Good afternoon, everybody, and welcome to the Allianz conference call on the financial results of the Q1 2023, which are for the first time based on the new IFRS 9 and 17 accounting standards. You know that already before we start the call, I have to do some housekeeping. 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 to 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 5. All right, that was all from my side for now. With that, I turn the call over to our CFO, Giulio Terzariol. Hey, thank you, Oliver. A good day to everybody. I'm pleased to present the quarterly results of Allianz, which are very, very good. We had a very good start into the year 2023. Before we do that, we are going to spend some time to talk about the results of 2022 just to establish a comparison between the new method and the old method. If we go to page five of the presentation, you can see that under the new method, the operating profit for the year 2022 was EUR 13.8 billion, which is pretty close to the EUR 14.2 billion of the old method. Here we have some offsetting effects. In the case of property casualty, we see there is an improvement of the operating profit compared to the old system. This is primarily coming from the discounting. On the other side, you see a lower operating profit on the life side. This has to do with some technical effects. From that point of view, this is just related to the first time implementation of IFRS 9 and 17. I'm going also to come back on these points later in the presentation. I'd like to draw your attention to the net income and also to the Shareholders' core net income. As you see, the net income is about EUR 300 million lower in the new basis compared to the old basis. That's a reflection of the lower operating profit. Also, as you remember, 2022 was pretty volatile, and the new system tends to be a little bit more volatile compared to the old system when capital markets are moving. That's also the reason why, we discussed that already in the December presentation. We have decided to adjust the net income for volatile items. When we do that, you get to a Core Net Income. That's the way we call this Adjusted Net Income of about EUR 7 billion. Also we adjust for the fair value swings, so for the swings on assets which are marked at fair value, where we don't have an offset coming from the liability side. Also we adjust for the P&C adjustment, which are in any case, in our case, a very small amount. I'd like to draw your attention to the Core Net Income, because that's also the way we are going to monitor our performance. The primary KPIs are going to be clearly operating profit as always, and then we are going to focus on the core net income. All in all, I would say nothing is the major change on the aggregate level. If we go now to page seven, look at the P&C business. Here you see EUR 600 million more of operating profit. Basically, the additional operating profit is coming from the net effect of discounting and unwinding. I know that you know the mechanics by now. Clearly, in the course of 2022, since rates have gone up, we get a higher benefit for discounting compared to the unwinding, which is based on the interest rate level of the preceding years. As you know, the preceding years had a very low interest rates environment. You see this geography also reflected in the insurance service results, which is going up compared to the old system because of the discounting. The operating investment results is going down compared to the old system because of the unwinding effects. The combined ratio is lower under the new methodology. That's because of the discounting impact. Structurally, if you remove the discounting impact from the combined ratio, the combined ratio has a tendency to be higher, and that's because it's based on a gross basis when we look at the denominator, instead of being based on a net basis. That's in short the story on the P&C side. Net impact of discounting is positive in 2022 due to the rate environment. Now we come to page nine on the development on the life business. In this case, you see that the operating profit was substantially lower. We are doing here normalization. We are basically normalizing for the hedge results of Allianz Life. The point here is when Allianz Life is doing the hedges, they are doing the hedges also based on the accounting that is in place. Clearly, the hedges were calibrated last year to the IFRS 4 accounting. The new accounting, clearly, that we need to implement retrospectively has a different sensitivity, and that's the reason why we got an accounting mismatch. If we had had this kind of accounting, the IFRS 17 accounting also last year, our hedging program would have been different. On top of that also we refined the methodology of how we run the IFRS 17 calculation, but we implemented this new methodology only in 2023 and not in 2022. That's also leading to a part of this normalization that we do. All in all, when you normalize the numbers, you get basically to an operating profit, which is broadly in line with the old basis. When you look then at the net income is absolutely in line with the old basis, and that's because we have some geography issue between the operating profit and the below the line item. The bottom line is in the newer presentation reality when you look at the net income, or core net income, but for the life business is more or less the same. You're not going to see a much different number compared to the old system. We come to page 11, and that's about the reconciliation between what we call the comprehensive shareholder capital, which is the sum of the Shareholders' equity in the CSM and the Solvency II own funds. Here we are removing the usual suspects, like the Tier 2 subordinated debt, the foreseeable dividend distribution. We are removing the items which are by definition different methodological approach. What is relevant in reality in these slides is the last item which is other. As you see, there is basically no major difference once we remove all the other items between the comprehensive shareholder capital and its Solvency II own fund. The message in this slide is basically that the two basis of valuation are broadly very consistent from a technical point of view. With that, we come to the IFRS 9 and 17 leverage. This is the way we are looking at leverage, which is basically the comprehensive capital in relation to the amount of debt that we are holding. Based on this new methodology, the leverage ratio is about 24%, which is lower compared to the leverage ratio based on the old system. We don't know yet what rating agencies are going to do, and by the way, rating agencies are going to follow different approaches, but we think that's also a way to look at the leverage ratio. That's also, I believe, a way to look at the leverage ratio, which is going to be pretty standard also in the industry. That was just, you know, a very short update on the numbers for 2022 based on the new system, but I believe the best way to familiarize with the new account is to speak about current numbers. As I said, also in the press call, no matter what kind of accounting we are using, we are going to provide clearly good results. The reason is the underlying performance and the fundamentals of the business are very strong. Any accounting system is going to reflect this strong performance. When we look at the Q1, we had a very good start into 2023. From a revenue point of view, we continue to see strong revenue in property casualty, double-digit growth. In the case of Life Health and Asset Management, revenue are subdued, but that's not clearly a surprise considering that there is still some stability in the market. The operating profit is ahead of last