Ladies and gentlemen, welcome to the Hannover Re Conference call on the Q3 2024 results. I'm Sandra, the Chorus Call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Karl Steinle. Please go ahead, sir. Good morning, everyone, and welcome to our earnings call for the results for the first nine months of 2024. As usual, our CEO, Jean-Jacques Henchoz, and CFO, Clemens Jungsthöfel, give you a brief overview on the business development in 2024 so far. Thereafter, Jean-Jacques Henchoz will provide an outlook for the financial year 2025. For the Q&A today, we will be joined by Klaus Miller and Sven Althoff. With that, I hand over to you, Jean-Jacques Henchoz. Thank you very much, Karl. And good morning, everyone. Before we discuss our nine-month results, let me say a few words about the personal announcement we made on Friday. I will hand over the CEO position to Clemens at the end of March. And I mentioned in our media release that the decision not to renew my contract was taken with a mix of emotions, and it was indeed not an easy decision for me. I've been extremely happy with my role as CEO of Hannover Re, and I've come to love this company, which is perhaps why it took many people by surprise. The main reason for my decision is purely private. And as I reflected about my personal goals for the coming years, I felt that I should allocate more time for my family and personal interests. Possibly turning 60 in September, right after Monte Carlo, added to my wish to be a bit more self-determined, although the prospect of not going to Monte Carlo was not part of the decision. I intend to build a portfolio of activities in the future, which will ideally include non-executive and advisory roles, but also an opportunity to give back in the form of nonprofit activities. In that sense, I have a great sense of gratitude for the opportunity to lead this fantastic company, and I've been blessed with a very strong team, and the good news is that Clemens is, in my view, an ideal successor. The two of us have worked in tandem for the last few years, and I'm convinced that Hannover Re will continue its upwards trajectory under his leadership. No pressure, Clemens. With Christian Hermelingmeier, we're also very fortunate to have a talented new CFO joining in April. He has convinced everyone within the Talanx Group with his deep expertise and leadership qualities in his current role. So the executive board is in great shape and will start the year with a lot of strength and a good outlook. So this is not a farewell event today, as I still have a number of tasks to complete and also some further opportunities to exchange with you all in the new year. I also intend to remain closely linked with Hannover Re after lunch. So this is certainly an outlook with my presence a bit more in the background going forward. With that, Clemens, maybe you want to add a few words before we dive into the figures? Well, thank you, Jean-Jacques. I certainly do share the mix of emotions you mentioned, Jean-Jacques. I'm very grateful for the time we have worked together and will work together in the coming months on a transition. I'm also extremely grateful for the trust placed in me. It is important for me to emphasize here that it is an orderly handover. Hannover Re is in an excellent position, as you will see from the numbers which we are about to present to you. And as I step gradually into Jean-Jacques's shoes, which are big, Jean-Jacques, I will make sure that Hannover Re stays on its strong and successful path and that we conduct our business, the Hannover Re way, the somewhat different way. And I very much look forward to continuing to working with all of you in the future. Thank you very much, Clemens. Let's go back to our figures year to date. Looking at the slide deck, I'm very satisfied with the company's performance in the first nine months of the year. As you can see, the operating performance is running very well in line with our expectations. On top of that, we recorded a net positive one-off tax effect of EUR 120 million in the third quarter. Altogether, this brings the nine-month group net income to over EUR 1.8 billion. Our initial full-year target of EUR 2.1 billion is comfortably within reach. Hence, we have updated our guidance for the group net income 2024 to around EUR 2.3 billion. In P&C, we have successfully expanded our portfolio in a further attractive market environment, resulting in forex-adjusted growth in reinsurance revenue of about 10%. The new business CSM and loss component for business written in the first nine months of 2024 amounted to EUR 2.4 billion, also growing double digits compared to the previous year. The combined ratio of 87.9% is well in line with our target of below 89%, reflecting the very good underlying profitability of our P&C portfolio. On a nine-month basis, the impact from large losses was around EUR 100 million below expectations, and as usual, we have nevertheless booked the entire large loss budget for the nine months. In life and health, reinsurance revenue was rather stable year on year, but has grown compared to Q2. Apart from regular portfolio management, this development also includes a few non-recurring effects and an accelerated runoff of U.S. mortality business following the last recaptures connected to our in-force management actions in 2018. Therefore, the stock line development in life and health does not concern me, and certainly not when I look at the successful new business generation, although almost EUR 500 million in the first nine months of this year. Also here, I would like to point out that this number is well in line or even ahead of our plan. And the reduction versus the prior year is mainly driven by the extension of an individual large treaty in the prior year. The profitability of our life and health business is very satisfactory. The experience variance was overall positive within all reporting categories and mitigated the impact from reserve strengthening for pockets of our morbidity book, mainly in China. The reinsurance service result of EUR 668 million is slightly above our pro rata share of our full-year target of more than EUR 850 million. The investment performance was also very satisfying. The return on investment of 3.1% is clearly above target and reflects the strong ordinary income. As expected within our guidance, we recorded