Hello, and good morning to the Hannover Re Investors Day. I wish you a very warm welcome on behalf of the entire management team. Again, this is a virtual format because of the pandemic, so we are not broadcasting from Copenhagen as originally planned. We are in Hanover, and I'm happy that so many of you are already participating. This Investors Day is our 24th edition, and therefore a long-standing tradition of Hannover Re. As everybody is talking about its purpose, the purpose of this event is very clear. First of all, we want to provide additional information, we want to demonstrate transparency, and we want to also advance the dialogue with you. We want to increase the understanding of our business, the market development, and also our positioning and our future prospects. As this may take a while, we have schedules for the next four hours. For an event to be viewed as helpful, in particular from your side, it needs a number of ingredients. It's just when I cooked up with my 12-year-old daughter last week to make a pie. You need to have a delicious and appealing recipe, a proper timeframe, and a good allocation of resources. But most important, you need to have the right ingredients. The basics, but also the herbs, the spices, and sugar, of course. I do realize that this analogy has some limitations, because it's a lot easier to make a pie. Nonetheless, I hope we have some delicious thoughts, a delicious food for thought for you. Just a few words on today's agenda. Our CEO, Jean-Jacques Henchoz, will kick things off and bring you up to speed with regards to our strategy and the achievements we have so far reached in order to have a sustainable outperformance. Our CFO will then go over the investment strategy in detail, and he will also give us some thoughts on inflation. As always, we will then invite Sven and Claude to share their thoughts on the non-life and the Life and Health reinsurance business. So we have a rich agenda and a rich variety in our agenda for today. Just a few organizational remarks before we start. Today's event will be recorded, and after each presentations, we have some time for Q&A. We'd like, for all those who'd like to ask questions, they can click on the Zoom link you have received last Friday. This is probably the easiest way to step into this meeting, and you can also turn on your video so everybody can see you when you ask a question. We also provide the option to dial in via phone, but then you have to put in your meeting ID and the meeting code. So it's now my pleasure to hand over to our CEO, Jean-Jacques Henchoz. Jean-Jacques, the floor is yours. Thank you very much. Good morning, everyone, and a warm welcome to our Investors Day. We wanted to have a meeting with physical presence, but given the uncertainties surrounding the restrictions on the COVID pandemic, we decided to play safe and go for a virtual event. I very much hope that next year will be an opportunity to meet in person. This will be certainly behind us and the possibility to meet and exchange also informally during breaks as well will be provided. So I'd like to give a bit of an overview on where we stand as a company, and also highlight the execution of our strategy. You see my title is: Teaming Up to Create Opportunities. This is taken from our purpose statement, very much driven through partnerships with our clients, with our broker partners, but also opportunities because we have a positive outlook, and see future opportunities arising. And that's very much the key message we want to convey, for today. So the agenda are a few comments first on our current position in the reinsurance market. I'll then update you on the strategy cycle, which is a three-year cycle, which started in 2021. And then I'd like to comment also on our ESG strategy, which is progressing very well. And you might have seen the announcement yesterday on our net zero targets. And then a few words on the outlook, before closing and opening up for Q&A. So on our position in the market, I don't want to go back too much into the previous strategy cycle, but one overview on the key metrics showing that in spite of a quite turbulent time with heavy Nat Cat activity in 2018-2019, but of course, some COVID pandemic in 2020. The main metrics are looking good. We delivered on most of them and showed, I would say, resilience in a very, very challenging environment. So looking back, we feel that the main objectives were we've set ourselves from the previous strategy cycle were met, and we're quite happy to see that there has been value creation for our shareholders. It's good, of course, to see the ROE performance in this challenging time, and particularly also the growth trajectory in all our business segments, particularly in P&C in the past two years. So good successful execution of the previous strategy cycle. Looking at the performance in terms of return on equity, of course, always good to have a longer term view. You see, Hannover Re produced above 13% ROE over the past decade. This is, of course, the platform for us to continue the strong trajectory. The ROE performance has been quite above the industry average, 5.6%, in this period. And you see that, we had some different cycles, and across these cycles, we managed to have this outperformance. This is something which is key to the management team. We believe that the ingredients which are helping this outperformance include the underwriting focus, the underwriting DNA of Hannover Re, and the discipline related to it. But also, the combination with the nurturing of partnerships with our clients and brokers. We're trying to be a very consistent player, looking at a long-term partnership and trying to produce win-win opportunities across the different cycles. The capital management side is, of course, also very important, particularly the retrocession program, which is key to our strategy in P&C. This is something we will continue to to build on, and and obviously in the past few years, it has helped the the performance. But we also want, across the cycles, be able to make money for our retrocession partners. This is also about partnerships on this side. And last but not least, the lean operating models has helped producing an extra margin over time and is a a a a key part of of our business model for how we want to operate going forward. So just to look back, and that's that's really our reference point and something we want to to continue to build on going forward. And a few words on on our lean operating model. You see here on the left-hand side of the slide, the development of net earned premiums. They quadrupled over the period since 2000. So quite a growth trajectory. At the same time, looking at our admin expenses, they increased by a factor of 2.8 during the same period. So you're looking at a model which is very cost conscious, and we're trying to build the franchise by making sure that the cost efficiency is continuously looked after. It's evident from the expense ratio, Admin Expense Ratio development. We're on average, looking at the past five years, about 3% above the industry average. So quite a performance. It shows, in my view, the scalability of the business model. It shows also that we continue to focus on operational efficiency, and this is something which is key to the discussions in our executive board. So the Lean Operating Model is difficult to replicate. In my view, this is a key competitive advantage, which is cultural but also organizational. We seek organizational simplicity, and I think it's very difficult to copy such a model, and we will treat it as a key gear ingredient for future performance. So just a look at the COVID situation. You know, most of the numbers, but I just wanted to give an overview on where we stand. In P&C, you remember that as of the end of 2020, we had an overall expected load of EUR 950 million net. This was a situation which kept stable over the past few months, and I can confirm today that we believe this is quite a realistic picture of our expected exposure. Of course, there are still some uncertainties on the potential long tail exposures related to COVID, but at the same time, I think we have some solid provision for it. So in my view, a stable situation, I would not expect movement on the P&C side. Life and Health is, of course, a different story. The excess mortality has been felt in our corporate business from the beginning of the pandemic, and the excess mortality is most pronounced in the United States, and continues to have a burden on our numbers for 2021. There's also some excess mortality unfortunately in South Africa, which is a country which has been very much impacted by COVID, particularly because of the lack of progress in vaccination programs. In Latin America, the same, some Latin American countries were quite impacted. I think with progress made with vaccination levels across the world, we'll see some improvement to the situation in 2022. But it's clear that the COVID pandemic has had a clear impact, not only on 2020, but also on our performance in 2021. What you know also in Life and Health, is that we have a pandemic retrocession program, which which is a parametric cover focusing on the U.S., the U.K., and the Australian market. And this would potentially give us a a protection for further aggravation of the situation, particularly in the United States. This is something which will be felt rather in 2022, if we have some relief from an accounting point of view, you would see that reflected in our numbers for 2022. And to end up on the global picture, I think, as I mentioned earlier, I think we've seen a lot of opportunities in the market. The global reinsurance market has been growing quite steadily, 7.3% in the past 5 years. Hannover Re has been growing faster than that. We've seen some good opportunities. We have been able to expand a lot of client relationships, and we're able to profitably grow during this period. And I believe we're well positioned to continue on this path. There are many clients who want to offer us more space in their insurance program. I think we're also a partner for the broker community and receive a lot of opportunities, traditional business, but also non-traditional business opportunities. So the outlook is in our view, good. And of course, you have a huge protection gap. This is of course, for the industry, a big challenge, seeing that delta between economic losses and effective insured losses remains very high. But we can see this as an opportunity to reduce the protection gap going forward. So we need to make some progress on modeling. We need to look into insurance penetration and increase it, particularly in the emerging markets. But I think beyond the natural growth of the reinsurance markets, there are also opportunities to expand the cake, if I may put it that way, by tapping into the protection gap. Well, I would say the protection gaps plural, because beyond Nat Cat, there are also many opportunities to grow further in reinsurance. And therefore, you know, this confirms our view that a pure play in reinsurance positioning is an appropriate way to tap into these opportunities. So, let me now move to a quick update on our strategy cycle, which we started in 2021. You see here the strategy map of the group. On the left-hand side, the foundations that we put it, first of all, culturally, you know, our purpose statement, our values. We have very strong culture at Hannover Re, which we want to, to nurture, and, a very strong governance framework in place. And this is very much the building block to, to ensure sound growth and, a cohesive strategy and organization, which is a, a high performance organization. We have performance drivers, and, I will comment on them, in, in a minute. These are the drivers for growth, and, we have performance enablers. I spoke about some of them earlier on, and I see them as the, the drivers for, potential outperformance. And that's very much our framework and where we want to operate in the future with the priorities set. A few strategic initiatives, which I want to comment on. But first, around the performance drivers and performance enablers, and then I'll briefly comment on our ESG strategy, which is part of the foundation. So let me start with Asia Pacific. We have set ourselves very ambitious goals in the region. We've been very successful. We've gained market share profitably in the past. But a couple of years ago, there was more to be done, and we identified a number of initiatives which we pursue with allocated resources, and expect to have additional EBIT contributions from these initiatives. So you see the key numbers, the expected numbers with over EUR 500 million of EBIT to be expected within the strategy cycle. We follow, of course, the demographic development. The exposures are gaining important economic development. And clearly, the share of wallet you have, even if you don't grow in terms of%, you see the trajectory of our main clients. They are growing very fast and need our help. We are on track with our financial targets at this stage. So the goal we're setting ourselves for Asia Pacific is, in my view, still a realistic stretch, but realistic target. As you see, we focus on EBIT generation. We don't look at premium. This is not where we're heading. The underwriters in the region know that. This is about bottom line. Meaning, if the cycle is not conducive to further growth in any one year, we accept it and make sure that, you know, our long-term trajectory is front of mind and not situation one year or the other. So we accept that growth cannot be always within expectations if margins are under threat. Which is not the case today. We're growing steadily. We are very successful in the area of Financial Solutions in Life and Health. We see the growing middle class with the emerging needs and the insurance penetration increasing. We see regulatory developments which are triggering interest for non-traditional solutions. The growth outlook is, for us, at this stage, in terms of premium, 7% in Life and Health, and about 11% in P&C. These are numbers built in. I believe that with the strengthening of our regional hubs in the region, and the recruitment phase we're in, we'll have what it takes to be successful and outperform in Asia Pacific. Good path and promising development in the region. We'll see a bit more in the Q&A probably, and when we discuss the business unit strategies later on today. The second initiative, which is important to us and is also a long-term endeavor, is our efforts to leverage innovation and also digital solutions. We have in place a number of accelerators within the business unit, and want to make sure that emerging ideas are consistently leveraged. That we develop new solutions with our partners and with you, whereas this is not from an EBIT production standpoint very prominent today. We are convinced that in a few years, this will be a material part of what we do. Two main themes we want to focus on. First is digital health data. We feel in the health sector, there's a real revolution taking place. And there's a potential for strengthening of partnerships with our clients, looking into health data and making sure that we contribute to an improved connection with our clients, increased profitability, but also positive contribution to healthcare by creating more awareness among policy holders. An example of what we're doing is ViaSense, a collaboration in the area of wearables, which is a very interesting opportunity for us to make steady progress in the digital health space. So more to come, still, in the making, but we're, we're quite confident that this will be an important part of what we do, and data analytics being one of the key skills we need to combine with our underwriting abilities. The second theme is related to direct digital distribution. Of course, many of our traditional clients are looking for an entry into the direct space, digital solutions, products, and new entrants are coming into the insurance space. FinTech companies with original and distinctive strategies. What we're trying to do in that space, again, in a pure play of reinsurance positioning, we want to partner with these different clients and potential clients and provide a new value proposition through the digital channel. We see a lot of promising opportunities. One example mentioned here is parametrics and a cloud insurance scheme which we developed with ELEMENT Insurance in Germany. This is a good example of something which we can develop in partnerships. Providing a lot of knowledge in pricing, structuring, product development and modeling, of course, as a key asset to the contribution to these partnerships. So here is an area which is of long-term strategic importance. It's not going to move the needle in terms of pure asset contribution in the short term, but I think there is a lot of potential opportunities coming up, and scalability is the goal, and I hope in a few years, we'll be able to provide examples with scale, in the sense of, you know, creating new partnerships for innovation. Client excellence is the other initiative we're pursuing. If you look at the feedback from clients, from brokers, you might conclude that we don't need to push too much on this, because we receive extremely positive feedback, because exactly of this partnership approach we're showing. But at the same time, we're growing steadily. Our clients are growing, some of them are consolidating and more demanding, sometimes more complex to handle. We are of the view that we need to prepare for future growth. One aspect is to ensure very strong key account management when it comes to the international clients, the larger clients, and be one voice to our customers, orchestrate the relationships. Another priority is to improve on our customer relationship management. We have a new platform for collaboration across the teams, and we want to enrich the client discussion. So short term, of course, we see a lot of inbuilt growth in the traditional business. It's not a growth challenge, but it's about preparing for future growth. So I think that the strengthening of our client interactions and approach to client relationships will bear some fruit in the midterm, and it's an investment which is necessary to continue growth beyond this strategy cycle. As an example, and I won't comment in depth on this, you see the latest feedback. We gathered the NMG global study, a survey which is done worldwide in Life and Health and in P&C, and of course, we look into the feedback in detail. You see the brand associations like partnerships, innovation, flexibility, supportive, the consistency, the reliability, which are attributes we like to hear. This is what we hear from our clients, that we are very much number one in a number of indicators in the capability index. These are, to a great extent, the attributes we want to see to picture further growth. And the broker community puts us in a number one position in P&C. So this is very good to see. A strong platform for customer loyalty and something we want to continue to nurture going forward. So client centricity is excellence as a long-term endeavor, building on what is essentially a strength of the Hannover Re model. Last but not least, talent management. I commented already last year on it. The number of activities are not totally surprising, but it is important in the context of our growth story. We've been growing steadily. We need to hire new people. The APAC initiative in particular shows the need to grow regionally. And it's important that we foster a strong culture as we grow, that we integrate our new hires, make sure that our culture is alive, and that our new talents create added value, but also Longevity in the company. You know that a number of our underwriters are very experienced, have a long tenure, a lot of loyalty with the company. And, succession planning is certainly one of the topics we want to strengthen over time. There will be a number of key roles to replace in the next few years. So we're putting a lot of emphasis on personal development, on leadership development, creating opportunities to be a bit more mobile and allowing also our younger talents to broaden their profile. So a lot of activities around talent management, talent development in a growing organization, and certainly the goal to continue to foster a very strong culture and make sure the Hannover Re way continues to be alive. So let me end up with the last topic on our strategy map, which is ESG. We are of the view that there is a lot on our plate, but we also did a lot in the past few years, and I want to comment on this. Of course, it has gained unprecedented global awareness in the last few years. I think the COVID pandemic, to some extent, has indirectly highlighted the need to do more with respect to the climate change in particular. And there are a lot of initiatives. There's a lot of activity going on, COP26. Conference is going to take place in Glasgow, and we decided to really make an effort to not only continue on our path and be diligent in that space, but also a little bit more vocal and say more about, you know, our priorities. We want to increase the dialogue, we want to increase transparency, and we want ESG to be well anchored into our corporate strategy. So, climate change is a key topic. But first, of course, in a contribution to mitigation strategies, but also in the area of climate change adaptation. I think there is a lot of things we need to do to adapt to climate change, to prevent natural disasters to be too destructive, and so on and so forth. So a priority for us, and you might have seen our our sustainability report giving you an overview on on where we stand with ESG. What we've done in the past 18 months is first of all join a few initiatives. We joined the U.S.