ageas SA/NV (AGS) Earnings Call Transcript & Summary

Welcome to this Ageas conference call. I'm pleased to present Mr. Hans de Cuyper, Chief Executive Officer; and Mr. Wim Guilliams, Chief Financial Officer. [Operator Instructions] Please note that this conference is being recorded. I would now like to hand over to Mr. Hans de Cuyper and Mr. Wim Guilliams. Gentlemen, please go ahead.

Good morning, ladies and gentlemen. Thank you all for dialing into this conference call and for being with us for the presentation of the 6 months results of Ageas. I'm joined in the room by my colleagues of the Executive Committee, Wim Guilliams, our CFO; Emmanuel Van Grimbergen, CRO; Antonio Cano, Managing Director, Europe; and Filip Coremans, Managing Director, Asia. We are happy to announce strong results for our first reporting under IFRS 17/9. This new accounting framework better reflects our performance by providing a more comprehensive view on the contribution and the potential of our Asian activities and our Life business. Our net operating result amounted indeed to a strong EUR 599 million representing 17% return on shareholders' equity. It contributes also to our comprehensive equity, which stood at a high EUR 15.6 billion. On the commercial front, our performance has been strong with inflows up 6% at constant exchange rate and the positive trend in both Life and Non-Life. In Life, the growth was primarily driven by China, which recorded a 12% increase in inflows, thanks to a strong sales momentum, plus 45% in new business ahead of a regulatory change in the guaranteed return. In Belgium and Portugal, where our customer appetite was lower in bancassurance in the context of higher interest rates, actions have been taken to enhance the attractiveness of our products. In Non-Life, inflows were strongly up by 11% at constant exchange rate with growth in all business lines and across segments. This strong new business, along with a very solid operational performance of the entities, especially in Non-life, drove the group operational capital generation up 16% and above EUR 1 billion mark. This translated into a high operational free capital generation of EUR 492 million. We can rely on a high solvency position with the solvency ratio for the Solvency II scope at 220%, largely above the group target of 175% and at 213% for the non-Solvency II scope, up by 6 percentage points. We have now reached the midpoint of our Impact24 strategy. We are proud of the achievements already realized and are confident that we are on a good track to achieve our targets. For 2022 (sic) [ 2023 ], strong operating performance of the first semester gives us confidence to increase our full year net operating result guidance to a range between EUR 1.1 billion to EUR 1.2 billion. Lastly, you may remember that we introduced last year for the first time an interim dividend. We are happy to announce that the Board will again this year propose an interim gross cash dividend of EUR 1.5 per share, and that we intend to repeat it on an annual basis going forward. We are still fully committed to our target of an average DPS growth of 6% to 10% over Impact24, so the final dividend will reflect our growth pattern. And now ladies and gentlemen, I will hand over to Wim for more detailed comments on the results.

