Ladies and gentlemen, thank you for standing by. I welcome you to today's Hannover Re conference call on Property and Casualty Treaty Renewals 2023. For your information, this conference is being recorded. Throughout today's recorded presentation, all participants will be in a listen-only mode. After a short introduction by the management, there will be a question and answer session. If you would like to ask a question, you may press star followed by one. Press the star key followed by zero for operator assistance. At this time, I would like to hand the call over to your host today, Mr. Jean-Jacques Henchoz, CEO. Please go ahead. Thank you very much and good morning, everyone. Welcome to this conference call, which will focus on the 1/1 renewal on the P&C side. As usual, I'll start with a few comments, and Sven Althoff will make a deep dive on the key figures for the different markets and lines of business. I'll then comment on the outlook for the year as usual. First, let me mention the devastating earthquakes in Turkey and Syria. We're all watching the news with shock and sadness, and our deepest sympathy goes to all the people affected by these catastrophic events. We hope that the rescue efforts will be prompt and effective. Let me now move to the overall market conditions. As you know, we're looking back at a year 2022, which was quite challenging for the industry, reinsurers and insurers. Insured losses from natural catastrophes were quite elevated, as you know, and clearly above expectations. Additionally, we had the war in Ukraine, which increased uncertainty in the markets, drove up energy prices, contributed to the surge of inflation worldwide. Supply and demand in the industry have become out of balance. We've seen that in Q4, and that's clearly due to the reduction of reinsurance capital, the rise in interest rates, the tighter retro market, and the hardly noticeable inflow of alternative capital in the ILS market. There was a strong difference between the increase in primary insurance and reinsurance prices. For this reason, the proportional business was less attractive to us than the excess of loss business. Rate increases were really strong in non-proportional property, and they were also attractive in a number of specialty lines. More moderate rate changes were seen in casualty and in credit reinsurance, which had a very strong track record in the last few years. Terms and conditions have hardened significantly. The best-known changes are the increased retentions or the elimination of working layers. There are many other risk mitigating instruments which have been introduced or reintroduced in the treaties across the globe, for example, annual aggregate deductibles. We expect the current market environment to continue for the upcoming April and the midyear renewals. That's because the key for the current market dynamics, the supply demand imbalance, will very likely remain in the course of this year. Moving on to our treaty renewals, I'd say that most of the described factors were also true for our portfolio. The improvements of rates as well as terms and conditions are adding up to a clearly improved risk-return profile in our book of business. Additionally, we saw continued healthy demand for Hannover Re as a reinsurance counterparty. I'm therefore very pleased with the outcome of the renewal. The risk-adjusted price increase overall was at about 8%, and even 21% for non-proportional business. The renewal of our retrocession coverage was also very successful. Sven will explain this in more detail later. We were not only able to renew the previous year's retro cover, but also have seen high demand for participation in our K -Cession as our long-term partners sought to benefit from the rate increases in our non-proportional nat cat book. In this renewal, we sharpened our focus on underwriting discipline. We encouraged our underwriters not to renew business if it did not meet our increased margin or terms and conditions requirements, or if it was the least profitable business in recent years. There was an element of pruning and portfolio steering this renewal. As a result, the amount of non-renewed or significantly restructured business increased materially. Because rates in a number of primary insurance markets have not increased as much as we believe is necessary to cope with inflation, we have also encouraged underwriters to offer proportional capacity in a more restrictive manner, and instead further expanded our non-proportional business. As a result, the underlying profitability has increased significantly, and at the same time, the underwriting year premium is unchanged practically compared to the previous year. For the financial year 2023, we will continue to see material top line growth. Some will come in the upcoming renewals in April, June, July. Also, from some of the lines of business, in particular, our single risk or facultative business, but also the structured reinsurance business will see some further growth as we have seen a lot of demands lately, and we continue to see continued interest from clients in the course of this year. In this respect, we are quite confident of achieving the expected growth of more than 5% for the group. This is life and health, P&C combined, after retrocession. As mentioned, the quality of our global book of business improved substantially this renewal. However, you can only partly measure the quality improvement through rate changes. Some exclusions or limitations in coverage are not systematically measurable and can therefore not be included in the reported price changes. These terms and condition improvements were observed in many contracts and will lead to a much better overall claims experience and therefore underwriting profitability. I believe also that the sustainability of the improvement is much better as a result. All in all, we're very satisfied with the outcome of the renewal. The improvements in prices and terms and conditions are, as mentioned, sustainable, we have achieved a durable improvement of the quality of our portfolio, which is much more important than top line, because it benefits our performance in the long run. This is the development of the renewals in January in a nutshell, and now we would like to give some more colors around the specific geographies and segments, and Sven will comment on this. Well, thank you, Jean-Jacques. Also good morning from my side. Today we are reporting about our traditional treaty reinsurance, which was up for renewal at first of January, which is 63% of our overall traditional business or 42% of our total P&C in-force premium. From a geographical point of view, EMEA is the most prominent first of January renewal, where the majority of the business is renewing at that date. For Americas and APAC, we still have very meaningful renewals at the first of April and in the mid-year, at around first of June and first of July. As Jean-Jacques already mentioned, we had an unusually high number of canceled and restructured contracts. Out of the EUR 1.3 billion of cancellations, EUR 950 million was coming from the proportional side. Here, we had a combination of us discontinuing with pro rata business, particularly in EMEA and in APAC, which was no longer making our profitability verticals. Also the fact that, given the stronger price momentum on the non-proportional side, our shifting of capacity for nat cat from pro rata to excess of loss contracts. With EUR 400 million, we also had a meaningful component of