Good day, and welcome to the ASR Nederland N.V. Conference on the half year results of 2022. Today's conference is being recorded. At this time, I would like to turn the conference over to Michel Hülters. Please go ahead. Thank you, operator, and good morning, ladies and gentlemen. Thank you for joining us today. Welcome to the a.s.r. conference call on our first half year results. Now, on the call with me are Jos Baeten, our CEO, and Ewout Hollegien, our CFO. Jos will kick it off, as is customary, with highlights of the financial results, and he will also discuss the business performance. Ewout will then talk about the developments of our capital and solvency position, the OCC investment portfolio. After that, we'll open up for Q&A. As usual, please do have a look at the disclaimer that we have at the back of the presentation for any forward-looking statements that we may make during the call. Having said that, Jos, the floor is yours. Thanks, Michel, and also on my behalf, good morning to everyone joining on this call. I hope all of you have been able to enjoy a relaxing vacation, and that you have returned with fresh energy and new ideas to deal with these erratic and volatile markets. Despite the geopolitical tensions and economic uncertainties, our financial performance in the first half year was strong, and our balance sheet remained very resilient. I am proud that in these times, our commercial momentum remains strong and allows us to grow profitability going forward. Without further ado, let's turn to slide two for the financial highlights. I'm sure you have been able to review this presentation this morning, already, so let me just briefly discuss the key achievements. We continue to run our business with focus and discipline, and strong performance of the business was offset against the impact of storms in February. Operating result decreased just slightly to EUR 513 million, which includes, next to the storm impact, also the ongoing normalization of claims post-COVID-19 as COVID-19 restrictions have been lifted in the first quarter this year. Combined ratio of 92.8 includes the impact from the storms in February this year, which amounted to about 2.6 percentage points. Even including the storms, we are still outperforming the target range of 93%-95%. In my introduction, I already mentioned the strong commercial momentum. In the first half this year, organic growth of P&C and disability amounted to almost 8%, and in combination with continued rational pricing, this drives our strong underlying business performance in non-life. Our organic capital generation is strongly up by EUR 56 million. The increase reflects mainly the lower UFR drag due to the higher interest rates as well as higher investment returns. Of course, these positive impacts come on top of the fundamentals of continued solid business performance. Later on in this call, Ewout will provide further detail on the OCC number and will give you some guidance for the second half of this year. I believe it is important to note that in line with our current capital management policy, a higher capital generation than anticipated translates into an enhanced capacity for higher share buybacks. As you know, we would prefer inorganic growth. The upside for 2022 at least seems considerable, though. Our solvency has remained resilient and stood at 214%, after interim dividend and the SBB of EUR 75 million, which we executed in the first half. As you all have seen, there have been quite considerable changes in various drivers of our solvency, such as interest rates, spreads, and the volatility adjustments. Finally, today, we announced an interim dividend of EUR 0.98 per share, which equals 40% of the dividend for 2021. Let's now briefly discuss our progress in the first half year in executing our strategic plan, and that's on slide 3. Just as a quick reminder, the bottom half of this slide shows the key parts of our strategic plans, which we have presented at the investor update at the seventh of December last year and are executing diligently. These eight focus areas drive the continued profitable growth and sustainable value creation for all of our stakeholders. Let me highlight some of our achievements in the first half of 2022. In P&C and disability, we realized strong growth with solid profitability. In pension DC, we continued the solid commercial momentum with a 32% increase of gross written premium compared to last year and increasing the number of active participants to over 140,000, up from 130,000. In our IORP pension business, we have seen a growth in our participants to over 150,000, up from 120,000. Enhancing the customer experience is important, and we are steadily increasing the number of customers that we can serve fully in a digital way. This was up by 5 percentage points in the first half to 47.5. Ewout, of course, will discuss developments in our investment portfolio. I would like to highlight that we have been fairly active in adding specific asset categories such as wind and solar farms, and we announced the acquisition of a portfolio of private loans of EUR 250 million, which will be added in the second half of this year. With regard to M&A, we have acquired a real estate investment management company that strengthens our position towards institutional clients in the field of real estate and especially infrastructure investments. Activity in this market was admittedly a little bit slow in the first half, but we continue to believe that consolidation of smaller and mid-sized players should provide opportunities in the coming years. We have received improved recognition in certain ESG benchmarks, therefore regaining our number 2 position worldwide by Sustainalytics and improvement in the ISS-oekom rating to C plus prime and the number 1 position in the Dutch Fair Insurance Guide. I do not want to overemphasize the relevancy of these benchmarks, but being highly ranked by quite a few is saying something. Let's turn to slide 4 to look at our business performance in the non-life segment. I'm actually proud of the performance in this segment. Solid underlying business and underwriting performance was more than offset by the impact from the February storms with EUR 38 million, and an ongoing normalization of claims post-COVID due to the fact that all restrictions have been terminated in the first quarter of this year. You may recall that in the same period last year, the non-life operating results benefited a positive impact from COVID-19 for an amount of EUR 68 million. Unfortunately, it's not really possible anymore to identify and quantify the impact from COVID-19, and I think we should assume that from here onwards, we are operating at a more normalized level. Organic growth of almost 8% exceeding the target of 3%-5% per annum, and is driven by higher sales volumes and some selective tariff adjustments. Our disability business continued to grow strongly by well over 10%. The growth is approximately two-thirds driven by price increases and one-third in sales volumes. Profitability improved, reflecting price actions, and the quality also improved by better portfolio management of the sickness leave and individual portfolios. Growth in P&C amounted 5.1%, driven by higher sales volumes. I'm particularly pleased to see that we have realized further growth in the commercial fire business. Combined ratio of 92.8 includes, as said, 2.6 percentage points impact from the storms and the normalization of claims and is still ahead of medium-term target of 93%-95%. So far, we are seeing only limited inflation risk in our non-life segments. We are relatively protected by the fact that products can be repriced annually and that the product terms and conditions include annual inflation charge. In the full year, and in February, we already alluded to the anticipated decline of the health portfolio, which is reversing part of the