Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Unipol Group as of December 31st, 2022 preliminary results Q&A session conference call. At this time, I would like to turn the conference over to Mr. Matteo Laterza, CEO of UnipolSai and General Manager of Unipol. Please go ahead, sir. Good morning, and thank you very much for participating to this conference. Before opening the floor to questions, I will spend a few minutes to comment the preliminary 2022 financial results that we released this morning. I have to say, first of all, that they were very strong results despite the very challenging environment in which we have run the business last year. I will start to comment the PSE, where the business we achieved a top line growth above 4%, mainly driven by non-motor business, where the main catalyst was the growth that we achieved in the health insurance with UniSalute growing double digits. In terms of distribution channels, bancassurance has been the main driver of growth with Arca Assicurazioni growing in the whereabouts of 30%. On the other hand, in terms of technical profitability, 2022 was impacted by two different trends. If on one end in non-motor, we had a positive trend, despite a slightly higher impact coming from Nat Cat and large losses. In motor, on the other hand, we had a deterioration of the combined ratio, mainly driven by the increase in the average cost of claim that has been offset Has been not offset yet by the repricing of the portfolio that we implemented starting from the second part of 2022. In life, the business went pretty well, despite a very challenging environment in terms of structure of interest rates. The business grew above all in pension funds, where we doubled the production compared to the number that we achieved in 2021. In terms of technical profitability, we achieved a very positive impact coming from both the financial component of the business and also the technical part above all driven by the mortality component of the profitability. Finally, investment income was very solid. We increased, based above all on the increase of the base rate of the free risk rate, that gave us the possibility to diversify our financial portfolio by increasing the yield of the portfolio, and at the same time, we reduce the volatility of our own funds. This is very important target, considering that we closed 2022 with a very robust solvency ratio, both at UnipolSai level and Unipol Gruppo. This was a very solid pillar that justifies the proposal of dividend of EUR 0.16 in UnipolSai, which is absolutely in line with the assumption of our industrial plan. We propose EUR 0.37 in Unipol Gruppo, which is above the target of the industrial plan. To sum up, I can say that we closed our first year of the industrial plan Opening New Ways, being on track on all the main industrial and financial KPIs. Having said that, I open the floor to question. I'm here with Enrico San Pietro, who is General Manager of the insurance business, and we are open on all the questions that you have. Thank you. 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 telephones. 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 Andrea Lisi of Equita. Please go ahead. Hi, thank you for taking my question. First question is on the effect you are observing from the increase in tariffs in the motor business, if there is any impact on your clientele, if there is an increase in turn rate or not. The second question is still on the combined ratio for next year, given the increase in tariffs on the one hand, but on the other, if you feel confident in your business plan target of combined ratio or if it is still too early to say, also considering if you can provide some indication that if there are higher costs in terms of reinsurance. The second question is on the life. In particular, you usually guide it for the life pre-tax profit in the area of EUR 250 million, if I'm not wrong. What to expect in current environment with interest rates that are so different with respect to your guidance of pre-tax profit in life? The last one is on if you're observing any increase of redemption in traditional life products. Thank you. Okay. On the first two questions, I will give a general review, and then I will leave the floor to Enrico for more flavor. As you know, starting from the second half of 2022, we started a repricing strategy of motor TPL products in our case in order to follow what has been the trend of the average cost of claim in 2022. Our strategy in general will be to continue to follow the evolution of the average cost of claim in order to offset it in terms of pricing. We will target to establish a decent level of profitability of the motor TPL business. It will be very important, which will be the evolution of these of these of the average cost of claim going forward in order to decide what will be the future strategy in terms of pricing. You have to have in mind that our target is, as I said before, to establish a different level of profitability in the business. Concerning life, the 2022 was positively impacted by two item. The first one concerns the contribution to the profitability of finance. The increase of interest rates across the board because it happened in all the financial markets, not only in Italian government bonds, allowed us to increase the level of profitability of financial assets and consequently also the increase of the profitability for for the company