Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Generali Group Full Year 2021 Results conference call. As a reminder, all participants are in listen only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Miss Giulia Raffo, Head of Investor and Rating Agency Relations. Please go ahead, Madam. Thank you, and welcome all to Generali 2021 Full Year Results Presentation. Before we open our Q&A session with our Group CEO and our Group CFO, I'd like to hand over to our Group CEO, Philippe Donnet, for some opening statement. Thank you very much. Thank you, Giulia, and thanks to all of you for joining this call. Today, we published our full year 2021 financial results. They were strong, and this further proves the soundness of our business strategy. I will go over the highlights very shortly. Before focusing on the numbers and what we have achieved over the last year, I would like to briefly comment on what is currently happening in the Ukraine. We are all deeply shaken up by the situation, and our thoughts and prayers go out to all the people who have lost loved ones and who are fleeing their homes and communities. Recently, our group implemented several initiatives to support the war-stricken population. We created an emergency fund of EUR 3 million to support refugee programs, which includes a donation to UNHCR, the UN Refugee Agency. addition, through our sustainability project, The Human Safety Net, we launched a global fundraising campaign to support UNICEF in their work to address impacted families, and the donation collected will be matched by Generali. Further, as we recently announced, we made the decision to begin closing our operations in Russia in line with the current international sanctions in place. These efforts are truly part of our role as an insurer and an asset manager in society and as a global corporate citizen. As far as our 2021 results are concerned, I would like to highlight five key messages. First, for the third year in a row, we posted a record operating results of almost EUR 5.9 billion, with strong contributions from all business lines. The adjusted net results of EUR 2.8 billion is our highest to date as well. Also, our total gross written premiums rose to EUR 75.8 billion, with an increase both in the life and P&C segments. These accomplishments prove once again the solidity of our business model, even in the current unforeseen circumstances. Second, the group solvency ratio reached the excellent level of 227%, up 3 percentage points versus year-end 2020, while absorbing the impact of M&A redeployment. Following these achievements, we will propose a dividend per share of EUR 1.07 to our shareholders. Third, with these results, our strategic plan, Generali 2021, officially reached its conclusion. Even in an unprecedented global scenario due to the COVID-19 pandemic that is still not over, we were able to execute successfully, thanks largely to our group's agility and our people. Fourth, our commitment to sustainability, which will continue to grow, has allowed us to deliver a strong performance for all stakeholders. Finally, we are now focused on our new strategic plan, Lifetime Partner 24: Driving Growth, whose execution is well underway. It is a plan that has sustainability at its true originator, and that is built around an even stronger commitment to being a lifetime partner to our customers. Now this commitment is more relevant than ever. We look forward to updating you on our progress on the plan in the upcoming month. In the meantime, now together with my team, we are happy to take your question. Thank you for your attention. Excuse me. This is the Chorus Call conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Michael Huttner with Berenberg. Please go ahead. Thank you very much and congratulations. These are truly astounding results. I have three questions. The first one is on rate rise, the second one is on cash, and third is on Cattolica. On rate rises, I've spoken to a lot of your peers. Like my colleagues, I'm not unusual in any way. Groupama, Unipol, AXA, and all of them. Michael? Yeah, yeah. Sorry to interrupt you. Can I please ask you to adjust the mic because we can't hear your voice very clearly. Sorry about that. Is this better? Volume a bit low. Sorry, is it volume low? It's just I'm using my. Now, it's perfect. Now it's perfect. Now it's perfect. Thank you. Okay. Sorry about that. Thanks so much. Thank you, Giulia. Rate rises. You mainly personal lines. I just spoke with AXA. We'd spoken with Groupama and Unipol before. All of them, in the various markets of France, AXA is more European and Unipol is obviously Italy, say that they're having trouble raising rates at the same pace as perceived inflation or so. Perceived, I'm never quite sure what that means. I just wondered if you can comment on that and whether that would affect margins because obviously the other things, you've got frequency and things. That's the difficulty in raising prices. The second is on cash. Eight point four billion net cash remittance for the last three years, which is an amazing number given that your initial target was over seven and a half billion. It makes the next target look really like, I'm not saying it's easy, nothing's easy, but it looks, it's eight and a half billion. You kind of think, "Hmm, that's not much." I just wondered whether you can comment how much conservatism you've built in or give us a feel because it doesn't, it feels a little bit low relative to what you've achieved. The final one is in Cattolica, and given the accounting and the change from equity accounting to full consolidation, et cetera, I just wondered if you can give a kind of indication of what the figure would have been in 2021 had you fully owned it throughout the years, so we can have an idea of when to create a model or, you know, what to put into 2022. I can't ask you on 2022, but that's the best way. Thank you. Thank you. I suggest, Philippe, to take the first one, and then the rest is for Cristiano. Thank you. Hello, Michael, and thank you for your congratulations. Yeah. I will take the first question. You know, people are not used anymore in the insurance industry to increase prices because there was no inflation for decades. Many underwriters don't even know how to increase prices every year. On my side, I'm in this business since almost 40 years now, and I remember when I was young, I was increasing prices every year, and it