Welcome to Beazley's 2022 year-end results. I'm Adrian Cox, the CEO. With me today are Sally Lake, CFO, and Bob Quane, our CUO. Here with the agenda for today. I'll talk you through the highlights, give you an update on our platform, do some recap of the capital raise and where we are with that. I'll hand over to Sally, who'll talk you through the financial performance. Bob will dive into a little bit more detail on each of the divisions, and then we'll revert back to me with an outlook for 2023. Please read the disclaimer. Thank you. Right. Highlights for 2022. A strong underwriting result last year with a combined ratio of 89%. I'm pleased with this. I think it reflects the hard work of the last few years. Given that 2022 witnessed geopolitical uncertainty really unseen since the Cold War, I think it also demonstrates our resilience to the unexpected. On that subject, our provisions for the war in Ukraine are unchanged since the half year. Our result wasn't immune to the secondary effects of all that, and the turbulence thereafter, which led to some quite significant rate increases, interest rate increases in 2022 and a subsequent mark-to-market loss for us of just under $180 million for the year. The combination of those two factors is a profit before tax of $191 million and a return on equity of 7%. Following some sustained premium growth over the last four years, we have reached the nice milestone of $5 billion in gross premium, which is an increase of 14% year-on-year in 2021. There's a bit of FX suppressing that, but I do note it is less than the growth in the first half of the year, and I'll go into a little bit of detail on that on the next slide. Although the growth is in line with our mid-teens guidance. Overall, in 2022, we generated a decent rate increase of 14%, which does influence our guidance for 2023. Finally, I'm pleased to be able to share that the board eventually approved a dividend of thirteen and a half p, which is in line with our progressive guidance and also in line with the historical about 5% average that we usually deliver. Some thoughts on growth in the second half then. It was lower than the first half. There are two main drivers to that. The first is the continued softening of the D&O market, and we have a reasonably sized D&O book. The second is the moderation of rate increases in cyber, which have been going up sharply since the start of 2021. We signaled at the results of the half year that we'd started to take risk off the table in D&O business as a result of the rapid change in the rating environment as new business came to a grinding halt in the D&O world after Russia invaded Ukraine in February. As has been quite widely commented on, I think, this rate change, the softening market persisted throughout the rest of the year, so we continued to de-risk as a result of that. That reduction in premium is reflected in the overall numbers for Specialty Risks, which houses D&O, which grew only 2% last year. We will continue to cycle manage prudently, as we always do, both to take risk off when the market conditions don't reflect that and to grow rapidly when they do. To cyber, better risk selection underwriting by insurers, improved management of risk by most businesses, and a complete reset of prices for cyber insurance has delivered good loss ratios for both us and I think the market as a whole in cyber. It's unsurprising and entirely logical, therefore, that the rate increases of the previous 2 years moderated in the second half of the year, given those good loss ratios. It does mean that the extra premium that we would have got from a higher rate change didn't come through as much in the second half of the year as it did in the first. And that those two things in combination subdued our growth in the second half and in the fourth quarter particularly. I would like to underscore that our appetite for cyber, both in the short term and the long term, is undiminished. An additional factor in our cyber business in Q4 is the changes that we made to our cyber wordings, particularly around war, which we implemented gradually in the last quarter of the year and fully at the 1st of January. This has had a temporary dampening effect on new business for cyber. To explain this a little more, we've been signaling for some time that the systemic risk in cyber insurance needs to be more transparent and explicit. The issue that surfaced most recently is war, given that cyberattacks now form part of many nation states' armory. War is not something that insurance generally covers because it's too big of an issue for the collective balance sheet of the industry. Insurance in a time of war is generally provided by government, not the private sector. Unfortunately, war exclusions were written before a cyberattack became a part of most nation states' armory, so it doesn't really contemplate that. We have updated our wording to reflect those capabilities. Most insurers and regulators feel the same way, and our updated wording is in line with the Lloyd's requirements that come into play at the end of March this year. Unsurprisingly, the market is figuring out how to make this transition, and it has been a little disorderly as not all insurers are implementing at the same speed, and some have yet to come to a full decision as to what they want to do. We are, though, seeing different insurers and different markets now quote with new updated war exclusions. We are confident that the market will reach some sort of equilibrium in Q1, at the end of Q1 or beginning of Q2. Noting that the Lloyd's Guidelines are for the end of March this year. Because we transitioned to this new wording earlier than most, there has been an impact on our business at the end of last year, the beginning of this, but we do not expect this to persist longer than the early part of Q2. Moving on to platforms. We outlined our platform strategy in the capital markets day in May last year, and here's an updated view of our premium by platform. I do think that access to risk is a key part of our strategy, and good access to risk is a real advantage, and our platform strategy, I think, gives us that. The first thing to note in this is that the growth in the E&S business, which is up to 70% in the U.S. and up to 60% in Europe, and the growth in our wholesale market business, which in 2022 grew at the same level as our U.S. platform at 13%. I think this reflects the fact that during times of market change, more business flows to the E&S markets and to the wholesale markets. Having said that, of course, our youngest platform, our European platform, which we had thought would grow the fastest, does, and it grew at 23% last year, and we expect growth at similar levels in 2023. Another nice milestone for us was that we wrote just over $2 billion of premium on our US platform, which is a great step on a journey that we began nearly 20 years ago in the States. The capital raise then. As you know, we raised just over $400 million in equity capital in November last year. The rationale for that was threefold. The first was an opportunity to regrow our property franchise. In the near term, in reinsurance, as we thought that the reinsurance market was finally going to reset to address its multiple challenges of climate change, inflation, and covering its cost of capital, and over the medium to long term in our insurance business, as we believe that technical and catastrophe-exposed property business is once again firmly in the wheelhouse of the specialty insurance market, having been commoditizing for much of the last decade. The second reason was to retain more of our premium in Specialty Risks and cyber that we've been sharing with proportionally with reinsurers over the last few years to maintain a good balanced net. Thirdly, to