extraordinary growth in the prior year. While we maintain our rational pricing policy and continue to pursue value over volume, we did experience more price competition, primarily in the basic health proposition. It shows in our health gross written premium and combined ratio. Let's now go to slide 5 about our life business. Operating results of the life segment increased by EUR 9 million to EUR 385 million. The operating result is mainly due to a higher investment margin driven by the further optimization of the investment portfolio and the lower required interest due to the gradual run-off of the individual life portfolio. The higher contribution to operating results in the life segment was partially offset by a decline in the technical result of EUR 34 million, driven mainly by the EUR 26 million of additional unit link provisioning due to lower equity markets and higher interest rates. GWP increased by 3.9%, mainly due to the commercial success of our Pension DC product, which saw an increase in premiums of 32% to EUR 450 million. The total assets under management of Pension DC, including the former Brand New Day IORP, decreased slightly to EUR 4.7 billion due to revaluations reflecting the higher interest rate environments. Finally, our operating expenses are relatively stable at 46 basis points in the middle of our target range. These basis points include the investments in our IT systems needed to adapt the ongoing transition within the pension business. Let's now turn to slide six for our other segments. Operating results of the two fee-generating segments, asset management and distribution and services, combined amounts to EUR 36 million, up 6.4% compared to last year. Asset management results was driven by positive revaluations within real estate. The inflows into the mortgage funds and pension DC related mixed funds were offset by lower market valuations due to higher interest rates and lower equity markets. This led to a EUR 1.1 billion decrease of assets under management. Mortgage origination amounted to EUR 3.7 billion, up EUR 1.1 billion compared to last year. In the current interest rate environment, is something we expect to come down a little bit in the second half. Operating result of the distribution and services segment increased by EUR 1 million, mainly driven by small acquisitions and organic growth. Finally, holding and other operating result decreased slightly to EUR -58 million due to higher operating expenses on one-off projects. This concludes the financial highlights and business overview. I now with pleasure hand over to Ewout, who will discuss our solvency and capital generation. Yes, thank you, Jos. Good morning to everyone on the call. Let me start by saying I kind of feel sorry for all the analysts trying to crunch the numbers on insurance in an eventful first half year of 2022. Modeling all the different movements during the first six months of this year, and the way these movements are impacting each other must have been a pain. Putting it differently, my respect for those whose estimates came close to the actual numbers. When dust has settled and numbers are out, we are proud that we can conclude that our financial and solvency numbers remain strong, and we trust you are pleased as well. Having said that, let us start at slide 8, which shows the movements within our solvency. Of course, I'm happy to see that our solvency position has been robust in these volatile markets, where our Solvency II ratio increased to 240% based on the Standard Formula. An 18% increase compared to the full year number, which proves the resilience of our balance sheet. A significant portion of the ratio increase comes from market and operational movements, which reflects positive impact from higher VA, higher interest rates, and lower equity markets, which together more than offset the lowering of the UFR, some risk weighting, higher inflation, and spread widening of mortgages and non-core government bonds. Much more important than the favorable market movement is that the higher ratio benefits from a very strong OCC, adding 11 percentage points to the solvency ratio. I will talk in more detail on OCC later on. The capital distribution consists of EUR 131 million interim dividend and EUR 75 million share buyback, which we executed in the first half of this year. Capital distributions took out roughly half of the OCC contribution. These developments brings us at a very strong level per H1. On the 240% ratio, I should note that I tend not to look too much at our solvency position as a snapshot on a certain reporting date, but also look at it a bit more on a through-the-cycle basis. To explain a bit, so the average VA of the last six years was around 11-12 basis points. The current 25 basis points is at the high end. OCC spread on mortgages was per H1 160 basis points. As mentioned before, we believe the longer term range of 80-100 OCC spread is more realistic. Applying a more through the cycle spread level and VA means that over the cycle, the 214% would be somewhat lower, but will be, at the end of the day, very robust and a strong basis for further organic and inorganic growth and capital distributions. Let us now have a closer look at our OCC presented on slide 9. The OCC came in very strong at EUR 428 million, an increase of EUR 56 million compared to the same period last year. Interest rates development has been very favorable this half year and is actually the biggest driver for the higher OCC. This leads to lower UFR unwind, which is positive, as you know, for our OCC. Higher interest rates have a negative impact on the net release of capital because there is a lower SCR release. In H1, we benefited from lower capital strain in non-life, mostly due to the decrease of the health portfolio and improved profitability in self-employed disability. There is also a positive impact from high solvency ratio, since in our OCC, we multiply the SCR impact with the solvency ratio. The underlying business performance is strong. In business capital generation, we see similar effects as Jos mentioned for the operating result compared to last year, with lower non-life contribution due to normalization of claims and the impact of the triple storm. This is largely offset by higher investment returns as a result of asset optimization over the last 12 months. All in all, a significant increase in OCC compared to H1 2021, and I can imagine you are looking for some guidance for H2. When taking sort of normalized OCC level of H2 last year of EUR 200 million as a starting point, I would add around EUR 20 million on the back of executing our strategic plan as announced at the investor update. This includes growth in non-life, fee-based business, and optimization of the asset management portfolio. In this number, we also expect some tailwind from higher mortgages and credit spreads to come through in our Q3 excess returns. Of course, interest rates are a bit lower than end of June, but I would still expect a positive contribution on the UFR drag based on the rates of last Friday of around EUR 30-35 million. On the other hand, I would expect lower net capital release due to the growth of the business and the lower SCR release due to the higher rates and as a consequence, lower SCR. That impact is roughly minus EUR 20 million combined. Based on those elements, I would get to around EUR 230 million for H2 this year and therefore around EUR 660 million for the full year. Now of course, we will have to see what we will be able to print at full year date. Given where markets are today, I believe this is the direction of travel. If the rates stay where they are today for the rest of the year, based on our methodology of averaging the UFR, we would also expect a positive UFR echo drag into 2023 of around EUR 40 million being the net amount of lower UFR drag and lower SCR release. Let's go to slide 10 to talk about the