Andrew James Ritchie: Ladies and gentlemen, welcome to the Allianz conference call on the Alliance Group financial results for the second quarter of 2025. For your information, this conference call is being streamed live on allianz.com and YouTube. A recording will be made available shortly after the call. At this time, I would like to turn the call over to your host today, Oliver Bate, Chief Executive Officer of Allianz SE. Please go ahead, Oliver.

Oliver Bate: Thank you, Andrew. I'm not sure what host means probably I pay the bill, but I don't know why. But I'm very happy to talk to you today. Thanks for your interest on this beautiful afternoon in Munich. I would like to do an introduction into the discussion and then Claire-Marie will go with you through all of your questions and a lot of the details that you may be interested in. Let me just start. Initially, even though this is the analyst call about what we are going to talk about, that is the delivery of the strategy that we have discussed at the Capital Markets Day in December, and that's exactly what is happening now. As a reminder, while we report in 3 segments: P&C, Life, Asset Management. Reality, we run from a customer perspective, 2 businesses. We run the protection in the retirement business and those are we are trying to drive further at this point in time in terms of value creation through 3 most important levers, there are many others behind. But the most important one, our 3, driving smart growth going forward. As you know, historically, Allianz has worked very hard on bringing the brand forward, customer satisfaction forward productivity, but it's now time to translate the strength of the foundations into growing market share. The second one is further reinforcing productivity. You can probably spend hours on the impact of AI on -- that the one thing we know for sure in our industry. We now have the opportunity to really process unstructured data in a much more productive way than any time before. And we're going to leverage that, not just in administration or call centers, everything is -- everyone talks about, but also how do we serve customers better, and you can measure that in terms of expense ratio for sure, which we've been improving for a long time again in the first 6 months, but also other items as you're going to see. And the further one and given this -- how do I say this properly, interesting political and economic environment, we need to further strengthen resilience because that's what customers want, and that's many of our shareholders want that too. What is the core message is Allianz has been, for a long time, a world-class product organization. We are exceptional at the products we design and sell and service. What we can do better is to help serve customers across products. And you will see that in lower -- in the form of lower lapses over time and in the form of higher cross-selling, some of that to come. Now on Page A5, let's please move there. Just 2 examples from the first 6 months, one, focus is on internal or growth in the P&C segment. The other one is on productivity, again, highlighting it through the expense ratio, we can take other items as well. On the first one, it's very important. We've shown 8% growth, and that's really important, of which 5% is pricing and 3% is volume. And the biggest contributors to the volume have been during the first 6 months. And by the way, they often change over quarters. They may change year-by-year. But this time, it has been Allianz Partners. So our platform business is keeping on growing very strongly. It meets very important demands in our economy. AGC&S, it's Brazil is growing leaps and bounds after we have completely reformed the platform. And certainly, last but not least, Germany, which -- where all our investments in improving performance are really paying off. Now you can take subcategories and say, yes, yes, yes, that sounds great. But what happens in retail, what happens at partners, specifically what's happening in commercial lines, and you see that the commercial lines number, let me just explain, we had very significant growth in the Health side of Alliance Partners that we account in the commercial lines segment. So the 6% growth number that you see there is without partners, and that's at a very solid 6%. partners, I mentioned it's 9% and retail lines is 8%. So across the segments, we see very, very, very good results. On the productivity side, the same picture as we've had the last 7 years, and you see from '22, but we can go back to 2019, where we started with the journey in terms of seeing it. Remember, we are coming from 28.6% expense ratio in 2018. Now this year, you are seeing for the first 6 months, 24%, that's 4.6% lower and every year, 30 to 50 -- 30 to 40, sorry, basis points improvement, and we do not intend to let go. Sometimes per OE or region, some of these numbers may change because of a change in the product mix, the change in the distribution mix. In an aggregate level, we do not expect this number to change over the coming years. It's certainly not for the strategic cycle that we've talked about. Now let me take your attention to Page A6, just an update on what we're doing on the portfolio. For the last 10 years, we've systematically said, we refrain from big acquisition, we focus on bolt-on and things that bring us new capability, maybe new distribution access or a new business model invention. So let me actually guide you through them and I start on the right-hand side with Sanlam, as announced before, we have stepped up our participation in the joint venture with Sanlam to 49%. We always said we want to do that. We want to be present, but we want to be present in Africa with a partner whose destiny and origination is Africa. So we are much better placed than where we were before. I think we are now -- at least 3x the size of our next competitor in order to be able to exploit the opportunity. And remember, the JV covers all countries outside of South Africa, the home market of Sanlam, yes. So that is important to say. I'll talk about India in a second. Let me turn to other investments that you could consider to be more traditional. In Australia, we went into a strategic partnership with the Royal Automobile Association of South Australia. It is very good for us because it helps us to diversify also from a net cap perspective. So in terms of net capital consumption, it's also pretty good. And then in Allianz Direct, we have done a number of very targeted small acquisitions in order to build on the scale of the platform. Remember, Allianz Direct is one of the very few businesses that exist in our industry that operates across countries with exactly the same operating and IT platform. It's not like they look similar they are identical. And now we need to integrate these portfolios to build the scale on the platform. You see that some of these acquisitions will only come into the numbers later this year or early next year. Now more unconventional, you may say are what we've done on Sconset Re. This is a continuation of the work we've done in '21 where we hived off EUR 36 billion in reserves. Now we have created an open or so-called open book or flow reinsurance structure in the United States in order to be able to not just address in-force books, but also new business that makes us competitive in products and segments that we were not competitive in before because of Solvency II on our capital model having different cost of capital. And we continue to work on similar solution like Sconset Re in order to optimize the usage of capital in the United States. Remember, because of the RBC model, actually compared to Solvency II, the U.S. is not very capital efficient because we cannot use the value of the new business as an offset to capital requirements, so we need to continue to work on capital efficiency while growing the franchise. The other one is Viridium. We have led a consortium that has taken over the company. We're very happy to having just closed this one, having received regulatory approval a while ago, and we want to combine our expertise in terms of running life insurance books with the expertise on the investment side, we are also the leader in asset management service provider to Viridium, so we expect a significant boost on our ability to grow both PIMCO and AGI out of this partnership. And by the way, Allianz Investment Management is the partner for Viridium in terms of asset allocation. So that's just a little bit of a view. Let me then hit to the most important strategic development of the quarter We've just announced our partnership in India with Reliance group. Many of you may know Reliance group really well. It's not just the biggest petrochemical and chemical company in India is also the biggest retailer in India. And it's also the biggest mobile phone company. Just to give you some numbers that are quite staggering. If you think about JioPhone, they have 494 million -- so almost 500 million subscribers. They have -- and that's very interesting. In the retail side, 356 million regular customers in Reliance Retail and just JioMart, which is sort of the Amazon equivalent does 600,000 deliveries a day. By the way, last year, Reliance Retail recorded 1.26 billion sales transactions in their retail network. So it's a giant partner that we're starting our journey with. Now a couple of you will say, so why are you starting with reinsurance, given the numbers you just mentioned as a very simple answer. We do not have any competition issues with our current partner Bajaj. Therefore, there is no issue with noncompete. That's why we're starting now, and we're launching with the renewal season that is in April of 2026. But as soon as we have fully exited our partnership with Bajaj, which is happening in a very amicable way, we are going to launch in commercial lines, in P&C, retail, in health and subsequently in all lines of insurance and by the way, also insurance services as a partnership. I'm also proud to say that in difference to what we had before, we have a 50-50 relationship, but we are going to have management control and that is the first apparently in the universe of Reliance. So we are very proud about that. Now you -- some of you will ask, so why did you then change is, again, a very simple explanation, while we founded the insurance company in 2001 with Bajaj, we contributed 100% of the capital that ever went into Allianz Bajaj, we brought the people. We brought the IT systems at the time. We grew it together, but we could only own and control 26% of the capital. And we could not agree with our long-term partner Bajaj to a very simple fact that Allianz would want to run the insurance business. We are not in the investment business for insurance. We are in the operating business. And as Bajaj -- the Bajaj family eventually decided that they would not ever relinquish management control to us. We have had to decide to find a new partner. We are extremely proud to have partnered with the best partner that we can ever imagine India, that's the Reliance group and the Ambani family. We are very, very proud and dignified by them partnering with us. And I gave you some numbers, the potential is gigantic. So that's what we have done in the first 6 months of this year in terms of working on the portfolio, strengthening growth and there is more to come, the investors over the next couple of months, following the same strategy that we've had for a decade now. Now let me turn your attention to Page A7, just to give you an overview. For us, it's very important to continuously deliver. And there may be a quarter where some of you feel well, this is a little bit light there? And why is this part of the portfolio not perfect. Just look at the growth profile, the financials delivered and the balance sheet strength, Property-Casualty internal growth that is always remember, without M&A and FX, 8% up over the first 6 months. New business value growth in Life is 9%. Asset Management AUM growth is a little lower, given what we have discussed, annualized at 4%, but already in July -- already July, i.e., already in the first month of the third quarter, we had $21 billion of net flows into PIMCO. So the growth continues extremely strongly. A lot of the FX -- translation FX are really noise clamory. We'll talk about it because the really relevant numbers that dividends coming out of the U.S. are hedged forward and therefore, that is something that we need to discuss. In terms of financials, operating profit is at 54% of full year midpoint. The core EPS is 8% and there we have been taking out both the tax we had to pay, but also the gains on UniCredit and the core return on equity is at an annualized 18%, which is an outstanding number, particularly relative to what our long-term average used to be. Capital generation, I'm very proud of the finance team and our OEs is significantly improving. We were heavily criticized in the past for operating capital generation. It stands at plus 13% for the first 6 months. Solvency remains strong despite all of the volatility. And obviously, there's a connection between point 1 and 2. And of course, our rating have been confirmed, and we have very good outlooks on the rating. So the overall picture, while every now and then something may move in a crazy world. I'd like to also mention one thing that I find very important. I've seen some comments around sort of we had lower nat cat, but we also had prior year development. No, I've been here 18 years. I never understand these questions. We do not need high runoff, and we certainly use every opportunity to be extremely prudent in setting our reserves, if I may say that. Now with that, I hand over to Claire-Marie to give you some more color on the details in all the segments around growth, profitability and whatever you want to know. Thank you.