Thank you, Hans, and good morning, ladies and gentlemen. The strong net operating result was driven by an excellent business performance in both Life and Non-Life, which translated into a life guaranteed margin at 160 basis points and a combined ratio at 93.3%. Please note that in line with our efforts to improve transparency on our nonconsolidated partnerships, these indicators are now disclosed for the whole group, including both the consolidated and the nonconsolidated entities. KPIs for the Impact24 scope only are still available in the Excel spreadsheet. I will now give more details on the group performance in Life. Now please remember that the restated first half of '22 numbers were impacted by the move to IFRS 9, which resulted in 2/3 of the restated realized capital gains being concentrated in the first half of '22. Compared to the first half of '22, the Group Life net operating result was down this semester due to a lower contribution from Belgium and Asia. In Belgium, this was fully explained by less realized capital gains largely from real estate transactions, EUR 30 million compared to a very high EUR 85 million realized in the first half of last year. As you know, the realization of real estate capital gains in Belgium tends to show seasonal differences year-on-year depending on the timing of the transactions. In Asia, there was also a lower contribution from realized capital gains. But more significantly, the result included some increased health costs in China in the context of the country reopening after COVID. Whereas the first semester last year, benefited from lower claims experienced during the lockdown. Additionally, the result included some adverse FX impact from the decrease of the Chinese RMB. Moving now to the Non-life activity. Last year, the non-life net operating result included a EUR 45 million positive contribution from the sales of the commercial lines in the U.K. If you exclude this nonrecurring element, the result was strongly up by 35%, thanks to an excellent operational performance confirmed by the group combined ratio of 93.3%. This combined ratio was driven by a strong claims experience across all product lines, supported by a relatively benign weather and by an improved expense ratio. Regarding the balance sheet evolution, the CSM role forward of the group shows a positive operating CSM movement of EUR 249 million, which is the contribution from time value and new business minus the CSM release. This positive evolution corresponding to a 5.1% growth on an annualized basis was supported by a significant contribution from new business, which was higher than the CSM releases. Indeed, the CSM release amounted to EUR 435 million, translating into an annualized release of 8.9%, while the new business reached a high EUR 466 million, thanks to the strong sales momentum in China. This positive operational CSM movement, along with a solid group net operating result, supported the comprehensive equity, which amounted to EUR 15.6 billion, almost stable compared to year-end '22 due to a significant adverse FX evolution. Our cash position has increased from EUR 624 million to EUR 830 million. It included EUR 620 million dividends received from our operating entities. This number does not take into account EUR 83 million dividends from our Asian operations, which have been approved and will be received in the second half of the year and which will therefore increase the total cash upstream from the entities to EUR 713 million. To conclude, I would like to add a word on solvency and free capital generation. Mentioned by Hans, the solvency of the Solvency II scope companies stood at 220%, up 2 percentage points. It was driven by a large 9 percentage point operational contribution above the accrued dividend. Solvency of the non-Solvency II scope was up 5 percentage points to 213%, thanks to a solid operational performance and market movements. Operational free capital generation of the group amounted to EUR 492 million. It included EUR 368 million from the Solvency II scope, which is a lower number than last year. Please note that it is fully explained by an opposite evolution of the operational required capital. Indeed, it increased this semester due to high business growth and asset managed actions where it was significantly down last year due to lower equity exposure in Belgium and the sale of the commercial lines in the U.K. The non-Solvency II scope, the operational free capital generation was in line with last year at EUR 211 million, with a high new business in China, resulting in both higher available capital and higher required capital. I have now reached the end of my presentation, and we are ready to answer any questions you might have.

[Operator Instructions] The first question comes from Michael Huttner from Berenberg.

Fantastic. And I think very strong results. And I actually have 3 questions, but anyway, I'll ask some and you can say, well, we will only take 2. The first 1 is, so you've got EUR 1.5 interim dividend. So we have no feel for what the dividend for the full year could be. Can you talk a little bit about that, please? The second one is Health in Portugal. That seems to be a challenge. And I just wondered how long it will continue to be a challenge and normally in insurance, we think in terms of fee. So as I said growth, it's completely resolved. This feels still like we're on the second kind of path, if you like. And then the third one is on real estate. The gains in Belgium clearly are mainly from real estate. And I just wondered if you can give us a feel for how that is progressing in terms of valuations and deals and whatever?

Thank you, Michael. I will take the first question. And indeed, we have launched a EUR 1.5 interim dividend last year. We are continuing this, and we're also giving a confirmation that it is our plan to do that annually in the future. Now that does not change our Impact24 guidance on the full dividend, meaning a 6% to 10% DPS, which we have announced earlier. So there is no change there, and we are confident to achieving it. It is EUR 1.6 billion to EUR 1.8 billion in euro terms. The only thing we say is that the full dividend will reflect the growth pattern. So the growth pattern you will see in the dividends announced in February, while the interim will be fixed at EUR 1.5. For the other 2 questions, they are related to Europe and real estate, so I'll give them to Antonio.

