Let's start. Good afternoon, and welcome everyone to our IFRS 17 Education Event. Now I know we are firmly in advent calendar season, and as a consequence of that, I'd like to thank you for turning up today. I know this is not gonna be at the top of your Christmas present list, but if you come away with a better understanding of how IFRS 17 applies to Hiscox, then it will certainly fill me with some Christmas cheer. I'd just like you to just rewind a bit and recall that in September we had a fuller technical session. Today's presentation really builds on that information, so please do refer back to that also. Today, usual caveats. The numbers that we include within our presentation, they're illustrative, indicative, unaudited, and therefore subject to change. You'll see that we aren't going to issue new targets or revising any existing targets and put those out. Nor are we going to have new forecasts or inside information either in the presentation or in the Q&A. Before I get into the agenda, what I want to do is introduce Liz Breeze, who I'm sure a number of you have met when she was doing the interim CFO job prior to my joining. Liz is also the executive sponsor of our IFRS 17 program, and she joins us today in that capacity. I'm gonna talk a bit about the key messages and the accounting policies that we've selected. Liz is then going to talk about the core IFRS 17 changes as they apply to our business. I'll then cover off, the numbers and the impact of IFRS 17. I'll cover off KPIs and the changes, and I'll also cover off the timeline going into 2023. Key messages. I'm sure, for those of you that have attended a number of other presentations, that you've heard this a number of different times. IFRS 17 is an accounting standard. There are no changes to the fundamentals. Our business strategy remains unchanged. The economics of the business remain unchanged. The balance sheet strength of the business is undiminished, so there's no change to solvency, there's no change to liquidity. If I then turn to earnings, what you'll see is when there's, because due to the sort of changes in interest rates, what we've now got under IFRS 17 is much less volatility through the income statement. That's because we're also reflecting those interest rate changes, not only on the asset side of the balance sheet, but also on the liability side of the balance sheet. That discounting will flow through the income statement and generate differences in terms of profit emergence. What I'd emphasize is the overall lifetime, profit will be the same subject to some currency impacts. There's also, under IFRS 17, some more significant, more granular, more detailed disclosures. For example, margin under IFRS 4 gets disclosed as a risk adjustment, and there's also a confidence level that we'll talk about in a bit more detail. There's also, movements in the risk adjustment that's, disclosed and analyzed in the analysis of change schedule, and Liz will talk a bit about that in her section. Lastly, because the standard puts an emphasis on growth and changes the geography and the presentation of the income statement and a number of items within there, what we'll see is a number of KPIs, either new or that get redefined, and we'll talk you through those aspects. The important point to make is that the way that we run our business under these new KPIs will not change. Accounting policy choices. There's a lot on this slide. I'm gonna talk you through some of the key ones from a, what have we chosen, what's the rationale for why we chose them, and what's the implications? The overriding principle that we've adopted for this accounting policy choice is simplicity, comparability, consistency with existing measurement under IFRS 4, and relevance to our business. Those are the three underlying principles. If I turn to the measurement approach, we have selected the Premium Allocation Approach, that's because really it is simple to follow. It means that we don't have to calculate a CSM, a Contractual Service Margin, on an annual basis. Really the results under both the GMM and the PAA are comparable. Turning to the risk adjustment. Risk adjustment methodology is underpinned by a consistent reserving approach with some small tweaks here and there. What it means is the impact on the undiscounted reserves is pretty minimal. I said fundamentally, the business remains the same under IFRS 17, you can see that on this slide. From a solvency perspective, we're regulated by the BMA for our regulatory capital. There's no change from the standard. Similarly, from a liquidity perspective, it's consistent. Turning to dividends, our dividend paying ability remains undiminished under the standard. Just as a reminder, as a Bermuda HoldCo, all of our retained earnings are distributable. Really the decision to pay a dividend and how much to pay for that dividend is really a commercial decision. It has no impact, the standard has no impact on that decision making. Turning to the financial metrics. I'm gonna just sort of walk across left to right here. From a top line perspective, there's a modest change under IFRS 17, and that's because reinstatement premiums, and it really impacts Re and ILS more than any other part of the group, are reclassified to claims. However, you know, that is from a group perspective, the overall impact is pretty insignificant, as you can see. Discounting, as I said, is probably the single biggest impact. You can see that come through, not only, in terms of the profit and loss account, but also through the half year, shareholders equity. In a period of more volatile interest rates that we've seen in 2022, you'll see the impact of that discounting obviously is more substantial. From a transitional, impact, the opening balance sheet from a shareholder's equity is there's a modest uplift. It's pretty small. What that does do is impact, from our leverage ratio, and it gets a benefit of about one percentage point. That means equity has gone up, but the definition of borrowings has remained the same. I know that other companies may choose to redefine their leverage ratio, and that's really if they choose to add in, let's say, the CSM into their equity number. You won't necessarily see on a go-forward basis those leverage ratios being strictly comparable. To sort of wrap up that section, really, you know, the key messages are fundamentals are the same, no change. Discounting will have a pretty big impact through the numbers, and I'll come back to that. Transitional impact is pretty small. What you will see is more disclosures, some new KPIs that I'll talk to in more detail. The key changes, I will now hand over to Liz Breeze to talk you through. Thank you very much, Paul. Right. I am absolutely delighted to be here today to talk to you through IFRS 17. It's a very exciting topic. Where do I start? I'm gonna take you through some more of the theoretical components of IFRS 17 and what they mean to Hiscox. IFRS 17 has been a very long time in the making. It's full of lots of nuance and complexity, and I'm sure by now you have been to many a training session, in fact, even maybe hosted some of your own. What I want to do today is bring alive what this means for Hiscox. There's five key areas I'm gonna bring to bring alive for you. Number one is the concept of economic value. We have been talking about our balance sheets from an asset perspective to be in line with economic value for a very, very long time. IFRS 17 is now introducing that for the whole of the balance sheet, including all our in-insurance assets and liabilities. The second key thing it introduces is a better presentation of profit drivers, which should be really helpful for all of you in terms of understanding how our business works. Third thing, this is particularly close to my heart, is reinsurance presentation. IFRS 17 makes a number of geographical changes to how we present reinsurance in our P&L, and I'm gonna take you through some of those in a bit more detail. Fourth thing, timing of expected loss recognition. This is all about onerous contracts. I'm sure you've heard that, about that before. We have them at Hiscox. We are no different to anyone else, but I'm gonna take you through how we're applying our methodology to derive those. Finally, one of the key outcomes IFRS 17 was trying to achieve was increased disclosure and presentation, in people's financial statements. I'm gonna share with you one of the important disclosures that I think is very relevant to help you understand our business performance better. Okay. Economic value. As I said, we have been presenting our assets, our invested assets, on our balance