Beazley plc (BEZ.L) Earnings Call Transcript & Summary

Okay. Good morning, everyone. First of all, please enjoy your party favors that we have provided this morning. It's a reward for turning up. For those of you who are dialing in online, unfortunately, we will not be able to send you a bag. But thank you for dialing in. Unfortunately, as is always the way, I seem to have picked up a cold in the last couple of days. So if I have to sneeze, please excuse me, and I'll try to make sure I mute myself before I do so. But I'm delighted to welcome you to our results presentation following what's been record profits for the second year in a row with profits of just over $1.4 billion, which allows us to return $700 million to shareholders this year through an increase in our dividend to 25p and the share buyback program this year of $500 million. It has been another challenging year for the industry and a more normalized attritional loss ratio for us in the second half of the year, alongside an active hurricane season as well as a number of systemic cyber events. But even with all this as a backdrop, and I'll just move to the highlights slide. We have delivered an undiscounted combined ratio of 79%, which is within our guidance of around 80% that we provided at the half year. And I think that's a testament both to our underwriting and our claims handling capabilities and our commitment to growing profitably. We had a good second half, actually, particularly in the fourth quarter, where we grew more than we had for the first 3 quarters of the year, which meant we were able to deliver year-on-year growth of 10% in all. Part of this does reflect the consolidation into our account of the staff underwriting scheme, and Barbara will provide a little more detail on that later on. But excluding that, our full year growth was still 8.5%, with which we are very pleased. And that's despite the fact that in the second half of the year, we did lose a little rate. And we're in a marketplace where it's getting a little bit more difficult to grow because most insurers are looking to do that. But as in 2024, our property team led the way with a 26% increase in insurance written premium following last year's 64% growth. And I think we were tested a little more this year than last with a $150 billion cat year again and a windstorm season that was more in line with expectations. And I think that shows that our expansion into the property market has been driven by intelligent underwriting, and Paul will talk a little bit more about that later. It's also been another active year for us in our Cyber division, sponsoring a number of new cyber cat bonds and an ILW that we announced in our Capital Markets Day. We will continue to explore how we can invest in this market in the future. And in addition, the team announced Quantum, which is a new consortium backed by insurers and reinsurers, which allows us to deploy $100 million primary line size, which was very well received in the marketplace. We also brought in-house Beazley security, which has helped that business grow, and we're very excited about the future of our consulting business. Before I pass over, I just thought I'd talk a little bit about sustainability of performance. This is the second year in a row that we've produced profits of over $1 billion. So I thought I'll try and put that into some context. We first produced this exhibit last year, I thought it would be worth repeating. As you may recall, back in 2024, we benchmarked ourselves against a range of U.S. and Bermudian peers. We see our main competitors as those global specialty insurers or composite insurers with a large Specialty division. Those are the people that we compete generally against in the U.S., in London and around the world. We see ourselves as a global or an international specialty insurance company based here in London but with strong franchises in North America and in Europe. So a list of comparable peers is in the middle line with the list at the bottom of the page as to who they are with a total shareholder return performance shown in the graph in purple. This year, we've also added a line showing our U.K. Specialty insurance to whom we are often compared. And as you can see, against all our peer groups, we have performed strongly this last year. I thought I'd show an exhibit of our rolling return on equity over the last 10 years. And over the last 5, which includes the COVID year, our average return on equity has been 17.7%. And over the last 10 years, which, of course, also includes the bottom of the last soft market, it's just over 15%. When we talk about capital allocation philosophy and benchmarks for our businesses across the group, we've always mentioned that our target is of a cross cycle return of 15%. Very few teams do this year in, year out, but over a rolling 5- or 10-year period, all our divisions should be able to deliver to this. And the exhibit shows the overall performance since 2014. And whilst in any 1 year, the results can be volatile and recognizing that insurance is a cyclical business. This diversified business that we have and the twin drivers we have of both underwriting and investment profit do give us the levers to deliver to our cross-cycle target. One of the more surprising things, I think, for the market about our results this morning was the increase in our dividend to 25p. We've always said that we have a progressive dividend of between 5% or 10%. It's generally been about 5%. But our growth did accelerate sharply since 2019 and the growth levels remain higher than our historical norms. Our view is that the ordinary dividends role is providing a generally predictable and reliable source of funds for our shareholders. And over the long term, it should broadly track premium growth. And you can see from this chart, that there had been a gap growing since 2019. So the thinking behind the rebase and rebasing to 25p specifically, is to bring those two back into more alignment. This is not something we expect to repeat unless we go through a similar growth spurt again. So we will be intending to return to our usual 5% to 10% growth next year but now did feel the right time to bring the two back into sync, having successfully begun to harvest the profitable growth of the last few years. And with that, I will hand over to Paul.