Thanks, Hans and Michael. On the health care business in Portugal, indeed, we have been suffering this year, reasons being an increased frequency as people shy away from public hospitals and make more use of the private insurance. So it's the -- you could say the frequency has gone up, combined with an increased inflation of claims costs as hospitals and other providers have to also put on through the inflation they are faced with. So these are the 2 things. So we have been increasing rates. We are continuing to do that at a slightly higher pace. And concerning timing, I think you will see an improvement starting next year. I don't think that the second half of the year, your rate increases and also various actions and products design that we're doing will already be feasible. So that will be put for '24. On real estate gains in Belgium, there are always various deals in the pipeline. So there is -- and that's public, we sold an office building here in Brussels already in Q3 in the city center and there are other things in the pipeline. So we expect to be able to realize the normal level of capital gains we have in real estate. It is true that market valuations, particularly for offices, are slightly down, but that does not really hurt our P&L because, as you know, we value our real estate at amortized costs. It has a very minor impact on our solvency margin as on funds to include the market value. And also bear in mind, we have a quite diversified modern real estate portfolio as we always try to update it. So no big issues on real estate nor on the capital gains for the remainder of the year.

The next question comes from David Barma from BofA.

Firstly, on Non-life. So the discounting benefit was a bit higher than I thought in the first half. Is this -- is it the kind of level we should expect now to be stable as you're assuming no change in the interest rate environment? And then if that's the case, should we expect some unwind in the 2024 P&L? And then secondly, on the capital generation of the non-Solvency II scope. I thought that would increase a bit more this year. So here, I'm referring to the EUR 211 million, I think. Can you explain a little bit why that's not the case, please?

Okay. David, Wim will take the first one, our CFO, and then Manu will talk about the solvency.

Indeed, yes, we have disclosed the current year, the discounting impact on the current year claims, which amounted to 2.6%. But please remember, this is 2.6% in which we take the total revenues group-wide. Whereas last year, we also disclosed the number, but that was for the consolidated entities only on the full year basis. So the 2.6%, if you compare last year, it was lower still because we had the interest increase over the year at that moment, yes? So that was the movement that we had over the year. Now we're more at a stable interest rate environment. So this is the one you can expect going forward, 2.6%, if rate stays unchanged. The only thing we will do at the end of the year is a full year disclosure, yes, full year disclosure, where we will also restate at that moment, the nonconsolidated debt. Now I have to be fully correct. In this document, we also added for the first time the amount of last year on the same scope, so on the full scope that the 2%, which was mentioned as you referenced. The difference with IFRS 4 that we disclosed in the June and December in fact, that was only on the consolidated debt and only on the consolidated revenues.

David, Emmanuel. So I'll take your question on the capital generation of the non-Solvency II scope. And if you -- I propose to go to Page 17, where you have a little bit more details. And there you can see the free capital generation of the non-Solvency II scope that is indeed stable at EUR 211 million compared to H1 2022. And you have the split between, on the one hand, the operational capital generation and on the other hand, the capital consumption. And you see that the operational capital generation is really increasing quite materially between H1 '22 and H1 '23 from EUR 599 million to EUR 700 million by the end of this first half of the year. So it is reflecting a strong time value, but also a strong new business contribution in the operating business. And on the other hand, because we have the strong growth, you see the capital consumption going from EUR 222 million to EUR 279 million. And please keep in mind, on the capital consumption, we have to multiply by 175 to get, at the end, the free capital generation. So the bottom line is strong operational capital generation, but also the capital consumption supporting the strong growth in Asia.

The next question comes from Anthony Yang from Goldman Sachs.

My first question is on the cash remittance from China, which I see is actually almost 0 in 1H '23. And I just wonder if -- and also, I think you kind of mentioned the approved EUR 83 million from Asia in the second half of this year. Maybe if you could elaborate more on why is that? That would be helpful. And then the second question is just on the coming back to the Europe. Indeed, U.K., if you can, could you give us an update on how do you think on the price versus claims inflation momentum in the second half of this year?

