Good afternoon, everybody, and welcome to the Allianz Conference Call on the Financial Results of the First Quarter 2022. 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 presentation and 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 CFO, Giulio Terzariol. Thank you, Oliver. Good afternoon to everybody. I'm pleased as usual to briefly present to you the results for the first quarter 2022, and after that, I'm going to take your questions. If we move to page three. The underlying performance in the quarter was a solid underlying performance with a good growth in revenue. Especially, what is nice to see is that the growth in revenue is driven by the Property Casualty segment with an internal growth of 6.6%. When we look at the operating profit, the operating profit is slightly reduced compared to the level of last year. This is driven by the Property Casualty segments, where we had also a high amount of natural catastrophe compared to what we had last year. This has been partially compensated by a higher run-off, but in total, we had a lower operating profit for the quarter. On the life side, we see a stable operating profit, which is definitely a good results also considering the market condition. With EUR 1.2 billion, this is basically the outflow divided by four, the outflow for the year, I mean, divided by four. In asset management also a good operating profit with a growth rate of double digits compared to last year. Yes, the flows are negative, and this is driven by clearly the outflows at PIMCO. Considering the market environment and considering also the size of PIMCO, considering especially the change in interest rates during the quarter, we think that's a good performance from a flow point of view. It should be highlighted that AGI had positive flows also in Q1. When we look at the net income, clearly here we had a charge of EUR 1.6 billion because of Structured Alpha. If you adjust the numbers for the Structured Alpha charge, we are back to a level of net income of EUR 2.2 billion, which is basically in line with what we would generally expect. Now, if we move to page five on the solvency ratio. The solvency ratio has reduced by 10 percentage points. To explain the development over the quarter, we'll go straight to page seven. We're starting from 209% at the end of the year 2021. If you take the buyback into consideration, the starting point was 206%, and we had a percentage point of reduction in the solvency ratio because of the change in UFR. The contribution from operating earnings, if you take the number after tax and after dividend, that's about 2 percentage point plus. When you look at the market impact, we have a -5 percentage point of impact due to a market movement. That's the pre-tax number. If you put this number after tax, that's a - 2%. That's negative even if interest rates have gone up, because on the other side, the interest rate volatility has increased, the equity markets have been down. We have also an impact due to inflation, to the Russia write-down, and also to the downgrade of Turkey. There were a lot of other elements that have more than offset the increase in interest rates in the quarter. I will say, when you look at capital management action here, we had impact of the dividend buyback. We took some management action in the sense of increasing our inflation-linked bonds, and this has a negative impact on solvency. It's not a big impact. We are speaking of about 50 basis points, but that's a small negative impact. We have reduced our CDX hedge for credits spread widening. There was another 50 basis points. In other, you see then basically the impact due to Structured Alpha. Then also there is as always some noise coming from the model, from exposure updates or also from the impact of the tax relief. I would say the major clearly item driving our Solvency II development was the impact of Structured Alpha, and also the market impact has not been positive, but has been slightly negative because of the aforementioned reason. Overall, we end up at about 200% solvency ratio, which is clearly still a robust level of solvency ratio, very much ahead of our, let's say, target or threshold of 180%. Now coming to page nine on the segments, starting from P&C. As I was saying before, a good growth rate of 6.6%. As you see, basically a lot of companies have contributed to the positive growth rate. There are a few exceptions. Usually this is because they need to do some cleaning in the book. That's, for example, the case for France. When you look at the AGCS, you see a negative number, but that's driven by the fronting business. If you remove the fronting business, in reality, the growth rate at AGCS was basically 10%. That's also more in line with the change on renewal that you see on the right-hand side. Speaking of change on renewal, as you can see, overall, the momentum is you can see positive change in renewal, also broadly better momentum compared to what we had in the course of 2021. This is clearly also needed in order to respond to potential increase in inflation that we might see down the road. When we move to page 11 on the development of the operating profit, clearly down compared to the level that we had last year by about EUR 140 million. This is driven by the combined ratio. You can clearly see the impact of the net CAT, which was 3.5 percentage point higher compared to last year. You can also see that the run-off is significantly better compared to what we had last year. Last year, you need to keep in mind we are being very conservative in the first quarter. Regarding the run-off that we see now, which is a little bit higher compared to what you would usually expect, this is a reflection of releasing reserves which were associated to COVID. I'm sure you're going to ask me later. I'm going to give you more details on this element. Then when you look below, you can see the combined ratio by customer segment. In retail, you see a big swings from 90% last year to 96% this year. This is driven mostly by net CAT and also to a certain degree also by the deterioration of the situation in Brazil. On the other side, when you look at the commercial line, you can see a big improvement in combined ratio. This is partly a reflection of the run-off releases, mostly driven by these COVID releases and also we have some underlying improvements in our commercial line. Now, when we go to page 13 on the operating profit by entity, I would say that generally you see when