-sponsored PSI, the Principles for Sustainable Insurance, and the PRI, the Principles for Responsible Investments. We strengthened, as I said, our ESG governance. We hired a number of people and have a team and a network advancing ESG generally, and we're pursuing ambitious goals in asset management. You'll hear a little bit more later on from finance in our underwriting activities with a key focus in the past few years on facultative. And, of course, our own in our own operations, our own footprint, and how to be a better corporate citizen generally when it comes to our activities. And yesterday, we announced these net zero targets for 2050, when it comes to the underwriting and asset management activities in 2030 for our own footprint. We're making a pledge to make fast progress and move towards a more sustainable future economic model. The Net- Zero Insurance Alliance was for us a very important gathering of peers and clients, and we felt it would be beneficial for us to join this specific alliance because it allows us to advance the methodologies on how to account for the CO2 footprint of insurance and reinsurance activities. So we decided to join this alliance, which is very beneficial to our strategy as well. Hopefully we'll set some standards for the industry going forward. So these are our commitments. I won't go into all the details, but I think this is for your background, and our sustainability report is also giving you a lot of information on our targets, on the priorities. I think in asset management, we have an opportunity to improve quite steadily in the next few years. This is about asset selection, but we also feel we can do more in new technologies, in renewable energy, in infrastructure. In underwriting, a lot of progress made in our facultative operation, as I mentioned. We decided to progressively exit the thermal coal segment. In facultative, we're also shying away from the most extractive projects, particularly oil sands, and are very diligent in improving our track record in underwriting. The next phase will be treaty. It is, of course, a bit more of a challenge for us because the level of granularity of data is not as significant. And this is why we want to work with our peers in order to make progress there. In our own business operations, we're carbon neutral in Hanover. It has been the case for a number of years. This is, of course, a combination of carbon offsets, but we also hope to focus on being more efficient, travel whenever we can use options which are more sustainable. We want to globalize this in the next few years, and by 2030, we want to be a net zero organization across the globe. So a lot to do there, but I think worthwhile targets to set ourselves and clearly, with climate change, the topic of our generation. You see that we have strengthened our approach and visibility, and this is reflected in some of the specialized ratings. We've been progressing very steadily with ESG ratings. You see a few mentioned here, and want to continue to progress. We're also very pleased to see that our company is listed in some of the specialized ESG listings. The DAX 50 ESG index in particular is an important one, so we want to continue on path, and I hope in the coming years that we'll have more examples of such specialized listings or ratings... improvement on ESG. So that's a good indicator which reflects the progress made by our company. So I conclude on ESG, I want to look into the outlook for 2022. The target matrix which you see here is unchanged. We feel that in spite of the continuing challenges, COVID, of course, continuing to be a highly relevant point for 2021, NAT activities, we feel that our three-year target matrix is robust and feel there's no need to revise it. So this is our form, our indicator for future success, and we'll be guided by these metrics going forward. That's the strategy cycle 2021-2023. Apart from that, what we want to do is continue to emphasize the importance of our dividend story. And we changed the emphasis. We want to discontinue the payout ratio which we've used in the past, and move to a new definition of our target for the ordinary dividend. And from now on, our goal is to at least secure the same level of ordinary dividend as compared to the previous year. You know that our last dividend has been EUR 4.50, and this is our base for future payment. Special dividend, however, stays as an option which is related to our performance in the year, our capital requirements, and our capital need for further growth. So we didn't change the messaging here, but of course, and as soon as we can, we -- depending on the performance, we are of the view that we should offer a special dividend. The emphasis, the message is on dividend continuity and a strong signal that we want to at least match the ordinary dividend performance we've shown in the previous year, going forward. So key takeaways for this initial part. I think first of all, you know, we have a very good growth outlook. We see many opportunities, so we want to support this growth through initiatives which give us some structure and Longevity around growth by Asia Pacific innovation, client excellence, talent management, really building on our success story, but also giving us the toolkit, the structure, the basis for sustainable growth. We're well on track in this initial year. This is good news. ESG is an area where we're working very hard. We're making progress across our operations, and see the steady improvement in our ratings as an indicator of success. We'll continue to work on this based on our guidance for net zero, our targets for net zero going forward. Then lastly, the capital management side remains key to success, and we want to convey the message of dividend continuity, and therefore emphasize the stability and improvement of our ordinary dividend going forward. I close with these key takeaways, and we have maybe five minutes approximately for a Q&A. My colleagues will join me now, Clemens, Sven, and Claude, for any questions you might have on this first section. Thank you very much. Well, thank you, Henchoz, for your lively presentation. I'm sure that has already stimulated a lot of interest, and therefore we are going straight into the Q&A session. So if you have a question, please raise your virtual hand in the Zoom room. For the Q&A session, I'd like to invite all the board members giving presentations today to take the stage. First, I'm pleased to welcome Sven Althoff, our coordinator for the P&C business, and with responsibility for the U.S., U.K., Ireland, London market, and some specialty markets like Marine, Aviation, Credit, Surety, and of course, Entertainment business. I'm also happy to welcome Claude Chèvre. Claude's responsibility on the Life and Health side covers Longevity business and most regional markets, except for the Anglo-Saxon markets. And I'm also pleased to welcome Clemens Jungsthöfel, our CFO, whose scope of responsibility includes, among other things, IT, investments, and finance and accounting. So I think we are set to take your questions, and, I've - I already see a number of, raised hands, and we start with Andrew Ritchie from... So Andrew, can you hear us? We cannot hear your question. Ah, now. Hi. Sorry, I think your operator is being quite unhelpful. Just in terms of interfering with muting and unmuting. A couple of questions. ... I'm not sure when I add together the various initiatives that have been outlined, I'm not quite-- you talked about incremental EBIT adding up to about EUR 300 million by 2023. I'm not sure how I view it as incremental. Because it... Or to what degree it's business as usual, and you're just unpacking what would otherwise be business as usual. I mean, if I add it together, it implies about a 6% growth in EBIT from those initiatives, on average, over three years. Is that on top of normal organic growth? Or just help us understand what's really truly incremental, I guess, is the question. On the capital management, I'm still a bit confused why change the messaging now? Or are you, are you not really changing the messaging, this is simply a formality of what we've always seen, which is a fair degree of continuity in the ordinary dividend and specials from time to time? I, I can't judge to what degree it's really a changed message or not. Thank you, Andrew. On your first question, I think, you know, we when we discussed the different areas of focus for the next few years, we felt they would need to be associated with additional resources. And we wanted to have a clear price tag on these resources, and the return expectations. Some of it, and it will be very difficult to really measure, in practice, what comes out of, you know, our core business, what is the result of initiatives. But based on the initial planning we had at the time, we felt, you know, we should put an additional edge contribution. Some of it will translate into incremental growth. Some of it will be an expansion of our business with clients. Some of it will be non-traditional business, but it's not on top of what we presented today. It will be a bit of a blend going forward. This was more of a, you know, an ambition we wanted to set to the teams, and it's added to our planning for the next three years. So it's not on top of what you've seen so far. On the capital message, a colleague might complement. We wanted, indeed, as you said, to make more explicit what has been implicit in the past few years. That message is not a change of direction. This is more of an explicit emphasis, which we want to convey to the market. So no, no big revolution, I'm aware, but I think making sure that the emphasis is explicitly communicated to the market. I think, or I hope, Andrew, that answers your question. We continue with Will Hardcastle with the next question. Hi, Will. Hey. It's a quick one on retro, really. I think it's also in here, this thing about the capital management structure. It's been a key differential vs peers, in respect to volatility. It's clearer in P&C, and it could be becoming apparent in Life and Health as well, by the sound of things. So it begs the question as to what prevents peers from replicating this approach? Do you think it's cultural or is it structural decision? Given you've drawn down a bit on retro in recent years, does it feel possible, do you think, to expect the price change of upcoming renewals on your retro to be better than the market price change, like it's been recently, given your long-standing relationships? Thank you, Will. I'll ask a question to Sven, who's very much into our retro approach. Good morning, Will. Thanks for the question. As you know, we have a long-term approach to buying retro, and true to your question, why is it not easily replicated? I think it can be replicated, but it's a question of how much appetite for volatility do you have for particularly your net cat writings. Here, our appetite seems to be lower compared to the average peer. Hence, we have continued building on the capacity we are buying on the retrocessional side. We know that we are very diversified by having various instruments of retro. So, we are therefore also flexible to structure our protection according to our needs for future years. Whether we have to expect price increases at the renewal over and above what we can achieve in the reinsurance market ourselves, is a little too early to say. I mean, you will not be surprised that on at least some of the losses, our retro program is working again this year. So we certainly have to expect increases in prices and/or adjustments in structure. But whether this will be over and above, or in line, or below what we can achieve in the market ourselves, is too early to tell. I would expect it to be in line again. Thank you. Thank you, Will, for your question. The next question is from Vinit Malhotra from Mediobanca. Vinit, go ahead, please. ... Hello, can you hear me? Yes, we can hear you. Thank you very much. Sir, yeah, so my question leads more to, I mean, yesterday there was this, or a few days ago, there was this ESG press release where, you know, you commented that from the investment management side, there'll be a 30% reduction in carbon exposure by 2025. Now, usually the ESG targets tend to be profile further out, but you don't normally, you know, have to share right away. But this one could be something that brings more action from your side. So I'm just wondering whether there is, whether there is some kind of market, which you're planning, because you'll be selling a lot or how do you think the actual practical, application of this, this could mean? Then I have one question from this ESG side, which presumably there'll be Q&A session afterwards, so I'll keep them there. Thank you, Vinit. I give the floor to Clemens on investment management. Yes, thank you for the question, Vinit. I will be covering some of that during my session as well. But just briefly on ESG and investment management, as you mentioned, we sort of raised the bar, on the one hand to, you know, formulating a target for reduction of, of carbon-intensive investment. We've raised the bar to 20% by 2025. So we increased our ambition early in the year there. That was part of our sustainability strategy. That will cover roughly 59% of our portfolio. It's mainly addressed to corporate bonds, covered bonds, and equity positions. So we will be actively screening those and will be reallocating some parts of it. On top of that, that was what we communicated yesterday, we have set a Net Zero target by 2050 in that area. Right. Thanks, Clemens. Well, thank you, Vinit. And, and of course you can address further question in later sessions as well. The next question is from Iain Pearce. So Ian, please go ahead. Hi, morning, everyone. I have three questions, if that's okay. The first one was just on COVID-related losses. You mentioned that you have a decent portion of losses related to sort of liability claims, longer term claims. Have you seen anything there just yet? Is there anything worth flagging? And also, with the high level of IBNR you still have on the business interruption claims, as these get notified, and you start claiming against the retro, is there a chance we actually see COVID losses going down going forward, and reserve releases in relation to those? My second question is on ESG. We've had some peers talking about growth opportunities related to ESG, particularly on the underwriting side. I think, you know, if you could provide some, some thoughts there, sort of where you might see growth opportunities related to ESG, that'd be quite interesting. Then on the dividends, just thinking related to this change in dividend policy, obviously you had quite a big jump in the ordinary last year. How we should think about the ordinary dividend structure going forward and what that should be linked to in terms of growth of the ordinary? Thank you. So Sven, maybe I'll invite you to comment on the first two questions and comment on the dividend. Yeah, very happy to do so. So on the COVID side, you're right that a fair number of our IBNRs are on liabilities and other long tail exposures like Credit and Surety. We are comfortable with our reserve position right now. We have not seen a lot of movement in Q2, nor will we see a lot of movement in Q3. So, we start in certain parts of the reserve, start recognizing some sort of prudence in our numbers. But it's still very early days when it comes to exposure for credit and surety. We know that we have more than EUR 200 million of our reserve coming from those lines of business. And yes, we have not seen the level of insolvencies rising in the last 18 months, but that, of course, is heavily supported by government support for either the economy or for the credit insurance industry. As those are phasing out, we have to expect insolvency levels getting back to normal or above normal. So, but we are comfortable with the reserve position. We would feel it's too early to start releasing some of that. So from that point of view, we can expect that that number should stay stable throughout 2021. Your second question was on growth opportunities on the ESG side. And there are plenty, but maybe I give you two examples of where we see growth opportunities. First, is in the sector of renewable energy, so wind, solar, and other means of alternative energy generation, where of course, you need insurance for operating those wind farms or solar parks. So that's an area of new business opportunities. And, the second example I can give, is the phenomenal amount of investment that is necessary to get in line with the goals of the Paris Agreement or the EU Green Deal. We're talking very, very large numbers of investments are required in order to transform the entire industry to be carbon neutral.... All of this activity, of course, needs insurance during the construction phase and then in the operating phase. So this should definitely be a significant source of government and commercial investment, and insurance opportunities. Thank you. Sven? On the dividend, I think it's been said earlier, I think, when you look at how dividend policy was sort of phrased was very much linked to a payout ratio when we look at the ordinary, and then we of course had the special dividends as an option from perspective management. The reason why we really wanted to strengthen the message here is that when you look into the past, how we think about dividend was rather that commitment to steady and growing dividends. And this is what we really wanted to reassure the market. We have raised the bar this year for the EUR 5.50, as Jacques mentioned earlier, is sort of the starting point for us. And of course, we are committed and wanted to keep that, and of course, grow that pace with our, with our dividends. Okay. Thank you very much, Ian, for your questions. The next one is coming from, Thomas Fossard from HSBC. Good morning, everyone. Hope you can hear me well. I had a question related to your Nat Cat writing. Can you remind us what's your appetite? How much allocated capital is currently to write Nat Cats? How you intend to grow this into 2022, and maybe be a bit more specific by regions. I think that in the past, you said that actually for U.S. Nat Cat probably wind, you were already maxed out. But just wanted to understand if potential price increases, with potential price increase on the horizon, it may change your risk appetite and how you really allocate potentially more capital to this line of business. And maybe, if you understand that you're presenting and leaving unchanged your 2021, 2023 target in terms of gross insurance plus 5%. But it seems to be that the sector is entering into a kind of non-cyclical upturn. So wanted to better understand how you wanted to take benefit of this cyclical upturn, and potentially if you could be specific and precise on what you are expecting in terms of growth rate on the P&C market for next year. Thank you. Thank you, Thomas. Sven, I will invite you next. Thank you, Thomas. On your latter question, I would ask for your patience. I will cover our midterm outlook on the P&C side when it comes to premium growth in my presentation. So hopefully that will give you a good idea of where we are. But of course, also happy to take further Q&A after my presentation, if you still have any questions. And as it comes to the Nat Cat risk appetite, our risk appetite has been very stable the last five years, I would say. We have grown our net cat writings proportionate to the growth of our economic capital. But the% of economic capital we are using for Nat Cat writing itself has been stable. You are right to test certain areas, and particularly US wind exposed business, where we have de-emphasized our growth. So 2021 is the third year in a row where we are growing our US wind aggregates much less than proportionate to the overall growth of our net cat risk appetite. The reason is diversification. US wind for us and for the entire industry, of course, is the peak peril. And that pattern is also showing through in our portfolio, that we decided three years ago that we want to close the gap between US wind and the other peak perils we are looking at. And in order to do so, come to that result, we decided to less than proportionately grow in US wind. That will remain unchanged going into next year. Yes, you're right. We, we feel that we are in a good pricing environment, and that good pricing environment should continue into 2022. But, we are not expecting a pricing environment that would make us fundamentally change our risk appetite on the net cat side. Thank you, Sven. Clemens, we invite you to briefly comment on the target matrix. Yes, on the growth, Thomas, I think it's you have to read it as an ambition over the cycle. That's how we look at the target matrix in terms of P&C growth. I think overall growth, 5% is probably a bit more allocation to P&C. We have a balanced message there. The first one being, we do see opportunities in the market over the cycle. And we want to take advantage of those. But at the same time, we wanted to convey the message that we are not really chasing top line. So we are--we don't want to sacrifice bottom line, and so really chasing top line in the upcoming renewals. However, you've seen that our growth has been in excess of what we see in the target matrix. So we will revisit that number for 2022, of course, again, and we'll include that in our guidance for 2022 as well. Thank you. Well, thank you, Thomas, for your question. It looks like we have no further requests for questions, therefore, we move on with our agenda. So thank you for your excellent questions, and thank you for taking the stage for answering the questions. We are not at the next coffee break, but I'm sure you're desperate for a coffee break. But some of you have doubtlessly learned in economics, foregoing consumption, as long as you have savings in place, or should I say, used to be rewarded with interest. And this brings us straight to the next topic. Our CFO, Clemens Jungsthöfel, will give an update on the investment portfolio, and the future income it can be expected to generate. He will also talk about inflation, and in particular, how we protect ourselves in multiple ways, and not only on the investment side. And I'm sure you will find this thrillingly interesting. But just as a housekeeping remark, information about our reserving position has already, it's already been published with our Q2 numbers, and therefore it is not part of this part of the section. On that note, I'd like to welcome Clemens on stage. Clemens, it's your turn. Yes, thank you, Karl. So, thrilling, you said, Karl, I'm still wondering really what has gotten me to put inflation on the agenda today. I think it must have been the team, who probably talked me into this. For good reasons, though, I have to say. Because inflation is really something that is in, literally in every second headline at the moment, in the newspapers, so it's, it's all over the place. And at the same time, interestingly, it's, it's a bit of an elephant in the room, the inflation, when we talk about our industry and how the reinsurance industry is affected. So, I think it's really worthwhile to, to spend some time on, on this. Let's start with the investments and how we are doing there. Well, I think I have to say on the investment side, that our portfolio has fared quite well over the pandemic. It has produced very stable returns. I think it has shown strong resilience over the last year, and it has also produced very strong and attractive returns in 2021 so far. So overall, I think we're doing quite well there, and that is despite the fact that we are in a market that I would still call quite challenging. So you know this slide already. It's familiar to you. It shows sort of the locked-in yields in our fixed income portfolio. That's the light blue bar, and the dotted line that you see here, you know that from previous presentations. Our reinvestment yields, that represents the green bar with the dotted line currently. You can see that our locked-in yields at the moment stands at 2.21%. If you remember the slide from last year, that came further down from 2.35%. I think we've managed to smooth that a bit. I would have expected a far harder option given the situation last year and early this year, but I think we've managed to smooth that a bit. Then the reinvestment yields, you can see, has decreased further from 1.45%. I think in 2019, we were standing at 1.57%, to what is now 1.38%. So reinvestment remains challenging for some time. The question is: How do we position ourselves in the market? And Karl mentioned it, so we slightly adjusted our strategy, our investment strategy, early in the year. Those are the three pillars of our investment strategy that you see here. It's the credit portfolio on the one hand side, the real assets, and ESG as a third, becoming more pronounced pillar. What changed from last year, basically in our strategy, I think the first one is, and you remember that in 2020, we had rather taken quite a de-risking approach, especially on the credit side. A bit more risk attached there on the credit side. We've seen the credits have come to more expensive levels now with monetary policy that's pushing down spreads. So it's not an easy exercise, but what you see here, we have reallocated some govies into equity and high yield focus funds. The focus there is on large and small corporates in developed markets. So it's really about finding the buckets that still provide attractive risk returns here. So the CLO spectrum, I think it still provides some room for some opportunity. It still offers some returns there, but really you have to look into it, particularly to the capital costs. That is very important when it comes to risk reward. So we reloaded some to A and triple B investment on the CLO side. Emerging markets, as you can see here, we do have a substantial portfolio in emerging markets, and there are still market opportunities in the emerging market space, but still rather developed markets are very expensive. So same here. It's a rather significant point there. So I think that accounts for the overall credit at the moment, so it's not easy to find the sweet spot there. Not easy to find opportunities here. I think you really have to go the extra mile on the