When we move to the page five, you can see that also the quarter was pretty strong on an underlying basis, so EUR 3.5 billion of operating profit and all segments had a very strong delivery. I'm sure you're going to ask me about the 93.5%, combined ratio in property casualty because considering the lower net cat load, one might have expected a better combined ratio. I can tell you right away that we have been conservative on booking that combined ratio also because we want to be well prepared for potentially increased inflation as we go into 2021. We feel very good about the quality of that combined ratio. Then, for the other segments, again, a very strong quarter confirming the tendency that we saw during the course of 2021. Clearly you see a net loss for the quarter. That's just a consequence of the after-tax charge that we took. Overall, a strong underlying performance for 2021, with a strong finish from an underlying point of view. You can see the strength also overall reflected at page P seven for the solvency ratio, which is at 209%, so increase compared to the level of 207% in 2020, and this despite having taken a charge of nine percentage points because of Structured Alpha. If you consider also for the buyback, that we announced yesterday, the pro forma capitalization is 206%, so a strong level of solvency ratio. When you look at the development of the solvency ratio, the driver for the solvency ratio, you can see that in 2021, we had a strong organic capital generation of about 30% pre-tax. If you do after-tax and after dividend, you get to a double-digit increase in capital generation. What is very important when you look at the ACR contribution, this is all coming from Property & Casualty, so there is basically no contribution to the ACR coming from the life business, which means on the ACR there is zero impact from the life business, and then you can see what is the contribution on the own funds, coming from the life business, which is about EUR 5 billion pre-tax and pre-dividend. Fundamentally, the life business is becoming accretive to our solvency ratio development. The market conditions have been also positive. Then under capital management action, you see an impact of 14 percentage points. I wouldn't call it a negative impact because that's the dividend and also the buyback that we did in 2021. Then there are other elements that are flowing to that number. One is 11 percentage points of improvement because of the back book transaction that we did, and clearly the transaction in the United States had the majority of the impact, but we did also other transactions in Europe, so in total 11 percentage points of improvement to the solvency ratio because of back book management. Of this 11 percentage point, we have redeployed nine percentage point in acquisition, which is clearly future growth. As you see, strong capital management, also deployment of capital. In tax other, you see the impact of taxes as always, and then clearly, that's also where you see the nine percentage point of impact coming from, Structured Alpha. Overall, strong solvency ratio. When you look at our sensitivities, they are pretty stable, indeed slightly reduced compared to the sensitivities that we had a year ago or last quarter. Now, coming to the next page, B11, we want to show to you also some KPIs for the ESG delivery. These are also the KPIs for the activities where we gave ourselves targets, and as you see, we are well on track to achieve our targets. We need also to say that, 2021 has been positively affected by the COVID situation, so somehow we need to normalize those numbers. Fundamentally, you can see that there is a strong movement in the right direction. We are confident that we're going to achieve our targets for 2024, 25, and 23 respectively. All in all, strong underlying delivery. Solvency capital position very strong. Also, as you see, we are very committed to delivery also on the ESG topics. Now at page 13 on the internal growth, for the P&C segments, you see that we achieved a good growth rate of 4% for the year. I don't know if you remember, but in the first quarter, our growth in P&C was negative, so you can see there was a good momentum in the course of 2021. When you look at the performance by companies, you see that the majority of the companies is growing. There are a couple of exceptions. Usually, these exceptions are driven either by competition in motor or by our activities in pruning, especially on the commercial MidCorp business. What is also to highlight is the performance of Allianz Partners. You can see definitely that there is a stabilization of the revenue. Clearly, 2020, was very much affected by COVID. I wouldn't say that we are back to normal because the travel business is not back to normal, but there was at least a recovery compared to what we saw in 2020. Price environment is stable overall, so this means that the pricing, the prices that we are getting at the moment are keeping pace with inflation. I'm sure I'm going to get questions from you on this topic, so I'll leave that for the Q&A later. Now coming to the operating profit. As you see, EUR 1.4 billion of improvement in operating profit. EUR 1.1 billion of improvement is due to the fact that we didn't have the repeat of the negative impacts from COVID of 2020, but there is still an underlying improvement, if you want, of EUR 300 million. When you look at the combined ratio, here I can tell you that on the one side we benefited from the fact that COVID didn't repeat. On the other side, the net cat have been clearly negative compared to last year. The run-off results, you can see a normalization to what would be more an expected level. Then we had about 30 basis points of underlying improvement. Another way to look at the combined ratio is to normalize the 93.8% for the extra net cat load. If you do that, you get back to the 93% combined ratio that we have given ourselves as a target for 2021, and that's also the starting point for our trajectory to combined ratio 92% in 2024. Overall, I would say a good delivery on the underwriting results and when we just look at the delivery by OEs at page 17, you can see good combined ratio in Germany, also considering the amount of net cats. Also good performance according to our expectation in United Kingdom, France, Italy. Australia's also had a good year. Then you can see also very strong performance in Eastern Europe. In Latin America, we have some opportunity for improvement as we go into 2022 and 2023. I will say what a statement is the performance of AGCS with 97.5 combined ratio. Our target was 98% for 2021, and I can also tell you that the underlying performance of AGCS is stronger than the 97.5 that you see on this page. There is clearly some quality in these numbers. Euler Hermes, as you see, also with a very good combined ratio. You can see that a lot of our entities are performing at a good level. On the investment results at page 19, you see that the investment result is up, so it's not down as we were seeing in the past. The reason for that is especially the recovery of performance in on the equity side. Clearly last year, the amount of dividend out of public equity and also private equity was lower, compared to the normalization distribution that we saw in 2021. Fundamentally a good delivery on the operating investment results. As I was saying before, this has offset, if you want, the higher net cat load at least relative to our expectation. This explains why we ended up with a EUR 5.7 billion operating profit, which is better compared to the outlook of EUR 5.6 billion. Now coming to the life segment. I can tell you I'm very pleased about the performance of the