investment portfolio. The investment portfolio remains robust and well diversified with a strong shift to quality. The quality of the portfolio is for instance underlined by the low loan-to-value within the mortgage portfolio being almost 30% government guaranteed and having an average loan-to-value of the book of only 64%. In addition, the payment arrears over 90 days are below two basis points, and the credit losses are below 0.1 basis points. We don't see any increases in the level of arrears or credit losses underpinning the quality of the Dutch mortgage market. The credit portfolio is of high quality with 97% being investment grade. Even when 20% of the portfolio get a full letter downgrade, it will only cost us 4%, 4 solvency points. In H1, we haven't had any downgrades or defaults underpinning also the quality of the credit portfolio. The real estate portfolio is showing its quality through positive revaluation in H1 and a sharp decrease in payment arrears compared to the same period last year. We are a bit overweight due to the positive revaluation on the portfolio, while other asset classes had a negative revaluation due to higher rates and deteriorating equity markets. We are using existing assets to fulfill third-party demand, which will further lower our exposure going forward. In the first half of this year, we executed our plan by optimizing the investment portfolio, increasing the exposure in illiquid credits, adding some extra mortgages to the balance sheet, and doing some additional investments in equities with EUR 200 million, among others by expanding our impact investments in wind and solar farms, becoming a relevant hedge to higher inflation due to increasing energy prices. In the second half of this year, as part of the portfolio optimization, we will add EUR 250 million of private debt to our balance sheet, a result of the private loan portfolio acquisition from NIBC. Risk profile of this portfolio is moderate with an average rating of double B. Loans are having a floating rate, so we will benefit from increasing rates, and portfolio is valued at actual spreads at the moment of the acquisition. An attractive addition to our investment portfolio. Additional benefit from that transaction is that the transaction offers our institutional clients the opportunity to invest in an external party alongside ASR in our diversified private debt fund and offers us the opportunity to grow in third-party asset management. Overall, I'm happy with the investment portfolio, which remains of high quality, and we are on track in execution of the operational plan to optimize the investment portfolio. Let us turn to slide eleven to discuss the flexibility of the balance sheet. As you have seen, the balance sheet of ASR remains strong with ample financial flexibility. The unrestricted one capital represents 74% of own funds and 158% of the SCR, and we continue to have ample headroom available within the Solvency II framework. Financial leverage increased by 2.1% to 26.9 on an IFRS basis due to a decrease in equity of EUR 731 million. On a Solvency basis, we are around the same number of leverage. Double leverage and the interest coverage ratio are also in excellent shape, which all contributed to remain safely above the thresholds of S&P single A rating, which was confirmed in June. Our debt maturity profile, as you can see, is nicely staggered and first call date is 2024. Again, we have ample financial flexibility and room to add leverage to our balance sheet. Now let's move to slide 12. The holding liquidity at the end of June stood at EUR 437 million, in line with ASR's policy of maintaining capital at the operating companies and upstream cash to cover dividends, coupons, and holding expenses for the current year. Cash upstreams consist of EUR 245 million from the life entity and EUR 88 million from non-life. In the graph on the bottom left corner, you can see that remittances have been strong over the last periods. While we typically aim to upstream only what is required in line with our policy, the actual upstreams taken into account tax have been in line with or even higher than the OCC. Solvency position of legal entities improved to 199% for life and 173% for non-life after remittance. Cash at the holdco, together with the strong capitalized legal entities, provide us that we have ample cash availability. Let's move to slide 13 for our capital returns. When looking at our capital creation, capital deployment, and capital return, our message at the investor update has been clear. We announced a cumulative OCC target for the coming three years of EUR 1.7 billion-EUR 1.8 billion, a progressive dividend, and a share buyback of at least EUR 100 million per annum. I mentioned the H2 OCC outlook before, and given current circumstances, our 2022 OCC may end up considerably higher than what we anticipated when we announced the EUR 1.7 billion-EUR 1.8 billion target range. With regard to the medium-term OCC target, we are now only six months into our plan period, and therefore we think too early to change the 3-year cumulative target. However, if current market circumstances stay positive, it would make sense to revisit this when we publish our updated IFRS targets before the summer next year. Independently from the target, a higher OCC in 2022 already providing us additional capacity for investments in inorganic growth and leaves further upside in our commitment to buy back shares at the full-year stage. Share buyback is contingent on our level of capital sources and on potential M&A. If we generate additional capital and we cannot deploy it will be returned to shareholders. Just to run you through my line of thinking on potential extra capital distribution above the minimum of EUR 100 million for the year 2022. When you take into account a proxy payout range over OCC based on total shareholder return, which I mentioned at the investor update of around 70%-75%, and you then have a look at the OCC numbers that we currently have reported and the outlook that I just provided to you, I can understand you are modeling a share buyback number above EUR 100 million for 2022. Of course, this remains an annual decision at the full year results. This concludes my part, and I'll hand back to you, Jos, for the wrap-up. Thank you, Ewout. To wrap up our presentation, let's look at slide 15 for some key takeaways. I think I dare to state that we have delivered a very solid performance. Our operating result absorbing the impact of the storms and normalization of claims, and only slightly lower than the record result of last year. Commercial momentum in P&C, disability, pension DC, and mortgages remained very strong, driven both by sales and volume and pricing initiatives. Our balance sheet has proven to be resilient, once again, I should say, and we reported higher solvency with strong growth in organic capital creation. Higher quality and well-diversified investment portfolio, and I am pleased to see a continued expansion into allocation to renewables and other illiquid investments such as private loans. Last but not least, certainly, we are committed to deliver on capital return commitments expressed at the investor update. Rest assured, we are not going to hoard capital. Additional capital generation needs to find economic and rational deployment or else will be part of our capital return. Let me hand over to the operator and start the Q&A, presuming there are at least some questions. Thank you. If you would like to ask a telephone question, please signal by pressing star one on your telephone keypad. Please ensure that your mute function is turned off to allow your signal to reach our equipment. Again, that is star one for a question. We will take our first question today from Cor Kluis. Please go ahead. Your line is now open. Hello. Good morning. Cor Kluis of ABN AMRO. Congratulations with the good