sheet using current economic terms for a very, very long time. IFRS 17 is now going to require that we present our insurance assets and liabilities using an economic value principle. What does that mean? It means we're going to take into account the time value of money. We're gonna discount them. There are choices in how we select our discount rates to discount those reserves, and we are taking the bottom-up approach, which involves taking a risk-free rate. We are using swap curves for each settlement currency that we operate in and then applying an illiquidity premium. The illiquidity premium is a requirement of the standard. It is not something that is material at all for our business. Given the nature and profile of the underlying assets that we operate in and the short tail nature of our business. Not going to be a key driver of how our discount rate works. Overall, I think this is a really positive development for our reporting. It's now bringing the whole balance sheet in line and representing the current economic conditions of the situation we're in. It's also, as Paul indicated just before to you, it's going to help with the volatility in our P&L. To give you a bit of insight into this, during the first half of this year, we did see interest rate volatility. We started the year, a U.S. two-year Treasury was, say, just below 1%. By the half year, it exceeded 3%, and that change in interest rates meant that we presented to you an unrealized loss in our investment portfolio at the half year. What Paul will show you, hopefully I'm not ruining the surprise, in a bit, a bit later on, is that the benefit of that change in interest rates it means our reserves are now going to be discounted much more extensively at the half year. Some of that volatility that you saw will be offset. Two things to point out, not all the volatility will be offset. We hold more assets than liabilities. That is a good thing. We hold them to support our capital as well as to pay our claims. Volatility will still remain from interest rate changes, but it will be much more muted. Fact one. Number two, discounting will impact our different business segments in different ways. Those parts of our business that have slightly longer tail lines, for example, London Market, you can expect a bigger impact of discounting in that segment. Okay, number two, profit drivers. There's two core ways that insurance companies make money. Number one they offer insurance services to customers. Number two, they try and make an investment return on the assets that are held for capital and those that are there to pay claims. What IFRS 17 is trying to introduce through its new income statement presentation, which we're showing on this slide, is two new subtotals. The insurance service result and the net insurance finance and investment results. These two new subtotals should help you understand a bit better how our profit drivers are working. I'll go through these in a bit more detail. Firstly, the insurance service result. We've always presented to you our underwriting profits. This was typically an item that was included in our earnings release. What you're gonna see now is this is presented in the IFRS 17 income statement with all the constituent components that make it up clearly presented to you. It's just gonna make that analysis a bit easier. It's important to say that the insurance service result won't be exactly the same as underwriting profit under IFRS 4. There are two key differences. Number one is discounting. In the insurance service expense line, which contains our claims, that number will be discounted. insurance service result will include discounted claims. The second thing is there also is a slightly different allocation of expenses. Paul's gonna talk to you a bit more in a second about attributable expenses and non-attributable expenses, but what's included in that insurance service result are purely those expenses that are relevant to servicing insurance contracts or what the standard is calling attributable expenses. That's the top half. The second part is the net insurance finance and investment results. What this is doing is bringing together the performance of the assets and liabilities in one single subtotal line. It's going to include the interest income from our investments, dividend income, and it's also going to include the unwind the discount on our insurance reserves or the interest accretion. It's also going to show you the economic impact from changes in economic factors, or the impact from the change in economic factors. It's going to show you the impact from the change in interest rates for both the assets and liabilities, the impact from movements in foreign exchange from our front investments and our insurance liabilities and assets, and also, on the equity portfolio they have, that we have a small equity portfolio, movements in equity prices. What you're going to see all in one place is the interaction between both sides, and I think this is a helpful presentation that IFRS 17 has introduced just to help give you a bit of extra clarity. Okay, third area. Reinsurance presentation. This is a geographical change that IFRS 17 has introduced. It's taken numbers that were placed in one slot before and moved them to another place in the new standard. It isn't changing how you measure them. This is probably the biggest presentational change that I see and is most relevant to our Re and ILS business. We do use reinsurance quite extensively in that area to help drive third-party income. It's something I'm going to spend a bit of time on to help you understand what it means for us. IFRS 17 very much introduces a gross way of looking at your P&L. What does that mean? At the top of the P&L, you start off with your Insurance service revenue. Think of that as your earned premium. Then what it does is it goes through a process of deducting various expenses. Your insurance service expense. It groups together all of your costs associated with buying and recovering on reinsurance contracts and calls it your net gain or cost from reinsurance to give you your insurance service result. Gross, working your way down to the ultimate margin that you're making. If I think about how IFRS 4 used to handle the presentation of reinsurance, it very much looked at the net. You had net on premium, you had net incurred claims. You had a reinsurance commission income line, which was very helpful for me. Allowed me to explain the money that we're making on third-party capital business. That also got wrapped into a net acquisition cost line. A very much a net presentation. This is kind of the core difference that IFRS 17 is introducing around reinsurance. There is more. Yay. If I think firstly about our gross own premium, as I said, that's mapping over to Insurance service revenue. Ceded reinsurance premium is coming into our allocation of reinsurance premium. Then there's nuances and new factors that get deducted from those two elements. IFRS 17 has a way of looking at cash flows, and it says if those cash flows are contingent on the same event and they're payable or due from the same party, they should sit in the same line in the income statement. When it comes to reinstatement premiums, reinstatement premiums on both our inwards business that we write and that we cede out to third parties, they are both contingent on a claim happening. Previously under IFRS 4, they would've been reported as gross own premium or ceded reinsurance premium. They're now being remapped to their respective claims lines, so they're an offset against your insurance service expense or your recoveries from reinsurers. That's the first big change. This really is only relevant for Re and ILS. There's a little bit of noise elsewhere, but nothing to get excited about. The second key area of change is commissions. Now, you hear in other people's presentations maybe a bit more activity on commissions. I'm just gonna focus on two areas that are relevant for Hiscox, and these are our outwards reinsurance commissions, of which there are two types. Overrider or ceding commissions, we're calling these fixed in this example here, and profit commissions, which are variable. Overrider commissions are paid, or sorry, or we receive overrider commissions when we cede business to third parties. What IFRS 17 is saying is they are linked to your payment of premium to that third party, therefore you should offset that revenue stream against that premium you're ceding. Overrider commissions are now being netted off our allocation of reinsurance premium. For profit commissions on business that we cede, IFRS 17 wants you to look at those