non-proportional business, which was canceled as part of the EUR 1.3 billion. Here, some of the aspects Jean-Jacques already mentioned when it comes to higher retentions and or annual aggregate deductibles come into play. On the business which we have renewed, on the other hand, we had a very pleasing change in pricing, which is a risk-adjusted figure of 8% across pro rata and non-proportional business, with a stronger momentum on the non-proportional side. Overall, we have renewed EUR 9.8 billion, so almost the same amount as the incoming figure, only slightly down compared to the previous year. On slide 11, we are talking about the price development in the various reporting lines. As you can see, all reporting lines are showing a positive price change, with the most prominent development in the Americas and on aviation and marine. On the premium side, we have good growth in EMEA and the Americas, and due to the cancellation of the proportional business in APAC, we have a stronger reduction in that region. Overall, as already mentioned, the renewal premium was roughly stable compared to the previous year, but with an 8% increase across all reporting lines, a strongly improved profitability profile of our renewals. If we look at the split between proportional and non-proportional business, you can see that the pricing momentum was less strong on the pro-rata side. As the insurance rates not always make up for changes in underlying exposure assumptions or inflation, we discontinued business in particularly EMEA and APAC due to profitability reasons. When it comes to the Americas, the main reason for us reducing the premium on the proportional side was a shift towards excess of loss premium for nat cat-exposed business. We had a much stronger momentum on the excess of loss side with a very pleasing overall price change of 20.7%, particularly strong in those parts of our portfolio which has seen losses during the 2022 year. EMEA, Americas, Aviation and Marine are most noticeable on that side, but also APAC, and particularly on the Australian business, we have seen strong momentum on the price change as well. That's the reason why overall we could also change the, well, increase our premium volume by more than 20%. This figure could have been a higher figure, also our ceding companies had constraints when it comes to their spending budgets. Given inflation and given that in many programs, there was the requirement from ceding companies to buy additional capacity on top of the existing program. A lot of programs have seen a shift away from lower frequency layers to higher severity layers at the end of the program, where of course, the premium on the contract is lesser than on the frequency protections, which often were enough restructured or discontinued, so reducing the overall premium pool. On slide number 13, you can see that we are reporting about the sixth year in a row with good price increases on our non-proportional business. For 2023, the 20.7% are leading quite a margin compared to the previous years. Just as a reminder, the numbers we are showing on this slide are those which we have reported to you in the respective Februaries after the January renewal. They are not recalculated to end today's as if basis. Let me go into the details for the various reporting lines. I would like to start with EMEA, where the overall change in pricing was 7.2%. We did increase the overall premium by 2.5%, despite the fact that we have canceled a few contracts on the proportional side due to profitability reasons. The most significant price increases we have seen was on the cat programs in Germany and France. Here the background are the well-known losses from the calendar year 2022, which were a driver for this development. Overall, particularly for the German and France portfolio, we can say that the expectation for profitability in our portfolio has clearly improved. When it comes to cyber, we have been able to renew our proportional business at improved terms and conditions. The momentum continues to be positive on cyber reinsurance. Just as an overall side note, this is not only in respect of EMEA, but in general, our today's cyber portfolio is now exceeding EUR 600 million, and we were able to continue to grow our portfolio at the 1st of January. As I will mention later, have also gained some additional flexibility by us placing additional retro protection on the cyber class. In the Americas, the property portfolio has seen the strongest rate increase in our overall portfolio. The volume effect was less pronounced due to often higher retentions by the ceding companies. As already mentioned by Jean-Jacques, we had a more moderate development on the casualty side. The overall improvement of the market was broad-based, but it was most pronounced in property and specialty and to a lesser extent in the long tail classes and casualty in particular. Latin America has only seen a small renewal. The main renewal is still due at the 1st of July. But also here we can report that we have a good momentum of price development and therefore improved profitability of our portfolio. In total, the change in price for the Americas was almost 13%, and we could grow the volume by almost 7%. In APAC, the development was less pleasing, particularly on the proportional side. In many cases, the development of the insurance rates, which are of course, the basis of our renewal decision for pro rata business, was below our expectation. Therefore, we discontinued business in particularly our Kuala Lumpur and Shanghai branch. On the excess of loss side, we could grow our portfolio, and sometimes we were able to shift capacity away from pro rata towards excess of loss. Overall, there was a significant drop of premium by more than 20% due to our decisions on the proportional side. Australia was a relatively small part of our first of January renewals, with only a few programs coming up. Here we had a similar pricing momentum compared to what I was able to report on the EMEA and Americas. Very strong development also here on particularly the nat cat pricing of the business. When it comes to our specialty classes, the development in credit and surety was relatively benign from a pricing point of view. We are coming out of a period where the loss experience in credit and surety has been very positive. Therefore, there was less of a demand from our side to increase pricing. Where we have seen increases is on the excess of loss programs due to inflation. Of course, the underlying turnovers of the business have increased, therefore, often enough requiring larger excess of loss structures. Due to inflation, they were readjusted in the pricing expectation from the reinsurance community. Overall, we are having a small reduction in the premium, coming from a very good level of profitability. Therefore, we are pleased with the development in credit and surety overall. In both aviation and marine, where we are reporting about a 17% increase in price, 2022 has seen losses, either from the war in Ukraine or from older product liability losses which have developed. Therefore, the market has developed a very strong momentum on the pricing on the reinsurance side. The same is not necessarily true on the insurance side, where the development of rates is stable overall on marine and aviation. Overall, the premium volume, which we did write, was relatively similar to where we started the renewal season. One major topic for discussion was the coverage for war perils when it comes