Good day and welcome to the Munich Re Quarterly Statement as at September 30th 2021 Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Becker-Hussong. Please go ahead. Thank you, Saskia. Hello everyone. Good morning and a warm welcome to our call on Munich Re's Q3 earnings release. Today's speaker is our CFO, Christoph Jurecka. The procedure is very simple, straightforward. Christoph will kick it off with his introduction, and then we will go right into Q&A. No time to lose. Christoph, the floor is yours. Thank you, Christian. Well, good morning also from my side. It's a pleasure to present the Q3 results this morning. Q3 was a heavy NatCat quarter, which was dominated by two major events, Storm Bernd and Hurricane Ida. These two events accounted for an insured market loss of almost $50 billion, with Ida alone standing out at around $35 billion, according to our own assessment. This fits into a series of above average major losses, including COVID-19 in the last five years. As a consequence, reinsurers have been increasingly scrutinized by capital markets as regards to the appropriateness of their internal models and partially perceived underestimation of climate change risks. Therefore, before I start with my usual remarks on our quarterly result, I would like to take the opportunity to speak about how Munich Re looks at these topics based on the slide deck included in our Q3 presentation, starting on page 19. Climate change is not a new phenomenon for us. Munich Re has been a pioneer in the research of climate change for almost 50 years. We recognized quite early the relation between global warming and the risk of extreme weather-related events. This impact is not uniform and there are significant differences across regions and perils. To mirror these risks, we permanently incorporate new data into our internal risk and pricing models. As risks are constantly changing, we also reflect forward-looking findings and incorporate the latest academic research. This in particular holds true for our 35 peak risk scenarios, but also for what we call non-peak risks. In total, as you can see on slide 21, Munich Re models more than 100 risk scenarios, albeit the basis for less impactful risks is somewhat less sophisticated compared to peak risks, which are driving our exposure management and economic capitalization. It is important to add here that depending on where we stand in the market cycle, the theoretical prices cannot always be implemented in the market. Therefore, exposure and cycle management, as well as underwriting, are decisive factors for the profitability of our book. For example, we have been traditionally very cautious with regard to frequency or aggregate covers, and we still are. One example of our peak risks is flood Germany, as shown on slide 22. By the way, a risk which we have been modeling for quite a long time. Even though the flood in July was the costliest NatCat event in German history, we deem a flood loss of that order of magnitude to happen about once every 50 years. While the aggregate loss is consistent with our model, the regional distribution of losses is much more difficult to model, also due to climate change-driven developments like the increased risk of severe rainfall in local areas. Now, how can we respond? First of all, it's our responsibility to help the people affected and support rapid reconstruction. At the same time, preventive measures have to be taken in addition to stricter rules defining the use of land. As there are still many households without flood coverage, this insurance gap has to be closed with primary insurance and related reinsurance cover, but only at risk-adequate prices. Capital to cover these perils is sufficiently available in the market. On page 23, you can see an example for a non-peak risk. Wildfire is a risk where the impact of climate change is clearly visible today. As you can see in the chart, there's a positive correlation between global warming and the frequency and severity of wildfires in California. Does this mean we don't write wildfire risk anymore? No, it doesn't. We have been analyzing this trend for quite a while, investing a lot of effort to improve our internal wildfire model. The increased risk is reflected in our pricing. In addition, we've adjusted our underwriting approach and have a much more selective risk appetite with a focus on rate adequacy. If you compare the actual NatCat losses with our expectation, you'll notice that there is a certain fluctuation around the expectation every single year. Looking at the 10-year moving average, as shown on page 24, this average meets our current expectation pretty well. Comparing last year to this year, sometime, sometimes it's just a matter of a few miles in the track of a hurricane. Whether a market loss ends up at $10 billion or multiple times higher. In the short term, the randomness of events and the specifics of the affected areas are much more relevant for the loss amount than climate change. In this context, it is important that we can reprice most of the Cat business annually, and thus respond to any change in the risk assessment in a timely manner. In the last couple of weeks, we were frequently asked if our expectation of around 8% non- Cat losses is still appropriate given climate risks and the recent uptick in losses. As you can see on slide 25, the 8% is based on a probabilistic bottom-up analysis of our current portfolio, considering the peril specific impact from man-made climate change and factors of natural climate variability, such as the variation of sea surface temperatures in the North Atlantic