year, but also, more important, is ahead of the outlook. If you take our outlook divided by 4, we are basically 5% ahead compared to that number. This is coming both from property casualty and from the Life Health business. In the case of asset management, we are a little bit behind the outlook divided by four, but that's normal because we are going to get the performance fees at the end of the year. Also in the case of asset management, we are positive that we can achieve our outlook for 2023. The operational KPIs are going in the right direction. Basically if you take out the cost-income ratio for asset management, you're going to see an improvement in the operational KPIs. We saw also positive flows at AGI and PIMCO in Q1. The Core Net Income is at EUR 2.2 billion. Here we have also the impact from the potential disposal of Allianz in Lebanon. If you adjust for this impact, which is an accounting impact, it's not really an economic impact, the Shareholders' core net income will be north of EUR 2.3 billion. If you analyze the number, you get to EUR 9.4 billion of core income for the year, which is also what will be an expectation for this new KPI. All in all, very strong performance on the operational side. Also when you look at the core net income, a solid number, especially once you adjust it for the accounting impact coming from the potential Lebanon transaction. Also, what was positive is the development of the Solvency II ratio at 206%. If you look at the sensitivities are pretty much unchanged compared to the sensitivities that we had at the end of the year. On Wednesday night, we announced the buyback, we continue to deploy capital, which is clearly a sign of the comfort that we have with our capital level and also with our clearly liquidity situation. From that point of view, we continue to create profit, capital, liquidity, and that's also very important. We continue to deploy capital. If you go to page 21 on the evolution of the Solvency II, basically the capital generation is in line with our expectation. The markets have been benign, so we benefited from the market environment a bit. Also what is important under capital management action, you see the deduction for the accrual of the dividends, but also there was about 1 percentage points, a little bit less than that, of impact on the solvency ratio because of an investment that we did in Innovation Group. We continue to invest basically in capabilities that should support our technical excellence on the property casualty side. All in all, to assist solvency ratio, if you adjust for the buyback that we announced on Wednesday, the number is very robust at 2.2. Now we come to the segment view, starting from PSE. Overall you see a very good growth rate of double digit of 11%, and also you can see that overall there is a good growth rate at most entities. Also, what is important, the change on renewal is pretty solid and accelerating compared to the change in renewal that we had also during the course of 2022. You see a constant acceleration over time. From that point of view, what this slide is showing is that we have been reacting strongly to the challenge of inflation, and this also bodes well clearly for the operating performance. When we look at the operating performance from a bottom line point of view, you can see that our operating profit at page 25 has gone up by about EUR 350 million. The improvement in the operating profit is coming from the so-called insurance service result, which is, if you want, something similar to the old underwriting results. This is explained by the improvement of the combined ratio by about 2 percentage points. Clearly, in the quarter, we benefited from a lower amount on net CAT compared to last year. Also you can see that run-off has been very conservative. All in all, we were happy with the performance of our entity, and we didn't really push this number. That's very important. 91.9 is 1 percentage point better compared to the number that we put forward as an outlook for 2023. We are running stronger than that, and we feel very good about the underlying performance behind this number when we think also about the quality clearly of the number, because one thing is the number and the level, one thing is the quality, and the quality is really good. We can see this reflected also on the performance by OE at page 27. You see a lot of good combined ratios, so a lot of our companies are performing at combined ratio, which are under the new method below 90%. I would also like to highlight that in Brazil, Latin America, we are making good progress. In Spain, considering the market environment, we have also solid performance. In the UK, I would say the numbers are good considering the market environment. We benefited from lower net CAT, from that point of view in the U.K., the situation is still a little bit more complicated than in other countries, as you see also from the disclosure of the competitors. Overall, we are taking strong action, and again, when you look at the total portfolio, we have really a very strong performance across a lot of entities. We are also very confident that we are continuing to see strong numbers in the following quarters. Now we come to the investment income, page 29. It might look surprising that the operating investment results goes down. In reality, with the new method, we have a situation where the accretion or the interest rate is going somehow to compensate for the increase in investment income, coming from the clearly the higher interest rate environment. From that point of view, we need to start thinking differently about the evolution of this KPI, which is going to be more flattish year-over-year. In our case then, in this case, we have a drop compared to last year just because last year we had positive FX effects in the evaluation results and others. The main message here, it's kind of a trend that you should expect to stay at that level based on the old system, because I'm sure the question will come, what would have been the number? The number would have been north of EUR 800 million. Again, might look surprising, but in reality it's not surprising at all, and that's very consistent with our plan. All in all, 1.9 almost of operating profit in property casualty. If you remember, our outlook was EUR 7 billion. If you annualize 1.9, you get to something close. If you annualize the number, you get something like EUR 7.5 billion. We are definitely ahead of our outlook for the year. We expect also that we will continue to see this kind of run rates in the following quarters. Now we come to life. On the life business at page 31, when we look at the production, we see there is a drop in production of about 12%. Here, we need to consider that we had the impact of the discounting, which is more a technical impact. If you remove that effect, you get to a growth rate of -6%, which is clearly much better than -12%. It's not surprising that in this situation where there is still some uncertainty, the production of uni linked or of single premium is going to be lower. On the other side, the New Business Margin is going up. We have very strong New Business Margin. This is a pretest number that's important. If you do an after test number, you're going to get closer to the 4% that you were used to see based on the Solvency II approach. What is important, we are seeing an increase in the New Business Margin. When you put together the production evolution, the New Business Margin evolution, you get then to a Value New Business of more than EUR 1 billion, which is relatively stable compared to the prior period, and more importantly, is also a healthy level of new business. At page 33, we are showing now the evolution of the CSM, and