Okay. I'll give to Filip to give you an overview of the Asian remittance.

Yes, thank you so much for that relevant question. Indeed, as of first half, there has been no dividend remitted from China. But as Hans and Wim mentioned, in the meantime, that dividend has been approved and will be coming in, in the second half. And if you look at the bigger picture of dividend remittance out of Asia, overall, we will have about EUR 120 million comparison to last year, EUR 147 million, but taking into account some effects of FX and reality of the results last year, all companies actually in the region, including China, have maintained or improved their payout ratios. So I would say this is a normal as expected remittance. The reason it has been delayed, maybe you have noticed it in other companies, quite a few state-owned enterprises in China have delayed their dividend payments from first half to second half. It's, let's say, a decision of the Ministry of Finance.

On the U.K., you asked specifically about inflation for the second half of the year, now obviously, I don't have that particular. What we see is that inflation for motor attritional claims has gone down slightly. It is slightly south of the 10%. It used to be higher than that. So we see a gradual decline in motor attritional inflation. In households on the contrary, we see what you could call inflation, but it's not so much the prices of the services, but it's things like people have to stay longer out of their house when there is a major claim and why do they stay so longer? Because you have supply chain issues. So it's just very difficult to get people to make repairs. So you actually see what translates in a higher average cost and inflation that is running higher than 20% now, which is quite high. On the rate side, you've seen in the market, depending on which source you consult, year-on-year rate increases of 25% to 30%. We are in line with that. Although we started increasing our rates in motor already in the second half of last year. So we were not very competitive in the second half, but it means that average premium is higher, and that will flow through the P&L in the coming months. We continue to apply that rate increase here. So we are in the 25%, 30% rate increase year-on-year in motor. And then for households, we just had a 14% increase a special one-off on top of the regular increases. I think all in all, the conclusion is that with the current rate increases and expected inflation, motor is definitely okay and household will be.

The next question comes from Jason Kalamboussis from ING.

Yes. Just to follow up on David's question on China. How should we see the development of the EUR 311 million in the second half? And in general, so how do you see things developing because we have had the strong new business in the first half. Is this also going to continue? Do you see that due more to the post COVID liberation of end of the year '22 and that could slow down in the second half? Coming also back to the dividends, to the remittence held for China. So it's EUR 83 million. Can you remind us the number last year? And also, the EUR 83 million is that based on the cash results of '22. So can you remind us how are the cash results developing so far this year so that we have an idea if this remittance is likely to recover this year. And the final thing is on Solvency II, you're reaching to 20%. For the moment, there is no question of share buybacks. But would you consider, for example, can this influence your decision, Hans, in having a slightly higher dividend yield growth for the full year if results continue to be strong at year-end, up till year-end?

Yes. Thank you for your question, Jason. It's Filip Coremans here. Let me take the first one first. The new business in China indeed in -- and that is across the board, but Taiping Life stood out at the upside was indeed extremely high. So there was a growth of about 45% in their new business volumes in local currency in euro because of exits around [ 37 ]. This is not related or not entirely related, I would say, to COVID reopening, but also to the fact that the guaranteed interest rates in China have been lowered as from the 1st of August. So this created obviously additional traction on the sales in the first half of the year. Now in the second half of the year for the same reason, we do expect some slowdown in new business volumes. But obviously, it should be beneficial for the new business margins. When we look at the new business margins, and that it also translates in the figures on strong operation on fund growth that we saw. The new business margin growth in China in the first half were still about 28%, 29%. But indeed, as you can see, a nudge lower than the 45% top line growth. So there was a margin squeeze more than compensated by the volume. In the second half, this may be reversed. We will expect better new business margins, but definitely lesser volume and potentially also a shift more from participating businesses to nonparticipating to -- from nonparticipating to participating business. The cost result as of the first half, it's around EUR 4 billion, EUR 4 billion -- EUR 4.1 billion, I think, slightly above or in line with last year. Outlook on that, we are not giving. Also, you may have noticed that our partner is moving more and more towards disclosures on this IFRS 17/9, if not entirely as well, so we respect that. In terms of outlooks on dividends for next year, obviously, this is too early to talk about it. It does not only depend on the result. It surely also depends on the solvency. You have seen the solvency ratio that came in for the first half at 197, a comprehensive 98 on core. Too early to tell where they're going. But this is just an attention point that we share with the partner and where the whole industry is looking at, yes? The regulator has introduced some new tools in that perspective. For instance, the issuance of core Tier 2 has been enabled. We -- and you noticed maybe we derisked a little bit in the asset mix. This is an option that we still have also for the second half as well as obviously looking at the option that they took in the first of the liquidity premium. So various actions are there to manage the solvency looking forward, and I think we're relatively comfortable where it's going too.

