Andrew Ritchie: Ladies and gentlemen, welcome to the Allianz conference call on the Allianz Group financial results for the first quarter 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, Claire-Marie Coste-Lepoutre, Chief Financial Officer of Allianz SE. Please go ahead, Claire.

Claire Marie: Thank you very much, Andrew. Good afternoon, everyone. I'm very happy to welcome you all to our first quarter call. As you will see as well, we have decided to change a bit the format of the call, adding to our usual set of slides, some pages which are providing some highlights and hopefully also leave more time for Q&A. We hope together with the teams that you are going to like it. And as always, we welcome your feedback so that we keep on improving. Let me start on Page 4, which provides an overview of our first quarter results for the Allianz Group. Overall, you can see that we had a very good start into the year and that Allianz is very well positioned to achieve its 2025 and its midterm financial targets, as we focus on executing our Capital Markets delivers driving smart growth, reinforcing productivity and strengthening resilience. If you look at our top-line, which is up by almost 12%. And as you can see, supported by all segments, which is positive, very positive. We emerged with a total business volume of EUR54 billion, which is a record level in the quarter for the Allianz Group. Also at a record level is our operating profit at EUR4.2 billion. And again, here all segments are contributing. Our performance is supported by our focus on customers, technical excellence and productivity, as you will see as we go through the segments. Our shareholder core net income emerged at EUR2.6 billion, which is a strong level. And we have, as you have seen, a lower translation of the growth of our operating profit into our shareholder core net income, which is due to two items. First of all, a higher level of restructuring this quarter compared to last quarter and last year. And second, an exceptional tax item related to the decision to sell our stakes in the Bajaj joint ventures. And this will, over time, obviously, once we get the proceeds, create more shareholder value, once we received and we deploy them, right? So adjusted for this tax effect, our core EPS is up 7%, which is in-line with our Capital Market Day communication. Our solvency continues to be strong. It is supported by a very good level of operating capital generation, which has offset the impact of our dividend accrual and our previously announced new share buyback program, which cost 4.4 percentage point of solvency ratio. Let me move to Page 5, let's have a look at our P&C business. So we had a very strong quarter for the P&C business, which is leading to a record level of operating profit. This performance is due to both the earnings of the growth and the very good level of combined ratio. With 7% internal growth, we see good top-line development, further growing from the strong 2024 base. Out of the 7%, approximately 5% is price and 2% is volume in the quarter. The pricing and the volume effect is higher in retail, while on commercial line, pricing momentum is slowing as we expected and as we have already communicated in the Capital Markets Day. Maybe let me illustrate that a little bit more. On motor, we are seeing the highest level of rate in our portfolio, as we continue to see discipline in most markets. Large corporate is moving towards flat rate. And the details of our portfolio illustrates well our underwriting approach against this background with double-digit percentage growth in new business volumes in Germany, as an example, as we went through our most successful 1/1 renewal in motor. And by contrast, we were disciplined in markets like the U.K. or some line of business on the AGCS side. The overall level of combined ratio was very good at 91.8%, even slightly ahead of the first quarter last year, which had a very low level of natural catastrophes of 0.4%, while for this quarter, the cat load was 2.1%. What is striking in my view is that when you look at our portfolio is clearly the breadth of strong performance with a large number of operating entities, which are delivering a combined ratio in the 80s or low 90s even though again, we had a certain level of natural catastrophes this quarter. Both retail and commercial are contributing very nicely to this 91.8% combined ratio. Retail has seen more has been improving strongly as we are clearly earning in the numbers the benefit of our pricing and underwriting actions. Commercial profitability remains at a very attractive level. It's lower compared to last year, but it is mainly due to the larger level of natural catastrophes we have seen commercial and also the lower level of discounting in that subsegment. P&C overall continues to be well supported by our productivity focus as this is evidenced by the further improvement of our expense ratio. So overall, on P&C, we see strong growth. We see the earning of our actions that we have undertaken in terms of profitability, which is basically leading to a level of operating profit, which is at record level for the quarter at EUR2.2 billion. Moving to Life Finance on Page 6. Here, you can see that our customer centricity and the disciplined underwriting we have put in place is clearly leading to an excellent performance across the board. To start with, what is particularly striking in our numbers is the continued strength of our new business production with sales volumes up 17% at a very healthy new business margin of 5.5% and which is driving to an excellent new business profit growth of 14%. We are delivering this growth after what was already a great new business level in 2024, so for me, clearly, it reflects the continued strength of our product proposition and our distribution initiatives. What is very strong as well is that our growth continues to be globally diversified, as I already mentioned last year. So this is really building on the continuous trend. And you will see as well that within our portfolio, almost all our entities have a value of new business growth, which is above 20%. The strong new business and also the healthy dynamic we see now [in force] (ph) have driven a good level of growth in our CSM this quarter. Clearly, this growth of the CSM will support our profitability going forward as we are going to earn this CSM in the future. And as a consequence as well of those good development, we have a normalized CSM growth, which is ahead of our yearly guidance at 1.9% and better than last year as well. This is leading to a strong development of our operating profit, which is supported by the earning of our CSM and as well as the impact of a small portfolio transfer we have done between P&C and Life finance this quarter. So clearly, we have a very healthy dynamic in the Life Finance segment. And from my perspective, this is fueled by many elements we have elaborated on during the Capital Market Day, including the need for trusted solutions, both on retirement and health in a volatile environment. Let me move to Asset Management on Slide 7. And here, you can see that our asset management business continues to see a good level of profitability. In the first quarter, we had strong net inflows of EUR 29billion that has been emerging from both AGI and PIMCO. As you know, the assets under management are also impacted by the market and the FX movements and this quarter, the FX effects were negative by almost EUR56 billion, which is basically leading then to an overall stable picture on the asset under management side. Our net flows continued to be supported by the strong relative investment performance of our franchise, which has supported a high market share of industry net inflows into active strategies into the quarter. Our overall revenues grew by 5%. As you know, performance fees can always be volatile. They are low at PIMCO for the quarter against a backdrop of high performance fees for first quarter last year. Our assets under management driven revenues, which excludes this volatile item, grew strongly by around 10% in the quarter, as you can see, supported as well by a very stable third-party asset under management margin. Our operating profit increased by 5%, and this is exactly 25% of our full year outlook midpoint. As you can see as well, we continue our focus on productivity in the Asset Management segment as the lower performance fees are barely impacting the cost income ratio. This journey will continue for the segment. And as an example, HDI has announced a strategic reshaping of its business recently, and we have posted in our non-operating results and associated provision to support this in the first quarter. Let me move to solvency on Page 8. You can see as well here our strong capitalization at 208%, which is almost unchanged versus last quarter with the operating capital generation, offset by the normalized dividend accrual and the EUR2 billion previously announced share buyback. The market effects have been neutral in the first quarter with FX effects, increased interest rate volatility and movement in spread, offsetting the positive effects from the interest rate and the equities up in Europe. Our operating capital generation is very good at 6 percentage point post tax. This is driven by high operating earnings, especially in the P&C segment and also some noneconomic variances of our Life and Health segment, which accounts for almost 1 percentage point. On an annualized basis, this brings us well on track for our ambition of above 20 percentage point operating capital generation by year-end. The concept transaction contributed positively as expected in the management actions. Part of the effect should actually be operating capital generation as a new business underwritten out of the new structure already in the first quarter benefited from a lower cost of capital. On the right side, you can see how stable our Solvency II ratio is under various stresses. Our sensitivities are mainly unchanged versus year-end 2024. So this is clearly overall emphasizing the structural resilience of our group. Let me move to Page 9. I'd like to spend a bit of time to highlight some of the key elements on how we are managing our performance during uncertain times. As I mentioned to you during the Capital Market Day, we have a very clear focus as an organization on structural resilience and we do so comprehensively when it comes to financial volatility, risk management, balance sheet and liquidity strength or governance. Of course, the capital markets context in the recent days has been more positive, but we are mindful of the volatility which has been observed in the recent months and the debate which clearly persists on the macro outlook. So this page provides a summary of the key features to remember from the Allianz Group when it comes to the market to FX and to macro sensitivities in the current volatile environment. I will clearly not go through those items in details, but this provides some elements highlighting our confidence in underlying assets and liability positioning and the option we have for risk mitigation. Clearly, we are very proactive as an organization. We constantly monitor, we stress test, we take actions as required. Also, our diversified business model, the strength of our franchises and the management toolbox provide strong downside protection to our organization. Well, clearly, this is super important for us to manage risk in volatile times. Our strengths can as well allow us to take advantage of dislocations or capture the opportunities as well. This can be to fuel growth or also to promote life and asset management product propositions as an example. Let me move to Page 10 and conclude here. What I want to stress out is our strong performance in the first quarter. The first quarter has seen positive contribution from all segments, delivering again a record level of operating profit, fueled by good growth and underlying productivity. This very good start into the year allows us to reaffirm with confidence our outlook for year-end at EUR16 billion, plus/minus EUR1 billion, with also good resilience in the context of any potential volatility. Those results are well in line with our Capital Markets Day targets. If I adjust for the effect associated with the posting of the tax effect associated to the Bajaj transaction. This transaction will, over time, create value for our shareholders with the expected proceeds creating more opportunity for accretive deployments and financial flexibility. We are focused on executing our Capital Markets Day targets with the first quarter already reflecting positively on the journey to deliver higher organic growth, improved capital generation and ongoing productivity improvements. With that, I'm happy to take your questions, and I hand over back to you, Andrew.