results, especially the OCC. Got some questions on that. The EUR 428 was quite high and based on your guidance or at least indications for the second half, you will probably arrive at EUR 660-EUR 665 for full year. Your target that you've given last year, at the end of last year was EUR 570-EUR 600 a year. You're already well above the target range. Yeah, could you comment on that? If there would be a moment for updating that to the new interest rate environment, when would that moment be? Is it full year results or do we have to wait for another capital markets day? That's on the OCC target. Then the second question is on the OCC for H1 at the 428. Of course, helped by some excess return and also the UFR directly improving. Thanks for the guidance for the OCC for the second half of this year. I think the OCC, the UFR direct is -EUR 108 million or something this year. Last year, I think it was in 2020 was -EUR 205 million. What will be the UFR direct for next year, based on the current interest rates? Of course, I think next year you'll get an extra positive effect. The full year UFR direct for next year would be appreciated. More operational in P&C and disability insurance. Do you see any price competition there? Because your organic growth remains quite high. It tells something about the price competitive environment. In health, there's more competition, that's clear, but also P&C and disability. Also on disability, could you comment on the inflationary environment? How are the three different lines in disability operating in that? Then could you comment how ASR will manage through the high inflationary environment there? Those were my questions. Thank you. To your first question, Cor. When are you going to update on our targets, I think, between the lines, it was already mentioned by Ewout. We are fully aware that our OCC is growing faster than what we assumed when setting targets. However, we are only 1.5 years since then. We're not gonna wait until a next investor day, but as already announced that given the fact that IFRS 17 will be in place as from next year, we definitely will come up with adjusted targets for that. So that will be somewhere around mid-next year. And that would be a logical moment to take a new look at the level of the expected OCC going forward. The second. Yes, Cor? No, thank you, Ewout. Yeah. The second question, I think, Ewout, you would love to answer. Absolutely. That was the question on the UFR for 2023, if I understood correctly, Cor. Thank you for your- Yeah. For your question. As you know, to determine the UFR drag, we look at the UFR drag at the beginning of the period and the UFR drag at the end of the period. We take the average of both in our reported number. To explain this by numbers where this will end. The UFR drag per full year 2021 on an annual basis was EUR 164 million. The UFR drag based on rates per H1 2022 was EUR 45 million. Indeed, the reported drag is then EUR 105 million. That means that we will have an UFR echo of 60 million based on rates per H1. Though, capital release will be somewhat lower. Let's assume EUR 20 million. The net-net additional OCC will be roughly EUR 40 million. Thank you. That means that the UFR for the full annualized UFR will be EUR 45 million for 2023. Sure. Thanks. On your last question, Ewout will elaborate a little bit on the inflation part of the question. On the competition, we do see increased price competition, especially in P&C and in disability. In P&C, it's not only in price competition but also in commission for brokers. We have seen where we lowered the commission for brokers, we have seen some competitors increasing a part of the commission for brokers a little bit. There is a strong competition ongoing, but we remain disciplined as well in our pricing and also in our commissioning to brokers. Maybe you want to elaborate a little bit on because it remains your first business love, disability. I allow you to elaborate on that. Yes. The question was on the inflationary environment in disability, right? When we look to the inflationary sensitivity in disability, that is part of the sensitivity that we also provided in a solvency sensitivity. In disability, we are sensitive for inflation on claims and expenses. Claims for part of the portfolio. Expenses for the large part of the portfolio. It's actually for the long-term business where we have some inflation sensitivity. We already recognized the impact of the higher inflation in our balance sheet. You will see that. We don't expect any additional inflation coming from that. What we do see is that also in the Netherlands, and as part of the discussion in the society, we have seen that the minimum wages increased with additional 2.5%, compared to the regular indexations. That will also have an additional impact on the provisioning. We took additional EUR 27 million of provisioning to cover the extra increase of 2.5% of minimum wages in the Netherlands. That was an addition to the regular inflation sensitivity that we have in disability. Clear. Thank you. Thanks for the questions, Cor. We will take our next question from Andrew Baker. Please go ahead. Great. Thanks for taking my questions. Two for me, please. The first, just to clarify on the buyback. So are you saying absent M&A, the best way to think about that is broadly a 75% payout ratio on OCC with a EUR 100 million floor? Then I guess interrelated, just on M&A, can you just give us a sense of how active the M&A pipeline is right now and where you're seeing the most activity, whether it's life, non-life or fee type businesses? Thank you. Thanks, thanks, Andrew. On the buyback, I think it's correct that the floor as we see it today is the EUR 100 million. Our preference remains that the capital we generate is invested in the company, either in organic growth or in inorganic growth. To your question on the pipeline, as stated earlier, we look at two different ways at M&A. The more strategic ones in the area of non-life, disability, pension DC, distributions, not to forget real estate. We've been active there on smaller transactions. We have done some transactions in the area of distribution. We have, as said, acquired a small real estate company and that's where we are focused on. The second part is the more financial M&A that will be mainly in the life area. On the pipeline, it's always difficult to comment on whether there is a large or a small pipeline. Be assured the M&A team at ASR is quite busy and looking into all kinds of opportunities. Maybe, I don't know whether you have to add something on the OCC part of the question of Andrew. What I highlighted during the presentation, Andrew, so thank you for your question, is that we have an eye on the OCC payout ratio. I mentioned a ratio of somewhere between 70% and 75%. Great. Thank you, guys. We will take our next question from Robin van den Broek. Please go ahead. Yes. Good morning, everybody. Thank you for taking my questions. I have to say, I think the introductory commentary was already quite good forward looking also. Maybe a few additional questions when it comes to that. Going into 2023, I think you've already given a bridge to 660 for this year. EUR 14 million of positive echo from rates coming in on top gets you to 700. I guess EUR 20 million for business growth is achievable as well. Then when it comes to the storm impact, is it fair to say that your normalized storm budget would be EUR 50 million, and that the residual EUR 50 million might be taken out by further normalization on the frequency side? Is 720 a realistic OCC for next year? That's basically question number one. Question number two is a little bit of follow-up on what Andrew just asked. If I listen to your commentary, you're basically saying you're running roughly EUR 100 million ahead of your OCC budget versus your business plan this year. Should we therefore simply assume that at least