Ladies and gentlemen, thank you for standing by. Welcome to Coface Results at 3:00 A.M., 2023 conference call. At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question, you will need to press star one one on your telephone. I would now like to hand the conference over to the CEO, Xavier Durand. Please go ahead. Thank you. Welcome everybody to this first quarter publication call. We're happy to report our net income at EUR 61.2 million for the first quarter. As you know, this is the first time we will be reporting under the new format of IFRS 17 and IFRS 9 accounting standards. We have provided in April a pro forma view of 2022, quarter by quarter. We will be comparing this quarter, first quarter 2023 to the pro forma 2022 that we had previously disclosed. Under those, under those precisions, our turnover, as you see, is up 11.4% at constant FX and perimeter. If you look down the list of our products, you see that trade credit insurance is growing almost 11%. The client retention is breaking yet another record at almost 96%. Pricing is down 1.5%, but less than it did, I would say last year. Business information continues to grow with a 15% growth at constant FX, and factoring is up 13.1%. Another good quarter, I would say, and we'll discuss the underlying trends in the following pages. You also see that a net loss ratio at 40.6% brings the net combined ratio to 66.3%. The gross loss is up from last year by 9.2%, as we see a normalization of the risk environment. Last year, we had also the impact of the last, I would say, bit of the government programs, which we contributed to. When we compare the net result, it's actually better this year. The net cost ratio is down by 2.1% to 25.7%, and that's both operating leverage and continued high reinsurance commissions. We'll explain how we're continuing to invest in the business during that time. Overall, we call this a strong quarter with EUR 61.2 million, 17% growth versus last year, and return on average tangible equity at 13.6%. We've added a page to the usual stack on page 5, just to highlight 2 different points in what we're doing. The first one has to do with how we're growing our information business, and we wanted to give you a little bit more color on what's going on in that business. It's actually made of 2 parts. One is the, I would say, historical business information units that we had in Coface, mainly in Eastern Europe and in Israel. That piece is growing single digits. Then we've introduced with our new strategy, new products, about 40% of our business, which is showing strong growth. We have the annual value of the new business that we're driving and the pipeline of new opportunities, which are seeing a strong double-digit growth from last year. I think another benchmark that's interesting for us, just to highlight this business, is that we've reached 13,000 individual clients for this activity, both large and small companies, and that compares to this, you know, roughly 50,000 clients that we have in Coface overall. It's starting to be material in terms of our ability to reach a large number of clients, even though the unit value of these contracts obviously is much smaller than what we get in credit insurance. Also some really nice growth in the other specialties that we've laid forward in our Build to Lead plan, bonding, single risk, debt collections, factoring. The revenues of these specialties is up 20%. Insurance and debt collection fees are up 17%. That's a reversal of a trend from, I would say, the past, where I think the last couple of years we had seen much less growth in those parts of the business than on the pure insurance premium. Just to give you a little bit more color on, you know, continuing to drive service and fee revenues for Coface. The other point we wanted to highlight is obviously the real estate portfolio. As you know, we mainly have bonds in the investment book, and we've been modifying our other holdings, mainly stocks, which have come down. Phalla will show this. Also, we have a EUR 200 million real estate book as a diversification of that investment. I wanted to give you a little bit more color, because everybody knows this is an area of the investment portfolio that is under more stress. We do not hold buildings directly, so we hold them through investment funds. We have been careful in selecting funds that have low to moderate leverage, so we are not invested in the highest leverage parts of that space. We have been proactively managing that part of the book. Actually, it started in the second quarter of 2021, where we had about 9% of our book in real estate at the end of 2021. We're targeting something like 5% by the end of this year, which means a EUR 90 million of divestments. There are limitations to the liquidity of these assets. While we are managing that exposure, we're also actively rotating away from what we consider to be the most risky part of that book, which is offices and retail, into something that, for us, has got more resilience, which would be housing and logistics types infrastructure. As you know, the real estate portfolio won't be run through the P&L in terms of mark-to-market under the new IFRS 9 accounting standards. It has a negative impact on our, on our, the return of our asset portfolio for this quarter, and then we'll explain this in the rest of the call. With that, I'm gonna turn to page 7. Those are pages that you're by now very familiar with. You can see the 11.4% growth in the total revenues to the business, 10.9, as I said, for the premiums, driven, as it has been so far for quite a while now, by past client activity and very strong retention. The other revenues, as I mentioned, they're up 15%, a little bit more. Information that's at 15%. Third-party debt collections, which is small, but it's starting to pick up some speed at 44%, factoring up 13%. As I said, the insurance fees, after several years of stagnation, is starting to see some momentum at 12.8%, which for us is a nice non-capital intensive source of revenues. On page 8, we usually break up our