Ladies and gentlemen, welcome to the Quarterly Statement as of March 31, 2025, of Munich Re. I'm Moritz, a CorusCall operator. I would like to remind you that all participants will be in a listen-only mode, and the conference is being recorded. The presentation will be followed by a question-and-answer 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 Christian Becker-Hussong. Please go ahead, sir. Yeah, thank you, Moritz, and welcome to everyone joining us this morning for our Q1 earnings call with our CFO, Christoph Jurecka. Same procedure as every quarter: Christoph will start with a short statement, then we will go right into Q&A, as always. Christoph, please go ahead. Thank you, Christian. Good morning, everybody. Also, from my side, big pleasure to be able to talk a bit about our Q1. As Christian said, just a few introductory remarks, and then we can go into the questions right away. Q1 was a quarter with quite some volatility in the sector's core insurance business and also capital market returns. While our underlying technical profitability continues to be very strong overall, high large losses, fair value changes in the investment result, and significant currency movement affected our net earnings. By contrast, Ergo and Life Re posted earnings in line or above expectation. Altogether, we present a resilient result of EUR 1.1 billion, which is testament to the broad diversification of earnings drivers in our business and once again demonstrates the effectiveness of our strategy to continuously expand the earnings contribution of less volatile businesses. Let's look at the Q1 earnings drivers in more detail, starting with the investment result. The running yield was pleasingly high at 3.5%, while the ROI of 2.2% was burdened predominantly by negative fair value changes of fixed income instruments. This was more pronounced at Ergo, achieving an ROI of 1.7% compared with 2.9% in the reinsurance segment. In addition, mainly the devaluation of the U.S. dollar resulted in currency losses of around EUR 500 million, evenly split between reinsurance and Ergo. As volatile capital markets always provide opportunities, we could noticeably increase the reinvestment yield to 4.6%, providing further support for an upward trend in the running yield. Now, turning to the business fields, first of all, I would like to reiterate that our segmentation has changed this year, with GSI being carved out of P&C Reinsurance and the two German Ergo segments being combined. As always, I will start with reinsurance. The life and health total technical result of EUR 608 million came in significantly above the pro rata annual ambition. We do not consider this to be the new run rate, given that we benefited from positive experience driven by the U.S. portfolio, which is not expected to repeat, at least not to the same extent, every quarter. Beyond the release of CSM and risk adjustment in line with expectations, the Finma Rie business made a strong contribution once again. Please note that from this year onwards, we changed the methodology regarding currency effects in the result from insurance-related financial instruments, which will now be reflected in the currency result. Benefiting from strong new business, including two large transactions, the stock of CSM further increased despite significant currency headwind, providing a sound basis for a continued high total technical result going forward. The two non-life segments were affected by losses from the L.A. wildfires of EUR 1.1 billion altogether, which is a slight decline from the initially announced EUR 1.2 billion due to positive effects of a weaker U.S. dollar and retrocession. Around EUR 0.8 billion of the L.A. wildfire claims are attributable to P&C Reinsurance. In total, the segment result was affected by major losses of 21.3%. With 17%, our final major loss expectation for the year is at the upper bound of the provisionally indicated range, also reflecting some rate reductions. The combined ratio of 83.9% includes a higher-than-previously-guided discount benefit of around 10%, resulting from the high volume of major losses. For the remainder of 2025, we expect a discount rate, which is somewhat higher than the anticipated 7-8% after having refined its allocation between P&C and GSI. Please bear in mind that there is an opposing impact due to a correspondingly higher EFI going forward. Business mix effects and an increase in the loss component had an increasing effect on the basic loss ratio, where the normalized combined ratio of 78.8% remained strong and in line with our full-year guidance. Releases on basic losses met the expected 6 percentage points. This brings me to the April renewals, where we maintained high profitability and the sound quality of our book. We continue to manage our portfolio diligently to safeguard an optimal risk-reward. We expanded premiums by more than 6%, in particular driven by selective growth and casualty proportional business in Europe, Asia, and Latin America. On the other hand, we gave up some non-proportional property business, specifically in Japan. Coming off a particularly high level, the risk and inflation-adjusted prices in our total portfolio declined by 2.5%. Excluding business mix effects related to a higher share of proportional business, the decline was more muted at 1.7%. On a year-to-date basis, which means January and April renewals combined, the price decline of our portfolio was less than 1%. From our point of view, the overall market environment remains attractive, allowing us to earn good margins on the risk we take. At the same time, we were able to largely defend achieved improvements in terms and conditions. I conclude the reinsurance part with our new segment, Global Specialty Insurance. Before moving on to the Q1 figures, please allow me a brief look at the full-year 2024 numbers, which we disclose for the first time. The explanation of the total technical result of EUR 534 million is pretty straightforward, as the combined ratio of 93.6% was elevated due to several major losses, reserve prudency, and reserve strengthening for U.S. casualty. For 2025, we expect a higher technical result, driven by an improved combined ratio of around 90% and ongoing revenue growth. Compared to