Okay. Jason, well, on dividend, share buyback solvency ratio, indeed, we enjoy a high, attractive solvency ratio. But we also have, I think, a very attractive dividend yield as well as dividend yield growth. Of course, it is also a matter of cash position and other metrics. It is not only solvency position. And so in that sense, our view does not change. We will, if we have the room, consider share buybacks. But at this moment, I think there is nothing to be announced. It will depend on growth ambition, solvency and cash position of the group. And that will be evaluated any time, but do not expect share buyback in the short term.

We'll now take the next question, which is a follow-up question from Michael Huttner from Berenberg.

I had 2. The first one is on the China dividend risk. When I was -- when I hear that the FinMin kind of delays dividend payments, my heart did a little beat lightly. So if you can talk a little bit about that because clearly, that it is a big part of your cash inflows. And the other one, I remember the dinner in London, you mentioned a little bit about growing your reinsurance business. And I'm sure there are slides on this. But maybe you can explain a little bit of what has happened?

On the -- Jason -- no, Michael, thanks. On the delay in dividend, I think you don't have to look too much into that. Ultimately, the payout ratio that I've been stick to was exactly the same as last year. But rather than having the decision made at before the end of the first half, it has happened in the second half. This was inspired first and foremost because they were also looking into the outcome of the transition to IFRS 17/9, which I think was a fair decision they took. But also, and I mentioned it, quite a few bigger companies in China have actually moved their dividend payout from first half to second half. This is also something that Taiping Group flagged in their investor call. And in fact, if you look at our -- the investment result for the Asian region is also holding back a little bit the investment results in the first half because these dividends came in after the 30th of June. So not much more I can add to that.

And Antonio again. On reinsurance, just to recap. So our reinsurance business is the biggest part is the internal reinsurance business, vis-a-vis, the capital management treaties with Belgium, U.K., Portugal and quota shares. Then there's also an internal reinsurance activity, as I would say, a normal reinsurer. So we participate in the panels of our subsidiaries and some JVs. And what is new, and I think that is what you're referring to is that we have started since the 1st of January to also offer reinsurance to third parties. The premium we have written up until now is around EUR 35 million. It is obviously about the risks that are not the same as we have. So European windstorms is something that we are not searching for because we have plenty of that ourselves. So it's a very diversified book some Asian, some LatAm business, Central Europe, it's a nice, well-diversified business. And we were very pleasantly surprised that we could actually write the business we wanted. And as you probably know, that is very much helped by the situation in the reinsurance market with increasing capacity in an extremely hard market. So, so far, so good on this third-party business and timing could not have been better.

The next question comes from Benoit Petrarque from Kepler Cheuvreux.

Just 1 remaining question on Life side, looking at dividend growth. So if I take your free cash flow for the year, starting with the EUR 730 million remittance and taking roughly EUR 190 million on costs, I get to EUR 520 million, roughly, EUR 520 million free cash that's actually decreased versus last year. I think remittance last year were a bit higher. So how do you take that free cash flow onboard in your fitting process for dividend growth this year?