Claire-Marie Thomas Coste-Lepoutre: Thank you very much, Oliver, and good afternoon to everyone. So looking at Page B3. Here, you can see, as mentioned by Oliver already that the group has delivered excellent results in the first half of the year and in the second quarter as well on a stand-alone basis. This is clearly positioning us very well for the full year targets, but as well towards our Capital Markets Day ambitions, also, as mentioned by Oliver. First, what you see on this page is that we have a strong level of growth that is coming across our 3 segments. And we continue to see that growth stemming from the 3 segments as we have seen previously. So we have a strong consistency here despite some FX effects that we have also seen in the quarter. So we grew at a total business volume of 8% at constant FX. As you can see on the page as well, it would have been double-digit growth at 10%. Our operating profit in the second quarter is even higher than the record level of operating profit we have achieved in the first quarter. So overall, our first half operating profit is at EUR 8.6 billion, which is up 9%, clearly an excellent level, which is fully on track against our guidance of EUR 16 billion plus/minus EUR 1 billion for the full year 2025. Here as well, as I have been mentioning for the growth, our 3 businesses are contributing to the positive development of our operating profit with a stronger support from P&C, as you can see on the page as well. We see as well an excellent development of our core net income, which did benefit from the sale of UniCredit Vita JV in the second quarter. But if I adjust for this gain on sale and for the famous Bajaj-related tax provisions that we have booked in the first quarter, our core net income is up 6% and our core EPS is approximately at 8% growth, which is the midpoint of our 7% to 9% EPS growth rate that we have been mentioning during the Capital Markets Day. As mentioned by Oliver as well, we continue to deliver an excellent level of IFRS ROE, which for the second quarter on a stand- alone basis is above 19% on a core basis. And I think even more fundamentally, I would say, beyond the P&L item, our resilience remains strong in the environment today that is quite challenged overall. Our Solvency II ratio emerged up at 205 -- 209%, sorry, with an excellent capital generation of around 13 percentage points in the first half of the year. So overall, an excellent set of numbers from growth to profitability and financial strength. Clearly, this is making us very happy as you have heard as well from Oliver clearly in his introduction. So moving to next page and having a look at the P&C business before. Here, we see a strong level of growth and an excellent level of profitability in both retail and commercial. In the second quarter, we achieved an even better level of combined ratio compared to the first quarter, and we have delivered an even higher level of operating profit, which was at a record level already in the first quarter. This is bringing our first half operating profit to EUR 4.5 billion, which is up 12% versus last year. This is the outcome of, first, a higher volume level, which we are earning through at an increased level of margin with some offsets from FX effects in the investment results. First, we see a good top line momentum that is continuing in the second quarter. This results in an internal growth rate of 8% for the half year. The growth was driven by both price 4% and volume 5% in the second quarter on a stand-alone basis. The volume effect was higher compared to the first quarter with very good volume growth from commercial lines, as you have seen as well, in particular from partners. And as mentioned already by Oliver, we see plenty of good example in the quarter of our platform play. In addition to partners, we have direct, which has been growing by more than 20% on an internal growth basis in the first half, with more to come, I would say, in the second half of the year as we are integrating FRIDAY and iptiQ, which are 2 acquisitions you may remember, we did previously. Our pricing trends continue to be robust in general with clearly quite some differences and nuances between geographies and line of business. But the average renewal rate at 6M is at plus 5%. The pricing continues to be strongest in retail lines, where we are at plus 8%. We are close to 10% in motor retail and mid- to high single digits in all other retail lines. In commercial, the rate momentum continues to trend downwards and now stands at plus 1% across our portfolio, where MidCorp remains resilient, and we see some softening continuing in the large corporate space at AGCS and Allianz Trade as an example. Our underwriting profitability is excellent with our combined ratio at 91.5%. This is fueled by 3 main dimensions. The first one is that we have an excellent attritional performance as we are earning through our pricing and our underwriting actions. We have had a relatively benign nat cat experience, but this has been counterbalanced by a conservative level of reserve setting, as already mentioned by Oliver as well. And we continue to focus on our productivity with our expense ratio 40 bps lower than last year at 24%. By segment, you can see as well on this page that we have strong improvement on our retail business, while the commercial profitability remains very good at 91%. Overall, it was an excellent first half for the P&C business. Our operating profit is 12% ahead of the midpoint of our guidance run rate. We have good underlying volume growth. We have an excellent underwriting profitability and the positive developments are very broad-based, both from a line of business perspective, but as well from a geographical angle. Let's now move to Life, and let's have a look on Page B5. Well here, we continue to see a double-digit new business growth at an attractive new business margin of 9.6% in our preferred line of business, which is very important from -- also from a resilience perspective. Our operating profit is up 5% versus last year, which is exactly in line with our outlook and also with our Capital Markets Day expectations. What I find very interesting when you look a bit further into the details of our portfolio is that our Life businesses outside of our 2 largest entities, Germany and basically Allianz Leben and AZ Life contributes just over 60% of the operating profit and increases their contribution 11% year-on-year. So we have a high quality, and we have a very well-diversified portfolio on the Life and Health side. This is as well what we see in terms of new business growth for the half year, which is really broadly spread with double-digit growth in Germany, in Italy, in Asia or CEE as an example. As always, we do have the second quarter on a stand-alone basis, which