P&C Reinsurance, the net financial result is comparatively low, almost zero in 2024. This is not unusual, given the limited risk-taking against the replication of insurance liabilities. Finally, the negative other operating result of EUR 290 million is comparatively higher than in reinsurance, as a primary insurer like GSI has a structurally higher cost base. Furthermore, the result contains services for insurance-related activities and continued investments in the development of a joint operational platform, which are expected to pay off in terms of higher business growth and economies of scale going forward. All in all, GSI achieved a net result of EUR 182 million in 2024, which we expect to increase significantly in the years to come. Now, let's have a look at the Q1 figures. The Los Angeles wildfire losses of around EUR 0.2 billion, together with claims from severe convective storms in the U.S., left their mark on the combined ratio, which came in at 95.5%. Please note that around 40% of the large losses of GSI in Q1 are ultimately borne by P&C Reinsurance. Our IFRS numbers do not include this relief, as internal reinsurance is fully eliminated due to consolidation. On an underlying basis, we are in line with the 90% full-year guidance. The business continues to grow nicely, particularly at American Modern in the United States. In primary insurance, Ergo delivered a pleasing net result of EUR 241 million, slightly ahead of the pro rata expectation. Ergo Germany posted a pleasing segment result of EUR 140 million. The technical performance in life and health increased due to improvements in life, short-term health, and travel business. The stock of CSM increased, driven mainly by higher interest rates, model updates, and premium increases in long-term health, while the CSM release was in line with expectations. In P&C, the combined ratio of 88.8% met our full-year guidance. Please note that from this year onwards, we changed the methodology regarding acquisition costs, which are now evenly spread across the year. As mentioned earlier, the investment result came in lower. The international business of Ergo achieved a good net result of EUR 100 million, mainly driven by a strong operating performance of P&C business in Poland and Greece, Spain health, as well as by an increased contribution from our Asian joint ventures. The technical performance in Q1 was in line with expectations in life and health, as well as in the P&C business. The combined ratio improved slightly to 89%, driven by the major P&C entities and short-term health business. Just a few remarks on capital management. The group's economic position remains very strong. The Solvency II ratio was largely stable at 285% in Q1, as the strong operating performance offset the deduction of EUR 2 billion for the new share buyback. I would like to conclude with the outlook for 2025, which remains unchanged. We continue to anticipate a net result of about EUR 6 billion, as we consider our Q1 net earnings within the range of normal fluctuation in a single quarter. As usual, we anyway do not change any KPIs so early in the year, as volatility can derive from various sources and can have an impact in different directions in the remainder of the year. While in this quarter we had to deal with high major losses and a negative currency result, we expect an earnings benefit after closing the acquisition of Next Insurance, presumably in Q3, just to name one other earnings driver in the course of the year. As always, our full-year guidance takes all of these factors into account. Our shareholders can fully rely on us to actively manage the inherent volatility of our business. With this, I'm at the end of my opening remarks, and I'm looking forward to answering your questions. First, I hand it back to Christian. Thank you, Christoph. Not much to add from my side. My usual remark, we can now go right into Q&A. Please, a maximum of two questions per person. If you have further questions, please rejoin the queue. Please go ahead. Ladies and gentlemen, we will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their 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 two. Questioners on the phone are requested to disable the loudspeaker mode while asking a question. In the interest of time, please limit yourself to two questions. Anyone with a question may press star and one at this time. One moment for the first question, please. The first question comes from Andrew Becker from Goldman Sachs. Please go ahead. Great. Thank you for taking my questions. The first one, just interested in your outlook for the mid-year renewals versus what you've seen in Q1 and Q4. It looked like in April you were willing to give up a bit more margin for volume. Just curious how you're thinking about volume versus margin against this backdrop for the mid-year. Secondly, we just heard from one of your peers that they'd be willing to use reserving buffers, not just to manage sort of large loss volatility, but also to support earnings if we do see a softening cycle. Can you just remind me your philosophy here? I think you've said in the past you'd be less inclined to use buffers to support earnings in the softening cycle, but can you just remind me where we're at on that? Thank you. Yeah, Andrew, good morning. First, mid-year renewal, it's early days, obviously. I think what we have to keep in mind is that the Q1 renewal is a very specific one, given that it's limited in size and very specific also when it comes to geography. In particular, Japan, as you know, is a major part of that business renewal. It is a bit hard to draw any conclusions from Q1 to Q1, Q2, Q3. Even more given the fact that the L.A. wildfire is far away from Japan, and it's significantly closer to the U.S. business up for renewal in Q1 and Q2. As mentioned in my introductory remarks, you look at Q1 and Q2 together, the price decline is less than 1% for us so far, which means that we are still in very attractive territory and margins are attractive. This has to be kept in mind also when we look about volume, because obviously there is a client relationship, and we want to serve and will serve our clients also going forward. Just to highlight a bit of how the process works, it is not like that