growth story by region, and whereas I would say last year, we had fairly homogeneous growth across all the world. You're starting to see some differentiation here, and that's really driven by what's going on in the economies in the different regions. Latin America used to grow 30%. It's coming down as we're seeing a softening of commodity prices from last year. Asia Pacific, slightly down. That's driven by obviously the slowdown of the activity in the technology ICT space, as well as commodities. If we exclude a 22 positive one-off, we're kind of flattish for Asia. North America, double-digit growth. Met in Africa, doing really well. Central Europe, negative because we are running off the book in Russia. Excluding this, we would be at a 1% growth. That also highlights some form of slowdown in Eastern Europe. Northern Europe and Western Europe, you see the numbers being inflated in Western Europe by some accounting one-off on the alignment of the accounting methodology. If you take that out, which is something like 10 points, you've got growth at 7 for Northern Europe and something like 11 or 12 for Western Europe. Continued growth in the activity of our clients in that part of the world. If you go to page 9, you see that the new business continues to be coming back to the levels pre-COVID. We continue with our stance of being, you know, prudent in the way we underwrite business in this part of the cycle, and very consistent with our strategy of value creation through the cycle. The retention rate, as I mentioned, broke yet another record. I think we've been breaking those records for 5 or 6 years in a row now. The price effect is -1.5, which tends to be somewhat more in line with, I would say, our historic trends, but it is better than it was last year. You know, after COVID, we had a good year in 2021. We had a rebound, a negative rebound in 2022, and things are starting to improve a little bit. On the volume effect, it's still a good quarter, but it is less than half of the activity we saw last year. We're clearly seeing a slowdown in economic activity, which is reflected in the turnover declarations that we get from our clients. Clearly, the cycle that we had predicted, you know, would continue, is happening. No real surprise when it comes to those numbers, for the team here in Coface. I'll go to page 10 and talk a little bit about the risk. You see that we had another good quarter at 40.7%, which pretty much in line, by the way, with the quarters that we had before that. There is a slow normalization underway. I think it's probably happening a little bit slower than we would've thought, but we are seeing a new number of claims increase since now almost 2 years. It'll be 2 years in June, close to pre-crisis levels. The large losses are increasing, even though they're still, I would say, below the average of the cycle. You can see on the bottom right of the graph here, we try to compare 2022 and 2023. Under the new IFRS 17 rules, we have to discount the reserves that we put on the books. That's why you have a slight blue line here on the top, which explains what the reserves would have looked like if we, if we didn't have that discounting method. The new vintage, we're reserving at 78.4%, actually very close from the 84.2% we had last year. As you recall, last year, that was the first quarter in which we saw the invasion of Ukraine by Russia, and we had taken some reserves, which explains why it was a little bit higher last year. On the other hand, I would say the intense blue, 35.6 are the bonuses from the prior years, and you see that they are lower than they've been in 2022 and in 2021. Getting back to the values historically that we had seen in the prior years. That's really because the two, I would say, extraordinary vintages that we've had following the COVID and the government policies, which had driven insolvencies to record lows, while these two vintages are now running off, so we're getting fewer bonuses from the past, and things here as well are normalizing. On page 11, we show the quarterly loss numbers by region, and we compare that to the annual losses in the prior years. It's a little bit tough to compare one quarter with the full year. I suggest we move to page 12, where we have the quarterly sequence, quarter by quarter for the different regions. Here, what you see is pretty much so that the four largest markets, more stable on the bottom are pretty benign. I would say, you know, the trends at 42 for Western Europe, 24 for Northern Europe, 26 in Central Europe, Middle and Africa, 29. Really, the risk remains, actually pretty stable and really good on these four markets. You see more volatility as we have historically known in the three smaller, more volatile markets on the top. North America rebounds from 0, actually, in Q4 to still a very good number at 32%. Latin America sees the second tranche of the large file that we had discussed in Q4. The difference here is that we've taken the second part, and that's, that'll be the end of this file. It is compensated this quarter in terms of the net loss by the charge that we will pass on to the reinsurers. Net-net, you won't see it, but on a gross basis, it still appears here on the Latin America curve. In Asia Pacific, it's rebounding from a say, a very low of -50 to +29. The quarterly numbers, as you know, are more volatile, but we still see a pretty good level of losses here in Asia. We have the usual page on cost on page 13. You see that our total costs quarter-over-quarter, in a year are up 10.9%, almost 11. You see how that breaks down between the 8.8% for external commissions paid to third parties and the 11.5% that we have in internal costs. Amongst those numbers, I just wanted to highlight a few things. First of all, the insurance costs are growing 7.9%. When you compare that to the growth of the insurance premiums, we are continuing to see operating leverage. The costs are growing less than the rhythm at which we are growing the premiums, which is exactly what we want, and we've been doing for the last seven years, I