Good morning, everyone, and it's great to see you all here. I'm sure you've all seen the presentation materials we released earlier this morning. I'm going to keep my introduction to the Q&A quite short, so we can maximize the amount of time we have to answer any questions. In summary, I'm really pleased with our business performance. I'm really pleased with the results that we've achieved for the first six months of this year. The strategy I laid out at the start of the year is delivering, and you can see that in the numbers. We're growing where we see attractive opportunities. In our retail business, we are accelerating growth while we continue to invest in marketing and technology. In our reinsurance and ILS business, we've delivered really strong growth into a much improved market, supported by significant net inflows into our ILS funds of around half a billion dollars in the first half of the year. In our London Market business, we've delivered selective growth as we continue to increase our participation in well-priced lines while we reduce our exposure to underpriced risk in the property bind segment. If I just turn to profit for a moment, we've delivered an excellent underwriting result. We've seen underwriting profits increase by 23% to $123 million. The underwriting actions that we put into place are working, and we're in a positive pricing environment. I'm really pleased with the 91% combined ratio and the much improved combined ratio for our retail business at 95.5%. Of course, the superb underwriting result has been offset by the investment income. As you know, that's a function of the challenging financial markets and in particular, the steep rise in interest rates. As you also know, much of this is non-economic, non-cash. Actually one of the upsides of the events of the last six months is the significant increase in reinvestment rates, which are now at 3.4% compared to just 1% at the start of the year. That's a 240 basis point increase. I'm sure you've all done the math, given our short duration of our assets, what that means for prospective investment income and returns on equity in 2023 and beyond. If I turn to inflation for a moment, inflation is a risk that's really well managed at Hiscox. Our back book is well protected because of our conservative reserving methodology. The significant margin we hold above our actuarial best estimate. The four legacy portfolio transactions we've completed, which, as a reminder, provide significant additional protection to around 20% of our gross reserves from 2019 and prior. Just as a further reminder, they tend to be focused in on the longer-tailed casualty lines. Now, we've also seen significant positive reserve development in the year, as well as organic capital generation, and that's enabled us to set aside a further precautionary reserve within our best estimate of $55 million. We feel really good about our back book. When it comes to the front book, the business that we're writing today, pricing trends are ahead of loss cost trends in every single business unit. We're feeling really good about the business that we're writing today. If I turn to our U.S. business for a moment, our U.S. DPD technology transition is going well. As of June, all of our direct customers are now on the new platform across all fifty states in the U.S.. That's about 1/3 of the total U.S. customer base. That's well over 200,000 customers now, new business renewing onto the new platform. We're really pleased with that. The process to migrate our partners onto the new platform has now commenced and will be substantially complete by the end of the year, with the bulk of the work being done in Q3. You'll also remember from when we last reported that in order to reduce the complexity of the technology transition, we were deliberately switching off some new business opportunities and pausing the onboarding of new partners. As a result, I expect DPD growth for this year to be the middle of the 5%-15% range before it accelerates to above 15% in 2023. Finally, when it comes to people, I'm really pleased that my leadership lineup is now complete. The vacant positions have now been filled. You'll have seen from the presentation earlier today that we have a blend of deep-rooted Hiscox experience on the group executive committee, combined with some fresh perspectives provided by fantastic external hires. In summary, I'm pleased with what we've been able to achieve over the first 6 months of this year. As I look forward, the global economic outlook is somewhat uncertain as a result of macroeconomic and geopolitical concerns. It's those two concerns themselves that are providing further demand for our products and creating opportunities for disciplined underwriters. As we look forward, we expect positive pricing momentum to continue into the second half of this year and into 2023. As you've seen in the performance of the first 6 months, our big-ticket businesses are now able to take those price increases, transform them into margin and positive earnings momentum. As far as retail is concerned, the operation improvements that we've made, combined with the portfolio adjustments we've completed, mean we're on track to achieve a 90%-95% combined ratio in 2023. The ongoing investment in marketing and technology provides a solid underpin to accelerate our retail growth in 2023 from the midpoint that we expect to deliver in 2022. I'll close there. Thank you very much. As ever, I'm joined by Jo and Paul here, and we're happy to answer any questions that you have. I believe you have a mic in your seat. Please give your name, firm, and then ask your question. Kamran. Hey, morning, everyone. It's Kamran Hossain from JP Morgan. A couple of questions focused on U.S. DPD. I guess in terms of the slowdown in U.S. DPD given the re-platforming, but I think you've always told us there's a strong kind of opportunities there for growth, and I expect that's still there. Could you maybe help to give some color around what the underlying demand trends are for U.S. DPD? T hen when you do kind of re-platform fully, and it does turn on what potentially this could look like. I know you've talked about 15% for next year, but maybe some demand trends. The second question on, related to this as well, in terms of the kind of parts of this business where you've kind of had to turn off on new business, is this focused on selected partners? What impact does this have potentially on onboarding new partners? Thank you. Sure. In