ahead of a renewal we sit together and discuss a question like you asked, how much compromise are we willing to make top-down. It really depends on the discussions with the clients, how clients react, also the overall client relationship, how long-standing is it, how profitable is it overall. These discussions always go beyond single treaties and single renewals, obviously. Therefore, I think I can only summarize that we continue to be optimistic for Q1, Q2, Q7, that the market will continue to be attractive for us and will allow us to also generate attractive margins out of our business going forward, based on the very attractive starting point where we're at, and also based on what we saw, particularly Q1, Q2, a bit less so in Q1, Q4. As mentioned, it was very specific. Second question, for what would we use our buffers, resiliency reserves? You called it. We usually talk about our reserve prudence. Basically, for volatility, obviously, it would be available, and we would be able to use it. A soft market long-term, I'm always a bit cautious, and let me explain you why. The reason is that a soft market can last quite a long time. The question is, for how long can you really support insufficient margins with your balance sheet? The risk is, of course, that you do not act decisively enough in pricing. Therefore, we continue to be reluctant to cross-subsidize businesses out of the balance sheet, which does not mean in exceptional cases we would compromise potentially. Really, the idea of the prudency is to deal with volatility, which is unhelpful. We think volatility is unhelpful in the context of the stock overall. This is for what we do have the buffers. Really, running the business profitably enough is not something where any reserve prudency can help you long-term. That is just not the case. Therefore, again, primarily my answer would be we use it for volatility and concentrate on running our business as profitably as possible. Great. Thank you very much. The next question comes from Michael Huttner from Berenberg. Please go ahead. Fantastic. Thank you very much. So Lifery, the insurance service result, EUR 608 million, your guidance 1.7 would imply just over EUR 400 million a quarter. And here you have an experience variance of around EUR 150 million. Can you explain where the experience variance is coming from? And whether it is structural, I would love you to say it is structural and that U.S. mortality has turned the corner. I would love you to say, if you remember the dinner, that it is all coming from these or partly from these obesity drugs. Obviously, facts are better. You said the sum seems to have stayed largely flat, and this is despite the EUR 2 billion deducted for the buyback. How do I—I have completely forgotten why I have never asked. You have EUR 2.1 billion net profit in—sorry, EUR 1.1 billion net profit. If I deduct the dividend accrual, I'm not sure that's what you do, but—and then add the—and deduct the buyback, then I'm down quite a lot, which implies that something else was very, very positive in the quarter. I just wondered if you could help me out. Thank you. Yeah, thank you, Michael. First, on L&H Re, I think this happens in a quarter when everything is stable and on top of that you have positive experience variances. I think I commented already U.S. And if I look a bit deeper, then it's mortality, but it's also disability, LTC. It's a bit all over the place. A very positive development, also driven by a lower amount of large losses this quarter. There is a bit of a natural volatility also in L&H Re, not as big as in other lines, but a bit there is. This quarter, we benefited from that. Nothing really to comment on. As mentioned before, please do not think this is going to happen every single quarter again. This is not the new run rate in any case. Solvency II. I mean, we deducted the EUR 2 billion. Please be aware there is no accrual for dividend in our methodology. This is important to note. Still, obviously, it is good news that we basically were able to earn the full share buyback in a single quarter. That is how you can interpret the numbers in Solvency II terms. Now, earnings in Solvency II terms are still a bit different from the earnings we have in IFRS, despite the methodology being much closer now than what it used to be. One difference you have to be aware of is that while in IFRS, we build up the CSM with new business in life, we write, it immediately increases the own funds and goes into the economic earnings in Solvency II. Some of the significant amount of new business in life health we have been writing will only be showing up in IFRS earnings over time, while in Solvency II, it immediately increased the own funds. That was a significant amount, by the way, still dampened by currency. If you would look at it normalized for currency, it would have been massive this quarter. That is one effect. Also, what is different is the currency dynamic and the interest rate dynamic in Solvency II compared to IFRS. While in IFRS, there is still the difficulty of what goes to OCI, what goes to P&L. That's different in Solvency II. In quarters with significant movements of interest rates, you end up having some volatility in IFRS, where in Solvency II, where we, as you know, match our duration quite nicely between assets and liabilities. In Solvency II, this kind of additional volatility from accounting choices does not happen really so much. We are really very well hedged, as you know, and therefore these sensitivities are probably a bit lower in Solvency II compared to what we saw in IFRS. If you then add up all those drivers and a number of smaller pieces, I cannot comment on all of them now in the call, you come up with a very positive earnings development in Solvency II in that quarter, which very nicely supports our Solvency II ratio. Wonderful. Thank you very much. The next question comes from Kamran Hossain from JP Morgan. Please go ahead. Hi. Morning. I've got two questions. The first one is on GSI. I mean, I guess looking back at the disclosure we got yesterday, plus today's quarter, you haven't hit the 90% combined ratio target in four of the last five quarters. Just interested in what the plan is to get this back to target. Just to clarify