Allianz SE (ALV) Earnings Call Transcript & Summary

Welcome to the Allianz Capital Markets Day 2024. It's very nice to see lots of you have made it to Munich through the snowy weather last night. And also, we have lots of people watching us virtually. And on that note, I have to tell you that we are live streaming on allianz.com and also on YouTube. And a recording will be made available after the presentations. With that, I'm very happy to hand over to our first speaker of the day, Oliver. Oliver Bate, the CEO of Alliance, if you'd like to kick it off.

Yes, let me also extend a warm welcome to everyone who wanted to be there and made it to Munich. We've been quite fortunate because the weather forecast was not so good. A big thank you for joining us today also virtually. We've put a lot of love, not just hard work into the things you're going to experience this morning. So a big thank you to all my colleagues, the team at Allianz, who's put this together, I'm just the sort of front runner, so to speak, for the event. The number of colleagues also staged today, so a big thank you to also the colleagues that are not on stage today. I will mention them in random. We cannot have the great team of Alliance on stage. So I'm trying to represent as much as I can. The presentation I'm going to give this morning, I will not go through all the slides that will be made available to you. So it's very important. There's not going to be a slide show or battle. I want to focus on a few things. But in order for you to understand the journey that we've been on and how the next chapter ties into what we've been doing before, I'd like to give you a little intro and lead you to where we're going to go. Some of the slides I'm going to skip, doesn't mean they are bad or not important. Just for today, they have less relevance and some of my colleagues are going to go deeper into some of the topics I'm going to mention. 2015, I started as CEO, we launched the Renewal Agenda, five key levers. The most important one, and we're going to talk about the extension of that today is the drive for Allianz to become a truly customer-centric organization. Now many companies in the world say that. It's one thing to say that, it's really another one, particularly in our industry that was not invented by customers actually, but by regulators for the most part, it has been quite a journey. And it was about renewing our core. We'll talk about that more that we've been doing for almost a decade now. But at the heart is customer centricity and mobilizing the real asset that Allianz has, our people, to deliver that customer centricity and financials are super important. We're going to spend a lot of time on financials and the validity of those and how they're really ambitious, but financials are an outcome of outstanding performance at the customer and the people interface and everything else is a supporting tool for that. Now in 2018, we launched a second story because we said in order to be really great, we have to reduce complexity. Our industry is fraught with complexity. A lot of that of our own making, even though regulation, which is not getting less, making a huge difference. But just the history of Allianz growing over next year, 135 years in more than 70 countries and many, many businesses have added complexity that most importantly, customers don't want to pay for. Customers don't want to pay for. So we decided we want to get more simple and in 2021, we added another component. We want to really get the benefit of scale. Many investors, many people doubt that being large is actually a benefit. It's the reason why we usually call in finance conglomerate discount. I spend a lot of time in my prior lives thinking about that, and we actually believe we deserve a premium. Now this requires to be the best at what we do everywhere or get the heck out of the things that we're not really good at. So in '21, we started to really in earnest look -- not just look into the mirror, but into who are the leading competitors of today and tomorrow and how do we bring the best performance into almost everything we do because also in our industries, not just Allianz, we'd like to what we call [ misnomer ] diversification that is actually cross-subsidization, businesses that don't perform that gets supported by others. And we have and are changing that as we speak in order to really be very good, and it starts again with the customers and their representatives. Today, we'll talk about lifting those ambitions even further because we have one value proposition for society that is truly important because we want to go be the go-to base in uncertain times. We have the strongest brand in our industry by a far cry in financial service, there's only JPMorgan, a little bit of Amex ahead of us, everyone else is far behind. We are the most trusted brand in our industry, and we need to make that more relevant for our clients. In fact, ladies and gentlemen, we have more clients that want to be served by Allianz today than we can serve them because we don't have enough access points for people. It's the first time in our history people want to come to us rather than we selling to them. Second point, we actually report because of financials the way we report, report by product, property, casualty, life and health insurance, asset management. This is not how customers think about us. Customers think about us as being in two businesses, one being protecting what they have. And the other one is helping them to prepare for retirement. That's what they really think we are. And we need to reflect who we are in the way we communicate about ourselves. I hope you're okay over there. Now the third one is we will accelerate the value creation in Allianz beyond what we have done in the past. By the way, when I talk about the past, I also mean the 17 years that I've been with Allianz. Because before, we often did really well in boom times and not so well in bust times. Long-term average until 2017 ROE was 9%, not even double digit, 9%. We've had more than 13%. Recently, we go to north of 17%. And at this point, we believe we have enough spread over cost of capital that we can now accelerate growing the franchise. So growing it smartly, not where the volume is, but where the value is, powered by even stronger productivity and strengthening resilience is the story that we want to tell you today and hopefully not just tell you a story but provide you for the fact -- with the fact that will make it credible. Just a quick look at what we've done on financials and on the health indicators. We gave ourselves targets in '21, and we had no idea how COVID would end. We had no idea about the distortions that would come, not just structured alpha, but the war in Ukraine, the war in the Middle East, the cold war between China and U.S., everything else and we have outperformed almost every single target that we've given ourselves, but more importantly, we're lifting the ambition even further. And I will not go through various KPIs. At your request, we are focusing now more on Solvency II operating capital generation. Claire-Marie will talk about that in detail. And we wanted to clarify a policy on distribution that we've had, but we've never made explicit, by the way, neither internally now externally to say at a minimum over the next 3 years, we will pay out 70% of the net cash that we generate. And we want to make sure that not just the financial indicators, ladies and gentlemen, but also the health indicators that drive the success, most importantly, customer satisfaction and the resounding excitement of our employees stays at the very top. Now I will not talk about -- a lot about the permacrisis that is around us. Geopolitics, climate change, demographic change, technology, we spend a lot of time talking about it every day. I do not want to talk about that. But one thing that's totally clear, we are operating in an environment where the state -- even the strongest states have no more the power to provide our citizens with solutions that they need, whether that's in health care, that's in retirement, they're already struggling to provide the basic good on transportation and infrastructure. And we see that not just as a threat, by a huge opportunity and the same is rising polarization. We have a huge issue in democracies because the middle class is being hollowed out. People need help and they're not getting it. Now that creates huge opportunities for those that have the trust of society, not just the trust of their customers but the trust of society. And as we said, we want to be the most trusted partner that comes with a lot of cost, but also with a lot of opportunity. So our value proposition, we secure your future as a purpose and our aspiration to be the most trusted partner for protecting and growing our customers' most valuable assets. I don't like assets, actually as a word I like what is important to us that may be our health, that maybe the safety of our relatives is at the core of what we do. We believe that's highly relevant. We are not just another financial services provider, at least that's not what we want to be. It comes with three promises. Let me reiterate them, and they will be resounding in everything at the top declined a little bit last year. Why? Because the premium increases in P&C and pressure on life crediting rate really didn't make customers very happy. So you see that. So despite massive investments in brand products and especially service quality, we had a very slight decline. Actually, on the loyalty leader side is one of the bigger businesses that went down that have a significant impact, despite them trying, by the way, very hard. But it shows that the customers give us very clear feedback. And it means for us, resounding reinforcement on being not just a brand and the product leader, but also the service leaders in order to improve price value perception. So we monitor that very much. By the way, as for you as investors, is a very important topic. Affordability of insurance and financial products will become, in my opinion, to the forefront of what we're going to discuss over the next few years. Now this is something I'm super proud of. When I joined 17 years ago, we were great in motivating our people. But when you look at just the simple fact, we were okay in terms of employee motivation and well-being. Okay, not great. Today, we are the benchmark in our industry. And I'm very proud of that. I mentioned this earlier for our people. We've just been nominated one of the best places to work and one of the top 25 in the world. By the way, a few of those companies reside in Germany, the #1 in the word is DHL, Deutsche Post. But even in Germany, we are better than them. Even in Germany, our home market, we are better than them. And there are many other items that you can talk about, diversity inclusion. We are #2 globally after Accenture, and we are the #1 in this country. I would have never thought this to be possible. And it's not because we are only super nice and everything goes in Allianz. It's really been -- we've been able to convince our people that serving clients better than anywhere else is at the heart of what we do, and they really love it. They also love this fact that we have a highly ambitious agenda on sustainability that is not just climate change. I mentioned inclusion and diversity. We're the only company in the country where the Board has an equal share of men and women except me, of course, at the moment, but they, at some point, will also fix that. Now resilient value creation with strong upside from scale, what does that mean? I'm just going to go quickly and show you because critical investors will say, "I checked your presentation in '21, footnote 24, and it says you would do the following thing, and you didn't." We'll talk about that. We don't think that way. But we looked at the five levers that we've been pulling over the last 3 years and by and large, we have delivered. We will never deliver on anything all the time. We are humans, but we really stay focused. Allianz is an amazing delivery machine. It just needs to oiled and it needs to be changed while we are running, but it delivers. And that leads to the fact that we've been, as I said, outperforming most financial targets in aggregate anyway. On the business level, we had a slight movement because of the bear market in bonds. We had less earnings in PIMCO the last 3 years and expected. I think that we'll catch up very, very soon. Christian Stracke will talk about that. But we outperformed on property casualty, something nobody wanted to give us credit for at the time, by the way. Remember, we were in COVID. So the plan was EUR 6.6 billion. We had EUR 7.8 billion, and that was not an easy thing to do given the massive inflation we have seen on claims. That is, by the way, still ongoing. So that's another way to look at it. It comes with tenure and age. You may forgive me because I'm looking over the last 10 years now. And we wanted to grow the company. We've added EUR 50 billion in revenues, more to come. That's the estimate for, by the way, all the numbers on '24 estimates that we're taking out of market consensus, they may be actually better. And operating profit has been on target, earnings per share on target and dividend per share even higher. And let me repeat, we really believe that one of the key value propositions in an aging society is for Allianz to be a highly reliable partner in delivering dividends, that is what people really need. And that's why we've been focusing. We do it for our investors, but we particularly do it for people that are in retirement that need the dividend income. We are now one of the top 10 dividend payers on the planet. And we know how important that is. We are also now the most widely held stock of retail investors in this country, which is important because it comes with trust, but also responsibility and what's even more important for me in this respect is now more than 75% of Allianz employees are shareholders. Can I repeat that? More than 75% of Allianz employees are shareholders. It was 17% when we started to revamp the program end of 2017, so just in 7 years. So all the productivity gains we share with our people and that pace into loyalty, as you've seen that. Now I have some self criticism to talk about, and that's this one. We'd like to be off the top of the house in terms of total return to shareholders. The last 3 years, we were not at the top. We were above peer average. That's fine. 20% is not shabby, but other people have done better. Three reasons in our own mind, Structured Alpha really shook a little bit the trust and do we have risks in the operations side under control. We'll spend some time on it later, cannot repeat itself. Second, we had more -- initially more claims inflation in P&C than was -- we thought was addressable. So we were a bit late, about 12 to 18 months late in addressing it. We have it under control now plus Peter will talk about it and we have the fixed income bear market. I add a personal favorite of myself. I think there is something that is called [Foreign Language] is a normal German thing, but it also results in other things. Big balance sheets are not very popular in times of crisis and people always worry about our balance sheet. There's nothing to worry about we believe. But it's not for us to believe, it's for you to believe and our shareholders to believe so we can do even a better job and Claire-Marie again will talk about that to make sure you can sleep well at night. Now how do we think about lifting ambitions and unlocking Allianz' potential even further? So I mentioned it earlier, we want to be the most trusted partner for protecting and growing your most valuable things. We want to do that by really bridging the protection gap and providing integrated retirement solution because, again, this is how customers think. This is not how accounting things. It's not how the product provider things, but this is how customers think. So we're going to show you the world in outside of Allianz from a customer lens more and more importantly, not just with the accounting view. We have two world-class businesses. Therefore, we're going to present to you protection and retirement, and we are adapting. It's very important. The financial services market and industry we serve today is not the world that I entered 25 years ago. It was not the world that we had 10 years ago. So we need to adapt. And one of the amazing things that Allianz has and that's, I think, underappreciated, but it's for you to judge, is really the great power of how we not just diversify but how do we grow businesses that are highly relevant over time until they become to scale, and I'll show you some. So about 45% of our profits come from Life, the traditional life businesses that's, by the way, highly profitable and asset management that form the core of what we call our retirement businesses. And the rest then P&C retail that you know, Commercial and then there's Health & Protection that has been a little bit of the step child at least from the investment community because we're hiding it into our accounts, and I will show that to them. Already more than 15% -- 11% of our profits come from Health & Protection, profits that have been growing double digits for a number of years. And it also shows that P&C Retail is 25%. In the Commercial, is not the same size, yes, but we are a sizable player, but the overall picture is very, very balanced. So we are not depending on the reinsurance super cycle or commercial line super cycle or any super cycle, we really know how to manage this across the part. And we believe the opportunity is unbound. I remember 20 years ago, somebody coming to me very clever and says, other insurance is dead because claims frequency is going to zero. Well, the opposite actually happened. If you look in terms of severity, it's never been higher, it is unabated, and there's lots of things to be done to control the cost of owning any kind of a moving vehicle. We have new risks coming on cyber. We have exciting stories to talk about how do we do that, particularly with our partner coalition. And we have an amazing challenge coming that's spiraling health care cost. Health care in the way we know it may become unaffordable for many people if we don't do something drastic very soon. And this is about being smart, not just not spending more. Again, Sirma and Klaus-Peter will spend a lot of time and give you some really cool stuff to discuss on what we're going to do about these opportunities. On the other side, we have massive changes in the investment markets in the way people buy retirement solutions, we need higher returns because as we all know, governments have no interest, no interest to have interest rates on their debt at high level of points. The markets have not been able to really ask for the proper return. Even though I have to say 2% real return in the U.S. now is pretty cool. In Europe, we may not see that because the governments need to print money and need to keep interest rates low as possible in order to fund their deficits. So we need new sources of return, and they need to be attractive on a risk-adjusted basis. That's something that we are very good at. We don't need high nominal return, we need risk-adjusted returns because the pressure on public systems are high and there's huge opportunity because of the accelerating generational wealth transfers that are coming. Lots to be said about property, casualty and retail. I always wonder why people talk about us in this as having a challenge or anything else. These numbers tell you everything about who we are and who are the others. It also tells you -- this tells you about what the trajectory are after the inflation spike on where we are and have been on underlying loss ratio development, just to be clear. And this is the plan going forward. Double-digit profit growth until 2027. And again, Klaus-Peter will tell you how we do that, how the retail alone more than EUR 5 billion profits. Another story. I just talked to one of you in the room who said it's really interesting, the cool stuff Allianz has, particularly the new things. Now some of these things are not new. One of the greatest thing my predecessor Michael Dickman was, was to create Allianz Partners because it says we need a platform that serves B2B2C clients. It was quite inspirational at the time and really wasn't sure how roadside assistance fits together with travel insurance and other things. It has been one of the biggest things we've done. We are now the #1 global service provider for B2B2C growing double digits. We will be very soon the leading EU direct insurer, and we will make money. It takes a while to get there. We are the #1 travel insurance -- by the way, very funny when you lead some of our competitors news like we are the #1, I don't know where they get their data from, this is the real data. And also on B2B, the leading claims platform and this super important is in our house. We actually believe it's not just an indispensable service to have, but the platform to control that people cannot replicate. Why? If you settle a claim through solve now, you save on average EUR 1,000 in our directed tariffs. EUR 1,000 is running, depending on you run the numbers, 15% to 18% of every claim. That is not just good for you as investors, it allows us to offer much more competitive tariffs than anybody else can do. Now the other thing, and that's very, very important, it creates super strong synergies. Insurance typically has been perceived as a low involvement, actually negative connotation product. Ladies and gentlemen, the opposite is true. With the services we're building around our products, not just Net Promoter Scores are going up, contact frequencies, propensity to buy, the propensity to renew are going up massively. So while some people believe you can be a monoliner and be great at it, we don't believe that. We actually believe having customers come to us is not just good for them, it is very good for us. Now Commercial, I'll talk about it, Chris Townsend is not presenting today, but I will try to cover it as much as possible. Just to tell you, again, double-digit growth in profit is what we are planning until the end of '27 with a combined ratio below 92%. And in an environment where claims inflation is very high. Why do we believe we can do that? We're actually not present in a number of the segments that are still very attractive despite some of the areas of the market softening. So we always say, people say, you're talking it down because it's good for you and bad for competition. It's nonsense. We are very strong in SME and mid-corp. And we are far below our normal market share in some of these segments. So we're going to grow because we can. And there's many things that we can talk about. By the way, another thing that's often overlooked by the way we report. As you very well know, with Allianz Trade, we own the world's leading trade insurer. And after a crisis, by the way, and I want to use this example to really complement Chris, [ Eileen ] and the team at Allianz Trade. One of the most successful rebranding campaigns in the history of Allianz has massively improved customer satisfaction growth opportunities. Now our market share is 40%. And we're actually going down, 40%. We are coming from below 30%. And people after COVID said, this is a product without value. The opposite is true, ladies and gentlemen. There are so many conventional wisdoms that are not true, and it's a core part of what we do in Commercial, and that's also often not understood. Health & Protection. We have a lot of competitors that have been putting Health & Protection in the front of their presentations for a long time. We were loath to do that because we wanted to first get good and from good to be pretty good before you show you some numbers. Now let me show you pretty good. I think we're one of the few places on earth where we run product design, data, pricing and underwriting centrally out of one database globally. We've just entered an Asian healthcare market without ever having been there because we can leverage the global data we have on morbidity in a way that nobody else can and replicate the data that others needed decades to compile. So what have been the consequences and what are we going to do? Again, we are going to grow profits more than double digit. By the way, the ROE in this business is now 26%. It wasn't always that great when we started the journey. And the reason why I show you these numbers because we don't report them properly. Some of that is in P&C, some of that is in Health, some of that is core and life and again, I personally believe we can even do better. But by '27, it's going to be more than 11% of the group profit base. So a very instrumental part of what we do. That the retirement opportunity is massive I don't think I need to elaborate. And what I only want to remind you of, we are already very strong in the most important markets that we're in. We can do better in Asia and we will. Now let me just highlight a few facts, and we're going to hear more from Andreas Wimmer today and Christian Stracke on talking about it. We have amazing numbers, whether that's around capital productivity, whether that is about market positions, we are the #3 life insurer globally, and everybody thinks is a problem, I think, is the biggest opportunity we have. But everybody wants to be Life today, Asset Management tomorrow, P&C the day after tomorrow, and then they reinvent themselves, let's call, we believe people need retirement products, they need to be managed properly, not at the expense of shareholders' capital risk. And by the way, when people talk about building alternative investment capabilities, Allianz has been there, is there and will be there, and we'll learn more about that. Here's just a couple of examples. This is what we want to do. We want to have out of our retirement business, more than EUR 10 billion profits by '27. Let me repeat that. More than EUR 10 billion profit. This was almost as much as we had when I started here in the segment as CEO, and we will grow AUM at least 8% a year. I think we can do even better, but we are very cautious. Capital intensity is something that somebody talks about all the time. I just wanted to mention, this is what we promised in '21. There is something that Andreas will talk about, and that's very important. That is capital efficiency of AZ Life. We are announcing today a very innovative flow insurance and in-force insurance, a product called Sconset that we've developed with PIMCO. I think it's quite amazing what has been done and it's the beginning. It's not a one-off after 3 years, is the beginning of a systematic drive to make our U.S. life business and all of Allianz' life businesses more capital efficient. I could spend an hour now on services. Since I spend a lot of time and we don't have a lot of time today, let me talk about more the third chapters and the three value creators because I want to really stay in time. The first one will be driving smart growth. And we have a really important reason why we call it smart growth because many investors told me, Oli, when insurance companies come and asset managers, they want to grow faster, we fasten seat belts because that comes typically with a lot of growth that turns out to be not so profitable a few years down the line. So we are very cautious about where and how we want to grow, and we'll talk about that today. How do we fund that? How do we fund that? Not by reducing payouts, not by doing large M&A. What we really want to do is reinforce the productivity journey that we've been on, much more systematic, much more consistent than many other places. And we're now at the point where we believe we can leverage not just AI, integrating global scale. And then Claire-Marie will talk in detail about how we strengthen our resilience further. So these are the three things. Driving smarter growth, getting even better on productivity at the rate to fund additional growth and driving resilience. Now when you look at the last few years, most of the growth came through increasing prices. And we've been able to improve productivity and price also because of that, it's totally clear. And it was only -- we were only able to do it because our brand, our service quality was such that customer retention was still good. It's not great, but still good. As we go forward, we want to double the organic growth. We want to double organic growth. For Allianz, it's the first time in history, and we want to do this in a way. Now these numbers look small when you say, only 0.5% more on customers, net cross-sell 0.5%. So that's nothing. Well, Klaus-Peter will show you that this means 30% uplift in growth on a gross basis. Now the second one is productivity. So we've done a lot of product harmonization, IT decommissioning. We can spend hours, Barbara is here. She's happy to talk to you during the breaks. We're continuously delivering Allianz Direct, which we know everybody from the number side, criticized will be the first insurance company operating on one platform across countries by the end of the year. There's no other place where that is the case. Just took a little while. This is our journey on productivity, and people always ask when will this end. It's not ending, it's continuing, and we have a very clear plan to continue to do the 30bps per annum until '27 and beyond. Doing the things we have been doing and more. And the more has something to do with the fact that we now are integrating the view on distribution where we are getting value out of distribution and only pay for value, not pay for volume anymore. Now resilience. Last, certainly not least, now when we talk about resilient with our investors, they always ask about credit ratings, they ask about Solvency II ratio. Solvency II ratio more for payout, can you not pay more if your solvency ratio was higher, could you not pay them out? And I'm not trying to be cynical. But we -- when we talk about resilient, we mean something else. And there's two components to it. One, it is about operational resilience. Again, we were stressed. Restructured Alpha with NatCat, with inflation, with enormous challenges over the last 3 years. Many by the way, people really ask how can all of this be handled by your people. You saw how our people react to the pressures. They're ever more excited, they're ever more excited. We'll also bring operational resilience because we are not depending on selling a product and selling a claim and then having people wonder what they are paying the premium because we are really diversifying the customer base. We're investing in customer engagement directly not just through intermediaries, increasing the share of direct customer ownership, which, by the way, protects your margin as shareholders. And on retirement, the same. We need to bring down capital intensity, we need to make sure that the results are super strong and that the investment portfolio has no doubt that it is super strong and in asset man, last but not least, have crisis proven risk management and investment performance at the core, and let me repeat, risk-adjusted investment performance at the top of the industry. The other one is financial resilience, and I'm not going to talk about because Claire-Marie will spend a lot of time on it. So let me just move to the outlook to stay broadly in time. So we're going to lift our ambitions yet again. Remember, '21, there was already a lot of lift up, and we would not present these numbers to you if we didn't believe the organization would be behind those targets. So that is not Oliver or the Board of Management. This is 175,000 people that will deliver this. 7% to 9% EPS growth, capital generation between 24% and 25%. Return on equity, this is approaching double what our historical average has been. Payout at a minimum of 75% on average over the time period, being the true loyalty leader in our industry and remaining at the top of the world in terms of employee engagement. This is no less than an ambitious program. Now here's the day where we'll talk about how we will or how we are going to make this happen. Only will means it will happen for sure, but we'll try everything. Klaus-Peter will talk about in 1 minute, about Property Casualty Retail insurance. Then after Sirma we'll have a coffee break. After the coffee break, we'll go through Asset Management, Life & Health. This is still the traditional reporting view, if I may say. We will hear from Christian, the President of PIMCO, and I want to extend a special welcome to him this morning about where PIMCO is and then Claire-Marie will finish sort of the presentation part with the CFO view. After the next break, coffee break, we'll have Q&A and then we'll invite you for lunch. After lunch, we'll have some more group Q&A sessions, so we don't have to do it in the large audience. The whole management team will be here, will be available for your question, all your poking, all your I don't believe this thing or can you not do more there. And we're really excited about you being here. Let me say that again, particularly those that made it to Munich today, we're very happy to host you. And with that, Klaus-Peter, and I think I'm on time.

