Ladies and gentlemen, welcome to the Allianz Conference Call on the Allianz Group Financial Results for the first quarter of 2024. For your information, this conference call is being streamed live on allianz.com and YouTube. A recording will be made available shortly after the call. At this time, I would like to turn the call over to your host today, Claire-Marie Coste-Lepoutre, Chief Financial Officer of Allianz SE. Please go ahead, Claire-Marie. Thank you very much, Andrew. Good afternoon, everyone. I'm very happy to report our very good results for the first quarter of 2024. If we look at page three and we start with the group overall, we see here good growth this quarter, with our total business volume up 7.5% at EUR 48 billion. Our operating profit is at EUR 4 billion, which is 27% of our midpoint outlook. Our shareholder core net income is up 16% compared to last year, also supported by improvements on the non-operating profit side. All segments are contributing to these results, which is really providing a good balance, and in particular the P&C segment. So let me go in a bit more details into P&C. Here you see as well a good growth level at 7.5% internal growth, with a very good pricing momentum. Our combined ratio is at 91.9%. Here you can see, which is in line with last year, you can see here that we have benefited from a lower level of a NatCat, with less reserve release as an offset. And what is really super important in the combined ratio is that in the underlying, our attritional loss ratio is developing in line with expectations as we earn the price increase. We emerge with an excellent operating profit at $2.1 billion, which is up by more than 10% compared to last year. On the life and health side as well, really good level of growth, growth at an excellent new business margin, which basically means we are emerging at a value of new business of $1.3 billion, which actually is the highest level of value of new business we have registered in a single quarter. When it comes to our CSM release and our operating profit, we are exactly in line with our expectations, and we have $1.3 billion of operating profit for the quarter. On the asset management side as well, really good quarter. You can see very, very high level of third-party net flows of $34 billion for the quarter, with an excellent level of performance fees as well that came into the quarter. Together with an improved cost-income ratio, this is leading to an operating profit at EUR 800 million, which is also nicely up compared to last year. Overall, on this page, we see a very good start into the year, and all key metrics in terms of growth and profitability are better than our full-year assumption, as communicated in the year-end call. Let's move to page 5, and let's have a look at our capital status. When it comes to the Solvency II capitalization, you can see that we are strong at 203%, which is slightly down compared to year-end 2023. If you look on the right-hand side at the key sensitivities, our sensitivities have slightly reduced compared to year-end 2023. As a consequence, we have a stable level of solvency post-stress compared to year-end 2023 at the end of the first quarter. Let's move to page seven, and let's look in more details at the development of the solvency ratio. Basically going down from the 206% to the 203%, you can see the model change effect, which is basically the regulatory update of the ultimate forward rate, which is bringing one percentage point down on the solvency ratio. In terms of operating Solvency II earnings, we are emerging at six percentage points, which is within the range of our expectation, between six and eight. We have a bit lower operating Solvency II earnings this quarter, mainly linked to the fact that we had a higher level of growth in the quarter, and especially coming from the life business. So as such, we have some timing effect at the beginning of the year with a higher level of premium that we anticipate is going to work itself out over the year. On the market impact, we are also slightly down, - 1 percentage point. That's related to positive effects that came from the equity side, with an offset coming from the update of the EIOPA VA, together with a slight widening of the sovereign spread, together with our ongoing mark-to-market adjustment of real estate. On the capital management side, we have - 6 percentage points, out of which we have the expected effects that came from the share buyback of $1 billion that was announced during the year-end call. We have the dividend accrual effect. And then we have a small effect coming from capital redeployment into smaller M&As that took place in the fourth quarter, like the Tua acquisition in Italy, or some renewal of our distribution agreement as well, that also came with an effect into that capital management action. Tax, I don't think I need to comment. So overall, I think if you step back and you look at the development of the solvency ratio compared to a top-down estimate, that will certainly have been to maintain a flat level of solvency ratio at 206. We have the three main drivers I was mentioning for 1 percentage point each. So this higher growth, the EIOPA VA and the mark-to-market effect of real estate, and then the smaller M&As and renewal of distribution agreements that all came for one percentage point. So overall, we have a strong and unchanged capital strength at the end of the first quarter versus year-end. And let's now move to P&C and have a look at page nine. So on page nine, our P&C growth is strong at 7.5%, and this is well shared across the portfolio. This is mainly driven by rate, but with nuances clearly depending on the dynamic of the markets. As an example, here you can see that we have highest rate change in the U.K. and in Australia, I would say as expected, given the inflationary effect that we expect to be the highest in 2024 there. We continue to have a buildup of rate on renewals. As you can see, at the end of the first quarter, we are above both full-year 2023 and the first quarter last year, which was at 5.6% against the 7.4% we see now. And in the underlying, on the Retail side, we have a higher rate change on renewal, which is at 11% in the quarter. For motor, it's even higher. Commercial is still solid at this point in time, with MidCorp, which is up 6%, and LargeCorp, which is at 3.5%, as you can see on this page as well. Let's move to operating profit on page 11. You can see our very good operating profit at $2.1 billion. On the Walk, you can see that we are benefiting here from both the technical side and the investment side into the positive development of the operating profit. In general, we are running ahead of our midpoint guidance for the year. Our combined ratio is at 