in two distinct components. Those that we will receive irrespective of what the claims experience is, and they're called the investment component, and again, they're deducted off the allocation of reinsurance premium. Secondly, those that are contingent on claims experience. Because they're contingent on claims experience, they're offset against recoveries from reinsurers. There's a lot of logic there, but it does mean that we're not gonna have in one line anymore our reinsurance commission income. Paul will help you understand a bit better later on how we will help you understand what's going on in our P&L a bit better. Okay. Right. Four-fourth one. Timing of expected loss recognition. This is all about own risk contracts, and I'm sure you've heard a fair bit about this already if you've been on an IFRS 17 course or presentation. First thing to say for Hiscox is they are not material. Paul is gonna take you through the numbers later. It's really not that exciting. I am absolutely delighted by that. We're not here to underwrite for a loss. We're here to make a profit. What I am gonna take you through though is Hiscox's approach to assessing own risk contracts. There is accounting policy and choice you can make in this area, and I think it's important to understand where we are sitting in that spectrum. To bring that alive for a second, we could have two companies that are writing the same piece of business, priced in exactly the same way, and they could both reach a different conclusion on whether a contract is own risk or not. I think that's a really important thing to understand. Okay. If I think about how this works, we first of all assess own risk contracts by reserve class, so think about that as line of business. We would do this probably twice a year, and we would start by looking at any reserve classes that have unexpired risk or think of that as unknown premium, and we would make assessment of the ultimate premium for those group of contracts. Then, from an outflow perspective, what the present value of expected claims and expenses are, plus a risk adjustment to take into account the volatility of those cash flows. If the inflows from premium are less than the outflows from the claims and expenses plus risk adjustment, those group of contracts are considered onerous, and we record a loss component in relation to that exposure. This loss component is recorded through the insurance service expense line in the P&L. What happens is, as we actually get the genuine experience for those contracts, the loss component is unwound again through the insurance service expense line, and the actual re-experience is there and replacing it. You can see here in this example that we started off assuming we would have onerous contracts. We recognized a loss component up front. The risk adjustment wasn't required when we actually came to recording our results, and we recorded a profit of $5. What this standard has done or this part of the standard has done, has changed the timing of recognition of loss. It hasn't changed the ultimate profitability. Okay. The final slide for me is the analysis of change. As I said, IFRS 17 wanted to introduce new disclosures in our financial statements to help you understand better and do better benchmarking with peers on how we are reporting our performance. The analysis of change is a key new note which takes our opening liabilities in relation to insurance reserves and reconciles them to our closing liabilities. It takes you on the journey of what hits the P&L and what those associated cash flows are. You get a lot more transparency in one place of all that activity. It's split into two distinct components, your liability for remaining coverage. Think of that as your unknown premium reserve, less your DAC, and your loss component that I've just defined for you. The liability for incurred claims. That's your best estimate for reserves plus your risk adjustment. I think the thing that's interesting here is, you're now actually gonna see your best estimate reserves broken out from your risk adjustment. Increased transparency, and you'll be able to see how that's moving through the period, including your current in-year experience and that's come from prior year development. I think this is gonna be a really helpful insight for you into how our IFRS 17 numbers are gonna work. With that, I am gonna pass it back to Paul. Thank you. To take you through how this works on our numbers. Great. Okay. There's three elements to this section. Firstly, I'm gonna talk about the impacts on our results of those changes that Liz has just talked about, and I'm just gonna cover off KPIs, and then we'll end up on with timeline. You know, I expect the reaction that you'll have when you see this slide is exactly the same when I saw it for the first time, which is that it? When you look at the opening equity, the reality of it is, moving left to right is, there's a bit of a benefit from discounting. We have, as Liz said, she's talked you through it, some onerous contracts. That impact is clearly immaterial. Then there's several small items that are individually and collectively small. That gets you to the right-hand side, opening equity under IFRS 17. Really not much going on at all. If I then turn to the opening reserves impact, I think it's far more interesting. Just to sort of step back and remind ourselves. The reserves under IFRS 4 have two key components. There's the best estimate, which is really the mean estimate of estimated losses, and then there's the margin, which is really a buffer for uncertainty around timing or the actual settlement of what those losses will turn into. Under IFRS 17, there's a much tighter definition around reserving, and it's caused us to revisit and modify our accounting policy. A good example of that you can see is the events not in data. Sorry, so ENIDs. Really, under IFRS 17, you can see that ENIDs get reclassified out of margin, and under IFRS 17, they're put into the best estimate. There's no overall change in those reserves, but there's a change because of that definition and how we've applied it. If I turn and look at that, the bridge going left to right and the impact, the first item you'll note is discounting. Obviously that has the impact of reducing the reserves slightly. That discounting is applied to all of the reserves except margin. Margin, as a reminder, gets reclassified as or relabeled as risk adjustment under IFRS 17. Importantly, the loss portfolio transfer, you'll be aware that we undertook a number of these through the last 18 months to two years. That recovery under IFRS 4 gets reclassified in the balance sheet under the asset for remaining coverage. That's because IFRS 17 focuses on the nature of what those contracts are for. It's a reclass. Again, no real change to sort of the overall balance sheet. The last items are, as I said, a number of small items that individually, collectively are small. What that means, and underpinning, the reserving is really a consistent approach under both standards. Our conservatism that you'll be aware of remains consistent and remain, you know, the balance sheet does remain conservative. Now turning to the new disclosures. IFRS 17 introduces the concept and disclosure around the confidence level. That really exhibits and discloses the level of conservatism in a company's reserves. If a company selects an 80% confidence level, that means in eight out of 10 times, the best estimate reserves can deteriorate, but they will still remain within the risk adjustment. We're not selecting 80%. It's just an indication of really how things work and what will be disclosed. At Hiscox, our approach is that if there is a large event, a CAT, understandably, the dispersal of those losses in terms of best estimate reserves, there's a wider variety of outcomes. What we'll do is select a higher risk adjustment to take account of that. Mechanically, what will happen is the confidence level will increase. We think that that approach best suits the nature of our business. Others, we're aware, may take a different approach. They may select a point estimate for their confidence level and anchor the risk adjustment to that confidence level. What it means is, although the two approaches are different, it means that they won't necessarily be comparable. Just as a reminder, you'll be aware that we are executing our strategy of balanced portfolios to manage volatility. What you can expect, and what we will expect is that the confidence level for Hiscox will travel around a certain range. We think it's a bit premature today to come and talk to you about what that range is or how