Yes. Thank you very much, Oliver. Good morning. A warm welcome to Property and Casualty Retail business. Now why is P&C Retail business so valuable for Allianz. It accounts for 1/4 of the group operating profit, and the segment is one of the most important growth drivers for the operating profit with a CAGR of 10%, expect by a targeted combined ratio of 92.5% by '27, and that's a strong improvement of 1.5 percentage points compared to '24. In parallel, we will grow our volume base but also our policy base. And we will do that without compromising profitability and at the same time, we will reduce our expense ratio annually on average by 30 basis points, and this is net after investments into new technologies. You have seen it. We own the leading retail franchise in the industry, and our commitment is clear. We will grow it further, and we will do so even more profitably. On the left, you can see that our total P&C revenues reached EUR 77 billion in '23 and the retail, including fleets and SME contributes EUR 40 billion. That's more of 50%. Now these numbers really position us ahead of our competitors. And the retail portfolio is a powerful stabilizer because it contributes, as you will see later, by the low combined ratio volatility to the overall P&C segment. And it's a value driver within the overall portfolio with this operating profit growth of 10%. Now what sets us apart and ensures the robustness of our P&C retail business? We are scaling globally across markets, and that ensures stability and continuous growth in revenues but also in value. We hold leading market positions and consistently rank among the top 5 in our key markets. Now our retail global strategy is built on three main themes: number one, and I will elaborate on it, lead in technical excellence; two, its innovation building on simplicity and best practices; and third, leveraging on our ability to scale with our Allianz Business Master platform. Now on the following slides, I will lead you through the three pillars for our future success. Number one, we are committed to further strengthening our technical excellence and resilience. Number two, smart growth. Driving the displayed policy growth uplift of 1% to 2% per annum, and three, rapid productivity powered by Gen AI and scale. Let's start with the first chapter, technical excellence and resilience. On the left, technical pricing excellence certification. We evaluate our operating entities based on the maturity of their pricing and underwriting excellence. And we've made progress with 35% of our GWP certified advanced or better in 2018. We have now reached 91%. We did our homework. We do not stop here, but we continuously raise the bar. '25 onwards, the advanced requirements will be further elevated and ultimately, every retail portfolio aims to achieve excellent. Now I would like to give you four examples to illustrate the impact and the significance of having a higher pricing certification, it's enhanced data granularity and then it's AI automation for our pricing optimization and the risk modeling and its reduced time to market and more precise forecast for our KPIs. Now in parallel, we are focusing on claims excellence. And managing claims holds a substantial value creation potential for us. Here to note for example, from our overall P&C business, it's EUR 1.4 billion of fraud savings and EUR 2.8 billion of recovery revenues both this year. Now we are very proud to give you clear evidence that our measures in pricing, underwriting and claims excellence are so effective to compensate and mitigate inflation. With our measures, we have successfully improved our underlying loss ratio from 69.3% in '23 to now in Q3, 67.3%. That's a reduction of 2 percentage points in less than 1 year. Our actions result in outperformance in our markets. And Germany stands as a prime example, where our loss ratio in mortar consistently beats market averages. And the same holds true for our combined ratio, we beat the German motor market in '23 by 5.5 points, and we expect to do so in '24 by minimum 7 points. Also important in other markets, Italy, U.K., Spain, Switzerland, just examples, we outperformed the motor markets and beat the local combined ratios. Now very important for you, moreover in P&C Retail, we have a visibly lower combined ratio volatility compared to our peers, confirming our technical capabilities in pricing and in underwriting. Apart from inflation, NatCat is an important opportunity for us, and we have continuously demonstrated a strong resilience. To be very clear, our exposure to NatCat is significantly lower than that of our peers. The evidence, during the last two major NatCat events, our share of gross losses was materially lower than our market share. Additionally, we have achieved a low NatCat and claims-related claims volatility, weather-related claims volatility. Despite the increase of frequency in these events, we were able to limit the average combined impact from NatCat and weather to 3.4%. How did we achieve that? Leadership in prevention, including warning text messages to NatCat. It's our NatCat technical excellence, including superior accumulation management. It's granular data for peril zoning. We have very detailed hazard zones and risk models in order to steer our business towards the lower peril zones and to optimize the local retention and the reinsurance. And last but not least, a multiyear forward-looking NatCat view is required to be prepared for future developments. We have additionally increased our NatCats by 1 percentage point since 2022 and we continuously monitor the trends. Let's turn to the second pillar, smart growth. Our smart growth strategy is engineered to expand our customer base but also our policy count to reduce dependency on price-driven growth. What is new especially with the new powerful digital tools and together with our intermediaries, we will expand the existing customer relationships, targeting more per capita contracts and we want to build new relationships. Therefore, we have launched the Growth Triathlon to attract new clients, to boost cross-selling and to reduce churn. What do we aim to get? We will get 1% to 2% extra net policy growth each year and each Growth Triathlon pillar will contribute 0.5 percentage points per annum. You will ask what's different this time and sets the Growth Triathlon apart from the past and our competitors' initiatives. In a nutshell, scaling the following assets that have proven effectiveness in selective markets now globally. And scaling means making them a standard. Now in detail, we increased inflows from new customers and cross-selling. And by that, we will generate 1 percentage point higher volume growth per annum and that equals an additional 1.8 million new business policies annually by '27. How we will do this? We secure to reach every customer with annual insurance checks but also with data-driven personalized campaigns. Number two, we will boost our visibility amplifying the online presence of our agents and the end-to-end lead process and management. And number three, we will utilize every customer interaction as a sales opportunity we work on inbound calls and online services. Moreover, tackling outflows now at scale will also uplift our top line by 0.5 percentage point higher volume growth per annum, and that translates into 1 million additional policies annually by '27. The levers are behavioral-based communication to our clients. It is reengaging with former customers. We know their profitability. It is safe desks with trained call center agents and the incentivation of our intermediaries will depend on them achieving net policy and customer growth. Now cross-selling is a very powerful tool, the most powerful tool. Why? Cross-selling increases inflows and reduces the churn at the same time. For example, we can have the probability of churn if we sell a second product to a single customer, single contact customer by 50%. Now we have a huge opportunity in front of us with 60% to 90% of our clients holding only 2 or less contracts. Now everybody talks about cross-selling, and I would like to demonstrate that we can access new customer segments and do cross-selling without cannibalization and jeopardizing our profit margins. And therefore, I would like to introduce to you [Foreign Language], it's a German example where we, together with Allianz Direct, have launched an innovative multichannel initiative to access all customer value pools in the German market because previously, we had only been successful with our agents in 55% of the market, the so-called convenience buyers and the service seekers. And now with the new coherent product and pricing strategy and a harmonized shopping window, we have successfully extended our reach to the price seekers and smart shoppers. They are the fastest-growing segments, and they represent already 45% of the market. The heart of our strategy is a joint market approach displaying the direct and the traditional offer together. Now the customers can save up to 18% switching to the self-service product. And this approach supports our agents in attracting price-sensitive clients and using the lower price but profitable self-service product as defense. And the nice thing is, at the same time, our convenience-driven clients are appreciating the services in the traditional products, are willing to pay for it, and that's confirmed by zero cannibalization. Now we have visible success, materially outperforming by net policies gained and our combined ratio. And this is just an example. We pursue a similar approach in Italy, in Spain, in Netherlands and in France. Now let me draw your attention to the third pillar, rapid productivity. Since 2020, we have a strong track record, and we continue to do so. How the levers are? Process optimization, building on process mining and broadening the use of robotics and Gen AI-powered self-services. Number two, it is organizational and system organization. And here, we also scale now right shoring in order to ensure efficiency and effectiveness. In parallel, we will also address our acquisition costs, for example, by exploiting scale effects in marketing and achieving a higher growth in customer journeys with lower commissions. Now looking ahead to '27, we want to maintain our momentum and reduce our expense ratio on average by 30 basis points. And that's a strong reduction, in times when inflation-driven price increases will slow down. And this is net of tangible investments into new technologies and growth. Talking about new technologies, a cornerstone of our productivity efforts is clearly generative AI, transforming our business along the entire value chain and our use cases clearly demonstrate the potential for productivity gains from 10% to 30%. And on the next slide, I would like to present to you an example how we are scaling AI. We have the ideal foundation to use Gen AI for informative outcomes. Number one, scalability. Number two, data expertise and treasure and number three, technology along our harmonized products and processes because we have groundwork already done. In claims Germany, we deployed 3 use cases: automatic claims creation, it's the coverage and liability check, and it is the invoice check. And we implemented in our pet insurance, pet health insurance, and we boosted right away the voice of the customer rating from 4.2 to 4.8 stars. And at the same time, we were able to raise the automatic processing share from 7% to 55%. Now we will scale the use cases across all lines of business. And automatic claims creation is already live now in property and in liability; in motor and legal and accident, it will follow until year-end. And by the end of '25, all three use cases will be implemented in all lots in Germany. Other countries will follow and we will leverage Gen AI business capabilities also for other business functions also clearly for Life & Health. Now let me focus on our ambitions to conclude. We are targeting a 10% CAGR to reach EUR 5.3 billion operating profit in retail P&C by 2027. And we will achieve this through the initiatives I've just outlined. Number one, excellence and resilience, we are striving for a combined ratio of 92.5%, and we will continue to limit the combined ratio volatility, number two, smart growth, growing the extra net policy growth of 1% to 2% annually and rapid productivity on average annual 30 basis point expense ratio reductions are confirmed. Thank you very much for your attention. I have now the pleasure to hand over to my Board colleague, Sirma Boshnakova. Thank you very much.