we like to focus on the so-called normalized CSM growth, which is the sum of CSM at inception, which is basically the CSM on new business. We have an expectation of a certain growth of the CSM, and then we have the CSM release into the profit. We like to look at the combination of these three figures. In our case, we have a growth rate for the quarter of about 1%. If you analyze that number, you get basically two, an annualized growth of 4%. Why we like to look at this number? Because to a certain degree, there is high correlation between the growth in the CSM and the future growth in the operating profits. Overall, I would say a good growth for the CSM. We see here a comment on the noneconomic variances and assumption change. The EUR 1 billion is a large number. That's all driven by a change in the way we are including Mexico in our CSM. Basically, we are excluding Mexico, the Mexican business from the CSM, because this is not necessarily a business that has to be accounted under IFRS 9 and IFRS 17. If you adjust for that change in approach, the economic variances, the noneconomic variances and assumption changes are a very small number of about EUR 200 million. With that, we can go to the next slide, which is on the operating profits drivers. This is, the operating profit for us is a bit ahead of our expectation, which is a good thing. On the same time, it's very much consistent, I would say, when you look at the single drivers with the expectation that we set when we had the call in December. If you go back and look at the document, you're going to see that the single drivers are within the ranges or the expectation that we gave you. Clearly a number that tends to be more volatile, we said that from the very beginning, is the operating investment results. It was extremely volatile last year because of this accounting mismatch I was referring to due to the first time implementation for Allianz Life. Definitely that number is too low compared to a normal expectation. On the other side, the Q1 2023 new number might be a little bit on the high end of the potential range. As you, as you understand, it's also a new calculation for us. In, in order to be able to establish what is a run rate on, this, dimension, we will need a little bit more experience. The bottom line is, strong performance, from the Life segment. Again, you can see that under the new methodology, we are recording a good profitability, basically the, at the same level you were used to in the older system. There is a KPI that we are not showing anymore, which is the difference between the current yield and the guaranteed evolution. If you remember, the number was, the spread was about 230 basis points. Last year, this number is going up by about 20 basis points as we speak because of the production that we have put in our system and because of the higher rates. From that point of view, there is a nice trend underlying clearly the solidity of our Life business. At page 37, we are showing the numbers for the selected entities. I would say that when you look at the normalized CSM growth, it's pretty consistent across the different entities. When you look at the operating performance, you can see also a good level of operating performance. No major surprises, no surprises compared to what you were used before. On that one, I would also say for the majority of the OEs, you can see there is a tight relationship between the CSM release and the operating profit. There are two exceptions. One is Italy and one is CE, Eastern Europe, Central and Eastern Europe. Here you see that the operating profit is higher compared to the CSM release because some of the business in Italy and CE is not accounting for under IFRS 17. Bottom line, strong results on the Life side with good New Business Margin and also a new operating profit, which is slightly ahead of our expectation. Also from a quality point of view, you can see the consistency between what we told you a few months ago and what is happening right now. We can go into asset management, and I will skip directly to page 41. Here you can see that, the third party assets under management went up by about 2%, and this is driven on the one side, also from the movement of the markets net of the effects. There is also a contribution coming from flows. As we always said, if the situation is stabilizing, we are going to see flows coming back and especially the beginning of the year, the situation was on the capital market was more benign. This explains also the positive flows that we saw at PIMCO. Also from that point of view, there is a reverse of the trend that we saw in the course of 2022. At page 43 on the revenue, it's not surprising the revenue are down. That's a consequence of the development of 2022. What is a positive, you can see that the fee margin is going up. That's the case for PIMCO. In the case of and also for the segment, because PIMCO clearly represent the majority of the segment. In the case of AGI, you see fee margin decreasing. That has to do with the Voya transaction. On the other side, we need also to recognize that the expenses are not there anymore. in reality, from a profitability point of view, the transaction of Voya is more or less of a wash, which is better compared to the initial expectation that we had. Now we come to page 45. On the operating profit evolution. The operating profit is down versus last year, that's in line with our expectation. If you remember for the year 2023, we have an outlook of EUR 3 billion. If you take the quarterly number and you annualize that number, you get to EUR 2.9 billion. If you think that we get the performance fees at the end of the year, it means that we are well on track to achieve that target if markets are stable or not completely erratic by the end of the year. Bottom line, solid results in asset management in line with expectation, and also we saw flows coming back in the Q1 and also year to date. Page 47. On the Corporate Segments, I would say it's in line with expectation, a little bit better compared to last year, and that's because of some more profit coming from our banking operations in Italy. Then at page 49 on the net income, and look at the non-operating items, you see that the realized gains and losses are lower compared to last year. Last year, in the Q1, we had a disposal of a participation, and also we had some realized gains on bonds. On the other side, you see that the restructuring expenses are lower compared to the Q1 last year, where we had also the restructuring coming partially from the Voya transaction, and then from the some restructuring in Germany. What you see here is this volatility coming from the assets measure fair value. This is also the volatility that we remove below the line. It's not one to one. There are some elements that we are not removing from this line item. The majority of these volatility is removed in the definition of core net income. All in all, EUR 2.2 billion core net income. I said before, if you remove Lebanon and you annualize the number, it's a strong core net income of EUR 9.4 billion as a sort of what could be an expectation, a normalized level for the year. Now we come to the last slide. Overall, again, a strong set of results. I would really say excellent start into the year with strong operating performance, I would say across the board. We are 5% ahead of our output divided by four. We also see good momentum, so we believe we are going to carry this good momentum in the Q2 and also in the remainder of the year. Also we announced a buyback just the other day of EUR 1.5 billion. We are also, at the same time, investing in the business, as I was saying before. I would say that we are very pleased with the results, but