guess. We're continuing to invest in the business as per our Build to Lead plan. You see that 2.2% of those 11.5 have been driven by investments that we deliberately make in this business. We're also adding to our technology investment budget because I think this is a good time for us to do that. There's some things we can get done this year that it's just not worth pushing off in the future. When you look at our gross cost ratio, it's actually down 1.2 points from last year at 29.4%, and that's really driven by the increased fee revenues that I've mentioned earlier. With that, I'm gonna turn it over to Phalla to take us through the rest of the deck here. Good evening. Let's look at the reinsurance page, and here we're on page 14. I will start with the premium cession rate at 27.3%, that, you know, that has been very stable compared to last year, because, you know, we're going back to, I would say, the pre-COVID period level, where you only have the third-party reinsurers in place. Claims cession rate is moving up from 7.1% to 27.4%, as Xavier Durand mentioned. Just to remind you that in Q1 2022, we have released reserve, the last chunk of the reserve related to the public schemes, of course, and we went back to the governments that put these schemes in place. This explained the low claims cession rates last year, while this year, again, a little bit back to normal pre-COVID, except that here within the 27.4%, we have passed, I think, the first tranche excess of loss related to this very large claim that we have in Latin America. For the first time in probably 20 years history, we reached the first tranche of our excess of loss. Bottom line, the reinsurance results moving from minus EUR 52.5 to minus EUR 21.3. If we move to the next page, on the net combined ratio, it stands at 66.3%. Again, pretty good results. If we really want to compare apples to apples, again, I will compare the 56% of last year without the public schemes in place to the 66%. Here you can see that this increase is mainly showing the last normalization, where net loss ratio is moving from almost 30% to 40.6%. Let's move now to the financial portfolio, where we are on page 16. If you look at the chart on the left-hand side, we can see that the mark-to-market of our investment portfolio is now amounted EUR 3 billion, slightly above EUR 3 billion. In terms of asset allocation, we have not moved much since end of 2022, with the bonds, investment in bonds at 75%. We have de-risked our equity pay part last year, as we mentioned that, now down to 3%. Investment in real estate fund at 7%, as Xavier Durand mentioned. Here, you can see that 60% is really liquid asset, as we are here at end of March, and we're holding cash to pay our dividend, which is what we made yesterday. If we move on the right-hand side, which is the net investment income, is -2.6. I think 3 highlights here. The first one, I would point it out to the underlying yield on our portfolio without mark-to-market, without realized gain. You can see that it's our yield, accounting yield is now at 0.5%, and this is twice as much as we had last year. Here, you can see that we are starting to really benefit from the interest rate increase, and the fact that we have moved our portfolio to take this opportunity last year. On the other hand side, we have booked a negative impact related to the fair value of our investment in real estate. As Xavier Durand mentioned, moving under IFRS 9, the mark-to-market, so the unrealized loss and gain, in this case, it's the unrealized loss, goes to P&L, while under IFRS 4, it used to go into our equity. Last, we booked this quarter an effect, so accounting impact related to the application of IAS 29 hyperinflation on Turkey and Argentina, and that has the booking of minus EUR 5 million pre-tax. Going into our net investment income. This leads us to a net income at EUR 61.2 million, with an operating income up 11% compared to last year, and the net income up 17% compared to last year. Again, a very satisfying quarter. Return on average tangible equity, I will start with the change in equity. We have on the equity side, the full year 2022, this is a pro forma under IFRS 17 at EUR 2 billion 18 million. Net income of the quarter at EUR 61 million, and then I think differently from last year, you can see that in terms of mark-to-market of our investment portfolio, it is now positive, excluding, of course, the liquid asset part and the investment in real estate that goes into P&L. This leads us to a final IFRS equity at the end of March of EUR 2.1 billion. Return on average tangible equity, starting with the end of full year 2022, 12.7%. You add up the technical results, we have a negative impact related to the financial results, which I've commented to, lead us to a return on average tangible equity at 13.2%. As usual, I'm gonna wrap this up on page 20. Look, I think just to say a few words about the environment to start. There's a lot of risk out there. I think we've, over the past few quarters, we've highlighted, you know, the geopolitical tensions, the war in Ukraine, that's showing no sign of abating anytime soon. Inflation that's out there, the increase in the rates from all the central banks and the pinch on liquidity that's simultaneously been driven all around the world. The incredible increases we've had over the last year in commodity prices, social tensions, economic risk around energy. I mean, all that stuff is out there. It did not materialize, as we said on the prior calls, as badly as it could have, I would say, during the winter. The risk is still out there, and then, you know, we're seeing some manifestations of that through, one, the number of insolvencies, which continues to rise, and many economies is now at or higher than the 2019 levels. The tensions you've heard about over the last few months in the U.S. around the banking liquidity, which adds an additional uncertainty to the economy because it will, I think, create some kind of a credit crunch from the mid to small size banks in the U.S., and there's thousands