Ocean. We also consider changing regulation and social inflation, such as building standards and demand surge. Even though we've expanded our NatCat exposure in absolute terms and refined our models, the expected major NatCat loss ratio of around 8% has been remarkably stable. Having said that, we are keeping this under regular review, and we might change it, but only if necessary. Finally, let me look at volatility from a more overarching perspective on page 26. Volatility is inherent to our business model, and we get paid for taking volatility from our cedents' books. The expansion of less Cat -prone and less cyclical businesses like Life Re, risk solutions and ERGO will reduce P&L volatility over time. Our strong balance sheet allows us to cope with volatility already in the short term. Even in bad years, we are committed to paying at least an unchanged dividend. Share buybacks increase the amount to be repatriated when no alternatives generating more value for our shareholders are available. As you have seen in the third quarter results, diversification between earnings components like the investment and technical result, and also between segments smoothens P&L volatility in quarters with increased loss activity. As a result, we are fully on track to achieve our IFRS earnings target despite the large events we have been seeing. This brings me now to our Q3 result. As already indicated in the pre-announcement, we achieved a net result of EUR 366 million, corresponding to an ROE of 6.3%. Year to date, the return on equity is a pleasing 12.1%. We are very happy to have achieved such a resilient performance given the high losses from Storm Bernd and Hurricane Ida. Not to forget the Texas freeze already in Q1. In our view, and as mentioned before, Bernd is a 1-in-50-year event, while Ida is a 1-in-10-year U.S. hurricane event. Also in Q3, we benefited from a good operating profitability in all fields of business, but also from a strong investment result and also currency result related to our investments. Therefore, let's start to look a little bit deeper into investment result. In Q3, we achieved an investment return of 3.3%. The result was supported by disposal gains from typical portfolio turnover, but also from outsourcing activities to third-party asset managers. As a part of the disposal gains in Q3 and even more so in Q4 goes back to our share reduction in Admiral. I would like to emphasize that our close business relationship remains wholly unaffected by this transaction, which in no way reflects Munich Re's assessment of Admiral's current or future performance. Due to largely stable capital markets, the derivative result was unremarkable. The reinvestment yield dropped to 1.4%, and as a result of investments in shorter maturities and lower interest rates during the quarter. Now turning to reinsurance. The Life and Health technical result, including fee income of EUR 9 million, again, fell short of the pro rata annual ambition. Higher than expected COVID-19 losses of EUR 168 million were driven by a surge in mortality in the United States, as well as an ongoing high mortality in South Africa and India. For 2021, we are now expecting COVID-19 losses of around EUR 600 million. We will not reach our annual guidance of around EUR 400 million for the technical result plus fee income. Adjusted for COVID-19, however, the underlying performance remains strong. In P&C reinsurance, we posted above average major losses, as mentioned. While COVID-19 losses were, and are expected to remain insignificant, the combined ratio of 112.8% was burdened by the mentioned events. Given the high amount of NatCat losses in this year, we will not achieve our combined ratio guidance for 2021. However, the underlying performance remains sound, including reserve releases the usual amount of 4 percentage points. The normalized combined ratio amounted to 95.2%, which is fully in line with our full year guidance. In primary insurance, ERGO continued its pleasing financial performance. With a net result of EUR 134 million in Q3, ERGO is on a very good track towards its full year guidance. I'm pleased that a strong underlying performance with sustainable profitable growth and stringent cost management, as well as a higher investment result, could largely offset significant losses from Storm Bernd also for ERGO of around EUR 0.1 billion. With negative effects of EUR 12 million in Q3, the COVID-19 impact continues to be marginal. German Life and Health business posted net earnings of EUR 80 million. Good operating performance in health and still very low claims in travel contributed to the pleasing result. In P&C Germany, the combined ratio of 95.6% in Q3 was remarkably resilient. High flood losses were mitigated by ongoing profitable growth, favorable underlying claims development, lower large man-made losses, and stringent cost discipline. Given this earnings power, we are sticking to our full year combined ratio guidance, albeit with increased uncertainty depending on further major loss development. The international business of ERGO posted a somewhat lower net result of EUR 32 million, affected by COVID-19 related claims in India and large losses in the Baltics and Austria. The operating performance continues to be strong. The ongoing good development in Poland and Greece, as well as a seasonally strong quarter in Spain, contributed to the pleasing combined ratio of 92.3%. Now, a few remarks only on capitalization. The group's economic position is very sound and remains sound. Our Solvency II ratio increased to 231% in Q3, which is largely attributable to the