credit side here to find the sweet spot, to find opportunities there. Or as one of our investment managers recently said, it really is like squeezing the last drop out of the lemon. And I think it describes it quite well. But I think we've done during 2021 a quite good job here on the credit side and have positioned ourselves. Then, of course, our real assets and private equity portfolio there. As you know, it's a very established asset class within our portfolio. Roughly EUR 1.3 billion at the moment, with commitment, outstanding commitment on top of that. It's highly diversified. It has been a very stable contributor, even in 2020, a very stable contributor to our earnings, and has proven to be resilient in difficult times. We've reported that in the first and in the second quarter, that it has been an uptick in terms of distributions from our private equity portfolio. So that is very pleasing to see. On the real estate side, roughly EUR 2.3 billion that we have there on the real estate side, both direct and indirect funds, focused on the U.S., on Europe, and then got a substantial portfolio both in Asia and in Germany as well. Roughly 45%-50% office space there, 50% in logistics, and retail, et cetera. So, I think on the fund side, we have a steady contribution to our real estate fund. On the direct side, same here. You have to be really looking into opportunities in the market. You have to be very disciplined. It's partly, in some regions, a very competitive market, so we are very mindful of pricing there. So we are rather taking an opportunistic approach, both when it comes to new investments but also to disposals. I'll come to that in a minute. I think we've managed to keep that very stable as well. On the infrastructure side, at the moment, roughly EUR 400-500 million there, includes equity and also debt positions there. It's a focus at the moment, mainly on the U.S., but we want to enhance that and distribute that to other areas as well. And we are looking steadily for opportunities there, part of our ESG strategy as well. So how are we doing on all this? You can see the familiar table here with our asset allocation. So you can see when you look at the bottom line, our asset base, when you compare the number from last year, has increased over the last 12 months by roughly EUR 4 billion. So, I think it's fair to say that the speed and the strong operating cash flow that our underwriting colleagues were producing over the last 12 months has been challenging for us on the investment side, really, to find spots there, to invest that. But I think, again, on the credit side, we've done quite well. The most notable change here you can see in the reallocation of the government bonds to more corporate bonds here. But we've also managed to grow our real assets, as you can see here, with the portfolio and the equities as well. So that's the team has done a good job here. On the right-hand side, the contributions. You know this table as well. You can see that, particularly on the private equity side, as mentioned earlier, which represents roughly 3% of our overall portfolio, but contributes 16% to our ordinary, as per June 2021. So again, a very pleasing and very steady contribution there, and I see that, for the rest of the year as well. So how does our corporate bond portfolio look like? We've grown it quite steadily, as you can see here. Substantially, as part of our strategy, we've increased the triple B rating investments here. As you can see, the position. Overall, the quality of the portfolio is still very, very strong for our fixed income portfolio, with 94% of our fixed income investments carrying investment grade. Quick glance on the alternative investments. As mentioned earlier, it's a constantly growing asset class. We've slightly increased our targets here on the real assets that you can see here on the left-hand side. Again, private equity, as you can see here on the RRS-... has been a strong earnings contributor, and even when you look back over the last 15, 20 years, in our portfolio, has always been a very stable contributor. So we will be keeping and, actually, building on this class going forward as well. Real estate, again, stable, stable contributor as well. It wasn't easy, as mentioned earlier, to, to keep that level of, of investments here, because we've done some opportunistic, sales. We had some very good market opportunities, so we took chance, and sold some of our, real estate, and, we're able to replace that in terms of, return is very stable as well. Pretty much in line with expectations. We do watch the, areas where we had potential COVID impact, and I mentioned earlier that, roughly 45%-50% is office space. There, I think it's all around how flexible you are in terms of office space. We have seen, very rarely issues, with that. I think overall, the customer is very flexible, and we do see, customers, renters there to ask for rebuilding in terms of new work, et cetera. So it's not about really, decreasing space at the moment. It's rather using it in a different way. That's what we see in our portfolio, but we watch that very closely. Again, on infrastructure, constantly growing portfolio with that and equity positions there. ESG, as announced yesterday, yesterday, and briefly touched base on it in super Q&A. Actually, and you might think that as we have become probably a bit more vocal on ESG and in activism, and I did look it up when I was preparing for the session. We actually started the ESG journey quite early, actually 10 years ago on the investment side, with some exclusions already in 2011. And we've actually formulated an ESG strategy on the investment side already in 2012. So journey started early. At the heart of our climate strategy on the investment side is the decarbonization of our investments. Again, the first target, 30% reduction in carbon intensity of the asset classes, so, covered bonds, covered bonds, and, and equities. The starting point from that is, 2019. We will be reducing, by 30%, to 30% by 2025. And then, of course, the attainment, of climate neutrality in this area, as mentioned by 2050. The goal will accomplished by, by active portfolio management. Again, that asset class is roughly 39-40% at the moment. Another step forward is, the increased emphasis on sustainable investments that sort of, counteract climate change, such as, infrastructure investments, and, impact investment. So let's spend some time on inflation. As mentioned earlier, it's a topic that is between every second headline. I do promise that I will not even make an attempt to try to predict the unpredictable, so I will not talk about inflation as it says. I would only share my thoughts on how this might or might not impact Hannover Re. What are the implications on inflation? Just briefly, here you can see the areas that can potentially be impacted by inflation. It's the obvious one, of course, on the pricing side and on the reserving side, but also when we define our Large Loss Budget for the year, we incorporate, or we take account of inflation there as well, of course. On the investment side, both in terms of hedging, but also in terms of how we invest, real assets is certainly one to affect. And then, of course, admin costs, et cetera, and the obvious ones, as well, can be affected by inflation there as well. On the pricing side, I think, first of all, it's really important to state that when we talk about general inflation, the drivers of claims inflation, so how that can affect our business, how it can affect our underwriting, the drivers are very different from what we see in the headlines. For example, U.S. CPI, as an inflation index for the U.S., so those drivers behind that are very different. If we were to sort of form an Hannover Re specific inflation index, that would be a blend across regions, across currencies, and then, of course, we would have to distinguish between certain lines of business and the drivers, what drives inflation in our LOB. That is, for example, drivers would be wages and salaries in our casualty lines of business, in our long tail casualty LOBs, then rebuilding costs, of course, in property, including cat costs, and then medical expenses, for example, in the Life and Health space. So what are we doing about it? On the underwriting side, the obvious one, of course is repricing as part of our regular annual renewal in the short-term business. So the best estimate inflation assumptions are annually adjusted here on the underwriting side. We incorporate historical experience, of course, on inflation in those assumptions, but also would add some loadings and will add future outcomes into our pricing considerations here as well. For 2021, we already raised slightly our assumptions here on inflation on top of what we've seen in the past, because you could see some dynamics, of course, early in the year already in terms of inflation. We will be revisiting and see if there are any future trends, of course, when we do adjustments for 2022. So those are under review at the moment as part of our annual cycle here. And of course, given the shortage of material, et cetera, all the, what we see in the headlines, what we see in the indices, et cetera, will be taken into account. What are other mitigating facts here other than the pricing? I think it's important to note that on top of that, we have index clauses in large parts of our portfolio, particularly in our portfolio outside the U.S., where it's not very common. Actually, in Europe, it's very common that index clauses, then we have sliding scales, and put options in many of our P&C reinsurance contracts, as well. So on the pricing side, as you can see, I think it's a sort of a basket of mitigating factors here that mitigate this exposure. How does that look on the reserving side? First of all, reserving is, of course, very much based on, you know, the actuarial methods that we use, very much based on historical data. So anything that we would have seen in the past in terms of inflation is explicitly, or implicitly actually in the triangles that we use for actuarial calculations going forward. So as long as inflation doesn't really change significantly, average inflation would be, would already be included in our reserves. I guess historically, should be around 2%-3% that we see as, implicit inflation anyway. And then, of course, we, we consider when we do our, actuarial work at year-end, we always look at, at loadings for deviations of what we've seen, in, in the past, in our triangle. Another element is, of course, the prudence in our reserving. You know, that, increase the, publish our, our studies there. You know, that we are carrying a substantial amount of, buffers in our reserve. Some of that is the result, of course, that particularly in the first underwriting years, we've had our ULRs above our pricing expectations. So that adds some prudence there. And then, of course, when you look at historic events, et cetera, I think it's fair to say that within the last 20-30 years, we haven't really observed a significant impact of changes in inflation on our technical provisions. So I think overall, I think the conservative reserve buffers do add some comfort here. And also, I think when you look at our large loss budget, we have been rather on the conservative side over the last 10 years. Of course, we have exceeded the large loss budget in the last five years. But when you really look long term, I think we've been rather on the conservative side here, so that adds some buffer here as well. On the hedging, so you do know our inflation-linked bonds. We have been, we've been reporting those. So this is, it's part of our, let's say, inflation hedging program. We do have other programs in place, where we have, hedging strategies and some jurisdictions and some currency, currencies. So this is really, sort of a substantial amount of inflation-linked bonds. So this is inflation-linked bonds, just briefly. It's basically a nominal bond where you have embedded, an inflation swap, which is linked to a consumer basket, like CPI, et cetera, that we had, earlier for each country. The portfolio is, at the moment, we slightly increased it in the first half, and it stands at roughly EUR 5 billion. The duration is mainly sitting at six years and nine years. You can see the exposure on the left-hand side. It's mainly EUR and U.S. dollar. So the, when you look at the swap, how is the mechanic of the swap? You have the fixed tail leg that represents the expected inflation at the current state, and that is what you can see on the left-hand side, so the average hedge inflation levels. Then you have the floating leg, that is realized inflation until maturity of the inflation-linked bond, and that's an exercise you do on a yearly basis to see, you compare sort of the fixed and the floating leg. And the accounting mechanics is, quite different, so the, the actual inflation is part of the amortization, of the yearly amortization. It comes with, with a time lag of two months, roughly. You will have seen this in our first and second quarter reporting that has contributed already to our investment income. So that is how the mechanics are. The swap doesn't have to be fair valued under IFRS. So it's really part of the market value change that you do not see in the P&L, but in OCI, in terms of volatility. It's again a bit easier to have. So is it ideal? We've put down some sensitivities here, and you can see that a change in inflation of roughly 100 basis points, which increased the market value of our inflation-linked bonds to roughly EUR 470 million. When you look at our, our liability at our technical provisions, of course, that's not 100% coverage. That, that is clear. It would probably roughly at the moment stand at around 20% coverage of our liability. So if you do the same exercise on our technical provisions, that would be probably bringing a, a sensitivity of, of around 4% in our technical provisions, roughly, at the moment. So I think it's a, it's a proxy. It's not, it's not perfect, of course, because, we do not, hedge non-safe CPI, as mentioned earlier. Different drivers in our portfolio, of course, we have other mitigating factors here. So it's really part of the overall inflation hedge strategy, and adds another mitigating factor to it, and works quite well, of course, at the moment. So key takeaway. Certainly investment, it's, it's fair to say it's a, it's a highly diversified portfolio. It's very, very resilient, we've, we've adjusted our strategy slightly to aim to squeeze out, out of the lemon, to go the extra mile. It's really hard work, and I think this is really where you have the advantage. You have to go the extra mile, to find some opportunities in the market and to, to smoothen out that drop in our, in our book years. And I think we've -- we're doing quite a good job, and I'm quite optimistic that we managed to, to smooth that out as well. Ordinary income, that's very pleasing. And also, when you look historically, I think it's the portfolio has been very reliable in terms of producing ordinary income. And overall, I think the low interest rate environment, of course, is challenging, but we will manage it. On the inflation risk side, again, I think it's a mixed basket of certain mitigating factors. Inflation drivers are monitored. We are monitoring them very closely. I think we have some tools there how we can mitigate. Our conservative reserving approach, of course, does help and really provides some comfort here and some buffer. The inflation-linked bonds contribute to that. And our real assets and our private equity, our real estate portfolio that we are rebuilding are also mitigating those effects. So I think it's inflation. Yes, in every headline, it's on the radar, but I think for us, very manageable. So I close here, and Lisa and Karl, go straight into the Q&A session, I guess. Well, thank you, Clemens, for your distinguished presentation. You're right, we are diving straight into the Q&A session, and we already have a number of raised hands. So we start with Henry Heathfield and continue with Vinit Malhotra. Henry, would you start, please? Good morning, all. Can you hear me okay? Yes, we can hear you. Thank you very much for taking my question. I'm sorry, I didn't quite manage to get in on the, on the previous Q&A, so I'd just like to start with that before we go too far down the, the route of the investor base. On the key account management, you mentioned you're EUR 100 million benefit in terms of fees by 2023. Essentially, client relationships seem pretty important in insurance to me, and I was wondering if you could just briefly talk me through what kind of touch points you have with the clients, whether there are underwriters and client relationship managers. And then also, do you always go through brokers in the renewal process? And is there any chance of reducing commissions when you continue to renew the same period of time, basically. Does that change in P&C vs Life and Health? Are there any specific lines of business where you might end up not having to pay commissions to brokers? And then sort of finally, in that whole kind of topic, what really are the advantages of renewing through brokers from a kind of reason set? You know, do you see a day where you need brokers, less brokers? Just kind of then a brief question on inflation. What kind of rates of inflation are used for reserving? Like, maybe if you could give me some specifics. And then how often are the reserves reviewed and adjusted in terms of these rates? And then when there is an adjustment vs historical, when there's adjustment take place, how does that flow through the income statement? I was wondering if you could just run me through that. I may have some basic questions, but I appreciate any responses. Thank you. ... Okay, well, thank you, Henry. And I apologize for the difficulties you had to dial into this session earlier. Why don't we start with the first question; therefore we have Jean-Jacques on stage again about the questions regarding the initiative. Yeah, thank you for the question. We touched upon it in the previous session. You know, generally, the Client Excellence initiative is built on what we've done so far, but we have growing relationships with many clients. We have, of course, also a need for collaboration within the organization, and that's just the starting point. We feel this is an area of strength, but at the same time, with that continuous growth with some of our partners, we felt it was the time to structure a little bit more, to have a platform for CRM, client relationship management. And for the great, you know, the larger clients to organize ourselves around key account management. This is in place. This is not an organizational change. This is more, you know, leveraging the virtual structure of the company and to secure longer term growth. The benefit and this is the idea behind these annual target benefits, that we want to increase the share of wallet. This is a major part of the growth story now. Broadening client relationships, increasing our shares on existing programs we like, but also developing new business ideas and accessing the C-suite more more consistently and and have more leads in the structured space in particular. So this is in the context of continuous improvement rather than a real change. The broker strategy is unchanged. This is our main origination channel. More than 2/3 P&C business is from brokers. We have excellent relationships. We feel that the brokers are not only, you know, distributors, originators, but also increasingly bring new ideas. I asked about the protection gap earlier on this morning, and I think the broker community is very good at tapping into new opportunities. And my sense, looking forward to the next, you know, few years, is that their importance will grow in P&C, and we want to partner with them. So there's no plan nor any idea to change gears here. I think we are an organization which relies on the broker channel. We have excellent relationships, as I said. So the Client Excellence initiative is very much in line with that broker position. No, no change expected going forward. So on the inflation, Henry, the average amount again is included in our reserving process. So if we add another year, the implicit inflation will add to our historical sort of view on the inflation. So implicitly, historically, we have on average, don't have any down on that number, but probably roughly 2.5% implicit historical inflation baked into our reserving anyways. That will add to our reserve position here. And then we will do an assessment if any loadings are needed to certain lines of business in terms of inflation that we see currently in the market. So that's a yearly exercise when we look close at our reserves. That's something our external auditor is looking into as well when we do the yearly reserving study. So that's a yearly exercise. From both elements, we inherit sort of the incremental inflation, and post loading, will form part of our reserve setting for year-end, and of course, will then flow through the P&L. So Henry, I hope that has answered your question, but, if not, please, raise your hand again, and, and we can discuss it even further. The next question is coming from Vinit Malhotra, and after that, we have a question from Andrew Ritchie again. Vinit, go yourself. Can you hear me? Now I can hear you. Okay, perfect. Thanks. So first question for Clemens is on slide 15, and maybe linked to what you just said. When you say potential loadings for year-end 2021 and the review, presumably for the U.S. social inflation and other such topics, or we will tackle things broadly, what are the risks we are looking at here? Could you help us understand, would it be visible in the possibly results, or is it something that could be into the whole process and then in the end, we won't able to see it? So just to better understand what magnitude, roughly, or what is the risk, or any comment here on that. Second question is just on your opening remark on inflation, Clemens. You mentioned that if you had a Hannover Re specific inflation index. I'm just curious, do you have a Hannover Re specific inflation index, and how is it doing at the moment? You mentioned 2.5% is in the world. ... Do you think that the recent three, four, five months of inflation data is flowing into your inflation index, and do you see any time for worry? Thank you. Yes, Vinit. Hi, happy to take your questions. So on the inflation, I think if you look at, let's say, general inflation, you can set aside for a moment the social inflation. I think it's part of the regular exercise that we do there in terms of loading. We haven't defined a loading for 2021. You will not see anything there in our third quarter results. It will form part of our reserving exercise for the year. So I don't expect a really substantial amount there in terms of really loading on what is in inflation in our reserve already there. But we will revisit that, and it will be part of our exercise here. So I don't expect it to be a large magnitude. The same counts for social inflation. I think we've covered last year, so it's yes, it's we've seen an uptick there, and I think we will see an uptick there in terms of implications, et cetera, et cetera. And you know that when caught from people to work and different places, that we do expect to pick up there. But our exposure there is really limited, so we aren't exposed to the large accounts there. So I think on social inflation, I'm not too worried for our exposure. There's that will form part of our yearly exercises, but again, nothing really material there at the moment. Okay. It looks like we only have one- Philip, I think I dropped one of your questions. So, I think there was a question on in Hanover, a specific inflation index. I would love to have that, to be honest, and our actuaries as well. But it's very difficult, of course, because you really have to track. So you have to track all currency, all lines of business, all regions, et cetera. You have to track index clauses in