is a bit lower than the first quarter in terms of growth. We always have some seasonality in our growth development in Life. We should also expect to have a bit of a lower growth in the third quarter as well. And on the operating profit side, the second quarter was a bit impacted by FX and as well some weaker investment results, which are partly reflecting the market volatility we have experienced during this period. We are particularly pleased with the underlying CSM development in the first half of the year. Here, 2 points to mention. First, our CSM growth adjusted for FX effect is almost 4%, which clearly demonstrates our low level of noneconomic variances in the current environment. And secondly, our normalized CSM growth is around 3%, which is clearly a strong level of growth relative to the 5% annual expectations we do have for normalized CSM growth. So in Life and Health, we see a strong market appetite for our products, which is continuing and be fueled by the secular trends we have discussed in the Capital Markets Day, the quality of the Allianz brand and the trust in our resilience. This clearly allows us to build sustainable value that we are going to earn in the future as we are going to earn the CSM going forward. Let's move to B6, and let's look at our Asset Management segment, where here as well, we are delivering very good results in a very volatile quarter. First, when we look at our results, you need to keep in mind that more than 70% of our third-party assets under management are U.S. dollar denominated, meaning that it's very important to look at the underlying to judge the performance. And from all 3 segments, you need to note as well that Asset Management is the most impacted by the U.S. dollar volatility. Corrected for FX effect, our asset under management growth is around 4% with net inflows at EUR 42 billion, which means an organic growth rate of around 4% annualized. This is clearly very strong for a pure active manager, in particular, in the volatile market we have experienced in the first half of the year. The inflows we have experienced mainly emerged from PIMCO. And here are some colors I'd like to give. First of all, PIMCO continues to see an excellent traction in its active ETF proposition, which is now sitting at EUR 40 billion of assets under management, and we have seen EUR 10 billion year-to-date of net flows into that proposition. Beyond the fixed income strategies, we have seen as well the credit and the private alternative strategies as being the ones which have attracted most inflows this year. And into July, as mentioned by Oliver, we continue to see more than $20 billion of inflows, where clearly, I think the offering from PIMCO continues to be supported by a strong outperformance in terms of Alpha for our customers of our strategies, which is being delivered over time. So really structurally in a 5-year, 3-year, 1-year approach, you consistently see that outperformance. And in the challenged environment we are experiencing currently, this is also a huge opportunity for PIMCO to create more value for our customer. Clearly, our profitability in the Asset Management segment is very resilient with an operating profit, which is up 5% in the context of negative FX effect and lower performance fees. Excluding performance fees and FX adjusted, our operating profit is up 7%, which demonstrates the strength of the underlying in a volatile environment. At both our asset managers, our third-party asset under management margin remains very stable, as you can see as well on this page, in a competitive environment and our focus on productivity is unchanged as the development of our cost-income ratio clearly highlights as well on the page as we are emerging at 61.3%. While we may continue to see the translation effects from the U.S. dollar into our numbers in future quarters, our strong track record on managing productivity, efficiency and profitability provides resilience into our numbers. We are confident on continued net inflows and our ability to create value for our customers and shareholders as well on the asset management side. Let's move to Page B7, and let's have a look at the development of our solvency ratio. We remain strongly capitalized with our sensitivities broadly unchanged, as you can see also on this page. Some elements maybe to highlight when it comes to the development of our solvency ratio since the beginning of the year. We have an excellent organic capital development at 13 percentage points year-to-date. As a reminder, for the full year 2024, we were at around 20 percentage points, and we expect to achieve more than 20 percentage points for 2025 with our medium-term objective to improve the run rate of our operating capital generation to 24 to 25 percentage points in 2027. As an organization, we have been very, very focused on this metric, and we see some of the early benefits of this in the improved generation year-to-date. We as well had in the first quarter, some positive variances in particular from Life, which I don't think are to be fully extrapolated into the second half of the year. Our operating capital generation is partially offset by the cost of the 2025 buyback program and the normal dividend accrual, as you can see here, with minus 11 percentage points. Then we have a small negative market impact, and we have a positive contribution from the management actions we have taken, mainly from the reinsurance transaction at AZ Life and the disposal of the UniCredit Vita JV. Those results reiterate our confidence on the strength and resilience of our capital position. At this stage in the year, we feel even more confident in our ability to improve our capital generation as we advance the initiatives outlined at the Capital Markets Day. Let me conclude on Page B8. Clearly, our results are excellent. We see continued business growth stemming from all 3 segments and a record level of profitability. This positions us very well for the second half of the year and allows us to reiterate our outlook of EUR 16 billion plus/minus EUR 1 billion operating profit for 2025. More fundamentally, this has well positioned us very well for the delivery of our Capital Markets Day ambitions. As mentioned by Oliver, as an organization, we are focused on working on the initiatives along the 3 levers: driving smart growth, reinforcing productivity, and strengthening resilience. And I will say the energy and the creativity also in cross-sharing the initiatives we have experienced during the meetings we had with the Board of Management of each and every operating entities together with Oliver in May is very much comforting in our ability to deliver against our ambitions. With that, I thank you all very much for your attention. And I hand over back to you, Andrew, for questions.