was normal. We are getting back to this kind of situation because inflation is back. Inflation is a good way, a good lever to be able to increase price. That's the philosophy. Having said that, we are taking actions in our group to put under pressure all business units in every countries to monitor prices, to increase prices. We will monitor this very carefully. I think there is something which is also very important is the quality of our distribution. As you know, it's a proprietary distribution. We have, I would say, a very loyal distribution, and we also have, because we have loyal distribution, we have loyal customers. I would say we have customers that were a little bit more sticky thanks to our proprietary distribution. This is also something that can help us to monitor prices better than our competitors. I'm also going to add something which is important. The fact that we've been strengthening our market position in many European countries, and the stronger your market share is, the more pricing power you have. I'm quite confident that we will be able to increase prices in the next few years. Thank you. Thank you. Hello, Michael. Cristiano Borean. So for what regards the cash remittance, I do take the challenge you made, but I would like to clarify a couple of points. Let me look at retrospectively and then look at prospectively. Retrospectively, the three years we are closing, we're actually accounting for some specific excess capital repatriation operation and in general, capital management actions. If I look in the three-year, we basically had almost EUR 1.8 billion of capital management action between 2019 and 2021. On top of that, we had a EUR 300 million one-off excess cash from fiscal consolidation benefits, which is not foreseen. If you just add all these together and you strip it out and you compare the EUR 500 million of capital management foreseen in the 2022, 2023, 2024 plan I was commenting in December when we presented the plan, basically it's 1.8 plus 300, 2.1 versus 500, and so there is a EUR 1.6 billion more. I take another perspective view. If you just take the net holding cash flow of 2021, which is EUR 2.6 billion, and you multiply it by three, you get a EUR 7.8 billion of net holding cash flow. The 8.5, it is actually a little bit growing and challenging, and it's not I would say, jogging in the fresh air. I do take factually the point, but we need to understand the underlying dynamics. Third question related to Cattolica. Here, I hope not to disappoint you because the theoretical question is impossible to be answered. The consolidation of a company depends when you do it, you have to reevaluate a fair value, all assets and all liabilities. The question is depending from the moment you do it, and it is not representative of the going forward view. Allow me to maybe try to help you in your exercise, which is what you are forecasting and foreseeing going on. The contribution of Cattolica in 2021 for the group overall is EUR 110 million, and this is stemming from 10 months of equity accounting, plus two months of full accounting. Here I would like to clarify one point. It is impossible to extrapolate the minority component result we are not having out of a full Cattolica result because when we do the so-called purchase price allocation, we allocated the badwill to our VA. We readjusted all the assets and the liabilities compared to what it is in their balance sheet. Just to tell you, in the operating result contribution, due to the fact that the first 10 months were fully accounted in the P&C component, we have EUR 146 million of Cattolica contribution in the operating result in 2021 figure, of which EUR 70 million in Life segment, and 129 in the P&C segment, yielding to EUR 110 net result because the first 10 months were accounted at equity method, we saw the full amount, so it was gross equal net on the contribution. Going forward, if you like and try to project, you need to take into account the fact that Cattolica has a restructuring also to go on. You have to expect in the next year the quota attained by Generali to pursue something which is in the mid- to high double-digit EUR million, so slightly below the triple-digit figure you've seen this year. Brilliant. That's very helpful. Thank you. Thank you, Cristiano. Next question, please. The next question is from Andrew Sinclair with Bank of America. Please go ahead. Thanks. Agreed. Well done on these results. Three from me as usual, please. Firstly, was just on parent company liquidity. I just wondered if you could give us the level today, and how much would be left pro forma after deducting the announced acquisitions and buyback. Secondly, was just on the really good P&C volumes, premium volumes in Q4, 9.4% like for like growth in Q4 is a huge figure. Just want to understand, is there anything one-off in there? Thirdly, was just on the Swiss reserve strengthening. Just really wondering if you can give us a contribution for 2021, what was the total number in the end? Remind us how much are you now expecting for 2022? Thanks. Thank you. They're all for you, Cristiano. Yes, Andrew. Allow me to remember, because when you will look at the Assicurazioni Generali local GAAP balance sheet, you will find almost EUR 4.1 billion of cash. I have to explain the source around it. Exactly as you said, Andrew, we need to strip out a lot of elements. First, you need to remember that we pre-financed EUR 500 million of debt, which partially already happened in February, and the other part will be recalled in 1 July of this year. We had EUR 500 million ready for that operation. On top of that, there are the EUR 500 million for the buyback and other acquisition of the same amount, totaling another EUR 1 billion summing buyback and the acquisition already reserved, which we announced. On top of this, don't forget that we have a EUR 1 billion liquidity buffer, which I maintain and contain to other especially in an uncertain volatile environment as we are facing today. The rest is just amount of money which are volatile for treasury operations. At the end of the story, what sticks is what we presented in the investor day of December, where basically after deducting from the buyback, we are in EUR 0.1 billion-EUR 0.2 billion left, not used from the previous plan. Regarding the P&C premium growth, is it a one-off? What we observed for sure, there are two effects. There is an effect of the