especially we are pleased with the momentum that we see flowing through our businesses. With that, I would like to open up to your questions. All right. Thanks, Giulio. Thank you for your presentation. We now will be happy to answer your questions. We will take the first question from Andrew Sinclair, Bank of America. Andrew, your line is open. Please go ahead. Thank you, good afternoon, everyone. Three for me, please. Thanks for all the new disclosure as well. Three for me. First is on the P&C business. You talked about the quality of results, and I feel you've kind of been making a similar message for the last few quarters about booking the current year conservatively when you're getting so much investment income et cetera. Without detailed reserve triangles, how can we really see that that prudence is being built? Where can you give us some numbers just to provide some comfort about the extra prudence going into reserves? That's question one. Second question was on capital return. Why was EUR 1.5 billion the right number? Solvency ratio is still over 200% post the buyback. Just thoughts on what could come next. I realize you just announced one, but what are the thoughts on further buybacks versus M&A? Third was just on life. You talked about the hedges in the U.S., that they're going to be adjusted for the new accounting, particularly in the U.S. Just it sounded a little bit strange to me. I mean, I'd have thought hedging would be focused on the economics rather than the accounting. Can you just tell us a little bit more about what hedge changes you've been making there and how we can feel comfortable that those economics are well hedged? Thanks. Thank you for the question. Starting from the first one, which is about the prudency and how you can get comfortable with the prudency. In reality, one way to do is you spend a lot of quality time with the chief actuary. You go through all the numbers, you're going to get the confidence. The other way to do it is just look at our track record. You can also see when net CAT are lower, the runoff is magically lower. When net CAT are higher, you see that there is more runoff coming through. We are managing to an outcome. At the end of the day, you can see that over time we've been extremely consistent. The proof point is just look at the consistency on how we deliver numbers. Just go back, do some analysis. You're going to see lower net CAT. Automatically, you see a little bit more runoff. You see also less runoff. You see also the attritional loss ratio tends to be a little bit higher and vice versa. This is a sign clearly that we have a lot of balance sheet strength. Also that when we are in situation like this, where the net CAT are lower, we are going to use this situation clearly to also to even further strengthen the balance sheet, let's put it this way. We are managing to an outcome. We said that, think about 2023, the combined ratio, we said, 93%. Now we are running 91.9 with a high quality, and we, can assure to you we're not being sweating to achieve this 91.9 combined ratio. Yeah, the other way is you need really to spend a lot of time with our actuaries, but we are not going to give you access to clearly our actuaries. Really, seriously, look at the numbers over time. Put the numbers down in a table, and you are definitely going to see this kind of pattern. Just look at the stated combined ratio. We're speaking of, in general, very strong numbers. Look at the combined ratio across the entities. You also don't see... That's also a sign you don't see a big dispersion of combined ratio, where maybe a couple of entities are posting 80 combined ratio to offset for a lot of businesses performing maybe not so good. In our case, you see rather a lot of companies performing very good, and then maybe you might have a couple of companies having a little bit of a more elevated combined ratio. That's also something I do. I always, you know, when I look at other companies, I always look whether the combined ratio is equally distributed between the entities, or you have somebody carrying more of the weight. I would say in our situation, you can see that there is a lot of quality across the board. That's on the combined ratio. Message, we're feeling very good about the performance in P&C, and again, EUR 1.9 billion of operating profit. Annualized number is EUR 7.5 billion, and again, we will definitely have strong numbers also as we go in Q2, Q3, and Q4. On the buyback question, look, we just did a buyback right now, so I'm not going to speak about when the next buyback is going to be. Clearly, you know our strategy and philosophy is always to combine capital deployment, both in the sense of remittances, but also we like to invest in our future. That's also important. We can do both. We have been proving that over the last years. If you take our buyback budget, you take basically what we have invested in M&A. It's pretty much 50/50 over time. We're going to continue to use this philosophy over time. Clearly I'm not going to make any statement about what could happen in the next three or six or nine months. Fundamentally, what we do is to use both clearly opportunity, buyback and M&A. I believe that's the best strategy in order to ensure a strong performance in the short term but also building up the franchise for the mid and long term. The final question is about the hedging on Allianz Life. You know, that's a classical situation that you have once, when you have an accounting change. Clearly, when you set your hedging program, you're going to look at what the economic of the hedging program are, but you need also to look at what the accounting is. By the way, the economics is also just a model. Sometimes we speak of economics, and we tend to emphasize this economic as being the absolute truth, where in reality, at the end of the day, it's also a model. The point, the philosophy has always been to try to strike the right balance between of the hedges, also considering the accounting situation. Clearly, if you do a change ex post or the account, you're going to get this volatility. There is no issue with the hedging at all. Indeed, this show to you the hedges of Allianz Life, they were doing what they were supposed to do in the old account. Now that we flip to the new account, and you saw the numbers in Q1, they show you also with the aligned hedges that the hedges are responding properly. That's just about the implementation of a retrospective change in accounting. It's more about accounting as opposed to be about the hedges. I hope this helps. Very good. Yeah, appreciate it. Thank you. Welcome. All right, thanks Andrew. We will take our next question from Peter Eliot, Kepler Cheuvreux. Peter, please go ahead. Your line is open. Thank you very much indeed. A couple of follow-ups actually on Andrew's questions, actually, if I may. Firstly on those hedges, I guess another way to ask the question is that, you know, if you had calibrated the hedges to IFRS 17 a year earlier, would we have seen any impact outside of the accounting, so on cash or on anything else? That's the first question. Secondly, on the runoff. The runoff ratio this quarter is three points lower than it was Q1 last year when it was 4% on the old accounting. Can I just do the math and say that on the old accounting, we would have had a 1% runoff this quarter? Is that the wrong way to looking at it? Maybe related to that, I don't know if might give you an opportunity to say, you know, your degree of comfort on the inflation reserves, and how they've developed over the last quarter. Finally, third question. Wondering if you could comment on the persistency you're seeing in life, both ideally by geography and channel. Thank you very