So I hope that this is not a joke. So first of all, thank you very much, Klaus-Peter, and good morning, and warm welcome from me. So there is a sign of break. I hope that you enjoy this part of the conversation, and we spent 15 minutes on our connected platforms that I have the privilege today to present to you and how this would actually contribute almost EUR 2 billion operating profit to Allianz by 2027. So let's start with the short definition of what we mean by connected platforms. And shortly, these are integrated digital assets that enable omnichannel and ultra personalized customer experience. They're set to build the future of how customers interact. And for us at Allianz it's not a dream, it's a reality. These are real businesses delivering value in terms of profit and growth, and it helps also future proof for Allianz. Today, we are talking about three distinct businesses. Number one, Allianz Partners, the #1 global B2B2C company; Allianz Direct, the leading direct insurance player in Europe; solvd, the B2B company that is the motor claims management suite, disrupting the motor insurance industry through cutting-edge AI and technology. By the way, today, the CEOs of these companies are also here and they will be happy to demonstrate in actions what we are doing. Together, these companies are already delivering significant value to our business, both via the operating profit of the 3 entities and by enabling synergies within the group. And this is already almost EUR 1 billion for 2024, and we aim to double this by 2027. So as a starting point, let me highlight a couple of facts about our connected platforms. First, each company is a leader in the highly competitive segment. The second, together, they generate more than EUR 11 billion revenue, while still growing more than 10% per annum. Working together, they become an irreplaceable asset providing peace of mind just a click away to more than 100 million clients across the globe and supporting them through every moment in their lives. Over 20% of the Property & Casualty growth is already coming from our connected platforms, and we aim to continue to fuel this growth in the future. And as I mentioned, we enable EUR 1 billion profit to Allianz already today. So we started to lay the groundwork of our connected platforms already 5 years ago. And today, they are the key differentiator to our customers and business partners, thanks to the combination of several factors that are actually unique to Allianz. And let me mention just a couple of them. First one is the flexible IT agnostic system that is designed to be fully adaptable and seamlessly integratable to any internal or external stakeholders. The second is the multipurpose model, engineered to serve all different sales channels, direct, digital through any intermediary. We have the global footprint, but still, what we are doing is we are meeting the local market needs and even more important, the local regulations. Harmonized products and processes. This ensures consistency and efficiency across the whole value chain. And last but not least, integrating of cutting-edge AI innovation, which is allowing us to deliver smarter, quicker and more personalized solutions. So as we speak today, thousands of our customers are traveling. And unfortunately, some of them would have an accident. So let's take an example of Allianz Direct customer and what he needs to do. Actually, he doesn't need to pull out his phone to inform us about this because our automatic detection solutions already inform us, and this is the moment when the full set of services is triggered. As a starting point, the Allianz Partners call-center agent calls proactively our client and checks the details, but most importantly, whether he is okay. Then in case of the immediate repair needed, Allianz Partners organizes repairing spot or transport the car to the closest repair shop, meanwhile, organizing the rental car substitute. In case of smaller accidents, and we hope that it happens in these situations, and we need damage assessment, through solvd, we provide an instant repair estimate and in this case, we support our customers, and they can book immediately online and sport the repair shop or in case they prefer cash, they get the cash settlements within 60 seconds. In the unfortunate case of medical assistance, our clients can check the symptoms or can talk immediately to the doctor through our telehealth activities. And in more severe situations, the location of our customers are sent directly to the hospitals and they started the transportation. For sure, we also take care of the rehabilitation period after the hospital. So at the end of the day, the full process will be automatically completed either within 60 seconds or within several minutes. And this is what we call peace of mind just a click away. And this example is only one of the examples that we have of the great services we provide to our customers thanks to the connections of different assets into one continuous flow. All three entities achieved strong top line growth while further improving their margins. Collectively, they have surpassed more than EUR 11 billion total business volume in 2024. And looking ahead, we aim to achieve more than EUR 15 billion total business volume by 2027 and double our operating profit to more than EUR 2 billion to Allianz. So now let's deep dive to each platform, look how it contributes to this and discuss a bit the scale-up plan. Let's start with Allianz Partners. This is a combination between insurance, services and technology. Allianz Partners is operating in all areas of people life, travel, health, mobility and easy living. And we are the #1 market player in most of the measures or actually in all the measures in terms of revenue, profit and Net Promoter Score. And just let me give you some examples. In travel insurance, we are 2x bigger than the closest competitor. In mobility and assistance, we are 5x bigger than the closest competitors and we have the predominant share in the profit pools of the industry. This is an operating entity working in 70 countries, 22,000 employees, by the way, 15,000 of them are working in the front office in the call center, delivering every day above and beyond to support our clients. We handle over 200,000 cases per day, more than 70 million calls annually, and we organize more than 10,000 medical repatriations on an annual basis. We provide peace of mind just a click away to more than 100 million clients and we serve more than 6,500 business partners. Among our key partners are leading airlines, automotive manufacturers, banks, retailers and other insurance companies. And with Allianz Partners, the Allianz brand is visible in more than 16 billion business partners website visits. Over the last few years, we started a fundamental transformation with the objective to shift from being product to a true solution provider, investing a lot in digital capabilities to embed fully in our partners. And today, we see already the benefits in this highly competitive market. Thanks to the combination of global reach, unmatched scale, competitive unit cost and comprehensive solution, we are now the key differentiator for our partners and our retention rate is higher than 95%. A key element of our strategy is Allyz. This is the app powering our connected platforms. And today, you'll have the opportunity to see it in reality. And with Allyz Travel, travelers don't need any more multiple apps. Allyz is the one-stop shop providing real solutions in real life to our customers like safety alerts, access to the lounge if the flight is canceled or delayed, VPN abroad, also access to our medical provider network. 24/7, our clients, if they don't feel well, can make an appointment with a doctor, can check their symptoms, can renew their prescriptions and they can get the whole support needed. We already have more than 2.3 million active users, and Allyz delivers on all levels of customer satisfaction, 4.8 out of 5 voice of customer and also delivering operational synergies. Going forward, we seek to continue and further accelerate our growth trajectory and we aim to add additional EUR 3 billion top line by 2027 and double the operating profit. And this is not an aspiration only. This is -- there is a clear plan behind this. And there are several reasons, and I will just mention a couple of facts. First, we want to be -- to continue to be the standard of embedded insurance and to outperform the market growth in percent per annum with the help of high retention rate and expanding into new segments, which means more than 10% per annum, all of that coupled by productivity gains. By radically rethinking our processes, we will harness data and AI and automate and focus on what truly matters. This would allow us to reduce our expense ratio further by 1 to 2 percentage points. Now let's move to Allianz Direct, which is also a great company. So until last year, it was a great idea to have Allianz Direct but now with the moving and the fast pace of AI and emerging technology, actually, it's essential. Allianz Direct is reinventing the business -- the insurance business and there are several reasons for this. First, the unique and scalable IT platform, the harmonized products that are operating or offered under one Allianz brand and operating into key markets always putting the customer at the center of everything that they do, and it shows. More than 2.3 million customers choose Allianz Direct which is reflected in EUR 1.2 billion revenue by 2024. We have created a unique business model in the past year in terms of business and platform. All operations are unified under one legacy-free IT, fully in the cloud with a service-oriented architecture. The oldest platform element in Allianz Direct is not older than 4 years old. And our platform works within several -- with all channels, not only through direct but also retail partnership with banks, MGAs and also allows us to fastly onboard the recent acquisitions of Luko, FRIDAY and iptiQ. While we are very proud of the achievements of Allianz Direct, for sure, the starting point was a bit challenging. We have different stages, ups and downs, sometimes we were not as fast as we want it to be. In the past 3 years, we focused on fixing the basics and the core elements of the business. And now we see the results. We have reduced our expense ratio since 2021 by 7 percentage points, our loss ratio by 3 percentage points and we increased the sales service rate to more than 85%, raising the customer satisfaction in all metrics. Now we are prepared to unleash the growth, and we aim to reach EUR 1.2 billion revenue by 2027, to double the operating profit to EUR 100 million, and we want to achieve this by several factors. First of all, for sure, organic growth, we believe that our unit cost, which is already a benchmark and we continue to improve it, will help us to offer competitive pricing and also enhance further the customer experience. And also, we will continue to look for strategic acquisitions that would allow us to expand in the market. And now shortly about solvd. This is our most recent company, which is becoming to be fundamental for the motor insurance industry. This is a company serving more than 200 billion -- yes, want to be 200 billion, but it's only 200, at the moment, business partners. Among them are insurers, leading companies and rental car companies, and they account for more than 85% of the revenue of solvd, and for sure, who are very proud of serving Allianz entities. To deliver top-notch services, we acquired three entities, ControlExpert, GT Motive, Innovation Group, connected their assets through cutting edge AI and technologies into one continuous flow. So now different insurers can support their clients with the first notification of loss of ControlExpert, which is with a fully digital journey supported by a voice bot. In case of they need instant repair estimates we have an engine AI-based tool that is powered by GT Motive and ControlExpert, and they also can get the cash settlement within 60 seconds. And finally, with the help of the repair shops of Innovation Group, all customers can book online appointment to the closest repair shop and get a top-notch service at the right price. In 2023, solvd handled more than 17 million transactions in more than 45 markets. As a result, solvd is already driving the growth and we expect that this year, they will grow by 15% versus the previous year and is becoming the leading motor claims management service provider. Looking ahead, we also have an ambitious plan. We want to reach EUR 800 million revenue and double the operating profit. And there are key several factors that would help us to do this. First, we will definitely expand our product in the existing clients because there is much more to be offered at this point of time, and we also plan to enter new segments in Europe and Australia. We believe that there is also a potential to improve the Allianz motor combined ratio by 2 to 3 percentage points to keep us at a competitive level. As you would agree, each one of these three assets shows strong performance on an individual basis. But together, they become an irreplaceable asset. And they're not only the growth engine of Allianz Group, but also the source of resilience for our retail motor, property and casualty business. We protect our core business via innovation and high customer satisfaction while enabling market outperformance. In summary, these platforms not only enhance a great customer experience, but also generate significant synergies and operational efficiencies. We have confidence in our strategy, and we aim to double the operating profit by 2027 and reach almost EUR 2 billion. We have more than 25,000 people working on these platforms, and they're highly motivated to reach this goal. I'm also confident that we'll create together an outstanding customer experience that will change the way people view insurers. Thank you very much and enjoy the day.