your contracts. You have to make assumptions on some area. So that is a very complicated and very difficult exercise to have an index. So it's nothing that I would call a specific index. However, what we do is that we really look specifically into those baskets and see what we can do there to mitigate inflation there. And that's what I was referring to, I think, with, you know, with repricing, with these index clauses, et cetera. The inflation link is on top, et cetera, et cetera. So it does overall, and we do sensitivity analysis on a yearly basis. We have in our risk committee, we have in our board, we will talk about inflation bonds, et cetera. How we address inflation is very much on our agenda very regularly. It's rather an overall picture. And again, I think overall, we do feel very comfortable with the position that we have there. Thank you very much. Right now, it looks like we only have one question left to answer, and that is from Andrew Ritchie. Hi there. Sorry to go back to this topic. I'm just trying to clarify something, I think to the risk of people getting confused. But when you say our inflation assumption embedded in reserves is 2.5%, I'm always wary of companies saying that, because that's not your claims cost assumption, is it? That's the tax sold CPI number. I mean, it just strikes me there's an awful lot more granularity aside from an overall 2.5%. And I don't understand if the messaging here is that looking at current inflation, you're still happy. We're talking about maybe adjustments, but you're still happy that we should see normal levels of runoff from your reserves, with the inflation environment as we see it today? So I guess that's the first question. I just think I'm skeptical that you can give us this overall CPI number. I'm sure there must be a lot more detail behind it, and claims cost is a lot higher, but I just want some reassurance on that. The fact that we should still see normal levels of quote, runoff as things stand. The other question was, you didn't cover the topic, but you are responsible for it. Just on IFRS 17, I mean, there's only one year left of current IFRS. What's the latest thoughts in terms of impact on financials? Is it significant? Does it help transparency in any way? What's your latest thinking on it? Yes. Thank you, Andrew. Andrew, hi. So on, on inflation, I think... Thank you for clarifying that. It gives me the chance to clarify that. So the point that I tried to make is, it's when we talk about reserving, inflation on reserving, what people are mainly referring to, or often referring to, is, inflation rates that you put on top of your reserves. The point that I'm trying to make is, that there is also an element of something that is called historical assumptions. This comes out of the, you know, techniques, the actuarial techniques that we use. So there is some incremental inflation already baked into our reserving. That is, that is often forgotten. That's why I wanted to refer to it. It's often forgotten there is some, some incremental part in there. And then, of course, you have to do the exercise and see, you know, what are the... That's exactly as you said, and with a very detailed exercise, you cannot just pick a CPI, et cetera. You have to go into your lines of business, into your duration, your currencies, your exposure, et cetera. Look at costs, iteration of your liabilities, et cetera. It was really to get a sense on what is probably overall made into our reserves. That's probably on our overall portfolio. But of course, when it comes to your reserve setting, long tail, that's the approach with a very detailed look into our exposure and into specific loading. And that's what we will do at year-end 2021. And then, of course, when it comes to short term spikes, you know, in working, in labor costs, in lumber costs, et cetera, what we've been talking about when we talk about impact of hurricane seasons, et cetera. That is something that you have to incorporate into your initial reserve setting as well, when we put up our slot reserves. And again, I think we've been a bit more on the conservative side there when we defined our budget. But of course, at the first of January 2021, we didn't know where inflation would go in 2021. But overall, again, I think with all these markets, we do think we're on a reserving position. So a normal runoff would still be a fair assumption? Yes. I think so. That would still be for 2021 a fair assumption. But again, Andrew, there will be many factors when we look at our reserves- Yeah. In 2021, and we will be reporting about those. On IFRS 17, yes, we could... Andrew, I've managed not to mention it. So we could talk hours about it. You're perfectly right. Yes, I mean, if you ask me, you know, you know, I'm, I've spent 20 years at KPMG. I think my first day when I started with KPMG in 1990, there was talk about an accounting standard, a common accounting standard also for the U.S.. But with, you know, add transparency and which, which do your work a lot easier. So have we had the standard where the standard reached at, it, it's a difficult question. But I think the attempt is still, and the way we have approached this standard, and, you know, this is not only about accounting standard, you know, that there's a lot of pain that goes into that, if you do it right. Because we don't wanna just switch from IFRS 4 to IFRS 17. So if you do it right, I think there's still the goal, and this is how we look at the standard. We still have the goal to use that, really, to add transparency to our cash flows worldwide on the P&C, but particularly also on the Life and Health side. So I do believe that, you know, with the actual databases that we are building, et cetera, where you have all cash flows to hand, that that adds transparency internally, both for us in terms of steering, but also, for you, in terms of, you know, transparency, particularly on the Life and Health side. I think there is a big step forward in terms of IFRS, is really trying to, to look through that lens on our financial statements, to really look through. And that's what I actually do every day, Andrew. Look through your lens on our financial statements and see how can we add value with these accounting standards. And this is really what we are diligently working on. It's a, it's a tough project, I think for, for everyone in the market. We are currently running another impact study. We are getting very closer, closer to what I would call a transition balance. Yes, there will be impacts, of course. I don't wanna talk too much about it today. And then we will have separate sessions on those, of course. But again, I think I'm very optimistic that we, that will add transparency and add value also, how you look at our financial statements. Okay, thanks. Well, thank you, Andrew. We have another two more questions. One is from Iain Pearce and, then Thomas Fossard. So Ian, if you would start, please? Hi. Yeah, so on, on inflation, I had a question that relates to the sort of competitive outlook. Obviously, it feels like there's quite a wide range of views on inflation assumptions. So how does that impact the competitive environment in relation to pricing? Are you sort of at risk of being a victim to the sort of least conservative set of assumptions, if there's some very wide inflation assumptions going forward? And then also, in terms of your own thinking in relation to inflation, I mean, has the current outlook changed your risk appetite into any particular lines of business? Are you looking to grow or shrink in certain areas because of your views on inflation at the moment? And then just a final one on the sort of shorter term risks. The different sort of losses we've seen in Q3, how are the industry dealing with, you know, incorporating labor shortages, supply chain disruptions into industry loss estimates? And do you think they've been appropriately captured? Yes, Ian, happy to answer those questions. So if we start with, you know, the market environment, et cetera. Of course, on the pricing side, this is very much of, you know, getting your price right and incorporate inflation assumptions into your pricing. Of course, you have to do this line by line, contract by contract, et cetera, so that will form part of our renewal, of course. It's gonna be a big part of our renewal. I do see adjustments there, of course, for some lines of business. Some will be more successful, some not. So, I don't think it's necessarily about competition here. I think we just have to be very, very clear about your assumptions that you have in terms of inflation. It's probably be either easier short term and long term, and you know, the discussions. And that's why I mentioned I don't want to come to, in, into, you know, predicting the unpredictable, because, you know, is it, is it a long-term trend or not? But I think, you know, with our yearly contracts, we do have the chance to react to that, when we, when we go into our renewal season. And that's how I look into the setting of our price assumptions here, where we are really close to the business and to the lines of business. In terms of losses, I think it's very obvious that inflation and what we've seen there in terms of labor shortages and price increases, et cetera, will have an impact on the losses, particularly in Q2, and what we see in Q2 and Q3 as well, for sure. I think this is really about, you know, and there will be an impact of cost, so this is really about your reserve setting. Are you a bit more on the conservative side? How have you baked that into your large loss budgeting? Again, I think nobody would have expected last year when we set our Large Loss Budget that we come to that level. But I think, historically, that's what I was referring to, Ian. Historically, I think we've been a bit more on the conservative side here with, you know, sitting within that range. So there is some buffer here, and therefore, in our large loss budget. But certainly also in our reserves. So this is rather around reserves and how that will impact our earnings. But that will, of course, help dampen that impact. Okay. Well, thank you, Ian, for your question. Then, we have a question from Thomas Fossard. Yeah. Yeah, thank you. I just wanted to touch upon the solvency topic, and the rating agency model. I don't think that is going to be touched upon later in the presentation. So just wanted to ask on your Solvency II ratio. I think that last year at the same time, actually, you talked a lot about your direction, or the trajectory of your solvency, that we should expect, bearing in mind that you had significant top line growth in P&C. And I think that you were leading us to see that, you know, the line of reasoning, the situation should be trending towards 20% or even maybe even a bit lower. So, I think that if you could update on the, on the group's solvency trajectory would be, would be, of interest. And also, if you could update on the, S&P model and the way you're, you utilize on, on the S&P model and, and, and maybe, you know, provide the, buffer you have over the, triple A, level here or so. I think that, you know, with the growth that you managed to, to, to provide, in the past years, I would have expect, I would expect this buffer to have, significantly reduced, this is, really factor-based. So any update on that would be helpful. Thank you. Yes, Thomas. I think on the Solvency II ratio, you've seen we've managed to keep it quite stable, although it's been a very volatile year, 2020. So, in terms of our limits and thresholds, you know, we report the last Solvency II ratio that we reported was 250. And, our limit of 180 and our threshold of 200 are unchanged. So, that's still the level, where we are looking at. And of course, the growth that we've seen, during the year, and you will see that in the, in the first quarter, we will, we will report on the Solvency II ratio, in our earnings call as well, will slightly have been reduced. So you might raise the question of course, you know, the hybrid issuance that we've done in the first quarter has added probably roughly 10% points to that ratio. So you might think, well, you know, is this an excess of capital position, et cetera? What, what, you know, what are you looking at? So the first reason is really we wanted to take advantage of the market price opportunity. It's very difficult, and you mentioned it, Thomas, quite rightly, that it's very difficult to draw a comparison to S&P or to other rating models here, right? Because those are mainly factor-based models of course, you know, they work differently. Our internal model, of course, is very much reflecting on our diversification, you know, where those models are working different, so it's very, very difficult to compare that. But we always mention when we were referring to our Solvency II measure, model, that the model is different, and that starting position there is different as well. So we wanted to make sure that was also the reason why we took the chance, in the first quarter, you know, that small window where we saw the significant opportunity to release the hybrid bonds, to increase our buffer in both Solvency II, but also in our rating models. It has created some buffers. I think there's still, I don't have the number off the top of my head, Thomas, but there is still a substantial buffer also in our, in our rating models to take advantage of, of, of growth going forward. So, just to make it clear, actually, the S&P model is not a constraint for you at the present time to grow further in your book over the next years? No, at the moment, Thomas, and again, that, that was the reason why we, why we wanted to add some buffer, to the model as well. That was the reason for, for the main reason, or one of the reasons for the hybrid bond issuance, and that will not limit us, this year or next year, in terms of our growth. ...Okay, well, thank you, Thomas. Thank you all for all your questions. Currently, we don't have any further questions, so therefore, we are ready for a break, and I'm sure you are too. So we will resume in about 10 minutes' time, so let's say 10 minutes after the hour for Sven's presentation. Welcome back to the second part of our Investors' Day. I hope you enjoyed your coffee break. The next highlight that awaits us is the presentation of Sven. This time, Sven has something rather unusual and exciting in store for us. In the past, Sven has taken a deep dive into specific topics or business lines. For today, we thought it might be helpful to provide an overview of the current status of the property and casualty reinsurance market, and give you a bigger picture of how we are tackling the opportunities we see going forward. With that, I hand over to Sven. Good morning, everyone. Also, a warm welcome from my side. As Karl said, I want to talk a little bit about how we see our midterm outlook on the growth and profitability side of our P&C business. Jean-Jacques has already mentioned and covered the strategic initiatives at group level, with the APAC initiative, and customer excellence, innovation and digital in particular. So I will not cover those as part of my presentation, but I would like to give you an idea of what we are doing underneath those group strategic initiatives on the P&C side. So for that, I will talk a little bit about the market environment. I will then cover our positioning, and give you some key takeaways towards the end of the presentation. From a macroeconomic perspective, we, of course, have seen a sharp recession in 2020 due to the COVID-19 lockdown situation. Already in 2021, we are seeing the global economy for the most part getting back on a growth trajectory, and a relatively sharp recovery in the Americas and in the APAC region. But even the EMEA region should reach the pre-COVID level in the year 2022. This is helping the global insurance industry to get back to a more normalized growth trajectory. Over here, we have seen somewhat lower growth trajectory in 2020, which, of course, has to do with the underlying activity. But it's our expectation that we will return to more normal growth patterns in the very near future. What is very pleasing is that from a rate environment, commercial insurance rates have been tracking positive for four years in a row now. So we get rate increases on rate increases for quite some time, and that this development even accelerated in the last one and a half years. At the same time, we can say that the reinsurance industry has been resilient when it comes to its capital base. So even in the difficult COVID year, 2020, the overall capital available for writing the business was not impacted negatively. In the last few years, we have seen that the traditional capital was slightly outgrowing the alternative capital, which was more stable in the last few years. And in the four years prior to that, it was actually the other way around, where the alternative capital base was growing more quickly. But what that means is that we are seeing in a growing economy and in growing insurance markets, that this is meeting a relatively stable capital base to underwrite the business. That development is actually helping traditional reinsurers in the ongoing flight to quality, and as you will see on the following slide, we feel that we are particularly well positioned to be a good and successful partner to our clients with their additional demand. When it comes to the market dynamics, we live in rather volatile and interesting times. Jean-Jacques has already covered the sustainability and ESG topic in his presentation. Here, the industry will play a major role, as I, as I said during my answer in the Q&A. In order to transform the global economy to get carbon neutral, there is a very significant amount of investment necessary, which will create additional opportunities on the insurance side. At the same time, we are seeing that our ceding companies are increasingly risk-averse, for example, due to the COVID-19 experience, which meant that we could benefit from significant additional demand on, for example, structured solutions. But this also means that cession rates are trending positive, so they're increasing, after a period where they have been mostly stable or even reducing at times. We are now seeing the trend that cession rates are actually slightly increasing, which of course is a good development from a reinsurers point of view. At the same time, we all face technol ogical progress, topics. Some of them are more internally oriented, so the automation topics are improving the efficiencies. We are getting to a situation where the industry is using more and more data standards, which, of course, helps to make the entire industry more efficient, and therefore policyholders, at the end of the day, hopefully spend less money to cover the general costs of the industry, but rather have more of the money available for paying claims. There are also market-facing developments like new distribution models or improvement in underwriting, or new products coming out of data analytics. Then, of course, you all know that, from a natural catastrophe point of view, the last five years have shown that we are seeing more and more losses coming out of what used to be slight perils, like bushfires, flood events, or ice storms in states that are not known for this kind of peril. This is increasing the volatility and the model uncertainty, again, fueling additional demand for reinsurers. And last but not least, on the cyber side, we have an ever-growing demand for that product. On the insurance side, the increased frequency of cyber incidents, particularly during the lockdown phase, has certainly led to an even more dynamic situation on the demand side here. So overall, the situation we're in creates good opportunities for reinsurers and, particularly for those reinsurers that will be able to react fast, flexible and reliable to those issues. So how did we do in the last few years? You can see, and on the next few slides, I'm going to compare us to a defined peer group. So you can see that, over the last 10 years, we and the peer group enjoyed a very good period of growth. The peer group grew by almost 7%, which is certainly a very significant and good and robust growth figure. During the same time, Hannover Re managed to outgrow the peer group by achieving a combined average growth rate of a little over 10%, which means that our market share in this defined group has increased from 17% coming from 2011 to 23% in 2020. Of course, the generation of profit is more important to us than the generation of premium, as Jean-Jacques already explained in an earlier answer. So how do we, how did we do on that side? When you look at the graph, the line is indicating our% share of the premium pool among us and the peer group, but the bars are showing you the EBIT share of us and the peer group. You can see that, very constantly, we had a higher EBIT share of the entire EBIT than we had a premium share. Just demonstrating that our focus really is on profitability, and that we of course use premium as a transmission mechanism to generate profitability. But that our strategy of increasing our share of the EBIT pool, which we talked with you about a few years ago during an investor day, has actually worked. On that basis, we are very bullish that we will be able to continue on this trajectory, and I will give you a few reasons where we see those business opportunities coming from. Last slide in this part of the presentation, I wanted to demonstrate the volatility side of the business. Again, comparing us with our peer group. We feel that the industry overall, over the last 10 years, has done a remarkable, good job of estimating what the loss situation will be. So the capability of the industry to deal with risk and have a good view on the risk situation is sound. Of course, not every year, but over a 10-year average, the result is actually quite impressive. At Hannover Re, we actually managed to be exactly within our estimated and projected natural catastrophe budget over this period, and all those numbers actually do include the COVID-19 losses. And pleasingly, we also managed to have a lesser volatility of our net cat numbers compared to the peer group. So again, this, in our view, demonstrates, that, we have a good planning capability.... and, that particularly on the natural catastrophe side, that, by means of buying a retrocession, we are also in a position to be less volatile than the average people. So let me start talking about our positioning. Jean-Jacques talked about our strong culture this morning, and I wanted to give you a few example, examples, where, where we see, our, the benefits, and, particularly our strength on the cultural side. I will not go through all the items listed here. I will only focus on a few. But let me first start by re-emphasizing again that we have a long-term relationship approach, which is very important for our clients, that they know that they will have us as a partner through the good, but also through the difficult times. We enjoy a situation where our staff is staying with us for a very long time, which means that our underwriters, when they sit in front of a client, a, have a very personal relationship with that client for a long period, and b, of course, we have accumulated a lot of experience, which again, is something that is important in the decision-making process and makes us a particularly reliable partner for our clients. We are delegating and empowering our people, so when our underwriters travel, our clients are talking to decision makers, which is different to the approach some of our peers have, where marketing and decision making can be different functions. For us, it's not. And the fourth item I wanted to mention is that we are very focused on tailored solutions. So we are listening to the clients, and we want to structure something together with them, which is filling the demand from their side according to their needs and not according to a pre-structured product we want to sell. And as you have seen on the growth trajectory, that is