terms of, the U.S. opportunity remains extraordinary. Really exciting. You will have seen from the presentation, there are around 33 million customers in our potential target base, and 11 million with our current product set, of which we have about 500,000 today, so pretty small market shares. The opportunity remains extraordinary. The demand remains really strong. We have a significant number of partners who are in the queue to be onboarded starting Q1 next year once the re-platforming has been completed. In terms of then, I guess the other indicator would be the organic searches or the searches online for small business insurance in the U.S. and so on. They have not dissipated. New business formation continues to remain strong. If you think about the contextual backdrop, the opportunity is extraordinary and actually continues to grow. We're gonna be growing into that. Very pleased with how the transition is progressing, and we're really looking forward to the end of this year, early next year when we switch on the new business opportunities and also when we switch on the partners. In terms of where we've turned things off, yes, it will be some selected partners where we've been able to switch things off and some new business opportunities that we have in some states that we just have to switch off just to reduce the complexity. We know this is the right thing to do because this is not our first rodeo, right? We've done technology transformations before. We've learned lessons from having done them before. It is really important to, insofar as possible, maintain fantastic service to customers and reduce the complexity for our colleagues who are undertaking the implementation. It's going well. We now have over 200,000 customers on the new platform buying product, renewing product, making midterm adjustments. We're already seeing significant benefits. I think you've seen that. Well, somebody, the magician up there has put the slides up. Y ou've seen the benefits that we're already beginning to see, whether it's through increased conversion, reduced time to quote, efficiencies, or just the ability of customers to navigate the new digital shop front. We're beginning to see something, again, really interesting. It's actually just a slight tick up. It's not yet a trend, but a slight tick up in triple bundles being purchased. It's a really exciting sort of future that we're facing into. Will. Hey, William Hardcastle, UBS. I guess the first one is on the inflation loading, can you talk us through how that's been determined? You know, how granular you've gone at this stage, you know, lines of business which is overweight. And how much of this do you think is Hiscox specific or a bigger industry dynamic? W e've got to think about it from a perspective that you've got a big reserve buffer, you've got LPTs in place, but it's Hiscox essentially that's come out with the loading today. Second, on DPD, yes, the U.S. DPD, there's a small growth reset today, I guess, for current year. You're very clear on the growth outlook 15%, in excess of 15% beyond. I guess the slide that's still present there, if we were to take the opportunity as it is today beyond versus where you'd have been thinking 6-12 months ago, is it the same opportunity, or is the re-platforming opportunity that the new systems, does that enhance the opportunity long term? Okay. Thank you, Will. In terms of the detail of how we've constructed the inflation load, Jo will take that. I'll give you an overarching comment about whether this is industry specific or, sorry, Hiscox specific or industry. Let me start with DPD. The opportunity, again, just to repeat, the opportunity is really exciting and the opportunity set hasn't changed. It's only become more interesting. What the new technology platform does, it gives us the tools that provides even more confidence that we can capture this opportunity. I kind of focus back in on this slide that you can see in front of you now in terms of some of the operational benefits and growth benefits that the new technology will provide. This is us meeting a gradual change in customer preference. Right. These are products that if you go back 10 or 15 years, customers would not dreamed of buying online. Now, not only do they buy them online, they wanna make changes online. They're comfortable buying triple bundles online. Okay. You can try, you can try and do it the old way, or you can access this huge market of 30, potentially 33 million customers. The way to access it is to have fantastic underwriting and understanding of insurance, but then to have the right tools that provide fantastic customer journeys and creates a digital shop front where customers can navigate. If that's the way they wanna buy it, we're ready for them. If they wanna talk to us, we also have call centers in place, right? We still take 100,000 calls a month in our call centers in the U.S.. This is about providing an omni-channel approach for our customers. This is just another route to access that fantastically exciting market. I would say relative to six months ago, my confidence levels are up. Six months ago, we had a technology platform that we had soft- launched. Now it's properly launched across the 50 states. It's working. Customer experience has improved. Over the next few months, we will be migrating the long list of partners that we have onto the new platform. As far as inflation is concerned. Look, in terms of inflation. Inflation isn't new news, right? I'm sure you read about it in the press on a daily basis, or you've been writing about it on a pretty regular basis. The Hiscox philosophy is to front-run things, right? and to take a very cautious approach. That is a philosophy that runs through everything we do. What you see with respect to inflation, whether it's the precautionary load, the reserve margin that we hold, or indeed, the LPTs that we executed, it's because we have a cautionary approach to these factors. We like to front-run things. We wanna put this in the rearview mirror, to paraphrase one of my colleagues. Now we're focused on growing the business and looking forward. Jody, do you wanna provide a bit more detail on how we've got to the numbers? Well, thanks, Aki. As Aki said, I mean, inflation risk is clearly not unique to Hiscox. This is a market-wide issue. I think the way that we look at inflation, we always look at inflation, you know, looking at inflation and the impact in terms of the business we're writing and the claims that