a moderate impact of EUR 44 million from impairments on real estate, and also the valuation of one equity participation had a negative effect on the result. The impact from realized losses, change in ECL, and the valuation of assets at fair value through P&L was, however, rather limited. Altogether, the return on equity of 22.9% highlights the company's strong earnings power, and the solvency ratio of 260% reflects our company's strong capitalization. The 15% decrease in the solvency ratio versus end of Q2 is largely driven by two factors. Firstly, foreseeable dividends for the year 2024 are included, which was not the case in the half-year number, and secondly, we have considered the planned growth for the coming year, as usual, in the third quarter. The first effect accounts for roughly two-thirds of the decrease, the latter for the remaining third. With regards to the foreseeable dividends, the number included in the solvency ratio as of today reflects the ordinary dividend of the prior year, as the actual dividend decisions for the year 2024 will be taken in early 2025. Shareholders' equity increased by 10%. The increase is driven by the group net income for the period. The impact from interest rate and currency movements was overall limited. The CSM increased by 9.2%, mainly reflecting the new business value generated by both business groups. We are therefore very pleased with this development, as it clearly exceeds our strategic growth target of more than 2% for the CSM. Risk adjustment increased by 7.8%, mainly due to new business in P&C and assumption changes in life and health. The total of €12.4 billion combining risk adjustment and CSM is up by 8.7% and is strengthening our earnings outlook for the years to come. On that note, let me hand over to Clemens for more of a deep dive on the financials. Thank you, Jean-Jacques. Yes, starting with the development in P&C reinsurance, top-line growth remained strong in the third quarter and is now at 10.4% adjusted for currency. The increase in net revenue was even slightly more pronounced due to the reduced volume of our retrocession program. The overall growth is well diversified by region and line of business, reflecting broad-based business opportunities in P&C reinsurance markets. In APAC, the favorable underlying growth was mitigated by our portfolio pruning in 2023, which still sort of earns through in the financial year 2024. In the third quarter, we have recorded a high frequency of losses from natural catastrophes, including a series of weather-related events in Canada, floods in Europe, and Hurricanes Beryl and Helene. Most of these events are at least partially covered by our retrocession program, and also, with regards to the floods in Europe, and in particular, Hurricane Helene, we expect to get some relief from retrocession, but as most events happen around the time of closing the books, our estimates are based on a top-down analysis. Hence, we decided to book the numbers gross for net at the end of the third quarter. The actual gross loss might come in higher when we will book the numbers on treaty level with the corresponding retro relief. However, the net numbers do reflect our current estimate. The total impact from large losses was EUR 1.3 billion in the first nine months, in contrast to the first half year. This number now also includes an estimate for Baltimore Bridge loss of around EUR 100 million net. As we have learned that the final proximate cause report will only be available in 2025, we have decided to book it at a level comparable to the Costa Concordia incident in 2012. There are still various missing details, and we have also not taken any position on discussed limitation of liability, all of which is needed to fully evaluate the size of the loss. The runoff result was an overall positive EUR 284 million. It includes positive prior year development in most lines of business, but also a negative development, for example, for individual large losses like the Italy hail events last year, which deteriorated by around EUR 130 million. In addition, the strong underlying profitability provided room to add some prudency for older underwriting years. Last but not least, the combined ratio includes a discount effect of around 7 percentage points. This is still higher than the interest accretion in the reinsurance finance result, but our prudent initial reserving should offset the difference. Altogether, the combined ratio of 87.9 is well in line with our target and reflects the very healthy underlying profitability and our continued prudent reserving approach for both new business and older underwriting years. The strong investment result primarily stems from the increased ordinary income from fixed income securities. The increase is mainly driven by higher interest rates supported by strong operating cash flow. The amortization of our inflation-linked bonds added EUR 117 million. In line with our expectation, we have observed some revaluation for real estate, resulting in impairments of EUR 44 million. Altogether, the EBIT in P&C increased by 57% to € 1.7 billion. The main contributors to the P&C result, to the service result, is the CSM release, as you can see on the next page, reflecting the 2023 and 2024 renewals in a very attractive market environment. The rather high CSM release in the third quarter is, on the one hand, driven by the exposure-based release pattern. On the other hand, it includes some catch-up effects due to a prudent release in previous quarters. Importantly, this does not have any impact on the overall level of profits because the higher CSM release is offset by a quite prudent reserving approach for the current year. Hence, a negative experience variance on the current year. Apart from this, the negative experience variance also includes the offset of the tailwind from higher discounting versus IFIE and the fact that we booked the full large loss budget. I already commented on the runoff result. The loss component from new business is quite low, confirming the attractive rate environment in P&C. The CSM growth is mainly determined by our successful renewals and is expected to moderate towards the end of the year, as we have no larger renewal date in Q4. Let's move on to life and health reinsurance revenue. Jean-Jacques Henchoz already commented on decreased slightly, as expected. The