issue of our green bond, while the change in all the other drivers was rather small. Finally, I would like to conclude with the outlook for 2021. We maintain our group net income guidance of EUR 2.8 billion, with unchanged EUR 2.3 billion in reinsurance and EUR 0.5 billion at ERGO. Within reinsurance, however, the composition of earnings contribution has shifted. Given the high amount of NatCat losses, we are expecting an increased combined ratio of around 100% in Property & Casualty. Due to COVID-19, we will also not reach the guidance for the technical result, including fee income in Life and Health. This has been lowered to EUR 200 million. On aggregate, the lower underwriting result can be fully compensated for by a strong investment performance, which is expected to continue into Q4. All in all, we are very optimistic to achieve the outlook, which is built on our usual cautious planning approach and reflecting higher than 12% large losses following our usual internal seasonality pattern. With this, I am looking forward to answering your questions. First, I'll hand back to Christian. Yeah. Thank you, Christoph. So we can now go right into Q&A. As always, please consider my housekeeping remark. We would like to limit the number of your questions to a maximum of two per person. If you have further questions, please go back to the queue. With that, I'll hand it over to Saskia for the first question. Thank you. Thank you. Ladies and gentlemen, if you'd like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Once again, that is star one for your questions today. Our first question today comes from Andrew Ritchie of Autonomous Research. Please go ahead. Oh, hi there. Thanks for the additional disclosure and discussion around catastrophes and climate change, et cetera. Maybe, Christoph, I'm just trying to judge. Is the message here then that you feel that catastrophe pricing is broadly adequate? Or do you... because obviously you feel more or less you're on top of it. Or are you saying still, okay, with current pricing you can position a good portfolio, but really you would still expect to see ongoing higher pricing across layers and regions to reflect some of the trending effects. I'm just trying to understand what the message is. Whether it's okay or actually we wanna see much more rate on catastrophe business. The second question is an easy one. I think when you segment the investment results, there's a section called commodities slash inflation in one of the slides which it hasn't, there's been zero or negligible effect in Q3 and nine months, which surprised me a bit. What I would have thought maybe some of your commodity-linked or inflation-linked assets would have had a positive result. Maybe if you just clarify that. Thanks. Well, Andrew, thank you for the question. Good morning. First pricing on the Cat business. Well, I think it's a differentiated picture. We saw hardening of many Cat bond markets over the last few years already, and this was highly necessary. In some markets and in some perils, where we did not see a lot of claims, we still need higher prices. This is what's reflected in my introductory remarks when I was talking about the fact that theoretical prices are not always easy to be implemented. That's especially the case when there wasn't a big event for a longer time. In the current environment, I would now be pretty optimistic that in Europe at 1/1 we see some upward movement in prices. That's at least what I hear. Looking at the events we saw in the past and to the pricing level we experienced in certain occasions, I think that's highly necessary. In other geographies, we saw quite significant movements in the past. There the question is for sure less than in Europe. Summing that all up, I think what I can confirm is that a Cat business is clearly a profitable line of business, earning its cost of capital and a decent margin on top of that. On a more long-term perspective and looking at the book overall, we're very happy with the profitability. Second question, commodities. That... I mean, there's a few items in there, and so there might be offsetting elements. The inflation link per se of course, are benefiting from higher inflation. Maybe, that's the more high level answer. If you want to have more details, we might be forced to take it offline, or you can take it up as question later on. Okay, thanks. Thank you. We move on to our next question now from Vinit Malhotra from Mediobanca. Please go ahead. Yes, good morning. Thank you, Christoph. The first one is more on the reinvestment yield, which you commented is due to lower maturity. Because when I look at the interest rates, it's not that much different. In fact, you know, the reinvestment yield of 1.4 is not very far from the December level of 1.3. But obviously, I mean, bond yields are 30, 40 basis points higher. So I'm just curious, are you positioning the asset side for pickup in interest rates consciously? Also seen in the duration, which are moving quite a lot every quarter these days. But are you positioning for a rise in interest rates? That's my first question. Second question is, just on the Life side, I picked up a comment that the COVID, ex-COVID U.S. mortality or experience was negative. Is that purely, is that something to flag in terms of some other trends, or is it just some fallout from how COVID is reported or linked to COVID illnesses or deaths? So if you could just comment a bit about the ex-COVID US mortality, please. That'll be helpful. I'll come back for more questions later. Thank you. Thank you, Vinit. The reinvestment yield. Indeed, the 