A - Andrew Ritchie: Great. Thank you, Claire-Marie. Okay. We're ready for questions. Just a couple of housekeeping points. Operator Instructions]. Okay. With that, I think we're ready for the first question. which looks to be from Andrew, Andrew Sinclair from Bank of America. Go ahead.

Andrew Sinclair : Thanks guys. Two for me then. Firstly, just on Viridium actually. What can you tell us about the transaction, what it cost for Allianz, how much you'll get from it? And really what it brings to Allianz to do this transaction is my first question. And second I suppose is actually just a slightly kind of big picture question on Life & Health. You've looked at income insurance you've taken a stake in Viridium, you're doing a huge amount more organically, some really punchy sales there, really good news. Is this just a signal that this is the right time in the cycle to be pushing more for growth in life. Should we be getting more excited about Allianz maybe pivoting a little bit towards Life & Health and a real growth opportunity here questions. Thanks.

Claire Marie : Okay. Thank you very much, Andrew, for your questions. So maybe let me start with Viridium. So with Viridium you know we are part of the consortium of investors and we have an equity stake that is around 20% in Viridium. We are really happy to be part of that consortium. The rationale for us, I will say is threefold as I have mentioned to you. So first of all, being the CFO, it's clearly a very good investment is double-digit IRR. So we are happy with the expected value generation from our investment there in Viridium. Secondly, we also want -- I mean, we also see that as an opportunity for our asset management business. And over time, this will provide opportunities for deploying more of our own asset management into the region. So that's clearly part and connected to the communication we have made in the Capital Markets Day of supporting more convergence between life and asset management, so that -- that's clearly part of that logic. And the third dimension is that for us, it is very important that at European level, there is a good quality back book integrator that is available and obviously, with the knowledge we have, but also with the knowledge that other parties joining the consortium have, we have -- we are now establishing a high-quality back book operator for the European market, which is providing flexibility to the market as well. And we may also become, at some point, a client of that back-book operator as well. Now I think you were asking also in particular --.

Andrew Sinclair : Sorry, just -- I mean I'm conscious on the asset management opportunities you mentioned. I mean there is another massive asset manager on that agreement as well. Is there some sort of specific asset classes or any more detail you can give us in terms of where you'll be able to provide asset management support for Viridium.

Claire Marie : So I cannot be extremely specific, Andrew I think it will not be appropriate in the setup. But maybe if you look at what was the strength of Viridium in terms -- historically, in terms of value creation as an operator was more by optimizing, I think operational setup. So we clearly see a lot of opportunities for optimization on the SA and the asset side from the level of expertise we do have on the matter.