you look at the combined ratio, you see good combined ratio in Germany, I would say in France, Switzerland, Eastern Europe, also Italy with a good performance. In the United Kingdom and Australia, you definitely see the impact due to the natural catastrophe. Then I would say Latin America, the combined ratio of 112% is driven by the situation in Brazil, which is not necessarily idiosyncratic. That's a situation that is affecting the whole markets. I guess we can speak later about what is happening in Brazil and what we are doing there. What is definitely positive is the development at AGCS with a combined ratio 95% and also Allianz Trade had a very good results in the first quarter of 2022. This is partly due to the release of run-off that I was mentioning before. We need to consider also that we booked an amount shy of EUR 100 million for potential IBNR related to the Russian situation. With that, moving to page 15 on the investment results. Overall, you can see there is a different trend compared to what we have observed in the last years. Now you can see the investment income is going up. When you look, for example, at the economic reinvestment yield, you can see an increase of 1 percentage point compared to what we had last year. From this point of view, we expect to have on this KPI some tailwinds, and we also expect to have a positive deviation compared to the assumption that we made for our planning for 2022. Overall, when you put together the numbers for P&C, we had an operating profit of EUR 1.4 billion, which is not very far away from the outflow divided by four. That would be a EUR 1.5 billion number for the quarter, considering also the amount of net CAT and also the fact that in general, we have been, I would say slightly on the conservative side. I think this is well, a good starting point for the conversation we're going to have in the rest of the. Now going to page 17. On the life side, we see that the new business margin is going up compared to what we had last year. That's not a surprise considering the rate environment and considering also the actions that we have put in place in the course of 2021 in order to get to new business margin which reflect our targets. Right now we are benefiting clearly from product features which are indeed designed for an environment with even lower interest rates. Overall also the mix is at the level that we like. From that point of view, the new business management continue to be very, very successful and the environment is making our work even more productive. Now going to page 19 on the operating profit, stable. The EUR 1.2 billion is also equal basically to the outlook divided by four, considering the volatility of the capital markets in the first quarter. I would say that's a very good results. As you see, basically all segments have been either increasing in operating profit or at least keeping the level last year, with the exception of the guaranteed savings and annuity. This is the segment or the sub-segment where we have also the variable annuity business in the U.S., and this clearly explains the deviation to last year. We know that last year the markets were very stable and this year the market had been unstable. By definition, the VA business going to produce better or worse results subject to the volatility of the equity market. With that, moving to page 21 on the value of new business. It's up significantly compared to last year. That's driven by the new business margin, because volume was more or less at the level of last year. When you look at the operating profit, I will say that you can see there clearly the swing in the profitability of Allianz Life USA because of the VA business. Otherwise, you can see a lot of consistency. In the case of CEE, you can see the impact of the acquisition of Aviva, which is contributing almost 50% of the profit of over EUR 100 million for the region. Moving now to page 23 on the investment margin. The investment margin has reduced by a couple of basis points compared to the level of the first quarter of 2021. This has also to do with the transaction that we did in the USA, because clearly we reduced the asset base that we have in the United States and because of the way the profit source generation works for Allianz Life. Allianz Life is usually contributing higher investment margin compared to the other entities. If you want, this is almost a mix issue. Adjusted for the mix, the investment margin will be pretty stable at the level of last year. What is more important, as you see, the guarantees are constantly going down. You can see now a reduction of four basis points compared to the level of last year. You need to consider that on the yield, we are going to see more resilience clearly with the new environment. From that point of view, clearly, if you remove potential volatility of the equity markets, fundamentally the difference between the effective current yield and the minimum guarantee should just improve over time and even improve more compared to the trend that we might have seen in the past. Overall, good results and stable results in the life business. Now moving to page 25, we come to the asset management segment. Here you can see that the assets under management have reduced by 5%, and we can go straight to page 27, where we are explaining the reduction of the third-party assets under management by more or less the same amount. Clearly, the major driver for the reduction of assets under management has been the movement of the markets due to equity market and also due to the rates going up. This has been partially offset by the U.S. dollar appreciation. Then when you look at the flows, we had negative flows at PIMCO, which again is not surprising in this kind of environment. On the other side, AGI had good flows, which were mostly driven by the multi-assets development. One thing, when you look at the right-hand side of the slides, you can see that the majority of the outflows. Basically the outflows were coming from the separate accounts. These are also usually the kind of assets where the fee margin tend to be lower. From a revenue point of view, I would say the reduction in run rate revenue is less when you look from this dimension, as opposed when you look at that just from an amount on net net outflows. When we go to page 29 on the revenue growth, overall, clearly you can see a nice revenue growth compared to the first quarter of 2021. That's also because of the base