91.9%, which is better than the 93%-94% range we based our guidance on for the full year. Now, if I go in a bit more details in the combined ratio on the right-hand side, you can see that our expense ratio is steadily improving by 30 bps compared to last year. The runoff level is lower compared to last year. Here we have seen as well some negative developments from some NatCat events from 2023 that contributed to negative runoff into this quarter. That was mainly for the events in Italy and Australia last year. Our NatCat impact is lower. Within the attritional, we are developing ourselves with an attritional, which is better by 0.4 percentage points compared to year-end 2023. That's fully in line with our expectation to achieve a one percentage point improvement by year-end as we are earning the rate momentum into the loss ratio. Then when you look at the resulting combined ratio for both commercial and retail, retail continues its excellent trajectory at 89.9% combined ratio. And retail is fully in line with our expectations at this point in time. Again, I'm re-emphasizing the effect of the attritional that we are indeed tracking on that side in particular. Let's move to page 13. And here you can see the translation of this very good performance across the entire portfolio. I think it's a very nice page across the board, clearly. You can also see that some of our operating entities where we were paying more attention last year, given also the inflationary effects, are developing nicely, like the U.K. or Australia in particular on that page. Let's move to page 15. On the investment side, we are up 19% versus last year as we continue to earn the benefits of the higher rates. Our interest accretion is at -$360 million. It's basically exactly in line with our expectations for the first quarter, given the seasonality effect as well. Our economic reinvestment yield is at 4.3%, which is ahead of last year too, which is good. So overall, we have an excellent start into the year on the P&C side. In retail, we have a double-digit price momentum, which is earning into our combined ratio, while commercial continues to deliver steadily, both in terms of top-line and technical performance. Let me now move to life and health on page 17. Here you see that we have a strong new business momentum in the first quarter with our PVN BP, which is double-digit up. That's particularly supported by Allianz Life, Italy, Asia, and the German Health Business. We also had a one-off effect in this quarter associated with a large structured reinsurance contract. Our new business margin is very good at 5.7%, which is above our target of 5%. And all our entities are delivering here. This is leading to a record level of value of new business, as I was already mentioning, at $1.3 billion. What is as well very nice is that 94% of this value of new business is from our preferred product areas. Let's move to page 19. Here we can have a look at the CSM Walk. This Walk is very simple this quarter. We have negligible economic variances, and we have some non-economic variances which are broadly in line with our expectations. The main effect here is actually the reflection of some of the lapse effect or update of our lapse assumption on the French book. We have a very nice normal CSM growth, which is at 1.7%, which is really good. That's above our yearly expectation, given the higher level of value of new business we have seen in the quarter. Our CSM release is at EUR 1.3 billion, which is exactly in line with our expectations and the yearly guidance we have for that item. On the sensitivity side, they are basically unchanged compared to year-end, and they are, obviously, very stable overall. So this CSM beast is quite a stable animal, I will put it this way. Let's move to operating profit on page 21. And there as well, it's a very simple page from my perspective. The translation from CSM to OP is fully in line with our expectation in the in-between items. So we emerge with an operating profit at EUR 1.3 billion, which is at 26% of our yearly expectations. Let's now move to page 23, where you can see that over our entire portfolio, the good developments I was mentioning are confirmed, basically. And both in terms of CSM and operating profit, we are in line with our expectations when it comes to an entity-by-entity view. So overall, for life and health, we have a very strong quarter. We both see growth. We see our new business value ahead of our expectations. Our CSM release and our operating profit are in line with our full-year assumptions. Let's now move to asset management. I'm going to skip page 25 and go directly to page 27, where you can see that our third-party assets under management are up 4% versus the beginning of the year. We had a strong start with $34 billion of net flows that are stemming both from PIMCO and AGI. And that went mainly towards the fixed income asset categories, but also in alternatives. On average, our net flows and the market movement take the assets under management up 5% versus last year, which I think is a good basis for the rest of the year. Let's move to page 29. Here you can see that our revenues are up 5% due to the higher asset under management and the very high level of performance fees, which are the highest in the first quarter since 2013. This is certainly not or probably not to be extrapolated for the rest of the year, I would think. But this is definitely nicely contributing to the performance of this first quarter. Let's now move to operating profit on page 31, where you can see that our operating profit grew by 7%, reflecting the higher average asset under management and the higher performance fees, while we had a good cost control with an improved cost-income ratio across both PIMCO and AGI. So overall, I think we had a very good performance of the asset management segment in a volatile environment in the first quarter. We now have good prospects for the asset management business this year. Next page on the corporate segment, I'm going to skip because it's better than expected, and there is not much to highlight in the Walk. Let's go to page 35, where we can have a look from the translation from operating profit to net income. You can see that this quarter, the translation is actually quite simple. We have approximately $500 million of non-operating profit, where we had, in particular, lower impairments compared to last year, with a 25% tax rate, which is fully in line with our expectations. Our core earnings per share is at EUR 642, which is up 18% compared to last year, which I think is an excellent level. Let's move to page 37, and let me summarize. We have a very good start into 2024. Our total business volume is at $48 billion. We see growth steaming from all segments, which