life segment at page 21. I remember that, the end of 2020, we had a lot of conversation about changing the mix, and one of the questions we were getting is, can you change the mix and still keep production going? As you see, we are being capable to achieve a very healthy level of production. When you look at the numbers here, you see a growth rate of 30%. Obviously here there are some one-offs to be considered. Even if you adjust for the one-offs, the growth rate of our production was double digits. From that point of view, a strong commercial delivery, and this by changing the mix and achieving a new business margin of over 3%. I can tell you the delivery has been very strong and very consistent across all our entities. Now looking at page 23 at the operating profit, you can see a nice increase of the operating profit compared to 2020 of about EUR 650 million. You can see that all profit sources have contributed to this increase. You can see the improvement coming from the loading fees, from the investment margin, for the technical margin. As always, when you look at the expenses, you need to net them together with the impact of change in there. I will say the primary drivers have been driving the performance of the life segment. When you look at the operating profit by line, you see also that all lines have contributed to the strong delivery in operating profit. At page 25 on the value of new business, you can see a strong increase of value of new business of 45%, with a value of new business EUR 2.5. That's a very good number. I don't know if you remember, but three years ago, we said we want to grow value of new business by 5%. Despite very challenging market conditions compared to the market condition that one could foresee in 2018, despite this more challenging condition, we have been able to achieve a 5% compounded average growth rate of our value of new business. Value of new business margin is also very strong. It's over 3%, and pretty stable across all entities with indeed a tendency to an improvement. Then on the operating profit, I like clearly to highlight the performance in the United States, with an increase in operating profit of 50%. Here we have to say 2020 was a little bit weaker, because of the impact of the volatility in the first quarter of 2020. 2021 is being very strong because the volatility in the United States or the VIX has been very benign. You have a sort of swing from a softer performance to a performance which is also indeed significantly higher than our expectation. Another area where we had very good results is Italy with an operating profit of EUR 450 million. Italy is the first country, one of the first countries that embrace the journey to capital-efficient products and selling unit-linked. You can see that now this journey is delivering over EUR 400 million of operating profit. Strong delivery also from our Italian team. Now at page 27, on the investment margin, you can see that the current yield is going up by about 10 basis points, and that's because of the normalization of income coming from, especially from equity. What is more important, you see once again that we are taking down the minimum guarantee in this case by about 10 basis points. You can be assured that this journey is going to continue. From that point of view, you can see definitely that there is a reduction of the guarantee level. From that point of view, we are very confident that we are going to be able to keep the spread between current yield and minimum guarantee as we move into the next year. Overall, strong performance in the Life business, strong operating profit, strong new business value generation, changing mix. We also did a couple of back book transaction. I would say even a benchmark transaction like the one we did in the United States. I would say great year for our Life segment and for our franchise in this area. Now coming to asset management. Overall, EUR 2.6 trillion of assets under management, including the proprietary assets. When you narrow down on the third party assets, EUR 2 trillion of third party assets with a growth of 15%. When you look at the growth across the asset classes and regions, you can see that all regions and all asset classes are showing growth. That's for me a sign of quality and also of a sort of diversification that we have. We see a similar trend, by the way, at page 31. When we look at the right-hand side, you can see that's how is the composition of the EUR 110 billion of inflows that we got. You can also see here that we are not just growing fixed income, but there was positive flows in all other asset classes. Also from a geographical point of view, you can see a nice spread across the different regions. Also we are kind of used to PIMCO making EUR 60 billion of inflows. I think the big news is clearly AGI making over EUR 40 billion of inflows. As Oliver was saying, before this, despite challenges, and also despite the fact that these guys just in 2020 did a major restructuring, and usually, you know, when you have a major restructuring, you might not necessarily expect a significant growth. AGI has been capable to do both, do a restructure and then also realize significant growth. When you look at what this means from a revenue point of view, you can see a nice development of the revenue with a growth of 14%, and the growth is especially pronounced at AGI. You can also see stable fee margin in total. That's also important. We don't see necessarily trajectory of a weakening of the fee margin. We saw a lot of stability indeed over the last quarters. All this leads at page 35, to an increase in operating profit of over 20%. Also, when we adjust for the so-called volatile items, which are the performance fees, we still see about 20% increase in operating profit, so very strong performance. Clearly what is really nice is also the development of the cost-income ratio at AGI with an improvement of 8 percentage points. Strong delivery in asset management, strong delivery from PIMCO, and I would say very strong delivery from AGI. Corporate, I'm going to skip it. It's basically flat compared to the level of last year. Now we come to page 39, on the non-operating items. Here you see that the realized gains have been more pronounced than in the past. This has to do also with the Lucy transition. About one-third of the realized gains are coming from Lucy. Also you can see the level of impairment was in 2021, very low. In other, you see basically the pre-tax charge of structured alpha. There you see also some DAC, some DAC offsets to the realized gains on the Lucy transition. Then when you put all together, you get to a net income of EUR 6.6 billion for the year, which leads to a double-digit ROE anyway. I'd like to reiterate this message that it's still double-digit ROE despite a significant one-off impact. Now we come to the outlook. It's page 41. Overall, EUR 13.4 billion for an outlook for 2022. As you might have recognized by now, we have a tendency also to set the outlook at the level of the preceding period. We keep you know faithful to this kind of tradition. The underlying assumption here on P&C for the EUR 6 billion of operating profit, we are assuming a 93% combined ratio. We have a tendency to be fairly conservative on the investment income. On the life side, we have normalized for the extraordinary performance due to the low VIX of Allianz Life, so we did some normalization there. For asset management, we also did some normalization, if you want, for the performance fee level, which was a little bit more elevated in 2021 compared to what is an average over time. With the EUR 13.4 billion outlook for 2022, we feel pretty confident about this