and also for the policyholder on the other end. We had also a positive impact coming from the technical component of the profitability above all in the mortality component of the business. In this kind of environment, I personally think that if the structure of interest rate will remain the same also in 2023, we can maintain this level of profitability. In terms of redemption, we didn't see a significant impact coming from redemption, even if we are monitoring this trend very closely, in order to in a sort of sense, intervene on the commercial distribution channel, above all, with our agents in order to be able to be very close to the asset and liability management of our portfolio. At the moment, we are not seeing any significant impact coming from redemption in traditional products. Enrico, if you want to add something on? Thank you, Matteo. Good morning, Andrea. Going back to the motor business, you ask if there are some visible aspects on retention or churn rate related to our recent increase in tariffs. So far so good. Till today, what we are registering is a very small decrease in our retention rate that is at, have been in the recent years at the top level of the market. Of course, there are other increases that we have to implement in the year, and we will see what will happen. We are quite confident because all the market has the same need to restore technical profitability and increasing price to do so. We don't see a significant risk of deteriorating our competitive position. What Matteo said is of course, also that we are working on tariffs and also on the other action that we put in our industrial plan, especially in claim handling, to offset the input of inflation. So to be able to improve the technical profitability of our motor business, and so we are targeting and improving in 2023 compared to 2022 results and even more at the year end of 2024, when we will, o ur industrial plan with, the target that, we put in it. The next question is from Peter Eliottof Kepler Cheuvreux. Please go ahead. Thank you very much. First of all, congratulations on the new format of the reporting. I'm sure it's gone down very well, and much appreciated by many of us, the call in English. Thank you very much on that. Three questions if I may. Perhaps first of all, if I could follow up on about the non-life underwriting. Appreciate your comments about, you know, the outlook, you know, with the whole market needing to increase profitability, et cetera. I'm just wondering if you could specifically comment on whether you think prices are going up at the moment to offset claimed inflation. I know you gave some stats in the presentation, but that was mostly sort of, you know, average over the year. I'm just... Obviously your prices started in the second half of the year. I'm just interested in the current picture, you know, whether prices are going up at the moment enough to offset inflation. That'd be the first one. The second one, maybe following up on the life results. Great results and good news. I'm interested specifically in the other operating items which were basically plus EUR 50 million for the year and sort of fairly consistently positive across the year. Is that a sort of normal run rate? And then, the third one maybe on the Solidarity Fund, just to confirm that we shouldn't see any more negative impact going through the P&L going forward? I'm wondering if you can just give us any confidence on, you know, maybe the, that the actions you've taken haven't impacted your operational, ability at all. Thank you very much. Okay. Thank you. Thank you, Peter. In non-life, and in particular in motor, we are, as I said, working on repricing. We have already worked on repricing with the target to follow the evolution, the upward evolution of the average cost of claim. Of course, there is a sort of lag between how the average cost of claim evolve and how the repricing can have a full effect in the portfolio because you take one year before all the repricing is in force. We are confident to be able to follow the average cost of the claim on the base of the assumption that we have not only 2022, but what we think will happen in 2023. Having said that, there could be some, it all will depends on, also on, the general competitive environment, on if the our assumption of inflation will be correct or not. In case we, they will not, we will intervene in order to reach our target to establish the profitability in the motor PPN business. In life, the other operating items are all belonging and coming from the financial component of the technical profitability. It is overall due to what is called the shadow accounting item that is used in consolidated PNL that will be replaced next year with the application of the IFRS 17. Shadow accounting is a by-product of the financial component of the technical profitability, so you can consider it a component of the financial financial income of the business of life, of life business. If it is a normal run rate, it will depend if the structure of interest rates will remain the same in 2023 or not. As I said several times, the normal profitability of the business is we're about EUR 250 million. In this case, we over-delivered because there is a very positive financial market structure. Also there is, we had a very positive result coming from the technical profitability, and this is the reason why we over-delivered in 2022. Concerning Solidarity Fund, as