is very good. Our operating profit is at EUR 4 billion, which is 27% of the yearly midpoint. Our shareholder core net income is up 16% compared to last year. We have a strong balance sheet with a solvency ratio, which is above 200%. That allows me to confirm that we are very well positioned to confirm our outlook at $14.8 billion ± $1 billion, as all our key metrics in the first quarter in each segment are better than our full-year 2024 assumptions. With that, I'm happy to take your questions. Thank you, Claire-Marie. OK, we're now ready to go to questions. Just to remind you how to ask questions, if you're on the web call, you'll see a button called Talk Request in the top right-hand corner. Click that, and you'll appear in my queue. If you've dialed in, press star five. And again, you'll appear in my queue. Just one housekeeping request and maybe a slight change from history. I'd like you to restrict yourself, if possible, please, to two questions. If you have follow-up questions, by all means, rejoin the queue. So with that, I think our first question is from Andrew Sinclair of Bank of America. Go ahead, Andrew. Thanks, Andrew. Two with this. So first, it was just on: can you tell us, Claire-Marie, just a little bit about prudence in booking of your attritional undiscounted loss ratio in Q1? It strikes me that probably with low NatCats and a higher discounting benefits, you'd probably book that fairly prudently. But it's always tough for us to measure that from the outside. Just can you give us some color in terms of the prudence of that attritional undiscounted loss ratio in Q1? That's my first question. And the second one was just looking at the CSM roll forward. The non-economic variances and assumption changes line has been negative pretty much every quarter under IFRS 17. I think you talked about French lapse assumptions in Q1 this year. But it's been a pretty constant negative. I'd probably hope that that number would be a positive over time if you're prudent, just if you can give us some color on what we should expect for that line going forward. Thank you very much. OK, thank you very much. So first question on the a bit giving some color, right, on the attritional in Q1. I think, indeed, so in the attritional, you have multiple dimensions. You have the large loss load, and you have what we call weather, which has a smaller level of NatCat we see, which are not making it to a NatCat, actually, but are still weather-related. So two components in the first quarter were basically in line with our expectations. So there was not particularly any supportive dimension into our attritional loss ratio associated with that effect. Where we are particularly monitoring and where I'm particularly happy is when it comes to the pure attritional development associated to the earning of the rates, so linked to the frequency and severity of the business we are seeing. Here, I think you know this is the first quarter only as well. I was also a reserving actuary in the past. You have some elements that you need to take into careful consideration in the first quarter. So even if you have priced up and you see nice rate increase that you expect to come through fully towards the end of the year, I think a reserving actuary will not reflect that at the beginning of the year because you have a bit to be a bit cautious and really make sure that your assumptions on the pricing side are reflecting themselves into the reserving side. So, I think the level of improvement we see at this point in time is a good level of improvement, given the fact that we have this naturally cautious approach in the first quarter into our attritional loss ratio. So now, on the CSM side, where you were mentioning indeed the development of the non-economic part of the CSM, so I think, from my perspective, the way I look at it, and I'm actually observing it on my own since the third quarter closed, I think we have had a lot of movements that were associated more to us getting to know or adjusting to the IFRS 17 world. And so we had quite some adjustments that were related to this transition and the fact that, as we were going through the books, we realized that we were in the need to adjust some dimensions. So that was one. And remember, we had some gross CSM adjustments that, basically, on a net basis are not relevant because we had some movements between gross and net. So that will be one big bucket, which I think are important into qualifying these components of the CSM development. And then I think, on the non-economic side, at this point in time, given the dynamic of the market, from my perspective, it's quite logical that we see weather-negative adjustments, given the lapse experience we are having in some of our books. Remember, we also sometimes have a positive recycling, if I may put it this way, between these non-economic adjustments because we see lapses. But in the case of EasyLife, as an example, that will recreate because we get more new business that will recreate new CSM at a higher expected level of profit also. I think that's also dynamics we need to have in mind. I think, given where we are in the economic environment for the life business, I'm not so surprised that we see that effect into that component of our CSM work. Super helpful. Thank you very much. Thanks, Andy. The next question is from Peter Eliot of Kepler Cheuvreux. Thank you very much, Andrew. I guess the first one was I was a little positively surprised on the discounting benefit, that it benefited the combined ratio by more points than it did a year ago. I just wonder, could you just sort of help us understand the moving parts there, whether it's just the interest rates that you're exposed to are higher or whether there are some other moving parts that we can't see, like duration or what have you? And I'm just wondering if you can help at all in terms of updating us on your expectations for the full year based on where interest rates are currently. The second theme, also interest rate-related, actually, but just looking at the sharp acceleration you've seen in interest and similar income, I mean, I think I looked at, in Q4, the year-on-year delta was +120. In Q1, it's almost doubled, + 216. And I think the growth in the asset base has helped, which is probably a mixture of volume growth and investment returns. But just wondering if you could help us sort of is there anything to sort of stop us projecting that further? Because if I look at the asset allocation as well, your cash has grown quite a lot, which presumably will be reinvested. So I'm just wondering if the yield of the portfolio is even slightly understated. But just wondering if you can rein in my optimism on that line. Thank you very much. Thanks, Peter. Indeed, on the