much. Yeah. No, thank you for your question. On the hedges, had we hedged differently in last year, the operating profit last year would have been all over the place. Clearly you get anyway different cash flow because the hedges, different hedges going to provide different cash flow. From that point of view, sure, there would have been a difference. You should also look at the things not just last year, you should look over the last 15 years. Had we had IFRS 17 accounting in the last 17 years, we would have had different hedging program all along. you know, that's basically the answer. What we try to do is always to hedge also based on the prevailing accounting. We take into consideration also clearly for the statutory accounting. We try to find the right balance between what we think should be an economic hedge, what should be a statutory hedge, and also what is an IFRS hedge. The things are holding together pretty well. When you have a change in accounting, clearly the system retrospectively can introduce some noise. When you put this noise compared to the size of the company, honestly speaking, it's relatively minor. On the runoff, if I understood your question properly, you're asking what is the difference in runoff between the two periods. This year, this. Including the risk adjustment. Yeah, including the risk adjustment. The risk adjustment is 80 basis points basically in both years. If you exclude the risk adjustment, the runoff would have been 1.2% in Q1, 2023, and 4.2% in Q1, 2022. Take out 80 basis point or risk adjustment. That number, the 80 basis point is supposed to be relatively stable. It might be 90, it might be 70, but it's not going to double. You can assume something or that's magnitude also for the near future. On the inflation reserve, since the last time I talked about inflation reserve, I just got even my grandmother was asking me about inflation reserve. I can just tell you it went up a bit. That was indication of the solidity of the choice that we made in Q1, but I'm not going to speak about the number, but it went up a bit. The final one was about the persistency on the life side. I would say that, in general, we see good persistency. I can speak about the U.S., lapses are very much in line with the expectation. Also in Germany, we don't see a pickup in lapses. Also in general, we don't see a pickup in lapses in Italy and France, with some exceptions. There are some portfolios and distribution channel where you see a little bit of an uptick, but nothing really major. Either there is not much really happening or nothing happening or some situations really just specific to some smaller books or some distribution channels. No concern on persistency or lapses from our side. Great. Thank you very much. Welcome. Thank you, Peter. We will take the next question from Michael Huttner from Berenberg. Michael, please go ahead. Your line should be open now. Thanks, Oliver. Thanks, Giulio. Thanks a lot for the invitation. Sorry, it's a bit noisy on the airport terms. I have 3 questions. One is, you're talking about strong momentum so much. I was wondering if you could give us a little bit more on the topic, you mentioned a few numbers, EUR 9.4 billion for net income and stuff. Maybe you could kind of put more flesh to the bone. I know you've done a lot, but I'm trying to get to hope that the share price will get to EUR 300. On the life cash flow, this is my favorite topic. I'm not sure if it's relevant, obviously you've seen what subsidy we're paying, you would probably thought what they'll pay next year. Can you give us a feel for what's happening, particularly with respect to Allianz Life? My expectation would be that it goes up quite strongly, because, well, the solvency is super strong. It's flat I think, but it should be. There's no cloud on the horizon as far as I can see, and you're saying there are no lapses or anything. The final is on alternative assets. I think I can never remember whether it's me just forgetting or you saying that you're kind of de-emphasizing them. I wonder if you can talk a little bit about this. Certainly, we've seen a lot of investors, and it's the one topic which about Allianz, where they do worry a little bit. In fact, allow me to talk to you. Just purely optional. You asked about life consistency. I jus t wondered about non-life consistency to give a feel for how strong the market is. Thanks. Yeah. You know, it's not always easy to understand you. I try to insight, then you tell me whether I got the question or didn't get the question. The first question, I think it was more general about the momentum and why I'm positive about the momentum. I'm positive about the momentum because of, you know, look at the numbers. We have a double-digit growth in P&C with an acceleration of, on the rate changes. If you think also about the dynamic of the earned premium, clearly, we are getting more and more earned premium, which has been priced for a different level of inflation. Also, inflation reality is now accelerating. We are getting very good numbers already now without making major efforts. That's definitely boding well also for the next quarter. We're already now ahead basically of our outlook for 2023 in P&C. On the life side, you see also consistency in the delivery across the OEs. We also know that higher rates are positive for the life business because we are matched. Let's start from there. From that point of view, you could say, "Who cares if you have higher rates?" We know that anyway, there is always a little bit of leakage in the system, so the fact that rates are higher is also definitely something strong. When you look at the solvency ratio evolution, you see that the capital increase in the solvency ratio is coming from P&C, which is a good thing. In life, we see in reality that the capital intensity, where the business evolution, when you look at the Solvency II, is even positive. There is a release of ACR on the business evolution coming from the Solvency II OEs. In asset management, I would say, you know, last year was very, very tough, but now we see there is assets under management are going up. There are some flows coming. We are basically, right now, if you take the number, you analyze the number, the operating profit, we are basically almost at the outlook level, and we know the performance fees are coming at the end of the year. If the markets are stable, we are definitely going to even see a better number compared to EUR 3 billion. We will see what happens with the capital market. That's the reason, the momentum why I feel good. The other question, it was a little bit more challenging. It was cashflow. I don't know. I think you were referring to cash with Allianz Life, but I'm not sure whether. Yes, please. Yeah. Yes, please. You're referring to cash flow from a point of view of policyholder cash flow, I guess. No, no. Actually, I was hoping that you would say there's a lot of cash coming as a distribution. Distribution. Allianz Life already paid about $200 million dividend Q1. By the way, they pay dividend on a quarterly basis, more or less, semi-annual. We already got $200 million of dividend coming from Allianz Life. By the way, they are growing, which in their case, grow tends to be a little bit of a drag because it's, they are not on Solvency II, from a capital absorption point of view. They have a nice growth rate. They paid already $200 million of dividend. We might see clearly further dividend in the remainder of the, of the year. No, no, a pretty good situation from a cash flow point of view. Not just of Allianz Life, by the way, in general, we are getting good remittances from our companies. The last question was about alternative assets. Look, alternative assets is the