Andrew James Ritchie: Great. Thanks, Claire-Marie. Okay. So we're ready to take your questions. [Operator Instructions] So with that, it looks like the first question is from Andrew Sinclair from Bank of America.

Andrew Sinclair: First for me was just looking at the undiscounted attritional, which is a really, really good figure. What scope do you see for further improvement from here? I think it 70.9% for the half year. I think Q2 stand-alone was about 70.3%. You mentioned there's been some conservative booking. Does that include conservative booking of the attritional? Or should we think about this as a pretty good level, where can we go from here? And then second was just on AGC&S. The rate changes minus 0.9% for Q1, minus 2.6% for H1. By my math, I think that means Q2 is down about negative 4.5%. But you have still got internal growth in AGC&S. Just really wondered if you can give us a little bit of color in terms of where you feel on rate adequacy for different lines. Are there any new areas where you're concerned and where you're happiest to push more for volume?

Claire-Marie Thomas Coste-Lepoutre: So thanks a lot, Andrew. So let me start maybe with the attritional loss ratio. So indeed, I think the undiscounted attritional loss ratio in the second quarter was very good at 70.3%. The main driver for the improvement was the retail business. However, I think the commercial business contributed as well. What we see clearly in the 70.3% is the earnings of the pricing and the underwriting action that is structurally coming through. What we see as well is that indeed, the undiscounted attritional loss ratio first quarter peak was a bit higher because indeed, as I mentioned to you at that point in time is that you are always a bit more conservative at the beginning of the year and then you recognize more of the benefits as the year is coming through, but also in balance of the overall performance. At this point in time, I would still consider that you should look at the half year, right, which is at 70.9%, which is good and which is also slightly ahead of our target for the year, which I have guided towards, which was 71% to 71.5%, which for me gives you a good reference still. So as things stand for and as we are earning the benefit of our actions, I'm confident we may emerge a bit better on that dimension or to put it differently, we may emerge also a bit better on our overall combined ratio that I had guided towards 93%, maybe a bit better than that overall. So I think that's what you can anticipate a bit given the strength of the underlying actions we see. And remember, Andrew, there is always a bit of possible noise in the attritional loss ratio because that's coming from retail plus commercial plus many different line of business and so on and so forth. So that's why I think looking at it overall is also giving you a good indication, I believe. I think then you were asking what are the development on the -- what are the price development we are seeing in the context of the commercial business, right? So I think, first of all, and you know that very well, Andrew, but I think it's important to have in mind that for us, the commercial business is made of really different buckets, right? We have the Partners business, we have the Trade business, we have the MidCorp business. We have the reinsurance business from Allianz Re, and we have AGCS that is focusing on the large corporate only. And we are focused at the level of -- I mean, across the book to grow in a very profitable manner. So we are focusing extremely tightly on technical excellence of our underwriting. This is also the case for AGCS. So even if we see some year-on-year rate reduction because clearly, the market is softening, I will say, across geographies and across line of business to be a bit nuanced, as I always mentioned, right? I think the areas where we see that we are mostly impacted by rate decrease will be cyber will be property, will be aviation, steel will be -- so I think it's quite broad-based. But it does not mean that the actual price against the technical price is not above 100%, which is very important to have in mind because you can be fairly priced even if the price is going down. So in many of the line of business and geographies, we are still in a status where we are fairly priced, but the price is going down. So we are grabbing some good businesses in the case of AGCS, where we are strong. like in the construction or in the -- still in property and so on and so forth. So there are really a lot of pockets where we can tap and grow nicely, as you may remember as well, also because our market share offers opportunities for growth in the case of AGCS. And also clearly, we have a good new commercial dynamic in the environment of AGCS also with the arrival of the new CFO -- CEO, who is activating some part of the organization as well.