effect. Clearly, the asset base that we had in Q1 2022 is significantly higher compared to the asset base that we had in the first quarter last year. Also then you can see that overall the fee margin has been improving compared to the last year level that's driven by PIMCO, partially because of mix and also partially because of a one-off last year, which was bringing down the fee margin. Overall a nice increase in revenue compared to last year. Clearly when you add these kind of effects at page 31, you can see that the operating profit is increasing double digits. If you take the total growth in operating profit without adjusting for FX. Now, if you then adjust for FX, you have a growth rate in the mid-single digits or still a good growth rate, and especially the increasing performance has been evident at PIMCO. AGI with an increase in operating profit of over EUR 200 million had another very good quarter. Overall, good results for the segments in Q1, which are not far from the outlook divided by four. We need to consider that performance fees are generally coming at the end of the year. From that point of view, usually having this level of performance in Q1 would lead us clearly to achieve easily the outlook. In this situation, we need to see what is going to happen with the market volatility. The first quarter has been definitely a good quarter for asset management. Now going to page 33 on the corporate. You can see a negative deviation compared to last year, but the numbers are in line with the expectation. The number last year was just simply too low. Usually, we are running at an expectation of about EUR 700 million-EUR 800 million operating loss for the quarter, for the year. The number that we see in this quarter is in line with this kind of expectation that we have for the segment. Now coming to page 35. Clearly, the below-the-line items are dominated, if you will, by the charge of about EUR 1.9 billion because of Structured Alpha. When you look at the other position, you can see that the net position realized gains and impairment has been positive, about EUR 150 million. We had some impairment clearly coming from Russia, but they were offset by realized gains, especially some realized gains coming from our Allianz X investment. When you put it all together, you get to a net income of about EUR 600 million, again, adjusted for the Structured Alpha after-tax charge of EUR 1.6 billion. Net income would have been EUR 2.2 billion considering the market environment and also, you know, the entire situation. I would say that's a good level of net income, which is basically in line with our expectation. Now page 37. As a summary, good underlying performance. Clearly, hits coming from the Structured Alpha situation. On the capital deployment, we have concluded as of end of April, the first part of the EUR 1 billion of buyback. Clearly we are now continuing with the second part of the EUR 0.5 billion buyback. From that point of view, we are continuing clearly in our capital deployment philosophy. With that, I would like to open up to your questions. All right. Thank you, Giulio. We will now be happy to take your questions, and we will take the first question from Peter Eliot, Kepler Cheuvreux. Peter, I think your line should be open now. Go ahead. Peter, can you hear us? Yeah. Can you hear me now? Perfect. Yeah. Now we can hear you. Wonderful. Go ahead, please. Okay. Thank you very much. So the first one, I'd just like to get your views on the sort of outlook for yield. I mean, you mentioned, Giulio, in your presentation, but I mean, in non-life, obviously five basis points up on last year. I'm wondering how much of that is driven by the inflation-linked bonds you refer to, and yeah, perhaps what your outlook is there. Then in Life, you guided to an investment margin at 75 basis points at the full year results. I'm just wondering if you could give us an update on that given the new environment. Secondly, I mean, since you invited the question on Allianz Trade, was wondering if you could give us any more sort of detail on the reserve release and, you know, how you think of your remaining reserving position there. Finally on solvency, I mean, you're still 20 points above your target in a very healthy level. I'm just wondering given the dislocation that we had in financial markets in Q1, I'm just wondering whether you thought about sort of taking out any additional protection or de-risking at any point or, you know, whether that was far from your mind, you know, given the level you were at. Thank you very much. Sorry. I'm not sure I understood the first question. I think I understood it. If I didn't, you can always ask me again. My understanding was you ask about the investment income P&C, and how much of that investment income P&C was driven by the inflation-linked bonds. I would say the impact, because the inflation-linked bonds was maybe about EUR 20 million, so it was not super substantial. By the way, the area where we have increased our allocation to inflation-linked bonds is in the corporate segment. In general, I would say the increase in our investment income is coming partially from there, but just because the rate environment is different. You need to consider that in a quarter, we can reinvest about EUR 7 billion. The first quarter is even a little bit higher because you have more premium coming through. I think that we have a sort of EUR 7 billion of reinvestments in a quarter. When you have a swing the way you are seeing right now, clearly this can provide some uplift right away. I would say some impact due to the inflation in bonds, but I would say the majority of the impact is just coming from the fact that we had this amount of reinvestment. I hope that was your question. If not, then you It was, Giulio. Thank you very much. I also asked a sort of part B to that question, whether you had any update on the Life investment margin guidance. Yeah, sure. There was the other one. Okay, I got this as a second question, investment margin. I think that William is going to also ask me about that. That's the famous 70 basis point, 75 basis point. You know, if you look at the 19 basis point, it's basically, you know, indicating that we had the kind of run rates also for the remainder of the year. It's going to depend a little bit on the volatility. If the volatility is going to reduce, I would say we have some room to go even a little bit higher. But on the other side, if the volatility is going to