EUR 100 million buyback is basically EUR 175 million for this year? Or is that too detailed to confirm at the moment? I was also interested to get the excess return dynamics on the wind and solar park and net capital book that you took over, 'cause it feels to me a fair bit of the beat on OCC today is also driven by better excess return. I'm not sure whether your guidance for H2 is incorporating these dynamics. So your commentary there will be quite helpful. Then, the fungibility of OCC. I mean, you're clearly an insurance company that benefits from the current macro scenarios, both on the stock side and on the flow side. So can you just clearly confirm that the full OCC is basically fungible towards free cash flow? And then sorry to be quite elaborative on asking questions, but you yourself mentioned about looking at the Solvency II ratio from a through-the-cycle perspective. I'm just wondering if you could give us an actual number, when it comes to that. Is that still well above 200% or yeah. We'll leave it there. Thank you very much. A lot of questions indeed. First of all, on the OCC assumptions and the numbers you mentioned there, Ewout Hollegien will elaborate on that a little bit. Your second question on your calculation, whether we would end up with a buyback of EUR 175 million next year, I think that's a bit too early to put a number on that. I think we've been quite clear on our view. Our preference, one, is investing in business organically or inorganically, if and when we wouldn't be able to do any transactions which consume significant capital. Then there will be room to increase the EUR 100 million that we have announced at least. Whether that will be with 25, 50, or 75, that's out there and the first moment in time to elaborate on that will be with the full year numbers. I think you at least can read in our wording that we are positive on the developments going forward. Shall I? On the excess return question, I think, Ewout, you're burning to answer that one. Yeah, I know. I will try to answer all the other four questions, Robin van den Broek. Thank you for your questions. On the OCC outlook to 2023, and of course, it's early days, but I think I couldn't do the math better than you have done. I recognize the 660. I recognize the EUR 40 million with the net number of the UFR EUR drag and the lower SCR release. I recognize that we want to grow organically with roughly EUR 20-25 million per annum. I would probably end up with the same number as you just mentioned. I think when we look to the excess returns and how that is incorporated in the outlook. It is incorporated in the outlook, so we believe that we will benefit a bit from higher rates for Q3, but we also expect it to normalize in Q4. All in all, in the outlook that we've provided to you, we believe the current level of excess returns is well-recognized with a kind of normalization in Q4. I think your fourth question was on the OCC and whether or not that is also free cash flow. I think when you look to the current capitalization of the legal entities, and we have provided the numbers both in life and non-life. Yeah, we indeed are well-capitalized also in the legal entities and thus well able to absorb the capital that we generate in our businesses. I tend to say yes to that question. On your question on the Solvency ratio year to date, it's indeed correct that we like to look at it on a more through the cycle basis. Also given the fact that the numbers today in current circumstances will be different than the numbers tomorrow. That's why we believe it's wise to look at the through the cycle number. I think what I already tried to say is that when we look to the VA, the VA was at 81.25 base points, which we believe is really at the high-end level, because the average of the past six years have been 11-12 base points. So that will probably reduce the ratio with 12%-14%. I think when you look to the mortgage spreads, which was 88 base points higher than last year, other than the full year spreads. Well, maybe the full year spreads were at a bit low level, but normalizing would still add probably 3%-5% ratio. When we look at the year to date, year to date rates, they went down a bit, which might take out a couple, 1 or 2 percentage points. We also see that the equity markets went up, so probably that will also cost us a couple of percentage points. Net, if you normalize mortgage spreads, if you normalize VA, probably around the 200% level would be. I believe we would probably be around that level. Again, it is very volatile. Excellent, guys. Thanks for your answers. Maybe one additional remark, Robin. In your first question, you assumed that our annual budget, quote-unquote, for storms is EUR 50 million, but the winning number in our plans is EUR 35 million. Okay, fair enough. Thank you. We will take our next question from Farquhar Murray. Please go ahead. Your line is open. Morning, all. Just two questions, if I may. Firstly, on the non-life business, growth of 7.9% and looks very solid. Could you just decompose that figure between tariff increases and volumes? And kind of perhaps elaborate maybe on what your expectations might be for that, looking forward from here. More generally, could you just elaborate on the pricing backdrop, which you kinda described as rational at present? Additionally, on the non-life business, could you start with line where you're seeing inflationary pressures come through at present? Could you maybe also discuss the nature of your repair contracts and how much of a fixed price period that perhaps gives you as compared to renewals? Thanks. Okay. On your first question, in the P&C business, I think it's roughly two-thirds of the growth is due to price increases and one-third is organic growth. That organic growth was especially in the SME business, and more specific in fire insurance, and we're quite happy with that. In the disability business, we have significantly increased sickness leave. I think you could assume the same relation between growth due to premium increases as in the other non-life business. Two-thirds due to premium increases and one-third due to new business inflow. We see a continued new business inflow also today. We're quite happy with the commercial way we deal at this moment. Despite the inflation environment, we still see a lot of commercial traction ongoing, and we're proud and happy with that. That this may be a step up to the second question on non-life. We don't have that many repair contracts with fixed prices going forward. Yes, we have to deal with price inflation and repairs take sometimes a bit longer than what a customer would hope for and what we would hope for. On the other hand, in all of our non-life contracts, we have a clause stating that premiums will automatically go up on an annual basis with the inflation number. We might see some delay in that, because inflation and prices might go up higher than the first renewal round of premiums. At the end of the day, the inflation will be matched by the increase in prices. That's why normally, we tend to say one-third of the top line growth is due to prices and two-thirds new business, and that's why it's now reversed, because a larger part of the price increases are due to the growing inflation. Perfect. We will take our next question from Benoit Pétrarque. Please go ahead. Your line is now open. Yes, good morning. A few questions on my side. Just wanted to come back on the 230 for H2. Just wondering how much kind of what is the level of combined ratio embedded in that guidance? Will that be roughly 93%-95%, or is that something different? Also about looking at the investment returns into H2, you know, do you expect like one of your competitor, you know, higher investment spreads, for example, coming from mortgages? Or do you think that would be offset by, you know, amortization of VOBA over items, i.e., a pretty neutral