Andrew Sinclair : And then on the [next stuff] (ph).

Claire Marie : Yes. So basically, I think -- I'm not sure I 100% understood your question on Life & Health. So but basically, what we are asking is see like M&A opportunities in general in Life & Health versus the organic growth that was basically what we are asking? Or should we concentrate more on organic growth, right?

Andrew Sinclair : Essentially just saying we've probably spent more than a decade of composite insurers pushing hard towards P&C and kind of edging away from life. I think income insurance is probably the first time we've seen a big tented Life acquisition in a while and then you followed up with Viridium. Is this really any sort of calling the turn in the cycle that you're seeing now actually is the time for where should really pushing the mix back towards life & health after a decade or more of moving away.

Claire Marie : So basically, I mean, you know that for us, we have our three pillars. And I think when you look at it in the current environment, first of all, the Life & Health business is operating at a really good level of ROE. And we are very stringent, as I was mentioning also in the Capital Market Day at looking at the profitability of each of our segments and their contribution to the overall. So that's why I think as well, Andrew we have always been mentioning that we like our three pillars, and we believe that the three pillars are clearly part of our strategy. And compared to many of our peers, we have never really moved away from Life. And we also, by the way, think that life and asset management are strongly coming together. So that's the logic. Clearly, with interest rate up now or I mean, increasing having increased, there is clearly also more opportunities in the Life & Health segment compared to what was available in the Life & Health segment when interest rates were -- I mean negative or close to zero. So this is strengthening the further appetite but also the more flexibility you can create strategically in that segment. We also see a lot of opportunity on the protection side and on the health side, that we are also developing very strongly. I will say, mainly organically, but we also see opportunities from an inorganic perspective. So for me, it is just very logically in line with our strategy. We have a lot of focus to produce growth in an organic manner. But we also are selectively looking at inorganic opportunities when they emerge and when they make sense against the guidelines. I have always provided back to you.

Andrew Sinclair: Okay. Thanks very much.

Andrew Ritchie : Thanks Andrew. The next question is from William Hardcastle. Will go ahead -- sorry, Will from UBS. Go ahead.

Will Hardcastle : Thank Andrew. First one is, I guess, can you help us to understand how you think about that P&C margin delivery. We know that in the past, runoff is often managed alongside Nat Cat. I guess how do we think about discounting volatility, which looked higher today? Do you always let this flow through the P&L? Or is there a management of that at all through attritional? And the second one is just seeking an update really. We've seen a lot of capital market FX volatility quarter-to-date April and May. I guess, can you give us an update on the asset management, AUMs and net flows so far, please, or at least at the end of April? Thank you.

Claire Marie : Yes. Thank you very much for your question. So indeed, a lot of market volatility. So I hope that's why also we have provided this overview on what it means for us and how we are thinking about it overall on this new page. But when it comes to the asset management segment, where we stand at this point in time in the quarter, we have seen mid-single-digit net inflows in the quarter. So we are -- we see good developments clearly after also a month of April that I think was very volatile, obviously as we all know. Then you were asking around P&C margin delivery, right? I think -- so we have given a target for the entire year. Our guidance for the combined ratio is around 93%. So we are clearly very comfortable with this guidance for 2025. And clearly, they are like the moving components you are highlighting. So for us, what is important is that -- we believe that the normalized cat load is around 3% that basically also our normalized level of runoff is as well between [2 and 3 percentage points] (ph). So that's also the type of magnitude you should have in mind. And then when it comes to margin developments. I mean we have also normal seasonality that you should -- I mean discounting also -- sorry, like discounting, we are also on track for the discounting guidance we have provided, but we also have some seasonality in the discounting effect and that's clearly what we see now in the first quarter where the discounting is higher, which is just quite logical because you have a higher level of reserves in the -- at the beginning of the year, and you have a lower level of reserve towards the end of the year, so as such the base for discounting is reducing itself during the year. So you have that seasonality effect. And then the last piece of seasonality. And then I comment directly to answer your question, but the last piece of seasonality is clearly at the beginning of the year when you are an actuary or when you are resolving actuary, you are always more careful in what you are picking as being your attritional loss ratio, right? It is very natural because you address the first quarter. So you have not seen all the evidences that could allow you, as an example, to relax some of the assumptions you are going to use to pick up your attritional loss ratio. So we don't -- so -- and then I think, to your question, so I think that's the way we are thinking about it, usually more careful in particular in the additional loss ratio peak at the beginning of the year and then waiting for the quality of the business and the quality of the underwriting to evidence itself to then emerge later in the year. And then I think if you're asking a more generic question on how we are managing runoff against the rest, I think it's very natural. I will say that when you are in positive environment where you see emerging -- I mean, a strong level of profit, you can also be a bit more careful in your best estimate peak within the best estimate range exactly along the lines of what I have mentioned in the full year call, right? And that was typically the experience we had in particular in the commercial segment in the fourth quarter.

Will Hardcastle: That's really clear, thank you.

Andrew Ritchie : Thanks Will. Next question is from Michael Huttner from Berenberg. Go ahead, Michael.

Michael Huttner : Fantastic. Thank you. And congratulations on the amazing results. I was actually a bit disappointed that your CEO [was not] (ph) because he might have reacted a bit more to why the stock is down. Anyway, on PIMCO and also on the solvency. So PIMCO, you talked about restructuring and that's clearly a big charge. I just wondered if you can talk a little bit at and what the benefit could be as a cost ratio growth or whatever? And also, I know I've asked the question in the past, you've always batted it back, but maybe I'd be lucky, the plan to maybe buy out some of the founding members of PIMCO, where we are at and what you're thinking on that? And then on solvency, that was the one number, which I really do think -- I mean, the operating capital generation is fantastic, but the solvency number itself, and I don't understand why it was clearly off consensus. I just wonder if you can talk a little bit more about how you see that. It's really strange. Consensus, which I think is a lot of facts have analysts, I'm not one of them, but then you reported 208%. So there's clearly something that I can't explain it. Thank you.