to those two specialty classes, where we had very constructive dialogue with the majority of our clients. On some business, we had to discontinue because we couldn't agree on the scope of coverage going forward. Overall, the profitability of the portfolio has certainly increased according to our expectation. Last but not least, the agricultural risks. Here we have a very mixed picture, an overall price increase of 3%. We had very pleasing situations, like the renewal in Brazil, where after the losses from the drought event, last year, we had a very strong reaction from the reinsurance market. A satisfying renewal here, but the same is not true in all the territories. Therefore, we have reduced our exposure in Asia due to insufficient profitability margins in the business. We have also de-risked for selected natural perils like drought and frost, for example, in France or in Poland, where we felt that the underlying exposure trend is not fully reflected in the pricing, and therefore we have reduced our positions for those perils. On slide 16, we are talking about the outlook for our structured business, our facultative business, and the nat cat business for the remainder of the year. On the structured side, we can report that we still see a very strong demand for tailor-made reinsurance solutions, which are bespoke to the individual ceding company, we are expecting some additional demand due to the fact that retention levels have gone up and ceding companies will look for solutions to deal with the more frequency end of their programs. That, of course, was fueled by the development of the pricing in the traditional business. Therefore, we have a strong pipeline for further growth in 2023. As you know, we always shy away from giving a percentage, or specific percentage, premium increase we are expecting due to the fact that transactions on the structured reinsurance side can be very bulky in premium volume, which is different to the traditional business. Therefore, predicting percentage increases is significantly more difficult for this part of our business. On the facultative side, we have seen continued strong demand, which in our view will only increase during the course of 2023. Again, one of the reasons is the fact that the ceding companies in general have decided to run higher retentions. One way of reducing their volatility profile, of course, is facultative business. We are seeing very pronounced rate increases in particularly the cat exposed business. Overall, we can report that the momentum for the facultative reinsurance pricing is good. In many cases, it's stronger than the underlying insurance rate development, and therefore, for the remainder of the year, we expect strong demand and us being able to increase our premium volume for the underwriting year 2023 by more than 10%. We will do that with a limited natural catastrophe profile because our preferred way of writing natural catastrophe exposure is through the treaty side and not through the facultative side. Last but not least, the natural catastrophe business, where we have seen overall risk adjusted price increases of 30% on average. The reasons have already been explained. Of course, the heavy loss activity and at the same time, the limited supply of reinsurance capacity. Risk adjusted rate increases have been most pronounced in North America. Our overall net risk appetite remains relatively unchanged. As I will explain in a second, the higher retro protections which we were able to place allowed us to offer additional capacity to our ceding companies without increasing our own net risk appetite over and above the in-small increases we were willing to accept when we started with the renewal season. For the April and mid-year renewals in Japan, Australia, and North America, we do expect continued strong momentum of reinsurance pricing, and we will be able to be a flexible partner for our ceding companies due to the fact that we had a successful retro placement. We will be able to take advantage of the positive trading environment for natural catastrophe business also throughout the year 2023. Finally, let me give you a few details on our successful retrocession renewal. Before I start with the property retro, let me mention the new cyber quota share, which we were able to place. We have secured capacity of EUR 100 million on a collateralized quota share basis. This is a very pleasing development due to the fact that the demand for cyber reinsurance and insurance indeed is continuing to grow, therefore, this is going to give us the flexibility to be a long-term partner with our ceding companies and accompany them with the underlying growth that they will have in their portfolios. On the property side, we have been able to renew all of our three main retro vehicles. Let me start with our pro rata cession, where we were able to place more than EUR 800 million of capacity. This compares to EUR 450 million of capacity, which we placed last year. Due to the very strong pricing environment, particularly on the natural catastrophe business, our retro partners were willing to support us even stronger compared to the previous year, also in order to take advantage of the good trading environment on their side. This was very welcome because of the imbalance of supply and demand for natural catastrophe business in general. It enabled us to be more flexible in our growth underwriting and satisfy the demand from our ceding companies. From that point of view, a very pleasing development. On the event excess of loss, so what we call whole account, we were able to place roughly EUR 100 million more in capacity, now at EUR 387 million. This was certainly a more challenging renewal, given the loss experience and the tightness of the supply side also for retro capacity, in particular for retro capacity. We have seen the same dynamic that we have seen on the incoming business. There was an ask for higher retentions, and there was a repricing of the business. In combination with K-Cessions, we were able to move the retention levels of our whole account protection upwards, so that our overall spend for our whole account excess of loss protection is not significantly higher compared to the previous year. Last but not least, the aggregates of large loss, excess of loss protection. Here, we decided to place slightly less of a limit compared to the previous years. The reason for that was the already very successful K-Cessions transaction at the time of placement. The fact that, due to the restructuring of the aggregate protection, we wanted to have less of a spend on that vehicle in order to control the overall spending on the retro side for the 2023 period. Before I give back to Jean-Jacques, a few words on the large loss budget, which is increasing from EUR 1.4 billion- EUR 1.725 billion. Here you have various drivers for this development. Let me start by the higher than anticipated growth we had in the year 2022 on the premium side and on the exposure side. We have the same dynamic on the exposure side like we have on the premium side when we think about inflation and the underlying sums insured and how they develop. Of course, also currency development. You know that a significant part of our business is written in U.S. dollar. Given the strong development of the U.S. dollar, there was a catch-up effect also from the currency side in addition to the inflation. Secondly, there is of course also some growth associated with our additional writings in the 2023 portfolio. As