Andrew James Ritchie: Okay. And obviously, we've got a lot of Andrew's around today. It's a very unfashionable name, but here we have another Andrew. So Andrew Baker from Goldman Sachs.

Andrew Baker: So I guess the first one, obviously, P&C, the internal growth still looks really strong. If we look at the insurance revenue, it grew 3.8% in Q2 alone. I appreciate some of this was FX. So are you able to give us what the FX impact was there? And I guess, any view on if we assume constant FX from here, how you would expect the insurance revenue line to develop would be really helpful maybe in '25 and '26? And then similarly, unfortunately, on the FX volatility, just on the P&C operating investment result. So again, FX impacts, Argentina had some impact. I think previously, you guided to EUR 2.8 billion or so for the year. Is that still a good number? Or should we relook at that just given some of these volatile items?

Claire-Marie Thomas Coste-Lepoutre: So on the P&C investment results. Indeed, you are absolutely right. We have seen a bit of -- I mean, a reduced level of operating investment results in the second quarter with some elements actually related to FX in the broad sense, right, mainly related to some hyperinflation countries. An example of that will be the fact that we had less return from the inflation-linked bonds, as an example, coming from Argentina and so on and so forth. But I would say at this point in time, and with the way I continue -- I mean, I think you need to think about it is that our outlook was at EUR 2.8 billion for the overall investment result for the year, which basically was implying EUR 200 million less compared to last year in the P&C segment overall. So if you look at the half year, we are exactly EUR 100 million below what we were in the -- at 6M last year 2024, which is absolutely consistent with the assumption we have taken. So we will really keep our guidance as we have provided it in the -- I mean, when we have set the outlook. Then you were asking...

Andrew Baker: Revenue growth.

Claire-Marie Thomas Coste-Lepoutre: Revenues. Yes. Okay. So on the -- so basically, on the fact that we -- yes...

Andrew James Ritchie: Sorry, Andrew, your question was how do we think about the revenue growth? The volume growth was high, but the revenue growth you noted was lower.

Andrew Baker: Precisely. Just how do you think about that with the FX impacts at all?

Claire-Marie Thomas Coste-Lepoutre: So I think, indeed, we are a bit lower. We are at 5.4% in the first half versus -- what, I mean, versus our Capital Market Day commitment, which is like 6% to 7%. I think that's a fair point. You have two elements you need to have in mind. Andrew, the first one is that indeed, we have the FX effect. And secondly, we had this transfer of some health business, I mean, the German health business and the -- so the UBR business, right, and the health-related business or life -- health-related business in Austria that was also transferred to the Life segment. So yes, you're correct for this later effect, then our growth is at 5.9%, which is towards the low end of this 6% to 7% commitment. And I think that's the way you need to think about it basically because this year-on-year effect related to that transfer will neutralize itself over time, 2026, 2027. [Audio Gap]

Andrew James Ritchie: Our next question is from Michael Huttner of Berenberg.

Michael Igor Huttner: I have two questions. One is hopefully for Oliver, well, Claire-Marie. Have your competitors or has gone to sleep, not just you, but we're seeing amazing combined ratios and very strong outlooks on pricing above loss cost in retail pretty much across the board. And is this -- what's happening? Have the consumers kind of said, no, we'll pay more? I don't quite get it. And then the other one is on the -- just a really silly question, maybe I put two together. The cost of the AZ life hacking and the cost of French fires, the more recent ones. That's it.

Oliver Bate: Yes. Thank you. As usual, very nicely phrased, smart questions. I'll deal with the U.S. is an unfortunate event and the key thing is really to protect our customers and to protect the business. That's the most important thing. At this point in time, from what we understand, it will not have a material impact at the group level. This is really important to understand. The key thing is to actually thank our people because at AZ Life, our employees are working 24/7 now to call our clients, our distributors and reassure them that Allianz is safe. Also, just to put it into perspective, the key thing is while there was a data leak of large numbers, there was no financial data released. So no policy content, no credit card numbers and things like that. So it's mostly contact numbers. And that is very important to know. But let me repeat because it's very important. At this point in time, we do not expect a material impact at group level out of this event. So that's for the first one. And the other one is in terms of pricing versus volume. It's very fair what you're saying, and I'm very concerned personally and many of us are about the issue of affordability of insurance for consumers. It's not just in auto, but it's also in home insurance. It's in health insurance. So it is not something to laugh about. The only way to really address this is twofold. The first one is to strengthen the quality of products and services to a point that customers feel that they are getting true value from us for what they pay. That's been a journey that you know we have been on for a long, long time. We will, in the fall, show you our updated Net Promoter Score numbers, and they're again improving massively in terms of loyalty leadership. So that's important. And you see that also what happens on the claims side. The other one is to try to pull every lever for our clients to make our products more affordable. So yes, shareholders should be happy about the productivity gains, but also customers because part of that, we are reinvesting into the business. And the third one is often goes unnoticed. The businesses that we are building as service offerings that complement our insurance offering, particularly offered by Allianz Partners and [ SOFE ] have 2 components. The first one is to improve service quality and therefore, value for products. But the second one is also to help to reduce the cost of risk. To give you a practical example, and we don't have the time for details today is when we route a claim, a casco claim in Germany through [ SOFE ] and by the way, also in other countries, but for Germany, I have the number on the top of my head, the casco claims outside of deductibles about EUR 6,000, EUR 6,500. We save about EUR 1,000 out of that. And that allows us to significantly reduce the price paid for the consumer. We're offering a significant discount. And that role, whether that's a car, by the way, today or a home tomorrow or even health care will have over the next 10 years, a much larger share of our think and our value proposition for consumers. So it's a very good question. But so far, we are able to fend our pricing, but we need to keep on adding value to consumers. Otherwise, it will become very tough.