1.4 is lower than what we saw in the last couple of quarters. The reason is that interest rates in the quarter themselves were lower than at quarter end. So towards quarter end, the interest rates went up again, but during the quarter, they were lower. On top of that, we invested in lower duration assets. I think what I can add is also that the volumes have not been spectacular high in this quarter. We're talking about rather low volumes. There's always a certain element of taking a position in these things, but much more often, it is really, you know, ALM driven, what kind of assets you're investing into, at which point in time. Maybe on top of that, as you are aware, the green bond was also issued in this quarter. You get in a lot of cash when you're issuing that bond. Then it takes some time until you take the reinvestment. So this also is in a sense not helpful for the reinvestment yield because it takes some time until you reinvest it. You have it in the short term, cash-like investments for some time. If your overall volume is not very high, then a bond issuance of EUR 1 billion is making a difference already also from that angle. I think that's the overall answer. Are we taking a big position towards interest rate increase? No, we don't. As you know, we're also looking at that in a very differentiated way when it comes to the various currencies we're investing into. That, no, there's not a, you know, big position taking. Here and there in single portfolios, of course, we are trying to optimize our portfolio all the time, also given the current environment. Small positions, marginal positions from an overall perspective are always being taken. Okay. Thank you. Thank you. We now move on to Will Hardcastle from UBS for our next question. Sorry, there was the second question, Vinit, on the non-COVID U.S. performance. I think I can make that very short. There's not a structural topic there. Potentially, there's something which is even related to COVID. We're not sure. We think the separation, what is COVID and what is not COVID, we've done it as good as possible. But you're never, you know, 1,000% sure there. Maybe there's an effect from that as well that will have to remain sorted out in you know, in the course of the next few quarters maybe. Altogether, no structural issue there. As you have seen, the overall performance of the Life Re was good. Okay. Thank you, Christian. I know. Thank you. Um, Go ahead. Thanks. First of all, on the premium growth drivers in P&C Re, what were the major ones here? Obviously, very, very strong growth, Q3 discrete. Anything that shouldn't be extrapolated, perhaps reinstatements, or is this a pretty good starting point to base our 2022 growth off? And secondly, again, thanks for the slides for the climate change NatCat impact. Maybe just to clarify, should one of the key messages I should take from this, and given expected exposure growth in 2022, you're still comfortable at the 8 points of NatCat budget at this point, is that correct? Or should we view that maybe there's some heightened risk of this increasing? Thanks. Well, thank you, Will. I start with the second one. Yes, we are still comfortable with the 8%. The process is unchanged, so we'll look at that again in the first quarter of next year. We'll dimension bottom-up analysis, including this probabilistic modeling, and then we'll find out if the 8% is still the best number to be communicated. That was the case for the, you know, the last many years. We'll see in Q1. If 8% is still the best number, then it will be eight. If it changes, it will be another number. At this point in time, I do not see any need and any tendency that the change would be appropriate. The premium growth on in the P&C reinsurance segment is really an across-the-board growth. It's affecting both the traditional reinsurance as well as Risk Solutions. In these business fields, it's really across all markets, more or less, all the businesses we are having. Because what we really see is that the current pricing environment is attractive really across the board, more or less on a global level. Therefore, we are really happy to grow the book in all these areas. As you know, growth per se is not a target for us. We only do grow our book if the profitability prospects are correct. With extrapolating our growth, the difficulty always is that it's highly depending on the market environment. If it continues to be attractive, then we will continue to grow our book across all the subsegments and all the businesses. It has to be attractive. The environment has to be attractive, really, for all of them. Currently, I think we're optimistic also for next year. Of course, eventually the cycle will break. I wouldn't be unrealistic that the reinsurance business and the global insurance business will continue to be a cyclical business. As a matter of fact, at a certain point in time, margins will reduce again and then we will react, of course. Thanks. Is there any chance to get an understanding of maybe how much of that 18% year-on-year growth is exposure versus price? Is that possible? That's a tough one. I mean, I think you're aware of the renewals, how we communicated them. There, as a rule of thumb, I think the price increase you would deduct from that. What is it? Around 2%, that order of magnitude. There's a lot of business where we are also growing, which is not part of the renewals. There it's much more difficult also given the fact that these businesses also differentiated and different. Mm-hmm. There, it's hard to give you a number. Also, the way we measure that is somewhat