baseline of 2020, which was partially impacted on the collection, on the COVID effect. The 2021 restart has a in relative term a point. I remind you that due to the pricing action and the strategy we announced as well coherently in December on the strategic plan, we are expecting the low to mid percent premium growth throughout the three years. A third question related to the Swiss reserve strengthening contribution for 2021. We were in the order of CHF 300 million. For 2022, I recall that the reserve is, under IFRS accounting approach, more than complete on the coverage. We are continuing to prudently reserve also in 2022, and we are expecting something in CHF 200 million plus, depending on the situation. Obviously now the rates are up, and we do not expect a deviation out of this. I remember that every year, regarding the part of the liquidity pro forma, for you just to complete the first answer, I would like to add that if you look at the EUR 2.6 billion of net holding cash flow of 2021, and we deduct the proposed dividend EUR 1.7 billion, we are in the ballpark of EUR 900 million-1 billion of free cash after dividend, which is recurringly composed by the group on a yearly basis. Super helpful. Thank you very much. Next question, please. The next question is from Farooq Hanif with JPMorgan. Please go ahead. Hi, everybody. Thanks very much. Can we just turn to the combined ratio? You talked about the 92.3% combined ratio if you take out COVID effects. What gives you confidence that you get back to 92 or below going forward? Can you talk about some of the drivers? In particular, I noticed that France had, you know, big underlying loss ratio increase. You had a loss ratio increase also in Italy. Can you explain some of the factors there and what might get better? That's sort of question area number one. Question number two, could you highlight again, apart from Cattolica, are there any one-offs in the investment results in non-life that we need to take into account? The last question also on Cattolica, can you also remind us, now that it's in the business, the timing and plans for any future synergies, revenue, and costs, you know, that will come through that we should bake into our numbers? Thank you. Yes. I start with the combined ratio, Farooq. Good morning. Ex COVID drivers, 92.3, why we stick to the 92% guidance, 92% below guidance. The drivers are mainly related to a couple of factors. For what regard the pricing part, we are increasing rates all over the board, both in personal and in commercial lines. Clearly, commercial lines higher than the personal one, but we are having this injected already in all the line of businesses. On top of that, we are managing our claims accordingly, as to the speed of payment in order to reduce also the delay time in an inflationary environment. On top of that, there is the frequency effect, which you should also take into account because we are observing anyhow a macro trend on potentially frequency. There is still something to be confirmed, but even the start of the year, in the first two months, the effect of the less severe but very well spread, widespread around COVID infection adds some lower frequency effect. We are still below the pre-pandemic level on frequency. If you have to combine all the three factors, this is giving us this direction. I recall as well the very prudent prior year effect of also 2021 versus 2020. I remind you that, going forward, we have to look everything under best estimate and not as a current year. France combined ratio was impacted in the second half of the year because of a higher amount of frequency of bodily injury claims, compared also to an increased level of prudence that we inserted in the business. But it is nothing specific related to underlying profitability, I would like to clarify. On the investment result, the effect of the benefit of Cattolica, which amounted to EUR 83 million for the sum of the contribution of the equity accounting plus the two months. There was the EUR 101 million of Banca Generali dividend and the EUR 163 million of the dividends from Lion Re. How this is sustainable going forward, if I just look at the number we are projecting in the investment result for the P&C, we have especially on the current return in general, all investment component, and not only the current one, we have basically a stable 2022 budget versus 2021. Now I hand over to Philippe. Hello, Farooq. Yes, on Cattolica, as you know, at the moment we own 84.5% of the shares of Cattolica, which means that we control the company, and we are already managing Cattolica as a controlled company. We are also starting the merger process with Cattolica. As you know, we will go for a delisting and a merger, or a merger and a delisting. This process requires, obviously, some regulatory steps. We never disclosed any plan on the merger, but obviously, we will merge as soon as possible. I can confirm that run-rate cost synergies will be in excess of EUR 80 million a year. Okay, thank you. If I may, that's really clear. If I may just ask one more question on the combined ratios. I remember you didn't take a lot of frequency benefit fully in motor historically, you know, during COVID. Is that also something that prudence is also available to you to help smooth the combined ratio? Yes, Farooq. Let me add just to complete also the first question. I would like to give you another point, which I think would be useful, and then we connect on the frequency. Don't forget that in 2021, we had a higher than average natural catastrophe impact, which was actually limited to 2.2 percentage points of combined ratio, but clearly above our historical average because also of the good reinsurance coverage strategy we pursue. This is another driver. For what regards frequency and severity in motor, we have always been prudent in the way these have been seen in the accounting component. Don't forget that when you look at the capital generation part, where you have the current year best estimate result, you have the actual development under the economic underlying effect. We are still observing an improvement in 2021. The only country which was below 2020 was Germany in motor frequency. In Italy, there was an increase of frequency clearly to levels which are more than 20% increase in relative terms of frequency in Italy and France, but these were well below the nine, still below the 2019 level. I hope this is giving