discounting effect, so certainly, we have a slightly higher than anticipated discounting effect from your perspective that I could understand. First of all, we have a normal pattern in terms of discounting. On a quarterly basis, we get a higher discounting effect in the first quarter. And that's basically going to reduce itself over the quarter. So we can happily also provide to you the discounting patterns the way we see them on a quarterly basis. So you have this seasonality effect that clearly explains part of the positive effect you may have computed in terms of discounting elements. And then the main driver for the higher level of discounting is driven by both a bit of higher volume in some of our operating entities, mainly linked to higher reserves. So that's the case for AGCS, as an example. And we also have certain operating entities with a higher level of inflation that will be Argentina or Turkey, as an example, that are also contributing to this higher level of discounting into the first quarter. So those are the main effects we see. But obviously, overall, the discounting also depends on the yield environment, which is also slightly better compared to what we had anticipated. So if this rate environment will maintain itself during the entire period of the year, that should also help, indeed, to bring our discounting effect a bit to the higher side, which will contribute positively to the outlook, clearly. But I think that's too early to assess that point at this point in time. And then on the interest and yeah, thanks, Peter. Could I very quickly? Yeah, sure. Very quickly, sorry. That's great. I mean, I guess we're probably looking at sort of Q1 this year versus Q1 last year. It sounds like we can assume that the seasonality this year should be similar to the seasonality that we saw last year or that you've guided to when doing our sort of full-year forecast from here. Yeah. Yeah, perfect. Yes, indeed. So that's actually, indeed, the case. You have the similar level of seasonality. I think what we expect in terms of discounting is that you have approximately 35% of your discounting effects that is coming in the first quarter. Great. Thank you. Then I think on the interest and similar income, the way I look at it, Peter, is that, for me, interest and similar income moves in tandem together with the interest accretion. So what you see is that, indeed, we are earning the higher rates into the interest and similar income. But we are paying a higher level of interest accretion. So that's the way to look at it. And indeed, here, in that case, net-net, we have a bit more of a positive effect. But I would not extrapolate too much further out these effects. Yeah. OK, Peter, thanks. The next question is from Will Hardcastle at UBS. Hey, thank you, everyone. First of all, can you help to outline the current opportunity set in German P&C, please? Last year, there was lots of discussions about the likely double-digit price increases in German motor, the opportunity for Allianz to grow volume as you'd push price increases further. There's a comment about the increased volumes 100,000 year-over-year. But can you help us to understand how many of those came in Q1 standalone and perhaps a quarter-on-quarter progression? And what percentage volume uplift 100,000 is? That would be helpful. And second, I'm sorry if this is going over old ground a little bit. But I remember a sustained period just over a year or so ago when there was the consistent inflation load in place. I guess I'm just really wondering what's happened to this IBNR. Is this still assumed as reserve prudence or loading? Or has this been classed as case reserves now? Thank you. Okay, so I think on the inflation loading, so it's broadly unchanged, our inflation loading at the end of the first quarter. The main point is that it has transformed itself, if you want, in terms of nature of a reserve. So it's still a reserve. It's still a dedicated reserve. But when it was first built up, it was built up for the short-tail type of line of business because we were expecting, at this point in time, with the inflationary environment coming through, that we will see an effect into our claims reserves in the subsequent year. And by now, this effect of the inflationary effect into our reserves did come through. So that's why it has already been reflected in our results and in our reserves, in particular, at year-end 2023. So now, what we have done, and we have done a lot of technical, actually analytic, reserve-related type of analysis, we have projected what may be the long-term nature of inflation to come into our long-tail reserves. And as such, we have adjusted our inflationary reserve for that effect. And that will emerge in terms of development, if you want, in terms of true-up over time because those reserves are much longer-tail compared to the other reserves. Yeah. OK, when it comes to German P&C, so I think your question was related to, basically, what was the opportunity associated with the growth on the German side, right? So I think what we have seen is a very strong level of I mean, we see a good level of growth in our P&C business, indeed. And we see that level of growth emerging both on the motor and non-motor side. I don't really want to enter into the granular information here because it's quite confidential information as well. And we usually do not comment granularly on a LOB-by-LOB basis. But basically, if you do, we have approximately 10 million customers in Germany. So 100,000 more customers in Germany is 1 percentage point more clients in Germany. And then you can take the expected profit here. What I think, maybe if we step back a little bit more on the German portfolio, there is definitely a big opportunity associated to growth. And we see we are well positioned, given the dynamic in the German market. And the first quarter is confirming that dynamic, I would say, overall. OK, thank you. Yeah, thank you. Thanks, Will. Next question is from Michael Huttner of Berenberg. Go ahead, Michael. Good afternoon. Thank you. I have two questions. One is on the life, and the other one is on real estate. On the life, you mentioned that part of the reason that the 6% growth in organic capital generation, those are the 6%-8% range. And that was partly because life growth was strong. But I thought, and I may be mistaken, I thought that somewhere it was said that the life growth is now self-funding, but in other words, no strain. So I just wondered if you could give a little bit more color here. I'd be really interested. And also maybe talk about that life reinsurance deal that sounds very attractive. And then on the real estate, so we're seeing more negative coming through. Can you say how much you've now reduced the valuation of