Benoit, thank you for that question. As you know, at the start of Impact24, our target was to have a cumulative dividend over the period of EUR 1.5 to EUR 1.8, which we increased to EUR 1.65 to EUR 1.8, and that we support with the holding free cash flow. So there, we have a target range over the Impact24 of EUR 1.7 billion to EUR 2.1 billion. Last year, we did already EUR 700 million, which means that for the 2 remaining years, we have to reach the lower boundary, EUR 1 billion. And to go to the upper boundaries, EUR 2.1 billion, we have time to make up the difference. So that means that we are comfortable on reaching that target that would then support our progressive dividend commitment in Impact24.

Okay. So you look at it on a 3-year basis, not on an annual basis?

Correct.

The next is a follow-up question from Anthony Yang from Goldman Sachs.

Apology, I think my signal wasn't good previously and I might missed this. Just on the cash remittance from China. I think you mentioned payout ratio is a consideration. But I just want to confirm, is the local solvency ratio at Taiping Life a consideration as well there?

Yes, obviously. So there are -- let me try to comprehensively summarize that. There are indeed considerations on solvency because we want to safeguard the company staying solvent after dividend. But let's not exaggerate the impact of dividend on solvency as well. The current dividend remittance has about, I think, about 3% impact on the solvency ratio. That's it. The second thing is indeed, earnings and retained earnings. Let's not forget that. They have quite a bit of retained earnings still on the book. So I would say the prime consideration will be sustainability of a decent dividend and a payout ratio and solvency. So that -- let me then take also a bit more comprehensively on solvency because I can feel that, that is underlying your question. The comprehensive ratios reported at Q2, they were quite comfortable. And we were at 96.7% and on the comprehensive ratio and half of it on the core. The target for comprehensive from a regulatory perspective are 100%, and the core is around 50%. Obviously, there is ample room. These ratios, they project from time to time forward in their quarterly solvency releases, where they give a mechanical update on what they expect that ratio to be, which is overall company's for the next quarter. In the last solvency release, they mentioned I think it would go down to around 170% and around 85% on core. That drop is mechanical to the extent that they take into account there the dividend that has been approved and which was expected and also the impact of valuation interest rate changes. Are these ratio is acceptable? They are acceptable. They're not as generous as we are today. But -- and that is where I think a few items are being lined up from a regulatory perspective and from a company perspective, and that are -- have to be taken in consideration. Ultimately, what will matter here is the end of year situation and not the quarters. Let's not forget that in China, the quarterly closings take less importance and less relevance in their decision making. So first and foremost, the regulator has enabled in China the issuance of supplementary capital instruments. And many of the peers and also Taiping Group is looking into that this could be core Tier 2 debt issuance. It's something that is a consideration and that may be coming forward in the coming months or quarters in China. The second thing, what you may have noticed and we did not go into the detail, but there's also active looking at the asset mix. Rerisking or derisking of the asset mix is always an option to adjust solvency certainty of equity, which has an immediate effect. Thirdly, and that's an action that Taiping Group took in the first half because actually, the solvency ratio at the end of the first half was quite high, taking into account that you still have this transition measures in solvency regime of C-ROSS II coming in, it is looking at the liquidity premium. Taiping Life has historically been at a very low liquidity premium of about 25 bps, where we saw in the industry that going up to 45. That 25 bps has been increased to 32 bps at the end of first half, which compensated to a large extent, not entirely, the effect of the transition measures falling away on C-ROSS II. So all these things come into play and are on the table of Taiping Group and Taiping Life management to manage the solvency situation looking forward. Important here is also a discussion that is taking place, as you may be aware, because you follow the market closely from the Insurance Association in China, where they're looking at feedback, yes, being asked by the regulator to provide feedback on the first year of C-ROSS II. And this feedback is something that the regulator may take into account, and this is speculative, what I say, in making some adjustments to the C-ROSS regime that has been in the press. Whether that will happen end of year or not, we will see. So -- but all these items come into play. And as I said, remittance will depend on the year-end situation. It can depend on the payout ratio on the current result. But let's not forget that there is retained earnings on the books of Taiping Life. That's it.