Claire Marie : Sure, I mean, if you want, I can be a bit emotional as well on the share price [reaction] (ph). But clearly, I agree with you. So let's say, on the restructuring dimension that we are mentioning. So the restructuring I mentioned that went into the first quarter results, in particular among others, right? We -- I mean, by the way, I think there were also quite some comments on the restructuring. I mean there are always a bit of volatility in the restructuring items. You never know when emerge, right? So this quarter, we had a bit more this quarter versus last year, which was extremely low. And by the way, remember that for the full year last year, the restructuring was EUR670 million, right? So anyway, so going back to your question. So the restructuring I was mentioning in the Asset Management segment is related to -- it's not related to PIMCO is related to AGI, right? So what AGI as mentioned, is a strategic reorganization, in particular, that is being implemented actually to support strongly the growth strategy of AGI. The focus is on optimizing the setup in the public market segment and also in designing a new setup for the private markets to expand further the client offering on the private market. Clearly, also this strategy implies that there will be discontinuation of certain activities. There is as well clearly job residences. We will be streamlining also the organization in order to basically increase the quality of service delivery to the customers and also having a more efficient organization overall. So I will not provide the granular details of this one, but it will be supporting -- it's supporting both strategically higher growth and also bottom-line improvements ultimately. Then I think you had a question on the operating capital generation for the quarter, right? Indeed, it seems there is a bit of confusion. So this operating capital generation is post-tax pre-dividend. So before we were used to present an operating capital generation that was post-tax post dividend. So if you were to take our 6 percentage points this quarter, it is equivalent under the old metrics to 3 percentage points of operating capital generation post dividend, which compared to 1 percentage point last year. So it is clearly much stronger compared to last year, and it is really a demonstration of as I was mentioning, high quality of our earnings in general and also some positive variances, which have emerged from the Life & Health segment. So I hope that answers your question on the operating capital generation. And I think you had the last question, which now I missed.

Michael Huttner : Just on solvency, why 208%. I know 208% in the number you're not responsible for what analysts say. But it's still -- is still a difference. I don't understand it.

Claire Marie : On the overall 208%, this is what you mean, right?

Andrew Ritchie : If I could ask Mike, you were trying to understand why we missed consensus. Is that the question?

Michael Huttner : Yes, that's basically it.

Andrew Ritchie : I mean if I could add my input -- I mean I think but -- we can't tell exactly how you guys model everything. There was quite a big accrual in the quarter both to the buyback, which we flagged, but I'm not sure all the consensus captured the ordinary dividend accrual. And then the final point, as Claire-Marie already highlighted, the market impacts you may have expected to be positive than they were, but we had some offsets from FX and interest rate volatility. But again, the key point is that the capital generation is what we are focused on, and that clearly, we think was a good number.

Michael Huttner : Okay, thank you very much.

Andrew Ritchie : Thanks Michael. The next question is from Andrew Baker from Goldman Sachs. Go ahead, Andrew.

Andrew Baker : Hi guys. Thanks for taking my question. So the first one, you're able to just give a bit more detail on the pricing dynamics that you're seeing in AGCS by line of business? And then secondly, just on retention. So you've talked about retention being one of the highest sort of areas of attention for the group. There's no sort of mention of it today. So just curious how are you tracking? I appreciate it takes some time to come through, but how are you tracking against your retention initiatives. And what's the best way for us to sort of see your progress here from the outside, given the disclosure. Thank you.

Claire Marie : I think on AGCS, what we see is that we see rates reach change, reducing across the board. So I think like the softening is happening across line of business and across geographies in general, right? And then status is quite different depending on the line of business and the geographies where we see the highest level of price reduction or softening will be in financial lines in cyber, but also quite largely in property. And around -- in general, around -- I mean, in general across the business, we are still at level of rate adequacy that is positive. So we are still on a base where we can grow from, right? So I think it's more we have -- we are in a situation where we have to be extremely nuanced and selective in the way we are growing, that's what we see. And secondly, we also see good opportunities in some areas where the market is also started to adjust again a bit like -- so typically, that will be liability or marine where we see also a positive rate change as an example. Most negative market definitely at this point in time will be U.K. and Australia at this point in time. And then you were having a second question around retention, right? Which is how to think about it. So the way we are looking at it from actually, we are measuring retention ratio in our business, but indeed, we are not communicating our retention ratio externally. And I don't think it will make sense because you have many components, right, which are showing up in the level of volume we are seeing, where we have like the price and the volume effect and also like a different dynamic on the new business versus the renewed business. So it will be very, very complex to share. But what you can see nonetheless, when you look at our business and the level of internal growth, we are showing on Page 9. As an example, you will see that we have a higher -- I mean, lower level of internal growth in the U.K., as an example, which is clearly linked to the fact that we are being very stringent when it comes to rigor in the underwriting, which basically is showing up then in our own dynamic approach. To the opposite, I will say we have a lot of growth initiatives, which are leading to a very high level of internal growth. As an example, in Germany, in Latin America to take like a very different market where we are really into the market momentum, also leveraging into new tools, new practices in terms of distribution to support the growth. Another example of that, more on the commercial side, will be islands Partners, where you can see as well the very high level of growth we are having, which is building on the -- also on a good retention and new business as well.

Andrew Ritchie : Thanks Andrew. Next question is from Iain. Iain Pearce from Exane. Go ahead, Iain.

Iain Pearce : Hi, thanks for taking my questions. The first one was just on the motor combined ratio, the 92.2% that you reported in Q1, that is a significant improvement on what you reported for last year and a massive one on 2023. I'm just wondering if you see that as a sustainable number and particularly with the rate increases that you are talking about in the first three months of the year. If you expect that number to continue to improve in the remainder of the year. And the second one was on the organic capital generation. So obviously, a very strong number, but you've flagged some one-offs in the Life & Health segment from non-operating variances -- sorry, noneconomic variances, could you just talk on what they are and how big that benefit is? Thank you.