already mentioned, this is not a major driver, but one of the components which led to the increase in the large loss budget on a net basis. We have, as a third reason, again, updated our view when it comes to risks in the various models. Some of those adjustments were moving upwards and therefore are also requiring a higher budget for large losses compared to the previous years. With that, I would end my part of the presentation and hand back to Jean-Jacques. Thank you very much, Sven, for this overview. We're now on slide 19, and I'd like to make a few comments on the guidance for financial year 2023. Clemens presented this exactly one week ago as we're moving into the IFRS 17 accounting in the upcoming quarterly reportings. As you can see, we expect the total reinsurance revenue to increase by at least 5% in 2023. This financial year, so the figure is also based on the numbers from prior year, but also the expected upcoming renewals in April and mid-year. Additionally, as Sven just reported, we see single risk or facultative as well as structured reinsurance as segments with a healthy business pipeline. We believe this will contribute to the growth of the portfolio in 2023. Overall, we're quite confident we'll be achieving our targets. They are prudent, granted, but I think it's a very good starting point. In any case, we will be paying very close attention to the profitability of the underlying business and not so much to the volume going forward. Our ROI target is at least 2.4%, as you've seen last week. This reflects the improvement in interest rate levels in accordance to the duration of our investment book. One has to bear in mind that the inflation linkers contribution will be lower than in 2022 in all likelihood. We have also catered, at least to some extent, for a higher volatility stemming from the IFRS 9 accounting, as mentioned by Clemens last week. We've already communicated our new group net income target for 2023 of at least EUR 1.7 billion. As Sven explained, the guidance is based on the proviso that large losses stay within our 2023 budget for large losses of EUR 1.725 billion. The guidance reflects an improving underwriting result in P&C. It also includes the cost of retrocession. As Clemens elaborated in the call last week, the combined ratio in the IFRS 17 world is very difficult to estimate, as discounting effects are not yet measurable. This aside, the quality of the P&C book has strengthened tremendously, and therefore the risk return in P&C reinsurance has improved. We estimate an economic improvement in this renewal to be in the range of 2-3 percentage points on loss ratios. Some of this economic improvement will be visible in our IFRS 17 net income in 2023, and some of it will be used to increase our reserving buffer in order to manage further periods. We are committed to maintaining our approach of prudent initial loss picks and prudent reserving. We believe it should put us in a strong position in light of elevated inflation levels, which we also expect for 2023. Regarding the dividend guidance, we remain fully committed to our dividend strategy and intends to provide a stable or growing base dividend. To pay a special dividend if we reach our profit guidance and have a comfortable level of capitalization to support our business. As usual, we will communicate the proposal on our dividend 2022, together with the full details of our numbers for the full year financial results on March the 9th. With that, let me close the presentation part of today's session, and we would welcome your comments or questions. Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one. If you wish to remove yourself from the question queue, you may press star followed by two. Anyone who has a question may press star followed by one at this time. We have the first question from Freya Kong from Bank of America. Your question please. Hi. Good morning. Two questions, please. You've retreated quite meaningfully from proportional treaties after growing quite strongly in recent years. What's driven this increased cautiousness on primary rate increases, and are there any particular business lines you would call out? This seems to be in contrast with most commentary we've heard from commercial lines insurers who say they are still pricing comfortably ahead of loss cost trends. Secondly, of that 2%-3% improvement in your loss ratio that you estimate, how much of this will be used to build into your reserve buffers? Thanks. Yeah, let me start with your pro rata question. The insurance rates are indeed still growing positively for most territories and product lines. We see a slowing down of that development. As Jean-Jacques mentioned at the beginning of the call, we also have increased profitability requirements due to the inflationary environment and due to the fact that we are updating our model assumptions over time. Therefore, the relative attractiveness of the pro rata business was at times no longer attractive compared to the rate development we have seen on the non-proportional side. Therefore, we have reacted in specific regions and for product lines like low margin business or in personal lines, for example. Indeed also in the industrial business, when we saw that the portfolio of a ceding company was not up to the average quality of a portfolio compared to the global market. Therefore, we decided to be more restrictive on that. On the profitability question, I give back to Jean-Jacques. Freya, thank you for the question. On that note, we, you know, we want to make sure that we exceed our target. That's the guidance for 23. That's the priority. We also would like to come back to significant levels of reserving. You know that we supported our results 2022, the priority here will be on rebuilding. We don't have a set plan, the intention, subject to the performance of the portfolio, will be to come back to the levels we've been at about a year ago in the course of 2023 and 2024. No decisions, no automatic decision on the reserving level. We look at performance first, later in the year, we take decisions. The intention is clearly to increase our buffers in P&C to manage volatility over time. That will be part of the, of the loss ratio, points with, we'll be gaining through the quality improvement, in this year. Okay, thank you. The next question comes from Andrew Ritchie from Autonomous. Your question please. Hi there. First question just on catastrophe exposure. I think just to clarify, Sven, I think you're saying effectively the net PML or cat exposure of Hannover hasn't really changed. Well, I guess we can see that in the premium growth is about equal to the price, but maybe just confirm that. In that context, isn't there a lot of dry powder for the rest of the year? Because your cat capacity, at least judging from the K-Cessions, which is the quota share for your cat capacity, appears to be dramatically up more than the inwards premium. I'm assuming you want to grow the net premium in cat. Is... Is it just a tremendous amount of dry powder for cat for the rest of the year? Is that how I should interpret it? The second question, I'm not quite sure what the 2-3 points economic improvement in loss ratio means. How do I relate that to the eight points risk-adjusted improvement in pricing? Is that eight points not really risk-adjusted? I guess I can see it working both ways. I mean, it sounds like you would acknowledge you haven't fully captured changes in terms and conditions, which would suggest you could actually do better