main driver is the runoff of our U.S. mortality book, which accelerated following the recaptures connected to our enforced management action in 2018. Furthermore, the appetite for new mortality business with long durations, like whole-of-life business, was limited in the last years, as we do not think that rates are adequate. Areas like financial solutions, where we have grown in the last years, have structurally less impact on the overall reported growth numbers as per IFRS 17 because for structured deals, only the fee income is recognized in the top-line numbers. The reinsurance service result is fully in line with our expectation, with favorable contributions from mortality, longevity, and financial solutions. Just as a reminder, the prior year result in mortality did include a positive one-off from a retro recapture. In morbidity, the result has mainly been impacted by further strengthening of the reserves for critical illness business in China. Furthermore, a client insolvency in the third quarter resulted in a negative one-off impact of about EUR 30 million connected to a financing treaty with this client. The investment result mainly reflects the good ordinary income, the change in fair value of financial instruments, and a positive impact of EUR 41 million offset by a negative EUR 43 million impact from the valuation of an equity participation in the third quarter. Both effects should be seen as non-recurring. In the case of the equity valuation, we even expect a certain recovery in the valuation going forward. Altogether, our life and health business group reported an EBIT of EUR 716 million. Looking at the drivers for the reinsurance service result in life and health, both the CSM release and the risk adjustment release are within the expected range. The experience variances of EUR 171 million is driven by favorable claims experience across different lines of business and also enforced management actions for our critical illness business in China. This partly mitigates the negative impact from the loss component of EUR 302 million. The new business loss component was a minor EUR 18 million. The main driver for the loss component was the reserve strengthening in morbidity and declined insolvency affecting the financing treaty. Altogether, the reinsurance service result is slightly better than the pro rata expectation for the full year. The new business CSM and extensions on existing contracts together amounted to EUR 560 million, based on, I'd say, diversified contribution from financial solutions, mortality, and morbidity. Changes in estimates had a positive impact of EUR 339 million. The main driver for the positive change in estimates was our U.K. longevity business. Adding positive currency effects and the interest accretion, the total CSM increased by 6.6% after recognizing the regular CSM release. Altogether, I'd really like to point out that from an economic view, assumption changes were positive for Hannover Re because changes in estimates within the CSM resulted in a higher positive number compared to the changes in estimates resulting in a loss component affecting the P&L for the current period. This highlights both the benefit of having a diversified portfolio and also our general prudent approach in setting initial assumptions. The development of our investments overall was very satisfactory. The ordinary investment income is strong. Several factors played a role here. The asset volume increased based on the strong operating cash flow. In addition, the reinvestment yields are still nicely above our average portfolio yield, with a continued positive impact on our returns from fixed income securities. The contribution from inflation-linked bonds was in line with expectations at EUR 117 million. And finally, the contributions from alternative investments increased as well. The impact from ECL and any valuation at fair value through P&L had a minor impact. For our real estate investments, decreasing valuations led to moderate impairments of EUR 44 million, in line with our communicated expectations for the full year. All in all, the ROI of 3.1% is above our 2.8% target. To conclude my remarks, the results for the first nine months of 2024 reflect a very healthy underlying profitability. Top and bottom line are growing nicely and further supported by the positive tax effect. The full year result is expected to come in higher than initially expected. And on that note, I'll hand back to you, Jean-Jacques Henchoz, for the comments on the outlook. Well, thank you very much, Clemens. As explained, the business development in the first nine months supported our expectations for the full year. However, the probability of exceeding our initial group net income target increased due to an additional positive tax effect. Accordingly, we have raised our guidance for the group net income to EUR 2.3 billion. The overall growth targets and the underlying expectation for the business groups and our investment return remain unchanged. Based on the business development and large loss situation in the fourth quarter up to date, we are confident to achieve our updated net income guidance of around EUR 2.3 billion. On top, our strong balance sheet provides a very solid position to further take advantage of the favorable market environment in 2025. This brings me to the outlook for the financial year 2025. The group net income is expected to be around EUR 2.4 billion. This is an increase of more than 14% compared to our initial target of more than EUR 2.1 billion in 2024, and we expect, of course, the tax rate to normalize in 2025. We expect the market environment in P&C reinsurance to remain very favorable, and we are very well positioned to act on growth opportunities. As a result, growth in reinsurance revenue should come in above 7%. The combined ratio is expected to be below 88%, also reflecting an environment in the target compared to the current year. The assumed discount effect on the combined ratio will likely be slightly lower in 2025 at around 6%-7%, but as Clemens explained at our recent investors' event in London, the impact from potentially lower interest rates will be gradual and manageable. In life and health reinsurance, we aim for a CSM growth of about 2%. The target for the reinsurance service result is more than EUR 875 million. This number is based on an unchanged expected CSM release between 11% and 13% and expected release of risk adjustment between 6% and 8%. The return on investments is expected to be at least 3.2%, reflecting the observed increase in ordinary income and a normalization in income from private equity and real estate. With an eye on our strategic ambition, this means we are expecting to continue to deliver a return on equity clearly above cost of capital and above our ambition of 14%. This concludes my remarks, and we would be very happy to answer your questions. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and 1 on the touch-tone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press Star and 2. Participants are requested to use only hands while asking a question. Anyone who has a question may press Star and 1 at this time. Our first question comes from Kamran Hossain from J.P. Morgan. Please go ahead. Hi, good morning. Two questions and just a quick comment as well. I think the first question I was interested in is just on capital deployment. I guess you've signaled in the Solvency II ratio for next year that you will deploy some capital into growth. Just interested in P&C, where you kind of think this growth comes from? Is this taking shares? Is this new business? Is this different regions? Kind of just some top-down topics there. The second question is just on kind of thinking about the combined ratio. Clearly, an improvement next year is helpful. Just interested in where that's running at present. I guess you were kind of 80, just under 88. You've taken some reserves, you've added to reserves, etc. Where do you think that's kind of running right now? And then just to finish up, I think just I'm sure there'll be lots of opportunities to say this, but Jean-Jacques, I guess from the team at J.P. Morgan, I just want to say we'll certainly miss our interactions. You came into the job running, inheriting a really well-run business, and I think it's safe to say it's being left in that way too. So I kind of just want to say kind of thanks from our side. Passing on an excellent business to Clemens and the team, and we're looking forward to saying goodbye. But yeah, I guess so that was my comment and kind of the two questions before, but thanks very much from our side. Thank you very much, Kamran, for the kind words. Kamran, it's Sven. Let me start with the capital deployment question. So where do we expect the revenue growth in P&C to come from? We are expecting broadly unchanged trading conditions across our entire portfolio. So therefore, like in previous years, we expect basically all regions, all product lines will participate in growth opportunities. One area which we can highlight is on the property catastrophe side. As mentioned during our investors' day, we see good opportunities on the incoming business, but we will also buy somewhat less on the retrocessional side, particularly our K-Cession. So those would be the main comments from me on the capital deployment side. Kamran, it's Clemens on the combined ratio. We are reporting for the first nine months now the 87.9%, as you will have seen that this does include the regular development of the current underwriting year. We're still being a bit cautious in the third quarter. It also includes a couple of runoff impacts, as mentioned, for example, for the Italian floodings from last year, etc. So that, of course, had an impact on the combined ratio for the first nine months. As for the next year, I mean, we have reflected the overall positive outlook and the level of profitability in our combined ratio assumption when we go into 2025, so we should see that reduction in light of our positive outlook on the profitability. It does include, however, of course, the level of prudence that we usually include in our initial recognition. We haven't changed that prudent reserving approach. So there's quite some level of resiliency baked into, of course, into the combined ratio. It also includes the ECL buffer because we still expect some tailwind from discounting versus ECL. So you might consider one percentage point, around one percentage point in the combined ratio being an ECL buffer on top of the conservative reserving. So that overall leads to the combined ratio as guided. Fantastic. Thanks, Clemens. The next question comes from Iain Pearce from BNP Paribas. Please go ahead. Hi, morning. Thanks for taking my questions. The first one was just sort of a bit more detail around the combined ratio guidance. It doesn't sound like there's an implication that you're expecting risk-adjusted pricing to be positive. So I'm just trying to understand the sort of walk from the 87.9 at nine months to the 88 guidance next year, factoring in that one-point headwind from discounting. If pricing's not getting better, if the prudence level's the same, just trying to understand what you think's driving that sort of one-point improvement when we account for the discounting. And then second question was just on the life and health guidance. Again, just trying to understand if we think about the 875 guidance, if we normalize for, say, the insolvency that we saw this year. Again, it doesn't imply much growth. So just trying to understand why you weren't a bit more confident guiding to a slightly higher number there. And also, if I could just echo some of Kamran's comments and congratulate you, Jean-Jacques Henchoz, on your time at Hannover Re. And I hope you enjoy the next phase of your career, which sounds very exciting as well. Thank you. Yeah, let me start with the pricing question. As I said, I mean, we are expecting broadly an unchanged picture. I mean, you know that the industry had a couple of good quarters from a net return to earnings point of view. So in those areas where we had a benign loss environment, we do expect some pressure on the pricing. We don't expect prices to fall significantly, but we have to be realistic here. On the other hand, as you are seeing from our major loss risk list, the list is very full. So there will be various parts of the portfolio where we will be able to charge further risk-adjusted rate increases. So the combination of the two, we would at this stage say that we should have pricing in 2025 across the entire portfolio, which is at the 2024 level with some movements here and there, but broadly similar. Just to add briefly to that, if you compare it