on this as well, I think, Christoph, you said the number would have looked better today, but you don't include the internal reinsurance effect. Just want to clarify whether the 90 includes that target or not, or whether it should trend a little bit above 90 and actually you get a benefit in P&C Re. The second question is on, I guess, in the life business, you've seen very strong new business generation. I think just looking at the market, we've seen some deals that include U.S. long-term care. Could you maybe elaborate on your appetite for kind of whether you want to take a long-term care business and whether business you put on in this quarter and previous quarters have included long-term care? Thank you. Yeah, Kamran, good morning. Thank you for the question. I start with the GSI piece. The 90% target is fully based on IFRS, which means internal reinsurance is fully not reflected in that 90% target. Of course, if you compare that number with potentially other specialty insurers, I think it's a relevant piece of information if there is any reinsurance protection included in that number or not. Here the answer is no, because we consolidated. This is also the reason why I mentioned it in the call. This consolidation effect obviously becomes bigger if you have significant amounts of large losses. Therefore, this quarter, I mentioned it, our approximation is 40%. This number obviously is depending on the amount of large losses you have, because this reinsurance is a non-proportional reinsurance that does not come in at the same level. It depends really on the amounts of losses you have. Now, you're right, the 90% target has not been hit now in Q1. Also last year, the combined ratio has been above that number. Let's start with prior year. In the prior year, there were some effects also from reserve movements, where particularly in Q4, we took some action to get a clean starting point for the segment to really work on its own, which meant we strengthened reserves a bit. Strengthening meant we basically moved the on-top reserve we are holding, a part of it, moved it to GSI in order to have a fair distribution of that on-top reserve between reinsurance and GSI. Because in the past, as it was all one segment, we did not care so much where we booked it in reality. Now, for different segments, to get a fair starting point, you have to think about how much of that on-top reserve you are holding in P&C versus how much in GSI. That is something which increased the combined ratio in GSI last year. I think I commented also on reserve strengthening for U.S. casualty that came on top of that. We had also quite a lot of large losses for GSI last year, which we still regard as volatility. The underlying profitability was much better last year. Now coming to Q1, also in Q1, the underlying profitability is in line with the 90% expectation, while we have, again, a big volatility. Frankly, it is not ideal to start with a new segment in a quarter where you have the L.A. wildfire and some severe convective storms, which immediately hit that segment above expectation. I would have clearly preferred not to have these events, but that is not our choice, obviously. Yeah, underlying profitability, I think, is still in line or is in line with the 90%. The large loss volatility, it is the same like in reinsurance. It is smaller than in reinsurance, but the fact in itself is the same, that you are a bit dependent also on what kind of events are happening in which quarter. We will have to see at year-end really what the large loss number is going to be. Other than that, obviously, the entire segment is focused on profitability, and there is a number of actions being implemented on the price side or underwriting side. I will not go into any further details here, but clearly, the profitability is the main target the colleagues are looking into right now. At the same time, still, the growth of 7% is quite significant. Coming to your LTC question, the LTC, generally, our appetite is muted. I would rather go as far to say if a mortality business is offered to us, it's generally a yes. If LTC is offered to us, it's generally a no. Here and there, sometimes there is a no as to all general rules. Sometimes there are exceptions, but really, really, really not a lot. The large transactions this quarter did not include any LTC, to be very clear. Thanks very much, Christoph. The next question comes from Evan Bogart from Barclays. Please go ahead. Hi. Good morning. Thank you very much. My first question would be on the outlook and the guidance. I mean, one element that we have there is the insurance revenue growth, EUR 42 billion for reinsurance for the group. I'm just wondering, given the building up of the effects headwind, is that the target that you would have full confidence in reiterating? Should we expect some acceleration of this run rate later in the year? Maybe on that topic of effects headwind, you could just comment on how you think about that. The second question is, in fact, on the effects. You've historically been taking a substantial long dollar position, both structurally and strategically, as part of the investment book. I'm just wondering whether that has changed right now. I mean, how do you think about the potential effects impacts in Q2 and later in the year? And what's your appetite over there? Thank you. Yeah, Evan, thank you very much. I start with the growth. I mean, I think it's obvious that this growth target has become a bit more challenging after Q1 compared to when we started initially based on the FX movement. So that's a correct observation you had. It's a bit too early to really revise it because in three quarters, a lot can happen, and we can either organically compensate it or also the FX could move again. Yes, it's a bit more challenging now to achieve that compared to when we initially came out with that target. More generally on ethics, indeed, a long U.S. dollar position was always part of our asset allocation overall, also to compensate for movements in other risky asset classes. Very often, the intrinsic hedge between U.S. dollar and risky assets worked quite well. This U.S. dollar and also U.S. Treasury used to serve as a safe haven not only for us, but for many, many investors