your portfolio in the past 18 months, maybe, and how much more there is to come? Thank you. Michael, sorry, your line wasn't great. Just to clarify, I think your question, the first question, just to help us out here, was you want to understand because we've said in the past that the life business is self-funding from a solvency perspective. You want to understand why we're flagging it as a sort of more strain in Q1. Is that broadly the question? Exactly. Exactly Exactly right. Thanks. Yeah. Thanks. Thank you. Sorry about that. Yeah, so with pleasure. So I can explain. Indeed, I think so the life business has been, during 2023, fully self-funding in the sense that we had some of the higher capital consumption associated to our backbooks that basically was free up during the year. And the new business under Solvency II model actually was also self-bringing its own fund to basically 200% of own fund against the capital consumption. And basically, we use the growth on the good growth we have seen on the Allianz Life portfolio, which is not under Solvency II, as you know, but which is under RBC and is treated with an equivalent formula, was benefiting in terms of growth into the solvency ratio from the release from the older books. So what we see now in Q1 is that we have the new Solvency II business that is basically growing with exactly the same logic. We have slightly less runoff, but we're still there from the older book under Solvency II. But we had quite some sharp growth on the Allianz Life book. And as such, we need to finance a little bit this growth. And it also comes with some pattern effect, which we think is going to offset itself during the year. So that's more of a momentary effect. And that's still very much linked to, I mean, but still, I think the overall trajectory, from my perspective, is a very good one. Yeah, so that's on the first point. And then on the real estate book overall, so we had 8% revaluation last year. For the first quarter, we had a bit less of 2% of revaluation in the quarter. I think those are really average numbers. I want to emphasize that thing, that first of all, you know, and I had a deep dive on that one. Our book is super high quality, very diversified across the countries. What we see is that this revaluation is done asset by asset. Some assets were revalued much more, others much less. Also, in some of that revaluation effect, you also have some FX effects that we need to have in mind. As an example, we have a nice real estate book in Switzerland, which is a super book and also appreciating very well. But it's in Swiss francs. You have some FX effect also associated with this one. That's for what we have done until now. For the rest of the year, as you know, we basically go through the portfolio during the year. So what the real estate team told me is that you can expect a similar level of revaluation as we have seen in the first quarter until year-end, with the view that there will be, as well, after that, a plateauing of the valuation because we really went through our book. And we have done a very good job, I think, at diligently reflecting the market developments. So I think that's what you can plan with. Yeah. Excellent. Thank you. Thank you very much. Great. Thanks, Michael. Our next question is from Will Hawkins of KBW. Thanks, Andrew. Hi, Claire-Marie. First question, please. On that slide 9, you're highlighting the acceleration of nominal rate increases. So you went from 5.6% to 7.1% to 7.4%. Could you give us the progression, if you were thinking about real rate increases, please? I'm imagining the absolute numbers are very different. I'm not really sure about the progression, whether we're seeing acceleration or what. And if you can split between retail and commercial in that answer, that would be helpful, please. And then secondly, you've made reference to BaFin discussing changes in transitional measures in Germany. And I'm really sorry if I'm totally behind the curve on this. But I'm not really sure what you're referring to and whether it has any relevance at all to the business that Allianz is conducting or not. I know your solvency ratio excludes transitional. So I'm not worried about that. I'm just not really sure of the context of what's going on. Thank you. Sure. So I think on the real rate increase, the answer is that it varies a lot, I think, from one market, from one line of business to another line of business. And so I think what I could tell you as an example is that the real rate increase in the German motor book, as an example, is above 10%, would be one example. In the U.K., also for our motor book, it's also clearly a very significant rate increase, which are fully in line with what I think you may have read in the press. So I think it's very much nuanced. I don't have an integrated number that I could give you easily for that one. But I'm not so sure it's extremely relevant, ultimately, because what matters is more what we see translating itself into our numbers, as I was highlighting previously. Yeah, but if you have a specific question on a given market, I think we could do a follow-up. Let us know. Yeah, then on these points on the transitional, so indeed, I think you are, first of all, exactly right that for us, it's not relevant because we don't steer our business with the transitional. So we have always carefully managed our business, excluding transitional. But I can explain to you technically what it is. So basically, in 2016, the transitional benefits were identified when you were computing the difference between the Solvency I reserves and the Solvency II reserves. So at that point in time, the Solvency II reserves, when you were to consider the market consistency with the interest rate level that were close to zero, basically emerged higher compared to the Solvency I reserves. As such, the delta between the market-consistent Solvency II reserves and the Solvency I reserves was considered being a transitional amount that was allowed to be amortized to zero over a period of 15 years, so until 2032. Now, basically, BaFin did launch a requirement to recompute what would be that delta today, which is normal. Actually, it's really in the prerogative of the regulator to ask for that. Obviously, if you do that based on that older book of 2016, which has developed, first of all, linked to runoff, also because we have built some additional reserves, and also linked to the fact that the interest rates are now higher compared to 2016, this delta between the recalculated Solvency I reserves and now Solvency II reserves has actually reduced to zero. That's the point. Then possibly, there will be a guidance that because this delta is now at 0, this should no longer be recognized in terms of transitional. That may