than 2-3 points, 2-3 points seems low versus the eight points. Just can you just help us square those numbers? Thanks. Can I start with your cat questions, Andrew. Our net risk appetite for catastrophe business was mostly stable. It's showing small increase, we are talking single digit percentage points here. Therefore, I would call that mostly stable. You're right when it comes to the dry powder. We have not fully utilized the capacities we have available for the full year 2023. We will have the flexibility to look at attractive alternatives or additional business cases for the first of April, first of June, first of July renewals. Therefore, we are optimistic that our net premium for the cat business will ultimately increase during the course of 2023. We are under no pressure to write additional cat business in case the pricing development should slow down, which is not what we expect. We expect a very strong momentum on the pricing side also to continue for the rest of the year. Therefore, the dry powder is very welcome. One reason why we have also not fully utilized the capacities at the 1/1 renewal is of course also a question of timing. I mean, some of the 1st of January business is renewed rather early. Therefore, we wanted to wait for the final outcome of our retrocessional placement rather than speculating how successful we may or may not be. Therefore, that dry powder was not available all through the January renewal, but only in the later part. Then on the question of 8% versus the 2%-3% increase in profitability. The 2%-3% is obviously not a direct translation from the price increases we are reporting. Has to be seen more in the context of how much we are willing to increase our to decrease, I should say, our ultimate loss ratio picks for the various classes of business. As you know, we have a more prudent approach on that side, so therefore, we are not translating the price increases one to one into that equation. Sorry. the better way of putting it isn't, to say that 8% is the economic improvement, 2- 3 points is the accounting improvement. Yeah. That's one way of looking at it, Andrew. I mean, it is a risk-adjusted figure, the 8%. Therefore, that is, of course, mainly looking at the economic side of things. The 2%-3% is how it will translate into our ULRs. You're right, yes. Okay, that's great. Thanks very much. The next question comes from Will Hardcastle from UBS. Your question please. Yeah, thank you. A lot of the questions have been answered, and thanks for a thorough presentation. I guess just one more then from me. Does the higher retro change your expectations heading into the June renewal? I know we've had previous conversations, and you said before that you wouldn't be seeking much U.S. catastrophe growth given already high exposures there. Has this changed that heading into those renewals? Will, your line was really bad. I hope I understood your question correctly. I give it a try. If not, please ask again. The higher amount of retro has not significantly changed our view as our view on U.S. perils. We are still working hard to improve the diversification in our portfolio. Whilst we are willing to grow the U.S. side in proportion with the rest of the portfolio, we are still not prepared to outgrow on the U.S. natural peril side compared to other territories. That was great. Thank you. The next question comes from Kamran Hossain from JP Morgan. Your question please. The first question is just on the reinsurance growth this year. I guess you highlighted you moved to non-proportional business, you know, lower premium, higher margin, theoretically. Do you expect that shift to continue later this year, or is that more of a one impact? Just trying to think about later renewals and top line. Second question, I think my question keeps changing as you keep giving me answers. On the risk adjusted, you know, price increases Andrew's talked about, versus the loss ratio improvement. I mean, even if you book, you know, the midpoint of 2-3 points, it suggests something like EUR 400 million post-tax benefit to earnings based on the midpoint, and that's on my NEP. If you're rebuilding over two years, it still feels like you're being pretty cautious. I mean, if I use the eight points, it's a huge number. just trying to think about just how cautious you're being right now versus, you know, how you've been in recent years and recent cycles. Thank you. On the renewals which are coming later, Kamran, it's too early to say whether you should expect the same decrease of pro rata versus shifting towards excess of loss. The one renewal is more pro rata heavy compared to other renewals later in the year. If our assumption is correct that the pricing momentum is continues to be that strong on the non-proportional side, we may continue to shift some of our pro rata capacity towards excess of loss. Whether we will have the same level of discontinued business, regarding our profitability requirements, which was a big feature for the 1/1 renewal, is too early to say, but most likely 1/1 was more prominent than the rest of the year compared to those cancellations due to profitability. Kamran on your second question, your estimate is correct. The development of our performance will be, you know, driving decision making level. As mentioned, you know, we will try to come back to comparable level of reserving protection, having a sufficient buffer compared to a year ago. If circumstances permit it, we'll take them in the course of 2023. If not, if we need a bit more time, we'll give ourselves a bit more time in the course of 2024. At this stage, indeed, it appears very conservative, but the year is long. A lot of things can happen. We're also in a new accounting regime, which we need to experience in the coming quarters. We'll give you some updates on where we feel we are in terms of financial year performance. Of course, we'll give you into to some more granularity on the reserving level as of end of 2022. It will give you some order of magnitude for for what could be achieved. As you say, at this stage, it would appear, you know, if everything goes according to expectations, that we're being cautious, that we have the potential to rebuild the reserving level in 2023. We'll do so if we have enough margin of maneuver. If not, we'll give ourselves a bit more time in the course of 2024. Maybe a few additional comments from my side, Kamran. I mean, we are talking about 8% on 40% of our overall P&C business. For example, it does not exclude, it does not include the Advanced Solutions business. As you know, these are underwriting year figures. For the financial year 2023, you know that the approximation from our side for how an underwriting earns in the calendar year is only 50% of the underwriting year will earn in 2023, with a further 50% then earning in 2024 and 2025. There's certainly also a time lag. Of course, the reserving comments which Jean-Jacques already made. Lastly- Yeah. Lastly, Kamran, the 2%-3% was after retro, while the 8% is gross figure. Okay, that was great. Thanks very much. The next question comes from Vinit Malhotra from Mediobanca. Your question, please. Yes, thank you, Yeah. Thank you, Sven. Vinit here. Just quickly following up from where you left this last question. I understand the 8% going to 2-3, maybe retro is 5%. Just clarifying, have you attempted internally even to quantify the terms and conditions? Because all those exclusions, all those high deductibles, they will come on top, right? That will be X