stay elevated, then I would say we might breach the 75 and go lower. As you know, we have always the volatility coming from the United States, on the VA. Also potentially if rates continue to go up, eventually there is, on the Allianz Leben business, we have some derivatives that we use for solvency tool steering. These derivatives are when IFRS, they cannot be completely matched through cash flow accounting. There is a point where clearly the derivative might create some accounting noise. It will depend a little bit on what happens to equity market volatility. Depends a little bit to what is going to happen to rate movements. If you ask me, if you take out the noise, basically that number of 75 basis points over time can just become better. I have, unfortunately, bad news for you. I don't think that this will be a number that we are going to have under the new IFRS 17. As we are looking at the disclosure under IFRS 17, we don't think we're going to be able to reproduce this kind of number. We are going to find other ways. Clearly to give you a sense about that topic, we might not be able to give you this kind of KPI moving forward. The bottom line is this investment margin clearly based on the product action that we have been taking and also based on the rate environment that we see right now, you should expect just to have stability and even an increase over time. That's basically the trajectory that we would expect to see on this KPI. Again, we might have to think about a different way to give you a sense about this dimension in the future. On Trade, I tell you, there were two items. First of all, we had released about, I would say, the run-off that we had at Allianz Trade was about EUR 100 million. This is all part of the reserves that we had during the COVID crisis, because as you might remember, we booked a loss, combined ratio during COVID that was, I think, around 100%. In reality, the claims trajectory has been the opposite. From that point of view, there are definitely some margin there. I believe that when you look at competition, they are also going to show some positive releases. On the other side, we have basically both also an IBNR for Russia. So far we did not see a lot of claims, or minimum amount of claims coming from Russia. I would say the two effects are broadly offsetting each other. We also can tell you that on the accident year in general, we are now seeing a lot of claim activity. From that point of view, we are feeling very good about the static combined, also about the strength of the balance sheet for Euler Hermes. You had a final question regarding the Solvency II and also how we are thinking about what could be the level right now, and also how we are thinking about the Solvency II moving forward. I would say that the level right now, it depends if you take this morning, was definitely more or less in line with the 199% that we have here. As market goes down and up, it can change, as I said a few times also in the past, it can change as we speak. I will say that you know right now it is going to be more or less at the level of the first quarter 2020 or the first quarter at the end of March. Now clearly we see there is volatility, so from that point of view, you know, we need to be prepared that there could be more pressure on the Solvency II moving in the next weeks and months. From the way we think about that, clearly we also think about potentially de-risking. What we have been learning also from past situation volatility is that sometimes when you overreact, you end up paying just a lot of hedging costs without, you know, and then eventually things are reverting. Our philosophy is going to be not so much to react to volatility, it's just really about seeing what kind of structural decision we want to do on the asset allocation, considering that the different rate environments can lead to different decision about the asset allocation. Our reaction now, and we are looking to that, is it will not be driven by how we feel the equity market is going to perform next month, but whether we can think differently about our asset allocation because right now we see that clearly there is more juice in the bonds and this can change our asset allocation to a certain degree, especially for the life business. That's definitely something that we have on the agenda, and we are going to have this conversation indeed in the next weeks. That's great. Very clear indeed. Thank you. Thank you. Welcome. Okay. Thank you, Peter. We will take the next question from Will Hardcastle, UBS. Will, your line should be open now. Thank you, and good afternoon, everyone. The first one is just thinking about retail motor specifically. I guess we've seen a lot of retail motor price declines across much of Europe, at least levels lagging that of inflation, even if they're up perhaps. Can you help us to bridge the gap as to why that shouldn't drive some margin deterioration? I guess, has there been a structural frequency benefit from driver behavior, perhaps? The second one is just thinking about operational inflation. Thinking about, you know, there was a bit of a disappointment around the expense ratio. Can any of that be attributable to inflation in any way or is that more mixed? Perhaps are you still confident of achieving the same trajectory versus prior guidance on expenses? Thanks. Yeah. No, thank you for the question. When I look at motor retail, the only country where we see pressure on the rates, it's in the U.K., which is also because of the dual pricing. Otherwise, when I go through our statistic, I can tell you that I see good rate changes in France. I see also good rate changes in Germany. Australia, also good rate changes. Spain, also good rate changes. And then I would say Italy, where in the past rate changes had a tendency to be negative, at least now they're turning positive. I would say your point is valid for the U.K., but we don't see the same trend in other country. Clearly, you know, if you ask me what we need to watch as we look forward is what kind of inflation we are going to get. For the time being, we are not seeing a significant increase in severity. I'm referring here to motor but also to other lines of business. Clearly we need to pay attention to what the future severity might be. To these points, we have been kind of preparing. I can tell you that, for the time being, the rate increases we are getting in general, there are always exceptions here and there, but the