Andrew James Ritchie: Next question is from Fahad Changazi of Kepler Cheuvreux.

Fahad Usman Changazi: Just on the P&C discounts, previously it was guided to 2%. I mean where are we seeing this end up for the year? And I suppose what are you assuming for Turkish interest rates, which might impact it? Second thing on the expense ratio, they're running better than the 30 bps capital markets guidance. Should we still be sticking with 30 bps? Is there something to do with business mix, for example, writing more reinsurance in the medium term, for 30 bps improvement is the right number to look at?

Claire-Marie Thomas Coste-Lepoutre: Yes. Maybe starting with your second question, yes, indeed, I mean, you always have a bit of a mix effect. So that's why our fundamental view is that you should be like taking into account more these 30 bps structurally year-on-year as being what we are aiming for. So that's really what you should be using. And then when it comes to the discounting in the first quarter, the discounting impact, you remember was relatively high. We were at 3.4% because we had some usual seasonality that we always see, but we also had some impact from hyperinflation Argentina. In the second quarter, the discounting benefit is at 2.5%, which is very much in line with our expectations. So all in all, given what we know already today about interest rate, I will see it very likely that we will end up the full year a bit higher than the 2%, which basically we were guiding for towards as part of our outlook. And we will raise land at 2.3% to 2.5%. But of course, it will always depend on what are the interest rates we are going to experience, but slightly higher compared to what we were considering at the beginning of the year.

Andrew James Ritchie: Next question is from James Shuck of Citigroup.

James Austin Shuck: So part of my question has been answered. I was interested in that difference between the internal growth in P&C versus the headline on the like-for-like. Presumably you mentioned you're at the bottom end of your range if you normalize for FX and other things. But presumably one of the missing pieces is also the ART's transaction. So I'm just thinking if I correct for that as well, presumably you're at the top end, but could you just clarify that. On the same topic, I just look at Germany P&C in particular, because the headline increased by 9.6%, but the like-for-like was 4.4%. I'm not aware of any disposals. So perhaps you can just help me understand why those 2 weren't aligned. That's my first question. Secondly, on Allianz Partners, Obviously, you've got a plan towards EUR 600 million profit by the end of the plan. You've got the 95% combined ratio target, 96.7% at 1H. It's now your biggest P&C segment really behind Germany, particularly if I look through the fronting that happens in AGCS. So Oliver, I'm just keen to hear how you think about this business as it continues to grow and scale. What do you think about in terms of the capital stack? Are you going to open up to the third-party capital at some point? Does it make sense for Allianz to be 100% owner? And how do you think about MGAs within Allianz Partner as well?

Oliver Bate: Sorry, James, it was quite hard to -- that your line is not great. The first question, I think, was -- we're focusing back on revenue growth in P&C. Did you ask specifically about ART business as well or something?

James Austin Shuck: Yes. Should I repeat it? Is the line better now?

Oliver Bate: Yes, I think that's the transfer between the health segment. If I understood it correctly, maybe you can explain that.

Andrew James Ritchie: And I think that particularly Germany is most impacted by the transfer of the health business. It's Germany and Austria from memory that are the most impacted segments.

Oliver Bate: Yes. James, this is Oliver here. Thank you for your question. So we have in Germany, an accident business called UBR that comes always in with 100% combined and has also always distorted our combined ratio numbers for Germany. And it is part of the protection business. As we sort of clearly formulated the strategy, wherein have transferred that. So that explains all the difference that you are looking at. It's a super attractive business, not under P&C KPIs because don't see the value creation more properly. That is maybe the first one. The second one was more around capital structure. It is a very good question. We continuously look at how do we access more efficient capital structure. So again, as I mentioned earlier, on the Life side, we need to continue with the likes of concept. We're using Viridium, and we want to, again, build it not just in Germany but across Europe that will offer the opportunity for our partners, but also for us and other markets to find more capital-efficient sources and then transform so-called spread business into fee income that comes with a lot less capital consumption and, by the way, higher valuations. And the same thing we will do and have been doing in P&C. Now there's a couple of things happening. The first one is whatever people say, and it's a bit differentiated when you -- if you have had LA -- nat cat exposure or not, Reinsurance prices are coming down for those that have been not attached. And more importantly, capacity is growing significantly and conditions are happening. So there is now capital available where there was no capital available. I think we're one of the only ones in the world that actually had an aggregate cover. So that's the first thing to bear in mind, and we're working on that. The second one is, indeed, we're not just looking at it for nat cat, but also for other businesses. For partners, that is not needed because they run an extremely capital-efficient set of products. Historically, the issue was a different one. It was, by and large, a services business is fairly low margin, a lot of operating leverage, and that is something that we are working on. If we, in partners, find a way to make it more capital efficient because they run a few businesses that are capital consumptive, we will certainly use them because we really like the 18% ROE that we have. Yes, that's it. And again, Claire-Marie and team are working very hard on improving capital generation for Solvency II. This is already working in the first 6 months. You clearly see it in the numbers. So it's happening as we speak.

Andrew James Ritchie: Next question is from Vinit Malhotra of Mediobanca.

Vinit Malhotra: I'll just ask one question. We heard this news about the early approval for restarting the AGI book in the U.S. And I'm just curious that you haven't really mentioned it today, Oliver. Maybe you did and I missed it, so apologies. But if you could just share some thoughts on that, it would be very kind and much appreciated.

Oliver Bate: Thank you, Vinit. It doesn't mean much short term. It's a big relief to me personally, Andreas Wimmer. We don't have to sign all these papers anymore. Second thing, we had some limitations in the sense of having to report on certain items from our U.S. entities that also has fallen away. So that's also a big relief to the colleagues at Allianz Life and at PIMCO. And other than that, it doesn't mean anything, right? It gives us more optionality as investment bankers would call it, but there's nothing in the cards or nothing changing as we speak. We are focusing really on further improving investment performance and productivity at AGI and growing as strong as we can. That's it. Nothing else in the cards at this point in time.