Well, thank you, colleagues, for keeping as close to time, as you obeyed my instructions. So I think we're just about 5 minutes behind schedule, so we're going to have a coffee break now. If you could be back in the room by 11:00, that would be great. In the break, I mean, Sirma mentioned there are some demonstrations of some of the platforms she was talking about. I should tell you there's actually five divisional CEOs here. We have the CEO of Direct, of solvd, of Partners and then upstairs, of Services and Allianz Re, is well worth exploring. There's some quite funky stuff going on there. They're very interesting, so please try and see those during the break, either now or at lunch time, and we'll see you back here at 11:00. Thanks. [Break]

So hello, everybody. Welcome back after the break. It's a pleasure for me to present now the Asset Management, Life & Health businesses, which account for more than 50% of our operating profit, and as Oliver said, we are very proud of that segment, and we want to expand it further. We want to grow further in a smart, meaning capital-efficient way, and I also would like to highlight today the resilience of the business, the stability of its cash and dividend generation. But let's start with taking stock. We have seen quite some challenges in the last 3 years, '21 to '24. We have seen this fast and steep increase in interest rates impacting our asset base, also to some degree the customer behavior in some Life markets, and we had Structured Alpha we had to cope with. We took management actions, in-force management, looked at asset allocation. We had strict cost control, especially on the asset management side. We established successfully the partnership with our friends from Voya in the U.S., and we strengthened our governance. As a result, we have overachieved our ambitions in Life & Health with about EUR 5.4 billion of operating profit at the end of the year, and we will reach approximately EUR 3.2 billion in Assets Management. We are quite positive about the future and the next years in the cycle to come. So you see that planning that our CAGR in Life & Health is about 5% over the next year. So we want to achieve EUR 6 billion of operating profit at the end of '27 in Life & Health. And for Asset Management, we even believe of a CAGR of 8%, then coming to EUR 4 billion of operating profit in Asset Management. We believe the market is positive for us. So we can build on higher interest rates, which helps us. We see secular growth trends that should also give us tailwind and further demand for alternatives and solutions for our customers. And we will combine this with further synergies from Asset Management and Life and the smart use of third-party capital, which then together should bring us and further increase the liability of our profits and dividends, while at the same time, reducing capital intensity. At the very center of our strategy, and this is important for me, and I think it resonates perfectly to what Oliver said, is a very strong customer value proposition, Life, Health and Asset Management. And you see this by the outperformance numbers of PIMCO, I'm sure Christian will come to that later again. But a strong customer satisfaction ranking of AGI, very strong but also the rating categories in Morningstar, see here, and the very strong product innovation we have in Life, good crediting rates and cost advantages we achieved by our scale which we can share between policyholders and shareholders. And also coming back to Oliver, huge retirement opportunity we are seeing. Personally, I believe we're the only global player who can really play in all these three regions, in the United States and in Europe and in Asia, building on a very, very strong brand, as shown before. Now we want to address this increased demand for retirement but also for wealth, protection and health by market-leading platforms. On the asset management side, we have two complementary asset managers. We have PIMCO, definitely the global leader in active fixed income, but also very strong in asset classes like real estate or private lending. And we have Allianz Global Investors, active asset manager with a very, very strong client servicing and I would even say outstanding support for distribution networks. On the Life side, we are super positioned in the U.S. with AZ Life, #1 in the fixed index annuity market right now. We have Allianz Leben, the clear market leader in Germany, new business market share of 40% in this home market. We have strong franchises in Western Europe, Benelux, France and in Italy, we are the #1 unit-linked provider. And we have the fast-growing regions of Allianz Asia and Central Europe, countries like Taiwan, Thailand, Indonesia, Malaysia and Central Europe, we have made the acquisition of Poland, also a very strong country there. We want to increase also and accelerate this growth by key strategic initiatives we do across the group of all these entities. In Asset Management, it's clear. It's a nice slogan of our friends in Newport, bonds are back. And you see the market leading inflows into PIMCO in this year. And certainly, this is a huge opportunity for us. But also across both asset managers, we want to expand in private markets, and as an example, private credit is a wonderful example where the need for our balance sheet capital fits perfectly to the offerings to our asset managers. But also very important, we also want to bring this more into retail categories to wealthy customers, but also across the board. And I will show you examples later. On the Life side, we're certainly focusing, as described by Oliver, of accelerating Protection and Health. And we want to focus on technical excellence along the whole value chain, underwriting claims, pricing and certainly, we will use AI as a very important tool for that. And finally, in distribution side of Life, super important for us, our own agent networks I would say it's really a competitive advantage of us in many key markets, given the strength of our brand, we will certainly want to grow productivity even further. And then we have joint initiatives between Asset Management and Life. I already mentioned, we want to bring and scale wealth management solutions across our offerings. We definitely can further expand our unit-linked propositions, growing our assets under management based on differentiated customer value propositions and certainly also, we want to increase the share of the internally managed assets. And we will optimize our capital structures, and I'm very happy that I can show you one example of that later when I come to the details of AZ Life. Also very important for us I already mentioned the growth in Asset Management and the inflows, we have seen also extremely strong growth in Life & Health in this year, 18.2%, as it was in the first 9 months the value of the business growing. And it was across all the markets. So it was very strongly driven by the U.S., but also in Germany or in Asia. And we believe we can continue this. But maybe even more important, we are growing in the right segments. So nearly 50% of the value of new business in this year is in Protection and Health and in unit-linked products. And 94% of the overall businesses within the preferred lines, we really want to focus on and that is reflected by the new business margin of 5.8%. And this new business will soon translate into CSM and CSM release. That's what we're seeing on the right side of the chart. So the business we will write between '24 and '29 will in '29 account for 50% of the CSM release then. And by the way, we are quite conservative when it comes to the assumptions of our CSM being the growth we assumed or how we calculate it. For instance, we use risk free rates. You know this, whenever we do additional returns, CSM will increase further. Coming back to the resilient topic. Our spreads in Life & Health, and I'm talking about all the general account business is super comfortable. You see this here, the numbers, for new business, nearly 400 basis points of spread there, and you see it also for our in-force business of more than 200 basis points. And you also know that we are caring a lot about risk management, matching duration and certainly focusing on a very high quality of our investment portfolio. Certainly, we have improvement areas. And one of them is capital efficiency. And Oliver pointed out our target for the year '27. I know Claire-Marie will talk a little bit more about that. And we want to support this target also in the Life and Asset Management segment by looking at asset allocation, liability management and certainly reinsurance and using third-party capital. And you see the new business capital intensity in your new business is already at a very low level, which we certainly want to continue this way. Now I want to come to two examples in more detail and do a little bit of a deep dive. The one is AZ Life. As I said, very fast-growing, huge opportunity right now in the U.S. annuity market. And you see the spreads here again on the left side, you see the asset quality in the middle of this chart, much more conservative as it fits to us as Allianz compared to peers in the market. And you also see the sensitivity, extremely low sensitivity of the CSM given specific shocks. By the way, around 90% of our businesses in the U.S. has some kind of penalties if you've gone to withdraw or you cannot withdraw above market value, very important from the resilient side. Now you all will recall our transaction we did in '21, which was called Lucid. And I'm very happy that today, we can announce that we establish a new reinsurance company, independent reinsurance company, Sconset Re, which will provide capacity and growth capital to AZ Life, a project, that was done in very close cooperation between the colleagues of Allianz in Minneapolis and our friends from PIMCO. The vast majority of the investment, the equity investment in this reinsurance company is done by high-quality external investors. So the share of Allianz is very small because it's nonconsolidated and independent. The vast majority of the assets is managed by PIMCO, but also some complementary strategies by Voya and Antares as our partners here. This vehicle will support our future growth in the U.S. And you see by the numbers that we started to reinsure $4 billion of in-force block and $5 billion to $10 billion of flow business into this capacity but very important, this has nice financial implications, immediate implications as you see on the bottom of the chart. But what I really want to note, this is a scalable solution for the future. It gives us strategic leeway to further grow the business in the U.S. in a very capital-efficient way. The second example of joint value creation I want to bring is using the example of AGI. You know AGI has about EUR 570 billion of assets under management, by the way, a very good retail margin or Asset Management margin of 40 basis points, really outstanding, I would say. Thereof about EUR 170 million are in the general accounts of Allianz and EUR 48 billion are with unit-linked of Allianz. And here, you see wonderful the close interaction between Allianz Global Investors and our Life entities being it, as I mentioned areas of general account, being it on really perfectly customized multi-asset solutions for our agent networks, being on the distribution tool support side, or on joint product innovation. And I really like the example of the private finance and private market product, which we established in Germany. It's the first solution in this market that really brings alternative assets to our clients in this home country, and we already collected close to EUR 5 billion into this product. I would say a wonderful example how we will work together, and we can transfer now this solution via fund solution also on an international level, especially to France or Italy. And second example I want to point out is the partnership between Alti Global, Allianz X, which is partnering and where we have the share of Alti Global and Allianz Global Investors, where we also announced a solution for private credit products for ultra-high net worth individuals. I think these are wonderful two examples how we can bring together the value of Asset Management and Life, capturing the full value or longer value chain, having steady flows into our businesses we can use and by the way, stabilizing our margins on both sides. Now to conclude, we are very positive and optimistic about the next strategy cycle, as you see here. Again mentioning the 5% growth rate for Life & Health, we assume and want to have as a target but also seeing where we want to grow in Life & Health. You see that in the unit-linked and Protection and Health, we will even grow by 7%. And certainly, the strong growth in operating profits in Asset Management, and I think Christian will say more about it, why we believe that we can also support with fee margins, they are rather stable also in the future and further growing our business together by all the synergies we have between Asset Management and Life. Thank you so much for your attention, and I hand over to Christian now. Thank you.