level. We are going to have a clear conversation about where we stand in the course of the year. With that, I would like to open up to your questions. Yeah. Thank you, Giulio. As Joe said, we are now happy to take your questions. Before we start the Q&A session, I would like to ask you one favor. If you join us via telephone, please mute your YouTube live stream while you're on the air because this avoids a potential echo. All right. That said, we will now take our first question from Peter Eliot. Go ahead, Peter. Thank you very much. Hopefully you can hear me. So I have three questions, please. The first one was on the share buyback, and just wondering if you can share any timing you have in mind on that side. Do you have an end date in mind, for example, for that EUR 1 billion? The second question was at the Capital Markets Day, you targeted 4% growth to get to sort of EUR 14.5 billion operating profit. Obviously from the starting point, which is a bit higher than you know indicated at the time, we only need sort of 2.5% growth. I mean, we probably need to back out performance fees, but, you know, would it be safe to say that the starting point is a bit higher than you're expecting and therefore the target more achievable? Finally, third question, just wondering on your non-life businesses, you know, which maybe are getting the most management attention at the moment. I mean, I guess Turkey was, you know, a high combined ratio and you're pointing to difficult markets. Is that perhaps the main focus at the moment or yeah, maybe just some insight on where you think there's still room for improvement. Thank you. Oh, hi, Peter. I can take your questions. On the share buyback, the expectation is that we are going to complete the share buyback by the summertime. That's the timeline for the EUR 1 billion buyback. On the Capital Market Day and the baseline, first of all, because your comment where we think that the target is more achievable, we think the target is achievable. Our message in the Capital Market Day was that's a plan, that's not an ambition. Now, if we want to talk about the baseline, in the Capital Market Day, we also said, look, EUR 13 billion was the basis. How we did the presentation, we also said, we expect to be a little bit higher than EUR 13 billion. From that point of view, I would say nothing's really changed clearly compared to what we know at December third and what we know now. The point is, again, the confidence that we have about achieving our targets in 2024, is strong and didn't change because of six weeks. Then on Turkey, first of all, let me say that Turkey, yes, the combined ratio is high, but the investment income is also very high. If you look at the numbers of Turkey, in reality, in local currency, Turkey had a growth in operating profit. We are speaking anyway of an ROE which is north of 20%, and now we can have a philosophical conversation about what the cost of capital in Turkey should be. I can just tell you that the company is operationally doing very, very well. Now clearly we will have to go through a time of uncertainty because of the situation there. Turkey is not a company that we see as struggling. We see Turkey as a strong company delivering also a good performance for the environment, so that's not an area of concern. In general, if you ask me, the area of focus, clearly we are focused on bringing the combined ratio down from the 93 normalized to 92%. As we discuss also in the past, one area of focus is clearly the improvement in MidCorp, and then we want also to make sure clearly that we are preserving the profitability in retail, and also that we might see more growth, even more growth in retail. On the life side, the message is we want to continue on what we are doing because we think the strategy is paying off very nicely, as you see in our numbers. For asset management, I will say also you see the delivery in 2021, has been very consistent quarter over quarter, so we are very positive on the franchise. as always, you know, if rates go up and down, this can create some short-term volatility, but the franchise is very, very strong, and I would say never been stronger at P&C or AGI as it is now. Great. Thank you very much. Welcome. Thanks, Peter. We will take the next question from Will Hardcastle, UBS. Go ahead, Will. Afternoon, everyone. Let me take the question. First of all, I mean, you called it, there's going to be a question on inflation, so I'll ask it. Just thinking about how it's impacting the P&C business, and you mentioned you'd held something back on the accident year booking. What about on reserves? Did anything happen there? And which line should we be concerned or just being on a watchlist, or are we just talking about a general provision at this stage? And the second one, is regarding the provision today for Structured Alpha. I guess you mentioned the vast majority of investors are being made whole. Can you just explain to me what isn't included in this provision at this stage and the potential where incremental costs can arise? Hopefully, that's able to be answered, obviously, without any numbers, but just what could still arise. Thanks. I can pick up these questions. On the Structured Alpha, we cannot give you more information. We can just tell you that the provision includes more, than the settlement we achieved with the major investors, but we cannot give you more information. One day, when this story is going to be behind us, we will be able to give you all the information you wish. I think you can appreciate that we are keeping true to what we said. We said we want to put some numbers around this topic by the end of the year, and that's what we are doing. We try to get to a resolution of this issue in a fast way, but in a considerate way. That's what I think you can see that we are doing exactly what we said that we are going to do. That's all for Structured Alpha for the time being. On the inflation side, I tell you, when we look at inflation in property & casualty first, I can tell you that as of now, we don't see inflation which is running faster, than what we have in our pricing. Trust me, we are having a lot of conversation with our OEs, so we have been indeed looking at the inflation already starting next year. It's not been something that we put on watch at the end of 2021, beginning of 2022. We start watching inflation already basically. I would say during the summer of last year, we put this on our agenda. When we look at the trend anyway, I can tell you that we see some more inflation on spare parts, but for the time being, nothing really gigantic, but there is definitely some inflation on spare parts. Just to give you also an idea, when you have a material damage, about 40% of the damage is going to be spare parts. The rest is still labor, or could be also painting, all these kind of things. From that point of view, don't think that if you have an inflation which is running high single-digit on the spare parts, you can assume this is going to be a high single-digit inflation on the total claim. A lot of our claims are bodily injury. We don't see pressure on bodily injury. As always, the answer is going to be different country by country. We see some clear pick-up of inflation, also in property to a certain degree, but for the time being, I would say that's all within our expectation. We are clearly monitoring the situation very carefully. The message that we send to our OEs is, if you see an increase in severity, because that's the way we talk, you know. You have many things flowing into the severity. If you see an increase in severity, instead of wondering whether there's noise, you just assume that that's inflation and