following. We are not necessarily divesting now from alternative assets. It's more about the new money that we are getting is mostly invested, not necessarily with the same allocation to alternative assets like in the past. We are still, anyway, clearly having allocation to alternative assets. Right now we see clearly that also more traditional fixed income can be very appealing. Just to give you an idea, because we always speak about cash flow in general, we had about EUR 25 billion of new money investment in Q1. That's more what we are using somehow to slowly recalibrate the portfolio to a less alternative asset allocation. We're not speaking now major changes. Okay. Thank you very much. You're welcome. Thank you, Michael. We will take the next question from Andrew Ritchie from Autonomous. Andrew, please go ahead. Your line should be open now. Hi there. A couple of questions. Giulio, you seem to be giving guidance now on Core Net Income. Can we just be clear what that is or how it's defined? Obviously, this is some self-measure you've come up with. Excludes purchase GAAP accounting impacts, which is clearly new. What investment impact does it exclude? I think it's to do with the thing that it might include things like private equity that marks that might be excluded in that measure. Can you clarify exactly what this new measure of Core Net Income excludes? Second question. The life CSM appears to have gone down quite a bit in 2022, it hasn't done much in Q1. Can you flag some negative variances outside of the Mexico treatment, the new business CSM is more or less equal to that running off. I'm not clear if I think things like life CSM is ever really gonna grow other than the unwind. Can you give me some insight there? The other question related to life. What additional work or analysis have you done on asset stress in Allianz Life, particularly real estate? It has, I think, the single biggest concentration of commercial real estate within the group is in Allianz Life. What additional work have you done on looking at that portfolio and assessing the quality of it? The final question is just a clarification. The risk adjustment impact should be neutral, but if the portfolio is growing, it won't be. Was there a small drag on the combined ratio from risk adjustment, i.e., more risk adjustment going into the new business than what's running off the back book? Thank you for your question. Maybe start from the last one. Yes, in theory. When you have growth, you should see a tiny drag. In our number, I didn't look at a double digit after the comma, so there was 0.8 and 0.8 on both. You are technically right. And because there is always some noise by the way, you're technically right. In reality, the risk margin should be a little bit of a drag, but nothing really material. That's on the risk adjustment. Maybe starting from the first question, which is the Core Net Income. Basically, what we are adjusting beside the GAAP's, which are very tiny in our case. The reason why we are adjusting for the PGAAP is on the one side is a non-cash item. Even more important, we can have a long debate about once you do the purchase price allocation about all this calculation. It's a very interesting dialogue that you can have with a lot of technical people. At the end of the day, it's something really arbitrary. Also I will say the depreciation, these PGAAPs, doesn't follow at all the economic or the deal because it's pro rata, but most of the time, you know, the profit is not necessarily emerging equally, and especially not at the beginning. We decided to remove it. It's really an immaterial anyway amount in our case. The logic is such that it can create some emotion, so we decided to remove it. On the most important part, which is the removal of the fair value swing. These are swings coming basically either from funds. They had to go through the P&L. These funds can be private equity funds, but I tell you, we have a lot also of emerging market funds, bond funds. When you look at the adjustment that we did for 2022, which is north of EUR 500 million, a lot of that adjustment has to do with swings in bond funds, also on bonds which are failing the test, the SPPI test. In reality a lot of the volatility is coming from interest rates. It's not coming from private equity or equity funds. There was also a component coming from equity funds, but last year there was a huge component coming from reality bonds. The point is we don't have a possibility to treat those bonds or funds differently. Then you had a question about the CSM and why the CSM went down last year. That has to do with the increase in interest rates, which has basically led to a lower CSM because at the end of the day, the profit that we do in the case of Allianz Leben tends to be a profit which is pretty safe. When you have an increase in interest rate, you're going to get basically a lower amount of CSM. Also last year anyway, we had equity market going down, so there was definitely a lot of dislocation in the markets. We had also this kind of effect coming from rates going up. We have a final question was on Allianz Life. Yes, we looked at Allianz Life. We looked at Allianz Life, not only from the point of view of the commercial loan portfolio that they have, but also we looked at Allianz Life from a lapse point of view. Again, we are not seeing any lapses, but we did anyway a test. What would happen if we have 2x the lapses that we usually see, and because of the surrender charges that we had, because of the income benefit, the clients would lose. Because of the MVA adjustment, we could sustain an increase in lapses of 2 x without any major impact. We also looked at the commercial loan portfolio. It's about $15 billion. It's a very high quality portfolio. I know everybody likes to say the portfolio is high quality, I can tell you loan-to-value is about 55%. The debt to service ratio is about 2 x. It's also diversified portfolio. We clearly then look at the individual position, there could be a couple of small items that might be in yellow, but otherwise there are no items which are having a color which is not green. I can tell you I was in Allianz Life during the financial crisis of 2008, which was a clearly a big test for a commercial loan portfolio, we didn't see basically any meaningful impact on the commercial loan. Think about high quality, also very well diversified portfolio. We have CMBS, is about $5 billion to 6 billion. High quality, triple A, the majority of it. We are definitely not chasing the high risky part of the commercial loans or CMBS. We are very much focused on the quality, and this is clearly very helpful when there is some tension building up in the market. No concern on that portfolio. Okay. Can I just clarify on the life CSM? Would you expect in the medium term CSM new business to exceed the CSM release? Okay. In the near term, it might be that it's going to be pretty even because right now, as you see, the new business value tends the production tends to be a little bit on the low end. I would definitely expect that once we get back to a more normal level of production, that we will see the CSM at inception being higher than the release. For the time being, you see this number, 1%. This could be what you're going to see ± also in the next quarters. Eventually, I would say we should go back to the level of production that we had, if you want, before the Ukraine war. Considering that we are going to keep a New Business Margin north of 5% annual, the combination should lead to a CSM at inception, which is higher than the CSM release. For 2023, I will be a little bit on the cautious side based on what we are seeing right now. Okay. Thanks very much. Welcome. Thank you, Andrew. We