Claire Marie : So I think like -- maybe I'll start with the operating capital generation question. So like we have like this 6 percentage point growth, right, of our 6 percentage point of operating capital generation of the life positive variances are almost 1 percentage point of operating capital generation. This is why I was mentioning the fact that I think above 20 percentage point of operating capital generation is the right reference point for the year, as we have already announced, right? So we are basically fully on track for the operating capital generation we had announced. I think those positive variances on the life side, they are just reflecting on some of the -- so they are -- first of all, the outcome of both positive and negative -- some negative also life variances we have seen. They are mainly related to some of the adjustment of our lapse assumptions, as an example also some corrections, some expectations of having -- I mean, of lower -- sorry, lower level of inflation we have observed against our own assumptions. So it's correcting basically for the effect of more conservative assumptions we had in our Life & Health operating results versus what has materialized, which is a very good sign, which basically means as well that we were maybe a bit too conservative on some of those operating capital generation emergence in the previous years, which are now being corrected, if you want naturally as we adjust some of our assumptions against reality. And then I think on motor combined ratio, I'm not -- could you repeat what was exactly your question. So you were using --.

Iain Pearce : Well, so you reported 92.2% for motor in the quarter. That's a massive improvement on what we've seen in -- versus last year and the year before. I'm just trying to establish if there's any sort of one-offs you've seen anything particularly positive or if that's the baseline that we should be earning through the rate increases that you're getting at the start of this year from?

Claire Marie : No. I think so basically, what we see in the motor market in general is a lot of discipline in terms of pricing as in many -- actually, in particular of the European market, there is still need for well-behaved environment as we continue to see some inflationary trends, which are a bit sticky in particular on the motor market. As you know, and basically, it is still the same as what I mentioned last year, we had anticipated some of those effects. So we continue to benefit from this environment. And we also see that being earned as well into our profitability. But I would not expect that to change fundamentally in the upcoming quarters.

Andrew Ritchie : Okay, thanks Iain. Next question is from Vinit Malhotra from Mediobanca. Go ahead, Vinit.

Vinit Malhotra : Yes. Good afternoon. Thank you very much. Just one on the life piece is on the normalized CSM, which is -- has grown very strongly, so it's 1.9%. I think the annual target is about 5%. So I'm just curious whether there's anything one-off is share I mean you have mentioned [CapGen] (ph) in life had some one-offs as well. And also, we've seen very, very strong growth in life. So just curious to hear about CSM and growth in life. A very quick one on the German combined ratio, where I'm just sort of following up here because it's -- is it just linked to the motor recovery, you just described, I mean, there's an 80 basis point improvement year-on-year in Germany, which is quite strong. So I'm just cross-checking that's all motor. And if I can just follow up a little bit on the sensitivities. There seems to be an increase in the [gross] (ph) effect from 3% at 4Q to 5%. And in the past, we talked about how it was a good achievement to reduce it. So I'm just curious if this is just market volatility hitting that number or something as to note. Thank you.

Claire Marie : Thanks a lot. On the CSM development, I think there is -- I mean, there is nothing particular to be highlighted in the CSM development. I mean I think the main point to be highlighted is that the CSM -- the normalized CSM growth is connected with the development of our value of new business, which is always a bit higher in the first quarter compared to the first to the further development into the other quarters, in particular because you have some businesses that we knew more in the -- on the first of January. So typically, you will have some protection and health business in the French market, as an example, but you have other markets like that where you have this more new business, if you want coming up in the first part of the year that then is being -- is coming through in the normal CSM growth. So that's why we always see that pattern that we have a higher level of normalized CSM growth in the first quarter, and usually a lower level of normalized CSM growth, as an example, in the third quarter which is traditionally a bit lower compared to the other one as an example. Then I think you were asking a question around the combined ratio in Germany, right? That is what you were asking?

Vinit Malhotra : Just following up is all motor-driven improvement.

Andrew Ritchie : So the question was, is it all motor driven? Is that the question?

Vinit Malhotra: Yes, yes.

Claire Marie: Okay. For Germany, yes. So I think like a lot I think what we see in Germany across the board is really good earnings of all the underwriting actions that in retail. So we see a very strong improvement in retail in Germany across the board, I would say. And Motor is a very strong contributor to that improvement as well. I did not have this opportunity this morning, so I can also leverage this one to congratulate at our German colleagues for all the work they have done that is really coming through as well in terms of both growth and profitability, by the way. And then your last question was around sensitivities as well.

Vinit Malhotra : Yes, about the cost, the combined effect, which we sometimes look at in volatile markets. It's gone up a little bit from 3% to 5%.

Claire Marie : Yes, indeed, so that there is nothing particular to be highlighted here. It's just like sort of noise from the growth effect. So it is really small, and it's actually been a bit lower. It was actually slightly lower in the fourth quarter, indeed but there is nothing special to be read into it.

Vinit Malhotra : Okay, thank you.

Andrew Ritchie : Thanks, Vinit. And I'll note that you snuck in three questions there, but anyway. So our next question is from William. William Hawkins from KBW. Go ahead William.

William Hawkins : Thanks, Andrew. Hi, Claire. Couple of questions also on the life business, please. In Slide 19, can you help me just understand the outlook for the expected in-force return the EUR748 million. Can I just multiply that by 4, and assume in the future that it rises in line with the CSM, which feels simple but hasn't recently been the case. So EUR748 million is actually quite flat year-on-year and is actually down about 8% on the fourth quarter. And whilst your stock isn't that sensitive to interest rates, you'll notice on the next slide refer to interest rate sensitivity and lower over return assumptions. So I'm just trying to get a feel for is that EUR748 million a stable base, I can roll forward or do it to be clever, probably do. And then secondly, also on the life business, yes, has market volatility in April had any impact on the AZ Life U.S. operating profits? And again, do we have any way of gauging sensitivity to that? April has been a volatile month for equities. And in the past, that can have hedging effects in AZ Life. So is there anything that we need to be calling out for that, please? Thank you.