you some guidance. Also, this year, we are starting the year in the first two months. What I observed was a frequency which is below the 2019 average frequency level in motor. That's really helpful. Thank you so much. Next question, please. The next question is from Andrew Ritchie with Autonomous. Please go ahead. Oh, hi there. Cristiano, sorry, I'm confused. Just following up on your comment. Why is the journey from IFRS non-life result to the S2 own funds P&C, the last year I could sort of take the IFRS number and I more or less got there, but there's a bigger gap this year. If you're booking IFRS more conservatively above best estimate than you were, then that doesn't make any sense 'cause the S2 is on best estimate. Can you explain the difference this year, why the difference is bigger between S2 P&C generation and IFRS? Second question, in non-operating restructuring charges in Q4 or the second half of the year, I understand the Cattolica restructuring. Maybe clarify is that most of the restructuring charge done. Could you just give us a bit more detail on all the other restructuring charges. There seems to be a shopping list of other restructuring charges. There's about another EUR 100 million in Italy outside of Cattolica. You mentioned France. You mentioned Switzerland. Are you sort of up-fronting some of the investments for the plan, or should I assume some of these recur? And just the final thing is clarification. When I look in the annual report, it talks about EUR 10.7 billion of private equity on page 320. Is that the new? I thought the private equity stock was about EUR 7 billion. Is it 10.7 billion? And do you have any sense as to the pipeline of realizations to occur in 2022 on that? Thanks. For you, Cristiano. Yes, Andrew. Thank you. Now, the P&C to own funds has a bigger gap than last year because don't forget that last year we had extremely low frequency element. As I was commenting before, we had this increase in frequency underlying economic terms in 2021 versus 2020. Don't forget that this is visible also because of the underlying combined ratio on economic terms being higher. Basically, you have an effect which is, if you just evaluate under the premium, basically, you are almost three percentage points higher on the current year best estimate effect in 2021 versus 2020. Don't forget that we have also some investment effect, but the major driver was the current year best estimate. For what regards the non-operating restructuring charges, the ones which were not Cattolica, there was on top of the completion of a plan started in France to be completed, called Excellence 2022, which was basically we are entering the last part of our restructuring plan as well, and in 2021 there has been an acceleration. There was the acceleration of some exit expenses on CTAs with, let's say, people in Italy on top of the Cattolica part. A new restructuring plan which has been launched in Switzerland, which started to bite in 2021, but will accelerate throughout the plan 2022-2024. Overall, there was not a kind of acceleration compared to the 2022-2024. There was a kind of, let's say, anticipation of some specific projects, but not an acceleration compared to the announced investment done. Going forward, you should expect anyhow less restructuring charges because this was a very specific year. Notwithstanding the fact that we will continue to do our operating expenses to transform the company. What is the stock of private equity related to the year-end 2021? We have, at the balance sheet level, almost EUR 10 billion worth of private equity, and we are foreseeing to increase. Basically, the private equity result in 2022, especially on the operating contribution side, but as well on the net, is almost flattish, slightly lower. Because there was some one-off small contribution in 2021 due to some unicorn investment that we had in private equity. Going forward in 2023, 2024, due to the different mix I was mentioning in the past between life and P&C, where P&C you benefit 100% of the result, while life, you know, you have less. The increased weight of life versus the P&C component, we will have something which is in the order of kind of EUR 100 million operating result lower than the 2021 contribution on the budgeted level. We will see, because I recall you, we need also to take into account going from 2023 onwards in the IFRS 9 accounting, we will see the full fair value change of the private equity investment. Okay, thanks. Can I just ask on the restructuring? I think the commentary talks about pension plan or pension reform in France. What was that and what is that going forward? Yes. More than a restructuring, that was a kind of other net non-operating expenses. It was not charged in the restructuring part, but in the other net non-operating expenses. This is a charge of almost EUR 40 million, basically that is the ballpark, which we did in anticipation of a potential change in pension reform in France. We were among the first to do it because we think that if this is acted, you have the disability cost which will increase for the company because you pay disability costs to your insured people up to the age of retirement. If the age of retirement is delayed, you have higher cost of disability. We did and took in anticipation this, prudently, according to the closing of the balance sheet. You can understand the level of prudence we set for this year. Okay. Thanks very much. Thank you. Next question, please. The next question is from Peter Elliott with Kepler Cheuvreux. Please go ahead. Thank you very much. I just want to understand some numbers as well in a couple of areas. First of all, in the asset management, would you be able to explain just a little bit more the EUR 30 million impact from real assets that you had? In terms of the Chinese result, though, you said it was much better than you'd expect at the investor day. Should I take from that that it's sort of partly one-off in nature? Or, because the transcript also talks about the growing contributions. Just trying to understand, you know, how much of that potentially is one-off. And then secondly, just coming back on private equity. You gave us the dividends for non-life at EUR 88 million. I was wondering if you could also give us the dividends for the other divisions as well. If I look at the sort of non-life dynamics, the EUR 88 million in dividends suggests that the private equity