improve balance sheet resilient resilience post extreme event. How have we fared since we laid out that plan in November last year? Well, the property markets have moved as we anticipated, so our treaty book gained about 50% rate increase at 1/1, and our North American open market business about 20% in rates at 1/1. As a result of that, we grew our premiums in property risk by just over 40% in January this year, which is absolutely in line with our plan in November. Much to the disappointment of our reinsurers, we successfully bought less cyber and Specialty Risks reinsurance at 1/1, but they understood our rationale and why we did it, and they remain fully supportive of us. We could have placed a lot more than we actually did. In terms of balance sheet resilience post-event, Sally and Bob will give a little bit more detail on this later, but the key points are that our 1-in-250 risk appetite is now less than 20% of shareholders' equity, which and it was over 50% a decade ago. Our 1-in-10 AEP has gone from 44% of budget earnings in 2022 to 38% in 2023. This has enabled us to grow and continue to reduce volatility across the business. With that, I'll hand over to Sally. Good morning, everyone. For those who don't know me, think you all do, my name is Sally Lake. I am the CFO of Beazley. I'm gonna be taking you through my usual trio of investments, reserving, and capital with a little sprinkle of IFRS 17, and then I'll be handing over to Bob to give you an update on underwriting. Just quickly, Adrian's mentioned most of this already, but here are the financials which we're really, we're really happy with. The net growth is slightly lower than the growth, which was expected, because we bought more reinsurance in 2022 than we did in the previous year. This has more of an impact on a written basis than an earned, as it takes a bit longer. Looking forward, as Adrian has already said, we're looking at a reversal of this, as we plan on buying less and already have bought less reinsurance following the equity raise. You'll see the expense ratio is flat year-on-year, and we're delighted with a sub 90% core, and note that we've been able to see better attritional claims than we were expecting at the beginning of the year. We're taking this opportunity of profitable growth periods to continue to invest in our business with some discretionary spend focused on automation, efficiency, and thus ensuring we are in the best position to continue to scale the business. Investments come first. After a tough year, we are pleased to see that we've made a positive return in the second half of the year after a real challenging year following the macroeconomic impacts that we were all very much aware of. The yield on our fixed income investments increased from just under 1% to just under 5% at the end of the year, and this gives us a real chance of making a really good investment return going forward. Although we do note that volatility within the markets does continue. How does that make us feel about our portfolio? High level, very much in line with what we saw a year ago. Sovereign debt make up more than half of our total investments, and our corporate debt exposures remain well below past levels, reflecting our continuing caution around the outlook for credit. Our equity investments are very limited amid current uncertainties. What's really interesting on this slide is that the total value of our investments continues to grow in line with our business, and it's increased by over $1 billion during the year to nearly $9 billion. Given the good level of yields, this gives a really good outlook in terms of investment income for 2023. Now on to reserve releases, before we look at the levels. It's really pleasing to see that we continue to see positive reserve releases across all areas of our business for a second year in a row. We saw an increase in our Specialty Risks division releases, which is our biggest division compared to the previous year. We see lower reserve releases in both cyber and property. Actually, you see that we've seen a small strengthening within our within those in the second half of the year, and I wanted to explain that. In 2021, we saw some adverse deterioration in our attritional claims in property, which we've corrected for. In our cyber book, the years affected by ransomware, particularly 2020, have had some claims settle worse than expected, and we saw some strengthening in that year. Despite all of that, they've continued to release at a total level, but slightly lower than in previous years. However, given the movements in these markets since these more challenging years and the claims experience we've been seeing on this newer business, this feels behind us now. That's demonstrated by the underwriting result in cyber. You'll also see that we've opened the more recent years lower in both these areas in the loss development tables. It's an emotional time for me because as you know, my favorite graph is going to be seen for the last time. I might have it stuck up on my wall. Just to remind everyone for the one last time what this shows us. This shows the level of reserve on our balance sheet compared to the bottom-up actuarial estimate, which is not a best estimate. It has a level of prudence within it. What we've done is always prefer to be within 5%-10% above our actuarial best estimate over time. As we mentioned at the half year, as we transition to IFRS 17, we'll be moving to a percentile range, and I'll talk about that more in a moment. At the interim results, we flagged that we have chosen not to build up the reserve at this point because of the transition to IFRS 17. I'll go into that in a minute. We ended the year at 5.3%, as you can see on that graph. Let's move on to the transition to IFRS 17. Moving, we're gonna move away from the percentage over actuarial to a confidence level range going forward. Our new preferred range will be to hold between the 80th and 90th percentile from now on. Our 5.3% margin at the end of 2022 would have been towards the top of this new range. It's also worth noting that IFRS 17 results are also subject to discounting, which is different to how we approach IFRS 4. The outcomes going forward will be affected by the prevailing interest rates at that time. Hopefully that's enough excitement for now, but just to note that we'll be having a session just after the Q1 IMS to go through more detail on IFRS 17 ahead of half year results where you'll be seeing lots of balance sheets under the new basis. Finally, before I hand over to Bob, we're just gonna mention capital. Adrian's already spoken a lot about the raise we did in November. The ECR shown here already allows for the additional premium that we're planning on writing during 2023. At the same time, our U.S. insurance company has seen a reduction in its requirements as we continue to use our captive that we set up a couple of years ago in order to get the most efficient way of using our capital in the U.S. Looking at these two together, the capital surplus is at 44% before dividend. It's exactly where we expect it to be when we raised equity towards the back end of the year. As Adrian said, one of the main drivers for raising the equity was to ensure that our balance sheet remained robust post-event. Along with this thinking, we will be assessing whether the 15%-25% preferred range remains the right level going forward. We'll be updating you on that in over the next year. Lastly, as mentioned, the dividend of 13.5p is a 5% increase on the previous year. I'll now hand over to Bob to talk more about underwriting. Thank you, Sally. Good morning, everyone. My name is Bob Quane. I'm pleased to be here to give you a high-level overview on how our four underwriting divisions are performing. Our start with