Claire Marie : Yes. Thank you very much. So basically, on your first question on the expected in-force return Indeed, I think like you know how this expected in-force return is made of, right? It's related both our VFA business and our BBA business. So in the VFA business, this is based on the market rate we expect and then the expected return we expect to see. And on the BBA business, we are using a locked-in rate, right? So I think the reason why the expected in-force return in general is lower this year compared to last year is related to the fact that -- I mean interest rates are moving down. That's basically what is mainly driving this one. So I think last year, I had provided as well to you what was the formula. I think the team can provide that again to you. But in a nutshell, what you do for mean to estimate our overall expected return you take for the VFA business, what is our market -- what is the market rate and just to give you a sense it moves -- the risk-free rates basically moved from 3.4% last year to 2.3% this year. So that will be the main driver of this effect. And then you have some weighting effects that you need to inject that the team can explain in details to you. And when it comes to the locked-in rate on the BBA side, it also went down a little bit from 4.5% to 4.3%. That's also explaining why the expected in-force return is lower. So for more details, you can reach out to the team. They will give you the exact formula, but that's the overall direction. And then on AZ Life, you are right that we can -- I mean, some market volatility can impact indeed the hedging cost for our product in the AZ Life portfolio. For most of our business, those changes can be managed within the [product ratio] (ph) I mean we use things like the crediting or the participation rate as an example. So it’s basically, this logic is applied to our entire book, except for the historical legacy variable annuity book, where this is coming directly on us. But basically, there has been no significant impact in the April market movements and actually even under any circumstances when we do stress this what may impact. It will be something like a low double-digit kind of level of impact, so not something that will structurally impact our performance. So you can be really reassured as well from that perspective.

William Hawkins: Okay. Thanks very much.

Andrew Ritchie : Thanks William. Next question is from Hadley. Hadley Cohen from Morgan Stanley. Go ahead, Hadley.

Hadley Cohen : Hi thanks very much Andrew. Just a couple of quick questions remaining from my side, please. Firstly, and apologies if I've missed this. In the valuation result and other in P&C. I think it was just below minus EUR800 million for FY '24. And I think you said at the time, it was in-line with normal expectations. But I think the guidance is now for minus EUR500 million to EUR600 million per year on a normalized basis. I'm just wondering what the -- what's changed there and if there's an offset somewhere that we should be mindful of? And then my second question is in relation to Slide 9, which is very useful, so thank you very much. But more specifically on that, I'm just wondering around your U.S. asset exposure, I guess, beyond those assets backing the your U.S. liabilities, how are you thinking about your U.S. exposure on the asset side more broadly right now? Does it structurally still make sense to have the exposure to the extent you do. Thank you.

Claire Marie : So I think -- maybe -- so I think your first question was on the valuation results and other, right, where we see indeed a lower -- I mean, lower like we -- sorry, our normal expectation for the year will be something around EUR500 million to EUR600 million annually. And this is basically lower for this -- it will be lower now going forward as we have been reclassifying some of our VFA business. From P&C to Life and Health. So as some of the businesses moved away from the segment, this is no longer going to impact the valuation results and others. So that's why you should use that guidance more of EUR0.5 million to EUR0.6 million for the full year. Nonetheless, we had -- we also had a negative FX effects that came through in the quarter as well, which is linked to the very, very small level of FX variation we see on some of our business, which basically has also impacted that number. Obviously, as well this element on the valuation results and other is offset in the income -- the interest income. Obviously that you would take as well into account when you are going to do the correction overall. I think also the team can provide you with more line-by-line item if you want to do the full assessment on that side. And then you were asking in general on U.S. exposure. So I think the way we are in the asset portfolio, right, that was your question. So I think it is -- in general, we have our portfolios that are very, very diversified, and we don't take -- and if you look at the overall page where we are showing how we are thinking about it, in general, we have this very structured approach of matching our assets and our liabilities as much as possible. You see that -- and then we take some structured decision when it comes to certain type of asset classes typically on the equity side. So our listed equity will be hedged. In general, our alternatives portfolios are hedged in the P&C segment, except for the private equity exposure, where we have decided economically that it was not making sense to hedge that portfolio. And this is -- this portfolio, you see creating a bit of market movements in the non-income -- sorry, non-operating side. Here, we clearly see that the economic trade-off makes sense. We are mainly focusing on hedging our balance sheet to protect the resilience of the organization. And there, the cost of hedging will not make sense against the expected value creation. This is a very low level of exposure overall because our private equity exposure in P&C against the entire P&C portfolio is something like 1% of the overall asset base. So that's a very low level and that makes sense in terms of risk return profile and also volatility management.

Hadley Cohen : Okay, thank you.

Andrew Ritchie : Thanks Hadley. Next question is from, Kamran Hossain from JP Morgan. Go ahead, Kamran.

Kamran Hossain : Thanks, Andrew. Sorry, it's a problem I have sometimes. Hi. Just the first question is on the direction of Traveling commercial. Obviously, it sounds like the personal side still has tailwinds behind it in terms of mostly coming through. On the commercial side, prices have peaked are now slowing down. How should we expect Alliance to behave in that environment? Do you think you'll reduce volumes to defend margin or do you think the combined ratios will inevitably kind of trend up? Just really intent kind of what your approach is going to be? Because it looks like in Q1, you cut volume a bit, so you see defending margin. The second question is just a follow-up clarification on Will’s question a while back. You told us about kind of you're having mid-single-digit flows quarter-to-date, which I assume probably includes a bit in April. Can you maybe tell us how the PIMCO AUM has moved quarter-to-date? I just don't want to get a surprise [into you too] (ph), case some of the FX and other asset movements might outweigh the quarter state flow. Just trying to figure those things out. Thank you.