of them. There's still risk out there. I think, in this environment, which remains hard to predict, even though I would say the general trend is what we had forecast, the individual events are hard to predict. We are staying absolutely true to our values, and we're continuing to, you know, do what we said we would do, which is, on one hand, being thoughtful about where we invest our money and what kind of business we write. Number two, making sure we focus on the clients and deliver superior service. We have an NPS that remains above 40. For us, it's a really good score. We measure that on a quarterly, actually, on a monthly basis, in a very detailed way. We're continuing to invest in our plan. I mean, this is a time when the business is performing, so we think it's a good time to continue to invest. We're investing in our ancillary products, we're also investing in our technology, we're being disciplined about cost. We are managing the risk portfolio overall, consistent with the trends, the long-term trends that we're seeing. We manage the new risk when they show up. I think the real estate portfolio is one that we had not discussed before, but which we've been working on for almost two years now. Yeah. We've been taking a number of measures to try to limit the impact that the increase in this interest rates would have on that book, even though it has an impact. That's where we are. In a way, staying absolutely true to our culture and continuing to deliver and execute. With this, I'm happy to turn it over to you for questions. Ladies and gentlemen, we now begin the question and answer session. If you wish to ask a question, please press star 1 on your telephone. We are now taking the first question. Please stand by. The first question from Michael Huttner from Berenberg. Please go ahead. Fantastic. Thank you, and congratulations again. This is so lovely. Three questions. One is, what is the amount of the business insurance fees? I was looking for it. I'm sure it's there somewhere, but I couldn't find it. That would be really useful. The second is on the reinsurance. You're using the excess loss. Can you help us out and say what the limits are on this to give a feel for the how well protected you are? Then the final question is, I'm really curious, insolvencies are up, and you said, you know, in many places, at or above 2019 levels, your loss ratio is definitely below 2019 levels. What's the difference? What's... What's the bit where you're so much different to back in 2019, that you can still produce these excellent ratios? Yeah. Thank you. Let me start by that one, and while I was gonna look for the insurance fees numbers while I speak. The overall, you know, usually what governments measure is the overall number of insolvencies in the market. It doesn't tell you where these insolvencies are happening and what kind of companies are being hit, which sectors. What we're seeing in a turn of a credit cycle like this, is it usually starts with the smaller businesses. It starts in certain geographies, and it starts in certain, in certain sectors. Right now, I mean, you're all aware of some of the difficulties we're seeing in the retail space, for example. I think construction is starting to feel some pinch. We've had, obviously, in the past, you know, certain industrial sectors that have been under close watch. two things underneath this. One, we're not necessarily exposed to those sectors that are most impacted, and second, we manage this proactively by, you know, being a little bit ahead of the curve. So that would be my two cents on it. And when it comes to the reinsurance, I think our limit is EUR 60 million or something like this, right? Well, the first tranche of excess of loss is EUR 52, I think, the previous. Oh, because that's a prior year. Right. Yeah. That's right. EUR 2.5 million before quota share. After quota share, it's EUR 40 million. Yeah. We manage anything above 40 net. Yeah. That was last year. We've increased those limits consistent with the growth of the business this year as well. The business information fee, the insurance fees, the limit fees. Limits. Sorry? The exposure, the total exposure. Okay. The total exposure increase. Is that your question? Was that your question, Michael? No, no. I was just asking for the fees from your business to business, you're investing in the business information, the insurance. Yeah. The fee, insurance. Is it- Yeah, the limit fee. Are you talking about the business information revenues? Yes. Oh, okay. Sorry. I should be clearer. Sorry. Sorry. the 15% year-over-year BI revenues growth? Yes. What is the actual EUR number? Oh, the amount, you mean the euro amount? Okay. Sorry, we were struggling to understand what number you were. Yeah. No, no, I'm really... Thank you for being so patient with me. It's somewhere in the back, no? Yes. We have that somewhere in the back of the deck. They're looking for the number, Michael. No worries. We'll give it to you. No, thank you. It's in the back of the deck somewhere. Thank you for your question. We are now taking the next question. Please stand by. The next question from Benoit Cœuré from Credit Suisse. Please go ahead. Yes. Good afternoon, good evening. Yeah, a few questions on my side. The first one will be on the claims frequency, which kind of normalize, which is quite normal. You know, do you see any acceleration of the normalization, towards the normalization, or is the normalization still very gentle and progressive? I was also trying to understand if you already see any signs of, you know, credit crunch happening in the U.S. following the March event, or, you know, is that too early? Basically, just wanted to get your view on the speed of normalization of the claims frequency. Second one is more on the large losses, which are still below average. You know, could you help us to understand how much points of combined ratio or claims ratio that could bring, if in case we'll be back to the kind of more longer term average in terms of large claims? Then the last question is on the, you know, the