result associated with non-life was EUR 247 million. I mean, I guess you've just given guidance on the sort of budget for next year. I mean, am I sort of right in thinking that, you know, a good proportion of that 247, you know, should make it through to the non-life next year? Thank you very much. Peter. Sorry. Can I ask you please to repeat your second question? The first part didn't come out too clearly on your two phones. Sorry. Okay. The second part was on private equity. You've given us the dividend number for the non-life division. So I was asking if you could also give us the numbers for the other divisions. Then I was also just trying to understand the dynamics, because you said, you know, the dividend was EUR 88 million, which from your reconciliation, I think that suggests EUR 247 million in sort of private equity results associated with non-life. And am I right in thinking that a fair proportion of that, you know, should come through in dividends for that division next year? Okay. Thanks. Yeah, yeah. Now it's clear. I will take it through. First, explanation of the EUR 30 million impact of the real estate. This is a combination of specific fees from higher transaction when we sold partially our skyscrapers in Milan and in Paris. As well, our one-off carve-out operation, which has been pursued during 2021. On the Chinese Guotai, much better than expected. Is this a one-off? Well, we were not forecasting such a positive contribution. We are observing a track record of this company, which is growing, just for your reference, since 2009, they increased more than 10 times the assets under management. There is a very positive dynamic in this company, which is performing well above the stock exchange of the Chinese market, creating interest on it. We have an equity stake, which is accounted as equity contribution, which is, by the way, also polluting income when we calculate the cost income ratio, because it is an income without a cost, you know, which is clearly supporting it. Regarding the private equity dynamic for all the divisions. What we communicated is, I think you should follow through more, is the combination of the managerial view look through where all the profits were there, which is something we put in the presentation as well, and not all dividend paid. You have to guess that when we say that had we accounted for the whole result, for example, in Life, you see EUR 179 million operating result difference. This should be expected as a dividend to be received in next year. Don't forget, 2022 is the last year where we will account this phenomenon in this way, because we will go in fair value accounting when we will enter IFRS 9 and 17, and this will be even more simpler. I will not focus too much on the dividend. I will focus more on the managerial representation. Hope I gave you the guidance. Yes. Okay. That's great. Thank you very much. Thanks. Next question, please. The next question is from James Shuck with Citi. Please go ahead. Hello there. Good morning. Good afternoon. My first question is just keen to understand the life and health gross written premium in France and Italy and development across the year. Very divergent trends. Savings and pensions up very strongly in France and unit-linked up even more strongly. In Italy, those savings and pensions down a fair amount, kind of high single-digit, and unit-linked up low single digits. Keen to understand the relationship between the sort of euro-denominated products, the traditional profit share and unit-linked and packaged items within that. Perhaps any changes in France that might be driving some of that unit-linked growth. Secondly, just looking for an update on Vitality. I know you've extended the agreement. This was something that was announced back in 2016, and I think you launched in Germany Retail and France Corporate. That's coming back quite some time. That seems a long time before actually seeing any benefits from this. Just keen to get an update on what's happening in Italy. As you roll out more widely throughout the group, when and how should we expect this to come through in the numbers? Just one last question on the life investment margin, particularly in Italy, that was down 86 basis points, down to 78 basis points. Is that a sustainable level? How should we think about the impact of kind of impairments and equity realized gains and resilience of that given the current environment? Thank you. Cristiano, over to you. Yes, James. What is the dynamic of life premiums in France and Italy? The dynamic in France related to 2021 has to be read in comparison to 2020. 2020 observed, especially in the beginning of the COVID crisis, an amount of lapses coming from people taking out also the savings component. On relative terms, we had an excess of exits, especially in the first part of 2020 of savings, which was pulling down the net inflow. When you look at the 2021 dynamic, it is more normal in the sense that still we are in a negative outflow, okay, for the savings component in France. We have a much higher growth of the unit-linked because selling hybrid product, it is the unit-linked, the juicy part. I'd like to remind you again that the unit-linked fees are out of the profit-sharing technical margin that you calculate, which is particularly diminishing the results for the rest of the lines, also in the technical part of the business. That's why it's so important to have a collection of unit-linked and keep a negative outflow in savings. The 2021 is more reasonable compared to the 2020 effect. On top of that, in Italy, we observed the opposite dynamic because Italy is focusing even more in a hybrid product with a higher percentage of unit-linked. If you just take out of Italy in 2020 the so-called Cometa Fund, which was a one-off, EUR 1.5 billion collection, the unit link growth would have doubled. This is key again to create long-term value and not exposing to investment risk. Here is exactly the dynamic behind, and here is the way you should look at. France is a combination of a much higher unit link with negative outflow in savings to keep changing the business. In Italy, it is a refocusing towards a higher growth of unit link. On the second question, I hand over to Philippe. Thank you, Cristiano. Yes, we launched Vitality about six years ago, even a little bit more. We have an exclusive partnership with Discovery for Europe. We are very happy about this because it's