Claire Marie : Yes. So I think on the second question, I mean, clearly but still I cannot provide you with such level of details. That's clearly not something that is available at this point in time. Then I think your question on commercial, right? I think commercial, what is very important from my perspective is, first of all, to look at the structure of the Allianz portfolio when it comes to commercial. We have, I think, a very different book compared to many of our peers. This is made of the large corporate book, which is basically the AGCS book. Then we have Allianz trade. So the credit insurance book. We have the MidCorp portfolio. And also, we have also the [Allianz portfolio] (ph) that is part of this overall made up of our P&C Commercial and Specialty portfolio. And clearly, the dynamic of those different businesses is different and also cycle effect in those various portfolios is as well different depending on where we are. So I think the point you were making is more related, as an example, to AGCS, where I was mentioning we see in general that we are at a good level of rate adequacy that has reduced clearly, but still it is not negative rate adequacy. So there is space for growth, in particular, in areas where we feel quite strong, like specialty will be an area, but also the multinational business, where we have a lot we can play with or ART as well, where there's also a lot we can offer in that business. On trade side, clearly in general, I mean, like the -- we are more cautious on the underlying assumptions as we see also some of the underlying risk increasing, but the quality of the underwriting currently -- I mean, the quality of our underwriting is very strong clearly as always, what we see as well is that the emergence of profit is also very strong in the current environment. So we will see no reason to also take negative assumptions when it comes to the profitability on the trade side beyond some normal level of normalization roll. And MidCorp is also in a very different stage depending on the various markets with some markets being more challenging than others, and is very connected with what I was mentioning before. So mainly, I would say, U.K. or Australia will be markets, which are more challenged from a rate dynamic, which does not mean that this is not rate adequate again to mention. So overall, we are very comfortable with the development of our commercial book. I also forgot sorry to mention partner that is also contributing to the commercial portfolio that has also different dynamic. So overall, no reason to change our guidance. We feel strong on the approximate combined ratio of 92% for the commercial business with continued careful trajectory, but still a strong trajectory as part of the overall P&C portfolio.

Andrew Ritchie : Thanks Kamran. Next question is from Andrew, Andrew Crean from Autonomous. Go ahead, Andrew. You might be muted. Hello. Andrew, are you -- we can't hear you. I'm afraid. So we'll come back to you. If we could move to the next question then is from Henry Heathfield from Morningstar. Go ahead, Henry.

Henry Heathfield : Good afternoon. Can you hear me?

Andrew Ritchie : Yes, we can.

Henry Heathfield : Thank you. Good afternoon. Thank you for taking my questions. Just a small couple of questions, please. I'm wondering, Marie, if you could talk a little bit more about what happened to the performance fees in PIMCO. I think in the past, it's been highlighted in Q4, they tend to be a bit heavier loaded in Q4, but it doesn't look like -- that's entirely the full picture here. So I was wondering if you could just run through that a bit. And then in corporate and other, that's kind of looks to be coming in quite a bit below your EUR800 million full year target. So I was also wondering if you could talk a little bit about what's driving that --. Thank you.

Claire Marie : Yeah. Maybe on the corporate segment and other, there is really nothing in particular to be highlighted. It's always an area where we are definitely very cautious when we set our outlook. So the level of cautiousness, if you want, on the spend on the corporate segments are being confirmed for the quarter. So for the -- for PIMCO for the level of performance fees of PIMCO I mean, as I mentioned and you rightfully said as well, performances are always volatile, right, in nature. And last year, it was particularly strong for our first quarter. Maybe just to give you a sense on how to think about it, like in the previous 10 first quarters. We had on average a performance fee share of around 4% of our total revenues -- so with the range of 2% to 6% of the revenues associated to the performance fees. In the first quarter of 2025. So this year, we had 2% of performance fees against the total level of revenue. So it's basically within the range, but you see it at the low end of the range. And if you follow that same logic for the full year for over the last -- the next -- the last 10 years, actually we have achieved a performance fee share that is in terms of percentage of total revenue that is between 4% and 10%. And so we expect to be within that range for 2025. There is nothing I can say more at this point in time because, obviously, there is a that is also connected to the volatility of the market in the performance fees.

Andrew Ritchie : Okay, thanks Henry. Next question is from Fahad. Fahad Changazi from Kepler. Go ahead, Fahad.

Fahad Changazi: Hi, thank you for taking my question. Just very quick follow-ups left. On Solvency II capital generation. It looks like underlying capital generation was about EUR1.1 billion. Is that a good level to build from will be a higher due to the assumption change. I'm not sure if it's including or excluding lending experience variance there? And another one just on the extra capital management actions, you just did a [concrete transaction] (ph) of course. But again, can you give us any insight into other management actions we'll be implementing in 2025 to increase Solvency II capital generation. Thank you.

Claire Marie : So I think on the implementation of the actions for organic -- for our operating capital generation, in the year, I cannot really give you an answer. If we look at the full toolbox that I mentioned in the Capital Markets Day. Clearly, we are working on I mean, many, many levers to improve our operating capital generation. And I think some of them will start bearing fruit as well this year, but also some of them will clearly provide an uplift much later on either towards the end of the plan or even like you know outside of the plan horizon. So at this point in time, I can really not give you more details, except reassurance that we are really working very actively on it. And we see a lot of momentum in the organization around the topic. Then I think you were --.

Fahad Changazi : Could I just follow up on that? You said some outside the plant, but we are still sort of on track for the '24, '25 operating capital generation target, of course.

Andrew Ritchie : Yes, that's the 2027 target, yes. So the target just to be clear, is more than 20% on the metric you see that 6% for Q1. More than 20% is what we said as a target for full year '25 and then yes, the target is actually [2027, 24% to 25%] (ph).

Claire Marie : The reason is that there are also -- I mean, out of those I mean we are working on many different levers, right? Some of the levers also will be related to getting some regulatory approvals. So obviously, will take time and are also linked to the fact that there is a lot of preparatory work and also -- so that will take time to emerge. There are also a lot of other actions, which we think should provide a benefit earlier on, but you also have a lot of underlying other effects like I don't know the mix in some of the diversification benefits and so on and so forth. So it's very difficult to give a very precise impact levers by levers and exactly when they are going to earn. So I think at this point in time, in a level of ambition that is clearly superior to what we had last year is, from my perspective, a good guidance. And then I think you were asking a question on the Solvency II operating capital generation for the Life segment on a stand-alone basis? Or like basically, how much of the correction we should be taking out of the positive variances, right?

Fahad Changazi : Yes, that's correct.

Claire Marie : So we do not split in absolute as part of the overall outcome, the operating capital generation because I mean, again, you have this mix effect and you have also the diversification effect that is coming through in the operating capital generation. So what I would do is that I will take the overall numbers we have shared and then you can reduce it. I mean, a little bit from the almost 1 percentage point of positive variances we have been sharing with you that is coming from the Life side. And then normally, you will have a positive additional elements that is going to come through from the earnings of the onset structure into the life operating capital generation which we have not yet reflected at this point in time.