Thanks, Andreas, and thanks, everyone, for giving us the opportunity to dig a little deeper into the PIMCO platform and the opportunities that we see at PIMCO working alongside Allianz. So getting into it, since 2021, where we've been at PIMCO has been initially through a pretty difficult period. We had, as we all know here, in 2022, the worst or one of the worst years for bonds ever and because of, of course, everything that we know in terms of the war or the inflation that came on and the higher interest rates that came from there. Since then, there's really been a stabilization, and there's been a return to growth this year. You saw some of those numbers from Andreas. And we believe that, that growth is sustainable out over the next many years, driven in part by this high yields environment, the yields in fixed income far above where they've been over the last 15 years or so, presenting an investment opportunity that is truly compelling to our clients in the context of an underpenetration of fixed income in portfolios. We'll talk a little bit about that. Also, demand for alternatives, especially demand in more diversified private lending opportunities where PIMCO is a leader across asset-based finance, a key area of growth for us. And then growth in wealth and retirement, many of the themes that Andreas and Oliver talked about, very clearly at play at PIMCO and in fixed income. All of this, we want to be diversified, and we have built out a diversified business that we see continuing to become even more diversified. First of all, in terms of third-party assets EUR 1.8 trillion in total, EUR 350 million of that is Allianz assets that PIMCO manages, the rest is third party. Then diversification across client type, across asset class, across region. We show the numbers here, some important things to call out. Over the last several years, there's been a lot of growth in wealth now by revenues. And you'll hear us talking a lot about revenue as opposed to AUM. We think in revenue terms, more often than AUM terms, in revenue terms now the business is balanced, 50-50 between institutional and retail. Institutional remains more than 50% of AUM but it's now balanced in revenues across the two. By asset class, a lot of new diversification there as well, and we seek to continue that diversification. Alternatives now, 23% of the revenues of the business, a significant driver of growth, also more diversification across the traditional public fixed income side of the PIMCO business, especially the income complex, which we'll speak a little bit more about. Then by region diversification as well. APAC, a very strong high-growth region for us; the Middle East, another strong, high-growth region for us. Within the Americas, U.S. institutional is a pretty mature market now, but wealth is growing as well. So diversification across the board there. PIMCO continues to focus and to provide to our clients, whether it's Allianz as our largest clients or all of the clients around the world, investment outperformance. We'll talk a little bit about how we get there. But our portfolio managers, our team strives to deliver best-in-class outperformance and these numbers show that we have delivered. Over the last 5 years, 84% of our AUM is performing above benchmark after fees, 81% of it is performing above our competitors after fees. And that's just on the traditional public fixed income side. If we look at the diversified private credit offerings that PIMCO provides, these are higher quality asset based finance type of opportunities, specialty finance, residential mortgages, real estate lending, corporates, their the loss ratios have been very low, providing an up in quality opportunity set to our clients. Now we have sought to and we continue to provide resilience in our business. And one of the things that we're most proud of over the last few years in a very difficult time and challenging time for our clients and for our business in fixed income has been the stability in revenues. And you see here in this chart, the stability in revenues even in 2022 and 2023 when the markets were very challenging for the business. How did we do it? Well, we grabbed some market share from our competitors, best-in-class client servicing, best-in-class investment outperformance, especially in terms of risk versus return as all of our spoke about, we were able to gain market share in an already advanced market share position to help to offset some of the loss of AUM and loss of revenues and also performance fees, that diversification of the business across hedge funds and some of the alternatives that provide those performance fees helped to offset some of the loss of revenues. Now this year, bonds are back. Bonds are back. Yields are stabilizing, even coming down somewhat in some parts of the world, and we're starting to see that growth materialize as clients become more and more comfortable with the stabilization in fixed income markets. Not only has the top line been resilient, but the margin has been resilient too, resilient and well above the competition. So we have been looking to contain or to maintain a 40% operating margin over the last several years, and we have been there working alongside Allianz, Andreas spoke a little bit about it and how we're there, a ruthless focus on efficiency and the ability to provide best-in-class solutions to our clients in the context of an efficient platform has provided these margins far in excess above our competition. Now one of the really exciting stories that has emerged in recent years is a closer and closer collaboration with Allianz. So for the longest time, Allianz has been our most important client, our largest client, EUR 350 billion of assets under management. And that, of course, is quite important and PIMCO has to fight every day to earn that AUM. But over the last few years, as Andreas mentioned, there have been more and more examples of this convergence between insurance and asset management. That is such an exciting development in the whole industry of asset management, where PIMCO is specially placed to be able to work with Allianz on solutions to take advantage of growth in the insurance liabilities and have that deliver growth in assets under management. And it's not just about driving top line AUM growth, but especially about finding ways to seed high-priority new initiatives, especially in alternatives. And Allianz has been absolutely critical for us in being able to provide balance sheet and seed AUM to launch new products. Our clients, our LPs, when they see PIMCO launch a new product, they want to see that Allianz has skin in the game. They want to see that the house is involved and Allianz has been there for us to drive that growth. And the Sconset Re platform that was just announced by Andreas is a key part of those initiatives where we see further growth there driving further launches of new alternatives products at PIMCO. So thinking about short- and long-term growth opportunities, for right now, there is an enormous growth opportunity just in core traditional fixed income, especially in the income complex at PIMCO. The income fund, whether it's the U.S. or the international version, you put it together, it's the largest mutual fixed income actively managed mutual fund in the world, it is the fastest selling fixed income actively managed mutual fund in the world, managed by Dan Ivascyn and Alfred Murata. It is one of the most compelling offerings that we have to our clients, a little bit shorter duration than some of the other products that have dominated PIMCO's business over the years. And that has given a lot of clients comfort in getting back into fixed income after the volatility that we've seen. But also asset-based lending. Asset-based lending is a natural extension of the PIMCO platform. All of the things that we've done for years and years in securitized credit are becoming outside of the banking system opportunities in this asset managed business in asset-based finance. So those will be the shorter than the long-term opportunities. But for right now, there is an amazing opportunity to deepen fixed income penetration in portfolios. This chart is a very simple portfolio optimization. So if in 2021, you had rates of near 0, well, then you probably only would have had your portfolio at about 15% in fixed income. Fast forward to today, with rates much higher, Oliver mentioned 2% real rates in the U.S., it's incredible, 2% real rates in the U.S. Net of inflation, you're getting 2% for U.S. treasury exposures. This is phenomenally much, much higher than we've seen in the last 15 years. And so given those levels of yields, the optimal portfolio is really more like 50% in fixed income. And very few of our clients' portfolios are structured this way. There is significant room for deepening of penetration of fixed income and portfolios and PIMCO is leading the way in capturing those flows, and we see here in this chart that PIMCO is the #1 recipient of these net flows into fixed income that we're seeing this year. Why is this opportunity so great? Why doesn't it just go to passive? Because still, the vast majority of what PIMCO does is active fixed income management. Well, many of the people here are equities analysts. And so I am a credit analyst by training, and I get it, it's difficult. Your job is very difficult. But the reality is that fixed income markets is just easier to deliver alpha. There are more than 30,000 securities at the Barclays GlobalAgg Index. In the S&P 500, of course, there are 500. There's much more room for there to be mispricing. There's much more room for there to be opportunities to capture in fixed income because of the complexity of fixed income that remains. Liquidity is better and better in fixed income in recent years because of the advent of the all-to-all platforms where PIMCO is a leading innovator and Mohit Mittal, our CIO, for traditional strategies has written about this in recent months about the improving liquidity in fixed income markets. But despite that improving liquidity in fixed income markets, which is an important offering to our clients, they want to know that there is liquidity still in fixed income and in fact, improving liquidity. Despite that improving liquidity, there still is ample room for alpha, and sure enough, PIMCO funds -- 79% of PIMCO funds outperforming the benchmark and with 70 basis points of outperformance relative to the benchmark, far above our competition. And so that investment performance will help to drive growth. Meanwhile, alternatives. Alternatives has been a phenomenal source of growth for us in recent years, in part, spurred by a partnership with Allianz in 2016, about EUR 75 billion of alternatives assets under management; today, EUR 170 billion and well diversified across real estate, multi-asset credit, hedge funds, asset-based finance, which I mentioned, which is growing like a weed and then corporate credit. So not just a lot of growth but diversification of that growth. And the way that we're growing it is by going out to clients and presenting the platform, presenting alternatives as a natural extension of the scaled platform of PIMCO. All of the portfolio managers around the world with all of their connectivity to so many counterparties, whether they be banks, which are a minority now of origination volumes or financial advisers or private equity sponsors or direct originations with corporates or our platforms. We have platforms that sit inside of PIMCO funds. We have minority stakes in platforms where we're helping to take some of their origination. We have offtake agreements with originators. We have opportunistic. The platforms are a diversified source of origination that gives us an edge relative to much of our competition, especially in that diversified private lending, private alternatives area. Turning though to risk management, risk management is embedded in everything that we do at PIMCO, it's clearly in our investment management, and that shows in how we've outperformed in times of volatility, but also it's embedded in the way that we run the business, the way that we service our clients, the way that we develop our products. And our commitment is to continue to be laser-focused on risk management. Another natural question you would have is, well, how can you maintain these margins when there is so much pressure on costs in this business and one ingredient right now is AI. PIMCO has been an early adopter of AI tools. We've developed a number of tools internally, which we've been rolling out. They are phenomenal in the amount of efficiency that we can gain from them. There's a lot more to come in this space. but it is an area of significant focus for us. Now finally, just to wrap things up, we will remain focused on excellence, excellence in client service, excellence in investment performance. The size and scale will matter, and we will leverage that size and that scale. We will focus on business resilience and on smart growth and some key ambitions that we have would be double-digit growth rates across wealth. So wealth will be a very important driver for us over time. 30% of revenues to come from alternatives. This is an area, as I've discussed, where we believe that we have a key edge, particularly in asset-based finance, which is the new wave of growth in alternatives, we believe that we can maintain double-digit growth rates in key global markets, so that would be things like APAC, the Middle East, a few other markets. In mature markets, things are stable, but we want to remain stable there, but build on our incumbent position, gain some market share, where possible and diversify revenues, especially by the alts channel. And then finally, defend those industry-leading levels of profitability. And so with that, I'll say thank you. And I will hand it off to the one you've been waiting for is Claire-Marie.