we said, when we release the industrial plan, it is an upfront number that we have in, we have in this industrial plan. But w e can going forward to allocate a small component of provision in order to further enhance the effectiveness of the Solidarity Fund, starting from the next industrial plan Thank you very much. The next question is from Sudarshan Bhutra of Société Générale. Please go ahead. Hello? Hello, hi there. A few questions from my side. First one is regarding the solvency ratio for FY 2022 versus normal nine months slate. I mean, it has been pretty strong considering that, you know, you account for all the dividends in the fourth quarter. Can you please provide some details on, you know, what are the moving parts of the solvency in the fourth quarter standalone? The second question is with regards to IFRS 17. When can we expect some more disclosure around that or, you know, some more insights on how you're going to adapt to the new reporting regime. The third question is around in the life business, you have approximately EUR 6 billion of reserves, which are, you know, for the higher interest rate guaranteed business. Are you, given the current interest rate environment, are you looking at any sort of in-force actions on this particular book or this portfolio? Any comments on that would be very helpful. Thank you. Concerning the solvency ratio, I will comment on the group Unipol Gruppo numbers that was released at 201% with an increase of 4 percentage points compared to the number that we disclosed in September 30th. We had a positive impact coming from the positive effect of the performance of financial market. It reserved that it had was the base and enhanced the had a positive impact on the own funds for 6 percentage points, above all driven by the evolution of interest rates, the impact of the narrowing of the spread in credit in corporate bonds, and also the positive performance of the equity market. We had a small negative impact coming from the widening of the spread of Italian BTPs for 2 percentage points. Adding all these components, we had a positive impact coming from financial market of 6 percentage points on our own funds. On top of that, we had also a positive impact coming from the reduction of the solvency capital requirement of 3 percentage points. Adding all this component and deducting the dividend that we propose at Unipol Gruppo level, we had an impact, a total impact positive for 4 percentage points overall. This is the reconstruction of the improvement of the solvency capital position. Concerning life business, no, we are not thinking about an action on the in-force portfolio. We are very confident with all our products in our technical reserves, also considering the fact that we have seen a component that have a minimum guarantee that is above 3%. We can afford these components of reserves without any kind of problem. We see any reason why we should think about an action on the in-force business. Finally, concerning the IFRS 17, we disclosed in our presentation that we will have a specific event at the end of March, in particular on the March 24th, where we will discuss all the topics concerning IFRS 17, our approach in the transition and which will be the impact on the main item of our balance sheet, comparing the IFRS 4 and IFRS 17, and also approaching the application of the IFRS 9 versus the IFRS 39. Okay. Okay, thank you very much. Just one more question from my side, if I may. This is regarding the non-motor business and the top line development in the fourth quarter standalone, which was just about +2% year-on-year, versus +10% at nine months. I mean, any color on the strengths or issues specific to fourth quarter would be very helpful. Thank you. Okay. We had a very important growth in the first part of 2022, especially in the motor, driven by growth on retail and medium, small and medium enterprises. When we arrive at the year-end, we have a big corporate business renewal, and we didn't have the same growth in this period. That's why the overall growth had a slight reduction in the fourth quarter. Okay. Thank you very much. The next question is from Georg von Wyss of BWM. Please go ahead. Yes. Hi. Thanks very much. You've said in the past that you don't want to merge UnipolSai into Gruppo Unipol in order to preserve strategic flexibility. Though you've been very transparent about the value of Gruppo, the discount remains at, it's around 30% now, and it varies between 20% and 35%. Everyone with any experience of this kind of constellation will agree that this discount will remain a fact of life, while merging the two companies would unlock about EUR 1.5 billion of value for shareholders of Gruppo. The question is, what strategic steps can you take to create as much value as the amount that you're leaving on the table, and why can you take those steps only by keeping UnipolSai and Unipol Gruppo separately? Okay. Thank you for your question because it gives me the possibility to explain the rationale, the real rationale behind the decision to disclose the dividend policy that we will apply this year. In which, as you know, we decided to increase the dividend of Unipol Gruppo quite consistently. This is a decision that come from the awareness on our side to be able to sustain over time a dividend policy that can persistently invert the priority in terms of dividend yield between Unipol Gruppo, which is a holding company, and