different. Therefore, I'm a little bit reluctant. All in all, I think the key message is that we're growing the book into a more profitable environment. It's not like that we're having the same book and increased the prices significantly. It's really we're having more business, but at more attractive prices and terms. Brilliant. Thank you. Can we have the next question, please? Saskia, please, the next question. Hello? Saskia? We can now take the next question from Iain Pearce from Credit Suisse. Iain, please go ahead. We can now take the next question from Vinit Malhotra from Mediobanca. Oh, hi there. Morning. Sorry I'm back again, unexpectedly. But just if I can ask one or two more topics, please. One is, you know that there's also reserve movements in the major loss category, not just the basic loss. Are you able to quantify them if they are meaningful in the third quarter? That's the first question, please. Second one I would say is that, the FX impact. I mean, the quarter was in terms of dollar strengthening, Q3 was not that different from Q1. But then Q3 has a material number there. Could you just quantify or explain whether there was some driver behind such a big FX move? Just last very quick one is that are you happy with the 95.3% normalized for nine months, given we only have one quarter to get to the 95%? I appreciate it's about in line, but would you have expected a faster run through of rate, for example? Thank you. Thank you Vinit. On the major losses, indeed, our reserving approach is very similar to the reserving approach in the basic losses. We start from a conservative perspective and then run off is something which will occur eventually in case our assumptions are proven to be correct. In year to date, for this year, we are talking not about a very significant number. Also these kind of prior year developments, they fluctuate significantly between the quarters sometimes. Therefore, we decided to release it only once a year with our annual report. As you know, where you can deduct the full year figures. Because we are of the opinion that that's, for clarity, is giving a much better picture than commenting on quarterly volatility with respect to these developments. Which are quite natural because we are reviewing all our major large loss provisions more or less every single quarter. It's just, you know, the usual activity, what you do in claims handling and claims adjustment that you review these provisions every single quarter. Sometimes trends tend to be a little bit volatile. Therefore, we're only talking about them once a year. Again, year to date, not very significant. FX. Well, our FX management has two components. First of all, we optimize the positioning between the various financial dimensions we have to look at. This is IFRS, this is the economic perspective, this is local GAAP, this is capital management. There's not a single sweet spot because our FX position is different according to all these various dimensions. Therefore, already the definition of a sweet spot implies that you're never completely protected when it comes to FX movements in none of these standards. After having taken that positioning, what our asset managers can do and what they are doing is they take positions on top of that. If they have a very strong opinion of an FX movement, of the US dollar movement, the pound movement, whatever, they can take a position like they do for other risky asset classes as well. Therefore, it may well be the case, or it's very often the case actually, that similar FX movement in various quarters, they result in different outcomes because the positions were different. The positions our asset managers have been taking. Therefore, I think the FX result in Q3 has an element of volatility in it, but there's also an element of a very good performance in that. This, I think, is something I'd like to underline here. Third question, the development towards the 95% normalized combined ratio. I think we are happy with the development. I mean, in any case, you shouldn't expect movements in the way we book things, to be, you know, to be overly volatile, given the fact that we take conservative views, when setting loss picks. Therefore, we are fully on track to meet the 95 guidance. What else could I expect, to be honest? Yes, indeed, we're very happy with the development. Many thanks, Christoph. Many thanks. Thank you. We now move on to our next question from Darius Satkauskas from KBW. Please go ahead. Hi. Thank you for taking my questions. First question. Some of your peers reported an impact to Solvency II ratio from capturing expected growth for next year in the Q3 solvency ratios. Does your 231% solvency ratio capture your growth outlook for next year? And if so, how many percentage points of Solvency II does this amount to? That's first question. Second question. I appreciate it's likely too early to tell, but when you have these discussions internally and given how you see the situation right now, do you expect COVID-related mortality losses next year? Thank you. Well, the first question, that's a very clear rule how we do the accounting. We account in Solvency II for insurance contracts as soon as we have the obligation. So as soon as we are legally bound to a contract. Therefore, what is not included there is future renewals, future growth, which we are not obliged to take in our books already. Everything where we have already a contract is reflected in Solvency II numbers. The second question, if I understood you correctly, was about COVID already for next year. As you have seen in P&C for this year, we reduced the