investment return pattern into H2? The second one is actually on the buyback. On 70% on the 660 guidance, you come to 120, 75 will put you at 160. Where are you? Which camp are you? Are you more on the 120 in the current market, or are you potentially on the 160 side? Just to clarify that, because that's a pretty large gap, obviously. And then just wanna weigh in terms of normalized combined ratio in H1. What will be the level if you will be stripping out everything, basically? Could you give us an indication? Also, do you see also post-COVID a bit of longer-term trends in terms of frequency trends, maybe a bit lower than before? You know, any behavior change, especially on the P&C side, that would be useful. Thank you. A lot of questions, Benoit, and assuming that you're sitting in your shorts under an umbrella, because I think you're still on vacation. Good questions. Together with Ewout, I think we will be able to answer them. First of all, the question to where are we on the share buyback? Are we closer to the EUR 120 or to the EUR 160? I think, as stated earlier, if and when there are no transactions in the M&A area, we do see that a higher OCC will lead to an increased buyback, but it's too early to put numbers on it. I think the first moment in time it will be on the full year. I think the 120 would be on the lower side of our thinking. Having said that, moving towards the combined ratio and as well in the 230 H2, you had a combined ratio question on the trend going forward. I think our assumption today, if and when there are no further large weather-related claims in the second half of the year, that we would be able to operate the business on the lower side of the bandwidth of our targeted combined ratio. That's in line with actually what we've always said. In a very bad year, we would end up at the higher side. In a very good year, we would end up at the lower side of the 93%. Assuming that there will be no weather-related claims in the second half, I would tend to say that that would be a good half year. I think those were the questions. Yes. I will answer and the other one. Yeah. I- There was one question that didn't come through quite. It was the second question, I think, Benoit. Yeah, your second. Yeah. That's on the excess return. On the excess return. Excess return. Yeah. Yeah. You know, mortgage spreads going up significantly in the third quarter. They were also much higher at the end of June, which is not fully captured in the H1 OCC. Any upside from that? Thanks. Yeah. No. Oh, okay. That's that one is clear. That's what I try to say when I say in the EUR 20 million growth coming from the business plan for H2, there are a couple of millions also a tailwind that is coming from the higher excess spreads indeed for mortgages and also for credits. That's it. A couple of millions is incorporated into EUR 20 million in the EUR 20 million number. I think you also asked a question on the underlying combined ratio. What is the more normalized combined ratio when you look to the H1 number? I think that when we look at this, the number that we've reported is more or less the number. The combined ratio may be slightly better, is also the underlying number. To explain a bit, we still had some COVID benefits, especially in the first quarter of this year. We of course had this triple storm impact, which was higher than the CAT budget that we include in our expectations. We had also some larger fire claims, which fell under category of bad luck. It's not what we believe is structural. What we also discussed is we had the extra provisioning in disability coming from higher minimum wages that resulted in additional provisioning of EUR 27 million. When you bring that all together, probably the combined ratio is close to the reported number, probably a bit better. Great. Thank you very much. We will take our next question from Jason Kalamboussis. Please go ahead. Your line is open. Yes, hi. Just, I have a couple of follow-up questions. The one is, the way I understood it is that there is no clearly there is no M&A that could derail the higher share buyback, given that you said that, you know, EUR 120 is at the lower end of your thinking. That's the first question. The second one is, a follow-up on what was just discussed. I mean, how big is the frequency benefit, the COVID benefit in there? Because the underlying seems to be 92%, so I would have expected the frequency benefit at this stage, even with the first quarter, to be minimal. On a maybe possibly 1% rather than anything bigger. The third quick question is, maybe you provided, but, for the UFR drags, how has the steepening sensitivity changed, since full year 2021, if it has? Thank you. Okay, maybe to your first question, which was not really a question but more a remark, but I feel I have to respond to that. I don't think you shouldn't read in our wording that we don't think there is no opportunity for M&A. We still have said to one of the answers to one of the other people that asked questions. Our M&A department is quite active and we prefer to do M&A instead of returning the capital and investing in the growth of the company going forward. That is, that's our clear preference. We think it's also fair to be clear on if and when we wouldn't do any M&A going forward over the next 6-7 months. It's also clear that given the tremendous growth in OCC, it's realistic to assume that we will do a higher buyback than presented earlier. Maybe that as an additional comment to your assumption that there is no M&A. Our M&A department is quite busy. Second question about On the COVID benefit. Indeed, Jason, well, let me first say it's great to see that you are covering us again. On the COVID benefit, what we see is that the traffic, especially in Q1, was still at a much lower level, because there were still restrictions in society, as you know. I think the total COVID benefit was around two percentage points on our combined ratio. Please note this is an estimate that we based on the traffic intensity, and that is how we try to come up with this estimate. Around the 2% level, that's what we believe. I think your third question was on the steepening of the curve. I think when we discuss the steepening of the curve, we should look at it in two ways. On one end, we saw the steepening at the curve between the 20- and 30-year points with roughly 30 basis points. Sorry, flattening. I said steepening, but it's flattening of the curve. Due to the increasing of the rates, the impact of the flattening between 20 and 30 years point was less than we expected. What we also noted is that there was a flattening between 10 and 20 years points, and that more than offset the impact on our associate ratio, more than offset the impact of the flattening between 20 and 30 years. Net, when we look to the impact of the flattening on our associate, it's roughly -2%. Just a couple of quick follow-ups. Just on the frequency, we are now, as of now, basically in normalized conditions, according to you, for the second half. Just on the M&A, my maybe I misphrased it, but my idea is that two M&As that are around EUR 30 million, you know, would be a reasonable, you know, size to expect, which means that there's still plenty of scope left, even if some M&A is coming through. We do have plenty of scope, also for larger M&A. I don't think it's wise to put a number on potential M&A, but we feel that in a number of areas, there is quite some activity. As mentioned in the distribution area, there are some activities, but also in other areas. As explained in earlier calls, we don't have an M&A budget, because if you give people a budget, then they probably will start spending it. We have some clear rules on M&A. We are very strict in the criteria, and if and when we do see opportunities and they meet the criteria, then we definitely will take a serious look at it because we believe the