cyber. As Adrian already set out, we had exceptional rate increases we saw in cyber have moderated in the second half of 2022. Despite this, we have seen strong growth in cyber as new business looks to buy high-quality insurance protection around the globe. Today's cyber is a $10 billion insurance market, but in the next five years, we expect it to grow to $30 billion. As our market leader, we are focused on helping the market scale up. There are two things we're doing to achieve this. Firstly, we have updated our war exclusion wording, which Adrian has touched upon earlier. Secondly, we're working with third-party capital to create additional capacity in the market by launching the first ever cyber catastrophe bond. This is a small but important first step, we expect to be able to announce additions to the cyber cat bond later this year. Our capital raise in November will allow us to retain more of our cyber risk as we pull back on our quota share arrangements, as Adrian talked about. Very disappointing for our reinsurers who were clamoring for more, we believe the opportunity in the cyber market coming from demand growth will offer them opportunity to participate in our cyber business going forward. In summary, we have an agile cyber business built on underwriting experience, married with data and intelligence gathering that is able to evolve as the cyber threats and market conditions do. Also, cyber has a substantial growth potential, and we intend to capitalize on that. Specialty Risks offers scale and diversification for over 20 products around the globe with multiple distribution channels, including direct, delegated and reinsurance. We see the opportunity to build our niche products such as environmental, M&A and Safeguard, which further will diversify our business mix within the Specialty Risks division. We will continue to support D&O clients and actively underwrite the class. D&O over time will become a smaller% of our business given the current market conditions. While other products that are seeing faster growth will become more substantial. This approach will continue to deliver sustainable growth across our Specialty Risks business. The Ukraine war had a significant impact on MAP in 2022, but we were pleased to maintain profitability across our MAP products. In the current geopolitical environment, political risk and political violence covers have become increasingly relevant to our clients. Looking forward into 2023, we expect the trends we have seen to continue to grow in high risk, high reward areas. We continue to develop underwriting tools to assist in real-time monitoring of mobile asset exposure, such as ships and planes in high-risk locations. Increasing market retention for war presents us with an opportunity to grow that book. We will lean into that opportunity. Hurricane Ian was a turning point for the property market, which is now playing out in 2023. The primary and reinsurance markets continues to see significant increases in rate, terms and conditions and deductibles, especially for catastrophe prone business. As Adrian has already outlined, January 1 was in line with our expectations and growth plans. Terms and conditions tightened, attachment points increased, rates increased significantly, property values increased reflecting inflation levels. Across the property portfolio, we have made strides in our understanding of climate risk. We've been actively investing in our modeling and pricing tools and taking steps to embed the learnings into our underwriting process. This work has put us in a solid position to take advantage of the current property market conditions to build out our property franchise in the U.S. market and other niche markets around the world. As we are planning to grow property, I wanted to touch on the issue of volatility. Here we can see our 1-in-250 risk appetite as a% of shareholder equity. Over the last 10 years, our risk appetite has remained relatively stable, while the shareholder equity has been increasing. As a result, you can see here volatility has been in a downward trajectory for more than a decade. On this slide, you can see the 1-in-10 loss relative to expected annual earnings. Just four years ago, the 1-in-10 loss event could have reduced our annual earnings by as much as 70%. Today, a similar event is expected to impact our annual earnings in the range of 30%-40%. We have worked to create a more stable and less volatile earnings landscape. With that, I'll turn it back to Adrian to cover the outlook. Thanks, Bob. Sally was asking me whether I'm gonna bring my water with me. I thought I would. Thanks, Sally. Never regret the water. Okay. Onward the outlook. Despite all the discussion about IFRS 17, we're gonna continue to guide for the moment on an IFRS 4 basis. There's plenty of time to talk about IFRS 17, we'll keep to language that we'll we all understand for the time being. As Bob said, you know, we live in a high risk, high reward environment. All the uncertainties that we've been talking about for the last couple of years, we feel are gonna persist into 2023 and beyond, and our guidance and our underwriting actions reflect that. Given the overall market conditions for last year and our expectations for this year, as we stood here last year, we said that we expected a combined ratio of about 90%. Having moved on a year with another year of rate changes and our expectations for 2023, we're lowering that guidance one notch to the high 80s in 2023. On to growth, we're giving both net and growth guidance this year as there's quite some divergence between the 2. I thought we were to try to explain those a little bit. There are 2 drivers between that difference in gross and net growth. The second we've already talked about. That those drivers are about of equal weight. There's a 10-point difference between gross and net, and so it's about 5 each. The second we've talked about, so we're buying less quota share reinsurance on Specialty Risks and cyber. The first is a more technical reason, which we wouldn't normally put up on a slide here, but it's has quite some impact. We thought we would. 5623, which is the Beazley Smart Tracker, we have moved this year from being an SPA to a full syndicate. As a result of that, the third-party capital that's backing it is providing capital directly to the syndicate rather than reinsuring Beazley. The gross premium moves away from our balance sheet straight to the third-party capital. All right? It doesn't flow through our balance sheet anymore. That has absolutely no difference net, but it makes some difference growth, and it's an over $300 million business now. It has quite some impact. We thought we would outline that. As I indicated earlier, we are experiencing and we have expected some short-term disruption on our cyber book as the market adjusts to the new WAR wordings, and we think that will impact the book through the first quarter of this year. We are expecting the market to settle over the next couple of months. Noting again that the Lloyd's deadline is the 31st of March, and it has a decent share of business. If the market doesn't settle as we've anticipated, we'll come back and update the market accordingly. Having said that, and as Bob was talking about, you know, our specialty risk book, which has been the engine of our growth really since 2010, we're not expecting that to grow at the same rate going forward given some of the headwinds that we've been describing. We have a new engine for growth in property, which we were very excited about in November, and we've had a very positive January. The diversification and the sort of the optionality that we've built into our product and platform strategy is really proving its strength now. We're still able to predict or project or guide to