mills. I know we probably can't quantify it today, but has there been an attempt internally to think, "Hey, will this be another percentage point if we have to guess?" That's, I know, a tricky one, but that's something that is also of interest. My second question is structured. You know, I always ask this in probably these calls, but with all this demand, and you know, you're expecting far more because of the structural change in high deductibles, could this be more profitable now? Could you just remind me, is it better than the, kind of 98, 99 that used to be in structured? Could you just remind us there? Just last thing is that this reserve buffer rebuilding up, sorry. Are you thinking of going back to the 1.7 that you last reported in May last year? I'm just checking that. I mean, I remember there were these two quarters of credit buffer releases, roughly EUR 160 million. Is that the number you had in mind when you said that you'd release reserve buffers last year, or was it a bigger number? Just trying to understand how much to subtract from pricing gains that you have. Thank you. Yeah, let me take the first two, Vinit. We have not tried to quantify the structural changes in the programs or the introduction of the risk mitigating factors we mentioned earlier. We of course, do that when we price the individual contract. There, this analysis is extremely meaningful. The various changes are so different compared to from one program to another program, from one client to the next client. To come up with a uniform figure, which is then a fair representation of that calculation for the entire portfolio, would be too difficult in our point of view. Therefore, we can qualitatively say that we had those improvements, but we will not start the attempt to quantify that effect for the entire portfolio. When it comes to structures, and the margin you were mentioning. I mean, those margins are clearly making our cost of capital. Therefore, there's not so much pressure to increase the level of margin for the entire portfolio. Also here, of course, it depends what is the driver for the underlying demand for the business. If we are talking about very risk remote structures, then the margin requirements will not change. If we talk about more frequency-driven layers, which are protecting ceding companies because they have now increased their retention under the traditional programs. Those structures will come with a higher degree of risk transfer. We are of course, then charging the same amount of margin requirement like we would with the traditional business. There's no arbitrage for the ceding companies possible, whether we put it into the traditional or into the non-traditional, IE, structured bucket. The driver is always what is the required capital for a transaction. All of our transactions have to make the hurdle rate of 1,000 basis points above risk-free. Okay. Vinit, on your last question, regarding reserving buffer. Indeed, you know, the latest number you've seen showed EUR 1.7 billion as a reference point. This is certainly our reference point, and we'll certainly aim at matching that level over time, will take account of the development of the portfolio, of course, volume wise, mix of lines of business development in the next 12 months, portfolio mix. That would be the reference point. On the ninth of March, we'll give you some initial input on the reserving level. The Towers Watson study will be published in May. We'll be able to give you some more indication. At this stage, I'm not able to give you a precise indication on the book used in 2022. I'll have to ask you for a bit of patience. In any case, during our next conference call, we'll go back to this question. Sure. Thank you. The next question is from Derald Goh from RBC. Your question please. Morning, everyone. Just two quick questions, please. The first one is just on the 8% risk adjusted rate change. Can you say what's the level of inflation and risk adjustment that you've assumed within that, please? The second one is just on nat cat. What's the volume of premiums that you have today after the January renewal? Thanks. On the risk adjusted 8%, as explained during our investors day last year in October, we are using a very wide basket of inflation indices. Almost 400 different inflation indices. Therefore, there is not the one number I can give you. What I can tell you is that the incremental increase for the inflation assumptions compared to the previous year has not been high. It was stable for most of our indices. Only in a few indices we have put another incremental increase in our inflation assumption at around 0.5- 1 percentage point. I don't have an average number across all product lines, across all territories for you. All I can say is that our assumptions in 2020, for the 2023 year were broadly in line with the assumptions we have also used for 2022. Could you kindly repeat your second question? Yep. Just in terms of your nat cat premiums, what's the volume of business you have today after the January renewals? Just on nat cat specifically? I mean, nat cat specifically or anything nat cat exposed. I'm not sure which way you quantify it, but I mean, both would be great. Thanks. Yeah, that's a number we have not disclosed historically. Therefore, for the number I have at hand for you, as we said, our premium has increased and the rates have increased at around the 30% mark globally. We are not giving that specific information on our nat cat or nat cat exposed business. Okay, no problem. Thank you. The next question comes from Thomas Fossard from HSBC. Your question, please. Oh, yes. Good, good morning, everyone. Two questions or two last questions for me. The first one will be related to non-proportional, sorry, proportional, APAC premium change, down 28%. Just was wondering how much of this decline was coming from the disbandment of or the consolidation of your Accident & Health large proportional contract. Is that already completely gone, or is it going to be non-renewed in April 1? The second question would be related to casualty. Maybe I missed this point in your presentation, but what's the view of kind of currently regarding casualty? I mean, was it down, was it up? Any pockets of interesting business in the current market situation? Thank you. On the cancellations in APAC, they were roughly half and half split across our Shanghai and our Kuala Lumpur business. Most of the business we have canceled in Kuala Lumpur was personal lines related on the pro-proportional side. We are not only talking about Accident & Health business here, we are also talking about other personal lines business, like motor. Therefore, we have reduced our Accident & Health portfolio in Kuala Lumpur, we are still writing an Accident & Health portfolio in that branch also on a proportional basis. Obviously at a lower level. On the casualty side, the development of terms and conditions has been more stable compared to property and some of the specialty classes. Therefore, casualty in our portfolio was also more stable. There was no general global trend. We did not specifically reduce casualty, but we also didn't see any particularly new opportunities. Therefore, we are talking about a stable portfolio here. Where we have been very mindful of the underlying insurance rate development is in some of the professional lines business, D&O business, where the rating quality has already started to reduce in 2022 compared to previous years. Here it was very important for us to understand