we're yet to pay is part of our sort of normal planning cycle. I think the difference this time is the inflation risk is slightly heightened. We look at it in two ways. We've run a really, I would say, robust process across our group, whether that be underwriting, pricing, capital, actuarial. It's a joined-up process. We really look at the sorts of business we're yet to write and then the claims we're yet to pay. On the business we're yet to write, what we look at is each one of our lines of businesses. From the ground up, we look at how they're correlated, what type of things they're correlated to. We use both internal indices, we look at our history, but we also use external indices, and we look at some sort of market indices and where possible, forecasting indices. We then look at those indices. As an example, you know, CPI, if one of our lines is correlated to CPI. Now, not all of the driver of CPI would be correlated to our product. Things like food, not necessarily a driver of our product. We sort of tailor those. Obviously, we then come up with an estimate. Now, I've been really clear on, I think, the slides in sort of, the inflation slides on sort of I think it's '27, '28. What we're assuming is not what we're seeing in our claims. You know, what we're seeing is materially less than what we're assuming. But what we've said is even assuming multiples of prior claim inflation, that assumption is still being offset with both premium inflation and rate inflation. Premium inflation is the premium that we get by updating our underlying sums insured, things like buildings and sums- insured, wage roll turnover. And then rate is obviously the rate that we apply to those. In all parts of our business, both big ticket and retail, we're making reasonably prudent assumptions. We're not seeing that claim come through in our case reserves. Notwithstanding that, we're still offsetting those assumptions with both rates and premium. In terms of the business that we've written, the precautionary uplift we took at the half- year, which is the $55 million, we've taken that same intel, and we've looked back at our portfolios. Again, you know, this is not something that we're seeing in our case reserves, but we've made a precautionary uplift. As Aki said, you know, we do like to front- load risk, and we've taken a precautionary uplift into our reserves. I highlight that plus our reserve and methodology, which is, you know, quite prudent in terms of casualty, where we hold onto good news, plus obviously the buffer that we're running on our reserves. As Aki said, the four loss portfolio transfers that we've completed, which I know two of them have been announced this year. Those four loss portfolio transfers have actually been, we've been working on those for a while. They have, you know, different drivers. Some of them is to protect businesses that we're no longer in. Some of it is releasing capital to focus on the go-forward opportunity. Some of it is to protect back- year reserve volatility. Also we have and again another buffer for inflation because they attach the sort of best estimate reserves. I think overall, hope that gives you a sort of an insight into how we're looking at it. It's a very detailed process that we go through. We've made some I think pretty conservative assumptions within both the business that we're yet to write and the business that we have written. I think that the overarching thing is this is the uplift is precautionary, and it's not what we're seeing in our case reserves. Andreas. Good morning, Andreas van Embden from Peel Hunt. Two questions, please. One on the London Market business. The binder book. I've seen in the back, you know, your property portfolio is down 19% in terms of growth within premiums. Is this all driven by, you know, the continued reduction in your binder book? How much longer will it take to reunderwrite that portfolio? And finally, how much FAL are you releasing by p ulling out of that sort of binder cat type risk, and how will you redeploy that FAL? Is that within Lloyd's or are you gonna take it out of Lloyd's and redeploy it elsewhere? Second question is on Bermuda, the ILS business. I can see nearly $2 billion of assets under management, quite strong inflows. Are these inflows institutional investor money that's coming in, or is it trade capital? And what is the tenor of that capital? How long can you hold on to those assets under management? And how are you deploying it? 'Cause I can see your premiums increasing 37%. Is this taking a larger share on your existing business, existing relationships in the reinsurance market, or are you writing new business? Thanks. Okay. I'll take the London Market question. In terms of FAL release, the specifics, I think, we'll get back to you on. In terms of more general capital allocation, Paul, if you wanna talk about how we redeploy that between the different platforms, and I'll take the ILS one. In terms of London Market, the bulk of the reduction in the property GWP is driven by the reunderwriting in our binder portfolio. We've been gradually reunderwriting that portfolio, coming off binders over the last few years as frankly markets have changed. While pricing has improved, and I have to say the property portfolio as a whole and the binder book specifically is now profitable. If you go back four or five years, it had become unprofitable. It is now profitable. Now the question for us is, capital allocation, and is it generating the appropriate return on capital? I would say we are probably coming towards the end. There's a bit more work to do, but coming towards the latter stages that of that reunderwriting. That property portfolio, in particular the binder book, is now quite different in terms of composition and risk profile. I think over the last four years we've reduced our property cat exposure in that segment by about 50% and increased rate by 50%. Just to kind of rebuild your mental model of what that business looked like, it is quite different in risk profile and earnings potential to what it was, three or four years ago. In terms of ILS, I mean, we don't disclose who the investors are. That's an agreement with our investors. What I can assure you of is it's institutional. It's investors that have been with us for a long period of time, many years. This is an asset class they like, and they have been reallocating capital. They're not new to this space. They've been reallocating from other ILS funds to concentrate more on the Hiscox