will take our next question from Ashik Musaddi from Morgan Stanley. Ashik, please go ahead. Your line is open. Thanks, Oliver. Hello, Giulio. Just a couple of questions I have. I mean, there is a big benefit coming out of in discounting in this period. Can you just help us understand how to model the discount benefit? Shall we just care about the movement in interest rates in a given quarter while work with the delta, or is there any better scientific way of thinking about how to think about discount benefit quarter after quarter or year after year? That, that would really help. Second thing is the CSM expected growth. I think that's just the unwind of the discount rate. Can you just give us some assumptions behind that? I guess it's too early to ask for this, but I just thought, okay, why not? Any thoughts on what are the assumptions with respect to interest rates, equity market, real estate, et cetera? Any thoughts on that would be helpful to get some sense. Just last question is, clearly, you mentioned to one question that Michael asked about alternative assets that the new money allocation is more heading towards traditional rather than going into alternatives. Why would that be the case? I mean, is it because you think that you have reached more or less a ceiling on alternative assets, or is it just because, okay, the traditional way of assets is giving you enough returns to meet your guarantees and the spread? What's the point? Why bother about going into all of the alternative? That three questions would be very helpful. Thank you. Thank you. Maybe starting from the discount. Yes, there is a technical way, obviously, to describe the discounting. I would say if you look at the annual basis, I would say that you can take a duration of about two, and then you need to apply what the discount rate is. Let's say now for the Allianz Group could be something slightly below 4%. You need basically, you can take our loss ratio, and you take 50% of the loss ratio, and you apply this 50% of the loss ratio to the insurance revenue. If you do that kind of calculation, and maybe Oliver Schmidt tomorrow or Monday can give you the repeat of that, then you get to the number. Think two years duration, about 4% of discount as we speak, and then take 50% of the loss ratio times the Insurance revenue. This should be a good process for the discounting that you see on a yearly basis. When you look at a quarter, there can be a little bit of noise, both on the amount of discounting and also on the amount of interest accretion. I don't think we need to get into these nitty-gritty things because eventually the two effects are more or less offsetting each other. There is definitely a way to learn how to project a discounting. The call might not be the right venue to do that, but absolutely we can help you out with understanding how this line item is going to move. On the CSM and the expected growth, I would say this unwind is supposed to be more or less at this level. It's not going to change significantly because of changes in the economic parameters. Clearly, if the economic parameters are changing, you're going to see a swing in the CSM, but that's reflected in the economic variances. This is not going to be enough to change substantially the expected growth, because expected growth then is always based more on a expectation, you know, for the future, which is not going to be overly sensitive to changes in the projection scenario. The final one on the alternative, I would say the following. Clearly... First of all, maybe also, let me be a little bit more specific. We are kind of emphasizing the alternative, but also is a choice between alternative equity versus alternative fixed income. I would say that for alternative fixed income, there is still a level of appetite that is a little bit higher compared to the level of appetite that we have for alternative equity. The reason for it is just a capital efficiency point of view, because at the end of the day, right now, by investing fixed income or alternative fixed income, you can get really nice yield, and that's enough for us to offer a good value proposition to the customers. These assets are carrying a lower charge compared to clearly alternative equity. That's the reason. We're getting a good yield at a capital efficiency which is superior. Very clear. Thanks a lot for all this, and I'll connect with Oliver later on. Thank you. Welcome. Thank you, Ashik. We will take the next question from Vinit Malhotra from Mediobanca. Vinit, please go ahead. Yes, good afternoon. Thank you, Oliver, and my three questions, one on each segment, please. The first one is just looking at the P&C growth, and its rate dynamics on slide, I think it's slide 12. Hang on, let me just deliver that slide. It's not 12, sorry, it's 23. I beg your pardon. Slide 23. I mean, what it seems to suggest is that, say, France or Spain is 8% of rate, but volume or internal growth is much lower. I'm just curious, you know, are you trying to manage some exposures in these key markets? I mean, there are other examples on the slide. You know, when you just talked about confidence and momentum, and I'm just wondering whether we need to discuss some of these exposure reductions which are implicit. That's the P&C question. On the life side, I would say that the CSM sensitivity, so thank you for providing that, to equities seems to be much higher than to interest rate. Maybe it's an optical presentation, the topic, but is that because of the VA book is at life? I'm surprised that interest rates are not bigger, and this is slide 33. Last topic is a bit more conceptual on PIMCO. You know we've talked about how stabilization or stabilizing rates, interest rates could help. Do you think we are somewhat nearer to that than we were before? I know March must have been terrible, but just curious to hear your thoughts on that topic too. Thank you. Thank you for your question, first of all. Starting from the P&C growth, I think you were focusing on France and Spain. First of all, I have to say, sometimes, you know, the way the base for the calculation of the rate change or renewal is based on some calculation which is not 100% in consistent compared to the internal growth. You need always to take these numbers to a certain degree with some grain of salt. I can tell you in the case of Spain, clearly the main focus has been strong pruning the portfolio. Not pruning because it's not so much about pruning. The situation in Spain, as you can see in the market, the combined ratio going high very strongly, there was a strong reaction from the company. You can also see that our combined ratio in the Q1 tends to be better compared to what you have seen so far. In the case of Spain, there is definitely a lot of push on premium or increases also at the cost of volume, and there was also, anyway, a pruning specific in mid-corp. That's the situation in Spain. In France, I would say there is less of a strong need of action like in the case of Spain. In that case of France, I would say the disconnect that you see between internal growth and the rate change or renewal is more due to, if you want, a methodology that is used for the calculation. That's a little bit more of noise as opposed to be an indication the volume in France is really going significantly down. On the CSM and sensitivity to interest rates, I have to say I'm also a little bit surprised that we don't have a little bit more sensitivity. That's anyway the reality, the numbers that we have right now. We saw more sensitivity in the past. That's again, bear with us. This is a little bit of a new calculation. We're going to see how the CSM sensitivities are going to move over time. You might have also set effect, by