a good way, the Vitality service we offer to our customers is perfectly in line with our ambition to become the lifetime partner to our customers. Because thanks to Vitality, we can help our customers to improve their health, to improve their way of life. It's really important. It's also a digital business, so it's fully part of our strategy. It takes time to grow it for many reasons because it's not in Europe, it's not exactly like in the Anglo-Saxon world. That we have different cultures, and let me say that in some ways our culture in continental Europe is a bit less healthy than in the U.K. or in the U.S., that the culture in Italy or Germany or France is completely different as well. Don't forget that the COVID-19 pandemic, on one hand, didn't help us to grow this business because, for example, all the gym rooms were closed during the pandemic. It was a bit difficult, a bit more difficult to offer this kind of service. In the same time, the COVID-19 crisis changed a little bit the mindset of the people. I think that now, people realize that it's important to take better care of their way of life. We are very confident that, thanks to the implementation of Vitality in Italy, at some point we will see an acceleration of the adoption of Vitality. At some point, definitely, it will become profitable. We should not expect huge profits from this, but it's definitely a service that we need to offer our customers being in line with our Lifetime Partner ambition. James, I take the third question on life investment margin in Italy, and I would like to recall to all of you that this number is showing Italy alone in 2021. Don't forget that starting from first quarter 2022, we will start allocating the Cattolica results within the country Italy perimeter, which was not the case for 2021, since we acquired control only in the last part, and it is accounting in the other segment. My answer is based on splitting the problem in two. The underlying Italian perimeter already existing, also on a like-for-like perimeter basis, has been impacted in 2021 versus 2020 by an increase of asset management fees on the business, which basically accounted for half of the investment result decrease. On top of that, there were slightly less realization than in Italy in 2021 compared to 2020 when there was a change in asset allocation. 2022, going forward, we will have on this perimeter an effect of increased maturing government bonds, for example, of Italian government bonds with a higher coupon, but mainly concentrated in portfolio where there is a fixed fee charge and not a profit-sharing with the classical, which should not have a material effect. Having said that, we need also to embed the second piece, which is the Cattolica business within Italy. On a non-like for like basis, the Cattolica investment margin is lower than the one of the Generali perimeter. You should expect, when this is fully consolidated as likely, decrease, but very marginal due to the small size of Cattolica, which is basically telling me that you can keep the actual level broadly at this. I hope I gave you the full picture. Just merely to clarify on the last point. On a like for like basis, life investment margin in Italy, you're expecting that to be stable in 2022, regardless of the equity market moves and economic output? Yes. Stable, if not marginally, benefiting from the contribution of the private equity as well, which should start kicking in as well. Perfect. Thank you very much. Stable overall, basically, because of the Cattolica. Next question, please. The next question is from William Hawkins with KBW. Please go ahead. Hello. Thank you. Most of my questions have been asked, so just two, hopefully brief. On slide 39, when you show the normalized capital generation, thank you for the comments about the P&C business. Just at the high level, do we take that EUR 3.7 billion as a clean base for the future, or are there any particular unusual or unsustainable factors? When we look at that small positive SCR release, can you just remind me, is that something that's sustainable and should be growing? Or at some point, are you expecting, you know, for example, new business strain to kick in or whatever? The outlook for normalized capital generation, please. Secondly, very briefly, but thank you for all the detail about the direct exposure to Ukraine and Russia. That's useful context. What, if anything, are you guys thinking about in terms of second order risks? I mean, I'm guessing for most insurance companies like you, the direct exposure is not so bad, but the second order could be more significant. You've already talked a bit about inflation, but I'm just wondering what you guys are focusing on when you respond to this. Thank you. Hello, William. On the normalized capital generation, you have to take into account there are three basically components, you know, life P&C, but as well, holding and financial, where the benefit of the lower DV cost of the debt and the better result of the financial segment, be it asset management and Banca Generali, was supporting. I would split starting from the last one, holding and financial. You will continue to see an increased contribution from the financial segment, while in the holding one, the big decrease of the cost of debt is rolling to the steady state. You will see going on life and P&C on a broadly stable capability to generate this level. Overall, this is a run rate level of normalized capital generation, which is, as you have seen, basically 20 percentage points of solvency per year, before deducting the dividend, which is quite a healthy point. On the second question, I will hand over to Philippe. Yeah. As you said, our direct exposure is very low. Our main concern once again it's about the people. It's a human concern. Having said that, what is our vision of the future, of what could happen on the financial and economic basis? Definitely we would have expected higher growth getting out, hopefully, of the pandemic. Unfortunately, what's happening there could slow down the growth. This is detrimental to the P&C business. As always, it's positive for the savings business, because when people do not spend, they save. They save money. This is the reason why our company is quite immune and protected, because we can mitigate risk. We do both property and casualty and life business. On the profitability of our business, what could be a likely scenario according