total credit insurance exposure. You know, on your construction book, do you see any deterioration there, any signs of weakness, and maybe higher claims, or is still a book doing well? I was just wondering on that book. Thank you very much. Your, the last question was relative to construction, is that right? Yeah, constructions. Yeah, yeah, yeah. Exactly. Yeah. Well, that one I can answer because it is traditionally the sector that starts to pinch early in a credit cycle. I think you're well aware that in some parts of the world, the interest rates directly impact the end buyers because the mortgages are variable rates, right? As it impacts the home buyers, they quickly start feeling the pinch. Their ability to borrow is lower, and that drives a much, a much reduced construction business orders, right? We're seeing that. It's not an area that we are absolutely well aware of. It's not everywhere, but it's in the mainly in the markets where you have variable interest rates and where the consumers tend to be impacted faster. I mean, there's lots of literature in the press about this, so nothing really surprising here. In terms of the claims frequency, yes, there is normalization. It is happening, but it's happening, I would think, probably slower than we could have feared. There's a definite trend of rising. You might wonder why that is. I think it's because it takes a while for the monetary policy to impact the real economy. It takes a while for the loan renegotiations to happen, and it also happened, I would say, on the back of incredibly generous monetary policies in the last 2, 3 years. It takes a while to soak up all that cash that's been spent, I would say, by the governments to prevent the effects of the COVID crisis. I think that's really what's underlying this. In terms of large losses, I don't think we have a split, you know, between the two things. As I said, a large loss for us is capped in its impact to, say, a couple% of our equity, right? These are discrete events. They're not high-frequency events. The, what we call a large loss would be something that's much smaller than EUR 40 million. It'll have an impact, but that's something that we look at closely. Yeah. The very large that we have, just to remind you, the very large loss that claims that we have in Latin America was related to fraud. Yeah. It's not a, it's not an insolvency, it's a fraud, which is a kind of a one-off event. We don't see many of those, but when they bite, they can be significant. Okay, great. Thank you very much for that. Thank you for your question. We are now taking the next question. The next question from Thomas Fossard, from HSBC. Please go ahead. Oh, yes. Good, good evening. Two questions. The first one would be, I guess that you will have to pay some reinstatement premium for the excess of loss. If this is the case, has it already been booked in the revenues in Q1, or is that something to align for Q2? Not sure that this is meaningful, but just to understand the mechanism here. On the Q1, on the Q1 results, very strong start to the year. I'm really trying to get a sense of if there were any obvious one-offs, and it looks to me that actually the one-offs were rather negative than positive. Implicitly, it's more hinting to a more than EUR 65 million or maybe roughly EUR 70 million net profit normalized. The way you're describing the outlook is that, yes, they are still on the horizon, but that actually you've got all the tool in place to reproduce a kind of operating performance. Maybe you can help us to understand what's, you know, what was potentially, in your view, things were which were a bit abnormal, and that we should keep in mind in thinking where you expect to land on a full year basis. Maybe the last point is, you're starting to indicate lower volume growth coming from your client. There is some normalization as well on that front, and probably likely to increase further. We see a reduction in the inflationary environment. Should we expect a slowdown as well of your top line, maybe more in 2024 than 2023, or second half of the year? Maybe you can help us on that. Thank you. again, I'm gonna start with the last one, because, you know, historically, our business grows, I don't know, more as a proportion of GDP, of global GDP than anything else. I think the last two years, if I count this first quarter, let's say the last year and, or year and a half or something like this, have been quite exceptional in that Coface has grown 14% last year and another almost 11% this quarter, right? I would consider that to be something exceptional, especially if the central banks are keen on bringing down inflation. As you know, we are an inflation friendly business in that the nominal rise in the turnover of our clients directly translates into growth in our premiums. The answer to that question is, I think, yes, I think we should see we should, and that's what we've indicated for, a long time now, that we should see that this situation won't reproduce itself forever. To tell you how fast is very hard to, for anybody to peg. I mean, I don't think even central bankers know. I'm not gonna make any forward-looking statement there, but I would think it's safe to assume that we're not gonna see those kinds of activity levels forever. In terms of Q1 results, I'll let Phalla take that one. Questions. The answer to it is, yes, we booked it. Which is the reconciliation? Oh, the reconciliation cost. that one... How much was it? Just to get a feel. Is not, is really not significant. Okay. Okay, listen. In terms of the Q1 result, I think Phalla highlighted some of the events. I said, when it comes to the fraud in Latin America, that is compensated on net basis. Yeah. not a one-off. The other things are pertaining to the portfolios. Yeah, which is the, you know, the mark-to-market and the accounting standard application. you know, on that one, maybe what happened... Negative that, so negative in Q1, which will be somewhat normalized, so leading to higher underlying net income. Well, I mean, it's, these things tend