mid-teens growth gross this year, which is mid-twenties net. Yield on the investment portfolio is 4.7% as at the end of December, which provided a meaningful headwind last year and hopefully a meaningful tailwind into this year. We have two sessions for you this year, one in May for IFRS 17. Given we've already got one in May, we'll do a property one in Q4. With that, I'll open up to Q&A. Please would you direct questions to me, please. I will allocate them out. Oh, right. That's why I'm bringing the water with me. All right. Tell you what, I'll bring the water and the bottle. I'll neck yours. Okay. right. Three questions. Sorry. Hi. Sorry. Three questions, please. Firstly, could you help us in the gross growth outlook for mid-teens, how much this is exposure growth versus rate expectations baked in? Secondly, on that slide where you show your 1-in-250 appetite reducing even further in 2023, how do we square that with the growth that you expect in property and property CAT? The last question is just on the ECR ratio being 40% clearly shows that loaded for growth in 2023, you still haven't deployed all the capital that you've raised when comments at that time suggested that you wanted to. Yep. How should we think about that? Okay. Three good questions. Thank you. Our rate expectations for this year overall across the book are less than they were for 2022. We don't give guidance on rate expectations for the year overall, but we are expecting to put on more exposure this year than we did last year because rates overall are more positive for us than they were last year, particularly in property. Our 1-in-250 has come down as a percentage of equity, even though we're planning to grow this year, and that is in line with the strategy that we outlined during the capital raise. We want to be able to grow our property business and maintain a balance sheet that was more resilient post-extreme event, and that's reflected in the 1-in-250. We wanted to be able to have our cake and eat it, which hopefully we have been able to do. ECR versus growth. We have got a capital surplus that's above our traditional 15%-25% range, as Sally was discussing. You know, this was, this was a conversation we had a number of times in November. Historically, when we first set our 15%-25% range for capital surplus, there was an assumption embedded within there that following an extreme event, we would be able to raise capital and grow into a market turn on the back of it. As we look through the events of the last seven years or so, I'm not sure that central assumption was as true as it might have been back in 2005 and 2006. One of the things we decided to do as we lent into the property opportunity was to increase our balance sheet resilience so that if there was an extreme event, we wouldn't have to go back to the markets in the same way that we would have done historically. That's why the ECR, the surplus over ECR is higher than it was. We will come back to the market later the year with new guidance as to what our preferred surplus range is. Thanks. Maybe just a quick follow-up, if that's okay. Of that $400 million that you raised, how much have you set for 2023 growth? Well, mid-teens overall. That's all, that's all I can share, unfortunately. Okay. The growth ambition is a multi-year 1. Alongside a more resilient balance sheet, we are intending to grow over a number of years. There is that to it as well. Okay. Thanks. Hey, James Pearse from Jefferies. Thanks for taking my question. first one is. The mic doesn't like the question. We'll have to move on, I'm afraid. Hold on one second. Oh, can you hear me now? Okay. Try to talk. Yeah. Yeah. Fine. Okay. Mic, we still don't have a mic that works. Hello. Now? Good. Nope. All right. There you go. That should be on now. Hello. There we go. Sorry. I think that was probably user error. Apologies for that. I'll start again. James Pearse from Jefferies. Can you help me bridge from, I guess, the 89% combined ratio in 2022 to high 80s this year? I guess if I just think about the main moving parts, you've got favorable impact from pricing this year and in previous years. Catastrophe losses for the industry were worse than average in HMY2. Presumably, there's some favorable operating leverage impact too from all that growth. I guess what's the adverse factor that I'm not taking into account that sort of takes you back to high 80s? That'd just be my first one. Second question is just on cyber rates. You know, still looking strong, but are moderating. When and where are you expecting those rates to settle? Great. Okay. Thanks. We started last year at 90%, right? Ignoring what happened in the year, rates have improved a bit since then. We're high 80s, right? Why did we beat the 90% last year? Because our experience in the first half of the year was better than we were expecting. Our experience in the second half of the year was roughly what we were expecting, and the combination of that is 89%. We've got to the high 80s by going, where did we start from last year? What's happened since? We've moved one notch down. That's essentially the explanation. Does that make sense? Essentially the kind of the three favorable factors that I laid out, kind of they effectively get you from nineties to high eighties, that kind of one notch that you've spoken about. The rates have improved overall, so we've brought our guidance down a notch. We had fewer losses than we were expecting in the first half of the year. Cyber rates, you know, we showed at the half year last year a cyber combined ratio in the high 70s. That was flattered because there was no cyber cat, and we provisioned for cyber cat. We did say, you know, we target a combined ratio of mid-80s for cyber. Broadly speaking, you know, we were making the sort of money that we were generating the sort of loss ratios that we needed to. I think the cyber market in general reached that conclusion in the second half of 2022. That combination of a pricing reset, better underwriting, and actually better risk management across a lot of businesses has improved the loss ratios. It's a relatively short tail class at the moment, right? For the current environment, cyber business is priced pretty adequately. We don't need any more rate. What's gonna happen this year on cyber rates? Well, we continue to think there's gonna be strong demand growth because you don't get from a $10 billion-$30 billion industry without strong demand growth. We also think the cyber insurance industry is feeling more confident than it was because it's managed to generate good loss ratios again. Broadly speaking, that's what we expect. Fundamentally, though, it'll get impacted by what happens to the loss environment, right? Because it's a short tail class. If losses remain, you know, below what people are expecting, the cyber market will get more competitive. If there are more losses emerging, that will re-affect accordingly. The more unexpected those losses are, the more the market will react. We're comfortable with that. Darius, KBW. 2 questions, please. The first one on the cyber insurance that you still maintain, how much more are you paying relative to last year? If you can give us any color on that, helpful. How should we think your expected cyber exposure growth, in sort of the medium term, you know, given the capital rates and the sort of demand growth that you envision? Thank you. The cyber reinsurance that we bought at 1/1 was proportional, and the terms and conditions were entirely unchanged, and the price was entirely. Unchanged. Yeah. It was all unchanged. cyber exposure growth, you know, we have an ambition to grow that business as fast as demand is growing for it. We have a plan for relatively decent exposure growth this year, but it'll react to how quickly demand is growing and where it is growing. What we've been investing in over the last 18 months or so is making sure that... 