wide it will be. This is a far more interesting slide. It's the profit before tax impact as we move from IFRS 4 to IFRS 17. You'll be aware that at the half year, we reported a loss before tax under IFRS 4, and that was really indicative of those substantial movements in mark-to-market losses on the bond portfolio. You can see on this page that discounting really has a substantial benefit and really brings in the level of volatility in IFRS 17 of changes in interest rates. The next aspect, onerous contracts, it's not a typo. There is a profit being recognized in the first half of 2022. What it means is the level of onerous contracts in the portfolio is smaller at the end of the first half than it is at the start of the period. That is because we put rate through the book and also we've taken underwriting actions. That provision that Liz talked about conceptually is being released through the P&L in the first half of the year. Turning to the purple bar seasonality. One of the things that you'll hear about IFRS 17 is there's a much more granular approach to data being warranted. What it means, and when we look at our reinsurance, our Re and ILS book, mainly, what we've noted, along with the changes to the ILS portfolio and the amount of gross written that we're writing, it means that we have a greater level of business that is earning in the second half of the year versus the first half of the year. In aggregate, this is under IFRS 17. In aggregate, the impact is neutral. What you'll see is that shift, and you should expect that on a go-forward basis. Finally, from an FX perspective, under IFRS 4, we had that anomaly where UPR and DAC was revalued at a historic rate, therefore really didn't change. Under IFRS 17 now, FX is revaluing the whole balance sheet at the closing rate, and therefore you're getting a benefit there because of the way that the FX rates have moved. That's the changes under IFRS 17 for the first half of the year. If I then move on to KPIs. There's a lot on this page, but really you can see the KPIs that we use and have put out around growth, profit, efficiency, and balance sheet strength. Those are what we've used in the past and what we propose to use on a prospective basis. Now, there's certain KPIs that remain unchanged, for example, the BSCR, prior year development, NAV, ROE. Remember, the last two are gonna be impacted by the change in profit emergence pattern that I've mentioned earlier because of discounting. There's a new disclosure around the confidence level. I talked about that earlier. Then we're moving on to the sort of new, newly defined definitions around things like growth combined ratios that I'll come on to. That goes to the point that Liz made about there being a greater focus under IFRS 17 on gross presentation in terms of the presentation and geography of the income statement. The growth KPI. What we're moving to under IFRS 17 is a new definition. It's insurance contract written premium, and effectively ignores and takes out the reinstatement premium that now gets reclassified to claims, as Liz mentioned. That obviously impacts our Re and ILS book, but you'll see no change to the retail business. I think that's an important point to make. Other aspect is that in Q1, we will publish our trading statement. That will be in May as part of our just normal reporting that will be fully under IFRS 17. The important point is the two bases are broadly comparable, and we'll provide enough management commentary around the underlying trends for you to understand what's happening across the business. The last point is, under IFRS 17, net written premium no longer gets reported. From a retail perspective, that doesn't really have a big impact, but certainly it does for Re and ILS and for London market. Again, what we'll do is provide enough commentary to help you understand what the underlying dynamics are for growth. If I turn to the combined ratio, I'm sure on the left-hand side, it's the sort of existing definition under IFRS 4 that a lot of you should be familiar with. You'll see that the focus is very much on a net measurement. If we migrate across to the right-hand side of that page, and you can see under IFRS 17, importantly, all components are gonna be on the face of the profit and loss account. This new definition, and we appreciate that others are gonna define the combined ratio in a different way. I think it will take some time for consensus to emerge. We think given our reinsurance profile, that this is most appropriate for our business. You can see there's Insurance service expenses. That's discounted claims plus attributable expenses, plus the net P&L result from reinsurance, all over a gross number being the Insurance service revenue. That is the new definition. What we're also changing is a move away from the 100% basis, either sort of controlled income, to more our share. I know that's been confusing in the past, you've talked, we've listened. How should you expect the combined ratio to behave in this sort of new environment, an IFRS 17 environment? I think there's two real drivers. One is around discounting, and the second one is about reinsurance. Taking the first one, obviously in heightened times of interest rate volatility, what you'll see is changes in the claims aspect of that combined ratio. It will move about. What we'll do is where that's material, we'll help you understand what the undiscounted movements are and what's happening. The second aspect is around the levels of reinsurance. We use ILS in our Re and ILS business. We utilize reinsurance generally either for risk management or to provide scale in our business. This is sort of a bit counterintuitive, but in times where we grow our third-party book, where we're expanding our use of reinsurance, because we cede profit away, the combined ratio in aggregate will deteriorate. Conversely, where we are retaining more for our own account, where we're holding more risk on our balance sheet, the combined ratio will improve. This is just a structure. It's, it's a feature of the math. We aren't gonna change our reinsurance strategy because of it, but it's just something for you guys to be aware of as we start reporting this new metric. The last aspect and the final bullet point is our retail core. You'll be aware that under IFRS 4, we have a target for 2023 to have the retail core end up within a 90%-95% range. Now, what we'll do prospectively is report the actual retail core on an IFRS 4 basis until it's no longer relevant. The loss ratio. Now this page I'm gonna be quite quick. It covers similar concepts. IFRS 4, you know, you'll be aware of the net approach. Under IFRS 17, it forces us to take a more gross approach with the denominator. You can see that we've got gross claims incurred, impact of reinsurance, and those dynamics that I mentioned that were true under the combined ratio will be true for the loss ratio for obvious reasons. Coming on to expenses. This is a busy slide, but essentially, IFRS 17 gets you to classify expenses in three categories. There's attributable expenses, non-attributable expenses, and partially attributable expenses. The attributable expenses go into the insurance service expense line, along with the claims incurred number. Really the attributable expenses are. The definition is those costs that you're gonna incur to write insurance, provide insurance. The big buckets are acquisition costs, claims handling costs. From a non-attributable expenses, they fall out of the Insurance service expenses, and hence they fall out of the underwriting result. They are things like investment manager fees, finance costs, brand costs, corporate center. They won't feature within that underwriting result. The last component is partially attributable expenses. Those involve a degree of judgment. There are things like IT costs, management time, and really we've done an assessment. We've looked through those costs, and we've determined that the majority of those are attributable. As a consequence of that, those, the majority of those partially attributable costs will fall into the insurance service expense, and hence the underwriting result. What does that look like from an expense ratio definition? IFRS 4 you'll be aware of. It's on a net basis. It's very much, the new definition is on a gross basis under the gross Insurance service revenue. We think that's a good measure of efficiency. It shows the cost that you need to incur to generate each dollar of revenue. We think that's helpful. I think a final word is, I talked earlier about the impact of seasonality. Again, prospectively, given that we're earning a greater portion of