to cycle, as you know. you know, again, Well, maybe on the commission, on the reinsurance commission, thing that you indicated that the reinsurance commission were high in Q1. I mean, it. Not sure I followed why this was the case in Q1? No, it's not. Specific to Q1 or? Q1. It's because we, I think we have pretty good reinsurance terms, and I was just referring to that, as we did last year. I mean, there's really no change there, right? Okay. Yeah, okay. Nothing in, nothing specific as well. No, nothing special here. Conclusion is that very strong underlying performance basically. Thank you for your question. We are now taking the next question. The next question from Hadley Barrett from Deutsche Bank. Please go ahead. Your line is open. Hi. Thanks very much, everyone. A few small questions, hopefully. Firstly, on reinvestment rate at just above 2%, it sounds very low, given where bond yields are, and what have you, Cohen. Can you just tell me what I'm missing there, please, and why the reinvestment rate isn't a little bit higher than that currently? I guess linked to that, on slide 10, I think you're suggesting that the discounting effect in the first quarter was around about 4.5 points on the combine, on the loss ratio. Can you possibly tell us what the average discount rate you used was in the first quarter, please? How should we think about that 4.5 points, all else equal, for the rest of the year? Should we assume that that should trend a little bit lower, going into the rest of the year, given the mix between paid claims and unpaid claims? My second question is around, I think the first-time approach benefit was around EUR 90 million, and I think EUR 30 million of that, give or take, came out in the 2022 numbers, implying around about EUR 60 million left for... I think you guided to that being coming through in 2023 and 2024. Is it possible to get a sense of how much of that is left post the 1Q at all? My final question, slightly more conceptual, but I think, you know, when we talk about normalized claims activity and over the cycle combined ratio and what have you, everyone seems to have, you know, 80% number in mind. I think that, you know, historically has been the right number. You know, you are seeing very positive operational leverage given expenses are growing less quickly than top line. How should we think about that sort of normalized, sort of over the cycle combined ratio now? Thanks. That's the $10 million question, right? A few things. I'll start with the last one, I'll let Phalla handle the first two questions, right? On this combined ratio question, a few points of reference. I think we have a competitor that stated in their plan what their combined ratio is. That's a kind of an anchor in the marketplace that we can't just ignore, because there's somebody that's willing to write that business at that level on average through the cycle. That's. They've been public about it, and they happen to be quite a lot bigger than we are. The second thing I would say is our cost ratio is improving steadily over the last seven years, as you've seen. I think back in 2016, we were at 36 or something like this, or even higher, and we're down to 10 points better. That's a huge improvement. I would just stress that part of that improvement is also driven by losses. There's couple effects that are countercyclical on this. On one hand, if losses are low, we get better reinsurance terms, and that translates into better cost ratios on a net basis, not the gross part. On the other hand, when there's more losses, you have more fees coming from debt collections and stuff like that. It's a, it's a hodgepodge, but I think looking at it on a net basis is probably not necessarily the right way here, because there is an impact of the losses on the cost ratio as well. You know, when you do well on losses, you tend to do well on both ratios at the same time. Phalla, you wanna talk about... Yeah, I'll take the other question. The first one, in terms of reinvestment rate, I think we have double the rate compared to last year in Q1. You know that we have, in terms of investment portfolio, this is coming, mainly coming from the bonds group that we have. You know, you know that we have a buy and hold strategy, means that, of course, we will reinvest and take advantage of the interest rate increase over time, but, you know, we're not changing, and we're not selling the stock that we have, the bond stock that we have, to reinvest immediately. We're walling up. It's a rollout, given the maturity date of our investment, that we'll be reinvesting in higher rate. Yes, it's increasing, and it will continue to increase over time. This is a first answer. The second one, in terms of discount, as you know, under IFRS 17, we're using an EIOPA yield curve every quarter. This is application of the EIOPA yield curve, so it's a usual yield curve that we're applying in terms of discount rate. It's not something that we're choosing, it's something that is given and that we're applying, that whole insurance market is applying. For the third question, which is. sorry, Phalla, just to come back on that. Yeah. In terms of the so if we assume that interest rates stay stable for the rest of the year, should we expect that 4.5-point level to stay stable as well? Will it naturally be seasonally higher in the first quarter, given the sort of claims profile? I would say all being equal, because of course, you know, we have the new vintage of claims coming through, and you have the stuff that if, given, if we're not increasing significantly the total amount of our reserve, all being equal, I would say yes, in principle. In life, I think nothing is the way equal, so right? Our books is moving, and the yield curve is moving. Sorry, just the last question on the FCA impact. For the, on the FCA impact, basically, your question is what? Is that on the, at the end of full year 2022, and this is what we discussed, on pro forma presentation, we still have EUR 60 million coming from IFRS 4 that we have taken to our balance sheet. If we didn't