Andrew Ritchie : Thanks Fahad. Next question is from James Shuck from Citi. Go ahead James.

James Shuck : Thanks. Good morning Mary, Andrew. I just wanted to ask about the sort of underlying loss ratio development, if you like. So the undiscounted attritional loss ratio ex that cat. So that 10 points basis points of improvement year-on-year. You do give us the split of the total combined ratio between retail and commercial, but really interested in what's happening on the underlying trends. So can you split out what the trend was between retail and commercial on the underlying loss ratio for me, please, in Q1? And then secondly, just in terms of cyber insurance, can you just remind me what your premium size is in cyber? And what size -- what line minutes you tend to put down, please?

Claire Marie : Sorry, could you repeat your question on cyber?

Andrew Ritchie : I think I got it. I think you wanted roughly how big we are in cyber and typical line size or retention. Is that right?

James Shuck : Yes, that's right. Yes, that's right.

Claire Marie : Okay. Maybe I first answer your question globally, right, on the attritional discounted attritional loss ratio. So I have provided the guidance for the year-end results that we expect -- if you take all the elements I have been mentioning, we expect our attritional loss ratio be within the 71% to 71.5%, corridor in terms of experience. And actually, what we have seen in the first quarter and I think, on the page, we had 71.5%. So we are well within our corridor of undiscounted attritional loss ratio. Which is also slightly improving compared to last year, and then when you look in the underlying, actually, we have also further additional effects is that we have the Arch transaction that is contributing negatively to the undiscounted attritional loss ratio. And we also have the transfer of the health business at move from the P&C segment to the Life & Health segment that is also contributing negatively to the undiscounted attritional loss ratio. So if I bring all of that together, what we see is a sort of 30 bps improvement of our discounted attritional loss ratio year-on-year. And then – and basically it means that we are well within our expectation for the undiscounted attritional loss ratio for the year at this point in time in the quarter. And then I think more generally on your question on what's happening between retail and commercial. In retail, we really see the full earning of our underwriting actions that is coming the undiscounted attritional loss ratio. We see also a very strong level of stability undiscounted attritional loss ratio on the commercial side. And the reason why the commercial loss ratio or combined ratio overall is higher is what I mentioned. We had I mean, a much, much higher level of nat cat load in the quarter for the commercial business. And also remember, the discounting effect on the commercial side. So basically, the reduction of the discounted benefits on the commercial side is much higher because the commercial business tends to be longer compared to a longer duration compared to the retail one, and that's basically why you have this higher negative effect of the reduction of the rates on the combined ratio for commercial. Then I think you were asking for cyber insurance. So overall, we have approximately on stand-alone cyber and tech PI, we have approximately EUR 350 million of GPW. So -- and we indeed see the softening. I was referring to as part of the overall cyber development of cyber -- we take a very, very cautious approach when it comes to our underwriting on the cyber side. So we have small risk limits which are basically between EUR 10 million and EUR 15 million, depending on the businesses. So when new business result and when it's renewals, it's more 15. And in addition to that, we have a very, very conservative reinsurance structure. That is made of several layers, which are first aggregating and so on and so forth. So basically, we have a quota share an event and an aggregate [EXL cover] (ph) in place. So we are extremely well protected when it comes to cyber risk overall.

James Shuck : Helpful. Thank you so much.

Andrew Ritchie : Thanks James. And then we have our last question, which is a follow-up from Michael. Michael Huttner from Berenberg. Go ahead, Michael.

Michael Huttner : Thank you so much. One is place but also knowing whether we're ahead of plan or whatever on the expense ratio of 24.1%, which is feels like a huge improvement on last year. And then the second one is unlike -- and then I'm sorry, I'm being really nitpicking. You said the Life ROE was fantastic in your really lovely financial supplement, it is good, 14%, but it's actually down on all the quarters last year, 16%, if you think it's relevant just to say, but if you know of anything interesting. Thank you.

Andrew Ritchie : Sorry, just to be clear, Mike, because it's quite hard to make you out. You -- the questions were focused on the expense ratio trajectory and then --.

Michael Huttner : On the Life & Health in which actually came down on quarter or relative to [indiscernible].

Andrew Ritchie : Understood.

Claire Marie : Okay. Very good. I think like one of the main driver for life ROE being down, as you mentioned, right, is related to the fact that the numerator has been impacted by the tax provision for Bajaj. That's the main explanation. If you want the exact details, you can liaise with the teams, they will basically give you the exact effect, but the main driver is clearly Bajaj. What I think is super important, Michael, is the quality at which we are underwriting basically our new business. And clearly, our Life and Health new business ROC or basically like where it's positioning against as well our Solvency II. ROE expectation is well above 15% across the portfolio. So we have a very, very strong performance at which we are underwriting our life business. So we are very confident on the quality as well of the future profitability that are going to emerge from our Life business. And then I think your other question was P&C expense ratio. Indeed, so in the P&C expense ratio, I think for the quarter, we have 50 bps improvement of the P&C expense ratio. Not all of that is related to productivity, obviously. We have a mix effect, as always, in the P&C expense ratio. And the second special effect is related to also the Arch transaction that is still creating noise a bit between the additional loss ratio, as I have just mentioned, and the expense ratio basically offsetting each other. So that was driving also partially some of the improvement of the expense ratio. What is more important is that fundamentally, we see the underlying expected trends to deliver against our expectations of minus 30 bps year-on-year associated with our productivity initiatives.

James Shuck : Understood. Thank you very much.

Andrew Ritchie : Great. Thanks, Michael. And that was the last question. Maybe before closing if I could just remind you Munich is a very nice place in late spring. We have, in a couple of weeks' time, our inside Allianz session, which we'll be focusing on our commercial business, our health business, AZ Life and also some technology. So I'd encourage you to sign up if you haven't, when we can give you even more details. And with that, thank you very much. And that concludes our Q1 '25 call. Thanks.