to us? Definitely, there will be some inflation higher than before, which, and I always already said it, which is an opportunity for us to better monitor prices and to increase prices on the P&C side. This higher inflation might put some pressure on interest rates that could rise. On the other hand, when you look at the public debt in many countries, there is a strong pressure not to increase too much the interest rates. At the end, a very likely scenario is a slight increase of interest rates, which is a very positive scenario for the profitability of our life business, for the value of our life new business, and also for our solvency ratio. Thank you very much. Next question, please. The next question is from Alberto Villa with Intermonte SIM. Please go ahead. Yes. Thank you for taking my questions. Three quick ones. The first one is on the unit link business. You have done very well in 2021. I was wondering if you have any indications of a potential slowdown in selling these products with the current market volatility, and if there are any geographies or distribution that may suffer more than others from such a situation, if it persists throughout the year. The second one is on the motor. Thanks for the comment on the frequency. I was wondering if you have any update on the cost inflation there, if there are evidence of more pressure coming from inflation already in the claims settlement. Finally, the third one is on asset management. Can you please give us an idea of a quantification of the fees contribution from in your operating profit in the asset management segment in 2021? Thank you very much. Yeah, Philippe, if you wanna take the first one, and then, you know, Cristiano, the other two. Yes, Giulia. No, on the first one, for the moment, we do not see any slowdown in the sales of Unit-Linked, so we're quite confident that we will be able to keep this trend. This is due to the quality, once again, of our distribution and to our ability to monitor the business mix, even in challenging conditions. Cristiano, on the second? Yes, on the cost inflation and on the claims settlement. First of all, I would like to recall what we shared already in a previous call, when we basically explained that, on the spare parts cost inflation, what we are observing was a huge spike right immediately after the COVID, because was normally allowing the spare parts producer to survive, and so they increased fast the cost. On a rolling window of 12 months, we are not observing the same level of growth, though we are observing a growth, but much lower than what we observed before. On the claims settlement component, I would like to recall that, yes, we did an acceleration when possible of the claims, but also to give just an indication on how we managing inflation, even when we look in the reserving. I would like to recall you that, historically, our actuary took a long-term view on the inflation expectation. Notwithstanding the fact that we have inflation, which was not always reflected in the HICP in the cost inflation of the business, our prudent reserving approach is, for example, for the motor TPL line, embedding already something which is in between the 4%-5% embedded inflation, which is an absolutely safe level of representation. On the third question regarding the classification of performance fee contribution in the operating result, I think you are referring to the fact that last year we had EUR 121 million or EUR 122 million of performance commission in 2020. Year-end 2020 was a very good year because volatility is bringing potential good performance if you have the right strategies. In 2021, we had only EUR 66.6 million or maybe EUR 57 million of operating earnings from commission. What I was telling you is that the performance fees contribution to the operating result is the combination of the amount earned and the usually it is 30% of it paid out in the part of the boutique, especially, which is part of the let's say bonus of the asset manager. This is maybe the classification element you were thinking. You cannot count one-to-one, because this is for almost one-third, 30%, accounting for extra labor cost as bonuses for the boutique only. Thank you. Next question, please. The next question is from Andrea Lisi with Equita. Please go ahead. Hi, just two quick question from my side. The first one is if you can provide us an indication of the segment Life and P&C to which the about EUR 300 million of direct and indirect investment in Russia and Ukraine are allocated. If also this investment are classified in the once impaired, always impaired category. The second one is if you can provide us an update on how many further costs are you expecting to incur from Cattolica integration. Thank you. Cristiano? Yes, Andrea. About EUR 300 million investment are allocated. I mean, I speak apart from Ingosstrakh stake, we speak about the listed investment we were showing are mainly allocated in portfolio of Central Eastern Europe entities shared between our Czech and our operation in Bulgaria and other minor countries, but these are the two largest contributor. I will recall you that they are basically all bonds. Bond were not impaired before. Usually the impairment on a bond is done when there is the uncertainty regarding the recoverability of the coupon and the notional, and so far there was no any sign of default, so they were not impaired. Clearly we will need to make a specific one-by-one assessment. They are basically all denominated not in rubles, or in euro or local currency, you know, of the country they're in, mainly euro. We will see what will happen in the next weeks. Many of them are allocated in the Life segment, but I recall you that in these countries, profit sharing rule does not apply. So it is more similar to a higher shareholder effect. Maybe I hand over to Philippe who wants to add on Cattolica integration. On the integration cost of Cattolica, I have nothing else to add on the EUR 212 million accounted by Generali Italia as a one-off restructuring cost. The integration is underway. All the streams are at the core of our Italian companies, and they are working well together to fulfill the time schedule. But the costs were booked, especially the one on personnel, in advance then. Progressively, we will see the popping up of the synergies, which will be progressively achieved throughout the integration plan. Okay. Thank you very much. Next