consolidation of the Dutch market is not ready yet. The second follow-up question was on the normalization. Yes, we do believe that we are, you know, more at a normalized pace when we talk about traffic, the traffic intensity. Thank you very much. We will take our next question from Farooq Hanif. Please go ahead. Your line is open. Hi, everybody. Good morning. Just going to M&A. It seems like the financial M&A clearly has potentially larger opportunities and, you know, the kind of the more strategic areas that have, you know, as Jason said, been smaller historically. I remember you gave a slide many years ago at Investor Day where you talked about the opportunity of financial M&A in life and the AUM that's available to you. Can you give us some numbers and thoughts around that, currently? I mean, given that it's been a step up anyway in back-book transactions, globally. That's question area number one. Question two, coming back to the combined ratio. I mean, are you assuming to get to your 93%-95% range or to get to the 93%, the lower end, are you assuming further normalization or, you know, is there some sort of negative pricing impacts here? Because it seems that, you know, you're dealing with inflation on your pricing, but is there additional competitive pressure? Just want to really understand how you get, you know, to 93% 'cause it does seem, you know, pessimistic. Thank you very much. Well, let me first answer the first question and then Ewout will elaborate a little bit on the second one. If we do look at the life environment and we've of course analyzed and there are more opportunities, but the number of opportunities that we think could be realistic, then there are still seven or eight medium-sized or smaller companies out there that, at the end of the day, need to find a safe home. Increasing interest rates are not helping right now, so it takes a bit more time before a management team start to understand that they need to act. I think we do see some increased pressure from the regulator on that. That would be around EUR 15 billion of technical provisions and that would be a potential area where we would tend to look at. Of course, as also said in the past, even when there are larger opportunities meeting our criteria, we also would look at larger opportunities. Yeah. Thank you. More on the combined ratio, Farooq. I think when we look to this year and we look more to the underlying number, we see that our portfolio behaves very well. It is not, we cannot say that this remains strict. I mean, you might lose additional one percentage points, for example, when there are some larger claims or whatsoever. I think it's just also underlining a favorable market, at least our portfolio behaves very well in this market. We will keep disciplined in pricing. It's not that we believe that we should give away some premium by protecting market share. We believe it's very important to have, well, stable and predictable pricing also for the market. We will be disciplined in pricing also going forward. It's more that we believe this is underlying a favorable year. The target range of 93%-95% is currently where it stands. What we see is that it is realistic to assume that for this year we will end really at the low end of the range. Okay. Thank you very much. We will take our next question from Nasib Ahmed. Please go ahead. Hi. Morning. Thanks for taking my question. Just following up on the combined ratio, you said there's 2 percentage points of COVID benefit and there's about 2.5 of weather. That kind of offset in your outlook going forward. Just trying to clarify the OCC outlook for 2023, where you ended up at 720. Are those 2 impacts offsetting in that number? Then on the mortgages, I think there's a comment in the slide deck saying that your strategic asset allocation on Dutch mortgages, they're already there. We shouldn't be expecting any further risking going forward. Can you actually increase your allocation or are you happy with where you are in terms of the mortgage proportion? Related to that, the uplift for mortgage spreads on OCC, if you don't continue to write more mortgages, do you still get an uplift from OCC if mortgage spreads widen from here further? Finally, on the stock of UFR that you've got on the book, can you tell us what that number is and how long it takes to run off? Thanks. Nasib, could you repeat the last question? That didn't come through quite clear. Yeah, sure. The last question was the stock of the UFR benefit on the balance sheet in your solvency ratio. Can you tell us what that benefit is on the own funds in euro amounts and how long it takes to run that off over time? Thanks. Ewout. Yes. I think I have the honor to answer all these questions. On the OCC, I think you're more or less right. The reported combined ratio is close to the lower end of the target range. The low end of the target range is what we assume in the OCC going forward. On the Dutch mortgages, we are indeed happy with the exposure that we have currently, so we don't foresee expansion of Dutch mortgages on our balance sheet. We do see still some room to optimize the investment portfolio. At the investor update, we announced that we want to increase the exposure in illiquid credits. I think we are now over half of it. The portfolio acquisition of private loans from NIBC will bring us probably at roughly 75%. There's still some room for further optimization on the illiquid credit side. On the Dutch mortgage side, we are happy with the exposure that we have. What you mentioned about increasing spread widening on mortgages will indeed result in higher OCC. Every quarter, we look at the spread level at that moment, and we take that into account as the excess return for that quarter. Higher spread widening will then indeed flow into OCI. I think the last question was on the UFR side. We have included in a sensitivity for different levels of UFR in the appendices. What you may assume on the UFR size is that it's well came down significantly given the fact that the 20-year swap rate was increased with 163 basis points in the first half year of 2022. Given the 173 basis increase of the 20-year swap rate, you may assume that the total UFR level decreased significantly, and that's also reflected in the lower UFR track. Thank you. Our next question comes from Michele Ballatore. Please go ahead. Yes, thank you for taking my question. My first question is on the investment portfolio. You mentioned some changes in your introductory message, which I don't know if you can give some colors on these changes, if you intend to do more on in terms of management of your assets, given the current investment environment. This is the first question. The second question is if you can give us more color on the trends in your fee-based businesses, both in asset management and distribution and services. Thank you. Okay. On the investment portfolio, if I understand your question correctly, and Michel Hülters, then the question is, what have we done in the optimization of the investment portfolio? Yes. Okay. What we have done is that for the first half year of 2022, we did some further investments in the illiquid credit side. We optimized a bit conform to the plan that we had. Also, we did some extra exposure in illiquid credits. Secondly, what we have done is that we also increased the exposure in equity. Net was EUR 200 million additional re-risking in equities. That was partly in wind and solar farm. That was also partly more in other equities. That was a bit offset by the fact that we have sold our Axcel shares because it was delisted. We had an exposure of EUR 80 million for that. EUR 200 million net on the in re-risking in equities. Some in illiquid credit. We increased the exposure in most cases also a bit. That was the total developments on the larger developments on the investment management portfolio. Your question was, what is