to the reporting combined ratio for the first nine months, the 87.9%, I would say that it's still at a cautious, at a prudent level at this stage, which you will have seen in the experience variance for the current underwriting year and the current financial year, which we have kept for the first nine months at a rather prudent level. And we will revisit that at year end. Just a few comments on the 87.5%. You say it's conservative on the life side, adding the one-off insolvency here. You would have expected a little bit more. First of all, that's Hannover Re. We are always a little bit cautious. Second, there is one thing where we had significant profit in the past, and that is Financial Solutions in China. And they are currently changing their regulatory regime. Clients were a little bit cautious in placing new business this year. This will probably continue till first or second quarter next year before we know the new rules. So there was, let's say, a break or a pause in the business in China for about nine to 12 months. If this picks up again, then we might be able to beat this guidance. Currently, we are cautious because you never know what the regulator does, and we can only develop new products and treaties when we know the rules exactly. That will take well into next year. Okay. Thank you. The next question comes from James Shuck from Citi. Please go ahead. Thank you. Good morning. My first question is on the growth outlook. So I think in your comments at the beginning, you mentioned there was around five points of SCR increase, which is expected from the growth on the books coming through the solvency at nine months. I think most of that was coming from the lower retro. I'm just struggling to square that a bit with the P&C Re gross revenue guidance that you're giving for above 7%. Because if most of that SCR increase is coming from the low retro, then I might have expected a little bit more. Second question is on just the expectations around the margin build. I think you've indicated that you'll continue to offset the difference between the discount rate benefit and the IFI. I'm just wondering kind of where you are in terms of the actual reserve buffer itself. Are you planning on adding to that over the planned period or in Q4 and into next year, either in absolute terms or as a percentage of the reserves themselves? And then finally, again, Jean-Jacques, thanks very much for your time. It seems brief, but very fast. I'm just keen to hear as you reflect back on the legacy that you're leaving. I'm just keen to hear your thoughts on what you contributed over that time. Thank you. So James, on Solvency II, and I'm not sure if I fully got the question, but we've seen the decrease in Solvency II. I think you can roughly allocate 10 percentage points of that to the dividend, the foreseeable dividend, which is a regulatory requirement, which we will disclose also in next year from Q1 onwards as foreseeable dividend. That should be roughly EUR 750 million, includes the minority share of the E plus F. So that's 10 percentage points. And the rest is really a mix of business growth, but also some economic impacts from credit spreads, interest rates, FX, etc. So it's a mix. It's five, six percentage points that adds to that. I don't have a number off the top of my head, really, how much of the business growth is included in that, but you're perfectly right. I mean, the seven percentage points that we are guiding on top line on a net basis will actually be a bit higher due to the fact that we plan to decrease the level of, particularly on the K-Cession, as disclosed earlier. On the margin, on the E plus F buffer, we really see this as a temporary sort of buffer. So it is not included in the resiliency reserve that we usually disclose based on the external assessment from Willis Towers Watson. So it's really a temporary exercise. It's going to be a triple-digit, low triple-digit number, probably per year as we were going through IFRS 17. We will release that over time. As for the regular reserve buffer, I'd say our plan is usually to grow the buffer with the book, so really with the net book. So we are happy with the level of resiliency that we have in our reserves at the moment. And just to remind everyone again, on top of that EUR 2.1 billion resiliency reserve that we reported at year-end 2023, on top of that goes the risk adjustment of about EUR 1 billion. So we are overall looking at a resiliency level of 7%. We do feel comfortable with that level. And my expectation would be to just keep that level as we grow in relative terms. I mean, we will always look at our reserving position at year end. If results allow for it, we might consider increasing that buffer, but it's not planned at this stage. And again, as always, James, we will be very transparent about it and report any increase in due course. And James, it's a bit early to start looking back. I'm still in the middle of it, but I'll come back to you probably during the call in Q1. But in short, as a quick response, I would say that I had two goals. The first, when I joined, was really to leverage the differentiation of Hannover Re and the incredible key success factors we can present in the market, particularly this notion of partnering with our clients, the lean operating model, the very clear focus on reinsurance. So a lot of it was leveraging the strength of the business model. And the other part of my job was very much to prepare for future growth. And we've been focusing on preparing the company to be able to grow further, to be future-ready. We talk a lot about portfolio management in our Executive Board. We want the end-to-end operating platform to be competitive and effective. We worked a lot on leadership and leadership development and succession planning. And last but not least, adjusting the culture, which is very unique at Hannover Re, to that growth outlook, meaning becoming more international in scope and in spirit, and also more modern in terms of how we manage risk and operate across the world. So quick response, James, I'll have a bit more time in Q1 to consider a bit the last six years, but I hope it gives you an immediate response. The next question comes from Michael Huttner from Berenberg. Please go ahead. Fantastic. Thank you so much. Two questions. So the first one is on 7% growth. I wonder if you can