react as fast as possible. The reaction, by the way, is not necessarily just on pricing, because, you know, we always think that the way to offset something bad is pricing. There are other levers that we can pull in order to mitigate inflation. We are spending a lot of time on steering. You might also remember that we put a lot of effort on claims already in the course of 2021. Indeed, that's one of the top priority of Oliver. You know, how we even improve further in effectiveness and efficiency in claims. Our reaction and the plan that we have is not just let's put rate increases, but also how we work on the claims side to minimize the impact of inflation. Okay. Just as a quick follow-up. I mean, it doesn't sound like there's, you know, the action being taken is, you know, awareness on the front end on pricing and actions taken on claims management as opposed to looking further behind and thinking about the reserves. Is that fair? Okay. Sorry. And just- Also from your reserve, I can tell you that that's part of the component, absolutely. It's going to be different country by country. In some countries where you can see also the competitive environment is very tough. One thing that we did, was also to make sure that we have a healthy level of reserve because we know that we're going to see some increase in claims, and so we will need to use some additional reserve strength to offset that. Definitely we looked also at putting a buffer specific for inflation. That's what we did, and I can tell you it's not a small buffer. It's an appropriate buffer that you want to put in a situation like this. Okay, thanks. Welcome. Yeah. Maybe I can just make an additional comment, otherwise I get bored. I think one of the reporting things that we don't do is when you look at premium growth or price increase, that is just half of the story, particularly in commercial lines. What we would normally have to report in the future at some point is exposure-adjusted price increases. So a lot of the things we've done in commercial lines over the last two years, and not just in AGCS, also MidCorp, is to completely change the exposures. So whether that's terms and conditions, deductibles, exposures to highly exposed sectors. You know, in the property side particularly, we have been mandating cancellations of the high exposure risk, even for risks that haven't seen a claim in the last five years. If the technical price to actual price is not consumer rate, we are reducing, have been reducing exposure. If you were to equalize the growth numbers are understating really the pricing strength that we have been gathering in commercial lines, and I hope we see that coming through in the results over the next few months and years. Thanks, Oliver. Okay. We will now take our next question from Michael Huttner from Berenberg. Michael, go ahead please. Thank you so much and well done for all the hard work. It's lovely to see. I have two questions. In a funny way they're not cut. On the back page in, I think B 47, you show your cash flows and you did show the total figures, but now we see the detail and non-life seems to deliver less and less cash flow every year. It seems to be at a record low level of EUR 2.6 billion for 2021. I just wondered if you could explain a little bit what's happening here and maybe what the outlook could be. My second question, and I think you alluded to it, was what had been the net inflows or outflows or whatever in January, in your asset management businesses. Then the last one on non-life reserves. I was looking at the SFCR and the excess reserves, which are included, so relative to best estimate, have been coming down. I just wondered if the actions you've taken, so to add to reserves to reflect inflation, et cetera, would that actually lead to a higher number here or does it stay hidden? Thank you. I can take this question. Starting from the last one, we don't have in the SFCR report any indication best estimate versus non-best estimate. I'm not so sure what numbers are you looking at, but that's not an information that we provide. I can tell you anyway that definitely the margin didn't go down in 2021 compared to what we had in the preceding period. I think you're now looking at, you're not interpreting that number, whatever you're looking at in the right way, but I'm sure that Oliver can help you with that. On the flows for PIMCO AGI, in January we had a EUR 3 billion flows in, combined and more or less half and half between AGI and PIMCO. I want also to say if rates go up, we might see clearly some negative flows at the beginning might happen. This is still a positive anyway for AGI, especially for PIMCO because, you know, every time we ask Manny, the CEO of PIMCO, you like to have rates going up or down, he's going to go for rates up even knowing that, in the short term this is not necessarily positive. When you look at, the midterm, you don't need to look long term, just look at the midterm, that would be definitely a positive. If you think in present value of, revenue and profit, definitely higher rates are not a negative for, asset management. If you focus on a quarter, that's a different story. I think the right way to look at that is a little bit of a present value instead of a quarter. On the cash flow, what you have to consider is in 2021, clearly there was the impact of COVID on the P&C side, so we got a little bit less dividend for example from Allianz Germany last year because in 2021 of the 2020 impacts. But also then consider that especially where we have composite insurance companies, which can be the case also in Italy, in France also that's the way we look at the business. We can get dividend excess capital from one entity or the other, depending on the situation. Fundamentally I would not look at the segment. You should at least combine property, casualty and life together. That would be maybe a best way to look at that. Fundamentally, over time in property casualty, we would expect the remittances to be about 80% of the net income. That should be depending on the growth rate, but they should be definitely a baseline, if not higher, for the dividend that we get out of the property casualty side. Hope this helps. Thank you so much. Sorry? Yeah, I think we're good. Thank you. That's wonderful. Thanks, Michael. Thank you. By the way, it was three questions, not just two. Anyway, okay. No problem. I'm just joking. We will take the next question from Ashik Musaddi from Morgan Stanley. Please go ahead, Ashik. Thank you, good afternoon, everyone. Just a couple of questions I have is, first of all, I mean, can you give some color as to how this EUR 1 billion buyback has been achieved? How did you get to this EUR 1 billion number? I mean, historically, half yearly was kind of EUR 750 million. Full year was, like, EUR 1.5 billion. So how do we get to this EUR 1 billion number? And just linked to that, I mean, would you say that this Structured Alpha fund or, and/or discussion with the regulator is playing a part in this, coming at this EUR 1 billion number? That's the first one. Would be very helpful. Second, there was a strong premium progression in the P&C business in fourth quarter, which is what we saw, like, in third quarter as well. Would you say just a base effect, or would you say that there is some movement from your side to start getting a bit more on the top line as well? So that would be the second question. Thank you. Maybe starting from the buyback. You know, we thought that, you know, we have basically EUR 4.4 billion of dividend. When you add another EUR 1 billion of buyback, we are at EUR 5.4 billion of redeployment, and we want to see what happens during the year. We didn't