premium in the second half of the year versus the first half of the year, particularly for the Re and ILS business, what you'll see is our costs are still being incurred in a linear fashion across the year. In the first half of the year, you should expect the expense ratio to be higher, the second half of the year to be lower. In aggregate, there's a neutral impact. That takes care of it. Talked through the impact on the results. I've talked through the KPIs and the new definitions that we're bringing in. I'll just cover off timeline. We're making great progress in terms of the IFRS project. In 2023 from 1/1, we start reporting in the new world in earnest. In March, we're going to report our Full Year 2022 results on an IFRS 4 basis, so the existing basis, but that will be supplemented with the transitional disclosures and the opening balance sheet under IFRS as at 1/1/2022. We get into May. As part of our normal reporting cycle, we'd have got our Q1 trading statement. That will be on an IFRS 17 basis, very much top-line focused. But again, just important to note that it's quite light in terms of disclosure. We're not gonna put out lots of additional disclosure around that and recall that the bases around the top line are pretty consistent. Then we get to late May, early June. That's the first time that you're gonna have a full year restatement of the P&L and balance sheet that is under IFRS 17 that bridges back fully to that under IFRS 4. That's the only time that we're gonna produce an IFRS 4 bridge. I think that's important. We've all got to shift across into this new reporting environment. I mentioned before the retail core number we will report under IFRS 4 until that's no longer relevant. Then we get to the half year. That will be fully under IFRS 17 with IFRS 17 comparatives. What it will mean is it gives you a couple of months to rebuild your models. I appreciate that's a lot of work and a lot of effort in a short space of time. We'll do what we can to help you in that area. This brings us to sort of the close of today's IFRS 17 presentation. Before we go to Q&A, I'd just like to end. You know, my personal belief is that IFRS 17, it's a good thing. It brings about more disclosure, more detailed disclosure. It brings about more transparency. I think that it will bring ultimately more comparability, although I think it will take some years before we get that and practice converges. I'll reiterate the point that the fundamentals of the business remain unchanged, be it strategy, be it economics, be it the balance sheet. What you are seeing play out is the impact of discounting through earnings. That is a timing impact. The transition adjustment is pretty small. There will be more disclosures, as I've said. There'll be new KPIs. There'll be more disclosures around the confidence level. We're making good progress. We're nearly there, and I look forward to 1/1/2023 under the new reporting regime. That concludes. I'm gonna grab a soft seat, and we'll turn over to questions. I think there is a microphone or 2 microphones in the room. I wouldn't mind if you can put your hand up, talk about who you are and where you're from, and then we can... Not where you're from, but the company you're from. God, it's far too intimate for Christmas. We can move on to Q&A. If you can direct them for me, and I will field them accordingly. Andrew. Hi. It's Andrew Ritchie from Autonomous. A couple of these are quite boring questions. Could you remind us, what was the duration split, average duration of retail on the market and re? I mean, I'm guessing Re is one year, but just the retail London Market. You mean from what, liabilities or? Yeah. Mm. When I'm thinking about the effect of discounting, essentially what curve I should look at. This is probably a stupid question. The sort of group controlled versus one share, does that completely disappear now? 'Cause the insurance revenue will only be one share. I think that's the implication, but just to clarify that. Tax. I presume tax is gonna be maybe more of a mismatch between cash flow tax and earnings tax, but maybe just tell us what happens on tax if we should think about that. This is also a stupid question. I should know this. As interest rates move over the year, if they move during the year, the effect of that on your combined ratio will be... Sorry, won't be in the combined ratio, will be in the finance expense. Will it be in the, in the combined ratio? Sorry, I'm not explaining myself well. No, I understand the question. If you get what I've addressed. Thanks. Look, why don't I propose if the last question Liz fields, if I rattle through the first three. From a reserve perspective, we don't put out the average duration by segment. What you'll know is, you know, the average duration for our total reserves is about 1.9 years, so pretty short tail from that perspective. It's kind of what Liz referred to is if you think about the discounting, the illiquidity premium is pretty trivial as a consequence of that. That was the first point. The second question is absolutely, we You know, there is a general Our proposal is that we're gonna move to own share for everything so that that is absolutely consistent within the business. I think it was confusing. Now it's absolutely I'm seeing some nods around the room. Hopefully, that is now consistent with the way that we have the business in terms of it in total. From a tax perspective, you're right. A lot of the tax follows local GAAP. A lot of local GAAP in our business isn't yet on IFRS 17. What you'll see is from an effective tax rate, it would be broadly consistent with what it is now. You might see some deferred tax movements because of things like the transitional adjustment on the opening balance sheet or for discounting, Andrew purposes. Generally, the amount of tax that we pay will be consistent under either standard from a cash perspective. Interest rate movements. Liz, do you want to take that? Sure. Discounting appears in two places, for our P&L. Firstly, when we initially discount our claims, they are discounted at the interest rate at the point of incurrence, like when it actually happens. The impact of that is recorded through the insurance service expense line. Then if they actually, if the interest rate changes through any given period, that change is recognized in that new and exciting subtotal I told you so much about, the net Insurance and Investment result. The subcomponent of that is being referred to as the IFIE, the Insurance Finance Income and Expense. IFRS 17 loves a bit of jargon. To be more specific, it's going through the IFIE line. Will, if we can direct a mic. Thanks for that. Will Hardcastle, UBS. Seasonality of the CAT premiums earned, you've talked through. I guess there's probably still some mechanisms that you could use if you choose to, probably to smooth that impact from an earnings point of view. Is that expected? I'm just thinking about things like reserve releases, et cetera. Do you mind that, you know, seasonality of potential earnings, or will you look to smooth some of that, if smooth's a word we're allowed to use? Second one, just on claims triangles. I guess, what's the disclosure we're gonna get here versus the history? You know, is it gonna be discounted, undiscounted? How far back do we think we'll go? Thanks. Great question. Do you want to deal with the second one on claims triangles? Just in terms of smoothing, I think, you know, sort of repeat the remarks that I made up on the podium. Essentially, you know, what the standard does do is just get you to look on a more granular basis about the way that the premium's earned. To my mind, I think it kind of is what it is. The important point is that, you know, I think as long as we're explaining what's happening, it's important for you guys to, to understand that. From our perspective, I don't wanna sort of introduce another mechanism and additional complexity. I think as long as we explain what's happening, I think that should be sufficient. We've just, again, just gotta sort of be aware of this is the new world and, you know, as a consequence, earnings higher in the second half of the year, all things being equal. Expense ratio being higher in the first half, from a accident year triangle perspective. Sure. At the moment, we give you 10 years worth of experience under IFRS 4 in our accident year triangles. Under IFRS 17, we will continue to present an accident year triangle. At the point of transition, the standard allows you to just apply five years and then build back up to 10. We will be taking that approach, because what we were also now including in our triangles is