'cause we're expecting demand to grow increasingly internationally. We just wanted to make sure that we have the mousetrap to capture that business internationally, 'cause historically a lot of it's been in North America. What we're really doing is positioning ourselves to capture the growth as it comes, and we're prepared to put that on. You don't need any more rate if cyber just sort of stays where it is. You're happy to correspond to it? Yeah. Given the current loss environment, I think rates are adequate. Yeah. Hi, good morning. Ashik Musaddi from Morgan Stanley. Just a couple of question. First, sorry, going back to that 90% to 80s, high 80s- Yeah I mean, clearly you are growing property CAT, which should typically be lower attritional versus nineties. Yep. You're taking more cyber. Yep. I mean, you're retaining more cyber, which is the same case. Yep. Whereas rates is completely different. You have two levers. One is your exposure in lower attritional is going up and you have rates. I mean, so that's what I'm trying to think, like what does this high eighties are we just trying to... Is it just because 1% or 2% makes, is a bit hidden in this high eighties, that's why we are not seeing that? Would you say, no, it's just rates that matters? The exposures are more or less not really that matters. Yeah. Our business mix has shifted a bit, right? You're right, as growth in Specialty Risks ebbs away a bit and we're growing more in property and we continue to grow cyber and we continue to grow MAP, that mix of loss ratio between attritional and CAT moves a bit. The combined ratio of high 80s, yes. The, you know, the component parts of that will change a little bit. There's slightly lower attritional and slightly larger CAT component to that, yes. We also wanted to share the 1-in-10 and the 1-in-250 so we could give some guidance around that. Okay, thanks. Yeah. Just to add as well. It's also worth remembering that we, when we guide, we assume an average CAT across the board, including in cyber. You know, cyber has had another year where we've had benign catastrophes from a cyber perspective as well. We always have guided assuming an average CAT there. That's, you know, you've got to remember that as well. Even though we've had a really good cyber year here, that is off the back of good claims experience from both an attritional perspective. Yep ... and a CAT perspective. Looking forward, we add back in that CAT as well. There's quite a bit in the bridging from how we ended 2022 and how we feel about 2023. Sorry to interrupt. No, that's... Thank you. Thank you. Just 1 more question on reserve releases. I mean, can you just give us a bit more color on what was driving the cyber addition, and is that a risk going forward, or was that just a 1-off for last second half last year? Thank you. Great. We were tidying up some claims from 2020 predominantly. It's the business interruption part of those claims that took the longest to settle. We know from our property business, don't we, the business interruption is quite complicated. You know, these are the first times that we've been assessing business interruption losses from this sort of event. They cost a little bit more than we had anticipated. That's all. 2020 is pretty much over now. We're not expecting it to persist. As we have said, you know, since Q4 2020 when we rolled out the new underwriting ecosystem and so on and so forth, the experience has been completely different. Thanks. It's Andrew Ritchie from Autonomous Research. I detect a bit of a tension between the slide from Bob that talked about the lower volatility of the P&L because of the 1-in-10 and the 1-in-250 versus a desire to hold more capital, which is what you implied, Adrian, from the, you know, that maybe your, there's an upwards tendency to a target capital level. 'Cause if your earnings are becoming inherently less volatile than history, then the 15-25 would be, you could maybe argue go the other way. I'm just curious to reconcile those two. In relation to that slide from Bob, is the 1-in-10 all exposures or is it just nat CAT? I'm not sure what it is saying. In relation to the capital- Hang on. Let's stop there 'cause we can answer the first two, otherwise I'll forget them. Okay. All right. Bob, do you want to answer the second question? Is it all divisions or just property? It's one in ten for property. For property. Okay. It's the annual earnings of the whole company. Yeah. It's all. It's the annual for property. Yeah. Yep. Exactly. We're trying to manage the near and the far end of the tail, right, Andrew? Mm-hmm. What we've shown with the 1-in-10 is that being able to grow, but not just grow property, grow across the book, generates a higher earnings level across the piece, which allows us to write property because we've got more earnings to risk, if you will. Yeah. Our 1-in-10's come down because we're not just growing property, we're growing cyber and Specialty Risks 'cause we're keeping more of it, and that's helped that part of the tail. The 1-in-250, which is a risk capitalized percentage of shareholders' equity, that's one of the reasons we raised equity 'cause we can protect the far end of the tail as well. We've got two separate solutions to the near and far end of the tail, if you will. You're increasing the probability of actually delivering a positive outcome. We are. Even with the one in... Even at the tail. At the put it this way. Another way to think about it, because I was thinking about this as phrase question, had we not raised equity, that graph wouldn't have reduced in 23. It would have gone up. Because what we're comparing it to is the amount of equity we have. We could have grown as we plan to without raising equity. What we would have done is put more share, overall shareholder equity at more risk by doing so. The reason that the graphs are coming down on the as a% of shareholder equity is as a result of the equity raise. I see them as complementing each other. Yeah ... rather than being at odds with each other. Had we not raised the equity, we wouldn't have been able to keep more in Specialty Risks and cyber. Exactly. Which is what's generated the extra earnings, which has suppressed the 1-in-10. Okay. What about looking at capital structure? Is that another avenue? I mean, another way of increasing tail resilience is to, I don't know, not repay facilities. That's there as an option. I know you've still got half facilities as an option, to have all of them as an option. Is that under examination as well, the capital structure? I think as we grow through, in the way that we're doing. Obviously, when we go back to the slide, I can't remember which number it was, looking at the various areas that we grow our business. We're still growing in Lloyd's and we're definitely growing in Lloyd's in 2023, et cetera, but we are growing in other areas as well. I think potentially as part of the work that we're doing as far as the surplus that we're looking at, ensuring that the ECR being our primary measure, being the most appropriate thing is something that we're looking at. In terms of looking at other ways to manage our capital overall, it's something that we always do. We consider different things when we ahead of the raise in November, because obviously we had different options open to us. I think that we thought equity was a good thing to do because it was a growth story and in the past, we've had questions about our level of leverage, and this was an opportunity not to add to that at this point. That doesn't mean that we wouldn't look at other instruments going forward, but there's nothing to report as we sit here today. Okay, thanks. Finally, the