the cycle management approach of our ceding companies. Most of them have taken their own steps in order to deal with the lesser rate that they are getting for their product lines by starting to reduce their volumes down, which we felt was the right way of dealing with it, and therefore, we would continue with that business. Others were more top-line focused and would write more exposure against the backdrop of reducing rates. Here we have reduced our positions. Overall, globally, relatively stable situation on our casualty portfolio. Thank you. Next question comes from Vikram Gandhi from Société Générale. Please go ahead. Hello. Hello, morning. It's Vik from SocGen. I hope you can hear me all right. Yep. Three quick ones. Firstly, I wondered how should we think about the capital intensity of the business review that 1/1. Has it consumed more capital or less capital than what you would have anticipated or planned for at the nine-month stage? That's question one. Second was, I'm looking at the flattish volumes on the renewals and the more than 5% growth guidance for the top line. I just wondered if you could help us with some of the moving parts on how to bridge the gap. I'm aware there were some comments made on the fact business and the gap business during the opening remarks. I'm not sure whether a lot of growth to be had for the rest of the year is likely to come from the structured re and ILS business. How could we bridge that gap? The third one, if I'm not wrong, I think, Sven, there was some expectation flagged in one of the previous con calls, I think it was in nine months results call, that the group expected strong pricing in the cat business to have a positive knock-on effect on the casualty business as well. It appears as though it hasn't really materialized at the industry level. Just interested in your thoughts as to how the dynamics have changed. Is it the high level of interest rate or something else? That'd be very helpful. Thank you. Yeah, thank you for those questions. You're right. In the late autumn, we were certainly hoping for a stronger knock-on effect also into the long tail classes. But you've already given the explanation why that didn't happen. The very strong interest rate development, of course, allowed for a more significant discounting of loss development patterns in the pricing than we originally expected. From that point of view, we are not unhappy with the casualty renewal, but we were certainly hoping for a stronger knock-on effect from the nat cat side also impacting the long tail classes. When it comes to the 5% premium growth we are talking about in our guidance, the three or four main drivers how we will get to that number is from an underwriting year perspective that we do expect good growth opportunities, as already explained from our Advanced Solutions business, our facultative business. We still have very meaningful renewals ahead of us for the Americas and APAC. We do expect further growth opportunities for that side. Fourthly, from an underwriting year perspective, I do also expect that due to the increase in reinsurance pricing, we will also see a stronger acceleration of insurance pricing development at least in the most impacted lines of business. Therefore, I do have the expectation that the premium adjustments, or the premium development, also at the ceding company level, will be stronger than anticipated now at the 1/1 point. I think there will be good momentum that in many cases, particularly on the property and in some of the specialty classes, we will see higher seeded premium volume at the end of the day compared to what the ceding companies were telling us going into the renewal.We have not preempted that development in our figures to a meaningful effect. The last point I would like to mention is that the 5%, of course, is a financial year number. As you know, we had very strong growth in 2022. As I mentioned earlier, the earning pattern for our business is roughly 50% of an underwriting year earns in the same financial year, 40% in the following financial year and 10% in the later financial years. Also the strong development of premium in 2022 will have a significant impact in getting to our 5% guidance on the premium side due to the fact that we are earning significant parts of our 2022 business in 2023. Last question on the capital intensity side. Given that the volume is overall stable and we have shifted more towards non-proportional business, this will be slightly more capital intensive compared to proportional business in general. On the natural catastrophe side, this will of course be strongly mitigated by our successful retrocessional placement. Therefore, the renewal that we had at first of January are in line with our capital projections. There is no surprising element here in the development of our portfolio when it comes to the usage of capital. Okay. That's fantastic. Thank you very much. The next question comes from Ismael Dabo from Morgan Stanley. Your question please. Hi. Just a really quick clarifying one for me. You increased the retro cover substantially by about 56%, yet you also increased the nat cat load, as well. I believe last year your commentary was that you increased the nat cat load because you were retaining more in your book. I know you've mentioned it's primarily due to the significant growth in 2022. Just want to make sure I'm understanding that correctly. Basically you increased the retro, but you also increased the nat cat load. Last year it was you increased the nat cat load slightly because you retained more. Just trying to figure out the rationale behind it a little bit. Yeah, you're right that we had that development last year. This year, due to currency development and inflation, as I've already mentioned, and the fact that we were growing so strongly in 2022, there was a requirement to increase the cat loads coming from the $1.4 billion, particularly when it comes to the currency development in some of the territories, particularly the U.S. dollar territories. We would have been particularly tight in our risk appetite because the free capacity that we had as a dry powder was eaten away to a certain extent by currency development. The fact that unlike in 2022, we had a much stronger imbalance between demand and supply on the natural catastrophe side. Therefore, we felt in order to create that room to maneuver, and in order to also help our ceding companies with their additional demand, it was the right moment in time to expand our retro placement, and have the corresponding increase in the major loss budget. As I said earlier, we have slightly increased our net risk appetite as well in the lower single-digit territory. If you take that all together, this is explaining the reason why we are having a higher nat cat budget and a higher retro placement going into 2023. Great. Thank you. That's all for me. The next question comes from Roland Pfänder from ODDO BHF. Please go ahead. Morning. Two questions from my side. Firstly, you mentioned you had an update on your risk models. Please, what were the drivers here? Secondly, you offered more nat cat capacity to your clients without increasing your net substantially. What were the positive side effects? Were you able to get other non-cat business out of this move, or how do you explain it? Thanks. Yeah. On the risk models, we are really talking about the usual annual validations that we are doing, where we are taking the latest information into account from underlying loss data and