the color on trends in the distribution and in the fee-based business. We always split that between distribution and services and the asset management. I think distribution and services, limited development, slight increase of profitability, mostly due to growth in the distribution companies. Secondly, when we look to the asset management activities, we saw larger movements there. Of course, as a result of decreasing equity markets and higher rates, the asset management came down a bit, resulted in somewhat lower fees. But that was more than offset by the growth in mortgage funds and also growth in the real estate funds. That together resulted in an increase in the asset management fees and profitability that we have. It's limited compared to what we see in non-life and in life. Thank you. Our next question will come from Michael Huttner. Please go ahead. Fantastic. Thank you. Well done for the results and lots of lovely answers. Headroom on the debt. Any thinking on incentive compensation for management? Why is the current level of visibility combined ratio, I think it's 90.7%, how can it be sustainable? Is it? It looks extremely profitable. These are my questions. Thank you. On the headroom. Headroom on debt. Yeah, on the headroom of debt. We saw that we still have many headroom on our balance sheet. I think when we look to the numbers, we have seen that the headroom for Tier 2 capital came down as a result of lower SCR, so our required capital came down. As you know, Michael, the Tier 2 headroom is also a relative portion of your required capital. As a consequence, the headroom for Tier 2 came down. We still have ample headroom for Tier 1 capital. I think when we look to our leverage ratio, we do have opportunity to have more leverage on our balance sheet without triggering a risk of a downgrade in our credit rating. Very happy with the headroom that we currently have on the balance sheet to provide us ample flexibility. I think the second question was on management compensation. Yes, it was. It's always difficult to comment as management on your own compensation. We are aware of the fact that supervisory board is currently looking into it, and we've also seen that there are questions on whether the skin in the game of management shouldn't be increased. That's up to our supervisory board, and we are aware of the fact that they are currently looking into it. In the meantime, I think we've delivered with the current compensation, so I shouldn't worry whether the level of compensation interferes with our ambition to deliver on our targets. The third question was on the disability combined ratio, whether that is sustainable. Historically, Ewout did run the business over the last couple of years. Historically, I've been responsible also for a very long period for disability. Over time, we have seen some worries, but over time, the disability combined ratio has always been in the area of the lower nineties. It's consuming a bit more capital than other businesses, so you need to be at the lower end of the nineties to be structurally profitable also from a capital point of view. That's why we, over the last couple of years, have increased premiums, especially in, for example, sickness leave, but also in collective disability because those business lines didn't meet the profitability requirements anymore. It moves in general over time through the cycle between 90%-92%. Okay. Thank you very much. Thank you. Okay. We will take our next question from Paul Walsh. Please go ahead. Your line is open. Good morning. Thank you for your commentary and for taking my question. Two for me, please. One, I know we've discussed this, already during previous questions, but in terms of inflation, could you maybe give me just kind of a general picture of the overall impact of inflation on your business at the minute? Secondly, with regards to IFRS 17, could you please give me an update about your IFRS 17 preparations, please? Thank you. Well, both questions, especially the last one will be answered by Ewout. Yes, absolutely. Thank you for your question, Paul, and nice to have you on the call. On inflation, indeed, the impact of inflation on our products is in different ways. I think we have some long tail business where you see the impact of inflation coming in to our balance sheet. That is mostly the Life segment where we are exposed to, you know, expenses to higher inflation, which needs to be capitalized, as you know, and also in the Disability where partly expenses but also partly claims can be exposed to higher inflation levels. We have disclosed the sensitivity that we have for higher inflation, and we see that the sensitivity for higher inflation came down compared to what we have seen, for example, during the full year numbers. That's also a result of higher rates. Because of higher rates, we also see that inflation sensitivity is coming down. I think in the sensitivity, we now see that 30 basis points increase in inflation will cost us probably 1 or 2% solvency points. That is less than we have seen at earlier days, but that's mostly due to the fact that we now have higher rates, which means higher discount rates and a less impact of inflation on the balance sheet. Secondly, we also have inflation exposure, of course, in our P&C. I think Jos explained it quite well at the earlier moment, is that we have in the terms and conditions clause that we can increase the premium by the inflation that we see in the market. That means that we are not so sensitive for inflation in the short-term products that we have in P&C. There might be a small timing gap between inflation kicking in and it being reflected in the premiums. Till today, we don't actually see that impact. All in all, we believe a very manageable inflation sensitivity at this moment and well recognized in the provisioning. On IFRS 17, we have done—I don't know if you have seen it, Paul, but we have done a teach-in session on IFRS 17 in June. This is where we have give some additional information where we are on the IFRS 17, but also give some flavor on how the numbers, especially from a balance sheet perspective, would look like. Well, like all other insurance, we will be very busy in the coming months to come up with what we call an opening balance sheet for H2 2022. We will not disclose that. That will be disclosed when we have the interim results for 2023. We already have to prepare it today. What we will do in summer of 2023, and the date will come, is that we will come up with the IFRS 17 numbers, and we also will come up with new target setting based on IFRS 17. That's where we are today. We're working very hard. The team's working very hard. I think a lot of people have headache because of all the work that needs to be done. We are on track to comply with the deadlines. We will provide additional information in the summer of 2023. Thank you very much. Thank you. That will conclude today's question and answer session. I would now like to hand the conference back to our hosts for any additional or closing remarks. Thank you very much. Well, everybody, hopefully it gave some even more insight on how we've done over the first half and maybe as important, how we expect to develop the company going forward. We loved to take all of your questions, especially we are very thankful to those analysts that called in from their holiday places. Hopefully you will enjoy your holiday for the remaining part. The other part of the analysts we will hopefully meet tonight in London, where we do host our traditional dinner and where we can talk forever about ASR, as we have done over the first half and going forward. I'm looking forward to see you all, some of you tonight and the other ones hopefully later this year. Thanks a lot and enjoy your vacation as if you're still on vacation. This concludes today's call. Thank you for your participation. You may now disconnect.