be enforced during the rest of the year. That's to be seen. There, I cannot really comment because this is a consultation that is ongoing. Vice versa, I think what you need to have in mind is that this computation could be asked in a couple of years from now or in 6 months from now if the interest rate development would be changing. Then the transitional could be reintegrated, if I may put it this way, into the solvency ratio as a transition. That means mathematically, your 20 points of uplift to transitionals will be going down because the main adjustment is to adjust from interest rates where they are today? Yeah, that's a much shorter way to put it together, indeed. No, no, perfect. Thank you. Thank you. Thanks, Will. Our next question is from James Shuck from Citi. Go ahead, James. Yeah, hi, Andrew. Thanks for taking my question, Claire-Marie. So my first question, really, I just wanted to dig into the increase in the SCR for the new business again. I appreciate it's elevated in Q1. You're pointing out it will normalize across the year. It still looks like you're using about 6 points, maybe 7 points of your gross capital generation and reinvesting that into growth. That's a high number relative to peers. And I'm just keen to understand whether you get the same benefit that others do from the release of capital on the backbook, particularly on the life side. When we look at other companies, maybe it's possible to see that there's this release and then that finances the strain on the new business. But you switch your product mix, perhaps, earlier than others. And therefore, maybe you don't get that same benefit. But just keen to understand that level of strain going forward, please. And then my second question, on the undiscounted it's quite a long phrase to say undiscounted attritional loss ratio ex-PYD, which I think was 10 basis points better year-on-year. You make the point it's 40 basis points better versus full year 2023, and that you're kind of on track for the 1-point improvement across the year. Now, obviously, given the starting point in Q1, that implies that as we move through on a quarterly basis through the year, you get the earnthrough of rate. And therefore, the exit rate at the end of the year is actually a much better number. My question is really how to think about any seasonality on that exit rate point because if we look into kind of Q4 to get you to that 1 point, then you're automatically at a much lower base level moving into 2025, perhaps with more rate to earn through as well. Just keen to get some insight into kind of Q4 as we move through into the year and then into next year, please. Thank you very much. Yeah. So I think on this point, on the operating Solvency II earnings and the capital generation, so I think the main point is that on the P&C side, our capital consumption, I think, is unchanged associated to the level of growth we are seeing from a quarter-to-quarter basis. And the main new element is this higher growth from Allianz Life side, which is coming with slightly less of an offset on the historical in-force book. Personally, I mean, my view is that definitely, we are going to generate on, I mean, for the upcoming next quarter, really this 6%-8% operating capital generation, which is a strong capital generation, I would say. So I'm not particularly concerned on that. On that On that effect, this is really these technical elements associated to also the higher level of premium in the first quarter. When you have and that's really going to be earned over the upcoming quarters. So I don't know, Andrew, if you want to add a dimension to that one. I think the only difference, James, if you're comparing us with peers, is probably things like the AZ Life growth there would be quite different from some of the peers and the degree of seasonality. Yeah, OK. Wonderful. Thank you. The Attritional Loss Ratio was your second. Yeah, exactly. Yeah, yeah. So on the attritional loss ratio, so I think for me, what is so I think in the attritional loss ratio, as I was mentioning right before, we have different components, right? So you have components that will always be volatile, as I was mentioning. So the large loss load and the weather load as well within this attritional 71 that was the guidance, you can see volatility as well. So that's why I think this overall guidance around 71 is a good guidance for the entire year. And then you will also see some attritional, some mixed effect into the attritional, I mean, constantly, obviously, because it's not as if we are a monoliner in one single country. So you will have the various weight of the various countries that are going to come through. So for me, it's really the earnings of the rate we expect to see from the book as per plan, if you want. But now, if we see good growth in some of the markets, which is going faster compared to some other books, that may nuance this attritional loss ratio, this pure attritional loss ratio development. So I will not take it as completely static. I will reiterate that this 71 is the right guidance from my perspective for the entire year. And potentially, you will see some slight movements also towards the end of the year. But then again, potentially, we'd be also seeing some further developments from there onwards. So for me, we discussed it last time we met. I think this view that our range of combined ratio between 93% and 94% in the current environment is a good range. I would think we can make progress towards 94% as well in the upcoming years. Then we can create more value, from my perspective, from a strong level of growth, from that level of margin for the future as well. Sorry, James, you were cut off. So I'm afraid if you want to follow up, you might need to get back in the queue. So with that, we can go to the next question, which is from Vinit from Mediobanca. Vinit, would you like to go ahead? OK, thanks, Andrew. So my two questions. First is on the motor market, Claire-Marie. From seeing some of the commentary, it seems like we are seeing a turn here in the retail motor. So you've mentioned Italy in your presentation. But also, we keep talking about U.K. You mentioned something in Australia. I'm not sure there's motor. But just from where you're sitting, what do you think what do you see is how far are we from this turnaround? Has it happened, or is it starting to happen? Can we remain optimistic about the motor market in the various regions you're in? Second thing is just a quick clarification. You mentioned 2% charge on real estate, which is about $25 billion assets, which is about $500 million when you look at just that 2%. Is that sort of the right number? Please, I just missed why are we doing these revaluations? Is it because of office occupancies or