Andrew James Ritchie: Next question is from William Hawkins of KBW.

William Hawkins: This is a very high level one. So please forgive me. But Oliver, I wanted to ask you if you could delve a bit more into the opportunities you see emerging in Germany, please. You were recently quoted in the press reminding us about the fiscal pressure faced by demographics and the pay-as-you-go social security financing. And I guess I did want to ask at the macro level, how serious do you think that is for Germany, given that you're starting with an incredibly low debt to GDP, I recognize that it's relevant, but I don't know if it's as relevant given all the other fiscal pressures going on around the world. But then more relevantly, I wanted to ask you about the commercial business opportunities that you're seeing in Germany from maybe the need for welfare reform and the -- what could be very large infrastructure spending going on in Germany. Just sort of to tie it together, is there much going on that will be incremental to our estimates? Or is this all just sort of part of the general noise of macro?

Oliver Bate: Thank you. I'll keep it very short. We can have coffee at some point to go into more detail as a complicated subject. But we think about it as an opportunity, why? First of all, the state is now becoming as overleveraged as other European countries. That is not so good if you think about it in terms of the question of [ GEP ] to GDP. But the nice thing for us is we'll have a spread that we can earn for our policyholders, and we run their investments very well. Second, and you saw that the last 2 to 3 years, Allianz health insurance is growing leaps and bounds, and is doing extremely well. We are now the loyalty leader in health insurance in Germany. We are also very -- growing very strong in group health, which is a super strong growing business. It's supplemental because post-COVID employers, who are still struggling to attract talented people are using that to retain their key employees. So it's a huge growth area for us. And with the steepening of the curve, believe it or not, life insurance is going to come back, right? Because people always compare that to investing in [ Vidia ]. That's a brilliant idea. Much more brilliant is to look at the trillions we have in non- anything yielding bank accounts in this country, where I think one of the worst in the world. So that's the right thing and that cannot stay if people want to have decent retirement income. Now on top of that, and then I'll stop, -- we have a huge amount of unfunded pension liabilities in companies in Germany of any size in difference to many other countries. Why is that? It's not for a lack of offers from the industry is because the financing of these liabilities through external party extremely expensive because of misregulation. You have to pay 30% more in Germany to fund your corporate pension than, for example, in the U.K. or in the U.S. So we need regulatory reform if and when they come, which I can only hope for, we have two things. One, we have a huge business opportunity, and we can supply a lot more capital for the rebuild of our infrastructure. That's my last comment. It will only materialize if we have decent political leadership. Let's hope and pray they get something done. Thank you.

Andrew James Ritchie: Our next question is from Iain Pearce of Exane BNP.

Iain Pearce: Just one from me on capital generation. So in the capital generation side, I think you flagged a positive one-off from Life. If you could just give us a bit of detail around the quantum of that one-off and what it relates to, that would be useful. And then also just following that, I think even without that one-off, you would have been running comfortably ahead of the 20% guidance, probably closer to the 27%, 24% to 25% guidance. And your comments certainly imply that things are continuing to improve in terms of the levels of capital generation and the optimization going on within the business. So just wondering why we should still be sticking with 20% is the right number for this year?

Claire-Marie Thomas Coste-Lepoutre: Yes. So I think, Iain, what we see in the plus 13 percentage points of operating capital generation at this point in time, I would say it's approximately 2 percentage points of positive variances, if you want to put it this way. There is one which is related the fact that we had some positive effects that came through, in particular, on the variances on the Life side. So that's one element to it. It's almost 1 percentage point. And the second effect is that we have benefited from very, very -- I mean, excellent performance on the P&C side, which contributed as well to higher level of operating capital generation against our yearly guidance, if you want. And that represents also as well almost 1 percentage point. So if you correct for those 2 effects, normalized, you come back to this 5.5%, I would say, operating capital generation per quarter approximately. So that's why I think we see improvement, but we are in this order of magnitude I was more mentioning. In the underlying, that's really what you can also perceive from the development is that as an organization, we are clearly working extremely actively on the toolbox, I presented as part of the Capital Markets Day. And there is a lot of good energy of the business teams working with the finance teams to really look at all options to improve here, which is bearing fruit, and that's contributing to some of the positive development. And so I would say at this point in time, we are more grabbing the low-hanging fruits in a way and the more heavy lifting type of levers will come later on. As an example, what I was mentioning, the shifting part of our business from the standard to internal model once we get regulatory approval and those type of things, that will more come later on. So that's why I think beyond those positive variances, I think the fundamental effect are still to come a bit later on as we have mentioned in the Capital Market Day.

Andrew James Ritchie: The next question is from Andrew Crean, Autonomous.

Andrew John Crean: A couple of questions. You've talked quite a lot about improving volumes through better persistency, better product density, lower lapses. Are there any data points from the first half that you could give us that show that you're moving along that line? And secondly, Slide A6, you said, I think that there was more developments to come in the second half. Obviously, you can't say what those are. But is it possible to just look at the types of areas that you're looking to do bolt-ons, whether it's to do with developing markets or different distribution systems. Some sense as to what is your thinking when you're looking at portfolio optimization.