some of those nuances that I explained to you earlier. Things like, commissions that are contingent on claims and reinstatement premiums that are being net off against claims. They will now feature within our triangle. For that reason, we're only presenting five, and we'll build up to 10. The key thing, though, which I think is definitely the right thing to do for us, is that we are not doing this on a discounted basis. They will be undiscounted triangles, and we will provide a reconciliation between the undiscounted amount to the discounted amount. I think that will help you understand how that pattern's working better. There's at the back, Faizan. Hi there, Faizan from HSBC. You already explained this, I didn't quite follow this. This is in terms of the confidence interval and the risk adjustment. Are you effectively saying your best estimate is effectively prudent, therefore you don't have to allow for the same level of confidence interval to get to what other companies are doing? That's the first question. The second one. Sorry, I missed the first few minutes of the presentation, in terms of understanding capital generation from IFRS 17 to the Bermudian SCR, could we use it sort of as a one-to-one? The third one is on the LPT transaction. I understand it from a reserving perspective, wanted to understand what the knock-on impact would be to the sort of premium side of the reinsurance. Is that also earning through, or did that come through in sort of year one, we won't see that anymore? I guess in terms of the expenses related to doing the LPTs as well. Thank you. Should I do confidence interval, capital gen, and you do LPT, and then I can add a bit more? Just the confidence interval. Really, the way that we think about it is there's building blocks. You've got the best estimate, and, you know, you can see the under IFRS 17 that will contain unearned. There'll be a different sort of build up to that. From a prudence perspective, what we'll have is a percentile addition generally around the reserves because they are volatile, and we want to have that degree of conservatism. The important point I was trying to make is that for our approach, if there is a large loss, by necessity or by derivation, what happens is the volatility around those reserves, that increases. We'll have a higher risk adjustment that will necessitate or just mechanically flow through into a higher confidence level. That's sort of what I was trying to do is contrast that with other companies who may take a different approach and essentially select a point estimate and sort of use their risk adjustment to anchor to that confidence level. They're different approaches. We think ours is suitable for our business, you know, because, you know, we do have a good spread, and we do encounter cats from time to time, as you've seen in 2022. That's the first point about confidence level. I think from a capital generation perspective, there will be certain read acrosses, but I think the other aspect you've got to consider is just the interplay around discounting. That isn't sort of like for like. There'll be a difference. Yeah. the last- I can finish off that. I mean, just on the BSCR, the BSCR rules are not the same as what IFRS 17 is trying to do. The BSCR is prescriptive on the interest rate that you're supposed to use. It also is sort of recognizing upfront some of the embedded profit that are in those contracts. The capital generation will be different under two bases. A bit closer, but still different. In terms of the LPT transaction, we have completed, I think, four over recent history. Really the key change as Paul highlighted in his presentation, was the reserve or the asset that we held for those reinsurance recoveries associated with the LPT is coming out of the net incurred liability line, and it's been reclassified into the liability for remaining coverage. There is no impact on premium for that kind of reclassification. In terms of future LPT transactions, what I would say is LPT transactions, no two transactions are the same. They are all very different. They all have their own particular nuances. Some have profit initial or initial recognition. Some are in a loss-making position, initial recognition. You know, we would have to look at the accounting treatment appropriately for each individual circumstance we face. Freya. Hi, Freya Kong from Bank of America. Could you share a confidence level range that's comparable to your current 5%-10% margin above best estimate? Secondly, are your peers also looking at including the discounting swings in the combined ratio? Would it be better to strip it out to get rid of the volatility, or are there reasons why you would keep it? Thirdly, just on gross versus net. Currently, it's very easy for us to see if you're looking to retain more business. Is it going to be harder for us to see going forward, and will we have to rely on qualitative commentary? I mean, I think. Well, I'll take those. From a confidence level perspective, no, we're not. As I mentioned right at the start, this isn't a session really about redefining targets or what that 10% might be. We talked generally around the approach that we're taking, and as a consequence of that, we expect that the confidence level will travel around the range, but we'll put that out in due course. It's very much a teaching for where we are now. The second point around discounting. I mentioned more theoretically, we've just got to see how practice emerges. There are different treatments. We've spent a lot of time thinking about the combined ratio definition. We settled on what we think is the most appropriate. Obviously, what we'll do is, you know, help understand and provide a commentary around what's happening from a gross to net perspective. That is one thing that we'll cover off. And that was the sort of discounting aspect. We did talk about where material will sort of help explain, you know, big changes in interest rates like they've been bouncing around in 2022. Where that is the case, you know, we'll provide commentary where it is material, though. We're not gonna provide that each and every year. Kamran Hossain. At the front, please. Thanks. It's Kamran Hossain from J.P. Morgan. Can I just ask about the challenges of implementing this internally? You know, you've got targets where, you know, everyone that's been at Hiscox or been in the industry for a very long time understands, you know, the 90%-95% combined ratio, what it means in retail. How, you know, how far along are you in setting the internal target? When you know, say to the head of retail, "This is what I want for next year," how far along are you in that process and what are the challenges? Yeah, Do you want to field that because you're? I guess I've been doing this for a long time now. One of the things we established very early on was the need to have a dedicated workstream around people and business change. Right from the outset of the program, we had a workstream that specifically looked at the needs of the people in the business, in terms of how we're actually gonna manage IFRS 17. We've done various training sessions over the last year for all our underwriters, our claims staff, all our leadership teams, to help them work out how they're gonna transition from the old world into the new world. Of course, what that also means is we will be setting internal KPIs to help manage the business so that we are focused on what that means from an IFRS 17 perspective, and we're in the process of doing that at the moment. But yes, it's very much been front and center in terms of running this program. I know I don't have the microphone, so I'll shout. Has it been quite an easy process to map from 90 to 95 to whatever the new target looks like, or is it a little bit tricky and a little bit more kind of like artwork? Well, no. I think there's a general point that we know that if you stand back, let's not get hung up on the retail core because you would have seen that there's a plethora of KPIs that we want to measure, have been measuring. Some of them remain the same, some will change. I think really the exercise has been about, you know, two things. Getting the data and systems and processes really kind of right, and that's one aspect. The second one that's really important is Liz's point, is really the teaching and the educational aspects of getting staff really familiar under IFRS 17 and what that means for them is again, like an exercise. I think that without that, what you've seen across the business is general disengagement from a while ago, let's say beyond before this year, to as the intensity and the deliveries ramped