guidance, and we didn't see a lot of activity anymore in the third quarter, at least. Generally it is trending down. There are still a few multi-year contracts which we have, which might, you know, end up having some claims next year. All in all, I would think that's rather insignificant in the context of all the overall amount of claims we're having in every single year anyway. It's more difficult on the Life and Health side. As you have been seeing, we have had to increase our guidance for this year twice already. I have to say, unfortunately, the pandemic is by far not over. We have increasing case numbers now again in Europe. Also the United States is by far not over yet. I think this pandemic surprised us already too often. Therefore, I'm a little bit reluctant to call it off already now, but I would rather say that also next year, we have to be prepared to still have claims on the Life Re side. I would expect them to be lower than what we saw this year, because I'm still optimistic, and I think humankind will be making progress in fighting this pandemic. Those claims will be lower. I'm pretty sure there will be claims also next year. Thank you. Thank you. We now move on to our next questioner, Iain Pearce from Credit Suisse. Please go ahead. Hi. Thanks for taking my questions. My first one was on NatCat growth. With the sort of statement that NatCat is seeing very good returns on capital and comfort around the 8% budget, should we be expecting exposure growth and PML growth in NatCat business next year? My second one was just around the decision to sell Admiral. If you could just give us a little more detail on sort of the strategic logic for selling down there and also what the realized gain we might expect on that stake sale in Q4 might be. Yeah. Thank you. On the NatCat side, I think as mentioned before, we are happy to grow the book if the rates are adequate. Again, I think it's the core of the strategy of every reinsurer because it's really where we started from as reinsurance businesses, reinsurance market overall. The geographic diversification is an obvious benefit we can deliver to the individual markets. As long as the rates are adequate, we are happy to grow that. How that will play out in the 1/1 renewal, I think it's too early to tell. Again, if rates are adequate, we are happy to grow that, and then PMLs also would go up. On the Admiral side, as I said in my introduction already, what we did has nothing to do with Admiral per se. The concentration of a single stock in the context of our all equity portfolio was just too big. Therefore, we reduced the investment amount into this one single stock to benefit from a better diversification going forward and to reduce the concentration risk here. Also, having in mind, and you're probably aware of that, how well the Admiral stock performed over the last few years. Thanks. Can we have the next question, please? Thank you. We move on to Michael Haid from Commerzbank. Please go ahead. Thank you very much. Good morning to everyone. Two questions, both on ERGO Life Health Germany. The net profit contribution from Life Germany was quite high, EUR 80 million. Year to date, it is even above EUR 200 million. Can you say more specifically what drove this IFRS profits? And is that level a level which you think is sustainable going forward? Second question. I assume the investment strategy remained broadly unchanged despite a shorter duration of the newly invested money. From the past, I remember you invest also in the U.S., and you run some FX risk there. Is this still the case, or has it even increased? Yeah. Life/Health Germany, indeed, we are happy with the performance. The maybe better than expected performance in at least in your perception is attributable more to health and the travel business than the Life business per se. As you know, in this segment, we are combining the Life businesses in Germany with the health business and also the travel business. Health is performing well. Also on the travel side, we have still a very good performance given the fact that, of course, also travel was restricted to some extent. Therefore, we would not expect that to continue like that also going forward. A certain swing back to normal is something we would expect on that side, maybe more midterm than short term. More short term on the Life side, I think what I have to mention as well is that from the SSRs or the SSR realizations, you're aware of them, we already did around 90% for this year in the first three quarters. Therefore, for the fourth quarter, we expect much less. You know, in IFRS, this immediately translates into realized gains on the asset side. Therefore, also for the fourth quarter, the general expectation for that segment would be to contribute under proportionally, given that lower realization level. The investment strategy is indeed unchanged. We are investing significantly in the United States, already, due to the fact that also our liabilities are to quite a substantial amount in the United States. It's for sure one of the most important markets we are doing business in. Indeed, we continue to do that. We are running some FX risks, but as mentioned before, we're also doing some hedging there, with the technical difficulty that it's never possible to hedge all the various dimensions of metrics you're looking at. IFRS, local GAAP, capital is all different. On top of that, we are also taking FX positions deliberately sometimes if we have a very strong view on markets. That also goes for Life/Health Germany, right? On the Life/Health Germany side, it's different. There, thank