actually honored very much by the clients, and so I would say very, very strongly embedded into our culture and a very positive aspect. So what do we do in addition to the group's strategic initiatives? What, what, what are the initiatives I want to talk about with you today? In the next slide, I will give you an idea about our approach to tailor-made solutions. I will talk about the protection gap topic in combination with parametrics. I will give you an idea about our risk appetite on the specialty side. And last but not least, from a regional perspective, I would like to talk about Latin America in addition to what we already talked about on APAC earlier today. So let me start with the tailor-made business. Here, as I already indicated, is the idea that through listening to the clients and by focusing on special services we are willing to provide to those clients, we can structure reinsurance that is tailor-made to their particular needs. We're taking this as a holistic multi-line approach, which is not only on the structured side, but also on the traditional side, creating additional demand from our clients. For them, it's very interesting because we can help them to deal with topics like changes in the regulatory environment. We can help them to steer the capital base, and we can help them to actually grow their own business by offering those services. Examples that has been very successful for us are on the telematics side, where, together with our seeding companies, we were able to develop tariffs, which take the telematics technology into account, which in certain markets gives those clients a competitive edge over their competitors, helping them to grow. They are quite happy to reward us with buying additional reinsurance from us. At times, reinsurance that does not make its way into the commercial market, but is only really reserved for reinsurance partners that are helping with the product development. So a very important aspect is having the technical capability of doing it, and secondly, to be close enough to the client to actually feel that demand and fill that demand. Other examples which we have seen are on the natural catastrophe side, where we are increasingly using also the technical parametric coverages, and on the cyber side, where again, in many markets, we have been able, particularly as in the SME space, to create products and tariffs of insurance products together with our clients and help them to penetrate their markets. The next item I wanted to touch upon is, our ideas about the Nat Cat protection gap, and, where do we see our role here in this respect? So, as Jean-Jacques said earlier today, there clearly is still a significant protection gap on the natural catastrophe side. And both the public and the private sector, are very anxious to learn about new ideas, particularly on the distribution side. How, in many situations, more simplified products, should, can be created in order to make, particularly the less affluent people, better protected, from the perils of natural catastrophes. This, of course, is deeply embedded into our ESG strategy. In order to find these solutions, you need both the technical capability on the distribution side, but you also need the risk capability of structuring those products and making them really simple to use. So for this, the parametric solution is almost perfect, because you can clearly identify what region, what peril exactly do you want to cover? And by not having too many human interactions in those models that we are using on the parametric side, the products we are creating are very cost-effective. They are very simple to use. Also, for the end customer, very simple to use. And very often they are related to technology like mobile phones, where even without having access to any broker or any insurance company themselves, those policyholders are able to just with a few hits on their phone to buy those products. We have experience with those on the agricultural side, on the natural catastrophe side, and we are working that this is also an avenue into us being more active in the field of private-public partnerships, where in the future, maybe even coverages like pandemic and/or cyber may be an issue. And we think we are well prepared to deal with those topics. I talked about our risk appetite, about natural catastrophe exposures in the Q&A earlier today, where I said that maybe our appetite for volatility is less pronounced than elsewhere. That is actually very different in specialty lines. We already have a significantly higher market share in specialty lines compared to our average market share. And when I talk about specialty, I'm talking particularly about topics like marine, aviation, credit, surety, and agricultural business. So that business has performed very well for us in the past, and despite us having a significant market share already, we certainly have the ambition to do even more. And one way of achieving that is getting closer to our clients. Here, the regional activities we have in the APAC region, but also in other parts of the world, and I will talk about Latin America in a second, are getting us closer to the client, and, therefore, also closer to local specialty opportunities, which are maybe not necessarily brokered through, one of the big, specialty wholesale markets, but, business you can only really ride when you're close to your customer. In addition, we of course, still have quite a few traditional relationships with clients, that are more based on the traditional property and casualty business. And adding, specialty business to those relationships through our customer excellence initiatives, will give us additional access also to the specialty business coming from those customers. The last opportunity I would like to talk with you about is our approach in Latin America. We talked about APAC in the last two investor days, but we are also very active in Latin America. The macroeconomic situation in Latin America is certainly not as strong as in Asia, but still, we have many rising economies, and we have, in those economies, a very often similar situation compared to APAC, with that, the insurance penetration is still relatively low in many of those countries. But there, with a growing middle class, there's a strong additional demand for covering property risks, in particular on the personal life side. But also, the economy is getting stronger, the commercial risk at demand from those countries, which are very often also agriculture-based, is on the increase as well. So of course, we want to take maximum advantage of that opportunity, and are working together with the ceding companies to provide additional products for personal and commercial lines solutions. We want to close the protection gap, as I always already said. Particularly in Latin America, the parametric basis of providing coverage has a very good momentum right now. So quite a few of our successes on that side are actually happening in Latin America. And for us, very often we have the added benefit that we can transfer our experience, which we have already gained from the APAC region into Latin America as well, so we do not have to reinvent the wheel twice. Taking that all together, how do we feel about our five-year outlook on the development of our business? Here you can see, often asked a similar question you asked us earlier, that we feel that we should have a sustainable growth of at least 7% over the next five years. On the right-hand side, you can see that we feel that this growth will continue to be well diversified. So we see all regions of the world growing, with the highest growth in the APAC region. But we also see all the business lines growing, with the highest growth in the specialty markets. Our combined ratio target for that period stays at 96%. So 70%, 7% average growth rate is a little more bullish than the 5% we were talking about earlier. Which brings me to the key takeaways. From a market environment point of view, the global economy is back on track. We can report that a relatively stable reinsurance capital meets growing demand, which is good for good quality reinsurers, so they can write more of that business. The market dynamics and unexpected events are creating additional need for stability and security. Our positioning, as I said, seems to be good from the results we could demonstrate in the presentation. We are benefiting from the flight to quality. We are outperforming the market both as far as growth rate, but also from a profitability point of view. We feel we have a clear strategic focus on how we are going about the business, and we continue to fully concentrate on the bottom line. And we want to be an excellent partner for our clients, a fast, flexible, and reliable partner, which is helping them with their performance and how they can grow their business. I demonstrated the opportunities, that there is more to say about Hannover Re P&C than just the group's strategic initiatives. Of course, they're extremely important for P&C as well, but there's also a lot of underlying momentum that will fuel additional growth in the future. And with that, I would say we can go to the Q&A, and I'm very happy to get your questions. Thank you, Sven, for your sound insight and food for thought. For the Q&A, I'd like now to ask Silke Sehm to take the stage. And Silke, as a member of the board, she's responsible for reinsurance business in Continental with Continental and African clients, for XL, as well as for ILS and structured reinsurance. And to round things off, she also oversees the retro covers we are buying. Going to the Q&A session, I'd like to remind you to raise your virtual hand if you want to ask a question. We have already got some questions. At least I see some requests. We start with Andrew Ritchie first, then continue with Vinit Malhotra. Andrew, please go ahead. Hello, can you hear me? Yes. Hi. Sven, I guess, just a question, if you could give us some sense as to your outlook for the pricing environment in 2022, in light of the events we've seen this year, the losses we've seen this year. And I guess my second question is linked. I struggle when investors ask me to try and put 2021 losses, catastrophe losses in context, because broadly speaking, it looks like the industry will miss cat targets again. And I can't judge as to whether 2021 is a normal year, above normal. Particularly things like Ida just seem very expensive for a relatively small storm, and obviously the German flood as well. So I guess in that context, number one is a sense of renewal pricing in 2023. Number two, how normal is the loss experience in 2021? And in that context as well, is catastrophe pricing really, really adequate? I know you, you're, you're not really focusing on that as a criterion, but is it, is it, is it in any way adequate? Thank you very much, Andrew. Let's definitely start with your pricing question in general. And on the cat side, particularly the cat pricing side, I will ask Silke to comment. So what is our expectation going into the year 2022? We are confident that the general positive pricing momentum will continue to be in place. We have seen that in 2020 and in 2021 that the market reacted very well to particular loss situations. So with the general positive trend, I'm optimistic that those parts of the world which have seen the losses will get those kind of rate increases that are necessary to deal with the losses. So they will be higher, and at times significantly higher than the average increase, both on the insurance and on the reinsurance side. The underlying pricing trend should be positive on a global basis across all product lines. That's definitely our expectation. When it comes to your question, how average or not average is the 2021 cat year? I think your observation is absolutely spot on. We didn't have that many events in 2021. But two of them, being the flooding in Europe, but also Hurricane Ida, are very expensive in themselves. Partly this, of course, particularly on Hurricane Ida, is fueled by the inflation topics we were talking about earlier. So, that certainly plays a major role here. But, at this stage, I would say we are still in an average cat year, but with two rather unusual losses. And, the flooding in Europe is, of course, very special as well, because that seems to turn out to be the highest insured loss in Germany ever. Which is quite remarkable for, for, an isolated, localized flood event. And, many ceding companies have tested and some even exhausted their, programs on, on a localized event like that, when I guess they actually bought for the big European storm event. So that's an interesting observation in itself. And we would not be surprised if that means that there is going to be additional demand for vertical cat cover, on top of the rate increases we can expect for the business that has been impacted. But I would now like to hand over to Silke on her view when it comes to the appropriateness on the cat pricing. Yeah, thanks, Sven. Hello, Andrew. Hello, everyone. Also welcome from my side. Coming to the cat pricing, I'm still relaxed from the pricing side, from a pure modeling and actuarial pricing side. You know, we model our cat exposures with AIR. And you also know that the new tri-pricing trend will be included in the update. And in addition, we have our own view to the model outcome. So it's not just pure underwriting by modeling output, it's more together with our own expertise and our own view on certain climate risk and flooding and wind exposure. So when I'm looking at our portfolio, we are currently writing, we have certain levels on profitability, and from this point of view, we have the highest level in the history, or at least in the last 20 years, roughly. And this reflects that the pricing as such is not wrong. I mean, as Sven just outlined, there are two major and very specific events with Ida and Bernd, but quite relaxed with the pricing. Also, the, sophisticated model agencies, they include the newest updates, in their pricing, and most of our net cat writings are on a one-year contract basis, so that with the climate change, we can adjust them year by year. This, I hope this answers your question, Andrew. Sorry, Silke, just to clarify, did you say you said it's highest in 20 years? What, what do you mean, the profitability of your cat pool? Yes, absolutely right. On certain levels, I said. So we have certain- On certain layers. On our profitability layers. So we have where we say technical results, then after management expenses, then after capital costs, and then—so this, I mean, the different levels where we measure our profitability. So now we can say how good is the expected loss in the net cat modeling with right in line layers of 1%. And but based on this model outcomes, this is the highest level on our profitability, how we measure profitability. So this is exact profitability after capital costs for the worldwide portfolio. Okay. But Andrew, Silke is of course talking about this in the context of pricing, not just about the actual experience. Yeah. The quality of the pricing- Yeah. The way we look at it, has been the highest in a long period. Yeah... Great. Thank you. Thanks. Okay, thank you, Andrew. So the next question is from Vinit Malhotra, and after that, we have a question from Will Hardcastle. Vinit? You should be able to hear me now. Can you hear me now? Yeah. Yeah. Go ahead. Thank you. Thank you very much. So just picking up on two topics you mentioned today. One is the specialty lines. And I think if we go back to Uli Wallin's quarter of 2011 investor day, then specialty lines and lower cat competency was mentioned, so 10 years ago. And, I mean, is this really that much more juice left in this lemon? Or that was from Clemens' comment, but is there more competition. I've heard from another peer, one of the other ones in France saying specialty lines are going to be focused as well. Could you just comment on where you see the market headed by for yourselves? And second question, if I can ask again, is picking up on tailored, tailor-made solutions, which, I mean, yes, I think that phrase is being used by you, with you. Something has been used by you in the past, from beginning in somewhere in, you know, Australia period, because you've seen some of these transactions. But I'm just trying to understand, is this new and then will catalyze growth, or is this something that has been going on and you're just putting a phrase to it today to explain to the market? And line, maybe a side question is, is it at least 7%, or if it's about 7%, so I don't mix that nuance on that. Thank you very much. Thank you, Vinit. Let me take the Specialty and the Growth question, and ask Silke to answer your tailor-made question. So on the specialty side, yes, there is still juice left in that field for us. Given our already high market share, it was the area in the years 2017-2019 where actually we did quite a lot of cycle management activity, given that both the insurance and the reinsurance pricing was not always meeting our cost of capital requirements during that period. So quite willingly, we gave up some of the market share we previously had. So now with the better pricing, that's not of course ground we want to win back again. So from a vertical growth point of view, there is scope to further grow. And I hope I gave you some ideas about how we horizontally want to grow the specialty business by embedding that into even more client relationships, and helping with our product knowledge, clients that are not already in the specialty field to become a specialty player. So from that point of view, we see this as a continuously growing path for us, where we have a lot of expertise, and there's certainly still scope in our risk appetite to grow our market share in that area. On the growth side, it's the same like we are using for the current guidance, and where we are saying greater or equal 5%, I would, I would say this is now a greater or equal 7%. And Silke? Yeah, okay. On the structured reinsurance side or tailor-made solutions side, how we label it. Sven mentioned already in his presentation, as we listen first to our clients, so it's not a product as such, it's really a solution, an individual solution. These solutions are discussed with the C-levels, and it's based on customized risk management. It's not giving capital with a share of 5%, rather than listen, what is the need, the demand for reinsurance from a risk and capital point of view, from a client perspective, and then in an interactive discussion, trying to match or find the best solution. This can be on growth and surplus relief type of transactions. It can be volatility cover, and it can be also quite innovative. From straightforward to quite innovative. To give you a feeling, in the last decade, we tripled the volume of that business, in our unit. We are currently writing more than EUR 3 billion in that division. The last two years, so this year and the last year, it was a record every year, number wise, of new transactions we have underwritten. From the profit we are realizing in that business area, we don't show immediately all of the profit, because we, especially if it's medium term, we, realize it all in the next years. There is a huge volume of embedded margin still in our results in that business. What we have achieved so far, profit-wise on that business, it's ROCA, it's return on capital allocated, is double digits. Between 15% and 25% in the last years, it was the ROCA in that business. Yeah, and one further comment maybe on that. Is that new? No, that is not new. You mentioned also Australia, and this is a long time ago, and there were certain cases in the past, but our focus was not on... Yeah, was always on the solution and structuring side and taking into account all aspects of underwriting. This is not pure underwriting. This is also accounting knowledge, whether it's IFRS 2 or IFRS 17. It's also compliance with regulatory knowledge and structuring knowledge. So, this is how we address this all over on the top. And we write those transactions normally to 100%. Thanks very again. So, just if I can ask again. Sven, I think you said this is not just in structure, which I know- Correct. Is new and EUR 3 billion, but it's also something coming up in traditional book. That is the new, right? Yeah, that's something I just wanted to mention, Vinit. I mean, the reason why we use the phrase tailor-made rather than structured reinsurance is indeed that it's the approach we are talking about here. That together with the clients, we are identifying their needs, and very often that translates into structured reinsurance. But the examples I was talking about earlier, like telematics or cyber, it was actually all traditional opportunities that we created together with the clients, and which is actually helping them to also grow their business. It's not only about existing business, but it's also giving clients the opportunity to grow their business. If I may, I can add on that, Sven. That the solution focus is also, I mentioned the cyber area, and he mentioned also earlier on the telematics space, where we cover cloud outage. So we try to find new solutions in teaming up with our client and, having the partnership approach. And one other example is also on the ILS side, activities we are doing. This has also the solution focus. We try to find the individual bespoke solution for the client rather than the product. Yes. Thanks very much. Thank you, Bennett. We still have a few requests to speak left, four to be precise. We continue with Will Hardcastle. Thank you. Just a couple questions on Nat Cats, really. The first one is S&P recently published a report flagging them now looking at Nat Cat performance relative to budgets. Do you have an expectation that capital charges on Nat Cat could be loaded for those companies where budgets haven't proven to be as robust as yourselves? And the second question is more of a statement followed by a question, but one fair issue in the industry I hear is, would suggest that climate change is leading to increased frequency, severity of Nat Cats, and therefore budgets in general can't get costly enough. But your budget's actually proven to be spot on, as you've provided over the last 10 years. The question, therefore, is, has this last 10-year average been normal in your view, that would imply your budget's accurate and implicitly that it is budget on? Or do you think yours is still overly conservative, perhaps, and the last 10 years isn't a fair reflection? Thank you for those questions, Will. I would not necessarily say that the budget of the last 10 years is going to be a good point for what's going to happen in the next 10 years. So that, of course, is something we are reviewing very carefully, particularly in the context of climate change and the various side perils which we have seen, yeah, materialize over the last five years. Which were certainly surprising the industry, and were also surprising us at times. So from that point of view, it is under review. And I guess the industry overall, in case they are willing to write more or the same exposure on the net cat side, will have to allocate more budgets to the probability of loss in future years. Which in itself is not necessarily a problem if that is reflected in the pricing, so that the capital that is required to support that budget is making it ROE fertile. So from that point of view, as Ulrike mentioned, our view on pricing on that side right now would be such that we would answer that question positively. When it comes to your S&P part of the question, I don't have a good answer for you on that side. I mean, S&P were certainly not telling me their ambitions on how they want to deal with the results of their study. So sorry, I can't help you on that side. Okay. Thank you, Will, for that question. We continue with Henry Heathfield from Morningstar. Thank you, guys. Very nice presentation. I just had three questions really. Just on, I mean, kind of going back to really Will's comment, a bit. I think