fund. We like to think that is largely because of the fund performance. I mean, overall for the last eight years, anybody who's been in this space, performance has been challenging. The relative performance of Hiscox has been very good. We have been able to attract significant inflows as you've just read about. Paul, do you want to comment on the capital allocation? Yes, sure. From a capital allocation perspective, I think there's three important things to consider. One, which you can see on screen, is just around how we think about capital within London Market itself. What we've been very deliberate about is growing where we see well-priced opportunities. We've grown in those classes is the first point. The second point that's sort of to consider is really how we've rotated out of property in London Market, you can see we've retrenched from there, where rates haven't been as attractive, and really been deploying capital into Re & ILS, the other division. You can see that's very deliberate with the 37% growth in the Re & ILS business unit. It's a very strong first half of the year. I think that brings two benefits. One is we're seeing better rated business in reinsurance property cat than the typical property cat exposed business in London markets, so we can write more on our own balance sheet more attractively. I think the other aspect is the growth on reinsurance enables us to capture more, capital light fees, and you can see that coming through in terms of growth in AUM and the management fee that that will trigger and derive. I think the last part goes really to, you know, a fundamental part of the business, is the retail business has very strong prospective growth opportunities, and we'll continue to deploy capital into that aspect of the business, be it technology, be it data, and the likes of those aspects. Andrew. It's Andrew Ritchie from Autonomous Research. A couple of questions. One, just a clarification. I should know this. I'm being a bit simple, I think. The inflation load is now part of the best estimate. In other words, when I look at the 11%, the denominator t hat's the case, isn't it? Just wanted to clarify that. Secondly, just remind us, stepping back on retail combined ratio, just remind us what the original trajectory was. I know it's the 90/95 in 2023. I can't remember what it was for this year. Just remind us, because you're more or less matching claims inflation with pricing, what's the other driver? Or just update us on those drivers to get to that glide path from where we are today. Another question. Dividend growth. Your predecessor always used to sort of reflect on, you know, 60% of the business grows at roughly 10%, and then the rest is cyclical, and you can work out what the long-term growth of the business might be from that, and the dividend should match that. M aybe I felt the dividend growth was a bit parsimonious in the first half, but maybe just update us on your philosophy on that. The final question, IFRS 17, that delightful topic. I think this theory is that as far as you're concerned, any reserve management can be incorporated in leeway within the risk adjustment. Is that what you're saying? Thanks. Great, Andrew. That's a bit of a record four-part composite question this time. Paul, if you can have a think about the IFRS 17 dimensions, and we'll kind of rattle through the rest. The first one is pretty quick. The inflation load is part of the best estimate, not part of the margin. In terms of retail combined ratio, the sort of loose guidance that we provided for 2020 at the time we made the announcement, which was a number of years ago, was 2022 would be 95%-97%. Therefore, the current performance is at the better end of the guidance that we provided at the time. The drivers are, in essence, two or threefold. If you recall, those drivers have not changed. Firstly, it was to improve the operational efficiency within our U.S. claims function, and you have read within the statement that is showing, it's taking time, 'cause these things do take time, but it's showing dramatic improvement in efficiency and simply the recomposition of that team to deal with the business that the U.S. now is, which is a high volume, low value individual claims. So that was the first part, reducing the amount of claims or number of claims that were sent to third-party expensive legal departments. That has now happened. Some portfolio readjustment, which you've heard many times from Jo, and Jo can elaborate on that. Those were the kind of major drivers. Those are all in play, and as you've heard, largely now complete, so pretty confident about getting to the target. In terms of dividend growth, look, we're a growth business, and you've heard my predecessor and me talk about the significant opportunities that we have. For us, it's always a balancing act where the dividend is really important. We know it's important as a sign of health for the business. We know it's important to many, many of our shareholders. Therefore, we are keen to pay a dividend. I do balance that against the significant growth, profitable growth opportunities we're seeing. I think right now, given the work that we've completed in our retail business, and we're poised for really accelerating that growth in 2023 and beyond, and the significant opportunities that we're seeing in the reinsurance market, which is becoming really interesting, I have to say, now and could be potentially quite exciting when it gets to 1/1. Now is not the time to really be expansive about the in respect to the dividend. What you can be rest assured of is our interests are entirely aligned. There is no interest in hanging on to equity when we can't deploy it effectively. You can rest assured we. That's exactly what's in our mind. Jo, I thought if you could maybe elaborate a little bit more on the work that we've done in the U.S., and then. Sure. Paul, if you could then take on IFRS 17. Sure. So Andrew, just to pick up on your point in terms of the inflation and what's the improvement. I think the key in the slide is this is our underwriting year versus what you see in the results, which is our calendar year. As Aki has said, clearly, we've made material repositioning in our U.S. business, which obviously has taken time to earn through. Actually, obviously, when you look on an underwriting year, you have a clean view versus a revenue year, which still has some earnings from prior years. We've repositioned the portfolio, as you know, in our U.S. business. Our