rate increases we are getting are aligned with the amount of severity or frequency that we are seeing. To your question, regarding the expense ratio. First of all, the increase that you see, the slight increase in expense ratio that you see in Q1 is driven by mix, and especially it's driven by Allianz Partners. As you see, Allianz Partners had a significant increase in business compared to last year. That's because of the clear COVID recovery and the expense ratio of Allianz Partners is higher compared to the expense ratio of the rest of the group, and especially the expense ratio in travel for Allianz Partners is higher compared to the expense ratio they have in other line of business. That thing is driven by Partners. If you remove Partners, you should see a slight decrease in the expense ratio compared to last year. To your question, there is no impact in inflation on the expense ratio yet. This is something that might potentially become an issue more as we go into 2023, and it's going to depend a little bit also on the wage inflation that might come through. Wage inflation might be different country by country, might be different also based on the agreement that's in different country you might achieve with the labor union. My take is we are going definitely to see some inflation increase in our expense bases. To this point, clearly part of this expense inflation increase is going to be offset also by rate increases because you need to consider that clearly there will be rate increases. Clearly we are going to still work on our expense management action. There is no change in our guidance with respect to the targets that we have given ourselves for the expense ratio reduction over the next two to three years. That's great. Thank you. Welcome. Thank you, Will. We will take the next question from Will Hawkins, KBW. Will, please go ahead. The line should be open for you now. Hi, Giulio. Can you hear me? Yes. Yes. Very well. Good. I'm gonna disappoint you and not ask about life. Thank you for what you just said about inflation in general. I'm kind of assuming you guys may be underweight social inflation risk in the U.S., but I just wonder if you could talk about how you're thinking about that. And also how topically in your mind the issue of litigation finance is in that equation. You know, as for all insurers, on the one hand you may say you want nothing to do with it because it accelerates inflation, and you want to avoid that. You know, on the other hand, you could argue that it's a useful hedge, and given that you're already investing in inflation-linked bonds, it's kind of complementary to that in some way. How are you thinking about social inflation and litigation finance in that context? Then secondly, please, Oliver said a load of really useful stuff at the beginning of the year about how you think about tail risk and diversification and the rest of it. Could you kind of just give us a bit of an update of where your thinking is with regards to refining the focus of the business in Allianz? You know, you don't really need to worry about diversification 'cause you're spread so far, but that means there are so many moving parts. What's kind of top of your mind at the moment in terms of refining the focus of Allianz? Thank you. Yeah. Maybe on the litigation finance, that's something that we are not really talking about within Allianz. That would be clearly mostly a topic for AGCS. I would say, you know, I take your comment, and we're going to double-check whether this can be used as a hedging. This is not something that is on my radar. I will not be able even to speak in a competent way about that topic, but I'm going to clearly address this issue with the AGCS and see what this can mean for us. In social inflation, that's something clearly that we are considering, right? We need to be ready that the inflation increase that we see and we see also in the United States has to be carefully considered. From that point of view, clearly we keep a cautious stance in reality on liability financial lines in the United States. It's very important that you put you know the right capacity, not getting too much exposure to that and also make sure that the rate increases are going to be there. Otherwise, our experience, as you remember, with financial lines and liability in the United States has not been a great experience, and that's not. It's been also a recent experience. That's definitely an area of focus because we know when inflation is coming, this is going also to push definitely social inflation. For the time being, we don't see now any particular problem when we look at our book. Clearly this is something that we are going to monitor, and our appetites remain cautious. On your question regarding the tail risk, for what we are doing, there, I would say that there are two elements. One element, we are continuously put a lot of effort around what could be accumulation risk also in the P&C side, what could be on the cyber risk. So these are all kind of elements that where we continue to refine our scenario. Part of the conversation about the tail risk, it was really about how we can avoid in the future to have the kind of self-inflicted wound that we had with the Structured Alpha issue. That's part in reality, maybe the most important part of that conversation about tail risk. It's not so much about, honestly speaking, you know, how much some institutional sensitivity we might have, how our CAT program is organized. We think these things we are clearly always refining. It's really about how we can avoid in the future that we might have this kind of black swan event. To this extent, yes, we are having a lot of conversation about, you know, in a company, you always do the top risk assessment, and you go through a lot of thinking about what your top risk might be, what the mitigation are. We are putting a lot of effort in thinking how we make this work that we are already doing, which is of high importance for the group, how we make this process even tighter moving forward. That's the major area of focus also for me personally. Fascinating. Thank you, Giulio. You're welcome. Thanks. Well. All right. We will take our next question from Michael Huttner, Berenberg. Michael, please go ahead. Your line should be open now. Yes. Thank you so much. Thanks, Giulio. Thanks, everyone. Yeah, Structured Alpha, COVID reserve releases, and 199%, is that enough? Those are my three questions. Structured Alpha, if it's