generally we're seeing higher, or from what I can tell and understand, we're seeing more higher frequency, lower severity within the industry. And for example, you mentioned bushfire, I think ice storm is another one. I was wondering if you could comment maybe on whether that kind of lends itself a bit more to alternative capital than it does traditional reinsurance. I mean, I think traditional reinsurance in there really is, you know, you're kind of the big guys. You're there at the backstop. If we're getting higher frequency, lower severity, maybe that moves demand a little bit away from you guys. Obviously, hopefully not. Then my second question really is just down to a bit more of an operational understanding of what the way reinsurance works. I understand that in commercial, you generally have sort of a primary lead, and in reinsurance, you have a similar sort of primary lead, but it's less operation allocation control, it's more down to the quantum. I was wondering whether you might sort of just kind of outline a little bit whether my understanding there is correct. Whether you might be able to provide a rough indication of what proportion of your customers that you have, you are sort of a prime lead on, as it were, you know, your biggest player. And then lastly, on the specialty lines, I mean, you know, I love the business model of the specialty lines, and that's the cost-conscious, the cost-conscious, culture. Just trying to move back to one of Dominic's questions on squeezing the lemon, really. How much opportunity do you feel could you give us an indication of how much opportunity you see to expand your specialty lines with clients where you don't have specialty lines with? Or, where you can take specialty from peers, and if it's taking specialty from peers, there's a bigger opportunity, then how are you able to do that? What's your, you know, what's your differentiator vs a Munich Re or a Swiss Re or so on? Those are my three. Thank you very much. Very good. Thank you very much. On the frequency severity question, whether this is driving demand away from us and more into the traditional alternative capital space. We have not necessarily seen that in the last few years that this is moving one way or the other. Of course, the cat part of the market is where the alternative capital providers are featuring the most because as Silke mentioned, the 12-month contract period is short-tail business, so this works for collateralized reinsurance. So they are an important part of that market, but I don't see them behaving very significantly different compared to the traditional markets when it comes to what they want to write, how they write it. So of course, it always goes in cycles. I mean, you know that, particularly the aggregate covers have seen losses over the last number of years. So those markets, which historically participated in those, maybe have less opportunity today, which creates opportunities for other players that maybe were not so heavily involved. So in that context, market shares between traditional markets and ILS markets may shift from time to time, but I think that's more the general typical nature of how the business is transacted, rather than the source of capital, would be my answer. When it comes to your question on lead positions, yes, you're right. Typically, commercial business and reinsurance business is based on a subscription or indicated basis, where you have a lead reinsurer taking a share, but not writing the placement for 100%. There are a few exceptions to that. Most of what Wiebke is doing in her structured unit would actually be placed with one reinsurer only. And that reinsurer then is, of course, taking 100% of the business and access exactly the way you were describing that. When it comes to the number of contracts we are writing, our lead position on the number of contracts we are writing is about 20%. If you look at the premium is actually higher than 40% of the business which we are writing where we do have the lead position. That of course is easily explained. When we are setting our own terms and conditions we are of course willing to take higher shares and therefore the% of the premium base is higher than the% of the underlying contract base. So that hopefully gives you an idea where we are in that perspective. And specialty and our cost-conscious culture go together very well. Our approach to specialty underwriting is a very centralized approach. So most of that business we're actually working out of Hanover in Germany. Of course, it's embedded into our local activities, and our local P&C colleagues help us in getting close to the clients, and staying in touch with the clients, but the underwriting itself is mostly done, as I said, out of one location only. To maybe give you an idea how being close to the clients and being cost-conscious at the same time can work is, for example, the Chinese Surety market, where that product was hardly available in the Chinese market five years ago. But all the various provinces have now opened up to the products of surety. And we, of course, have a lot of worldwide surety knowledge. So what we are doing is being close to those Chinese customers that want to enter the line of surety through our local Shanghai colleagues. But the expertise really is put into the equation by our colleagues in Hanover, which is both supporting the cost-conscious culture, but it's also a good example for areas where we see further growth opportunities on the specialty side. Just on your, your 40% volume vs 20% number of contracts, I mean, it overall seems like a pretty good- ... I get the feeling it's a price taker kind of in industry, but does that give you any pricing power or, or not really? Well, of course, we would say yes. It does give us some pricing power, but within reason, within reason, I would say. I mean, we are not minded to sell on price only. We are minded to sell through our qualities, which we described earlier today. So that does give us a little bit of an advantage. Can I charge significantly more confident that the average pricing is, and the client would still give me that business? It happens, but of course, that would not apply for the bulk of the business. Okay, now- But our clients are more sensitive on walking away from us, so the pricing we achieve tends to be more sticky. So while it's difficult for me to win business by being more expensive, it's also less likely that I will lose business just because I'm a little more expensive. If that gives you a good feeling about it. We still have more questions than time, so we are already run over the time budget. Unfortunately, owing to time constraints, we only can give the opportunity for answering those questions which have not been asked yet at a later Q&A session. And therefore, I would like to thank you all for your very good questions and also Sven and Silke for answering them. We are now breaking for another coffee for about 20 minutes, and we'll resume at half past the hour. Welcome back, everybody, and thanks for being so punctual. We can now dive straight into the last presentation of today with a focus on Life and Health. Claude has given some remarkable presentations in the past few years, and, he's applied his outstanding presentation skills to a whole range of topics, and, today's offering is no exception. He will be talking about Longevity business in particular, a subject that has been underrepresented in our external communication. He will talk about a number of things, and he will talk about where we are right now in that business and what the future earnings streams look like. So that's enough from my side as a lead in, and, therefore, I hand over to you, Claude. Yes. Good morning, everybody, or should I already say good afternoon? Many thanks for staying. Many thanks for your interest in the last, and certainly not least, presentation of Investors' Day, on the business group Life and Health. If I think back here, when we come in here, on the Investors' Day, I wonder who of you guys and of ourselves here thought that we would be again reconvening in the same setup, you know, the TV studio, this camera, without seeing anybody. I think not too many people, at least not myself. You know, the advantage of reconvening in the same setup is, of course, that you can try and improve and become better, and I hope that we all have become better in the second time now, that we reconvene in the TV studio. Talking about improving and becoming better, I would like to remind you that you have all received a feedback form, and that we would like you to complete. ... And ideally, please complete the form, not putting just a score between one and five, but really putting your comments. I mean, how did you find the topic? How did you find the content? How did you find the slides? How did you find the presentation? This is extremely important for us, so that we can become better in the future. Last time I was looking into these feedback forms, and I mean, you gave to my presentation quite good feedback. I must say it was quite positive. There were two remarks that I was seeing that made me think. I mean, some people said, "Claude, you're just talking too fast." Yeah. That you talk too fast. And I thought to myself, "Well, how can it be? It cannot be. I mean, me talking too fast?" So I went through this painful exercise, and you know how painful it is, watching your own presentation on video. And it was painful, I tell you. And you know what? It was too fast. I mean, I had problems myself to follow my own presentation. Yeah, so what I tried to do today, and please, please complete the task, is really to slow down. It's not easy because I cannot see your reactions, but I try really to slow down. So that's actually the first thing. The second thing may be some people ask me: "But why did you come on stage with your mobile phone?" Yeah. I have this speaker with me, and it was not my mobile phone. So again, this is not my mobile phone, guys, this is the speaker. It is a bit big. It is, yeah, that's it. But that's, that's what I have here, and that I will be talking. So, today's topic, Longevity. So after a short introduction, I will then really make a, a start on Longevity, show you some interesting and hopefully interesting slides on our Longevity business. Followed by, the Life and Health earnings power, and then afterwards, the key takeaways as everybody else before me. After that, we'll have a Q&A session. Klaus will, of course, be, joining me for the Q&A session, so that you can hopefully ask any questions you might have on the Life and Health business group, in the future. Okay. Well, let's have a look quickly on the last investor day. And you remember on the last investor day, I was talking about the earnings growth drivers for business group Life and Health, and I was identifying mainly three drivers. Number one was Financial Solutions, the second key growth driver was Asia, and the third growth driver was Longevity. And I can reassure you, these growth drivers haven't changed over the years. They're still the same growth drivers for us in the Life and Health business group. So what we did last time, and you see this on the bottom of the slide. At that time, we were looking into each of these growth drivers, and we were showing you the normalized EBIT of the past, of each of these growth drivers. And we were also showing you what we would expect as a normalized EBIT in the future. These were the figures we were showing you. So we see that there on the financial solution side, for example, we were showing you that we expect an additional EBIT over the upcoming then four years of EUR 150 million. Whereas in the Asian business, we would expect an additional EUR 60 million EBIT over the upcoming four years, and in Longevity, we would expect an additional EUR 80 million on top of the situation in 2019. And let's have a look quickly on how we performed in 2020, and that's what we show you on this graph for each of these growth drivers. So when you look into what we expected to achieve, what we promised to you, it really happened. So on the financial solution side, you see that we have been pretty much spot on. In Asia, we have overachieved our our EBIT expectations by quite a bit. And in Longevity, the same, we were overachieving our expectations by quite a bit. So if you look into the earnings growth drivers as a whole, I would say that we have been overachieving in 2020. So today, what I would like to do is really concentrate on Longevity, because Longevity is one of our most important business lines that we have within Life and Health. So let me maybe start with a little bit of of history, how we developed our Longevity business over the time. And what you see here in the timeline, which starts in 1995 and ends up in 2020, is that we have a an experience of 25 years of Longevity business. What you see here on the timeline are various colors, and what we try to do is to sort these colors in a certain way. So the green dots, the green years that you see are years in which we have experienced an important product expansion. Whereas the gray dots are years in which we have experienced a very important system or underwriting system expansion. And the orange dots are years in which we have experienced an important geographic expansion. Let's quickly go through all these years. So in 1995, we started with Longevity, and at that time, I must say, we were not really experienced. And what was the idea? Well, let's start with a product which, where the life expectancy of people is not too long, because we're not very sure about all these things. So we started with a product that we called an enhanced annuities. They still exist, these enhanced annuities. They're mainly annuities for elderly, sick people who have a very small life expectancy to go, so something between two and 10 years. That's the way we started in the U.K., with enhanced annuities. And you see, if you look into this graph, that only 13 years later, in 2008, we started to look into the first block transaction, into the first deal where of pension payments. So that was really a big change. And what we did there, we concentrated with the same logic as before. We concentrated more on blue-collar workers than on white-collar workers at the beginning, because blue-collar workers have a lower life expectancy, of course, than white-collar workers. As we then eventually went into to more and more white-collar workers in the future. In 2011, you see that we wrote our first index deal, and a few years later, our first Longevity deal, what we call an RPAT, a Regular Premium Annuity Treaty for deferred risk. So you see, so we got more and more comfortable with the long-term liability to take on board. So starting with deferred annuities, which are elderly fixed people, we ended in 2015 already with our first deal for deferred annuities for blue and white collars. We then continued with a quite interesting product in 2016, which is what we call an automatic Regular Premium Annuity Treaty. An automatic treaty, meaning that cedents, on certain frameworks that we set, can give us automatically certain blocks of annuity business. These blocks of annuity business have very clear characteristics. They're very small in general. They have very little experience, because we come with a global pricing approach, a more general pricing approach to set these deals. So this was in 2016, and in 2018, we have the first cover for unit linked business, where the liabilities move together with the underlying funds, which were of course, also the premium that we received, and the liabilities also moved, so we would not take any investment risk. That was in 2018, so the first cover for unit linked business. This is the product expansion that we have. Now, moving to the system expansion, I would like to show you to the, the year 2000, where you see that we developed our first underwriting system for, it, for deferred annuities, for individually deferred annuities. It was quite an easy system, where the way we did the underwriting was the following: We asked some questions, and based on the answers that we had among the diseases these elderly people had at that time, we would then calculate a life expectancy and then tell the people how high or how low the annuity would be, based uniquely on their life expectancy. A few years later, in 2007, as you can see, we made a very important system expansion that we're still using today, where we said, "You know what? Life expectancy alone is probably not good enough." Because you can have diseases whose life expectancy is exactly the same, but some diseases, diseases like, let's say, a smaller cancer, are something where you might die very early on, but if you survive the first two years, you're gonna die much later on. So the life expectancy is somewhere in between. But in diabetes, for example, you would say nobody is dying of a diabetes early on, so everybody will die from this more or less in the same way. So you see these patterns, these, survival curves of certain diseases, they look totally different, and we started to introduce these survival curves into our system. And this is what we have been doing in 2007. Maybe the last point is the geographic expansion. Of course, the whole thing started in the U.K., and as you know, the U.K. is still our most important region for Longevity business. But if you look at the geographic expansion in 2010, that this is orange dot, the first dot, that we wrote our first Longevity deal outside of the U.K.. It was not really far away from the U.K.. It was... Sorry, I have to be careful here. It was not very far away. It was in Ireland. And in 2014, we wrote our first Longevity deal in continental Europe. This was the deal that you have heard of, which was in, in France. Later in 2017, we wrote our first index cover outside of the U.K.. This was in, in the Netherlands. And we then moved, 2019, into the Americas and also into Germany, of course. And in 2020, we started our first deals in New Zealand and Australia. So this is the history of our Longevity book. Now, something which is also interesting on this slide is, of course, the bar chart, which you see in the middle. And what we show here is the covered annuities that we have in our book every single year. And what you see is that it slightly nicely increases from 2005- 2020. And in 2020, what you see here is that our covered annuity, these are the yearly payments, are approximately EUR 2.2 billion. Now I have to here to make one more comment. It's not totally right, because what we also increased here is our liabilities, which we have in on our books for deferred business. So we included into these liabilities also our deferred business, because at the end, it is part of our risk, which we are taking on board in a certain year. But you see that we have been nicely growing our business both in terms of product, systems, and also geography. I will talk about the Regular Premium Annuity Treaty, and I'd like to show you how this functions, because the Regular Premium Annuity Treaty is really the preferred option currently that our clients are choosing. Now, when you look into the Longevity negotiations and Longevity deals, you often have more parties involved than in a standard reinsurance deal. So you have, of course, you have the members, or let's say the policyholders of the pension fund on the one hand side, then you have an insurance company, which we call a cedent for us, on the other hand side, and then the Longevity reinsurer. You often are in a situation where you have, I would say, a double booking process, where on the one hand, you have our cedents having a negotiation with the pension team on how they want to deal with the pension that they have in their book. So are they going to take a pension buy-in? Is it going to be a pension buy-out? Is it going to be a swap structure? Whatever. So this is happening between the pension fund and the insurance company, whereas between the insurance company and the reinsurer, of course, we'll be discussing about terms and conditions of a Regular Premium Annuity Treaty. So what does that mean, really? It means that we, as a reinsurer, we often get the same deals via various insurance companies, and this means twice the bit of workload, of course, when you analyze these deals, because you get all this information from various companies. And also you need to take into account if there is another negotiation going on between the pension team and the cedent. So this makes the whole situation quite complicated, but that's what we're dealing with every single day. Now, coming to the Regular Premium Annuity Treaty, which is really the preferred option, as I told you before already. What is the idea? The idea is that, and I'm giving you here the most easy possibility of an RPAT, as we call it, an RPAT, is where you're taking on board a closed block of annuity. And what we will do as a reinsurer at Hannover Re, we will apply our best estimate mortality rates to this block of business and calculate the future annuity payments that you would have to pay until the last pensioner dies. This is what we take as a basis, and then, of course, we decrease this estimate by a margin. And this is what you see on the right-hand side of the slide, with this, this blue line, which is what we would call the fixed leg. This is the premium that we get from our cedents every single year. That's the fixed leg. Now, now this, the claim that we pay. The claim that we pay is simply, is simply what we call the floating leg. These are the real annuities. So these are the real annuities that the cedent is paying to the end consumer. And this is the difference between fixed leg and floating leg. Now, looking into this graph, at the beginning, you see that there is not too much happening. I mean, the fixed leg, and we would expect that, is slightly higher than the floating leg. This is more or less our margin, because you wouldn't expect any deviations at the beginning of a Longevity deal, the first, say, five to eight years. But afterwards, there are two possibilities of happening. One could be that people die less than what we anticipated. And this is what you see in year five, six or seven, where the floating leg is exceeding the fixed leg. As the floating leg exceeds the fixed leg, of course, that means that we, as a reinsurer, we pay the difference. This is mainly a claim for us. And on the other hand, you could also have the situation where people die faster than we anticipated. This is the last year, you can see that in there. There, the floating leg is smaller than the fixed leg, and this would then be a profit for ourselves. The good thing about all this is that we do not take any investment risks here, because as I said before, we're getting the premium year by year, year by year, so no investment risk involved to our shareholders, and that's why we like it. But why do we like these long-term liabilities also? A very important point here is that the only risk that we're taking on a Longevity book is really a biometric risk of people living longer than expected. What we do not have in a Longevity book is, let's say, a policyholder optionality. If you take a standard life policy, the policyholder, even if it's a long-term policy, the policyholder has always the possibility to say, "You know what? I cancel the policy. I cancel the policy because the market has become much more aggressive. I have the possibility to buy another policy somewhere else at half of the price." So you have the possibility that the policyholder leaves and buy a policy somewhere else, and that your pricing assumptions at the beginning are totally different to what it looks like 10 or 15 years down the road. This is something which we do not have here. The pension business has the pensioner has no option else than waiting until he or she dies. There is nobody who will say, "Well, I'm going to cancel my pension, my pension annuity and buy an annuity somewhere else." This option does not exist, and this is what makes these