in a way. Now, given the political development, I think it's an ongoing public debate to what extent this safe haven is still in place or not, and who knows how it is going to continue. We also do not have a crystal ball, so we do not know it any better. We are really very actively following that discussion and carefully observing what's going on in the market. We'll revise our appetite also for that long position in line with also our appetite for risky asset classes all over the board. We'll regularly review what's going on. It's too early to draw final conclusions. I think the only fact I can add is that already in the course of Q1, we reduced our U.S. dollar long position quite significantly. It's still there, but it's significantly smaller than what it used to be. Can I just follow up on that, please, on the effects impact? Maybe you could talk about the sensitivity of your earnings, let's say, to a 10% devaluation of the dollar. Thank you. Yeah. As you know, there's always a one-off effect in the currency result. I think I interpret your question right, that you're also interested in the concurring effect. The one-off, we digested more or less already, so you can see what is in order of magnitude. The recurring effect, so let's assume a 10% decline in the U.S. dollar. Then my rough estimate would be that our net income would be affected by roughly half of it. If you assume 10% lower U.S. dollar steadily, constantly for a longer period of time, I would expect a minus 5% effect on our net income. Thank you so much. The next question comes from Shanti Kang from Bank of America Merrill Lynch. Please go ahead. Hi. Good morning. Thank you. Yeah, last week, we heard from a company that mentioned that they were able to secure an aggregate cover, which was expected to buy in a one-in-four and a one-in-five type scenario, which is lower than we typically expect. I was just curious to hear more about your participation in the aggregate market today. The second question was, obviously, on solvency level, clearly, capital generation is very strong. I was just curious, given the comments earlier this year on M&A, I think you mentioned you'd look in global specialty. I was just wondering what size or scope of M&A you'd be looking at within that segment, for example, or if it would be outside of global specialty as well. Thank you. Yes, Shanti, thank you. First question, aggregate covers. I think the usual disclaimer is correct here as well. We do not talk about individual clients or non-clients or future clients or clients of the past or individual primary insurers. What I can only tell you is that we are still extremely cautious, and we always have been extremely cautious when it comes to aggregate covers. We do not see a huge trend in the market back to aggregate covers anyway at this point in time. My final remark would be, even if generally we are very cautious in aggregate covers, not each and every aggregate cover is equally toxic. Of course, also there, the details matter and sometimes matter a lot. Not everything is equally bad. We continue to be very cautious in that respect. Still, of course, we look at each single one in a very differentiated and detailed way, if offered to us. Solvency II, indeed, I mean, the capital continues to be strong. We always have been quite outspoken, at least in the last couple of years, that M&A would be an option for us. We are still busy in closing the next transaction, and the closing is expected to happen probably in the third quarter. That's what we currently would assume, maybe early July. We are kind of busy, but at the same time, we would continue to be interested in observing the markets. If, again, an attractive target would be available, which would help us to improve our business overall, would add capabilities which we currently would not have to what we, as a group, can offer clients, we would be very much interested. Even more if the price would also be attractive. Yeah, generally, we continue to be interested in M&A, and if the right opportunities come, we are here. Great. Thank you. The next question comes from Will Hardcastle from UBS. Please go ahead. Thanks very much. I'm just looking to frame really how the renewals are coming in in a historical context. We're hearing broadly stable a lot. I guess if 2023 were generally considered to be the best renewals in 20 years, would 2025 still be in the top five in, I guess, 22 years? Or are you thinking closer to average? There is quite a wide range of views out there, so I think this would be a helpful reference point. Just trying to understand in P&C Re, the 21 percentage points major losses, did these include any reduction from prior year helping to reduce that? If so, can you help quantify from which events? Thank you. Good morning. I start with the second one because I am much more confident that I understood it correctly, but with the first one, I am not so sure. We usually do not disclose PYD specifically every single quarter, but it is part of the way we book things. There is always some up and down due to PYD in our large loss numbers. I think what I can mention, though, this quarter is that nothing significant, if that is of any help for you. The first question, if I understood it correctly, and otherwise, please jump in, was the question if the current pricing level, where it stands in historic comparison. There my answer would be it continues to be very attractive. I mean, again, the combination of 1-1 and 1-4 would be less than a percentage point decline off a historic very high level, which means it is still indeed a very attractive level. This is all risk-adjusted. In these price change numbers, as we interpret them and as we communicate them, the change in exposure, but also the change in the risk, for example, due to climate change, model updates, and all these kind of things is all included in there already. You have to also keep that in mind. T hat's helpful. I guess to put it into context, what you'd classify that as just early signs of softening from an extremely hard market, but a long way from a soft market. Is that a fair comment? I think that's a fair summary, yes. Thank you. The next question comes from Chris Hartwell from Autonomous. Please go ahead. Good