question, please. The next question is from Nasib Ahmed with UBS. Please go ahead. Hi. Thanks for taking my questions. Just two questions from me. When I'm looking at slide 56, you've got your financial leverage, you're lower than your peers. I was just wondering if the right opportunity presents itself in your focus areas of Europe, Asia, and asset management, could you raise that to invest in those areas and give yourself a bit more room above the EUR 2.5 billion-EUR 3 billion over the next plan? Second question is related on your target for interest expense reduction of EUR 50 million-EUR 100 million. Are we looking at the bottom end of that range given rise in interest rates now? Thanks. Yes. Hello, Nasib. The financial leverage, I really appreciate that you pointed out the fact that the indicator on the unrestricted Tier 1 ratio is to be looked because this could become even more looked at going forward when we will have this substituted by the contractual service margin, as many rating agencies are still thinking that. Which is bringing us in a leverage ratio level, which is acceptable and fine, allowing us to have flexibility and to catch it in case of opportunities. We have always been absolutely extremely flexible and opportunistic in the way the opportunities are popping up but I just wanted to highlight that we reached a good level. Clearly regarding the savings on the interest expenses, clearly higher interest-based interest rates are higher potential expenses. Don't forget that, in any case, we are always prudent in hedging or pre-hedging, in some cases, some of the refinance amount. In any case, yes, this is fair comment to say that going forward, the potential benefit, if we stay at this level, we were projecting in the plan rates which were marginally lower. On one side, on the financial leverage and the debt cost, we could have slightly less, so the lower range of the benefit or the mid-range, while, don't forget, there is the whole benefit in the full asset part because of higher investment result, even also in the liability part because there is a much better loss absorption capacity. Thank you. Next question, please. The next question is from Steven Haywood with HSBC. Please go ahead. Good afternoon. Thank you. Just one question from me. In the outlook in your press release, you mentioned greater uncertainty, volatility, the risk of downgrade. Can you give any more color on this and any indications on your targets? And then you also mentioned the outcome of extensive analysis of life portfolios. Has there been further work done here since your investor day presentation in December? And can you give us any idea of what might have been done since then? And obviously with the current market conditions, does this increase the likelihood of sort of life in-force transactions or management actions? Thank you. Okay. Yes, Steven. For what regards the outlook, I just recall that we mentioned the situation of uncertainty stemming out from this war in Ukraine. Clearly it is difficult to make a prediction related to what the outcome of the war would come. Notwithstanding this, we commented that we are committed to pursue our targets, and we do not change anything around what we communicated in December against our target. We are confident on that. For what regards the in-force management actions, for sure we had some in-force management action already in Italy, as we explained during the investor day. On top of that, we did some other in-force management which allowed to reduce the average guaranteed rate in the country. At the end, this is an environment which could become conducive for in-force management and capital deployment action because it is accelerating the possibility. This together with the next year application of the principle where basically you are resetting many portfolio at their accounting economic level allowing for a risk margin. You're saying both the market and also the accounting change is accelerating this in-force. Are conducive. Conducive. Okay. Thank you very much. Next question, please. The next question is from Gian Luca Ferrari with Mediobanca. Please go ahead. Yes, thank you very much. Good afternoon. A couple of questions. The first one is on India. I was wondering if the 25% stake purchase from Future Enterprises has been just put on hold or you expect that to be no more on the table given the situation with the bondholders out there. The second is on the fact that we recently read on the Italian press that the government would be once again looking at the COVID benefit of Italian insurers that they got in 2020. It's pretty strange that they are still looking at that after two years, but I was wondering if you can comment a bit on this. Thank you so much. Philippe? Thank you, Gianluca. As you know, in January, we announced the acquisition of a 25% stake in our P&C joint venture in India from the Future Group. The completion of the acquisition is obviously subject to regulatory approvals, and definitely this acquisition is still on the table. What happened is that one of the Future Group lenders had filed an injunction for blocking the deal in a court in Mumbai. This decision of this court has been overruled by a higher court, and definitely the deal is coming back on the table, and it will proceed according to you know the I would say the Indian culture, which may be in some ways a little bit chaotic. We are very confident that it's going to happen. Thank you. Yes. Regarding the press, we read as well. We take always into account what are the developments. We are in constant reach with our business unit in Italy. So far, I have never experienced any form like this outside this discussion I read on the press. We will follow, but I recall you, we were extremely also prudent and very open in supporting our clients, our distribution. There were huge amount of money put on the table by all our business units, starting from Italy, during the period of COVID. I think the equation should be balanced with all the effects. Thank you very much. Thank you. This concludes our Q&A session for today. Miss Raffo, the floor is back to you for any closing remarks. Thank you all. We just want to thank you for all your questions. As always, the Investor Relations team will be at your disposal for any follow-up question you might have. Have a good day. Thank you very much. Bye-bye. Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.