long-term liabilities for us so attractive. Now, of course, the basis of all this, and I told you, is our pricing, is our best estimate. So how do we do the best estimate? How do we price the business? How do we monitor the business? And the basis for this is really to have an excellent data collection and monitoring in place. We are doing that for now, and you have seen that, for 25 years. For probably 15 years or so, we're having these RPATs in our book, and we're collecting and monitoring the data systematically for 15, 20 years to come. This is very important. What you see here is an extract of the report that we're building every single year and analyzing every single year. These are real figures, and I think that should be very interesting for you guys now. Let me mention, focus directly on the very last line, which is titles. That's interesting. What you see here in the first column is you see the present value of all the claims that we have taken on board at the moment at which we have written the deals. So we have written various deals over time, so these are all the deals accumulated, and these, these are all the present values of claims of all the deals accumulated since we are writing Longevity deals. And you see that the present value of these claims is approximately EUR 32 billion, so that's it. In the next column, and that's also an interesting thing, you see how much of these claims we have already paid out. So today, you see, that's the situation in 2020, we paid out 40% of these EUR 32 billion expected claims. It's clear, because these deals, they're already in our portfolio for many, many years. So that's the complete situation... Now, what is the margin that we realized so far? You see that there, EUR 554 million of margin. What is the future margin that we expect out of this business? So taking into account the future runoff of all these deals, so the future margin is actually EUR 1.2 billion, and the admin expenses, that means the full admin expenses that we're estimating for the full duration since the first deal 15 years ago until now, and until the last pensioner dies, that's probably within 15 years down the road, is EUR 260 million. So that we have a total margin, that is the third before last column, of EUR 1.5 billion. I think that's a very interesting slide, because what you could now do, you could now calculate the EBIT margin. Well, an approximate EBIT margin. Let's do that together now. Now, how would you calculate an EBIT margin out of these figures? Well, it's easy. We take the total margin after admin expenses. EBIT is always after admin expenses, and we divide it by the present value of claims in the first 2 billion, plus the realized margin, plus the future margin. And if you do that for yourself, if you get a calculator and you try and do it, you will see that the margin, the EBIT margin that we get out of this business on average, is roughly about 4%. And I think that's a very interesting figure also, and you can really demonstrate this with this table. Another very interesting column is the second before last, which is the actual over expected at quote. So what does that mean? That means we're analyzing for the whole book, how many claims did we get in reality, and how many claims we estimated at quote time? So 10 years, 15 years ago, five years ago, maybe last year. So we're making this analysis in a very detailed way, and what we can show you is that over the whole book of Longevity business, the actual over expected at quote, is staying at 100%. Of course, if you go into the detailed treaties, and I showed you two examples there, they're all a bit different. That's very clear, but the whole book is performing exactly as expected with the margins that you see there. And now, the column I like most, I must say, which is, I would call it the, the EUR amount of a 1% mortality decrease. Yeah. Let me explain this to you. So what we do is we run a stress, and we say, "What would happen to our portfolio if the mortality that we estimate, as a best estimate, was over the whole duration, 1% lower than what we think? And what is the impact on our portfolio if this happens?" And what you see here is that the impact is approximately EUR 90 million. So 1% less mortality over the whole duration of our book means EUR 90 million impact. That means EUR 90 million less margin. So let's make. We have a look at the margin, total margin, or let's say the future margin that we're having in our book. It's EUR 1.2 billion. And let's make an easy calculation. And I'm, I'm sorry, I'm sure the Longevity guys are watching me now and are all laughing when they see that. Let's suppose this thing is linear, just to simplify it. You would say that we could probably easily, easily support up to 10% decrease in our mortality assumptions over the whole duration of time. Because 10% decrease, if it was linear, sorry, would mean EUR 900 million reduction of our future margins, and we have EUR 1.2 billion in our future margins, so we would still be okay. What I want to give you with this, these figures, is just a feeling on how we monitor the business and how resilient this bit, our Longevity business is to mortality changes. Mortality changes is the most important ingredient on Longevity. That's what we saw before. Now, we have already talked about Best Estimates, and that's why I would like to deepen this a little bit here on this slide. What means Best Estimate mortality for our Longevity? If you concentrate first on the left side of the slide, you see there a graph with four lines. The first line, which is the top line, which is a 100% horizontal line, is showing our Best Estimate assumptions for mortality in 2021, which is today. And you see there, for every single age, from the age of 30 to the age of 100, you see the Best Estimate that we have today, the two sexes, as we call them. And let's put this at 100%. Now, when you take this as a basis, let's concentrate on the next line, which is the cyan blue or the light blue line down there. Now, what does this line show us right now? This line shows us what the best estimate mortality of a today 30-year-old male is in the future, compared to the best estimate mortality of everybody today. So, so let's have a look into that. So if we take this, this 30-year-old male, and let's put him, let's say, 40 years in the future. So in 40 years, the guy is 70 years old. In 40 years, we have 2061. When he gets to the age of 70, you can see that the mortality that we assume in our best estimate for this 30-year-old male today, in 40 years down the road, at the age of 70, is 60% of the best estimate mortality of somebody who's 70 years old today… Okay? If you do the same thing again, and we go up to the age 90, that means we go six years ahead. Yes, and you can see that our best estimate assumption for this 30-year-old male, when he reaches the age of 90 in 2081, is 40% of the best estimate mortality of somebody who is 90 years old today. This is the way you need to read this graph, and I wanted to show you this graph because I think it gives you some feeling on what we mean by best estimate. Now, what does that mean? I mean, this does not only mean that a 90-year-old person in 60 years down the road has a lower probability of dying. It means also that the probability that somebody reaches the age of 90, given that his probability of dying in between is much lower than today, is also much higher. So you will end up with much more people at the age of 90 dying with a much lower probability, of course, and this is what we take into account in our pricing assumptions. Now, you might ask yourself, I'm sure, why does the curve go up after the age of 90? Well, because differences become smaller when we start to become really older. I mean, running around, doing some fitness at the age of 110, is probably less of an impact than at the age of 50. So that's why we believe that this goes, it goes back. There is an age where everybody has a probability of dying of 1, of 100%, and this will also be the case in the future. So that's, that's the reason why you see these lines going up again at the end. Let me remain a little bit on this graph. You have two more lines there. You have two more lines that you see, which is the dark blue line and the green line, are so-called stress tests, that we perform when we do pricing and when we analyze the business. One of the stresses, and that's a very privileged stress, is to say price, and if our best estimate was still too high, not its mortality, but was the whole best estimate was only 75% of our best estimate, or was 25% lower than our best estimate. This is what you see in the green line. The more interesting line is the dark blue line, where we say, what happens if our best estimate is quite good now? I think it is quite good now. Today, I would say, I mean, we're not getting it wrong. We know our best estimate today, so we start at the same level. But let's suppose that the best estimate is a little bit better, and it is 1% every single year. So that's the reason why you see that the dark line is getting further and further away from the blue line, because of course, differences become bigger and bigger. So this is what we call a 1% trend stress. These are stresses that we perform regularly in our business to see what if. Now, when it comes to determining how much Economic Capital we need to take risk on board, we do not one of these two stresses, but we do a stress that we call the cure for cancer scenario stress. And I purposely show it here because it is a little bit more complicated. But in a nutshell, the cure for cancer scenario means, let's suppose that five years down the road, somebody finds a cure for cancer, and at that moment in time, people really start to not to die anymore from cancer. They will die from something else, but not from cancer. So the way the impact is stressed is similar to the 1% stress test I'm showing to you here, and this is the stress that we perform in order to determine how much economic capital we need to hold in order to accept certain risks. And we, of course, need to have a margin, which allows us to cover the internal capital that we need to cover. So that's what I wanted to show you on the left side of the graph. Why did I show you the right-hand side of the graph? This is exactly the same, but this time it is for somebody who is not 30 years old, but somebody who is 60 years old. What you can see here is that the impact of the stresses, it's really the impact of the stresses, and in particular, the impact of 1% stress, is relatively much smaller than the impact of 1% stress that you have for a 30-year-old person. This, this means that for a 60-year-old person, we need to hold much less economic capital, so we need a lower margin than for a 30-year-old person. Why do I say this? Well, this is saying why our in-payment business, where we have no deferred annuities, need less margin than deferred annuities. Now, maybe also just to say too, we're not offering deferred annuities for 30-year-olds, by the way. I just want to show you the difference here. Deferred annuities are typically offered for people who are 55 or 60, so who have five or 10 years to go to pension. So that's the main reason why deferred annuities need a higher margin than in-payment annuities. Okay. So that was it on Longevity. I would like also to talk a little bit about Life and Health earnings power, and directly coming to Longevity, and show you what the earnings power of the Longevity business has been in the past and what we see into the future. You see this on the... So on the left-hand side of the slide, you see the VNB, and the FX of the Longevity business over the past seven years graph. On the right-hand side of the slide, you see then the future cash flow that we're expecting from the Longevity business. So let's first start on the top left part of the slide, with the VNB, and you see that we have always been in the past producing nice VNB. And this is also kind of logical, if you want, because this is a long-term business. So we're expecting, as you have seen before, long-term margin getting out of this business. It's not immediate, it's long term. So that's why you're getting a nice VNB out of the long-term business. And you see this also in particular in 2019 and 2020, we have a lot of new business opportunities, and we were writing a lot of new business opportunities in Longevity, so this created also, of course, an increase of the VNB. I also have to tell you that in these figures, we also included the impact of the Financial Solutions business in the US, which is linked to a unit-linked business, where the underlying biometric risk is morbidity. So this is also included here, so you need to take this into account. But still, if you look into the figures, very nice VNB for the Longevity business as a whole. The EBIT also looks very nice, in my view, very positive. And you see also that there has been apparently an effect in 2020. I showed you a figure in my very first slide, you remember, where I was showing our performance in 2020 compared to what we expected to be. You see here also that there is a nice outperformance. The reason for this outperformance are some Financial Solutions deals in the U.S., that's one part, but there is also another part. And what is the other part? Well, it's the Longevity business itself. On the one hand, COVID had a positive impact on the Longevity business, because there were a little bit more people dying than we, than what we expected. So this has, of course, a positive impact. On the other hand, there is also something else which is happening. We are not showing 4% EBIT, that I was calculating in the review a few slides before. We're not showing these 4% EBIT from day one on. We are not showing the 4% every single year in the Longevity block. What we're doing, we're doing so-called PAD. These are provisions for adverse deviations. And these PAD, even at the beginning, we're probably showing a 2% profit margin, and then we're releasing the PAD over time. So every now and then, we're looking into our PAD, and we see what are the PAD that we can release. And the PADs that we can release are mainly PADs for people who have already died. We don't need any PADs for people who are alive. So that's what we're doing every now and then, and this is also something which happened in 2020, so the reason why the, the EBIT in 2020 has been higher than expected. So PAD from one side, COVID on the other side, Financial Solutions, of course, the third reason. Now, looking maybe on the right, on the top right side, which are cash flows that we're expecting out of the Longevity business. You see long, long, long cash flows, quite steady cash flows. I'm actually convinced that you're all gonna say, "What's happening in 2038, 2036, sorry?" Where we see only EUR 11 million, whereas all the other years around, we're expecting something like EUR 30 million. And these cash flows are cash flows for the existing in-force business that we have in Longevity. These are, of course, not the cash flows that we're getting on the future business. So what's happening in 2036? Well, this is one of our index deals, the one that I was mentioning. I think it was the Dutch deal that I was mentioning at the very beginning. This is a new index deal, where we know that in 2036, it's gonna pay out EUR 50 million. But during the two years before, we're getting a EUR 3 million fee, so the deal is actually positive for the payout, and this is why you see this cash flow pattern there. It's happening in 2036, and that's why you see this peak there at EUR 11 million. Yes, so that's on the cash flow side. This brings me maybe to the last slide, which is a slide that I have already been showing last time. You remember a year ago, we were looking into the whole business group, Life and Health, and not just Longevity this time. These are exactly the same figures, by the way, that we have been showing last year. So you see the past again, so the normalized EBIT that we have been able to see, on the Life and Health business group over the past, up till 2019. In 2020, of course, what I would like to propose you is to analyze the difference between the normalized EBIT that we were expecting at that time for 2020, and what really happened, so the actual. This is the difference between the EUR 502 million and the EUR 385 million. And you see this in this nice waterfall chart, where you see, of course, we have a negative impact from COVID. These were at the time, EUR 261 million, you remember that? We had some positive impact on minority shareholdings that we have in our book equity. And we had also some positive impact, and I showed that in my very first slide. Remember, when I showed you the outperformance of our earnings flow drivers? And the total positive impact of this has been EUR 89 million, which brings us to EUR 385 million in EBIT on an actual basis for 2020. Now, what's going on from 2021 onwards to 2024? Well, if you remember well what I was showing a year ago, I was showing exactly the same pattern, exactly the same figures, but we were expecting to reach EUR 600 million normalized EBIT in 2023. You certainly remember that. And you might say, "Why is it now taking one year longer to get to this normalized EUR 600 million EBIT that we're showing here?" And the reason cannot be COVID, because I'm showing you a normalized EBIT, and not EBIT with any underperformance or outperformance or special impacts. So why is it still one year longer? And the reason why this EBIT takes us one year longer are new clients. We in this new business of our clients, has simply, I wouldn't say stopped completely and it has slowed down dramatically in the whole world. And these figures that we were showing you at that time, were supposing that we will still have a very nice business production, and our experience will have a nice business production. It has slowed down over the last year and also this year, and this is the reason why it will take us a little bit longer to reach EUR 600 million on a normalized basis. Maybe just one thing, don't expect us to finish this year with 502. You see the 502, which are there in 2021. We already know that this year has been negatively impacted by COVID. In the first half year, we have communicated negative impacts of EUR 263 million, if I'm not mistaken, and it's also clear that COVID is not over. I mean, people are still dying, and I'm actually convinced that we will have tons of questions in the Q&A around COVID, and we will try to answer the questions, of course. 500-502 is the best estimate of the, or best estimate of the, Life and Health business, of course. Yes, and this brings me to key takeaways. I mean, again, I'm repeating what I said before. If you look at the Longevity business in the past, one thing we can say is that we have an outstanding reinsurance expertise on Longevity. That's very, very clear. We have even been voted best in class reinsurer, as you can see there, by NMG. We have gained, over these 25 years, a very, very granular mortality experience, which is the basis to write Longevity deals. We have not stopped innovating on both, on the product side, but also on the system side, and we have shown a consistently strong performance, you have seen that in the last slide. The future of Longevity for us is important. I mean, important is that we don't wanna have any surprises. So what we need to do, and what we do already a lot, and we're gonna do this even more in the future, is closely monitor this business. Closely check what's happening exactly, and this takes of course time and resources. We try really, as I showed you with this dollar amount, this euro amount, of 1% deviation. We try there to have a very strong resilience to these mortality patterns that can happen, and right now, our portfolio is showing this resilience very, very clearly. We continue with product innovations, definitely, so that's very important. And further, geographic expansion also is something that is on top of our minds. I mean, talking about geographies, which are interesting, Asia. Asia might come. Also, we are talking about markets such as Korea, Japan, but maybe also China, could be markets of the future. We're writing our first Longevity deal into an African country right now, and we're writing our first, probably the first Longevity deal into Latin America. So this geographic expansion will be very, very important for us. And again, data collection and, and segment. Now, maybe two takeaways in business group Life and Health. You have seen this in the last slide. We have an increasing underlying profitability on a normalized basis, of course. The VNB volatility, so the value of new business volatility, as you might see in the future, it may be coming from Financial Solutions and from Longevity. I mean, Financial Solutions are contributing a lot to the VNB, but it's also very patchy. So there are years where you write a lot of deals, there are years where you write less deals, so it has a huge impact on our VNB level, and the same is right for Longevity. And if you look at the EV volatility that we have on the Life and Health side, I would say, in principle, not too much, but still it will be, and it can be, and will be negatively impacted by COVID. Of course, and by any future pandemics, that's very clear. There are some positive impacts that we have seen, which will also happen into the future, which are possible recapture of financial solution deals. When you recapture financial, financial solution deals, you get the future fees that you expect to get over the years, you get it in one time, so this has a positive impact on your interest. But then of course, and this can be positive or negative, we have also sometimes effective measurements of companies. That's what happened, what happened last year. Remember that I think it was the Monument Re group, and this could also happen this year again. So this is where the volatility might come on the inside the Life and Health. and with that, I suggest we move forward and go directly, Karl, into the Q&A session, I guess. No? Huh? Yeah. Well, thank you very much, Claude, for your fascinating presentation. It is to go into the Q&A, and for that, I also like to welcome Klaus Miller to the stage. Klaus is in charge all Life and Health regions, namely, North America, U.K., Ireland, and, as well as North and Eastern and Central European markets. So that just sets us, us nicely for the Q&A session, and I already can see a few virtual hands up, and, the first one is coming from, Andrew Ritchie. So Andrew, please go ahead. Oh, hi there. A couple of questions. Apologies if this is a simplistic question. The mortality curve you showed for Longevity in your pricing assumptions, is that the same mortality curve for mortality business, as in the assumed improvement in mortality, which looks pretty dramatic? Would it be the same for mortality business or different? Secondly, I mean, you invited the question, what's your expectation for COVID mortality impact as things stand at the minute, in 2022? And the final question is a cheeky one, but you put projections for 2023 and 2024, which we know are gonna be wrong, because it's gonna be a different IFRS basis. So is it gonna be higher or lower under IFRS 17 for the life business? Yeah, Andrew, many thanks. So let me maybe take the first question. I mean, it's very clear that also on our standard mortality business, there are mortality improvements, that also may be clear. We do not have exactly the same assumptions, but we have similar assumptions in principle. How it depends on the markets. There are some markets who do introduce into their ri- in, into the pricing, the future mortality improvements. And if you introduce these mortality improvements on the mortality business, the price becomes, of course, a little bit cheaper, and that's a risk that you take. There are other markets, and most of the markets I know, and these are not your markets, Klaus, I know, but my markets, we do not take on the