something else that you could highlight, and just so that we can understand the risk there more? Thank you. Sorry, the line was not very good. If I am not precisely answering your question, please let me know, right? I think your first question was on the development of the motor market in Italy, right? And sorry, was it Vinit, are you looking for an update on motor across the book, essentially? On retail motor, essentially, through Europe, yes. Retail motor across the book, OK. OK. Yes. Yeah, so basically, across the book, we see good improvements into our motor business. So our motor combined ratio improved by a bit more than 1 percentage point to 94.6% in the quarter. And that's supported, in particular, by better profitability in the U.K., French, and Italian book. And then for real estate, you were asking why we do the mark-to-market revaluation. Actually, those assets are fair value. And so as such, we have, I mean, as part of our fair representation of our assets, we have to perform this mark-to-market valuation of our real estate book. OK, thanks, Emma. Thanks, Vinit. Next question is from Andrew Crean from Autonomous. Go ahead, Andrew. A couple of questions from me. Firstly, we've seen two life back book deals fall away in Europe for other people. Could you just give us a comment on how you see the life back book picture, firstly, in Europe, but also uniquely for you in the U.S., so whether any deals are planned there? And then secondly, I was interested in your commercial versus retail splits and would like to be able to analyze you in the underwriting side along those lines. In order to do that, we'd need to see what the impact of discounting on the two areas was, the PYD and the NatCat impact on each area. Is that something you might consider giving more disclosure on so that we can get in behind it? So a new question on the life back books. So I think, in general, I think for the Allianz Group, we are constantly looking at ways to optimize our capital deployment. So clearly, life back books are part of the considerations. They are part of the toolbox as are other tools. I mean, there are multiple other tools you can use, like reinsurance will also be another one. And indeed, you're right. We did big actions, in particular, on our U.S. Life book with the legacy transaction. But we are constantly, as I mentioned, looking at other ways to further extend along the same logic. And as we speak, we also continue to look at that across our portfolio. When it comes to, I think, life back books operations right now, when you look at what's driving them from an economic perspective, the yield environment currently or the general environment is less favorable to make them fly, I think, in general. So it's a bit less of a positive environment for life back books on one end. And also, I think the higher rate environment is making also life back books, the way we have them today, also much better to operate with as well in terms of risk-return profile, I would say. Yeah. Then on the commercial versus retail, I'm not keen yet to adjust our annual presentation. So we may consider to do more, to provide more color on that going forward. But at this point in time, I don't really want to provide more detail. What I can tell you is that our loss ratio, basically our global loss ratio for commercial in the fourth quarter, was at 67.9%, which is basically also an expense ratio that was better compared to the expense ratio we have on the retail side that basically led to this number. So for me, and also traditionally, so I think what is important is that the current dynamic between commercial and retail is quite different at this point in time. And you can see that also when you look at the underlying developments for AGCS or for retail. Typically, we see that the rate environment has started to soften in some dimension. We are still capable of capturing the volume we want to see in those businesses. But the dynamic has changed a little bit. While on the retail side, rates are the opposite. We were more in a way softer environment. And now, with the rate, we are capable of injecting into the portfolio. The forward-looking dynamic is more positive on that side. Yeah, I think you had the specific questions on the discounting effect as well. What I can tell you directionally is that the discounting effect on the commercial book is also higher compared to the discounting effect on the retail side that's linked to the duration of the book and also the different types of currencies we see there that is also contributing to the higher level of discounting on the commercial side, which is 1 percentage point higher, actually, compared to retail, if you want to do some math. Thank you. Thanks. You're definitely capable of the math, Andrew. You're not getting any more disclosure. Thanks for the question. Thank you. Following my rules, we now move to follow-up questions. So Peter, congratulations. You're the first follow-up question. Peter Eliot from Kepler, go ahead. Thank you very much. Feel very privileged. First one, actually, is a predictable question that hasn't been asked yet. But wondering if you could just give us the latest on PIMCO flows quarter to date. And the second one, you've talked a lot about real estate. And you've also commented on traded equity markets in the presentation and elsewhere. Just wondering if you're able to add any thoughts or insights into the performance of your private debt and private equity. Thank you very much. Yeah, so on the PIMCO flows, so we have seen a continuation of positive developments in the months of April and also as we speak. So for the months of April, we are in the high single-digit number for the net flows on PIMCO side, which I think is really demonstrating that there is space for really good quality active asset management on the fixed income side, also in the overall context of the market. So that's good. And as I mentioned already to you as well, in general, the PIMCO management is quite bullish on the further development and also on the new strategies that they have been injecting. Yeah, when it comes to the private equity book, actually, at this point in time, we are happy with the development of our private equity portfolio, both on the equity side and on the debt side. We have a very high-quality private equity portfolio that is super diversified. You know we have a very long history of doing private equity. We are benefiting from this longstanding experience that basically is dated back from more than 20 years. We have teams that have built really nice portfolios over time with a very high level of diversification. Great. Thanks very much. Thanks, Peter. We answered it. The next question is from Michael Huttner of Berenberg. Thank you. I feel