necessarily overthink whether it should be EUR 1 billion, EUR 1.5 billion. We just felt that, you know, to start with this amount and then to see how the situation is going to evolve, and then we will take further decisions as we go into the second part of the year. But don't think that there is a lot of overthinking about, you know, whether it should be a little bit higher or not. On the point about the growth that we see coming, clearly we had some strong growth in the fourth quarter. You can also see in reality if you look at the analytics, that some of the growth has been driven by AGCS. Allianz Partners was very strong and also Euler Hermes. But even if you adjust for the global lines, you see about 7% growth rate. Now, there is a thing that you need to consider. This is also growth rate compared to the fourth quarter 2020. If you look at the trajectory in 2020, clearly you have a situation where you know we got into COVID in Q2, and then it was going down Q3. Q4 was still a lot of lockdowns, and then Q1 2021, was still pretty down, and then you see a recovery. Think about a sort of a concavity, you know? That's the reason why you're going to see a growth rate which is a little bit more pronounced than normal. This said, if you ask me, the expectation for 2022 is a growth rate of, I would say 4%. Let's say 3%. That would be low, to be honest, but you never know what the environment might be. We might go all the way to 5%, depending on how the economy is going to evolve. I will say a range between 3% and 5%, and my pick is about 4% growth for 2022. Great. Thank you. Welcome. All right. Thanks, Ashik. We will take the next question from Andrew Ritchie, Autonomous. Andrew, please go ahead. First question, just on the cost-income ratio, on the asset management business. Giulio, could you just tell us, is there any investment to occur? We're also, you know, aware of some inflation in staff costs. Most of the listed asset managers have been guiding to higher cost-income ratios in 2022 to reflect that. Could you just give us some sense of that? Also could you remind us of the flex on the cost base of asset management in the event that assets are lower, given market movements? I think in the past you've said it's like a 60/40 fixed variable. Could you just remind us on that? I'm just trying to sense what the flex is should the asset environment be trickier there. Second question, the move in interest rates have in the past caused volatility, particularly in the German Life investment spread. As interest rates rise, I think you have some interest rate swaps that then get negatively marked. Could you remind us what the volatility could be as interest rates rise to the investment margin? The final question is just a broader question for Oliver, really. I think you said you'd learnt lessons from Structured Alpha. In particular, it had precipitated a sort of thorough review of products, sales practices, all that kind of those kind of issues. Is that really completed? Have you really done that in depth across the group in what's been a relatively short time, or is it still work in progress? Andrew, the issue is a formal answer now. We've done a lot of things, but until the U.S. authorities have issued their statement of facts, as they call it, I think you know that we are not allowed to comment anything also on internal investigation and the outcomes. Rest assured, we've been working relentlessly. By the way, I would also like to remind everybody, we actually did completely change the top management team of AGI at the end of 2019, and we started before the financial flash crash to work on massively simplifying. It's a bit unfortunate for the team at AGI, and I like to express that what happened. We did say, right before that we want to reduce number of products and strategies by more than 40%, and we have done a lot of that heavy lifting already. You see that in the cost-income ratio, by the way. Complexity has been reduced, productivity has been increased, and this is ongoing, and we do that across our universe now and consistently. It start with a question of what products do we really want to offer, relative to the risk return profile that we feel comfortable with? The first question is, do we need to be in certain products really even if they are attractive? The second one question is, how do we then look beyond models, risk models, Solvency II, where true risks lie, regardless of capital charges, and how do we deal with them? Again, not by adding safeguarding functions and all kinds of protocols, but really aligning incentives, selecting the right people and things like that. But again, details, we can discuss if and when we have addressed that with the U.S. authorities, and I beg for your understanding really that we discuss it in depth once we have done that, hopefully soon. The first major milestone we have done, I'd like to reiterate because it's been not well understood, that we did not just intend, but we have settled today and early in the morning with the vast majority of the exposure in terms of investors. We have taken beyond that some caution also on beyond the investors on some of the litigation fees. That's as much as I can say today. Perfect. On the other questions, on the questions regarding inflation for asset managers, I can tell you that in the U.S. we see some wage inflation. That's definitely the case. We see this also to PIMCO to a certain degree. You know PIMCO has basically a philosophy that the cost-income ratio should be below 60. From that point of view, I don't have concern that we are going to be able to stay below that level of cost-income ratio. But clearly you might not see the 57.4 that you saw in 2021. There is some inflation that's more pronounced in the United States as opposed to other geographies. On your questions regarding the marginal cost-income ratio, it's the reverse. We have 60, I think it's more like 40. At the end of the day, if we lose EUR 100 of revenue, we will say the profit margin should go down by about 60%. That's the way to think about, you know, how we look at an impact of lower revenue, what does this mean after cost for our profits. Then you had a question on the swaps that we have. This is mainly indeed Allianz Leben. By the way, we are using hedge accounting. To this day, we can use hedge accounting, but there is clearly some part of this position that we cannot put through hedge accounting. I will tell you that the situation is in reality manageable because yeah, if rates go up, we're going to see a loss on the part which is not under hedge accounting. We have enough other levers that we can pull in order to get to the desired operating profit. We have a lot of buffer. You know, we have policyholder participation too that can be utilized in order to stabilize the profit. In reality, the only issue is if you have a spike of interest rates at very end of a quarter or let's say of the year, because in that case, clearly we cannot activate some of the levers that we have at our disposal. As long as we have time to react to an increase in interest rates, we have things that we can put in place in order to stabilize the profit at the targeted level. Okay. Thanks very much. Welcome. All right. Thanks, Andrew. We will take the next question from William Hawkins. Go ahead, Will, please. Hello, gentlemen. Thank you very much. My first question feels slightly redundant because you've just published your business plan. Oliver, since you showed that slide 12 to focus on diversification versus tail risk, I wonder whether you ever kind of reflect that maybe reducing the footprint of Allianz could be a constructive way of reducing the tail risk. You know, it's