UnipolSai, which is an operating company. We think that if an investor decide to invest in a holding company, which has a higher risk, it is right that he's remunerated more than in the case in which he invests in an operating company. Starting from the baseline that the level of profitability of the operating company is above the average of the market. We start from a level of profitability of the operating company that is as a matter of fact really interesting comparing other possible investments that you can do in in the same sector. Unipol Gruppo has value as a sum of the parts way above the market capitalization of the company. We are way above EUR 5 billion, having the market value of UnipolSai and the net financial position of the company that today is less than a little bit more than EUR 800 million. We have a cost of debt that is in the whereabouts of 3%, with an average maturity of a little bit less than five years. We were able to invest all the cash that we have in financial securities, whose yield today is above 3%. We are in the condition, as I said before, to maintain a level of profitability at a holding company level that can justify o ur capability to remunerate in terms of dividend yield the holding company more than the operating company by inverting a trend that we had in the past in the past few years. In this case, all the discussion concerning the collapsing of the trade control have not a lot of sense on our point of view. We have the condition now, as I said before, to deliver a yield of the holding company that is above the operating, and that can justify the investment in the holding company. The next question is from Alessia Magni of Barclays. Please go ahead. Hi. Good morning. Thanks for taking my question. I apologize if I repeat a question. I missed the first few minutes, so I don't know if they've already been asked. I have three questions from my side. On combined ratio Unipol, if we look at the large losses from the year, that seems quite big. I was wondering if you could give more color on the fourth quarter in particular. On motor, I appreciate the color you gave on what you are doing at Unipol in terms of pricing. Can you please tell us what you see the market doing in terms of pricing compared to versus inflation? The last one is on Life. Do you see any sign of surrender? If you can give more color on the recent development in the fourth quarter on premium, that would be great. Thank you very much. Okay. The first question was about the large losses in the fourth quarter. We had we give in the same figure the amount of large losses and also net CAT event. Basically, what we have seen compared to the previous year is an increase in the net CAT events in the fourth quarter. This is the explanation for the figure that you have seen. Related to the second question about motor pricing. It's quite difficult to understand precisely what the market is doing. Of course, we try to understand what's happening on the tariffs, but there are other mechanism to understand the real effect on the portfolio. Roughly speaking, what we are seeing is finally the fact that the market is experiencing at the same time, and it happened in 2022, inflation and also an increase in loss frequency that is coming back to normality, to new normality. It's still at a lower level compared to the 2019, but in 2022 had a more growth. So my understanding is that there's a wide awareness about the technical need to reprice, and this is what is happening. So it's happening in quite a visible way. What we can see. We discussed it a few minutes before about retention rates. Our retention rate, despite our price, our repricing, is at the moment, more or less at the same level it was last year. Basically, the competitive environment is moving, more or less, the same way we are moving. The last question was about life surrenders. So far, no material change in surrenders, and this give us a lot of confidence about what is going on in the 2023 exercise. Thanks. Sorry. Just to... Not clear. Just a quick follow-up on the Nat Cat event. What in particular was the driver? Is it specific to Unipol or is the market seeing an under something on the quarter? Thanks. We are not able to give you a precise answer because of course the market figure is not available. Basically, we didn't have that very big event, like Vaia in 2018, but several medium-sized events that summed up gave us this kind of increase in this kind of losses. Perfect. Thank you very much. The next question is from Michael Huttner of Berenberg. Please go ahead. Thank you very much. Yes, I really just like people said, I really appreciate the format of this call. I have two questions. One is on reserve in P&C, in non-life, and the other one is on the solvency and the investment portfolio. On the reserves, if I remember, in Q4 last year, 2021, there was a significant addition to reserve, I can't remember the figure, but I think I estimated somewhere between EUR 300 million-EUR 500 million. I just wondered what has happened during the course of 2022 in terms of the reserving position in P&C, whether it has gone up or down or is stable, how are you looking at it? That would be my first question. My second question, I noticed, and apologize if my numbers are wrong, that the percentage of your investment portfolio invested in Italian government bonds has come down from 33%- 27%. I just wondered if you can talk, give us