cyber war, presumably these haven't earned your book is still gonna earn onto the new terms. It didn't happen instantaneously, so you've still got. I mean, we started writing new business with the new wording in October, and all the renewals are starting to go on from January, so that will take a year to, as you say. Okay earn through. When you talk about disruption, you're talking about demand or the pricing is gonna look weird because the price drops because you've excluded... No, it's not a pricing thing. It's a terms and conditions thing, right? If other insurers are not changing their war wordings... Mm ... brokers and clients may, in the interim, before that transition is complete, choose to buy in on our wording. That's what we're saying. Why would others not be changing their war wordings? What is the rationale you're hearing? I think there seems to be a general acceptance that a war wording that was written before there was anything, and before there was anything called offensive cyber capability was written, the war wording needs adapting to contemplate that. The insurance industry historically hasn't been very good at making changes before anything's happened. The insurance industry generally reacts to when something's happening. What we're trying to do here is go, we can anticipate something happening, we'd like to do something about it, and making that transition is a little bit messy, and that's where we are. That's all. Are people trying to compete and say, "Look, my policy is more comprehensive than yours," for example, or is it just...? I think it's just a little bit untidy at the moment. Right. You know, as I, as I mentioned, you know, not, not all insurers have concluded what they wanna do. People are implementing at different speeds. We are seeing different insurers around different markets start to offer quotes with updated war exclusions. There is this Lloyd's deadline in March. Our central expectation is the market will settle down because the, you know, reinsurers are very concentrated on it. Regulators are very focused on it. This question is not going away. It's just that the transition takes a little bit of time. That's all. Okay. Thanks. Thanks. Will Hardcastle, UBS. Given the big capital stack now, 40%, I guess just trying to think there about the cyber retention going forwards. Is it a possibility that this could actually, you know, keep increasing the cyber retention? Or is it a matter of this was an opportunity taken this year, and if growth persists, we could look to, you know, increase the use of reinsurance going forwards? Which direction should we think that's going in? By cyber retention? Gross and nets. Just trying to understand how much the use of reinsurance, the proportion will change going forward. Proportion of insurance. I think, you know, we've always talked about maintaining a balanced and diversified portfolio. You know, historically, there'd been a sort of rule of thumb, and we didn't want any one product to be more than 15% of the, of the whole. We flexed that with cyber because when prices suddenly double, it's difficult to do that. We, you know, we are very explicit that you can have too much of a good thing. What's happened with what property has given us the ability to do is to continue to diversify the business in things that we're good at, where the market conditions are right. One of the secondary impacts of growing our property franchise is that we will be able to continue to grow our cyber and still maintain that diversification. That's one of the reasons why we bought less reinsurance this year. Hopefully, that will persist. The, the more growth engines we have, you know, good growth engines, the more we can grow cyber because we maintain that diversification. That's a core part of our strategy. Sorry, can I... I'm not in charge of the mic. Sorry. It's Cameron Haisman from J.P. Morgan A couple of questions. First of all, I guess on cyber and just thinking about the growth outlook overall. Clearly, you know, kind of Q4, Q1 has been a little bit difficult, and cybers been a massive part of your growth story, and you're probably gonna rely on increasing exposure, you know, in 2023 to hit your growth aspirations. Given that cybers a, you know, it's not just a Lloyd's thing, to what extent do you have real confidence that you can hit the cyber growth, whatever you're implying within your overall growth numbers so that we, you know, that we can come back at the half year and, you know, things seem like they're going well. That's the first question. I mean, let's. I'm really bad at multiple questions, so let's get to that one, and then we'll go on to the next one. Sure. When we thought about the guidance for this year, we brought it down a little bit to reflect the this temporary disruption in the cyber market as, you know, through this transition that we described. We have already taken that into account. We believe that our central expectation is that will calm down and settle down at the end of the first quarter, beginning of Q2, right? That is our central expectation, and that is all, that is the basis of the guidance. If that doesn't come, if that doesn't happen, we'll come back and update the market as to what our expectations are now. The evidence we've seen so far is that leads us to that expectation and that guidance. Just to follow up on that before I go, before my next question. In terms of, I guess the other markets, you know, U.S. players, what are you seeing there in terms of kind of words changing, in terms of kind of policies changing? Yeah. We have seen, insurance, domestic insurance companies, including in the U.S. quote with wordings that have been updated to reflect cyber in more. Second question is on capital and probably in a slightly different way. Not gonna ask about the 40%. I guess if you plug in your high 80s combined ratio, mid-20s net risk and premium, 4.7% investment yield, you end up with a pretty big PBT number. Mm-hmm. Clearly, if you get to your aspirations for earnings, this year, you're gonna be sitting on a huge pile of cash, hopefully. What do you intend to do with that? Is this, you know, dividend grows 5% next year, or if you do sit there, you hit all of these things mid, you know, mid-20s growth, high 80s, 4.7% yield, what do you do with the money this time next year? It's nice that we're spending the money before we've made it. You're right, there are some good tailwinds, right? We've put them out there, you know, a high 80s combined ratio with that sort of investment yield on our assets and that sort of growth should produce a good PBT if you combine all that together. What we have said when we think about capital is our primary obligation is to grow the business in a prudent and sound way, right? If there is opportunities to deploy that capital to grow the business further, in a sustainable way, generating the sorts of margins that we want, that's how we will deploy it. You know, when we look at the drivers for growth at the moment in things like cyber and property and some of the specialty business that we write, it is not easy to think that that growth is gonna persist for a number of years. Our central expectation now is that we'll be able to deploy that capital well for the next few years. If things change between now and the end of the year, and actually we don't think we can deploy that for good growth, we will return it. Thanks. Hi. Abid Hussain from Panmure Gordon. Just one question following on from Cameron's question, actually, on capital. Clearly the trajectory on PBT is looking very healthy for next year and possibly beyond. Just looking at the capital number, the $400 million that you raised, how quickly are you looking to deploy that? It feels like you're not looking to deploy all of