U.S. business was a real hybrid of the small retail business, which would be more akin to our U.K. and our European portfolios, and then some larger ticket business written on our U.S. excess and surplus carrier. Going back sort of a couple of years, we took the strategic decision to say, yes, that portfolio was remediating, that portfolio was repricing, but actually, our long-term opportunity in U.S. Retail was very much focused in that small ticket business where we have differentiation, right to win, significant investment in digital and operational capability. Quite frankly, we wanted our management time and effort to be focused on that opportunity. Hence, we exited around, I mean, it was around about $160 million of business in totality, and about $100 million of that from the more recent what we the smaller business repositioning. Within the retail I'm really happy with the underwriting year results. Therefore, you know, you can see. You will see that come through. I think what's also not in this slide is just ordinary course correction. We talked historically about remediation, repositioning. That is once and done, that's behind us. What we do have in all of our portfolios is just ordinary course correction, where we slightly tweak change portfolios, slightly reposition them. You can't see that in that slide, and that might have a bit of a tick in terms of management action. That's from retail. I thought I'd just pick up while I have the mic just on the big ticket business as well, just in terms of the portfolio. I think we sort of focus the sort of London Market on the, you know, the binder part. I'd say a couple of things on that. One, you know, this is not unique to us. You know, our portfolios are actually performed better than Lloyd's in those two areas. You know, as Aki said, while we've repriced, they're just not as profitable as we would hope, and therefore we've repositioned. I'm delighted with the work that Paul and Kate have done to actually, you know, at headline level, yes, you know, it looks like a growth written premium down. But actually, underneath that, you know, we're definitely growing areas of the market where we see attractive opportunity, where we see attractive rates. And more importantly for me, you know, we've really repositioned that portfolio. For, I would say, not insulation through the cycle. We will never insulate ourselves through the cycle, but we definitely reposition that portfolio for resilience through the cycle. You know, getting less exposure, more premium reducing our line size and actually creating a portfolio that actually leading more, delegating less, where we just have far more control. I'm really delighted with the shape of both the big ticket portfolios, and you obviously heard the opportunity in Re, but also the retail portfolio as well. Turning to Andrew, your question around IFRS 17 and reserves. I think the first thing to state, and you would have heard it earlier on in the questions, is we are well reserved, and we've made that point prudently from a best estimate perspective, but also from a margin perspective. You know, if you sort of just think we are in pretty uncertain and volatile times. We've had COVID, we've had a war, you know, we've had inflationary pressures. That's what the whole industry has seen and experienced. O ur 11% margin should be, you know, realized in the context and that precautionary inflationary loading that we've put on, seen in that context. Notwithstanding that, you'll know that the 11% margin is above where we would typically travel. It's above the upper limit of the 10%. If you then sort of see how that translates into IFRS 17 considerations, there's not a read across. What we do is we look at the reserves, the volatility within those reserves on a period-by-period basis, and we determine the level of strength that we want in there. As I said, I come back to the point that we are well reserved. IFRS 17 doesn't feature. Ashik. Thank you and good morning, everyone. Ashik Musaddi from Morgan Stanley. Just couple of questions. Sorry to go back on inflation. I mean, how should we think about reserve releases going forward? I mean, if I add back the inflation load, I mean, the reserve releases would have been about $135 million, which is pretty large. Would you say it's a good run rate going forward because things have stabilized a bit, on an adjusted basis? Or would you say, probably we should still stick with the, with the current numbers of around $70 million to $80 million, half yearly basis? Just on that, again, on inflation. This $55 million, have you assumed any progressive inflation, or would you say that there's, the inflation load is basically based on the inflation that you're seeing right now? Just trying to understand if there is any further risk of what if inflation goes up another 2%, from the current level. How should we think about risk around that? Just last one on commercial lines and reinsurance. I mean, there is a bit of mixed message that we are getting from the industry. Some people are retrenching from reinsurance, some people are getting a bit more on property cat reinsurance. What you're trying to say is, okay, you are reducing London Market, but going on your own capital on the property cat. What would be your net position on that would be helpful to know. Thank you. Okay. Thank you, Ashik. In terms of inflation and the interaction with reserve releases, Paul, could you take that? The $55 million or indeed just the how we've developed our inflation assumptions. Jo, if you could take that. In terms of how we think about property cat overall and exposure, over the last few years, we've adopted a cautionary stance, and you've seen that in the work that our London Market leadership team, led by Paul and Kate, have undertaken. You know, Jo just elaborated on that. We've had a relatively cautionary stance in Re and ILS, but that's because of the market circumstances we were facing at the time. Those are changing, right? We have seen significant rate increases in property cat, retro, cyber, actually in the reinsurance space. That is driving the 37% growth you've seen in the first half, and the property cat and retro in particular because of capacity crunch, because some markets have decided this isn't the right place for them. There's a real expectation at the moment that we could see further increases. I mean, just to put into context what's been happening, if I give you one very specific example. In