eye-catching that, you know, every so often it's a tiny business that causes a disproportionate amount of problems for Allianz. Now, you may just look at that and say, "Well, that's part of the cost of being a successful diversified business." Or it may just be that, you know, if everyone is spread so thin, there's always going to be something which is creating a bit of a headache. Seeing as you showed that slide, I wondered if you could just talk about the temptation to reduce the footprints overall. Then secondly, please, Giulio, I think it's now at least three years when you've been telling us your investment margin is gonna be about 75 basis points and ends up being about 85 basis points, which is lovely, but I'm kind of wondering, you know, why is it gonna be 75 this year? Can you just kind of help me understand why 75 is the magic number? And also, you know, does there come a point when if you've effectively taken 30 basis points that you didn't intend to take over the past three years, and the investment margin is ultimately a zero-sum game, are you just accelerating profits that means at some point that figure may decline slightly more quickly? Thirdly, please, on that slide B9, when you're showing the solvency walk, what do we think the SCR business evolution is going to be this year? I presume it's gonna be small in either direction, but is your SCR gonna be consuming capital or releasing capital in 2022 please? Thank you. Well, very good question, and something that we spend a lot of time on in terms of the portfolio. Actually, I tend to disagree because AGI is a super big business. It made more than EUR 900 million in profit, 40% up. By the way, had the largest flows ever, third largest in the equity. So unfortunately, the issue is in there from a significant business, not from a small one. The question is actually more around what we had before, the question also from Andrew. What are the right products and elements to be in, and are we comfortable with them under severe stress scenarios, right? Something may work very, very well under sort of assumed normal situation, but when a tail market event hits, are we then still comfortable? The vast majority of our businesses are rock solid, even under severe stress. Let's take Turkey that we just had discussed earlier. Many competitors find it completely impossible to operate in this environment. We are the market leader, and we are returning more than 20% ROE, by the way, in euros, and that is really important. What we need to do is wherever we operate, we need to be a market leader. The answer is we need to get out of businesses where we clearly are not the market leader, and we cannot deliver best-in-class performance. That's what we do. That's why in 2016 we went out of Korea because after trying a long, long time, since 2001, we convinced ourselves we couldn't do that, and that's why we're getting out. Again, AGI pruned or is pruning 40% of its portfolio in order to make sure that we're not just cost-wise, but also exposure-wise, getting to the things that we should be focusing on. I have to tell you, I find these focus strategies a bit ridiculous because in reality, people sell a lot of their businesses that they don't know how to run, book an accounting gain, and then call that focus. There is a very nice saying that nobody ever shrank to greatness. We really believe that we can build scale and do that, but we don't do that by buying large companies. We do, again, as I said, string of pearls, and we need to make sure. If we can't get to leadership position a certain period of time, we are going to exit. You will see that as we think about it. We need to transform. Let's talk about Allianz Life. You know, everybody and their friend and mothers had to, you know, spend $ billions to get into the U.S. life market in the 1990s, and then the middle of the 2000s, you know, had to go home with their tail between their legs. We have built one of the most successful life companies in the United States, and people still said, "We don't like the exposure." I actually understand that given the size of the balance sheet and the capital consumption. We've now worked two years on how do we leverage private market capital in the way that gives us much better returns and much better growth. That's what we're doing. We are transforming really the most capital consumptive part of our business and turning them into fee-based businesses. Will there be volatility? Absolutely. The issue is more working not on the small things that create the problem, but making sure that the large ones, AGCS, by the way, is also large, are run with the same intensity and diligence as everybody else, which means we need to move away from cross subsidies. I think the issue in the culture is more we're doing so well that people can become complacent, and that's the one thing we need to fight. You know, we need to be having the fighting spirit. We need to make sure that some people don't bet on the strengths of the company, and that is really the job for the next few years. Make sure that all cylinders fire, not just 8 or 9 out of the 10. On your question, maybe starting with the first one, which is on the investment margin. First of all, you know, I'm doing like the one that says the stock market is going to go down. They still keep always saying that, hoping that one day it's going to be right. That's little bit my philosophy on this one. Seriously, I would say we might be slightly conservative maybe in our guidance, but fundamentally, you know, there are a few issue why the investment margin has been high in the last years compared to what we would expect. This year or last year in 2021, definitely the volatility has been very low. There is push in the investment margin because of low volatility coming from the United States. In the case of 2020, what we put also in investment margin in the case of Allianz Life is any positive unlocking in VA, or also in FIA because they can affect basically the line item that goes into the investment margin. From that point of view, positive unlocking, and we had positive unlocking, especially in 2020, in Allianz Life. They have a positive impact, technically speaking, on these investment margins. From that point of view, I tell you 86 or 87 basis points is definitely not the investment margin that we expect on a normalized level. I would definitely say that the expectation is should be below 80, and now we can discuss whether 75 is maybe slightly on the conservative side. I'm pretty confident that a normalized expectation is below 80. One thing that you need to keep in mind if you do your math, you cannot assume that a reduction in the investment margin is one-to-one a reduction of the operating profit because there is a DAC offset. That's very important. Every time you do your calculation, don't say, "Okay, if Giulio tells me there is 10 basis point less of investment margin," you start doing your math and you say, "This is one-to-one equal to profit." You can assume that there is about 30% of DAC offsets on every reduction that you do on the investment margin. And that's how you can somehow get to a proxy of the operating profit impact of normalizing down this number. On your Solvency II business evolution question, I can tell you that from the life side, we expect basically no contribution from the ACR because right now we see that the release of ACR coming from the in-force running out is not in line with what could be the increase in ACR coming from the new business. From that point of view, the expectation is basically that we're going to see this also in the future, if not even a more pronounced this kind of tendency to have