that given that the volatility of the book's gonna increase with the growth in the property lines. Is that a fair reflection? The growth that we achieved in property at 1/1 and in January of just over 40% was exactly in line with our plans. We plan to continue to grow property fast in this year and hopefully, if things persist as we think they will, you know, over the medium to long term, particularly on the insurance side. We did want to achieve two things, the ability to grow our property book, which we are doing as we planned, and to have a balance sheet that's more resilient, which does mean that, as we've been saying, we're rethinking the 15%-25% surplus so that we remain more resilient post-event. We are deploying the capital. We've written exactly what we hope we would write in January. It's a multi-year opportunity. Just to follow up on that. Would it be fair to say that half of the capital raise was to build resilience and half was for growth? Does that sound about right? No. No. I mean, it's difficult to apportion because it diversifies away, right? The trick we've the useful thing we have is we have 3 peak risks, liability with Specialty Risks, cyber with our cyber division and digital and property, and those diversify against each other. What we've actually managed to do is to deploy the capital in 4 ways. 1, more resilience post-event. 2, grow property. 3, grow Specialty Risks. 4, grow cyber because they diversify against each other. It's quite difficult to unpick that and tell you how much has gone to each because they all diversify. Thanks. Is that fair? Hi. It's Tryfonas Spyrou from Berenberg. I guess looking more sort of to the medium term, it looks like the group is, you're trying to diversify more in having, more exposure to different business classes. I guess what would be your. More exposure to? To various sort of Yep ... classes and segments. What would be your optimal, if you would look back in sort of in five years time, what do you wanna achieve in terms of optimum business mix and diversification? We took a slide out. There you go. left it. There's no question. ... in case we got asked this question, right? What you see here is the mix of business between the 4 divisions over the last 11 years. We do flex them according to, you know, long-term trends like demand and also short-term trends in terms of pricing, in terms of conditions and so on and so forth. What we've always tried to make sure is that overall we're diversified in a way that's capital efficient and safe in terms of managing volatility. They do change quite a lot over, you know, when you move from here to here. Of course, the most striking thing is that property was, which is the purple one, was quite large and is now relatively small. We've grown it a little bit here, and that will shift. Our job is to make sure that we run those twin things of making sure we deploy the capital where the risk reward is best, but maintaining diversification at an overall level. You know, we're in a fortunate position now of having another division where for the medium term we think the risk reward looks good because the property market is finally addressing the issues and challenges that it has, and it's back into the specialty wheelhouse. We'll see hopefully that purple grow. I, you know, Specialty Risks, which, you know, because of a variety of headwinds we've describing probably won't grow as fast those divisions that will likely shrink. Overall, as a proportion of the whole we maintain that diversification. That's the strategy we deploy. Thank you. Good morning. It's Nick Johnson from Numis. I got three questions, but I'll do them one by one. Thank you. Firstly on cyber growth. If the market doesn't settle in relation to war exclusions, how easy is it to flex growth in property or other lines to offset that perhaps less growth in cyber? Are you seeing really abundant opportunities to grow the business in property and other lines? Is it, you know, always a hustle to grow the business and it takes time? We're seeing lots of opportunity to grow across most of our business because prices are good and demand is high for most of what we do. You know, I don't think we'll react to issues on cyber by saying, "Well, we've gotta grow more over here because we're trying to maximize the opportunity everywhere." You know, the good thing about having lots of opportunities is if one doesn't work out, it may not matter because other things are, have the opportunity to outperform. So I guess putting the question a different way is do we have the opportunity to outperform in other divisions if cyber doesn't? Yes, we do have that opportunity 'cause there's lots of opportunity out there. Hopefully overall we'll be able to pivot if we need to. Thanks. Second question is on reserve releases. I mean, reserve releases have been fairly subdued for some time when viewed in relation to growth in the business. Should we expect reserve releases to pick up at some point? Will that be independent of the current year loss ratio, or are the two somehow inversely linked? That's actually quite a big question, isn't it? Because of IFRS 17. Yeah. Yeah. I would say that the most recent years that we've written and have reserved are opening at a lower level than previous years in... mainly because they're price better, but in part because as we all know, we were aiming to be at the bottom of our range for IFRS 17. I would say probably, but perhaps not back to the levels that we were expecting because we've brought our reserving down. It doesn't mean that the profitability changes, but there is I have some expectation that profit from a year will be there'll be a shift somewhat towards current year rather than prior year. I'm not expecting it given that there isn't a huge shift in reserving. You know, we've kind of... our range is overlapping from our old, but it is still 80th to 90th percentile, which I hope everyone else agrees is pretty healthy. I would expect, you know, over the medium term, I would expect some shift, but I'm still expecting reserve releases even though in the new world they'll have a new name. More in May. Yeah. Thanks. The last question is also on IFRS 17. You say in the statement, I think that the transition to IFRS 17 would produce a 2% benefit to NAV. That feels quite low to me given the sort of weighting in longer tail business. I perhaps would've expected a bigger benefit from reserve discounting. Is there something else at play in that calculation? Yeah. What we say in the reserve in the release is that we expect an increase in equity of at least 2%. There's 2 things there. It's a one-sided. We're saying at least rather than exactly 2%. The second thing is that the date of transition for IFRS 17 is the 1st of January 2022. It's not that long ago, but it is from a yield curve perspective. When we've looked at that, we've looked at the effect of the change in reserving, one, and the introduction of discounting. The introduction of discounting when your yields are 0.9, I think we said, under 1. In January 2022. Yeah. In January 2022, has an effect, but it's a much smaller effect than you would see at year-end at the end of 2022 when yields were around 5. You're completely right. I agree. When we look at different dates and IFRS 17, the discounting will have a much more significant impact on equity to the positive. That's a teaser for you all. You're all not gonna miss May now. Thank you very much. Thanks. Hi there. Faizan Lakhani from HSBC. I have 3 questions. I'll split them up. Thank you. The first one is on, it appears from the wording that rates are probably starting to soften. It sounds like sort of low single digit for the year, for 2023 outlook. Versus the loss costs, how? You know, are you expecting net rate to sort of feed