Florida, you know, which is a big buyer of property cat insurance and reinsurance. The reinsurance rates last year, I think we saw, I'm trying to quote from memory, I think they were up 20% or 30%. They were up again +30% this year. All right? It's beginning to get interesting. Beginning to get very interesting. We deploy capital depending on market opportunities. When you look at the group overall, I would expect on our own balance sheet that the property cat exposures will not decline. They will be flat to slightly rising. They will probably rise in the reinsurance platform but not in London Market. That's the way you should think about it. It is becoming a very interesting market. Paul, do you wanna take reserve releases and then Jo? Yes. Your point about the question about reserve releases going forward and how to think about it. Firstly, I'd sort of repeat my earlier comment, is we start off from a prudent reserving position. If you look at slide 20 is very helpful, but we've got a good track record of prior year releases consistently through history. Then again, you know, the slide shows that from a margin perspective, we are above, you know, the upper limit of where we typically travel. If you take, you know, consistent reserve releases from a historical perspective, prudent positioning margin above where we'd sort of traditionally like to be, you can draw some conclusions from that about a go-forward position. The point on inflation and the 55, you know, as I said, this is proportionate. It's not what we're seeing. If you think about the actual case reserves, you know, some inflation is already priced in. You know, as an example, one of our homeowners who, you know, needs to following a flood or a fire, you know, your base in your case reserve is on the estimate to actually put that put our policyholder back in the position they were. You've already got inflation, current inflation baked into your case reserve. This is on top. I think your point of is it progressive? You know, what if we see it, you know, persist? It is. I mean, what we're looking at, if you think about our portfolio, pretty short duration, probably less than two years on average. As we mentioned, some of our longer-tailed casualty lines that would be higher than two years. You know, we do have significant protection in our loss portfolio. You know, again, you know, this is a proportional uplift that we've taken in our best estimate, but that's over and above what we're seeing in our reserves. If I just add to that, just to remind you what Jo has said before. That as we came into this year, whatever our inflation assumptions were, we doubled and then effectively in many lines quadrupled. That gives you an idea of how we're thinking about this. This is not putting in what we're seeing today. This is really taking a forward-looking view of what could happen. If it doesn't happen, then, you know, actually to your point, it will come through in reserve releases. If it does happen, we've priced our risks appropriately, and we're well protected. Tryf. Sorry, Tryf. Could you maybe hold the mic a little bit closer? Oh, sorry. I was wondering whether you can give us some guidance as sort of on the fee income you should be expecting the next couple years. The second question is on the solvency capital generation. Take everything into consideration, the higher inflation, higher nominal premiums from inflation. Can you perhaps comment on what is sort of your expected normalized capital generation on a solvency basis? I think previously you mentioned this was on 50-200 basis points per year. We're keen to get an update on that number. Thank you. Great. Okay. In terms of capital and capital generation on a normalized level, Paul, if you could take that. In terms of fee income and ILS, we don't typically disclose fee income. I know we've reported a figure I think of $23 million. I think about it in this way. The ILS funds come with it's a little bit more complex business, but essentially come with two forms of fee. There's a fixed fee, which you get effective for origination, and then a profit commission component. The last few years have been somewhat challenging, as you know, from performance. Therefore the variable component, the profit commission, has been pretty meager, right? The fee income that we've generated is typically the fixed. Now you've got two things at play now. You've seen the reinsurance platform, combined ratios for the last 18 months. Significant improvement, okay. Combined with that, you've got an increase in funds from roughly $4.5 billion to close to $2 billion now. Prospectively, there should be a very material increase in fee income, because the fixed component increases, and now, because of both the new money and the increase and the improved performance, it should generate significant variable, profit commission coming through as well. That won't be until next year. Just turning to capital, you know, what I'd say is I'm very pleased with the BSCR position. It's 200%, as you know, and you can see on slide 21. I think it talks to two things. One is the strength of the balance sheet. It's also well-funded. We've got lots of liquidity. I think to the specifics of the question, you'll see that the capital generation that we've achieved in the half year enables us to do two things. One is fund the dividend and also fund our growth plans. That's true, you know, for the first half. It will be true of this year and into next. We're confident of that position. Iain. Hi, Iain Pearce from Credit Suisse. A couple on U.S. DPD. Firstly on the guidance change between Q1 and now in terms of the 15%-20% coming down to sort of or in the mid-range of 5%-15%. Really, what's changed since then in terms of why you feel the need to lower that guidance? Then similarly, on the 15% growth for next year, if we look at the original guidance for this year, 15%-20%, taking into account a U.S. re-platforming and then growth of 15% for next year, that does look like a slowdown. What's driving that? Has anything changed? Are you seeing more competition? 