So thank you very much, Christian. Good morning, everybody. So before I go into the deep dive of my presentation, I would like to share with you some key messages. First of all, and as you have heard from Oliver, we have delivered well when maybe we could share also my presentation, I assume it comes. So first of all, and you have heard it from Oliver, we are delivering well against the targets we had set for ourselves in 2021 for 2024. And obviously, the way the world has unfold itself since 2021 is very different compared to what we were expecting back then. And you have heard that today, we have seen a war, we have seen massive inflation up, we have seen a bear market in the fixed income environment and despite that, we are delivering well, which is demonstrating clearly the strength of our diversified business model and the resilience of our organization. Now based on that strong starting point and also the secular trends you have heard from my colleagues and the levers we want to pull, we feel comfortable to raise our ambitions across the board. We are bringing up our EPS to 7% to 9% per year. We are also going to further focus on profitability, profitability under IFRS. We are bringing up our IFRS ROE to 17%. We are also focusing on profitability from a Solvency II perspective. And lastly, we are clearly an organization that is cash accretive, and we will continue that focus going forward. And we are targeting more than EUR 27 billion of cash for this new cycle. Obviously, resilience is a very important dimension when it comes to the delivery of that performance, and I will also do a deep dive on resilience as part of that presentation. This plan we are committing to today is both from my perspective, challenging for the organization and is at the same time, well stress test. This is a bottom-up plan. And just to give you a sense of what it means, just the last 2 weeks of November, Oliver and myself, we have been meeting with more than 33 top management team or Board of management team of our operating entities to actually discuss and challenge their plan and this is the outcome of that very rigorous process that we feel comfortable to present to you today. Let me now go into revisiting our accomplishment compared to our target set for 2021. As you can see on this page, first of all, from an earnings perspective, we are actually delivering well. And basically, Property & Casualty has strongly beaten our expectations. Health -- Life & Health has been doing a good performance and on the Asset Management side, this is a miss, as you have heard, but this is coming from this bear market environment. When it comes to our delivery for 2024, we are very confident when it comes to those, as I have mentioned to you already during our third quarter close. Let me now go to cash and capital, as you can see on this page. And here as well, we have a good picture. Clearly, our organic own fund generation, our return on equity and our Solvency II ratio outdid compared to our expectation. On the net cash remittance side, we are at EUR 21 billion. This is due to the effect of Structured Alpha and you know as well that with the Lucid transaction that Andreas has already mentioned, we were able to counteract on some of the effect of Structured Alpha. This is for me as well, a good illustration of the fact that this organization is able to react also to unforeseen events very clearly. On the organic own fund generation, we are at EUR 32 billion, so also ahead of our target. And this is linked to the very strong growth of our operating Solvency II earnings. On the net capital generation, this view is basically adjusted for the old dividend policy. So we are at 8.5 percentage points, which is below the 10 percentage point we had targeted. And this is due to the very strong growth we have seen on the P&C side. So this is also the reason why we see better delivery when it comes to our organic own fund generation. So that's a good miss, if you want, in a way, clearly. But you will see later on in my presentation, this area is also a part where we want to focus on more as part of this new cycle. Then on the return on equity, it is clearly a bit and this is as well a bit if you adjust for the move from IFRS 4 to IFRS 9/17. By the way, for those of you also doing the comparison, the change of accounting standards has really minor effect into the numbers I'm sharing with you. So actually, nothing that I am sharing today is blurred by the accounting changes neither from a past nor from a future perspective. When you go to Solvency II ratio, we are clearly ahead of our target with the strength of our capital base as strongly enhanced itself compared to 2021. And it's not only that we have more capital from a Solvency II perspective, but also the quality of our capital is very high. So now clearly, based on this strong starting point, the secular trends you have heard about today and also all the levers we want to pull, and that you have heard from my colleagues, there is a lot of energy in the room very clearly. So we feel really strong that we can raise our targets across the board. So starting with EPS, we wanted to move our EPS target to 7 to 9 percentage points for -- 7% to 9% per year for this new cycle. Then on -- we wanted to continue our focus on profitability, as I was mentioning, so from an IFRS perspective, but also from a Solvency II perspective, so bringing our ROE to above 17% for this cycle, our Solvency II ROE organic capital -- sorry, our Solvency II operating capital generation to 24 to 25 percentage points by 2027. And lastly, as we are growing our operating profit and as we continue our very strong focus on remittances, we wanted to bring our net cash remittances to above EUR 27 billion by -- versus our new cycle. With this strong performance and also the strong resilience we have in the organization and that you have heard as well from my colleagues, we feel extremely confident to reconfirm to you our attractive payout policy, which is made of two components. The first one is our 60% payout ratio with a ratchet upwards. That's basically unchanged compared to what we have shared with you together with our year-end results 2023. And today, we are formalizing an additional commitment, which was always there but has never been formalized, which is a minimum 15% additional capital return on average over the next 3 years. With the remaining maximum 25% of flexibility, we will be very disciplined. So that will be used for value-adding internal growth and as well for bolt-on M&As that will be mainly focused on adding scale or adding volume to our platform. Let me now unpack for you the development of our EPS for this upcoming cycle. So clearly, as you can very well see on this page right, we see space for value creation in our three segments at this point in time. And this is very well displayed here. If you start with P&C. So on P&C we'll be focusing on distribution, as you have heard from Klaus-Peter, so focusing on the client acquisition, cross-sell, also higher retention. We'll also be focusing on technical excellence, which is very important and as well on productivity so that will allow us to grow the value we are creating on the retail side. You have also heard from Sirma, all the great assets we are pulling together and on which we see a lot of opportunities for further development and for value creation that is coming into that number in addition and on the commercial side, we take a cautious stand when it comes to the cycle development, but we are confident we can maintain the high level of margin we already have today in that business and continue growing, tapping into the areas where we have space for growth. On the Life & Health side, you have heard that from Andreas, we are planning to grow our CSM by 5% per year, and we will be as well growing in particular, the capital lighter product. So our preferred line of business related to unit-linked and as well to health and protection by 7% on average. Moving to Asset Management. Also, as you have heard from Andreas, we see opportunities in both AGI and PIMCO. Obviously, PIMCO, you know now all about it, as mentioned by Christian, so here, we will be growing our assets under management, our third-party asset under management by 8% per year. And we will continue the very strong focus we have when it comes to efficiency to secure our market-leading positioning in terms of profitability. The last piece of our EPS development is actually coming from capital management, so that will be made of the 15% minimum additional return I have been mentioning to you but as well value accretive capital deployment that we want to do. And clearly, we also have really good targets in mind for this part, too. So let's move now to cash and capital management. So clearly, capital and cash optimization is not new for the Allianz Group. We have been doing that for a very long period of time. But at the same time, we also see opportunities for doing better as part of this new cycle. And so I'm going to lead you through that as part of this presentation as well resilience is a fundamental part of optimizing both cash and capital because, obviously, in order to deliver on those dimensions, you need to secure that you are optimizing in terms of capital efficiency. So this is coming from the fact that you are looking at minimizing your volatility and at the same time that you are securing that you have a good representation of your businesses under any type of solvency regime. So I will also spend time on this resilience dimension as I go through my presentation. Starting with economic value creation. So here, as a group, clearly, we have always been spending time on optimizing both sides of the equation. So the earnings side and the capital consumption, very clearly tapping into the toolbox that is displayed on this page. At the same time, we also see more space for tapping into even more of those tools, which are related, as an example, to reinsurance or to alternative capital provider, as mentioned by Andreas today like the Sconset transaction, but as well looking at our business setup or looking at the scope of our internal model together with the rest. So if I were to continue steady state as part of this plan, we'll be moving our Solvency II capital generation from 20 percentage points to 22 percentage points as we are growing faster our earnings compared to our capital consumption as part of this plan. But we see space in tapping into more of the lever -- into more into the levers, which are also displayed on that slide. And as such, we are bringing our target to 24 to 25 percentage points for 2027 as an organization. Why do we see space for doing so is, from my perspective, really well illustrated on this page. First of all, you can see on the left side that today, approximately 60% of our internal model covers of SCR. Clearly, we think that our internal model is a much better way to reflect the business we are operating into. And as such, we will be seeking to move part of our standard model business into the internal model, obviously, in close alignment with our regulator. And on the right-hand side, you can also see that there is space for doing better under the metrics of Solvency II ROE as part of our portfolio. Obviously, we are managing portfolios, right? So we are not looking only at Solvency II ROE. We are looking at a comprehensive set of KPIs, including cash, including IFRS performance and so on and so forth. But under that metric, clearly, you see that there is space for doing better. On the P&C side, we have businesses that of to-date is portfolio too capital consumptive. So this is also related to the model, as I was mentioning, also to other reasons and as well related to the earnings to -- like earnings of scale. When you go to the Life & Health side, where we are operating at a 14% average Solvency II ROE, so slightly higher compared to the P&C solvency to how we linked simply to the fact that this business is consuming more capital market type of capital but still at a strong level of performance. We also have space for doing better. And we will achieve that by focusing on our preferred line of business, as mentioned by Andreas, and as well by doing more of the type of operations like the Sconset operation that we have been mentioning as well. Let's now move to cash. And here, so we have always been strongly a cash-accretive organization. We'll continue our focus to have an 85% remittance ratio which basically allows us to achieve an above EUR 27 billion of cash -- net cash target for this new cycle. Obviously, also the strong focus we are putting on operating capital generation will over time provide more leeway to create -- will over time translate itself into cash and will provide more leeway structurally for us as well. Why should you have confidence into our cash remittances beyond the fact that I'm always asking for more cash in the Board meetings, as my colleagues can confirm, is displayed on this page. I think you can see on the left-hand side that our treasury department, together with our operating entity, is actually doing a very good job at securing a high diversified cash profile, both across segments and across geographies, across operating entities. Secondly, on the right-hand side of this slide, you can see as well that our cash remittances are made of two components: one which is recurring remittances and the second one is excess cash. On average, our recurring remittances represent 90% of our remittances. This is a very strong base, clearly. As a CFO, I always like to look at also cash from a top-down perspective because I think it gives a good sense of what we are talking about. So on average, as part of this plan, we are expecting to get EUR 11 billion of shareholder net income that is locally produced under local GAAP. Then post remittance ratio and post dividend payout, it means on average, EUR 2.75 billion of residual cash available to the organization. So over a 3 period of time, it represents EUR 8 billion to EUR 9 billion of residual cash in total. So out of that residual cash, we will be paying the minimum 15% additional capital return I have been mentioning. And for the rest, it will be used for further value accretive capital deployment. Let's now move to resilience. As I have mentioned to you already, the resilience dimension is a very important aspect of the way we are doing our business within the Allianz Group and is clearly a fundamental support to our capabilities to deliver the type of performance I have been mentioning, including the way we have been able to maneuver the last 3 years and delivering against our targets in those -- in that context. The way we are thinking about resilience within the Allianz Group is very holistic and you can see that on this page. So we are thinking about resilience from earning volatility. So this is really looking at the portfolio structure, the cycle, how the cycle is going to unfold. This is also thinking through in terms of macro sensitivities. We are also thinking about resilience in terms of risk management, obviously. So this is looking at our balance sheet, what are our tail exposures, what are the things we are accumulating on our balance sheet. This is doing this fundamental exercise of defining what are the right stress scenarios, so challenging ourselves and then deciding if yes or no, we like that risk and if not, how can we mitigate it and eventually can we go back at point of underwriting as an example. This is as well looking at the strength of our balance sheet, clearly, from an asset, from a liability perspective, from a capital structure and from a liquidity standpoint, and last but not least, this is as well from a governance perspective. So we are looking at governance, obviously, when it comes to meeting the regulatory requirements from ensuring we have the highest standards when it comes to conduct, which is extremely important to us, also related to customer satisfaction, obviously. It's also as a follow-up of Structured Alpha, we have been further looking at our governance oversight, and we have further strengthened our oversight structure but is as well, and for me, that's a fundamental aspect, and I think for all of us in the Board of management as well, this is in terms of risk culture. We are convinced that each and every of our employees are actually owning part of the organization. And each of them are basically in a unique situation to see something that nobody else can see in the organization. So we want to make sure that everybody feels very comfortable to speak up and to address the points that they are seeing. And as such, this is really connected to the diversity dimension we are striving for that Oliver has mentioned because people feel comfortable to speak when they are in diverse environment. And the second dimension is that we want to make sure our people are very engaged also from that perspective. Let me now go into some highlights into our resilience profile and I will start with the resilience on the P&C side in terms of earnings volatility. On the left-hand side of this slide, you can see our average combined ratio over the last 10 years and compare to the standard deviation of our combined ratio also over the last 10 years. And the gray dots actually represent peers. What you can see is that the Allianz Group has the lowest volatility of all peers when it comes to the P&C combined ratio and we are performing at a high level of also performance when you look at the absolute value of that combined ratio. This is due to the very strong diversification of our portfolio, the high quality of this portfolio, obviously, across geographies, across line of business and also the way we are doing technical excellence within the Allianz Group. On the right-hand side, you can see a summary of our reinsurance program which is also playing a very important role in securing the lower level of volatility, obviously, against adverse events. I also would like to spend a bit of time on the cycle management. And here, I'm picking the Commercial business, obviously because it's quite topical as we see some of the softening already happening in the Commercial business in some parts of the world. Well, for us, when we are talking about Commercial, it's actually made of the AGCS business, so the corporate and specialty business. It's made of the trade business, so the credit insurance and the MidCorp business, which today is sitting into our operating entities. And then in the gray part, you will find the reinsurance business or part of the business operated as part of our platform, as an example, related to partners. What you can clearly see on this page is that the way the cycle is behaving or the way the cycle is impacting those three businesses is quite different. So there is clearly a strong diversification effect between those three main pillars of our Commercial and Specialty business. And secondly, within each and every of those businesses, we also have a strong diversification under the shape or form of various line of business or various geographies. This is why when you look at that picture, that we feel comfortable to have this view in our plan of maintaining a strong level of performance at basically the same level of margin for the next 3 years. Let me now move to macro sensitivities. So the purpose of this page is not to discuss what is the direction of rates for the next 3 years, which is, I think, vastly debated on average as a topic and we don't take any strong position as part of our plan on what will be the direction of rates. The purpose of this page is to show to you how our operating profit will react to a relatively large shock when it comes to interest rates, so minus 100 bps will basically translate itself into a reduction of our operating profit of 5%. Here, you will see that within those we have natural diversification that is coming from our segment. So obviously, this shock would impact more our P&C business with an expected partial offset on the asset management side, but this minus 5% overall to our operating profit before any management action is, from my perspective, extremely manageable. Then if we move to our balance sheet and we look at P&C reserve first. Here, you can see that over the last 20 years, we have delivered a positive runoff of above 3 percentage points and this despite some challenging situations we have seen during that period. This is clearly the proof point of the strong way we are operating when it comes to reserving standards with Allianz Group. We are also, in addition to that one, holding excess inflation buffers that we have put in place together with the spike of inflation. And lastly, when it comes to the most disputed part of our reserve environment, overall, like meaning the U.S. long-tail line of business, we have a minor exposure to it overall of 3% of our total reserves. And you may remember as well that together with the divestment of our U.S. MidCorp business, we have further reduced that exposure during the summer. Let me now move to the Life side on the liability side and you have already heard that from Andreas. We are clearly focusing on high-quality new business, which is made of our preferred line of business. This business is actually triggering higher margin and is as well coming with lower sensitivities to financial markets. So it has also in terms of risk return profile, a much better profile compared to the traditional products. And you can see how nicely this high-quality new business has already been earning itself into our CSM on the right-hand side because it represents already today, 72% of our CSM. So as such, this is bringing a lot of stability as well to our Life & Health earnings because it's a very low sensitivity also for the future. And you can already see that today in the sensitivities we are publishing for our overall CSM today. Let me now move to the asset side. Clearly, and Oliver has already mentioned that today, we like the quality of our asset portfolio. We have been obviously managing our assets for a very, very long period of time. And we also have a lot of dedicated capabilities that allows us to source the best possible asset. So both in terms of traded and non-traded, we have a very high quality of our portfolio, and we are also conservative when it comes to the valuation of our assets. So you may remember that at year-end 2023, we had asked, as an example, PwC to perform a very stringent deep dive into our alternative assets to really secure that we are valuing those assets the right way. Just to give you a sense as well when it comes to our own real estate portfolio, we do have external appraisal of those assets twice per year. We also have rotating process on a quarterly basis for the rest of our real estate portfolio. When it comes to private equity, we also are following the best practice standards when it comes to the valuation of those assets. So we are extremely stringent when it comes to the valuation of those assets. The second dimension that is very important to have in mind when it comes to our asset portfolio is illustrated on the left-hand side of this slide, where you can see that 80% of our assets are actually covering our Life & Health business, which means that basically, we hold them for a longer duration and also we hold them for total return. So we hold them to maturity to create value. So that is giving us a lot of strength in terms of immunization to market movements, clearly. And secondly, if we were in the need to react to those, obviously, we have a lot of future discretionary benefits that gives us flexibility. And secondly, we can also always adjust our crediting rates. If I move to -- further into the non-traded environment, we're looking at non-traded equity and non-traded debt. There, you can see that we have a lot of diversification in those 2 sub-portfolios. We also have a lot of, I would say, fairly standard assets into those non-traded portfolio. So you can see infrastructure on the equity side or you can also see the non-commercial mortgages on the debt side. And lastly, we have a lot of long-standing experience clearly and very -- many natural buffers than in the way we are looking at those portfolios. So as an example, on the private equity side, that we are almost operating for 30 years now, we have many, many old vintages in the private equity portfolio. And on the non-traded debt side, you can see as an example that we are operating with low loan to value, as an example, in our real estate lending portfolio. So again, high quality and very strong resilience of our assets portfolio, overall, as I have already mentioned to you at the beginning. Let's move to our capital. And here, you can see that today, we are operating at 209% Solvency II ratio, which is well ahead of our target Solvency II ratio of 180%. And then you can see that we have a very high quality in our own fund structure because more than 80% of our own funds are made of unrestricted Tier 1. Secondly, we have a lot of leeway when it comes to the tiering structure of our own fund. We like our very healthy level of debt leverage today at 24%, and we will be aiming at maintaining a similar level of leverage as we go in the -- as we go as part of the plan, which basically will mean that we will have extra capacity to raise debt if required as part of this plan. On the liquidity side, we are also very rigorous, and we do hold at holding level liquidity buffer of EUR 8 billion. This is obviously a buffer. This is not intended for capital deployment. We want to have that buffer in place in case the market would close or in case there will be an issue that will not allow refinancing on our side, but as well in case of unprecedented industry events. We are intending to pay our dividend, our share buyback, any type of returns and our M&A out of our very strong ongoing cash remittance that I have already mentioned to you today. This page, I think, is a very good summary of the resilience of the organization overall. And here, we are basically stress-testing our solvency ratio against different type of scenarios. You can see that in none of those scenarios, we are basically below our 180% solvency ratio, which I think is a very important situation to be into today given how uncertain the world is currently. You can see that our sensitivity to quite a severe equity shock of minus 30% is basically of 14%. So we are emerging at 195% solvency ratio. This equity sensitivity has reduced itself quite significantly compared to 2021. And this is also an area where we will be willing to further reduce our sensitivity, and we are going to work on that as part of this cycle. You can also see that against a combined stress test, so everything coming together, so equity, interest rate and credit spreads, we are emerging at 185%, which is a much reduced level of sensitivity as well compared to 2021. It has reduced by 40% compared to 2021. And lastly, you can see as well that we have a relatively low sensitivity of our solvency ratio to a relatively high NatCat event. Let me summarize for all of you. So our upcoming cycle is about lifting ambitions. We want to bring up our EPS target to 7% to 9% per year. We will continue to focus on profitability, both under IFRS and under Solvency II. And as we are today, we'll continue our strong focus as well on cash. We are aiming at delivering more than EUR 27 billion of net cash remittances as part of this cycle. To deliver that, we will be focusing on growth. As you have heard from all my colleagues, we will be as well focusing on productivity. So tapping into new technologies, as an example, to really tap into our cost base, as mentioned by the colleagues and supporting the growth. And we -- and also we'll be looking at the productivity of our capital further, as I have been mentioning to you. Clearly, resilience is playing a key role to ensuring that we can deliver against that ambition and is also very much -- I mean, very much coming from the strong diversification profile we have within our business. And also simply, I hope you have understood that when I was sharing our holistic perspective from the way we are looking at risk management simply altogether. This plan, I believe, is both challenging for the organization and is at the same time, well stress test, and I think it's very important to do that exercise when we are in the environment we are into. And lastly, as our management incentives are very much aligned with all of yours, I'm very much looking forward to sharing with you the outcome of those -- of this plan in 3 years from now. And with that, I hand over back to you, Andrew.

Thanks, Claire-Marie. Well, we're still roughly 5 minutes behind schedule, so that's good. So we're taking a 10-minute break now. We just need to rearrange the stage slightly for the Q&A session. So if you could be back here in 10 minutes, 12:15, and we'll go through the Q&A session then. Thank you. [Break]

Great. Well, thanks for coming back. I'm pleased to kick off our Q&A session. Just to remind you, we do have -- this is the streamed Q&A session, and then obviously, we'll have the Q&A sessions with the groups after lunch as well. I'm going to take questions from in the room to start with, and then, I think we've got a few queuing up virtually. [Operator Instructions] And with that, we would like to kick it off. Andy?

This is Andy Sinclair from Bank of America. I'll keep it to 2. Firstly, just on cash, and I love the EUR 8 billion Holdco cash figure. But just on cash remittance, I was maybe hoping for a little bit more. I'm just kind of trying to understand that cash remittance figure perhaps given the actions being taken to optimize solvency? How much is there of that feeding through? And maybe if you could just split that EUR 25 billion to EUR 27 billion cash figure into recurring versus one-off? That's my first question. And second was just on Life and Health, 5% CAGR fine, but again, maybe felt a little bit prudent to me. I felt that -- I mean, even 7% on the growth segments to me felt Health and Protection going well, unit-linked, you'll get some market growth, inflation, hopefully, contributing to premiums on top of that. Maybe if you can just give us a little bit of color on your macro assumptions behind those Life and Health targets? What you've got from markets, bond yields, inflation, et cetera?

Claire-Marie, do you want to kick off on that?

Yes. So I think so clearly, on the cash side, so it's above EUR 27 billion, should be read as the target. So it's made of both recurring and some excess capital, but to a consolidating level of excess capital remittances, so we are always looking. And clearly, we are working on some -- we saw some actions there. So I think what you should take as assumption is approximately EUR 1 billion of excess cash remittance per year. So I think one of the reasons you may read this number a bit -- as being a bit too low. I think what is super important to have in mind is that we have clearly optimized our portfolio also from a growth perspective. And some of the businesses which today are actually growing faster are also coming with a lower cash remittance. So we have -- we did optimize the portfolio from that perspective, and that's why we have this cautious view on overall net cash remittance, again, with some upside potential from my perspective. And maybe clearly -- quickly on the Life before I hand over to Andreas, you also need to rebase a bit our Life and Health operating profit growth related to the JV with UniCredit. And you need to have in mind that the OP effect is much bigger compared to the net income effect as well related to this one. So it clearly beats into this trajectory clearly. And then we have some very big businesses on which it's always a bit -- I mean, it's difficult to grow them massively, right? And lastly, you have this technical effect related to the CSM, where a lot of the growth we are doing will take a bit time before they get in terms of operating profit. So you have also this technical aspect. But maybe when it comes to the more fundamental, you can comment further on that.