you for asking that more precisely. On the Life/Health Germany side, we are investing in US assets, but there it's really about, you know, hedging or fully hedging the currency effect. There we do not take a lot of positions, but it's really hedging. The reason is that the liabilities are euro liabilities there. We need to have a tight match currency-wise between the liabilities and the assets. The position taking takes place in the reinsurance business. Thank you very much. Thank you. We now move on to Vikram Gandhi from Société Générale. Please go ahead. Oh, hello. Thank you for taking my questions. First one is on the IBNR level for the P&C COVID reserves. At 65% at the nine-month stage, that looks remarkably high. Is it likely that we may see some releases, perhaps next year? That's question one. The second one is, assuming the group is able to achieve the EUR 2.8 billion or around EUR 2.8 billion for this year, which you're certainly seem quite optimistic, how should we think about potential return to share buybacks? I know it's you know a year-end decision and reviewed and you know decided by the board and so, but it basically I wanted to get a context of how we should think about potential capital return versus the growth environment. Those are my two questions. Thank you. Yeah. Vikram, thank you very much for the questions. The claims adjustment process in COVID-19 is ongoing. Unfortunately, I have to again emphasize that it's slower than I would have expected personally, again. There is a number of reasons for that. But what we do is, of course, we follow our clients, and we have to rely on the claims reporting as it comes in from our primary insurance clients. They are sometimes still waiting for the outcome of some legal proceedings, of some court actions, these kind of things. So it takes a little bit longer than expected still. I would expect claims adjustments to go on until you know, 2022 for sure, maybe mid of the year or something. Please be aware that I've been wrong with my assessment a number of times already, so don't give too much credibility towards what I'm saying now. Having said that, the IBNR level is still high. That gives us a lot of confidence that our reserves are not on the light side. But I think for everything else, it's a little bit too early, when you still do not get, you know, the notifications in and still have, you know, you are waiting for information from some of your key clients. Then it's probably too early to talk about if there are any buffers or not. I also wouldn't rule that out. Buyback. Well, yeah, I don't have to repeat everything, I think. I mean, you're all aware that share buybacks are an integral part of our capital management and that we will always use them for repatriating more capital as soon as it is clear that there's not a more or higher value creation by investing the money elsewhere. Now, this year, so far, we have been in a very sweet spot. We have been growing our book significantly and at the same time increasing our capital strength, and not only by the green bond, but on top of that, really by the operational development we have been showing. This is, I think a lot of support from a, you know, overarching capital management perspective. Can I predict anything now already what we will do in Q1? No, I can't, because we wait for the year-end results. We wait for the 1/1 renewal business developments. Then, as you know, we'll make up our minds only then. So far, I think we can be very happy with the performance of our company and with the growth and the combination of the two leading to an even stronger capital base. That's encouraging, isn't it? Yes, indeed. Thank you. Thank you. As a brief reminder, dial star one to ask your question today. We now move on to Thomas Fossard from HSBC with our next question. Please go ahead. Oh, yes. Good morning. Two questions. The first one will be on the Life Re business. I think that it's probably fair to say that the volatility of the Life Re earnings for the industry. I mean, I think that there is a kind of discovery process at the present time due to COVID. Does it change your view of the long-term earnings volatility of the business line? And as a result, the need for maybe additional pricing or margin to cover maybe higher capital that you need to allocate to this line of business. And the second question would be relating to maybe the 2022 outlook. It seems to me that compared to the scenario you based your five years looking forward view at the time of your last capital market day. It seems to me that things have strengthened much more in terms of top-line growth, in terms of pricing. I mean, any comments you could put on how this is potentially accelerating the delivery of what you were expecting to achieve, or if this is frontloading somewhat what you wanted to report? Yeah, anything would be interesting. Thank you. Thank you. Thomas, on Life Re, well, I think for COVID-19, it's too early to make the final assessment at this point in time. When the whole pandemic started, I think we were talking about our pandemic model, also publicly, saying that the EUR 1.4 billion loss would be a 200-year event. We are by far not there yet, on the Life side. But on the P&C side, claims have been much higher. What we also still don't know is if this COVID-19 impact on mortality, which we are seeing now in various markets, if there will be an offsetting effect after the pandemic has been dying down. There's a lot of speculation and debate around that, but I don't think anybody has the clear answer yet. Therefore, I think for final assessment, it's