The next question comes from Steven Haywood from HSBC.

Firstly, on the net operating profit guidance for 2023. At the top of the range, EUR 1.2 billion is obviously double what you achieved in the first half of this year. So considering at the top of the range, are you expecting some headwinds in the second half of this year versus the first half net operating profit? I would have expected more positive capital gains to come in the second half in Belgium. And then obviously, other business developments positive to come through in the second half. So I was expecting a higher outlook for your net operating profit guidance. And secondly, on the combined ratio target of 95%, part of the Impact24 plan. Considering, I think this is at the consolidated entities and you've achieved 90.5%. Should we possibly consider revising that 95% combined ratio target? Or should we potentially apply it to the whole group and not just the consolidated entities? I wonder if you could give your thoughts on the combined ratio target going forwards?

Okay. Thanks, Steven. Well, first, on your guidance, we are saying indeed EUR 1.1 billion to EUR 1.2 billion. In this, we always assume that we would consume the normal weather budget. So that means that if weather stays as favorable as it has been in the first half of the year, in that case, I think we should further target closer to the EUR 1.2 billion than the EUR 1.1 billion. So in that sense, I think you have -- you are right that under favorable conditions, there is still upside potential. On capital gains, at this moment, indeed, we have no indication that our capital gain ambition would not be achievable. You see that we still also have on real estate in the equity of EUR 1.3 billion unrealized capital gain for real estate available. So there, I think we have -- as you know, we book at amortized cost and our real estate is not leveraged. These are 2 things that you should really take into account. So we are comfortable there on realizing and as Antonio just said, a first deal has already been announced in Q3. So they will be visible at the end of the year. So I'm also confident under current market circumstances that we will achieve the capital gains that we have under budget. Final reference because you might look at the 2022 full year results coming from IFRS 17, which were above EUR 1.2 billion. But please do not forget there were 2 exceptional elements in there. There was EUR 146 million from a fresh transaction that we have done in the general account in the second half of the year, and there was the EUR 45 million from the U.K. commercial lines. If you would take that out, your reference '22 under IFRS 17 was EUR 1.88 billion, meaning that with EUR 1.1 billion to 1.2 billion, we do see an interesting increase in our profit outlook for the full year. Then combined ratio, well, first of all, we review these targets only at the revision of a strategic cycle. So that's the first comment I want to make. So we are comfortable indeed today on achieving the 95%. But again, you also know that weather can easily play 3%, 4% in this ratio, so also the 90.5% that we have disclosed now is under the favorable conditions. We have a group-wide view, by the way, because that's your question. The group-wide view for the first 6 months was at 93.3%, so also well within the 95% target.

As there are no further questions, I would like to return the conference call back to the speakers.

Ladies and gentlemen, thank you for your questions. And to end this call, let me summarize the main conclusions. We welcome our first half year results under IFRS 17, improving the transparency of our Asian activities and our Life business. We recorded a strong net operating profit of EUR 599 million, supported by an excellent business performance in both Life and Non-Life. We enjoyed a very solid commercial performance with inflows up at 6% at constant exchange rates, thanks to the strong sales in China and in the non-Life across segments. This resulted in a high CSM new business of EUR 466 million. This positive start to the year gives us confidence to increase our full year net operating result guidance to a range between EUR 1.1 billion and EUR 1.2 billion. Additionally, we announced an interim dividend of EUR 1.5 per share. With this, I would like to bring this call to an end. Don't hesitate to contact our IR team should you have outstanding questions. Thank you for your time, and I would like to wish you a very nice day.

Ladies and gentlemen, this concludes today's conference call. Thank you very much for attending. You may now disconnect your lines.