final, what are the consequences you spoke about in that [still state] yesterday in the press release, the and, you know, what's, you know, burn a big hole in balance sheet. Maybe you can give a bit more background to what happened and how far and how close we are to finding settlement and what that might be. COVID reserve releases, we've already had, you said, some is coming through in Allianz Trade, and I just wondered when we might see some COVID reserve releases from the other line. If I remember correctly, there must be about EUR 800 million left or something in AGCS. The 199%, is that enough to do buybacks, even share buyback? Of course, sorry, one last topical question, what are the flows today in PIMCO and AGI? Thank you. Yeah. Michael, I understood there was a question about Structured Alpha, then there was a, I guess, a question around COVID releases. Yeah. There was a question. COVID reserve releases. Yeah. Flows. Then, um- Flows for PIMCO and AGI. PIMCO and AGI. Buyback. Is 199% enough? You know, Yes. I'm really disappointed that it's still the same today as Q1. I'm kinda thinking, "Hmm." Anyway, there you go. Yeah. The answer on the very start from the last one, the answer on the buyback, yes, absolutely. With the Solvency ratio 199%, there is no problem to do a buyback. I want to give a perspective. Another buyback of EUR 1 billion, let's say, is a couple of percentage points of Solvency II. 2 percentage points of Solvency II, honestly speaking, is a small movement of the interest rate volatility or the interest rate and so on. We need to put everything under the right perspective. Again, for us, you know, driving also the capital management philosophy and buybacks, which are part clearly what we do, is not just a consequence of things happening to us, it's also a target. From that point of view, if we need to work harder to get to do some buybacks, we are going to do it. It's very important. It's not just that we're sitting here and things happen to us, and then we say, "Oh, we cannot, we can or cannot do a buyback." We are clearly working in order also to make sure that we can deploy capital according to a certain level of expectation. Again, it's 200% solvency ratio. There is no hesitation about doing or not doing buyback. On the flows from PIMCO, I tell you in the month of April, there were about EUR 6 billion negative, so it's still clearly a negative number. In the case of AGI, they were slightly positive. We see a little bit of a continuation in the negative outflows at PIMCO. I have to tell you, I'm totally relaxed about the outflows at PIMCO. Clearly, it's not going to be helpful as we think about the next quarter or maybe as we think about 2022. If you think about the environment, clearly, eventually for PIMCO, it's going to be a very good environment to operate. I really strongly believe that the outflows of today are going to be the inflows of tomorrow because people are going to be on the sidelines now. You might not come, you know, to the idea to invest in a bond fund right now if you have an expectation the rates are going up in the next few weeks. Eventually, when people are going to say there's the new level, then you're going to see a lot of loss. Fundamentally, and we always said that, yes, this can be a little bit painful in the short term, but that's definitely not painful or the opposite as you look a little bit, you know, across the cycle, let's put it this way. From that point of view, we don't see really these flows as being or as a concern. If you ask me, I also really believe they are moderate compared to the kind of outflows you might see in a situation where rates are going up and there is this expectation that rates go up. For AGI, still a positive month. Now it's becoming clearly a sort of track record for AGI to have positive flows. On the COVID situation, I will say there is still room clearly for us to release some reserves. It's going to be also a function clearly of some proceedings, you know, that are happening, different legislation. You know, if you ask me, clearly there is more possibility to see some releases. Also just maybe to say that the increase in the positive run that we saw this quarter in reality is coming from a true-up of our retro on COVID. We are expecting to get some more recoveries from the insurance company compared to the conservative assumption that we had put there during the COVID time. That also explains part of this positive run-off. Then on the Structured Alpha, I fear you need to be patient to have more information about Structured Alpha. I can just tell you that the provision is taking care of the financial exposure related to compensation payment to investors and also any payments under any resolution for governmental proceedings. On the final resolution and the implication for Allianz Global Investors, we need to wait clearly for the final resolution. There is no more that I can tell you at this point in time. The only thing I can add is that we are seeking for a timely resolution of this issue. I believe the way we are confronting the situation starting August 2021 tells you that we are really trying to be as fast as possible to put this behind us. You still need to have some patience before we can put a definite closure to this topic. When you say patient, I'm not patient at all. Are we talking? Can you give a kind of a benchmark? Is it months, years, decades? Benchmark of what? How long is it taking? Okay. I cannot tell you how long. In terms of giving you amounts, years. No, no. I think it's going to be. We are not speaking of months, let's put it this way. We're speaking of, Okay. Less than months, if you ask me. Okay, cool. Thank you so much. Thank you. Good luck. Thank you. All right, Michael, thank you for your questions, and thank you for your patience. We will take the next question from Andrew Ritchie, Autonomous. Andrew, please go ahead. Hi there. A couple of questions. First of all, an easy one. Could you just remind us on the details of your aggregate cat cover, catastrophe cover? I think that's one of the reasons why you're still very comfortable with the full year outlook. Just remind us when that kicks in and what the per event deductible is for that. Second question. I appreciate the solvency is very strong and you know, you could fund another buyback given the solvency. If I just think about cash, though, the sort of remitted cash per annum that you've sort of indicated or how you've been