privileged as well. And hang on. It would be better like this. You talked about the earn-through of the retail pricing. I just wondered if you could give a little bit more of your feeling of how this will develop for the year. And then the other question is a really stupid one. I'm really sorry. Could we just not apply $4 billion by $4? I know we've talked a lot about this could be better. This could be worse. But it sounds like you're quite happy with the number overall. And those are my two questions. Sorry, Michael, just to be clear on the final question. Are you talking about the overall OP? Yes, please. The first question was earn-through of retail pricing. You just want a bit more color there. The second question is whether we should multiply the Q1 OP by 4, essentially. Is that right? Yes. Yeah, cool. Thanks. Sorry, your line's not great. Thanks. Sorry. So on the outlook, so I think I mean, you have been doing insurance for a long time, right? I think this is the first quarter. Clearly, as I indicated, I think our key KPIs in terms of growth, in terms of profitability are clearly ahead of our full-year expectations. But that's only the first quarter. So that's why I think it's too early to revisit any outlook at that point in time. We don't know what may happen, also associated to NatCat developments and so on and so forth. So that's definitely too early to say. And you know I think we are doing a really good job at addressing the inflationary trends. But inflation is not gone at all. I mean, that was also in the headlines recently. So we continue to see some inflationary trend. So we have to be very modest as well on our ability to manage the inflationary trend into our portfolio. Again, I think we are really doing a good job. And I see that coming through. But it's too early to say at this point in time, I think. And then on the earnings through of the rates, for me, I mean, what we see and that's fairly technical, right? Because you have to take a really portfolio by portfolio what you expect to come and how this is going to earn. So you really need also to take the earning patterns. So to give more color on that item is a bit difficult. I think this is what we see coming. And also, you may remember that for some of our books, we started to increase the pricing more towards Q2, Q3. So you will also expect that the earnings pattern of those is going to come stronger in the second half of the year. That will be fully in line as well with our price increase trajectory. That's super helpful. Thank you. OK, thanks, Michael. Our last question at the minute is from Iain Pearce of BNP Paribas Exane. Iain, do you want to go ahead? Hi. Thanks for taking my questions. The first one was just on PYD. So it sounds like PYD is a bit lower this quarter due to some prudence, given lower NatCat, higher discounting, and some loss creep on some prior year events. But also, you're sort of flagging higher inflation reserves on long-tail lines, which just leads to the question around the development of the reserves that you're seeing in AGCS. So if you could give us any detail on how progression on the AGCS reserving position is going, that'd be really useful. And then just combining that with what we've seen on new business in AGCS, where you have been shrinking the portfolio, what are you seeing on go-forward claims? How are you seeing pricing in the commercial markets? And where has the exposure reduction come within AGCS? Thank you. Yes. So on maybe AGCS top-line developments, so we have indeed a slightly lower level of internal growth on the AGCS side. And that's linked to the fact that we have not taken up some of the business we thought was not priced accurately where we wanted them to be priced. And that's mainly the financial lines business, in particular in the U.S., but some also business in the U.K. That will also be the case for some of our cyber business and as well for some of the aviation business, which is also not entirely priced where we want it to be. You also have in this internal growth, which is negative, -1.9%, an effect that is associated with some delayed booking in the first quarter that basically we are going to catch up in the second quarter. So that was more technical effects that could not be reflected at that point in time. So that will come as a positive effect into the business. But other than that, I think on the AGCS side and on the commercial side in general, we are developing in line with our expectations. And the commercial dynamic is actually really good also on the MidCorp business associated to the Allianz Commercial Initiative, where we are seeing also good development and good growth momentum on that side as well. On your question on the PYD, also for AGCS, so we are obviously looking at that extremely carefully. We do not see similar. I mean, we have not been in the need to strengthen our portfolio for some of the line of business that were in the press because we have been very diligently looking at the development of our anticipated some of that development into our books. So in general, I'm feeling really happy with the level of reserve strength on the AGCS side. And also, as part of our small M&A operation in the U.S. for AGCS, we have also sold $2 billion reserve that will also move away from the AGCS portfolio. But overall, reserve strength, I feel good about clearly for AGCS and more broadly for the entire balance sheet of the Allianz Group. I think in the first quarter, we have seen less reserve release. But that was simply related to the fact that our numbers were emerging quite nicely. There was no need to push fundamentally. So we did not stretch anything. So that was a very poised and natural runoff that came through in that circumstance. But in the first quarter, where you are again always a bit more conservative for the reason I was mentioning earlier on. That's great. Thank you. Now, we have one question left in the queue. Michael, you're stretching the definition of follow-up. But I'm going to be nice to you. So do you have another follow-up question? It's a really simple, light one. It's Brazil floods. Can you give us a feel for the loss and how you see it? OK, sorry. Again, I think you wanted Brazil floods if we have anything to say. Is that the question? Yes. OK. Yes, please. Yeah. So it's very early for that event. But that will be super well manageable. It will be to the low mid-digit type of event for us likely. Super. Thank you. OK, well, that concludes. I see no other questions in the queue. Thank you very much, everyone, for dialing in. If you do have any follow-ups, myself and my very capable team are here. Please get in touch. We look forward to speaking at the second quarter. Thanks very much. Thank you very much. Bye-bye.