split it out a little bit because I'm still a little bit vague on what you said about cyber at your kind of deep dive session a few weeks ago. Vague is me. It's not what you said. It's just, I can't remember whether you're back in growth or you're pausing. I'm a bit confused. And from memory, cyber is a significant component, potentially. So the pockets of growth. And the second is also on growth. So you've got this target this year and next year of life CSM growth of 2%. You've achieved 6.6%. And I can't see in any of the numbers. I don't know the company very well, but I can't see in any of the numbers anything to cause concern going forward. So I'm just wondering whether you could comment on whether 2% is just because you like being very conservative, or is there something we're missing, or is 6% the right number, which is nine months? I don't know. Thank you. Let me start with P&C. So as I said, we do expect a very diversified growth pattern. So in our planning, most of our region, most of our product lines would show growth at around the 7%. When it comes to your specific cyber question, we have indeed reduced the volume of cyber business in the current underwriting year. This was mainly driven by the fact that we saw increased pressure on ceding commissions under some quota shares at a time when the primary market started to give rate reductions. So that didn't work for us in some instances. And we took the opportunity to consolidate our cyber portfolio a little bit after many years of continuous growth on that side. From a risk matrix point of view, we have plenty of room to grow on the cyber book of business. So therefore, given that the original cyber market keeps seeing additional demand and keeps growing, we, of course, want to be a partner of our ceding companies to accompany that growth. So in that sense, we are not expecting a reduction of our cyber portfolio also in the next year. Maybe some growth, but we have not baked any particular growth ambitions into our overall guidance of 7%. So in that sense, cyber should behave very much like many of our specialty lines. Thank you. Michael, on the CSM question, the 2% versus what we've seen in the financial year 2024. So the 2% is basically to be seen in line with our financial ambition over the strategic cycle, where we expect the CSM to grow by at least 2% per annum. The 6% this year does include some positive actual over-expected from the regular revisiting, revaluation of the portfolio. I think the 6% is a very good proof point of our prudent reserving that we see positive contributions on the CSM from revaluation. So it does show that we are prudent in reserving in the first place, but we do not regularly project those out. We do expect positive A over E's also in the future. However, we don't necessarily include that in the plan. So we should see the 2% CSM growth really as a commitment, as a confidence that we want to grow our life and health book, particularly going forward. And we also do expect a CSM growth on a net basis in P&C for the next year, given Sven's comments both on the top line growth and given the rate environment. Just if I may ask on the CSM, you mentioned the prudent reserving. In the slide 10, so you've got this lovely waterfall chart. Where is the reserve, what I would call reserve release? Which of these bits of the waterfall is it in? Is it in the change in estimates? Yes. Yes. When you see the CSM walk, so the change in estimates is the 339. And that is basically the revaluations of our business. And that is fueled by sort of all lines of business, mortality, financial solutions, etc. And there you see that. Yeah. Yeah. There you see exactly that positive amount, which is, again, a reflection on the rather prudent initial recognition, initial reserving. Wonderful. Thank you very much. The next question comes from Vinit Malhotra from Mediobanca. Please go ahead. Yes. Good morning. Yes. Good morning. I hope you can hear me. First of all, congratulations, Jean-Jacques, on your next endeavors. And of course, congratulations to Clemens. So just on my question, so there are three questions. Please do quickly numbers and one just maybe theoretical on the outlook. So just on the outlook, in the press release, there is a comment that the combined ratio outlook is based on the improved market environment. And then obviously, we know that you're talking about a flat pricing. And then when we look at the Cat or the large loss budget, that's about maybe one and a half, two points negative drag, let's say, next year. But still, the combined ratio is you're keeping it flat or flattish on the nine-month level. So just curious a little bit about how you see this Cat or large loss loading being absorbed in the combined ratio guidance. And I know it's coming from retro, but also how is it reflected in that sort of table? So it does indicate that the pricing of the business would be getting a little better in your view there. So that's the first thing. Second thing is the third quarter standalone. I know you don't look at it purely on that, but the reserving, the runoff seems to be a bit negative here, EUR 18 million or I'm sorry if I missed it. Is it from any particular direction that you can guide us on? And lastly, the real estate, the EUR 44 million reval. I know we've been talking about private equity real estate, and we always said it's not been happening. But is there any commentary on why now? Is it just because funds gave you the updated valuations, or is it any drivers there that you can point us to? Thank you very much. Yeah. Thank you, Vinit. Let me start with the first two questions on the comments regarding the market environment. Yes, of course, you're right. We are expecting a broadly flat risk-adjusted rate environment. But of course, this is now the third year at a favorable level of rate environment. So when the business is earning through, we, of course, still have an impact from the strong years 2023, 2024, with the prior years becoming less important than our forward-looking profitability estimation. So therefore, it's really the three-year block, which led us to make the comment as we're expecting a similar rating environment on a forward-looking basis. The increase in the large loss budget, you're right, of course, this is partly driven by the underlying growth of the business now and