move under IFRS 17, yes, I would say that part of the EUR 60 million, but I don't know, we haven't done this exercise, will be released or probably released during 2023. How much would it be in 1? I don't know. There's always an 18-month- 18-month period. Given that nothing is made out of the air, you would assume 18 months for somehow this to be released, which we're not gonna see, right? Okay, understood. Thank you. Thank you for your question. We are now taking the next question. The next question from Benoit Bellez from Oddo BHF. Please go ahead. Your line is open. Yes, good evening. Most of my question have been asked already, but maybe two remaining questions. First one regarding business information. You gave us a breakdown between historical business and new product. In your view, would you say that new business could be more profitable in the end than historical business? Maybe it's difficult to think about it like this, but you think you might have more pricing power on this kind of business? Just to understand if, after first investment phase, you expect also a positive impact from the shift in product mix. This is the first question. Yeah. Yeah. Sorry. Go ahead. Go ahead. No, no, sorry. Even another question, you know, everyone is talking a bit more around Artificial Intelligence at this point of time. We've seen that you've made some additional investment in technology. How do you see it? Do you believe that Artificial Intelligence is an opportunity for you to improve your processes, efficiency, and so on? Do you believe that it could be maybe a risk with potential new competition? Thank you. Well, yeah, on that one, I see all this, all the hype around, you know, ChatGPT and all that good stuff. Yes, in theory, you would think it's possible that at some point of time, these systems become so great that they start replacing operators, right? You know, I think what's more likely to happen is what we've seen actually for all these tools that have been introduced over the last 30 years, I mean, the latest being RPA, you know, Robotic Process Automation, or is for these tools to progressively come and become integrated into our business, and to help us become more accurate, more efficient, look at much more data than we used to do before. I think it's, history is more likely to repeat itself than to have some kind of revolution, where tomorrow we're just gonna get rid of hundreds of people that are gonna do the business. If only because we have to control these tools, we have to understand them. To build them into a regulated entity process requires a lot of back testing and a lot of proving to regulators that it actually works, and that if something shifts, this thing's not gonna go crazy. I don't think it's gonna be the miracle solution, if you will, that people maybe think. It is impressive to see what these things can do, but nobody's tested them over the long haul on a business with changing circumstances, and can demonstrate with 10 years of background that they actually work, you know, and that they can keep it under control. I think we're still gonna see some stuff. Actually, if you look at, our retention is helped by some actually AI work that we've done, where we've taken data that we couldn't really understand, just by looking at it, and having the machine help us define, you know, which clients are at risk and which are not. We've done that work. It's taken actually years, but it's helping, as you can tell. It's not the only thing that's helping, but it's one tool that's helping us. I do think it's gonna be the same going forward. You know, we can only put in a business process that is that sensitive, where you actually starting to allocate hundreds of billions of risk to a machine. You gotta make sure the machine's gonna do it right? We're gonna be both interested and reasonable about this, right? In terms of the business information margin, so I think we've said all along that the traditional information business is slower in terms of its growth, and it's under more competitive pressure because it's been around for a long time. In theory, we should be getting better margins. The other thing is, to develop the new business, we've got to invest. We're spending actually money, we're hiring people, we're building things in terms of technology, we're learning, we've got to build a marketing presence, blah, blah. When you add it all up, I don't, I don't really know how to answer your question. You know, if it were mature and if it were if we were really ahead of the game with everybody else, it would be true, but in a growth environment like this one, which looks more like a, if you will, an internal startup of some sort, or creation of a new product, it's not really a startup because it's built on the, on the core knowledge of the business, but it's still something new that we're developing. It's very hard to answer that question, quite frankly. Do you expect an improvement in margin, for example, next year on this business? Or is it too early for you to continue? The timing is also a question. I mean, I think the way I've been discussing this with the market is to say the following: It's core to what we do, right? We are an information-based business. That's how we underwrite EUR 700 billion of risk on millions of companies. That's how we're able to onboard clients with new. We have 180 million companies in the database, blah, blah. That's core to what we do. It happens that this data can also be used for other purposes, for other use cases that traditionally we weren't considering or we didn't even imagine sometimes that it could be used for. To do this, we've got to invest.... We're doing it in a way that's neutral on the P&L, so you're not seeing it, but basically, we're building a business for free, or we're expanding the franchise for free, you know. I think rationality means I should push it for as far as I can to scale before I start milking it, right? We've got a very small cow here, and if you start milking it too hard, you're not gonna get some milk, but it's