a little bit more color about this, talk about this, and maybe explain the impact on solvency and the sensitivity of solvency to, you know, changes in government bonds trade, Italian government bonds trades going forward, and whether you also wanted to change that in-investment mix anymore. Thank you. Thank you. Concerning the reserve the reserving policy that we applied in 2022, yes, you remember very well last year, we were very conservative in the reservation o f in the in P&C. This year we maintained the same approach in terms of conservative approach. We applied these to the calculation of the best estimate of liabilities in P&C. As you know, starting from 2023 in our balance sheet, with the application of the IFRS 17, it will be the best estimate of liabilities that we will be important in terms of conservative approach going forward. This was the reason why in the best estimate of liability in P&C, we added a little bit more than EUR 100 million in order to prevent what will be the implication of inflation in the future claim in P&C. Concerning the investment portfolio, yes, we decreased a little bit our weight in Italian government bonds. We already I can say that we completed our diversification strategy that we started a couple of years ago by decreasing the investment in Italian government bonds and diversifying in other corporate bonds. Above all, in the top component of the credit structure. In other words, in the high rating component of the credit component structure of the investments. We will maintain the actual level of investment in Italian government bonds that enabled us to have for UnipolSai rating that is above Republic of Italy. For us it is enough in order to allow us a different level of volatility of our own funds. At present, in terms of sensitivity, in case of 100 basis point increase of the spread of Italian government bonds, we could have a negative impact of 4 percentage points in Unipol and 5 percentage points in UnipolSai. As I said in another question, that we had in the final quarter of 2022, we had a negative impact of 2 percentage points in Unipol Gruppo level because of the widening of the spread of Italian government bonds between the September 30th, 2022 and the December 31st, 2022. It is not only sensitivity, but it was applied in the final quarter of 2022 just to be confident that this number are resolved. Fantastic. Thank you. Thank you for all the details. Thank you. Any further questions, please press star and one on your telephone. Mr. Laterza, there's one more question, a follow-up from Michael Huttner of Berenberg. Please go ahead. Thank you so much for the opportunity. It's just, I just wondered maybe can you give us a feel for how the first six weeks of the year are developing in terms of premium growth, maybe? It is very early to give a flavor of the first part of the year. We are just in the middle of February. I can say that business is running pretty well despite the forecast on a slowdown of European economy that I read in newspapers. Concerning the trend in P&C business, the trend is going very well. Concerning life, as I said before, the environment is very challenging. Today, the absolute level of interest rates is quite high on all the maturity of the yield curve. Concerning all the component of the investment products, the environment in terms of our commercial performance is very tough. On the same time, we are following very closely the trend in terms of surrenders. At the moment, there are not any reason why we can be worried about. We have to be aware that today the prospective of investment products for in life is not so positive as it could be 1 year ago when interest rates were close to 0 and a lot of people were looking for traditional product in life. Overall, we are performing quite well generally. I have no other remarks to say or other points to add to all to what I have said. Thank you so much. Thank you. The next question is a follow-up from Peter E. Elliott of Kepler Cheuvreux. Please go ahead. Thank you very much for allowing me the opportunity to come back as well. I wonder if I could just ask you to talk a little bit about sort of the impact of, you know, the type of reinsurance, environment pricing, just whether that sort of influenced or changed your strategy at all or how you're managing that side of things? Great. Thank you. Of course, there is a significant change in the reinsurance market. Market has hardened. Prices went up and capacity in some business lines shrink. For us, this is something that we were able in the for the main part to offset since the portfolio we were able to deliver, in result that we were able to deliver, during all the years to our reinsurance partner were very good. There were some changes in our reinsurance structure. For instance, we did not renew atmosphere, the aggregate, that was protecting us for small and frequent atmospherical events. Basically the impact on pricing, the impact on pricing is only on the property business line, which of course we need to reprice it. We are doing it to be able to restore our technical profitability. Great. Thank you very much. Mr. Laterza, there are no more questions registered at this time. Okay. Thank you very much for participating to the call. As we disclose, we will see on the March 24th for the next meeting. Thank you very much again, have a good day. Bye-bye. Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.