forward-looking, but also, of course, the fact that we are going to place somewhat less retrocessional coverage on the property side. Given that the business is inherently profitable, I mean, the way we are modeling our K-Cession, of course, would in any normal year be a session of profits for our retrocessional partners. Therefore, with us placing somewhat less, we can expect this to somewhat contribute to the slightly better combined ratio outlook compared to this year. On your second question, when it comes to the runoff, as Clemens has mentioned when he made his comment on the slide, we had a number of negative runoff situations this year. So we can say that in most classes of business, the overall number of the runoff is still a positive. But in addition to the hail in Italy, we also had a deterioration of old aviation products claim. We had development on some nat cat catastrophe losses, which happened very, very late in December last year in Australia. There was a number of developments in the runoff result. It's also fair to say that given that many of our segments are producing very favorable combined ratios today, that we have not necessarily steered for a better runoff result in those classes of business, which are already well below our target combined ratio. Vinit, on the, on the impairments real estate, I mean, we did expect the impairments to come through. We fully baked it into our guidance 2024 and our expectations, but only in the fourth quarter because that's when the actual valuations are coming through because those are related to direct real estate investments. You can see these impairments that we've taken in Q3 really as a rather precautionary stance on it because simply as the results, to be honest, allowed for it. Overall, fully in line with our expectations. As for the overall investment result, it's absolutely in line with our expectations. You should see the ROI for the full year coming in not below the ROI that you've seen now, which is a reflection that we fully baked it into the 2024 numbers. Sure. Thank you very much. The next question comes from Shanti Kang from Bank of America. Please go ahead. Hi. Yeah. I just had a couple of questions on life and health. I noticed that the reinsurance service result has come in a little bit softer than we'd expected. I was just wondering if you could help me understand the biggest contributor to that and if you expect the trend to continue towards year-end. Then the second question is just on the assumption changes you mentioned on the L&H book that you've taken. And can you talk us through what you're sort of seeing to drive those changes in your view? I think you mentioned something around the U.K. But yeah, that was it. Thank you. Yeah. On the first question, sorry, could you repeat that? I didn't get the first part. Yeah. It was just on the reinsurance service result. It just came in a bit softer than consensus. And we were just wondering what the biggest contributor to that was and if you expect that to continue into the year-end. The reinsurance service result is impacted by the one-off write-off of the financing treaty due to the insolvency that we mentioned. So it's EUR 30 million impacted there. So that's really seen as a one-off. And that has impacted probably the reinsurance service result. Yeah. But as I said earlier, we have EUR 25 million on a single life exposure. One person dying or not dying could make a difference of 25 million EUR easily. Explaining that on a quarterly basis is always a little bit tricky. The second question was on, help me again. assumption changes. The assumption changes in the U.K. Yeah. We have a whole life portfolio, and we decided to change the lapse assumptions on that. When you have whole of life and you have coinsurance, you get more premium than you need in the first years. That means lapses are usually positive. We have lowered our lapse assumptions for these whole of life policies. It is always a little bit tricky to estimate something which is 40 years into the future. As usual, we are very conservative here. Obviously, we have no experience from the underlying portfolio because we do not have it for 40 years now. But we have market data and decided to be conservative here. Okay. Thank you. And then sorry, I just had one more question on the China critical illness book. I know you loaded reserves this quarter. Are you expecting more strengthening Q4? Thanks. What we do here is, as with all our other portfolios, we do an annual review. And we have realized already six, seven, eight years ago that we expect something in China to work out less favorable than originally expected. The cash flow for the time being up till today is still positive. But our assumptions for what is far into the future have worsened a little bit. And this is due to some changes in the market with much more screening than we initially anticipated. So there is a government, let's say, order that you should do more screening. In China, these things are usually done when the government wants it. So that has increased the incidence rates. And we have reacted by being a little bit more cautious. But my expectation for the future is that the underlying profitability of our life and health book in general will easily compensate for that. So although there might be more strengthening, I would not expect that you will see much of it in our numbers if not explained explicitly. Okay. Cool. Thank you. As a reminder, if you wish to register for a question, please press star followed by one. The next question comes from Faizan Lakhani from HSBC. Please go ahead. Hi there. Well, reiterating what everyone else said. So Jean-Jacques, thank you very much for our interactions and best of luck for the future. And I also wanted to congratulate Clemens as well. My first question is coming back to a topic that's been addressed a number of times, and that's the 2025 outlook on the P&C combined ratio. Just putting all the bits together, you're around that mark right now at the nine-month stage. You have a bit of a drag from discounting. But at the same time, you have the benefit from less retro, which should be a positive. Just how do I sort of split those elements out? And just, I guess, broad picture, how dependent are you on 1/1 prices being flat next year to maintain your outlook for the combined ratio? Second question