'Cause we're just running those numbers through it does appear that U.S. DPD growth expectations are lower. on the inflation side, could you split out the inflation loading that you've taken between the different segments, if possible? That'd be great. Thanks. Okay. Thank you for that, Iain. Answering it in kind of reverse order, no, we can't split out the inflation loading between the different segments, but it's pretty broad-based. In terms of the guidance for this year. I guess the relative to what we thought back in March, comparing now, I mean, the key difference is actually the partner migration. Direct to customer is kind of done. It's, they're on the new platform working well. Partner migration, as you know, is a two-way affair. We require development at our end, and require development at our partners end as well. Frankly, what we've had is a change in scheduling between us and some of our big partners as to when they can do the development at their end. That scheduling is now complete, so the guidance that you're providing has a degree of contingency as to when that migration will occur. That is the key differential. It just means that some of the new business that we've turned off just stays off for a little bit longer, which is the key driver. As you heard earlier, the opportunity remains extraordinary. It's growing. The demand is strong. We still have a long list of some really exciting partners who are going to onboard the platform come January next year. In terms of the go forward sort of guidance, the guidance isn't 15%, it's above 15%. You know, I don't want to be more specific and provide lots more exactly what it is going to be. It is a big opportunity. It's going to be above 15%. We're really excited about it. We have back-end loaded the marketing for this year, so you'll see a significant increase in our marketing in the second half of the year relative to the first, somewhere between upwards of 30-40% increase in marketing in H2, and that is setting the ground for what will be a material uplift in U.S. DPD growth into 2023. Faiz. Have you got a mic? First question is on the shape of the return on the retail combined ratio. Sorry, could you start that again? Just trying to understand the shape of profitability in the retail long term. Given if you do you reach the top end of your retail combined ratio guidance, is that gonna hit your sort of profitability sort of hurdles, or would you look to improve that further? The second question is just trying to understand the growth in the London Market. When I strip out the property binder work, which makes sense, the growth still seems fairly below sort of, you know, rate. Just trying to understand what the shape of growth will be in the London Market business going forward. Okay. In terms of profitability, excuse me, for the retail business, as you say, we are, you know, we're on track to meet the 90%-95% combined ratio for 2023. Profitability in that range, combined with modest investment income hits the right ROE range for the group. So we're in that range. We're very happy traveling. You know, you can travel at the bottom or the top, but it's a range we're very happy. That combined with good solid growth, a couple of points of investment income, and I think you as investors and shareholders would be very happy with the return on equity we can generate. In terms of growth of London Market, well, look, we grow where we see attractive opportunities, all right? We've never had a growth target for our London Market business. It is already one of the biggest businesses in Lloyd's, all right? You know, we're not talking about a small syndicate. On a contractual income basis, the London Market business is already at $1.6 billion. This is a big, big business. What we are doing is growing where it's attractive, and if opportunities are presented to Kate and Paul and the underwriting leadership team in London Market, they have. If they have the conviction, they're gonna grow. We have the capital to deploy. You've heard that from Paul. We've got a strong balance sheet. We've got strong capital generation. you know, the only thing we want from the business is if they see the opportunity and they've got conviction, they will grow. Sorry, just to add a last one. Do you have a differentiated view on the profitability of London Market business relative to some of your peers who've grown above rates recently? I can't talk to anybody else's book. I'm going to talk to our own. We have choices, right? We have a diverse portfolio within London Market, and then across the Hiscox Group, we have a significant degree of diversity within the portfolio. We have choices as to where we want to put our capital, where we wanna put our human resource, where we wanna grow. Given the choices that we're facing, I'm very happy with the progress that the business is making. Great. Thank you. Frey. Hi, Freya Kong from Bank of America. Three questions, please. Your previous guidance for overall retail growth was to approach the middle of your 5%-15% range in 2022 and accelerate beyond this in 2023. Are you still happy to reiterate this overall growth guidance given the slight change in DPD? Aki, your earlier comment suggested your writing business where rates are ahead of loss cost trends. Jo, you were saying you expect rates to largely be offset by higher claims inflation. Could you clarify what we should take from this? Should we still expect to see margin improvement, or does extra conservatism mean you will hold your margins flat for now? Just finally, could you give us some guidance on the effective tax rate given the global corporate tax implementation has been delayed? Thanks. Okay. Paul, if you could take the question on tax. In terms of growth rate, I'll take that. I'll clarify what I mean by loss cost trends and so on as well. Maybe I'll take that one first. When I say pricing is ahead of loss cost trends, this is just repeating essentially what Jo has said, which is the inflation that we're seeing today is significantly below the pricing that we're seeing. Right? What we've then done is build in, and Jo's elaborated on this, and I'm sure Jo can elaborate again, build in a much more conservative view in our reserving, in our loss picks, in our pricing decisions of what prospective inflation could do. To your point, what's gonna happen to margins? Margins will remain good. I think you heard me previously say that in Re and London Market, we believe we're writing at an expected margin of 80% combined in Re, and about 85% in London Market in a normalized year. We're still there or slightly better now, particularly in Re with what's happened in the market. We believe we're slightly better. Frankly, if we're being overly conservative on inflation, that will come through as margin expansion, but probably not in 2023. In terms of growth guidance and being in the middle of the 5%-15% for