Yes. Maybe I'll just add and say I'm happy that you asked the question and say, you want to grow more or us grow more in Life, I actually appreciate that. But I think we really have to balance it doing it in the right segments with the right capital efficiency and the right margins. So we are not topping the operating profit growth in -- but we want to balance it with cash and other KPIs. And I think this is the important part. That's why we also have a bit higher target when it comes to unit-linked and when it comes to, as Oliver said, protection and health and a bit -- maybe a bit less aggressive on other sites. And I think it's also fair to say we have 1 or 2 markets where we already have a super high market share, and then, we should not expect that we can then increase further.

Sorry, just following up on that. Just any color on what's the bond yield assumptions backing that and whether higher or lower yields would have any material impact?

Do you mean for Life and Health specifically?

No. So I think we -- so basically, we took central rate assumption with a dedicated basically time spent. So nothing specific...

She's right. We take a very cautious view on the world. Very cautious view on the word. And I think on behalf of our clients, that is highly appropriate given what's happening. You may say, as a shareholder, where is your confidence? I think it's very important in these times where we have war in front of our door not to think just about the return on equity, but the return of equity. So we may be being a bit conservative on certain of these items. The other thing I'd like to remind of the only business that doesn't need capital to grow itself when you acquire customers or grow new businesses are runoff businesses. So just a slight comment, and I don't mean it in any derogatory form, but you need to compare businesses that grow customers versus that grow cash from existing business that work only via price or higher timestamp in investment coupons. So we are really aiming at growing the customer base of the company. We're going to make very significant investments that we believe are going to be highly profitable, but they require some initial investments also in capital that we need to offset. But we are highly confident that you will get as investors a very strong return on that. It's very different from raising prices only because you have a different capital consumption dynamic, certainly in P&C. I hope that's helpful.

Michael, I think you were next.

Very geeky questions. The first one is on trade credit. The accounting is slightly different, but you're kind of 17 points worse than the best in combined ratio. And in very rough numbers, that would be EUR 400 million operating profit difference. And I just wondered what the plan is there, what the assumptions are going forward. The second is on the Asset Management, PIMCO. I think there was talk in some kind of journals or whatever that you might be buying out the minorities, I'd be interested in that. And then the third point, I spoke to Oliver, to you earlier, and you mentioned something really, really interesting about the cash, but I didn't understand it. And I just wondered whether you could explain that part of the resilience, the kind of the cash buffers you have, which I think you mentioned a figure, maybe I misunderstood...

No, the -- there's a side comment around how we think about mapping cash flows and looking at risk-adjusted returns. They are not only numerical or financial pieces. People can say, I have no liquidity risk until you have to take out the assumption that something is tradable. So one of the things we'll probably talk about the next few years is about is there true liquidity. When Christian talked about liquidity and bond markets, which is going to be a very important question in the future, we really have a principle that is matching cash flows and not just spreadsheets. So that was my side comment. On PIMCO, I can make it very short. We are very proud of PIMCO, and we'd like to own as much of PIMCO as we can. And that's it.

On trade, I don't know what are your reference numbers. We can discuss, right? Clearly, I mean, like [indiscernible] is operating at the highest level of performance, and we have a lot of elements to look at that, that we can discuss. It may be related also to the fact that we always structurally have this approach of recycling as part of trade, which is a very important aspect of the way we are doing the business, but in terms of quality of the deliveries, it's outstanding.

Iain?

Iain Pearce from Exane BNP Paribas. You spoke a lot about the links between Life and Asset Management and the evolution of that going forward. So I think the obvious question is, do you need to be the owner of AGI in order to fully exploit that benefits and that trend going forward? And then the second one is just on the commercial combined ratio guidance. If you could just give us an indication of which bits you're expecting to see deterioration? Or is it mainly AGCS that you expect to lead that decline? Or is there something going on in trade combined ratio as well?

I think I can respond to what Oliver also resonates that we are very proud owner of our asset managers. And I think both PIMCO and AGI play a complementary role, being it from a product or from a regional perspective. Also, I think we have shown in my presentation the close interaction between AGI and Allianz and our own networks. So I think this is very important to appreciate that. And as Oliver said, we want to grow in Asset Management. We want to grow our net income in Asset Management. So I would always say, well, in principle, we are open for strategic partnerships and further gain scale if it's value-accretive, but it also has to have a fit from a strategical and cultural perspective because this is super important for the long-term success. So that would be my answer to that.

So basically, when it comes to commercial, so as mentioned in our plan, we are basically maintaining our level of margin, so 90% to 91% combined ratio is what we -- sorry, basically around 91% is basically the level at which we are planning. I mean some level of softening. It depends a bit on the various years, but it's mainly coming obviously from AGCS, also Corporate and Specialty business. We are also -- given ourselves flexibility related as an example to some of the very opportunistic businesses we are doing with Allianz Re as an example, that are really related to, yes, certain positive situations in the reinsurance market that we are not tapping into continuing towards the end of the planning period.

I'm actually going to take -- I'll take one of the virtual questions now because William has been waiting very patiently. So if I could take the virtual questions. So, William, if you could have his line unmuted, that will be great. Thank you. Go ahead, William.

I did just want to come back, please, to Slide S17 and hear a bit more about your views about interest rate assumptions and your resilience to that because that slide is showing only 5% downside, but for a business plan that has 7% to 9% EPS growth, that's kind of quite a big number. So what is your assumption about yields? And how do you feel about the fact that we've seen a very large drop in the Eurozone swap yield just in the past few months, and it's already down about 100 basis points or so? So if you could talk a little bit more about -- you've shown a downside sensitivity there, but what should we be reassured about that the earnings can continue to grow even if yields have stepped down a bit, please? And then secondly, Slide F09. Can you just help me -- the management actions that you're showing that are reassuring. I'm still just trying to be clear in a simple way, your SCR through this business plan, are you expecting it to be growing or declining each year? And could you try and put a number on that to just help me think about how much is coming from numerator and how much is coming from denominator?

So the first question is on the interest rate side, and the second question is on the capital generation walkthrough to the '24-'25, I think. Is that right, Will? Yes.

Yes. So basically, like as part of the plan, we are clearly expecting our SCR to develop together with the growth of our business. Obviously, there are a lot of significant growth assumptions related to the business development, as you have heard from all my colleagues. So there is expansion both sides, I would say, both on the earnings side and on the SCR side. Clearly, like without the levers we are pulling, we expect, and you see that in the plus 2 coming from 20 to 22, right, we are seeing like twice less more or less growth of CSM versus -- sorry, of SCR versus operating earnings as the way you need to look at it. And then the additional levers will come on top. When it comes to the exact deployment year-on-year, I could really not tell you that right now. There is no particular drop of basically SCR consumption beyond the fact that, as I was mentioning, we are going to work structurally on certain -- on some of our businesses where we will be looking at reducing the level of capital consumption. So to make it very concrete, as an example, today, our Benelux business, as an example, is on the standard model. That's a business where we think over time, we can move it to the internal model as an example. We also have our Polish business, which is in the same situation, will be another example of that. And then we have the structural focus on the capital-light product, as has been mentioned as well by Andreas that will come into play.

And the interest rate sensitivity, how comfortable you are around the assumptions and outlook for interest rates, I think was...

Yes. So basically, as mentioned in our plan, we have stress-tested. So I feel comfortable we can deliver in the current interest rate environment, as mentioned to you. And then just to give you a sense of, I think then the sensitivity, which are displayed on this page give you a good sense. And then obviously, we have a lot of levers we can always work on as a board of management, right, in case of need. And that's what we are also aiming to do if required as part of this plan.

So, Will, that's a great question, actually. So our internal plan forecasts that without countermeasures, we significantly raised the solvency ratio. So we want to build flexibility further into the plan, and that's obviously before shocks. And it's very important, as you compare that also across peers, look at the number, please, again, sorry, for the footnote comment, before management action and after management action. We show numbers before management actions, i.e., the gross numbers. And trust us, we always build in enough flexibility to be able to offset some of these things. So the shocks are like-for-like checks before management starts to work. That's as much hint as I can give you.

All right. Okay. Thank you, William. Gosh, well, we'll stick with William.

Will Hardcastle, UBS. I guess, just to clarify on this really quick one. In the 7% to 9% using forward rate curve assumptions, is that what you're assuming? The main questions are, where are those inflation excess reserves today? And what would you need to consider? What would need to happen before you maybe consider releasing them? And then just trying to square a few of the moving parts. I think you suggested debt leverage is likely to remain about stable through the plan, but also the M&A capital distribution is funded through the remittance. I guess just trying to understand should we just expect debt to be used to increase the solvency ratio? Or what is the proceeds? I guess that's a slightly facetious way about saying what's the use of the debt here.

So maybe I'll start with the last one. So our plan is not based on any type of basically financial engineering playing with debt against equity to basically deliver. And we are also not planning to sit on the capital right and not to basically create value out of the capital or anything. So I also think that as part of -- and what we will do typically is that on the way when we are in the situation to have excess capital, we'll be balancing our profile also against cash and so on and so forth. And basically, we will be returning if there is a need to return it. So that's really the way we are thinking about it.

But it's a great question. So let me reiterate. On Moody's, we have the highest rating of any insurer that I know, right, credit rating, the highest, and we don't want to go down on that. On Standard & Poor's, we have AA. According to our internal capital computation, we are AAA now, right? And I think it's true for a few others. So we are really running a very, very, very conservative ship. And we believe that's the appropriate stance for the environment we're operating in. And let me repeat what Claire-Marie says, we would not present you with a plan where financial engineering and increased leverage will produce higher earnings. That's not what we're going to do. So risk-adjusted returns will improve, not the returns will improve.

The question was on -- I think it was interest rate assumptions, again, basically, which you can answer again if you wish. And then the use of -- when would we use the excess inflation reserves or not? How they would be used?

So on the -- I think like on the rates, yes. And then on the excess inflation reserves, clearly, as I have mentioned to you, broadly, I think the excess inflation reserve is in the same order of magnitude compared to what we had mentioned to you in the past. It has moved in the shape or form, as I mentioned to you already, right, from short-tail to long-tail type of business, and it will emerge over time. So for me, that's just the right way to look at it also because you know we have seen much more inflation compared to even what we were anticipating at year-end 2022 because inflation has been there longer than anticipated.

Yes. And maybe that's also an implied question. I like the question very much because it shows it's very smart. We are not basing this plan on increasing runoff. So can I repeat that? So this plan is not based on -- because of a hard cycle, we've been putting a lot of money aside. And now the plan says, we're going to improve runoff to X by massively reducing reserves. That's not part of the plan, at least not at Allianz.

Andrew?

Andrew Crean of Autonomous. Could I ask a couple of things? Firstly, the 7% to 9% earnings growth, that I assume has some component of recovery in retail and then underlying growth in the business. What I'm trying to get a sense of is what the pattern over the years would be? Do you see the recovery in retail completing at the end of next year? And what is the exit growth rate once that's through the line? Second question is on footprint. On Asia, you've made a couple of moves there or certainly income insurance, which hit some regulatory buffers. There's been some chat about your Indian JVs as well. Do you see yourself as underweight in Asia? And do you see this is an area which you need to close the gap on? And how would you do it?

I think, Klaus-Peter, do you want to take the first question?

Yes. We expect over the plan a GWP growth of above 7% in the retail business. So it's slightly above the average. And this is now, as you can see, significantly driven by the growth in policies. I was referring to it in run rate. We will get from new customers and cross-selling probably 1.8 million additional policies, and we reduced the churn, so another 1 million. And that will really drive the growth. So it's 2.8 in run rate per year.

Sorry, I didn't express myself. There's a 7% to 9% earnings per share growth across the group. Some of that is recovery in retail, some of its underlying growth in all your businesses. I'm just trying to get a sense as to how much is the retail recovery and what is the underlying rate of growth. I suppose, the exit rate from '27 onwards.

So if you look at it, I think from the -- like you know, in the EPS CAGR walk I have been sharing with you, you can see that 45% is approximately coming from P&C overall. And within that one, we -- I mean we expect some recovery to come still next year on the P&C retail one, and then, the rest would be stabilized. The exact number effect of this one into next year, into the 45%, I don't have on top of my mind, but we can basically go back to you.

For the Asia footprint, Oliver?

I'm representing Renate here. I'm answering the question who's leading very successfully. So in Asia, we do want to be much stronger than we are today, but we want to do it in a way that's economically sensible. So what we don't want to do is spend billions on buying bank distribution through upfront payments because when you look in certain markets, the average ROE of the life insurance industry is 3% to 4% to 5%. So this is what we don't want to do. To your concrete questions, Southeast Asia is the core of what we've been focusing on. And we will work on these things on a continuous basis. We also want to build a business that is economically very attractive. So we don't value it on multiples of embedded value. So we really look at cash earnings and cash growth. By the way, in terms of capital efficiency, we also need to work. We have a very strong health business there. And then the spread business that we have is only supplemental to that. So we're trying to make it very profitable. So we're building that out. And remember, 80% of business in Asia is life and health and only 20% is P&C, normal development. So we're doubling down on health and intelligent life products for that. In terms of your concrete questions, yes, indeed, we are in the process of rethinking what we do in India. We are, by far, the most successful foreign investor in property casualty insurance in India, and we intend to strengthen our position there from a position of strength that we have today. The rest will let you know over the next couple of months. But we consider India to be one of the most important countries for Allianz to grow and develop in over the next few years.

Vinit?

So just looking at the lens from what Oliver recommended, which is the protection and the retirement, it seems from just looking at these slides that retirement is really growing much faster in terms of your target profits. I think I worked out quickly, EUR 7 billion going to EUR 10 billion, whereas the protection bit is growing a little slower. So I'm just curious, do you think -- is it people are going to try to save more? Or do you think you're trying to do something different there that should lead to a big shift in your earnings from this retirement perspective? So that's really the top-down question. Just 1 for PIMCO for Christian. So when Manny Roman talked about alternative assets, I think, 3 years ago, these slides were similar in the sense of revenue split was about 20%-ish and you're at 23% now. And now if you're thinking of 30% in 3 years, it's quite a pickup in terms of how the last few years have been. Now obviously, it could be that private equity would get more interested as interest rates fall or -- so I'm just curious to hear your thoughts on what really didn't happen that time and it will change now.