Oliver Bate: Thank you. I'll take the first one, Andrew. It is not yet there the way I wanted, just to say clearly, neither this thing. But remember, Allianz is a very, very big ocean liner, right? So from the time we prepared all the technology and the tools to the time that we drive it. And let me explain to you why sort of changing and excelling the course will take some time. The first one is given the insensitivity that people worry about the most, those people -- our wonderful colleagues that are managing Allianz, they have still to deliver on profitability, right, which is the key thing for us to do, and you can very quickly lose margin. So we've been very adamant, particularly in Commercial lines to do that. And it's still hard for people to balance and to do the end, not just the or. The second component in terms of that, these things always come with a delay effect. So as we drive that, the first time you're going to see it accounting-wise, in my opinion is in the second or third quarter of '26, because some of the measures just -- a lot of the premium that we write today have been written, a lot of the renewals have been written by the time we end the first quarter. So there will be delay just from the fact of how the re-underwriting cycle works. I'm talking to P&C at the moment. So it's going to take some time, but we'll provide you with an update on how we do over time, trust me, because we really need to get this thing right over time. By the way, both levers are very important. And to give you an example, what we are currently doing, we are completely resetting the incentives for our distribution partners, everything that does not require to cancel or renegotiate the overall commission systems in order to make sure that both retention and cross-selling are making it. We have, as I said, 50% of clients that haven't had a contact with us for a long time. And that is not because we're idiot, it's because we have distribution systems that are excellent, as I said initially, at selling individual products that are less excellent in driving that. In fact, when you are an expert on selling life business in Allianz, you have 0 incentive, factually, historically to work on cross-selling. And that's not a good idea. And that is what we are and have been changing and that will bear fruit because we have more demand inbound, Andrew, than we can support. So it's not a matter of conceptualizing, it's just operationalizing it every day. Now the second question you got, Claire-Marie?

Claire-Marie Thomas Coste-Lepoutre: Yes. I will answer it. So I think -- I mean, no big news, I would say, on that Slide A6 when it comes to our M&A focus, right? So we are, as an organization, constantly screening and looking at what makes sense against what are our M&A targets. Clearly, we are focusing on a bolt-on strategy when it comes to M&A, as Oliver was mentioning. In particular, I will say on the P&C side, looking at elements which are either allowing us to be in the top 3 in our markets because for us to be able to implement the sort of technical excellence system, if I may put it this way, for our operating entities, we need to have a certain scale. That's very important. And the second dimension, I will say, on P&C is definitely as well further continuing to build our platform play. So it may be under the shape or form of smaller portfolios as we have seen for Allianz Direct or adding, as an example, to resolve infrastructure to be able to deliver a better ecosystem to support our technical excellence. So those are the type of examples of things we are looking at. We are as well in terms of geographical focus, definitely very interested in Southeast Asia. And our Indian development is an example of that, but also what we were -- when we are looking at Singapore or other places, similarly, both on the Life and P&C, that's the type of perspective we are looking at. And then there is definitely the play when it comes to providing support to our life and asset management convergence. So it can be, as an example, also helping our asset management to invest into teams or basically to buy certain teams to accelerate our asset management capabilities as an example, together with some elements around the capital optimization type of approach or typically what we have done with the Viridium consortium, which is very much going into that logic. So I think no fundamental change, but we continue to be, as an organization, extremely focused and active at looking at what makes sense to enhance our overall portfolio.

Andrew James Ritchie: So we have 1 follow-up question from Michael. Michael, your line is live again. So it's Michael Huttner from Berenberg.

Michael Igor Huttner: I had three actually. But one is the total figure for FX headwind, if you have that either for Q2 or H1? The second is Viridium numbers, how much do you own? How much have you invested? Because they've changed, haven't they since Hannover sold their stake. And then I didn't see any Reliance numbers. I'm really sorry, I'm probably lazy, but can you give us an idea of -- in terms of maybe solvency strain or anything like that?

Andrew James Ritchie: Just to be clear -- it was FX headwind 1H, we can give you that. Viridium, you wanted the amount we invested on our shareholding roughly, right? And then the third one -- sorry, related to that, you want the [ S2 ] impact, I think, which we put in the analyst presentation.

Michael Igor Huttner: Yes. And I'm sorry, I haven't read that yet.

Andrew James Ritchie: And then what was -- you have one other question?

Michael Igor Huttner: Yes. I did have one. It's the corporate and other, which was very low. And I have read the comment, but I was a bit puzzled by it.

Claire-Marie Thomas Coste-Lepoutre: Yes. So the FX headwind for the quarter was in the operating profit was around EUR 160 million. It was mainly related to the FX effect I have been mentioning on the P&C side, on the investment side. We have as well and that you have identified, I assume, on the non-op side, on the fair value through P&L, some negative effect that came from the valuation of the assets. Basically, that's a negative EUR 260 million approximately. And then...

Andrew James Ritchie: Viridium, I'm sorry, Michael, you wanted the rough investment level?

Michael Igor Huttner: Yes, the investments and how much it is, I guess.

Claire-Marie Thomas Coste-Lepoutre: Roughly EUR 700 million.

Andrew James Ritchie: It's roughly EUR 700 million and we're in the equity. So it's about 20% of the equity if that helps. And I think we've said it's just around point of solvency impact in the second half. I think the final question was corporate and other. Is that right?

Michael Igor Huttner: Yes, please. Yes.

Claire-Marie Thomas Coste-Lepoutre: And just like to clarify, right, on the FX headwind, right, that's for the entire first half. That's not for the second quarter stand-alone, just to be precise. And then the corporate, you were asking why this is better than expected, right, overall. So first of all, there is always a bit of seasonality in the corporate segment. So that we see in particular because we have a lower level of admin expenses in the second quarter. Yes, there is always that seasonality effect. And usually, we have a sort of catch-up in the last quarter of the year that is coming through. And the second element. So I think we have another element, which is associated with the seasonality related to the investment income, which was relatively high in the second quarter, and that's mainly related to some inflation-linked bonds and also to the dividend payment pattern we are getting into the corporate segment. Additionally, we had also a better contribution from Allianz Technology into the corporate segment. That's more related to the fact that we have established also with the help of the new finance team there, like a more structured way of capturing the revenues on Allianz Technology side. So that's also coming as a positive effect into this quarter. And lastly, as you know, always, we tend to be a bit conservative in the outlook for the corporate segment. So that's also a reason why we are also better from that angle.

Andrew James Ritchie: Thanks, Michael. Thanks for that. Great. Well, that concludes. We have no more questions in the queue. So thank you very much, everyone, for your participation. With that, I wish you all a nice rest of summer, and we'll speak to you at Q3. Thank you.