mortality business, mortality improvements into account. So what we say internally is, if the trend is our friend on the mortality business, because we price the business with the current best estimate mortality assumptions. So on my side, remember the 100% line? And we know that people are probably dying less into the future, and this is an additional margin, and this our trend, that is our friend, that we're gonna use hopefully into the future. That's on question number one. The second one, you told me it most- Yeah, Andrew, obviously, it's difficult to look into the future, what will happen in the fourth quarter. We have seen in the results already for the first half year, EUR 263 million, which is basically the same number as we have seen all last year. And, as Claude said already, this will continue into the fourth quarter and first quarter, say, and the fourth quarter as well. The numbers are currently put together, but from my perspective, the question is not so much what will happen, is it a EUR 50 million or a EUR 100 million hit somewhere? The question is exactly the same as with the P&C colleagues today. Like was said, the times have never been better, at least in the last 10 years, in P&C pricing as they were today. For the lifetime, an equivalent statement would be, what is the earnings power Claude referred to for our underlying business? When you just look at the last couple of years, we are now seeing about 75-ish% of our normalized EBIT coming from Financial Solutions. About 10%, possibly growing to 15, in the meantime now, from Longevity. As Claude and I, over the last 10 years, we shifted gradually from being the normal mortality reinsurer, and they usually call that business. We were not that happy with not enough data and very old and hard rates. So we decided to shift a little bit to financial, but not only a little bit, we shifted to Financial Solutions and to Longevity. If you want to compare it, we are not negative about mortality organic business in general. We like that. But most of the profits come from elsewhere. So it is like, when Claude and I go out for dinner, at like, we use a fine dining restaurant. We start with an appetizer. As a starter, we have Longevity, and then its Financial Solutions. And dessert then usually has some of our strategic operations, like Viridium, like Vitality, like and others. So the dependence on the mortality side will shrink in the future. Having said that, you will see the claims, no question about that, in the third quarter. And I'm really afraid, possibly also in the fourth quarter. We have seen the spike in the U.S. in August and September in mortality in the population. There are lots of, let's say, mitigating effects on our side. Jean-Jacques referred to the pandemic cover we have done already in 2013. I was at that time not really keen on that because I thought our group risk management is charging us too much in terms of premium for a pandemic risk. They were right, and because I didn't write the capital requirement for this pandemic cover, and we did it very cheap. Now it is in the money, and we'll probably pay out in 2022, as Jean-Jacques indicated. For the real first quarter numbers, you have to wait for a few more weeks. Thank you, Klaus. And then your last question I addressed. I mean, yeah, that's a tricky question, I must say. One thing is clear, if IFRS 17 is an accounting system, it doesn't change anything on the economics of our business. So the economics are not going to change, but the concrete impact is something that we're calculating now. Clients are using it already. We're now making all our test scenarios, and we will be able to tell you something later. Right now, I cannot answer this question, unfortunately. Okay, thanks. Thank you. Okay. Thank you, Andrew, for that question. We continue with Thomas Fossard with his question. ... Yeah, actually, I had some questions for Sven and Jean-Marc. So I don't know if you have the time to? Yes, please go ahead. All right, okay. So I, I'm sorry, I had a couple of questions for this previous presentation. The first one is really a general question regarding pandemic and climate change. I mean, are you seeing any regulatory pressure around the world that actually the industry are not factoring well enough this risk, and you may face, or the industry may face, re-regulatory pressure coming on this side, on these two sides, actually? And the second question for Sven as well is, you know, if you could help us understand what your... What is your exposure to aggregate covers that you may have sold to your clients? Is it a product that you've been able to sell in the past or not so much? Just to better understand what's your exposure to, if you call this the side risk. Yeah, sure. Thank you, Thomas. I guess you are particularly referring to aggregate covers on the natural catastrophe side, right? So let me start with that question. Historically, our risk appetite for aggregate covers on the natural catastrophe side has been much more limited compared to the vertical per event towers. So we only have a very small part of our Nat Cat business sitting on an aggregate basis. That has changed a little bit in the latest two renewal seasons, where we took slightly bigger positions. Once that business was repriced after having had losses for a number of years. So the risk reward relationship was such that we could write a little more. Structurally, we much prefer the event towers and try to avoid the aggregate towers. So on your pandemic question, I mean, we see that regulators and politicians are encouraging the industry on certain lines of business, like pandemic coverage, to start providing that cover again in order to support the economy. But I wouldn't call this significant pressure at this stage. I'm certain that the P&C industry will be prepared to write more pandemic exposures again. But it's difficult to start creating that product in an ongoing pandemic, because the risk of you writing a known loss is just high with the COVID-19 situation. Once COVID is behind us, at least the pandemic side of the COVID behind us, I'm certain that there will be a coverage for pandemic exposure again, from the commercial market, and also in private-public partnerships. Okay. Thank you, Thomas. The next question is coming from Vinit Malhotra. Yeah. Sorry, I hope you can hear me. Yes. Thank you very much. So just staying on the life side. So, yeah. So thanks for a great presentation, Claude and Klaus. So just, the shifting of the EUR 600 million by one year, you mentioned, is linked to your clients selling lower volume of life insurance covers. And just, I'm not really concerned about one year, EUR 600 million here or there, but what is important to me is, what are you seeing in the demand side? So we keep hearing that COVID has enhanced sensibilities around risk, in everybody, apparently. And so will there be higher demand for protection? And obviously, you just said Financial Solutions is 85 or 75% of EBIT. So does that hold on to Financial Solutions or maybe less so? Should we shift a little bit more towards protection, because of this potential demand? Just some thoughts on this would be very welcome. Thank you. Yeah. Let me... You touched on a solution side of workflows. Maybe just on this direct insurance side. The demand is there, of course, you know? But the problem is that many insurance companies, they have not been prepared to capture this demand, because they needed to change the way they were distributing their life business from a standard, old-fashioned, analog way of distributing into some kind of digital distribution. And this takes some time. So this is where we see this, let's say, this slowing down of new business conduction very clearly. You are absolutely right, but it is clear that the consciousness of the end consumer in insurance-like business has increased, and this might give us, of course, a certain push into the future. But you also know, and I was explaining that publicly before already, that the new business on the Life and Health side is really only just the real new business that you write. It is not like on the P&C side, where you write every single year, I would say, a whole portfolio again and again and again. On the Life and Health side, we're sitting on a big portfolio, and this is there. New business is representing quite a small part of the portfolio. So that's why these impacts that you will see, these, I would say, increased sales of life risk policies on the Life and Health side, will take some time. On the Financial Solutions side, we are still growing even this year, but we are not growing as fast as we anticipated. And the reason is linked to COVID, in the sense that COVID has changed something in the financial markets dramatically, and clients are just... I wouldn't say paralyzed. They've just stopped and held back and say, "We wanted to solve a regulatory problem, but does it make sense to continue with what we have discussed in the ten of our weeks so far? Or should we just wait till the capital- the financial markets settle a little bit, and then maybe get a better price?" Whatever the clients are thinking, I can't tell you. But it stalls a little bit. The really big demand we have seen 18 months ago is still there, but the execution lacks a little bit. Not on our side, but on the client side, and this is why we pushed it back. You can expect that maybe there is slightly more business in the next two years, and we still reach the goal. But for the time being, we have just decided to push back the plan. Official plan pay off a little bit. Thank you. Thank you, Vinit. The next question is coming from Henry Heathfield. Thank you, guys. I think you can hear me. Yes. Very nice presentation again. Thank you very much. I'm unfortunately going to ask some questions that highlight my lack of understanding, so sorry for anyone that's already answered this. In your slide 8, your present value claims at quote amounting to EUR 32 billion. I wonder if you could just break down exactly what that is. Is that the difference between your fixed leg and floating leg, and what's the at quote? That would be really useful for me. The second question on the same slide is just moving from the future margins to the total margins, the admin expenses in between, you have a negative EUR 2 million, but we know from future margin of 1.2 to total margin of 1.5. And so perhaps I don't understand why the expense, certain expenses are bumping up total margins. It's probably a complete lack of understanding on my side. And then finally, just within this kind of Longevity reinsurance, I mean, how can you be better than the peers there? It seems... I mean, I kind of understand how you can be better than peers in special opportunity, and reinsurance with P&C side, but I just imagine the data is quite, quite kind of homogeneous. So I just wonder, kind of, how you can differentiate yourself really, vs other markets? Yeah. Thank you. Thank you very much for the question. Based on your first ticket, we looked at the slide, but we all, you know, we, we remember the slide with, with the monitoring, with the extracted monitoring, and you were referring to the first column, which showed the present value of claims at quote, which were the EUR 32 billion. And what this really represents is that, can you take one piece of business? If I take one piece of business onto the, onto the book, then what I'm doing with my best estimate assumptions, we're, we're, estimating the all the annuities that we're going to pay out for the whole lifetime of this business that we take onto our book, until the last pensioner has died. And then we take the present value, and today the present value is easy to be taken because interest rates are so low, so you can more or less sum them up. If you take the present value of the best estimate annuities that we're going to pay from now until the last person dies. And the figure, the EUR 32 billion that we showed, was the sum of all the present values of best estimates that we were having over all the years on this business. So it is really, it's either this business which has been written at various points in time, in various years, and we sum them up. So this is one thing. So I hope I am answering this question. The second question was your admin expense question. So the EUR 259 million, I think we have—we're showing there. These are the admin expenses that we estimate for the whole duration of that treaty. So when you, when you write new business, of course, you need some expenses to take the business on board, for negotiations, et cetera, et cetera. Then you need to monitor price, the business, et cetera. So these are the admin expenses. And the 259 is the sum of the total factored-in admin expenses for every single deal from the inception, from the day we quoted the deal. So the 259 involves all the admin expenses we already have, and all the future admin expenses we need in order to monitor and administer the business. This is the 259. That's why you can take them out, and you jump the margin that you have. You could have done it within hindsight, I must say, because I've also shown you how much admin expenses we have already had, and then the future admin expenses that we would have, so that we have something which is similar to the margin. The margin we split into past and future margin, the admin expenses, we keep it as a whole. So this is... I hope I'm clarifying this part there. And now, I'm really sorry, what was the third question? How, why do we better than- Okay. So, you know, I would say the market is very competitive. What we try is to diversify ourselves out of where the market is most competitive. I told you that at the beginning, we were in the U.K. only, and what we did, I showed it to you, is also via new products, via new systems that we were inventing and innovating every now and then, always a little bit ahead of the game. So if a market starts to become too crowded, and this is a little bit crowded, you know, it's me, the U.K. is a little bit crowded on digital Longevity, then we say, "Guys, come on," yeah? We don't need volume here. And Jean-Jacques mentioned it already. We need profits. So that's where we say we slow down, and we look into other possibilities. And that's why I was showing you the geographic expansion, and I was mentioning geographic expansion into New Zealand, Australia, into Japan, Korea, into Africa, into Latin America. So this is the way we're going about it. Now, in addition, that's also very important in my view, what clients love about us is to get a, I would say, execution reliability, or execution certainty. They love it! Not only the Longevity, they love it, the Financial Solutions, they love it on the P&C side, we heard that. And this is a very, very important factor. So sometimes it's not the price, which is determining; sometimes it's really the fact that you know you have a partner who is looking at the business, who is flexible, and who can also grow quite fast. Because I told you, remember, the various factors that you have when you're quoting a Longevity deal. You have various insurance companies, potential negotiating, so you need to be flexible and fast, and speed sometimes is an advantage. Speed combined with very good data, success in an absolute competitive advantage, in my view. Can I just, sorry, on the admin expenses, just clarify, is that the cost to you or is that what you charge? No. It is the cost to us. Sorry, sorry, this was not clear. It is the cost to us. Okay, so the total margin is removing the admin, the admin cost that you will have, you will incur those? We have some of these 259, we have incurred them from 1995, if you want, I'm exaggerating, until 2020. And part of these admin expenses are going to be incurred. We price them in. When we price the business, remember, the sixth layer is our best estimate, plus the margin. This margin needs to cover what? It needs to cover admin expenses. So at the time of pricing, you need to know what your future admin expenses for the whole block of business are. So you price this in, and you need also to have into this margin, you need to include the cost of capital. And I explained to you how we calculate the cost of capital with these stress scenarios, the future cancer scenarios. Those need to be included when we price the business. When we talk about VNB, as you know, VNB is really the future, is the profit of the deal after admin expenses, after cost of capital. So this is the VNB, is then really what's left over. I'm not sure I'm responding to your question, but I hope it helped you. Yeah. Yeah? Super, super. Thank you. Thank you. I'm not sure if we have another question, at least on my screen it says, Iain Pearce, has raised his virtual hand. Is that still valid? Yes, please. Hi. Hi, everyone. Just, just a quick one. It's just a quick question on the actual vs expected. I was a bit surprised that you got that 100%, given that I was under the impression we've seen fairly favorable experience in terms of sort of, for Longevity, like, in terms of higher mortality recently, particularly in the U.K.. So just wondering how that factors into the, sort of, actual vs expected as you proposed that. Mm-hmm. Yes, I'm happy to do so. Let me give it a try. Okay? I did a quick question, but, you know, if you take COVID, COVID had an impact, of course, on our business. But what is the impact of COVID? It is probably, Klaus, correct me if I'm wrong, 10% increased mortality, probably. Let's take it to 10% increased mortality. And if you then look into our Longevity book, the average age of our book is approximately 75 years, and that's more or less the average age that we have there. And the mortality, now I'm looking at Klaus, of somebody who is 75 years old, is probably 2%. Let's make it 2%. Yeah. So the additional mortality of a 10% increased mortality is 2 per mil. It is only 2 per mil, you know, that we see as an additional mortality. It is very, very limited impact, if you want, of the version of the COVID, that we will see on the mortality. This is definitely not something that we can see already now on the actual vs. expected analysis that we ran in 2020. The impact is minor, and you will never see that. Just in terms of sort of mortality trends, even pre-COVID, obviously, those sort of, you know, Longevity tables have been incredible, I guess similar from the fact of the life? Yes, yes. Okay. Thanks. Okay, well, thank you for all your profound questions. I think we are closing the Q&A session now. And also thank you, Klaus and Claude, for your wide-ranging insights. In a moment, Jean-Jacques will summarize the day and take a brief look forward. And as always, we will not be providing any new guidance for today and for the year 2022. That will have to wait till the Q3 conference call on November fourth. I'd like to also throw your attention to the questionnaire. Claude already mentioned that your feedback is very valuable to us, and we're really looking forward for that in a very detailed manner. And therefore, that is a very important element for us to refine our work continuously. On that note, I'd like certainly to thank you all for participating at today's investor day. This is also on behalf of the entire investor relations team. It's really gratifying that so many of you have participated today and have showed such a keen interest in our presentation. On that note, I'd like to hand over to Susanne. Thank you very much indeed, and thank you to all for participating today. I found the questions highly relevant and I hope it was an informative half day. And of course, any further question you might have, you can interact with us in the coming days and weeks, no doubt. I won't go to an in-depth summary of the sessions. I think that would be too much at this stage. We just want to show one more time our purpose statement, because I think it's underlying what we're trying to do as a company. As a purpose statement is about, you know, entrepreneurial spirit on risk sharing is expressing this idea. The teaming up aspect is very much about team, one team, Hannover Re, and well coordinated for the partnerships with our clients, with new entrants of the business, new partnerships we're trying to seek. The creation of opportunities underlines the fact that we're very optimistic about the outcome for Hannover Re. We see many opportunities being in the so-called bread and butter business, but also in more, you know, tailor-made areas of our business. So I think growth is certainly not the biggest problem. I think the issue is more, you know, to manage the cycle, to manage profitability over the next few years. In my presentation, I tried to convey the message that we're well on track on the strategic initiatives. We are gearing towards supporting future growth. I think their impact will be felt over time, but it's important that we work very focused in a very focused way on these initiatives to continue the growth trajectory of Hannover Re. I also mentioned the ESG, which is a very typical theme where we've done a lot of work and recently issued some statements to signal the path and the support we want to have on Net Zero targets, on climate change generally, and we want to be an active player in that field. We mentioned the dividend, clearly not a new strategy, but certainly an attempt to make very explicit what we tried implicitly to do. So focusing on the continuity of the dividend and making sure that the ordinary dividend continues to be steady and grow over time. Clearly, subject to capitalization, we are focusing on making sure we can deliver on having an additional special dividend that remains in the cards for this year and the coming years. And this is very much part of our strategy as part of the dividend communication. Clemens had a deep dive on inflation and asset management. I think on asset management, you've seen we're very well diversified, that we're very resilient, and we're happy about our positioning at this stage. And inflation risk, very high on the agenda. We know that, we're looking into it. Looking at the pricing approach, our reserving approach are conservative in taking this into account. And obviously, on the asset side, we have the linkers, EUR 5 billion cross-currency linkers, which give us an additional protection for inflation risk. P&C, you've seen the growth story. We continue to grow very, very well. We see opportunities in the traditional and in the non-traditional space. There is growing demand, there is momentum in the market, with the pricing going in the right direction from our perspective. And the fight to quality, which is linked to consolidation of panels of reinsurers, and for us, as a preferred partner for our main clients, but also for the brokers. We see the benefits of these trends. So a very optimistic outlook and a preferred partner position in the P&C space. Life and Health deep dive on the Longevity. I hope it was useful to give us a sense for the earnings power of this line. We're a leader there. I think we have a history of product innovation in Longevity, and one of our goals is, of course, to continue to diversify the book of business. Are very U.K.-centric at this stage, but are seeing some good opportunities outside of the U.K. going forward. And you've seen the earnings power of the whole portfolio, the EUR 600 million EBIT, with a slight delay, but in normalized terms, I think the earnings power of the Life and Health business is very convincing. Clearly, we have a short-term challenge with COVID, but I think going forward, the Life and Health business will generate very good earnings for the group. So that was it. I hope it was an informative half day updating you on our strategy, on our business, and look forward to remaining in touch. Next milestone for us is the conference call. It's on the 4th of November, and that's where we will present our Q3 results and another opportunity to address your questions and feedback. Thank you very much, and with that, I close the investor day for Hannover Re.