even a release, if you want, a slight release of ACR. Then the increase in ACR is going to come from property casualty, and I can tell you that if you. We apply as a rule of thumb, you can apply something about 30% to the NPE growth, and that's how you can somehow get to a proxy of the increase in ACR. That's what you see also basically in our numbers in 2021. It's all driven by NPE growth, and if you assume something between 25%-30% of ratio to NPE, you get a good proxy of what the ACR might be doing. Is that full? Fantastic. Great. Thank you, gentlemen. Thank you. All right. We'll leave this on a facetious note. AIM has been exceeding our expectations with the shift to alternative assets. That has really bolstered our returns. The old assets are substantially more profitable, by the way, not just on the life side in terms of returns, but also in asset management. However, they also tend to be more lumpy in returns. The one thing, and we'll know that it's gonna come from IFRS 17, is these things are a bit more lumpy, and that's why we are very cautious in terms of forecasting average numbers. Numbers will be risk-adjusted higher, but they may be a little bit more volatile. Therefore, we'd rather be a bit more conservative, as we tend to be. Thank you. All right. We will take our next question from Vinit Malhotra. Vinit, please go ahead. Yeah, thanks for the opportunity. Just three quick ones. One is on the target. Giulio, you mentioned about history. When I look at history, I mean, except maybe the COVID year 2020, the actual has always been very close to the top end of the guidance. Now we see EUR 14.4 billion as the 2022 outlook upper limit, and that's so close to the 2024 target. I mean, can you just talk about scenarios where this could actually happen this year, and then obviously we have to think of higher target for 2024? That's just the first question. Second question is on the P&Cs in Spain. MidCorp is being mentioned. From just hearing many other companies, it seems MidCorp has been the, you know, sort of attractive business. Could you just talk about what happened there? You know, you mentioned conservatism. Is that more conservatism, or is there some issues you'd like to flag on that side? Lastly, capital-efficient products in life. I think EUR 415 million is probably the highest quarterly operating profit. In the past, maybe two years ago, I've asked you whether you were seeing a bit, a change in the profit numbers of capital-efficient products. Is that the accounting, is it an accounting effect, or is it what we just heard from Oliver about how the asset management is coming in and helping create more value? Thanks. Okay, the first question was on the outlook and how we got to the EUR 14.4 billion. I would not be focused too much on the EUR 14.4 billion because I will say to get to that level, we should really have the opposite of the perfect storm, like very low net cat level, very strong capital markets, so good level of performance fees. That's how we can get there. I will say that as you said before, we have a tendency to end up in the upper half of our outlook. Yeah, we will see what happens in 2022. I think this could be more reasonable expectation as opposed we go all the way up to 14.4. Clearly, if we see very benign market condition, if we see very low net cats, that could push us clearly to a very high level. That would also be not necessarily what I would call a baseline. That's on your comment about the EUR 14.4 billion, what could bring us there. On Spain, on MidCorp, the issue there has been also large losses. Clearly when we look at large losses, we are always very cautious, because it's too easy to say large losses are just volatility and they're going to normalize away. That's the reason why we will clearly take a close look at the performance of that book. Anyway, we are also putting rate increases there. Fundamentally, the issue has been an accumulation of large losses, but we don't take this necessarily as an explanation to say everything is fine and in 2022, there will be no issue. Also, the motor performance is good, because there is clearly also still a low frequency in Spain. We are also kind of prudent in the sense of, you know, we might see clearly an increase in frequency, potentially in severity as we go into 2022. There was also some element of prudency on that aspect. It's a little bit of prudency with respect to motor and then also large losses that have affected the MidCorp business. The last question was on the capital-efficient products. What we are seeing there is the combination of Allianz Life delivering very strong performance in fixed index annuity and also in the so-called RILA, which is the registered index-linked annuity, which is, you know, what has replaced basically the VA business. Also what we see is clearly, and we said that also in the past, that there is a trajectory coming from Allianz Leben. In the past, you didn't see much of a profitability in that line of business coming from Allianz Leben because due to the accounting, the way we do the accounting, there was a sort of strain also under the current IFRS. Now this strain is going away because the book has achieved clearly a different size. You can really. If you want, the growth in profit is over-proportional compared to the growth of the assets under management of the business because of these accounting issues. You see maturity, if you want. Think of that. Allianz Leben capital-efficient product was almost like a startup. Now after three, four years, clearly you see performance kicking in. We are pushing these capital-efficient products also in other markets. The main driver of this performance are Allianz Life, because of the strong delivery there and Allianz Leben because of the strong delivery with this sort of embedded growth because of this accounting drag going down. Right. Thanks very much. Welcome. Thank you, Vinit. The official time for our call is over, but we still have a couple of analysts in the queue, so we'll add a couple of minutes and try to get everybody into the call. We will take the next question from Kamran Hossain from JP Morgan. Go ahead, Kamran. Hi. Afternoon. Thanks for taking my questions. Three questions. The first one is just you clearly had, you know, good success in the U.S. on back book deals. Can you maybe talk about the potential elsewhere in the group outside of the U.S., that there is potential for deals and whether actually there's enough capital out there to kind of, you know, support those deals? The second question is just on net cat budget. Just could you give some kind of guidance around how that changed and to what extent that's forward-looking rather than based on history? The third question, I guess you're one of the first companies to report that has a big U.K. motor business. Any thoughts on how the U.K. pricing practices review has impacted the market yet? Thanks. Yeah. Maybe I'll start with the last one. On the U.K., I think the situation is very fluid, let's put it this way. I don't have a definitive answer, let's put it this way, but what I can tell you is the following, that we, started January with a pricing which was new business pricing, which was more conservative compared to what the market was putting there. We saw that, you know, the competition was more aggressive. To a certain degree, we had to make some adjustment to pricing. Now we also believe that there could be some movement in the other direction from the competition. Fundamentally, it's a little bit too early to say. The only point that I can make is that we started with a more conservative position, than what our competitors in general had, and now we need to