delivering is in the region of EUR 6 billion-EUR 7 billion. If I add up your outflows, you know, the dividend, the buyback you're already doing, the regulatory, the fines, slash slash payments, I mean, I'm getting to EUR 7 billion. Should I care? Does that matter? Or should I not think about even looking, adding up your inflows and outflows? I mean, I'm just trying to understand, do you think about it in terms of short-term liquidity, flexibility to, for example, do another buyback? My only other question was on the asset management business. I appreciate 60% of the cost base is variable, roughly. But on the 40% that isn't variable, there is inflation. I mean, salaries are going up, at least that's what other asset managers have said in their earnings results. Is there more and more of a challenge now on the cost-income and controlling that in the asset management business than, say, you were very relaxed on that at the beginning of the year? Is that slightly less, are you slightly less relaxed on that now? Thanks. No, thank you. I never relax. I might be the impression, but, I'm, you know, the opposite of relaxed. Starting from the first question, net CAT, our aggregate is starting EUR 1.2 billion, and then we have a EUR 500 million capacity. Now, there is a deductible of EUR 30 million for every net CAT. So the first EUR 30 million is on us, and then what is on top of the EUR 30 million goes into the aggregates. At EUR 1.2 billion, we start getting this recovery of EUR 500 million. The way I look at that, broadly, you know, we have a net CAT and weather related budget of about 3.5%. I would say when we get to the 4.5%, broadly, at that point, the aggregate should come into play. I would say there is a 1 percentage point, more or less, of possible negative deviation that we might have compared to plan. Then we have the aggregate that will give a protection for EUR 500 million. That's the way I try to simplify the story. One thing that's to keep in mind is we see high investment income in property casualty compared to our assumptions. We, in the EUR 6 billion of outlook, we had an assumption of EUR 6 billion of operating profit outlook for property casualty. Our assumption was that we are going to add EUR 2.4 billion of investment income. We are going to be most likely at 2.8%, maybe even higher if rates continue to stay at this level. This is going to be definitely an offset that within the Property & Casualty area we are going to see in the case we go all the way up to the 4.5% net CAT and weather-related compared to our budget. There is a little bit of offset there. We need to see what inflation is going to do. You know, when you put together the different pieces, there is also these big offsets that we are going to have coming from the investment income. You had a question about cash. I would say, you know, cash is not a constraint. Just to give you an idea, keep in mind that because of the Lucy transaction, we got already now slightly more than $4 billion in dividend. This is also something you want to consider. In general, we see healthy cash flow generation from our companies. There is always excess capital that we try to tap into. Just consider that the Lucy transaction, the transaction in the United States has generated a significant amount of liquidity for the group. Cash is actually not a constraint. Coming to the topic of inflation. You were referring indeed to inflation as a management. Yes. In PIMCO, for example, we had to run higher salary increases compared to what we had in the past. As you see, when you look at the cost-income ratio, for example, of PIMCO, the cost-income ratio for the quarter has been actually pretty good. Yes, we might have some inflation pressure. As you see, we have also clearly other levers that we can trigger in order to try to keep the cost-income ratio stable. It's more work to do, obviously, you know. When you have some headwinds then you need to work a little bit harder on other levers in order to get to the desired outcome. Okay. Thank you. Welcome. Thanks, Andrew. We will take our next question from Thomas Fossard, HSBC. Thomas, please go ahead. The line should be open now. Yes, good afternoon, everyone. Just one question left on my side, which will be related to your strategy in the U.K. P&C. Giulio, can you dig a bit more on what you're currently doing in the U.K. since actually prices are looking to be relatively flat. You're growing 5%, but I've seen the combined ratio shooting up by 9 points. I'm not sure exactly what was driving this negative evolution on the underwriting profitability and what was potentially your stance regarding the upcoming quarters for the U.K. Thank you. No, thank you. Yeah. The growth that you see is not driving the combined ratio higher. Here there are different elements. The growth is coming actually from commercial lines, and that's a reality coming from rate increases in commercial lines. You're going to tell me, "But Giulio, I see zero change on renewal for Allianz U.K." The reality is you have positive rate increases in commercial lines, and you have negative change on renewal because of dual pricing in retail. In reality, growth is coming from commercial lines, and it's coming from rate increases. Clearly there is some pressure on rates because of the dual pricing. Our strategy. You have the net cat impact, right? You need always to consider the net cat. The net CAT has been more elevated also compare to last year, but also compare to what our expectation will be. What is our strategy? In P&C commercial lines, the strategy, and also in SME, the strategy is clearly to continue to look for rate increases in order to make sure that we get to the profitability level that we like to see. It is not just about rate increases, also we are upgrading our expertise in commercial lines, but that's part of the equation, just get into a different profitability level in commercial lines. It's not about volume, it's about margin profitability. The beauty is in this environment it's possible to get rate increases and have also a good level of retention. On the personal lines side, it's about finding the price points, because clearly when you have this kind of changes in regulation, you know, you need to clearly you are looking for what you think is the right pricing, but then you need to also see what the competition is doing. I think especially in the first quarter, there was definitely some movement up and down in trying to