Sure. I'll start with that. Thanks. Well, I'd say alternatives at PIMCO is really starting to pick up steam and especially because the market is kind of coming our way in asset-based finance for the longest time. And private credit is much more monoline around corporate direct lending, where PIMCO is active. But the diversified private lending opportunity set where we're seeing an acceleration of banks exiting from that space, first in the U.S., and now we're starting to see it in Europe as well, there, the opportunity set is growing and client awareness of and interest in the space is growing significantly to, one, sort of in the absolute because it's an interesting opportunity set and also as a diversifier away from monoline corporate direct lending. So the growth will come in asset-based finance in multiple different ways. That will be in the asset type, but also growth is going to come from new types of clients, acceleration of insurance solutions, where we're seeing -- we're one of the leading providers of capital-efficient insurance solutions and alternatives, sort of think private IG type of exposures, that has grown quite well. And then also on the wealth side, where we're one of the leading providers of interval funds and semi-liquid products to wealth investors there. We have a number of interesting initiatives that we've launched in recent years and that we'll be launching next year as well with leveraging some of the distribution and balance sheet strength of Allianz as well. So we understand it is -- there is a distance between here and there, but the reality is that it is a growing space for us.

Yes, Christian gave a good part of the answers. Vinit, thank you for the question. But it's -- the key opportunity for us is to really open more distribution capacity for us. It's both the opportunity and the challenge. So the key thing is how clients can get to us, which is the right way to put it because we get sometimes even more requests from clients to access Allianz products that we can field. So the key investment side will be the ambition for PIMCO, AGI in our life companies that we have the products now, how do we allow them to be accessed by our interested clients. And we still have a lot of clients in Allianz who just have 1 product, and we do not talk to. So a lot of the focus, Vinit, will be on how do we provide access for distributors and particularly clients behind them to the solutions that we have. So distribution, which is a lot of part, we showed that Growth Triathlon today is going to be the key part. It's actually really the first time that Allianz in its history is systematically driving distribution strategy from the top.

Andrew?

Great. Andrew Baker, Goldman Sachs. First one, just on the asset management, the 8% third-party asset management AUM growth, are you able to give a split of net flow versus market assumption within that? And secondly, on your solvency, so I think you still got a target flow of 180%, but the 75% payout ratio is maintained above the 150% level. So just curious sort of practically -- obviously, in a stress event, what would happen if you fell below the 180% level?

So -- I mean clearly, like the 150% is really applied to the dividend payout. That really a strict level from our perspective. That's really clear. The target level is our ambition level, right? I think the very healthy level at which we should be operating. And it will obviously depend under which type of scenario we are under, right? And that's -- because that's really important for us that we can also operate with the right level of overall resilience. That will also come first, I think. That's the way to look at it. Then I think the exact split between our -- between the inflows and the market valuation, I just have a slight doubt in terms of percentage. But it's -- in the case of PIMCO, it's basically mainly only net inflows. There is -- because there is no direction that has been taken when it comes to, basically, the appreciation of the market. Clearly, in the case of AGI, it's a slight combination of the 2, and the exact split, I would say, it's 2/3, 1/3, something like that.

But on the solvency, it's very important you understand this is not a static number, right? So we -- I want to go back to this management action thing. So we don't sit there and that the number drop and then say, oops. So we have very clearly defined alert levels that you see and which actions take into place that under no circumstances, ideally, we'd ever have to go back to you and say we can't pay dividend now. And a great stress was actually COVID and the measures that had happened. Remember that we had a regulator who was very clearly stress-testing our ability under very severe stress, some of them that you would call unreasonable. And even under those, we were highly resilient.

Hadley?

Hadley Cohen, Morgan Stanley. Just firstly, a very quick clarification point. The cash remittance numbers, sorry, I'm just within the sort of 1 billion of sort of one-offs that you're talking about within that. Are you already including the planned proceeds from the UniCredit JV? Or is that in addition to that? And then on P&C, the growth rates, the volume growth is -- there's a big uptick. It's a very ambitious target that you've got in that respect and presumably that drives a significant uptick in pressure and intensity for the agents. I'm just wondering to what extent there's been any change in incentivization or how the agents are remunerated to achieve those sort of profitable growth targets?

Claire-Marie and then Klaus-Peter.

Yes. We have really a change in paradigm because we were incentivizing before basically on the basis of volume. In parts, we were incentivizing also on profitability. And we have now implemented in all the major jurisdictions. Very clear that the agents will only get an incentivization at a certain level of profitability and that the incentivization will be very much curtailed if there is no net policy or customer growth. And we will develop that further. And that is so far accepted by our agencies, and we have huge agency forces. Just to give you some numbers, in Germany, we have 8,000 agents, and it's contracted already for next year. We have, in Italy, 2,300; in France, 1,800. So it's really that we have changed a huge amount of agency network to this paradigm.

And then to your explicit question associated to the JV. So basically, we have not taken that into account. So really, our plan is -- really the logic of it is really the base case given the structure of our portfolio and how do we expect this portfolio to perform in terms of cash. So -- and that basically will be part of what I was mentioning to you, which is basically part of the upside, but also part of the flexibility in terms of basically value accretive capital deployment we intend to do as part of the plan.

James?

It's James Shuck from Citi. I just wanted to return to Will's question a little bit earlier on in terms of the solvency generation. So the 22 points, can you split that into the sort of own funds generation and then the increase in SCR because one of the things that we noticed about your own requirements of business evolution growth is that the capital requirements are quite strong. And I think you've mentioned in the past you're going to be focusing on reducing that. So keen to split that out if possible. And then secondly, again, thank you for the EUR 8 billion liquidity buffer number. What does that actually mean, though? Do you have a target range on that? How much of it is distributable? Is there central pooling requirements in there? Just a bit more insight into how much of that is really distributable over and above where you need to be?

So clearly, we have a target range. So this is -- and that's why this average EUR 8 billion is the level at which we consider we have to operate given the possible sensitivities we could see in our business and also you know what may happen and what may be required either if the markets closed or if we have certain stress happening to our operating entities, and we need to bring them at the right level of capitalization, et cetera, et cetera. So we have a very sophisticated actually way to manage this solvency reserve. So from my perspective, what we need to retain is the fact that this is -- we are operating with such a reason, this is conservative, and this is the level at which we will not distribute. So that's -- and here, again, I think there are nuances to it associated to the stress testing we are doing. Then I think to your other question, the -- in the plan -- in the natural development of the plan, we are actually growing faster the earnings compared to the SCR. So I think to answer 22, we are developing with 6% more growth of the operating earnings against a 3% growth of the SCR. That's basically what is coming in the underlying. And then as I mentioned, we will be further working on these other levers that should basically allow us to basically bring up this organic capital generation. There are also very interesting elements in the organic capital generation of the Allianz Group related to the fact that we have a fairly large life portfolio, right? And also part of our capital is bought by our policyholder. And so on this one, we do not earn organic capital generation, which is quite logical. And this base effect is quite strong as well in our numbers.

That's why. James, thank you for the question. It was very useful to ask for the own funds generation, as particularly, as you know, very important for the German business, where the own fund generation is a key part to cover the SCR. So we're actually trying to bring down the sensitivity in Leben, and this is where it's most relevant. In other business like U.S. Life, we showed you, we want to create more reinsurance solution to actually reduce the absolute capital consumption because we have a different model. So you need to assume that the concept is alive and growing platform. And we're just doing the first one. So if we have more time in the breakouts, we can then go into the various components that drives. Claire-Marie, I think, gave you the most important hint, if I may repeat that in the speech, which is we, for various reasons of complexity, historically have left some of our important businesses that consume a lot of capital in the standard model, and that is pretty punitive in terms of the ability to generate capital and, by the way, stream it. And we're going to focus a lot of energy in the next few months and years on trying to bring them on to the internal model. And as Claire-Marie said, Benelux is a key example for it to do that.

There's another question over there.

[ Johann Schmidt ] from [ Metzger ]. I have 1 question on the non-life insurance market in Germany. The underwriting results of some more regionally focused players were hit significantly by weather-related claims over the past 2 years, also due to a tightened reinsurance cover. And do you think that this could lead to increasing M&A activity in the German non-life market in the medium term? Or do you rather think that these profitability issues will be fixed by rate hikes, which might offer the opportunity for you for internal growth? That's my question.

I would say there is probably a 2-step approach to it. And first of all, the regional players, they lack diversification. They will do 2 things. They will do price increases as far as they can. But some of them, like the public insurers, also try to get more diversification working together on reinsurance. It is not clear if this is sufficient to really counterbalance the NatCat trends. So I think we have to observe the situation. But first of all, it will be a driver for internal growth, and that's also what we think that we have continuous rate momentum in non-motor retail.

Michael?

That's already the second question.

That's actually your third question. So this is your...

I don't know what to say that. They're not very difficult questions. The first one is, Claire-Marie, the -- it says very clearly above 27, so I just wondered maybe you can make us dream. Can you give us how much more? And my very back-of-the-envelope calculation from what [indiscernible] and your answers is if you grow the SCR at 3% and grow the earnings twice that rate, you get an extra EUR 1.5 billion a year unless obviously completely wrong. And if you start with 8, you get to 9, and 9 times 3 is 27. And a little bit more, you get very quickly to 30. And then the other question is related to that last question on NatCat, so clearly -- well, not clearly, but NatCat is an issue. You're obviously very comfortable. But I think in one of the slides, the more recent years have higher NatCat ratios. I just wondered if you can explain a little bit the resilience you see there.

So a very good point. I think like indeed the slide, we're showing the retail portfolio, right? So it's a bit different when you look at the diversified global portfolio and you inject businesses like partners business and so on and so forth, which is much less cat-prone type of businesses. So what we have in the plan and is very much in line with what we -- what I had already mentioned to you, which is like this 3% NatCat load. And then you have also part of this NatCat load, if you want, which is also in the attritional, right, which is a weather related that you could also see on that slide, which was part of the 4 percentage points. So that's -- so -- but -- I mean, we fundamentally agree with you, and I think Klaus-Peter has spoke well about what we are doing, NatCat-related and maybe Klaus-Peter can come back to it as well to explain further what we are doing in terms of actions on the NatCat side. And I think the above 27 is indeed above 27, right? So I let you do your own assessment. There is options for basically doing more from that side. But again, I want to reiterate the elements I was mentioning, which is related to the way our portfolio is developing as well and the fact that we may need to fuel the growth to basically give a bit more leeway to some of our businesses, which is extremely important to do because ultimately, you will get more value out of that over time. So it's very important we strike that equilibrium the right way, and that's what you should read in that number from my perspective.

Should I add? I mean we had until 2022, roughly 2 percentage points of NatCat budget. As said, from there, we increased it by another point. And as Claire-Marie was saying, we have weather related, that's below EUR 20 million, and that covers up for the rest to make up for the 4. And we are working really on 4-dimension to get a better hold of NatCat, and that's why we have these, yes, share of gross losses that are lower than market share. The prevention, perhaps the NatCat warnings via text messages. We have already sent out millions. We can really address our clients by postal code and tell them you have to expect this kind of weather, please take care. We are probably one of the first ones that did not only try to do NatCat via price, but going back to the point of underwriting and require prevention measures. That means waterproof doors, windows in lower parts of the buildings, valves that stop the flow back. The second is accumulation management, is really at a high level in Allianz, and we provide even centrally tools that our operating entities can use to be better there. I was then saying that we really have detailed data on the hazard zones. And for example, in Germany, you can divide it by 4. And let's say, 3 and 4 are really the zones where you have return periods of 1 in 10, 1 in a 100, and we have really moved our portfolio very far away from this. And we are trying to be predominantly in zones 1 and 2. And all of this together works. And together with this multiyear forward-looking, where we are creating the buffers in the budget, but we are not only keeping them in the budget, but we are pricing them through to the end customer, and this is important. So what we are pricing through is the 2 things: one, the budgets; and second, the reinsurance cost. And I think that's the whole concept, these 4 dimensions, why we think we are ahead in the competition to manage the NatCat.

Andy, you got another follow-up question. This might be the last question.

Just going back to Slide F10 from Claire-Marie's pack and where the business units are not named, but lined up for Life and Health and P&C. Just wonder if you can give us any idea about what some of those, should we say, lesser or underperforming business units are? And is that all fixed? Or does sell come into the mix for some of those as well?

So indeed, so I think on the P&C side, so I think both -- in both cases. First of all, you need to have in mind the Solvency II RoE, right? So that's 1 measure that we are using to steer the portfolio overall among many other KPIs we are looking at. Then it's a spot view. So typically, if you are a P&C business and you have had a huge NatCat in that year, right, you will be in the low end. It does not mean you are a bad business, right? You just need to normalize and then make sure that this is addressed and priced the right way, which -- so you have some of our businesses that are in that bucket on the P&C side. So I think on the P&C side, to summarize, it's mainly either that effect or the effect of the need to work on capital intensity for some of our businesses because they are not reflected the right way, which is the case of Benelux and also then further working on scale mainly. So as an example, you will have like the direct business there, which is just related to the fact that this business needs to gain scale to be at the level of profitability we expect overall. Remember, this is 18% on average. So that's quite high. And secondly, the Solvency II ratio is calibrated at 200% solvency ratio. So it's a very demanding target as well, right? Then on the Life and Health side, it's also a bit of a combination of different dimension. We have some businesses where, obviously, the Solvency II framework is not so friendly to the large traditional books. So typically, we'll have the French Life case in that situation. Leben is doing very well even under that framework. And then you have businesses which are not reflected the right way under Solvency II, like AG Life, as an example, which is coming with very high RoE, very high also cash remittance. So simply the profile under Solvency II is not the best one given the way it's reflected in our own portfolio overall. So you have a bit of everything, and we will be also further structurally working on all dimensions in the portfolios.

Okay. Okay, fine. Great. I think we're done on questions. Many thanks. And again, for those that are staying after lunch, there are opportunities to follow up. Just some housekeeping. You all find numbers on your badges. You might be wondering the whole day what do these numbers mean. I can tell you, so after lunch, the lunch will finish about 1:50, the meeting is upstairs, your room number, the number on your badge is assigned to a specific room where you'll go for the small group. You'll stay in that room. And these guys and myself will circulate around those rooms. So find the number on your badge, be in that room corresponding to that number at 13:50, pretty simple. Great. Thanks very much for your time. Thank you.