from scientific studies. From that point of view, there was not a particular trigger of us re-reviewing certain risk models other than the obvious one. I mean, of course, in case of major losses, you always have an actual to expected exercise and see whether the actual loss experience was in line with the expectations you had when you were writing the business. It was a combination of just updating the risk models from a normal validation point of view, and having a closer look at those perils where we have seen loss activity over the last two or three years. I hope that explains your question on the risk modeling side. Could you please repeat your second question? Yes, sure. You offered more nat cat capacity to your clients without keeping much more net for yourself. What were the positive side effects here? Were you able to write more non-cat business from your clients? Did that help or what was the issue to really offer this higher capacity? Yeah, that was definitely a feature we have seen and we also expected to see. As you know, we are in very long-term partnerships with our ceding companies and very often across their entire portfolio. Us being a stable partner on the natural catastrophe side certainly helped our positioning also on their non-nat cat related placements. Even within property, we have been able to write additional business with the ceding companies, which is, for example, not covered by the K transaction, as this is only taking the event towers and, for example, not the risk towers. We could also leverage within the class of property. Of course, it's further demonstrating to our ceding companies that we are a constant, a consistent long-term partner also in difficult times, which of course also helps the long-term positioning of Hannover Re in those client portfolios. It's a mixture of short-term opportunities we could raise because of that, but also a long-term view cementing the strong partnerships we have with our ceding companies. Okay. Thank you. The next question comes from Phil Ross from Exane BNP. Your question, please. Hi. Good morning. firstly question for Jean-Jacques Henchoz on your comment at the end of the presentation. You said there'd be less emphasis on top line going forward, if I heard you correctly. I just wanted to clarify what you meant by that. Is that a statement related to the optics of the new accounting regime, or are you signaling that we should expect structurally lower growth from Hannover Re in future? I think Sven Althoff may have largely answered the numbers part of that, but I just wanted to clarify the statement. The second question on capital return, you talked about the desire to rebuild prudence in the balance sheet throughout FY 2023 and then maybe FY 2024, depending on what happens. How should we think about this in the context of the special dividend guidance? It seems to me like there might be some potentially competing factors there in future. Thank you. Yeah. On your first question, Phil, I didn't want to imply that we're doing away with growth. I think the long-term trajectory remains very positive. What I wanted to say that we managed the cycle and there were a few trends we saw this renewal, particularly the attractiveness of the non-proportional business. We looked at the quality rather than volume on that b ut there's no change in the outlook. We are still very confident about the continuous opportunities. We're seeing a lot of opportunities around the globe. We want to make sure that this comes in the book with the necessary quality, and that's what we did. That's the instructions we gave to the underwriters. Any one year, depending on the market circumstances, we'll take the necessary step on the underwriting side. Mid to long term, the outlook remains very good. We receive much more opportunities in through the brokers, through direct channels than we would want to take on board. We're very positive about the outlook. You know, on dividend, we'll say more in March. As I mentioned, the approach remains the same. We'll have to look into the level of capitalization. There's the Solvency II view. There's the rating capital view. We're looking into, you know, rebuilding the prudency as I mentioned. Based on the numbers, the final numbers for 2022, we'll come back with a proposal which would be submitted to the general assembly on the dividend. The approach remains the same and no change of approach on base and special dividend. Okay. Very helpful. Thank you. Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star followed by one. We have a follow-up question. Mr. Gandhi, please go ahead. Hi. Thank you for the opportunity. Just one quick last one, actually. This is a conceptual one. You know, the comments that, you know, improving terms and conditions are not fully reflected in the risk adjustments or the risk-adjusted pricing. I'm just trying to understand, I mean, you know, isn't all the changes to the program structure, I mean, whether it's retentions or deductibles or, you know, whatever layers that, you know, reduce or moving up the layers. Whatever changes the programs are, aren't those really an input to determining the price that, you know, Hannover Re offers to the clients? By definition, those things should have been factored into the pricing because that determines the pricing. I'm sorry, I'm a bit confused as to why they should not be reflected in the risk adjustments. As I tried to explain on an individual contract level, we are of course able to put that into numbers and be very specific about the impact of those structural changes. Lumping that all together is difficult because the type of changes we are talking about are very different, and the impact on required pricing is therefore also very different season by season by season. Therefore, attempting how much value you can give to, for example, the introduction of an annual aggregate deductible where you have the development normally that the premium for the same limit is less compared to the previous year premium. The layer is better protected because there's an annual aggregate deductible going first before we start paying losses into a number for the portfolio, which is telling you how that is changing the quality of the pricing is just a very difficult exercise. We have not started the attempt to do that at the portfolio level. We of course do it when we are individually pricing the business, but taking that up to the portfolio level is just an exercise we have not historically done. We will also not start doing it for the 2023 year of account. Okay. Okay. Understood. Thank you, Sven. Thank you. There are no further questions at this time, and I hand back to Jean-Jacques Henchoz for closing comments. Well, thank you very much to all of you for joining this call. I won't attempt to summarize, but I think you covered a lot of the messages through your questions. Thank you for that. We really wanted to convey the key message on the dramatic quality improvement of our P&C book and the positive outlook, and I think we captured these topics during the discussion. Next time we're together will be, as mentioned, on March the ninth, where we're looking at the year-end full year-end results, and we'll be able to give you some more granularity on the outlook for the market P&C, but also life and health going forward. Thank you very much. I close the session for today. Ladies and gentlemen, the conference is now concluded and you may disconnect your telephone. Thank you very much for joining.