see how the situation is going to evolve and stabilize. I think we can speak about this issue when we have the Q1 call. I'm sure at that point I can give you some good indication of what has happened, because right now the situation is still developing. On the net cats, I just stated the way we are thinking about net cats. Maybe let me tell you that when we look at net cats, internally we look at net cat and weather-related losses. Overall, in the past, for the sum on net cat and weather-related losses, we had a budget of about 3% of premium. We moved this budget up already in the last two years to about 3.2% of premium, percentage point of premium. Now we, for 2022, the way I look at that is 3.5 percentage points. I would say that compared to the situation of three or four years ago, we are 50 basis points higher in the cat allowance, including weather-related, than we were at that time. Now to give you also an idea, anyway, we have an aggregate in place, so I will say that if we see more nat cats that are included in this 3.5 budget, I would say when we start getting to 4.5 percentage points or lower, that's the point where the aggregate should come into place. Think about that two combined budget of net cat and weather-related of 3.5%, which is 50 basis points higher compared to what we had a couple of years ago. Then I would say at 4.5% we should be capped in terms of net cats load because the aggregate will come into place. That was clear? That sounds clear. Okay, perfect. Yeah, that was very clear. was very clear. Thank you. Then on the back books, I think there is appetite out there, yes. There are a lot of transactions happening also in the U.S. Sixth Street announced a transaction just after having done the Lucy transaction, and they still have appetite to do things. Yeah, there is appetite there. So it's not a problem to find buyers. From our standpoint, clearly we are continuously looking at what our options are, and if we believe that doing a back book transaction is the right way to go, we are going to do so. I would like to make a point that Giulio actually made this morning. I'm missing a little bit energy today, so I wanted to make the point. It's not just about, you know, selling books. It's how the bankers see it. It's actually the last resort. If you don't know what to do, you need to sell a business. There are many other levers. Giulio made the two examples today that I would like to repeat. First, in Italy, on the pension business, we have been renegotiating some pretty capital-intensive contracts, in a way that has provided massive capital relief, and we're continuing to do so. Actually, the industry is picking this up now, so there may be more larger contracts also for us that are changing. The other one is France, where we are working very hard, not just on the new products that have three times the margins that we had just two years ago, but also transforming the in-force because they come with higher investment upside for our consumers. Our sales force is actually super excited to provide an alternative to sort of the lower margin products that came with the older tax benefits. Again, the regulators there are very happy because we're providing more upside at much less capital consumption. There is many levers that we're pulling at the same side, and people only look at sort of, you know, are you selling reserves? That is just one part of it. The second thing is many of these things take quite a while to prepare in order to get them really as a win-win. For example, in Switzerland, we've worked for two years and before we did the first ever direct insurance into Bermuda. Lucy didn't come. Our project in the U.S. didn't come overnight. We actually observed the market, and we saw a massively growing interest into transactions, particularly in the quality of books that we have relative to other people that really have problems. You've seen this enormously beneficial economics for our partners and for us because the quality is so strong. We really have to get the timing right in order to extract the maximum value for our shareholders. This is different for other people that have real problems and really need to get out of businesses, which we have been addressing quite a few years ago. This is now really about optimizing risk and return, and it's not about solving a problem per se because we don't think we have a problem really left other than smaller items. That is super important. We're literally thinking about the transformation. Now, the next step is not just thinking about in-force but also leveraging because I love your question, how can we do this for new business? What we're working on is to work with private capital to say there are highly competitive segments of the market in the U.S. and elsewhere. Can we not set up structures that where we do the product design, where we do the distribution? We capture a very nice share of the value creation and then, put the business onto balance sheet that have much better cost of capital than we do have. That's the next level of transformation that we're working on. It's coming. Some of that is coming 2022. We're super excited to drive value creation massively. Now I made the joke and says, for as Giulio said, with the P&C business, with the new business strain of 30% of net earned premium, if we could do the same thing in P&C to really not have an SCR strain anymore from new business, then we found a really a cool trick. Kidding aside. In life we've made huge progress after working hard for many years, and now it's really about driving growth at ever rising ROEs. I would like to point out the key thing is not the ROEs, it is to reduce the tail exposure. Making sure that we systematically reduce the exposure to tail shocks, and you're going to see that in the reducing volatility of our Solvency II ratio and strongly growing Solvency II ratios, because the new business now is going to be accretive to Solvency II, and which is a total change and it's coming this year, right? I think the investor community has not really understood yet and picked it up. That's fantastic. Thanks for a very comprehensive answer. All right. We have one caller in the queue, then I guess we have to come to an end. We will take our last question from Thomas Fossard from HSBC. Thomas, the line is yours. Yes. Good afternoon, everyone. Just one last question for me related to your credit insurance business or your RMS back to very strong operating profitability in 2021. Giulio, could you tell us how you're dealing with the profit sharing or repayment of the public scheme, and how much you've been able to front load, if you wish, the profit sharing that you need that you owe to the state to the different state and or how much we should expect still to come in 2022? Thank you. We start the agreement basically in June 2021. In 2022, there is no profit sharing. Now, what is happening to the extent that the reserve were set conservatively, when we have a run-off, we are sharing the run-off of positive run-off with the states. The majority of that happened already in 2021. I would say as of 2022, since we are out of this profit sharing and since you know the excess prudence in the reserve, let's say, is being also released, there is not much left from that point of view. Okay. 2022 is a clean year from- Business, business as usual. Yes. Absolutely. Okay. Thank you. Okay. Welcome. All right. Thanks very much for everybody who joined the call. In case there are any questions left, please call myself or my team. We will be very happy to help. For now, we say goodbye. We wish you a very pleasant remaining day and a nice weekend. Goodbye. Thank you. Thank you so much.