too early. Yes, indeed, volatility is a little bit higher due to COVID-19 compared to what we have been expecting. On the other hand, the way we are currently presenting Life Re in IFRS is very asymmetric. Worse performance shows up pretty quickly in the numbers. A better-than-expected performance, if at all, with a long delay or over a long time only. Which I think I mentioned a few times already, and therefore, I think the value of the business per se is not really reflected well enough in the current IFRS numbers. I think it's higher than what you could deduct from these IFRS numbers. A few years back, we had all these kind of debates around the MCEV publication. Going forward, we'll have IFRS 17. There are for sure better views how to look at the Life Re business than the current IFRS. Let me put it that way. Therefore, I'm not concerned overall. Overall, it's clearly an attractive and profitable business for us, despite the pandemic, at this point in time, which is a short-term effect anyway. Having said that, of course, we are reviewing that. In certain areas where we think prices need to be increased, then we do so. Similarly, what we are doing in the P&C area as well. Maybe that's on Life Re. On the outlook 2022, well, I mean, indeed, a lot happened since our Investor Day a year ago. I mean, it's clearly premature to talk about numbers today and to give you an indication what the outlook could be for next year anyway. Maybe a few items I would look at if I would be in your shoes and to assess what maybe we could be able to do in the next year, in the next few years. Let's start with growth, something you mentioned also. I think this year we have been indeed growing more. Market has been more positive than what we expect. The cycle has been more positive. What remains unchanged is that this cycle will not last forever. We're also paying a certain price for the longer cycle. We were discussing large losses a lot today already. I think it's good to have that better, longer cycle now, but it's also necessary. This cycle will not stay with us forever. The cycle will turn again, and that was our assumption when we released our strategy a year ago. I don't think this has changed significantly. In the later years of the strategy, we would still expect the cycle to be much less positive than it is today. The strategic answer always was to grow the businesses outside of the traditional reinsurance, and we are very happy that we have been able to grow them as well. The P&C business, so the risk solutions business, the ERGO business, the Life Re businesses. There, we are making good progress to damp volatility and to have a higher share of earnings also from that sources. Summarizing all of that, yes, the growth is good. Margins are good. The question out there is for how long it will continue to be that good. That's the growth side. On the claims side, volatility hit us this year above our expectation. Clearly, for next year's outlook, we have to talk about the expectation then again. What the expectation is, and this is too, of course, for the large losses, but then also for the normalized combined ratio, which will benefit from the renewals we saw this year. Covered that early on today as well. At the same time, there is a significant part of our business which is not part of the regular renewals. We will have to carefully analyze also the price development in these areas, then also the business mix development, because obviously we were very happy to also write, for example, proportional business with higher combined ratios, as long as profitable and at low risk, then it would somehow, of course, influence the combined ratio to be expected next year. It's maybe not always covered in the renewal reports. That's also something we would look at internally. If you make up your mind what to expect from us, that should also play a role. On the investment side, as much as the investment return helped us in you know, diversifying around the higher NatCat losses and helping us to achieve our targets this year, you cannot expect that to be a new normal. These high realizations had very specific reasons. We have been talking about Admiral, we have been talking about outsourcing, we were talking about portfolio management activities. These kind of things are not, in a sense, sustainable that you could expect them to continue. Therefore, you should be very cautious. Finally, my last remark is a comment I gave already end of 2021 when we talked about the guidance. End of 2020, when you talk about the guidance for 2021. Back then I said the plan for 2021 is particularly stretched. This is also something which I would at least to remind you of. Because when you talk about or think about what the basis then for next year is, this is also something you have to keep in mind. That's maybe from my side, what I can say about our assessment. Internally, I cannot give you anything else. The board has still to assess our plannings, which is still ongoing internally. That's about what I know myself. With that, I can leave it with you and trust you'll take the right conclusions from that. Thank you. As there are no further questions at the moment. I'd like to hand the call back over to you, Mr. Becker-Hussong, for any additional or closing remarks. Yes, thank you. Nothing to add from my side. Of course, happy to follow on with you on any questions you might have. Hope to speak and hear all of you very soon. Thanks for attending and bye-bye. Thank you. This concludes today's call. Thank you for your participation, ladies and gentlemen. You may now disconnect.