morning. Actually, I'm just going to have a sort of question actually. I'll leave that one actually. It was largely covered before. GSI, obviously, the profitability of that you discussed earlier. In terms of the top-line growth, I think you mentioned in your opening remarks American Modern as being one of the areas of excitement. I was wondering if you can maybe give a little bit of more detail on what the growth opportunity is, maybe a little bit in terms of specific product lines or geographic opportunities. Second question, we've been sort of thinking about Donald Trump, excuse me, and Section 899 and Section 891, which we appreciate are very much tail risks in effect, potentially putting fairly punitive taxes on remittances to, I guess, unfriendly countries from a tax perspective. We're just sort of wondering within the sort of context of reinsurance, what sort of areas of sort of what can you do to sort of mitigate that potential risk? Sort of thinking about maybe writing throughout the jurisdictions or some other sort of funky transactions, something like that. I wondered if you had any thoughts around that. Thank you. Yeah, Chris, thank you. Good morning. American Modern is a specialty business with very retail-ish kind of special insurance. Therefore, it's not like there are large transactions having any impact on growth numbers, but it's a bit all over the place. Also, to a large extent, or to at least some extent, also price-driven. It's volume and price. It's admitted business. As you know, you have to file for tariffs, and then you have new tariffs, and this all supports the growth then. Nothing really specific to be mentioned on top of that. Section 899. Now, this is my favorite topic in a way because what I mean, what potentially would happen here is that as a reaction to the global minimum taxation of the OECD, which has been implemented in the EU already, the U.S. might respond in way of some retaliation or additional taxes as retaliatory measures against that global minimum taxation, which first of all, I think proves that the idea of a global minimum taxation is no longer working because the basic requirement or the precondition for it to work is a broad worldwide consensus to comply with the rules which have been agreed by the OECD. This obviously is no longer the case. By the way, not only not in the U.S., but also other markets are having difficulties with the concept in the meantime. This makes it then extremely hard because, I mean, global minimum tax is called global because it was meant to be global. That is no longer the case. I think it's unhelpful generally. I think the European Union would be well advised to no longer have it or at least adapt it in a way that these extra territory aspects are taken out because the U.S. is a reaction on the fact that the EU might impose additional taxes on U.S. companies. Obviously, then they would do the same on European companies. As long as there's no agreement on the rules, I think this can only be unhelpful, very similar to the tariff discussion, which is maybe more on everybody's mind. Now, as all these rules are not in place yet, it's extremely hard to think about how to mitigate that, except asking the European Union to get rid of the entire rule set of the global minimum taxation. What I can say at least is maybe to give you some answer at least and give you maybe also some confidence is that we, of course, are very flexible in many aspects in the way how we write business. We are currently writing business in the U.S., out of the U.S., but also having U.S. business being written out of other jurisdictions, for example, Germany, but also other places. We are quite flexible in that regard, and we could react if there are any possibilities that reactions would mitigate the impact. That's one part of the answer. The other part of the answer is that obviously we do not know how big the amount would be, but my current expectation would be that it would not be that big for us anyway. Again, early days, who knows what is going to happen and a lot of room for policymakers to change something on both sides of the Atlantic. The next question comes from Darius Satkauskas from KBW. Please go ahead. Hi, yeah. Two questions, please. Do you still see U.S. property cat as a growth opportunity in the near term given the sort of trends and the fact that inflation has been eroding nominal attachment points, etc., even if you managed to sort of defend it since the move up in 2023? Would it be possible to give us some color of where you think through the cycle normalized combined ratio for GSI is? Thank you. Yeah. U.S. property growth? Absolutely. I mean, if the business meets our requirements when it comes to terms and conditions, but also price, of course, we are prepared to grow that business. It's a healthy business generally. As discussed earlier today, the margins are still in a very attractive place, generally spoken. It will depend on the renewals and also how the L.A. wildfire will impact those renewals in 1-6 and 1-7. Yes, generally, we are absolutely prepared to grow in that area as well. Can you remind me of your second question, Darius? I'm not sure if I understood it. Yeah, just try to get some color on what you think through the cycle normalized GSI combined ratio is. That is a harder one because there is not one cycle in specialty insurance, but there are many cycles affecting the various lines of business or various businesses quite differently. Therefore, it is really difficult to give you an answer. I think the 90% we currently see is an attractive target, and it is the right target at the right point of time, I would say, given the current situation where the markets and where the cycles currently are. A lot of these cyclic movements are also offsetting each other. Thinking about the situation where all the specialty businesses are being on top of their cycle at the same point in time, that is probably anyway unrealistic. Again, I cannot give you an answer. I think the 90% is the right target for now, and everything else would be highly speculative at this point in time anyway. Thank you. The next question comes from Vinit Malhotra from Mediobanca. Please go ahead. Yes, thank you. Good afternoon. If I can just