this year and accelerating beyond that into 2023, that still stands. You've seen our underlying growth rate adjusting for the U.S. portfolio remediation is at 8.5%. I expect that to be a solid number for this year. The U.S. DPD guidance. Remember, it's a really important part of our business, and it's really exciting. Today it's less than 20% of the portfolio, and we've made a small adjustment. In terms of the overall group, it is not such a significant impact. As I said, I'm really we as a team are really excited about where the business is gonna go in 2023 once all the new business opportunities are switched on, the technology is working across all partners and customers. I spoke about reinsurance. That is also another really exciting opportunity. I suspect the group overall will see income growth, and retail will see an acceleration from where we are today. Paul, do you wanna cover the tax rate? On the effective tax rate, you're right. The global minimum tax rules have been sort of delayed for a couple more years at least, and I think it reveals the challenges of trying to implement this on a global basis. Certainly in the near term, you know, our guidance on the ETR is really around 12%-15%. Then I think should and when that does get implemented, you'll see it around 15% and above. Okay, Ivan, and then I think we'll go to. I think there's some calls on the line, questions on the line. Hi, it's Ivan Bokhmat from Barclays. A quick question on the investments. Just wondering whether you have made any changes to the portfolio, whether you need to put in some hedges or in any way, you know, which would affect the profitability or the capital charges for the investment book. Okay. Thank you, Ivan. Paul, can you take that? In the short term, if you look at the portfolio, it is very conservatively positioned. I'd say two things on it. One is, if you look at the duration of the bond portfolio, it's less than two years. Just in terms of the sort of strategic asset allocation, you'll see we've got modest exposure to risk assets, modest exposure to below investment grade bonds. In the short term, I don't see any need to change that strategic asset allocation. I think the portfolio is very well positioned from where we are now. As Aki mentioned in the introduction, you'll see that, you know, 2021, we were achieving a yield of 1% on a go-forward basis in excess of 3%. The investment return pickup on 2023 should be pretty meaningful. Okay. Shall we take the calls from those that are on the line? If you would like to ask a question on the telephone lines today, you may do so by pressing star followed by the number one on your telephone keypads. We will now take our first question from Nick Johnson with Numis. Nick, your line is open. Thanks. Hi, good morning, everyone. Just one question, please, on ILS. Looking forward to 1/1 next year, presumably there's gonna be very strong demand for capacity. Just wondering, based on your conversations with investors, how strong would you say investor appetite is to deploy more capital onto the ILS platform? How are you feeling about scope for further inflows at 1/1 next year? Thanks. Thank you, Nick. We're always talking to our ILS investors, and there is a degree of excitement. I think it's fair to say that the ILS, particularly our ILS investors, as you may have heard earlier, they've been with us for quite some years. They're reasonably sophisticated. They are, again, becoming more interested because the pricing is better. Compared to, I guess, where the market was five or six years ago, there is much more, a greater understanding of what is the right price for these risks, among those investors. We're talking to them. There is the potential for further inflows in the second half of the year, but I can't make any promises. Thank you. I think there was one more. Our next question comes from Darius Satkauskas with KBW. Darius, your line is open. Hi. Thank you for taking my questions. First question, you mentioned the natural catastrophe experience outside of Russia and Ukraine was normal or as expected. Could you maybe provide some a bit more color on what is normal for Hiscox for the quarter or for the second quarter specifically? That'd be very helpful. Thank you. The second question on ILS. I find it interesting that the ILS inflows were. Okay, thank you. The second question on ILS inflows. I found it interesting that inflows were material when some in the market were expecting sort of alternative capital capacity to remain limited. Do you think this is Hiscox specific or ILS funds more broadly are seeing invested amount right now? Thank you. Okay, that's great. Given Jo heard the first question, you can take that. I'll respond to the ILS one. Look, Darius, you probably have better statistics on exactly what's going on with alternative capacity around the world. What I can tell you is that it's specific to these investors who've provided us with just over $500,000 million of funds. They have increased their capacity in this space, but only with us. Some of it's been new money, some of it's been money that they've pulled from other funds. You know, if this microcosm reflects the wider market, I wouldn't be surprised if at an overall market level, their capacity hasn't increased, maybe even slightly shrunk. we've been able to increase ours. As you may well have heard earlier, it is entirely driven by the eight-year track record that we've been able to demonstrate for these investors, which as I mentioned, the last eight years have been tough, particularly the last five. On a relative basis, the Hiscox ILS funds have done very, very well. The first question was, we said that the Nat Cat experience was as expected in the first half, so what is as expected? I'd say a couple of things. One, we don't disclose our actual Nat Cat budget for the year, but clearly it is backloaded towards the latter six months where we see the most exposure. In terms of what we are anticipating for the first half, our Nat Cat budget was on our estimate. What's driving that? We've had things like the Australian floods. There's been some, you know, European winter storms in our retail portfolio. The expectation for the first half was on. You know, clearly we've backloaded the Nat Cat budget for the second half of the year when obviously we have more exposure. Okay. Thank you. Thank you. Thank you, Darius. We are now out of time. Thank you very much for all your questions and we'll draw this to a close. Thank you.