the way, by OEs, but I was also kind of pleasantly surprised to see that we had this kind of stability. I had to say something anyway. If you look at the Solvency II ratio, in reality, Solvency II ratio is also very stable when you look at interest rates. Indeed, the volatility that you see on the solvency ratio is mostly coming from the ACR. It's not coming so much from the own funds. From that point of view, in reality, the two calculation are giving a similar message that we don't tend to be very sensitive to interest rate. This side, I would have expected also a little bit more sensitivity to the CSM, but this number are not going to change substantially in the next quarter. The main message is, as of now, we look pretty immunized from rate changes, and you see that both in the CSM calculation, and also you see that in the calculation, the Solvency II. Regarding PIMCO, if I understood your question, it was about. The question was about what kind of momentum we see on PIMCO interest rate trend and so on. I can tell you right away, in the beginning of the year when, if you remember in January, February, there was definitely a positive sentiment. We saw flows coming back pretty strongly. I would say starting March and also April, we saw basically flows being relatively flat. When you look at the flows that we had here today, they are basically coming from the first weeks of 2023. On the other side, also, you didn't see outflows, you know, in the last two months, if you want. It looks like the situation now is more stable compared to what we had last year. I would expect that the trend is going to be, or the possibility to have a positive trend is higher compared to the possibility to have a negative trend. The reason is, once we are going to have all this noise about the debt ceiling behind, once I believe we are going to have a confirmation that inflation in the U.S. is stabilizing, automatically there will be less read across that the rates might go up, and this is going to lead to investors being willing to or being going into fixed income solution. If you ask me, I would even expect that at some point in time, we're going to see very strong flows coming into PIMCO because a lot of investors will look for fixed income solution. At the moment, I would say is still a little bit choppy. Clearly, for the time being, it's difficult to say what direction we're going to have in the next three, four months, but I'm pretty positive that midterm, we're going to see really good numbers coming through. Okay. Thank you, Giulio. Appreciate it. Thanks, Vinit. Our next question will come from Dominic O'Mahony from BNP Paribas Exane. Dominic, please go ahead. Hi, folks. Thanks for taking questions. I've just got a couple of, frankly, quite detailed ones remaining. First is back on the P&C pricing slide. I was just slightly surprised to see the rate change for AGCS at about 2.3%. On the face of it doesn't look like the sort of number that you'd want to see cover inflation and reinsurance costs. I wonder whether there's more context and color on the rate you're achieving there that might explain why your nonetheless very happy growing at +22%. The second question was really a follow-up on the laps surrender persistency topic, and it's a very specific topic. How much exposure do you have in Allianz Leben to annuitization options? Have you seen any sign of your customer base changing the rate at which they exercise those annuitization options? Thank you. Okay. Maybe I start from the second question. I don't know what is the percentage of policy with the annuitization option. I can tell you anyway, we don't see customer changing their behavior. That's, I know for sure that there is no change in behavior, but I couldn't tell you now how much of our business has annuitization option. Now apparently it's about 70 to 80%. I don't think it's anywhere used at that level. One thing is to add the annuitization option, but the utilization, the annuitization option is very low. We don't see any change in this annuitization option. That's on that item. Otherwise, regarding GC&S, I just tell you the 2.3% that you see on the slides. We had the follow-up with the GC&S on the number. We think the right number is more about 4 to 5%, which is basically in line with the inflation that GC&S is seeing. It's always different clearly by line of business. Fundamentally, what GC&S is doing is pushing rate increases, which are in line with the expected inflation, which is also around mid digit across the book. Also the retention ratio to GC&S is pretty healthy, we are above 90%. You can see the combined ratio is very strong, we are thinking that there is the right amount of rate increases coming to match the inflation, also to preserve the profitability of the business. Very good. Thank you. Thank you, Dominic. We will take the next question from Thomas Fossard from HSBC. Thomas, please go ahead. Yes, good afternoon, everyone. Just one quick investment insight on the P&C. Just a clarification on the momentum for the price increase. You're saying 5.6% in Q1. If I'm looking at the previous quarters, it was up 7.5% in Q4 and 6.7% in Q3. The question is, have we now passed the peak of the price momentum? Given the timing of the renewals of your main countries, I mean, should we have now a pretty final picture of what you expect the price increase to be in 2023? Thank you. I would say, first of all, when you look at the numbers, always also make sure that you look at it by OE, because clearly you're going to see different trends when you take trade into the equation or outside the equation. That's also very important. In general, I would say I would expect that we are going to see these kind of rate changes being stable at this point in time. I would not expect that you're going to see an additional acceleration, but they should be stable because these are the rate changes clearly that are needed in order to match the inflation, let's put it this way, that we are seeing right now. I want to be anyway very clear. In reality, you know, we don't see a lot of bodily injury inflation yet. That's something very important. When we think about spare part inflation, that's a little bit of a different game. I already said in the call last time that basically if you increase inflation, spare part inflation by 5 percentage point, that's equivalent to 1% of loss ratio. I'm speaking here motor. Another way to look at that is if you have a increase in spare part inflation of 5%, the inflation that you get in your book is 25% of 5%. It's like 1.25. Think about that. You see 8% of spare part inflation. This means in reality 2% inflation for the book. Against that, we get some nice rate increases. I think what we are getting right now is definitely adequate to match inflation, also to match an expectation that bodily injury inflation might go up. That's exactly what we are doing. We are not just trying to keep the spare part inflation in the price and to put into the price, but also anticipating potential inflation down the road. I would expect that you're going to see these kind of rate changes stay also in the course of in the remainder of the year. Thank you. Thank you, Giulio. Welcome. All right. Thanks, Thomas. Thank you, Giulio. We do not have any further questions for now. Thanks for joining our conference call today. We say goodbye to all of you and wish you a very pleasant remaining afternoon. Yeah, ask a lot of difficult questions to Oliver next week about IFRS 9 and 17. No, thank you, guys. We know it's a lot of change coming. I hope that we could give you a good disclosure. With that, thank you for your time and for your calls, and to the next time. Thank you. Thank you. Bye-bye. Cheers.