ask on the there is this push on the casualty side outside the U.S., and we also know that one of your other peers has a stated target on the growth area. Today, you're also growing in that market. Could you just comment a bit about how attractive is it? What's the competition? What's the risks? Second question again on P&C Re on the loss component, where there was, I think at least to me, a surprise negative effect. Can you just comment a bit because I think one of your other peers noticed that market was profitable now, pretty positive? Just curious as to what drove that increase. If I can ask, the GSI 90% is growth stock, no internal impact. Am I correct? Yeah. The third one, yes, very straightforward. There is no internal reinsurance included in the 90%. The 90% is the plain vanilla IFRS number. Loss component, indeed, it's a bit surprising that the loss component in that quarter did increase. That is very much interest rate driven, but also a sign of a prudent reserving approach again. We reflected some new business, maybe even more cautiously this time. Your question on casualty proportional outside of the U.S., a lot of that business is motor business, obviously, and the dynamic is pretty clear. It depends a lot on primary prices and on the question where does the cycle in motor business stand given inflationary tendencies, which might be or sometimes are a bit hard to digest in that business. The attractiveness is very much depending on the direct business. Then, of course, the commission you negotiate with the client. Again, a lot of that is motor business. In a way, if you compare it with U.S. casualty business, a low-risk business, I would say. Sure. Thank you very much, Christoph. The next question comes from Iain Pearce from Exane BNP Paribas. Please go ahead. Hi, morning. Thanks for taking my questions. The first one was just on the global specialty growth outlook. The sort of EUR 10 billion you talked about at the full-year presentation looks a bit stretched based on the underlying growth, particularly if we factor in the likelihood of FX headwinds going forward. Do you still see the EUR 10 billion as a reasonable number? Also, if you could touch on what you're seeing in terms of pricing within the global specialty segment, that would be very helpful. I think there was a question from Chris about American Modern growth opportunities, which might not have been covered when we were talking about the tax item. The second question was on the currency result. Clearly, we had some negative FX items in P&C Re, which was sort of expected. There is quite a big negative FX item or currency result in Ergo, Germany, which I struggled to understand given the jurisdiction. If you could touch on what is driving that, that would be very helpful as well. Thank you. Sure. Thank you. First of all, GSI, the EUR 10 billion target is still the target, but I think what I said before in a more general context is correct here as well. Given the FX movement, it has become more challenging to get there. Also in the operational steering of our GSI business, what matters most to us is profitability. The combined ratio target is much more important than the growth target. The second most important target is growth. Currency anyway makes it a bit harder to achieve it. We'll see how far we get. Yeah, it's a bit more challenging now than what it seemed to be a few months back. On the pricing side, obviously, I mean, we're talking about a very diverse segment with various cycles and various business lines from some lines very close to retail up to the very high-risk lines in Lloyd's business. It's a bit hard to speak generally about the pricing there. I think our strategy is obviously in all these businesses to prioritize margin over growth and still achieve a fair and reasonable amount of growth given that we want to overproportionately grow this business and compare to P&C Reinsurance. That very much depends on business opportunities as well and on the competitive situation in the various lines and geographies where we are doing that business. Really, the margin is what matters most to us. Currency result Ergo, Germany, this is done as a yield enhancement strategy. For Ergo, Germany, for some of the businesses for ALM purposes, a high running yield matters quite a lot. To achieve that, investing into U.S. dollar instruments sometimes makes a lot of sense as the running yield is higher in the U.S. The currency is sometimes hedged, sometimes not, sometimes hedged within a certain collar that they still have some FX exposure, but that depends a bit on the book. Look at it as FX being just one additional asset class also for Ergo, a riskier asset class, admittedly. In the course of ALM optimization processes, the exposure is then being set up and optimized. As you saw anyway, we're talking about long-term life and health business here predominantly. There anyway, the beauty of IFRS 17 is that the CSM is dampening those effects. That business is in a much better situation to also cope with volatility more long-term. If in a single quarter the currency goes down a bit, if in a few quarters from now it will go up again, it will really not hit the bottom line, but will be digested by the CSM in both directions, which is, given the long-term nature of the business anyway, a very good outcome of the IFRS 17 introduction that in those long-term businesses, the investment strategies, ALM strategies can be much more long-term oriented now than what they used to be. Sometimes you have some IFRS volatility, at least in the investment result from that. We are happy to bear it given that the entire strategy still makes sense long-term and from an economic perspective. The next question comes from Faizan Lakhani from HSBC. Please go ahead. Hi there. Thanks for taking my questions. The first was on the discounting benefit that's meant to be structurally higher for the rest of this year. You mentioned there'd be an offset on the IFI. Would it be right to say, given the timing difference, that you get an elevated benefit this year relative to next year? Second question is on GSI. I know you don't provide a budget for the NatCat losses, but given the fact that you've said that the experience is in line and that