not gonna be a lot of milk, so it won't matter for Coface. The question is, I think it's too early to answer. I think we will know when we get a better sense of how big this thing can be, and I think logically, we should keep pushing it, as long as we can see some significant growth come out of it. Okay. Thank you. Thank you for your question. We are now taking the next question. Please stand by. The next question is from Michael Huttner for Berenberg. Please go ahead. Your line is open. Thank you very much. I had 3. The first one is, if you do have that number of business information revenue, that'd be lovely. The second is, you spoke a lot on investment, I just wondered whether you can give a feel for how much you are investing and whether, in a way, you're investing ahead of the curve. That's the feeling I have at the moment. The final thing is, when you discussed IFRS 17, there's a question which my competitor asked about, you know, the EUR 60 million and kind of drags you like on non-profit-making lines. Of course, you, I think when you discussed IFRS 17, you said it has an impact of when you have a reserving, where you set up a reserve now and you kind of, collect the run of profit, kind of two years down the road. IFRS 17 kind of half forces you to front load this a little bit. It's more evenly spread. And I just wondered if you, if you can get a feel for, for the impact of that relative to where it was before. Thank you. IFRS 17, we're a short-term business, right? I would say after 2 years, we kinda know where the vintage is gonna be, right? After 2 years, over a period of 2 years, I think IFRS 4 and 17 really doesn't make any difference, right? Or minimal. What changes is the dynamics. IFRS 17 forces you to recognize profits or losses faster than IFRS 4, because it's a different methodology. It introduces more volatility, because every time, I don't know, like, an interest rate varies, then the discounts are different, and then you have to combine with IFRS 9, you have to look through the P&L, more things than before. It just creates more volatility during that 2-year period. That's pretty much all I can say, quite frankly, 'cause I don't know- Yeah, exactly. you know, as I said, the EUR 60 million is really related to the prior year period on the IFRS 4, that I think if we had stayed under IFRS 4, this EUR 60 million will be released under IFRS 17. As IFRS 17, we recognize the prior year period earlier, this is what we have booked in our FTA. It's just a one-time event. I don't know if it's- It's one time event, that's the point. I don't know if it's really worth. Going back to this. 'Cause over a two-year period of time, EUR 60 million is okay. It's a one-time. I don't know if it's that big of a deal. The in terms of the business information number? The first question is slightly below EUR 13 million for the first quarter. Okay. Thank you. In terms of how much we're investing, look, when I say we're investing, you know, it's not like there's a the old business runs on one side, and then we've got some kind of a just an innovation shop where we would put all the money. The money is spread amongst many different things we need to continue to build in the business. That includes salespeople, or new people and new geographies to do stuff. That includes technology that we need to change or upgrade or improve on the core business. That includes new features and technology that we didn't have before. Maybe, maybe AI is a piece of this, maybe extranets or APIs or, you know, a whole bunch of technical tools that we need to invest in. It's a hodgepodge of things, and I think we're staying the course to pick those things that matter the most for us, for the long term and for the short term. That are consistent with obviously, our capacity to drive them home. That's not just the money, actually, it's sometimes much more the user's ability to drive all these projects simultaneously. I think is one probably significant limitation in terms of how much we can do at any point in time. We're being thrifty because by spending too much, sometimes you overload the organization with too many things, and in that case, things get done slower and not as well. And you're not necessarily gaining time, you know? We're trying to balance out the execution risk with the speed, with the short term. Trying to change the wheels and the blinkers on the car while you're still running the race, right? That's pretty much the way I put it. That's very helpful. Thank you. Thank you for your question. There are no further questions at the moment. I will hand back to conference over for closing remarks. Well, look, like, thank you very much. We're right at 7:00 P.M., so it's been an hour. I mean, it actually went so fast. I'm surprised. Look, it's a pleasure, quite frankly, to have those discussions, because I think we're really talking about the heart of the business, and for me, it's all we do, right? All day long. Thank you for your interest, for these conversations that I think are getting to the meat. We're in this environment where, yeah, things are... The long-term trend is exactly as we said before, so there's no news. The short-term events are whatever they are, we try to manage them as best we can. I think we're getting, you know, better at being agile and being on the ball, and we keep coming up with examples of how we're managing these things as they show up. I don't know what next quarter will carry, we will be happy to speak with you. It'll be middle of August, actually, right? That's not the most convenient date. It's IFRS 17 driven, 'cause it's, we're learning that thing, we're gonna try to do the best we can to deliver it smoothly and as quickly as we can, it's a little bit more complex than the stuff we had before. Thank you for joining, we'll talk to you, I think it's... What is it? August? 10th August. Okay. Tenth. Tenth. Tenth. Tenth of August. Okay. Thank you very much. Thanks, everyone. Bye-bye. That concludes the conference for today. Thank you for participating. You may hold this conference-