up to getting much more interest, much more engaged. The underwriters are much more involved in it. We're holding reserving committees under IFRS 17 and IFRS 4, for example. There's getting the challenge, and I think we are, you know, I talked about implementation going well, is we are gradually inculcating all aspects of the business with an IFRS 17 mindset. Part of that, and what's important, is that we move away quite rapidly from constantly thinking about, you know, old currency of IFRS 4. It's sort of imperial to decimal in sort of if you rewind a bit. That's sort of the new thinking. Ben, up front. Thanks. Thanks very much. I suppose following on from Kamran Hossain's question. Sorry, it's Benjamin Kelston, Investec here. I just wonder if there are any changes in management incentives that you think that you would see as appropriate in terms of this shift, or if that would all stay the same. On the point that you made, I guess the one point where you're saying the combined ratio might change is where if you grow the amount of third-party capital that you're using, the combined ratio gets worse, and you said that that wouldn't cause you not to make whatever decision that you wanted. How then would we think about it? I mean, if we all see that worsening and the view is, well, this is looking worse, are you then giving us adjustments that effectively are going back on the old basis? How do you think about the economics where they're not quite aligning with maybe the way you're thinking them out? Yeah. Well, I think they're great questions. I think from an incentive perspective, you know, we're still very much aligned around how do we maximize shareholder value? Then we'll be judged on and evaluated and appraised on a number of financial metrics and non-financial. I think that's no different under IFRS 17 than it is under IFRS 4. What it will mean is obviously a degree of translation and thinking about again, what does the world look like in an IFRS 17 world? Making sure that, you know, management's incentives remain consistent with that of the shareholders. I don't really see that sort of conceptually changing significantly from what it is today. The second point around decisions from a gross to net perspective, again, I think it comes back to, you know, we've said right at the outset, the key messages are the business fundamentals. The economics remain unchanged. I think what we need to do is ensure that internally, following on from Kamran's question, that the MI and the data that we use is ensuring that we highlight and shine a light on the right performance metrics that are giving the right sort of reasons and tunneling under that. You know, I think if you look at it comes across as quite sort of complex, but if you think about it's really that reinsurance dynamic is predominantly in the Re and ILS space. You know, Liz has been working on that component for, you know, for months. I feel we've got the tools, and I think we've got the sort of mental agility to start switching into the new world to understand what those economics are and ensuring that we understand performance and making the right management decisions off the back of it. That's quite extensive, but is there anything else from Re and ILS? No. I mean, I think that's broadly it. I would say if you had a very, very material shift in your third-party capital, you would see that fluctuation in the combined ratio. You've now got a very, very large denominator, being your gross earned revenue effectively. It is effectively a more stable ratio. You're gonna have to see big swings, where it really start taking into effect. I think, you know, the fact that you get more third-party capital means your denominator will grow, therefore you might be applying a slightly worse combined ratio, but to a much bigger number, so overall you're generating more profit. It should work its way through, but I appreciate as we start transitioning to this new way of thinking, it's gonna be a bit challenging at first. Sorry. Can I just ask as a follow-up, what degree of benchmarking have you been able to do in terms of, I guess, both against how you think your peers here might set it and how things are gonna look against your broader peer group, which is still gonna be predominantly in the IFRS 4 world or US GAAP world? Thanks. I mean, I guess there's two components to that question. There is a what does the world look like in benchmarking under IFRS 17 for peers, and there's a general GAAP question. I think the general GAAP question is we've always had that. You know, US GAAP has some differences to UK GAAP. It has some differences to IFRS 17. I think that will continue, I think, around, you know, how do you compare and contrast performance. I think for IFRS 17, it's what I said around. I think fundamentally IFRS 17 is good. It provides more disclosures to enable greater levels of comparability. I think in terms of different treatments, different approaches, I think that's gonna just take some time to bed in and converge. I don't think it will be 2023, everyone's on the new measure and there's it's instantly comparable. I think it will take time. Andreas. Andreas from Peel Hunt. On the disclosure side of things, in terms of your reserves, you said you were gonna show or aggregate your reserves by class. Will you also disclose your reserves by class, let's say, property casualty, reinsurance, or is everything gonna be aggregated? Question two, on the unearned onerous contracts, will that be disclosed on an aggregate basis or by class? Can we see whether you've put on in the past an unprofitable business, including the risk adjustment on the casualty book or on property? Yes or no? The third question, I'm not sure... This is like... I'm not sure how this works, but on the onerous contracts, can you split that between the unearned business that is becoming profitable again or has become unprofitable from the new business you've recently put on the books, and it's unprofitable and might be profitable in the future? Can you make that distinction in those onerous contracts between unearned sort of existing business that is volatile and new business you put on the books that is unprofitable, and will you be willing to disclose that? Thanks. If, if I let Liz take the onerous contracts question second, what I would say about onerous contracts is just bear in mind it is immaterial. It's really small. Just start with that point, but then we can talk more conceptually. Going back to your point about aggregation, you know, no, we will continue to aggregate and disclose at that higher level unless, you know, we have a specific requirement under IFRS 17. Obviously, as the business evolves and develops, you know, we're always looking at disclosures and how we might improve and enhance the sort of communication. There's no plans currently to certainly go to reserving class level. No. Just to add to that. It's for reserves and for the loss component associated with onerous contracts, they won't be at this stage disclosed by segment. It's a total disclosure for the group. In terms of your question is can we break out the contracts that are onerous that are becoming profitable and those that are staying onerous, I mean, I guess we can, but I don't think it's something we're gonna commit to disclosing. Again, it's just not a material number for us. It's not very exciting. It really. It's just, it's kind of a new factor of the standard. And it isn't something that's drawn out, for example, in the analysis of change. In the analysis of change, you'll see how the onerous contract or the loss component is unwinding over time, and you can see how much new loss component is being added on. You could compare the two, and Perspective, but not what was onerous is now not onerous or is staying onerous. Andreas, you've got a follow-up. I obviously confused you. Let's say we're entering a soft cycle, and suddenly, you know, underwriting quality just deteriorates just naturally across the industry. Will that be reflected in the new business you write and an increase in the onerous contracts that come on the balance sheet, including the risk adjustment, and that may be over time become profitable? Is that something we can see through the cycle, how the quality of your reserves develops on the back of that new disclosure of onerous contracts? Has it just become irrelevant? Yes, I appreciate it's a small number, but it's because it's aggregated, you know, it could be a big number for a certain segment in the market. Is it a small number by segment? I mean- Is it a small number just because you've aggregated everything? It is just