you're operating at 95.5% at Q1, can we assume that once we adjust for L.A. wildfire, that you have sort of a four- to five-point budget for NatCat? Is that the right way to think about it? Finally, you mentioned expense ratio is structurally higher as well. You talked about potential operating leverage. Could you provide some sort of walk or framework on how to think about the expense ratio development for GSI going forward? Thank you. Yeah. Let's start with a discount. The discount of the 10% is heavily influenced by the large amount of major losses this quarter. That is a significant driver. If you normalize for the large losses, that element of discount is also being normalized. Some of it is already being taken out by the normalization. There is still a remaining effect on the basic losses, but this is partly also compensated by IFI going forward, but then also compensated by business mix effects and other smaller changes. Therefore, I would not see any support neither for the future nor now, but it is pretty in line with expectation when it comes to the overall profitability. On the GSI expense side, if you look at the full year 2024 numbers and the way we commented there, I think what I highlighted is that we are still in an investment phase. We are building a joint platform. There are some investments also, for example, for a joint finance platform, but also joint operational platform. These investments will still take a few years, but then will pay off due to additional growth we try to achieve, of course, but also due to synergies or economies of scale. That will be a few years until we really get there. Therefore, short term, I would not expect any significant relief on the expense side. More long term, I would expect that to happen. The next question comes from James Shuck from Citi. Please go ahead. Thanks. Good afternoon. Just on the IFI versus discount rate benefit topic again. If I understood you correctly, just in your answer to that last question, you said that the combination of those two are in line with expectations. I think kind of what we're trying to get to is that positive or negative expectation for the full year. I am interested. I mean, you've said in the past that you will offset any positive and add it to an unspecified reserve, and then that will be released in the future as interest rates start to come down. How will we see that release come through? Will it manifest through the attritional loss ratio, or will you separately identify it for us in the normalization of your combined ratio and P&C Re? That's my first question. Secondly, on Next, I just had a couple of questions kind of actually on this business because I struggle to see how you can get to a mid-triple digit, granted U.S. GAAP net income in the midterm. There is revenue of EUR 548 million currently in the pack that you disclosed. Even if I grow that at 20% per annum for the next kind of two, three years, to get to mid-triple digit, you are talking about a significant margin on that kind of revenue. That business made a loss of EUR 94 million in 2024. Perhaps you can just help me understand the glide path to mid-triple digit for Next, please. Thank you. Yeah. Thank you, James, for the question. I think that you tried to answer the first one a bit more high level without going into all the technicalities, which I tried in my previous answer. I think my high level answer would be that there are many moving parts in the normalized combined ratio right now. If I look at all of them together, the normalized combined ratio sits pretty much where we would have expected to be anyway. The combined ratio target is 79%. The normalized combined ratio is slightly below that. It is pretty much there. Did we book any additional prudency or something in Q1? No, we did not. It more or less was moving parts, which then all led to the fact that we are still around this 79%, which is reassuring that the core profitability is unchanged, but no additional prudency was booked in that case. The IFI is part of that equation, of course. I would not expect any big relief, but also not a burden going forward. Currently, we are really in good shape when it comes to achieving our targets. I think that was the main message about the normalized combined ratio in light of various moving parts, be it discount, be it IFI, be it business mix, or be it also the loss component. Your second question on Next. What are the drivers? Two things I would like to add. One is capital management. Currently, Next is writing some of the business not on their own balance, but using other balance sheets. We can internalize a lot of that and by that maintain the margin in the group and deploy the excess capital we have in order to support the growth. This will all be much more efficient. There will be capital synergies. By the way, on top of that, also to a smaller extent, but also operational synergies with our U.S. operations in the group. The second piece is significant growth over a few years. We would expect the growth to continue to happen over many years, by the way, in a market where the market share of Next is still very small. It is an underserved market given that the incumbents do either concentrate on real retail business or on the large corporate business. Next is in the sweet spot in between where you still have a multi-billion market in the U.S., This market is not being so specifically addressed by the existing players. The assumption is that significant growth and profitable growth will be possible going forward. Those are the assumptions behind our business case, basically. Then over the years, we'll get to these mid-triple digit numbers as outlined in the presentation we published on Next a few weeks ago. Ladies and gentlemen, this was the last question. I would now like to turn the conference back over to Christian Becker-Hussong for any closing remarks. Yeah, thank you. Nothing to add from my side. Thanks for joining us this morning. Further questions, please do not hesitate to call us. Looking forward to seeing you all soon. Thanks again and have a nice remaining day. Bye-bye. Ladies and gentlemen, the conference is now concluded and you may disconnect. Thank you for joining and have a pleasant day. Goodbye. Goodbye.