through, or is this gonna start to move the other way? We're not expecting rates to soften overall. We're still expecting rate increases overall this year. I think our guidance of high 80s will give you an indication that we still think we're exceeding loss costs overall. Okay. Even for the written premium to come through, you'd still expect that. Okay. We are, you know, and we keep saying this, there are areas of our business which are exposed to social inflation, which I think is the most pernicious of them, and we're being very, very bearish on those. We're fortunate, you know, we don't write commercial auto, we don't write general liability, we don't really write products liability, so we're not really exposed to social inflation in the way that some are. We do have elements of our book, particularly that which has bodily injury exposure to it, like hospitals, you know, or has claims that can outrage a jury like EPL, where we're being very, very bearish because I think that's where the inflation exposure is most concentrated. I understand your sort of high 80s guidance, another way of sort of thinking about it would be from the current year loss picks that you're putting in your triangles. There's sort of 2 impacts there, where you reduce your reserve margin, you have better rate feeding through. How do I sort of disaggregate the 2 roughly? I mean, how much has reserve margins come down on your current year loss picks? I would say the predominant is how we're feeling about the business. When we talk about the shift in reserving, it's not significant. We haven't moved out the bottom of our range, et cetera. I would say the primary reason we're feeling happier to open lower is because we are seeing, we have had significant rate and... I'm not sure who wants to start this. You said it was the last time. Yes. There you go. For the last time, significant rate primarily, and then in the rounding, ensuring that we weren't adding to the reserve buffer as planned. I haven't got a numbers to give you of the split, I would say it's, you know, primarily the feeling better about the business. 'Cause our reserve margin hasn't really shifted much in the last five years. Not really. a third one. I'm gonna come back to capital on this one. I'm still a little bit confused here 'cause the 40% factors in 2023 growth. Yeah. Yes. I understand this is a play at maintaining sort of resilience in the business. Your predecessor used to say that 15-25 was a self-imposed target. You don't really need to do the 15%-25% anyway. Even in a large event, you could go below that. We could. now it seems to suggest that you have to be above that, and then that doesn't really tie back to the sort of a solitude equivalence, where it sounds like now you need to be sort of 300% above plus or so. It just sounds very, very prudent to have raised capital when your intensity business is very low. you know, as we said, I think there was an assumption that post an extreme event we would raise capital, that underpinned the 15-25. Andrew was always very clear. We could go below the 15 if we wanted to. The fact is we never did, right? In fact, in 2020, when we could have gone below the 15, we chose to raise capital instead of going below 15. Whilst we had that theoretical capability, in actuality we never deployed it. When we thought that through last year, towards the tail end of last year, and we thought about how can we grow into this property opportunity that we've been waiting for 10 years to do, you know, how do we do that in a way that doesn't leave us more exposed? If we're not going to go down below the 15, and we don't want to go back to the market post-event, because, you know, appetite for that, I think has diminished over the last few years. How do we do it in a way that's safe? That's what led us to the action that we took. When I think about sort of rolling forward to sort of 2024, 2025, your payout ratio is relatively low. Your capital intensity isn't particularly strong. Our payout ratio? Sorry, the dividend as a percentage of- Right ... your normalized earnings. The capital intensity of business you're writing isn't particularly high, given the fact that you had diversification. Does that mean effectively the 40% that you're at is sort of the new level that you want to be at then? Nope. All we've said is that we are going to reconsider the 15%-25% and come out with revised guidance later this year. Because no, we haven't given any number, and we're thinking about it. Also, you know, the growth opportunity that we've got in property and other property is multi-year. We expect it to deploy this not just this year, but into the next 5, 10 years. We will give more guidance when we've thought all this through. Great. Thank you very much. Hi, it's Ivan Bokhmat. I've only got 1 question left. Bob, thank you for the chart with the one in 10 years AEL. I'm just trying to think, if we were to consider things like the annual CAT budget, I know you don't disclose it, but it would be a great idea if you did, since a lot of your peers talk about it in this way. Considering your plans to grow in property, shall we expect it that budget, if there was one, which I'm sure you've got one, shall we expect it to go down or up in% of premiums, let's say? We already know that PYD, as Sally suggested, should be expected to be a little bit lower. Yeah. We've alluded to this. We've said this, yes. When we look at the mixture of, when we look at the makeup of our expected loss ratio, I think the cat component's gone up a bit and the attritional's gone down a bit. Yes. Could you try to steer it as% of premium in any sense? No. Of a range or? No. No. Although I note the request for us to disclose our cat budget. Thank you. Thanks. Sorry you've had to wait so long. It's okay. Thanks. It's Anthony from Goldman Sachs. two questions, I will ask one by one as well. Thank you. The first one is just coming back to the mid-teen guidance on GWP. You mentioned the property growth there. Is it more on the primary property or on the reinsurance property? It's pretty well split between the two this year. I think ultimately, the bigger opportunity is in primary property. The immediate near-term opportunity was in reinsurance. You know, when we look at the split of our property business between reinsurance and insurance, our insurance book is much larger than our reinsurance book. The growth will be roughly, you know. They're both growing strongly this year. Reinsurance as a percentage much more strongly than insurance. That will go the other way in the medium to long term. Sure. Thanks. The second one just on the guidance core at high 80s 'cause I think you mentioned the price moderation generally. Is it right to think that that margin could peak in 2023? We're expecting rate increases to go down, but they're still rate increases. That's primarily because things like property are adjusting to recognize that there are exposures there that there hadn't been properly priced for in the past, and so rates are going up. Are we in peak period? I don't know. It all depends what happens this year. Certainly, we're not dependent upon peak pricing for opportunities to grow, right? We like leading into areas where there's long-term demand growth, so that although we'll manage the cycle, there are opportunities during most stages of it. As we think about property, as we think about cyber, as we think about stuff like mergers and M&A and environmental and political risks and all sorts of stuff that we sell, you know, the exciting thing is demand growth we expect over a long period of time. That's what helps give us our optionality. Thank you. All right. I think we have come to an end. Thank you very much indeed for coming. Thanks for your time. Enjoy your weekend. Thank you.