find the right price point in the sense of what you think is the right technical price, but then you need also to look at what the competition is doing and try to position yourself in a way that commercially is still viable. I believe we are going to see clearly more stability as we go into the second and third quarter because the entire market is going to have more experience about what the dual pricing change is doing. One thing to keep in mind, I believe that inflation dynamic is a little bit more pronounced in the United Kingdom, so this might add a little bit to the complexity to find the good price point in retail. That was clear? Perfect. Thank you, Giulio. You're welcome. Thank you, Thomas. We will take the next question from Vinit Malhotra from Mediobanca. Vinit, please go ahead. The line should be open now. Yes. Thank you very much for this question. I have two questions on Life and one on solvency sensitivity. On the Life, we're noticing is the technical result was probably the highest I have seen in, well, many quarters being reported, north of EUR 420-odd million. Is there any element you'd like to flag here, or is it more about, yes, this is what was meant to happen because we sell preferred products and, you know. I'm asking also because in the CMD, one of the sub positive surprises was that Life was being given a more push. Just want to understand the thinking there and also these numbers. Second topic, Life was, you know, we've talked in the prior reporting about convergence in the full year results of convergence of Life asset management. Since then, obviously interest rates have had pretty strong move. How is that thinking there? Is that still an idea to try to do something as a converged, or is it more because, you see those two offsetting each other at higher rates, better for Life and short term, not so good for asset management? Just in the topic and out there. Last bit, and this might sound a bit cheeky, but the interest rate sensitivity. Your objective for a few quarters or maybe a year or two has been to lower the interest rate sensitivity, and congratulations, you're doing that. It's about two points of solvency, I can see. Is it worth reviewing the strategy given what the market is doing and outlook for interest rates? Thank you. Maybe I start from the technical margin. In reality, the increase in technical margin in the quarter is mostly driven by the transaction in the United States because basically there is the amortization of the insurance commission goes through the technical margin. That's where we are putting the amortization of the insurance commission. So that's in reality the major driver. Clearly the improving or increasing loading fees and increasing technical margin is part of our strategy as we move forward. For the quarter, I tell you the big increase is driven by the technical effect of where we are showing the amortization of the insurance commission related to the Lucy transaction. On your question about the convergence between asset management and life, the fact that rates are going up is not changing. That's thinking as a strategy where we really believe that by combining our footprint in the life business and also what we have built on in the asset management, we can tap a lot of the value chain. It's really about this idea of tapping the value chain between what, you know, our manufacturing from the product point of view can do and what then we can do on the asset side. As you might know, we are producing a lot of revenue in our asset management business coming from the fact that we are managing our proprietary assets. We did a calculation that if you add those revenue after cost to the ROE of the Life business, we will get a lift in ROE on the Life business of 1 percentage point. The point is we want clearly to continue to play this kind of strategy and make even stronger because there is definitely some value that we can create by having control of a large piece of the value chain. In a lot of countries, we are also owning the distribution. Basically we are owning the entire value chain from the customer to the asset management. The last question was about the sensitivity. Oh, it's very tempting, you know, to a certain degree to say rates go up, let's start changing our duration gap and maybe open up more of a gap. All these kind of things, but they can be very tricky. From that point of view, I don't think that we are going to yield to the temptation to go into an interest rate bet. We are going to keep our philosophy that we try to be duration match, and we are not going to run a risk that we might be on the wrong side of the equation. That's not something that we do. The thing that we will consider is clearly in a different rate environment. Can we think differently about the strategic asset allocation? We are not going to have a different think about duration positioning. Okay. Thank you, Giulio. Welcome. Okay, thanks Vinit. We will now take the next, and actually the last question from Vikram Gandhi, Société Générale. Vikram, please go ahead. The line should be open now. Oh, hello. Hi, I hope you can hear me all right. Just a quick one. I wonder what's the level of consistency in terms of the inflation impact between what we see under Solvency II and what we see under IFRS numbers. The reason I ask, this is, there's a comment saying that there was negative inflation impact on Solvency II for the quarter. But what I'm trying to get to is that the level of inflation embedded in the results on the IFRS as well, or it's a different math with, some of the related results on the IFRS which are not in Solvency II? Any color there would be helpful. Thank you. No, it's a different math, and basically there is not necessarily an automatic inflation impacts in IFRS. In the case of Solvency II, in some life businesses, you need to adjust automatically the expense assumption based on the inflation, the economic scenario for inflation. This leads basically to a small reduction of their own funds. That's a peculiarity of the Solvency II calculation in for some businesses, you don't have the same treatment under IFRS 4. It's just for solvency purposes. Okay. Thank you. Thanks, Vikram. All right. We do not have any further questions, so this concludes today's call. Thanks to everybody for joining. We say goodbye to everybody and wish you a very pleasant remaining afternoon. Okay. Thank you for your time, and have a good rest of the day. Thank you, guys.