was on the large loss budget. Could you split out what's driving that? How much of that's down to gross growth versus the reduction in retro? I just wanted to sort of get a qualitative feel in terms of what happens to the volatility in a normalized year for NatCats. Thank you. Yeah. Let me start with the second question. I don't have the exact split for you when it comes to the increase to EUR 2.1 billion. How much of that is less retro? How much is underlying growth? But of course, the underlying growth should be at least around the number for the revenue growth. As I explained earlier on this call, we expect that to be very diversified and therefore reflect more or less the current composition of our portfolio. Therefore, this exposure increase is going to be at least in that area. And then on K-Cession, even though I don't have the exact number, it should be a mid-double-digit contribution to the increase in the major loss budget. I don't have the exact figure for you. When it comes to your 2025 question, how dependent are we on the pricing environment? Of course, our base assumptions play a crucial part in setting the guidance for the next year. From that point of view, if we should see a pricing environment that is completely different to what I just said, we would, of course, revisit the guidance for 2025. We would be able to talk about that when we do the renewals call in February. For now, we are optimistic that our base assumption is going to be correct. Minor deteriorations from that base assumptions would not immediately lead to a change in our guidance. Again, quite a bit of the business we are going to earn in 2025 is going to come from the years 2023 and 2024. 2025, of course, is an important component in the profitability assumption, but not the only one. S orry, just coming back to the first one. How should we assume volatility in the NatCat losses to change given the reduction in retro? Will it be relatively modest, or will there be certain perils that could be more volatile? Well, you have to expect a little more volatility, not significantly. I mean, as I said, we do expect the combination of more business on the inward side plus less on the outwards, which, of course, is creating a little more volatility. On the other hand, we expect the reduction in retro buying to come from the K-Cession, which by its very nature is a proportional retrocession. So therefore, a proportional cession is only changing the underlying volatility profile of the business to some extent. Here, the biggest way of how this change is materializing is by us selecting the parts of the portfolio that are covered in K, so particularly the peak peril cat. This change will not be felt outside our exposure bases in North America, Europe, Japan, and Australia because all the other areas and Chile, I should add, because all other parts are not covered by K. So it's not a global increase of volatility profile, but some increase in volatility profile in peak perils given the attractive pricing environment. So it's, of course, our assumption that the upside in an average year should give us a benefit compared to the volatility downside. Thank you very much. Much appreciated. The next question comes from Henry Heathfield from Morningstar. Please go ahead. Good morning all. Thank you for taking my call. Congratulations to you both on your future moves. Just a quick question coming off the back of that question there. Your large loss budget has increased by 50% to EUR 2.1 billion over 2022. I don't know. With all the kind of news we're seeing around climate change and natural catastrophes, are you generally growing this line faster than the rest of the P&C book? And then should we expect the start of the softer cycle starting next year? That's kind of my two questions. Thank you. Well, we have grown the property business in line with the rest of the portfolio development. So from that point of view, we are not growing it faster than the average portfolio. When you look at our portfolio development, we have grown particularly strong in some of the earthquake perils over the last number of years. For example, we had above-average growth in places like Canada and Chile. From that point of view, when it comes to climate change-related and wind-related growth, this is very much in line with the general growth of the business, which, of course, has to be expected. Jean-Jacques said earlier on the call that it's important for us to have the partnership approach in our business. To the extent that our existing partners are having underlying growth, we, of course, want to be in a position to accompany that growth. Therefore, we have some increase in our exposure base, but not above-average growth in climate change-related perils. I hope that answers your question in that respect. [crosstalk]. Mostly coming from the property line, really. I mean, you, of course, have some property cat exposure also in other lines of business like agriculture or, for example, marine business. But the bulk of the portfolio development on the property cat side clearly came out of the property business itself. Okay. Maybe on your second question on the market terms, we discussed it a few weeks ago in London. Always difficult, of course, to predict. But I would say some of the criteria we look at include the demand. The demand remains very strong. We expect also additional demand in 2025 from insurance companies around the world. I think the other driver is that the market has been extremely disciplined in the past couple of years, and we don't see this changing anytime soon. We also note that there are very few to no new entrants in our space in the coming year. And last but not least, of course, the large loss burden has been considerable on the industry in the past few years, which also has a bearing on the future outlook. So our best estimate, and it's just a gut feeling rather than a scientific view, our best estimate is that we're going to see stable terms in 2025. Thank you very much. Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Jean-Jacques and Shaw for any closing remarks. Well, thank you very much. I won't go in depth because I think we covered the ground very well. Thank you so much for the great questions. And have a nice day. Thank you. Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect the lines. Goodbye.