immaterial. You're looking at, you know. It's small tens of millions for on a book of under 10. It's round and under 10. It's and under 10. It's really Around 10 on a $4.5 billion book of business. I mean, that just gives you a sense of size. It's just peanuts. From a soft market cycle perspective, I mean, it's just speculation. You know, let's see where the cycle develops. At the moment, we actually seem to be in an environment where the hard market, where rates have been increasing for four to five years, seem to be increasing for a further year or two. You know, as we get into that soft cycle, when it happens, as it should happen or as it will happen, we'll have to see what happens and how different businesses react accordingly. You know, Liz mentioned right at the start, you know, Hiscox is an underwriting business, so there will be an absolute focus on underwriting profitability. I can give you a very theoretical answer. Where so not related to us or anything else, but your loss component will be in a softening market cycle, assuming that you couldn't, like, maintain profitability in your book, your loss component would get bigger. You could see that trend happening, and it would be disclosed in your analysis of change. You would be able to see that in a theoretical way. I'm not saying that's what would happen to us, but that from a conceptual thing, which I think is what you're trying to drive at. You can see that. If you're shrinking the book. Yeah. In absolute terms. Lots of things. ...it could come down. Yeah. Abid. Hi. It's Abid Hussain from Panmure Gordon. just one question from me. Your new P&L, do you think that'll be, in your view, better aligned to your cash flow, and capital? I'm really thinking from the perspective of your dividend paying capacity. Does it all make sense to look at dividend cover, for example, or from the earnings or should we just scrap that all together? I wouldn't personally scrap it all together from, you know, using IFRS 17 and the P&L as a measure of performance. The point I made is, it just doesn't impact our dividend paying ability. We'll look at, you know, the underlying cash flows, we'll look at the underlying balance sheet strength of the business and make decisions accordingly. Can you share your underlying cash flows with us as well? Sorry? Can you share your underlying cash flows with us as well? Right. Yeah. Great. Hi there. Faizan from HSBC. Just a follow-up question on Ben's point on the reinsurance. I understand from a Re and ILS, it's much more material. In terms of You know, for example, 1/1 renewals where you've got, you know, hardening rates, how do we disaggregate between the fact that you're paying more for your reinsurance versus picking up more reinsurance to understand the underlying performance, even for sort of one, two point sort of swings. Like, I'm struggling to understand how to delineate that. The second question This is a stupid question, I think it was answered. The discounting, how often do you revise the risk-free and liquidity premium? Is that every quarter? What's that period to do so? Yeah. I think if Liz takes the second question. On the first question, I mean, it's really isn't sort of so... If you're talking about rate and one-ones, it's just not gonna really be any different from IFRS 4 versus IFRS 17. You're still gonna see the business on a written basis earn through and come through in your Insurance service revenue result. I don't think there's any major difference. No. You'll still be able to see the ceded own premium amount, that allocation of reinsurance premium. That's effectively ceded own premium, adjusted from some of those nuances that I highlighted before. I think the second question was on discounts, discounting and how often do we refresh that rate. It's each reporting period. Each time that we report to you our financial performance, that will be a refreshed discount rate. Is that every six months, every three months? Just to know. Three, three months. It's every three months. Because that's effectively it follows our reserving cycle. Alan had a question at the front. Thanks. Alan Devlin from Goldman Sachs. A couple of questions. First of all, in periods like we've had in 2022, obviously, you've shown the profit to be more stable and a better reflection. We'll be able to see the underlying economics on the core, on the investment income net of all the interest rate implications and moves, so we can see how the business is doing relatively easy, or will it all be kind of a combined together? Just second on the ILS business in particular. You know, given that you know, a large premium business, but effectively you could pay fees. Are we going to see the... Now on a growth basis and the core is not that meaningful, are we going to see how well that business does under the new accounting standards, or will it be lost within the Re and ILS? No, I mean, I think clearly there's a theme here around Re and ILS and the sort of reinsurance. What we've said is, you know, we will help you understand those trends as there are major movements. I think that remains consistent. We're sort of hearing that from today's session loud and clear. Similarly, in terms of periods of major interest rate changes, it's the same theme. Where they are material, we'll help you understand the sort of undiscounted component. I'll just repeat the point that we're not gonna do that each and every year if it's immaterial. We'll help you understand that big changes of interest rate. It's important. As you say, it's sort of there's two components. There's gonna be one that impacts the combined ratio and the, and the claims incurred number where that gets discounted, and then the other movements are coming through the IFI. To an extent, you'll see interest rate movements impact that sort of bottom half of the P&L that Liz highlighted in terms of the IFI, and that sort of quantum going through. I think we've still got time. I don't know if there's any questions online. We've no questions online. Any further questions in the room? Sorry. Sorry. Andrew. It's about the same. Are we going to get enough information to work to model the reinsurance result, the theoretical reinsurance result? I mean, are you going to give us the ceded premium, the claims recoveries? Because that's not part of the standard. You don't have to give us that, do you? Yeah. I mean, I think the challenge will be that this is a new standard, IFRS 17. We know that next year is a transitional year, and I'm very aware that sort of we need to help you with 2023 as much as we can. Yeah. If I just build on that. Slide 12 is when I spent my session on reinsurance presentation. You're still going to get allocation of reinsurance premium. Yeah. Which is effectively ceded earned premium. You're still going to get recoveries from your reinsurance, except you've got some commissions and reinstatement premiums that have moved their kind of geography around in there. In terms of the fee income that we generate from our ILS business, I mean, that wasn't that transparent under IFRS 4. It's really no different under IFRS 17. I think, we have, in various earnings releases, helped you understand trends when that has been a material shift and there's really no difference in that happening today. The fees you'd receive would then be netted out against. Hang on a sec. Recoveries? No. Two types of commissions. There's your fixed commissions. Yeah which is your ceding commissions or your overrider commissions. They're offset against your allocation of reinsurance premium in the new standard. Okay. Right. Profit commissions are offset against your recoveries from reinsurers, so effectively your reinsurance recoveries. Okay. And this is a stupid question, but what... I don't understand why the LPT effectively becomes unearned. It's- under the standard. Wow, we can get into quite a technical point. Exactly. Essentially I'll stay at a real high level, but the concept is that the LPTs are giving protection to future deterioration. Because it's a future deterioration, it's a unearned aspect, the classification. It's a new way of thinking. Your syndicate accounts at Lloyd's will still be in. UK GAAP. UK GAAP? Yeah. Okay. All right. Great. I can see the energy's gradually dissipated from the room about this. It feels like we have perhaps answered as many questions as you've got. I just wanna say thanks once again for coming along and for the real engagement. I know that this is a complex subject as we all transition into this new world. Thanks very much for your questions, and have a great Christmas and see you in the New Year. Thank you. Thank you.