Thank you, everyone. Good morning. I'm Paul Bantick. I'm the group CUO. I've been 5 months in a row. So really excited to be able to talk to you around how the business is performing really well at the moment. Starting off with this slide. And what I really want to talk about here is our platform strategy. We have a product-led underwriting strategy and underpinning this is our three platforms, and this is something that we've been talking about. And this allows us to really access business where we think we can generate the best returns. Europe is our newest platform. And of the three, we opened this in 2016 and we saw an increase of demand for our products out there. And we are very excited about the future growth potential that we have in Europe. North America, which includes both our admitted and nonadmitted paper and our wholesale platform, which allows us to write global business via Lloyds. We've been investing in Europe, and we actually have seen a lot of underwriters that we've added there in recent times, and we're very excited about -- around the future generation, this will bring for us for growth. For our business written on the ground in the U.S., we've previously been accessing the U.S. E&S market via Lloyd's. And as part of our platform strategy evolution, we set up our own E&S carrier onshore, which we started writing on last year, and this is something that we spoke about at the half year as well. This has been going incredibly well for us. It began with our property business, and we're now seeing other lines starting to join and also transition to the E&S carrier. Due to the moving of the writing of our business on our E&S carrier, the proportion that's retained by the group, the growth numbers for America are slightly flattered in this slide and the wholesale numbers are also slightly muted. So a more true reflection would be that growth in North America was 4% and wholesale being 13%. I would say this is going to be a feature that you're going to see for a little while, particularly over the next couple of years as the remaining business also transitions. This, as we previously discussed, is going to leave us with a much simpler and more efficient business based around our three platforms, and that is the ultimate goal here. This is a slide where I wanted to talk about the diversification we have within our product suite, which is instrumental to enable us to manage the market cycle, deploy capital where we see the best risk/reward dynamics. This chart shows how we managed to evolve our business mix over the last 10 years through the cycle and navigate it. What you'll see at the bottom as well is the growth that we've achieved during this time. So the premium is along the bottom. And you can see that over time, we've diversified our books. Our underwriting strategy is product-led, and that's opposed to geographically led, which is incredibly important. It provides us with a number of benefits, including allowing us to be nimble, react quickly when conditions change, which they can do very quickly. We saw this with the cyber market hardening, the D&O market, the property market more recently. And when we see these moments of dislocation or hardening, we're very able to take advantage of them. You can see that with the cyber business over the years, you can see with the pink at the bottom there, the hard market in '21, '22. And then more recent times, you'll see how that's now moderated. So we're able to lean into the opportunities, drive diversification and then show the moderation as market conditions change. On to property. This really shows the outcomes of the opportunities we've taken advantage in the E&S space as well as strong growth on our wholesale platform this year. The combined ratio is a little bit higher than last year but still well within the hurdle rate we set ourselves as a business. Very sadly, we saw an active hurricane season and post our growth were tested by hurricanes, Helene and Milton. I would say that our numbers and the ranges that we gave for these remain unchanged from when we discussed them in November and during last year. And this is a testament to the team's not only expertise in this area but how they've reshaped and reset the business in the property space post all the growth. The market has seen a slowdown in rate increases, and that was expected. And for that -- for us, that's looking like the 22% to the 1.3% this year. I would point out this is in line with what we're seeing in the market. Delivering an undiscounted combined ratio of 74% in a year of active hurricanes is a great result, demonstrating that rate adequacy here remains very strong. At this point, I would say it's going to be very challenging to say where the market will go on pricing. As conditions as we've seen in the first 2 months of the year are very changeable, especially given the recent sad wildfire activity. I'm going to come on to that in a little bit. So for each of the teams, we're going to show you the platform split. And obviously, I spoke around how the transition to our E&S carrier is the distorting numbers slightly in certain spots. So as we walk through these, I will also clarify how that's impacting each of our trading teams. This shows a split for property. You can see the impact of the moving to the E&S carrier, and it does skew the numbers a little bit. Again, on a more effective basis, we would have growth of 14% in North America and 24% in wholesale. The small reduction, you'll see it's currently a small share of our premium in Europe. The reduction there is driven by the treaty reinsurance business that we write in Europe. In the last 2 years, the team has been working very hard to think through our exposure to secondary perils in the property space such as the recent tragic wildfires. What we've seen is our exposure to these have fallen as our property premiums have grown nearly threefold since the last California wildfire event in 2018. This is because we've been actively thinking about the portfolio and underwriting on a per peril and per location basis. The current view of our exposure, as we said this morning, is in the region of $80 million. The vast bulk of this is in the property reinsurance space for the wildfires. I want to note this is obviously an initial estimate and is not dependent on the final industry loss. This is approximately and what this chart is showing us, double our loss experience from the 2018 California wildfires. However, our premiums have increased threefold and the industry loss is estimated to be approximately 3x higher than 2018, which, as you'll see here, makes the reduction in the implied loss ratio for us. This demonstrates, I think, our ability to lean into the property opportunity, think about the secondary perils, manage our book of business, manage the diversification and navigate the market well. On to Cyber Risks. We have continued on our cyber Journey. And as Adrian said, there's been a lot of exciting things happening in the cyber space as well. Another area has seen activity this year. We've seen some systemic events in nature albeit none of them catastrophic. Our full spectrum approach to cyber continues to help us navigate the market well, continues to help us support our clients. Beazley security coming in-house will help us drive more innovation, more products, more solutions to help clients with their needs. We executed the first ever cyber catastrophe bond at the start of last year. We added further bonds this year. We added an ILW this year in 2024. And we've given you details on these. But I think the underlying message for me is that these are showing that we can and continue to build meaningful amounts of catastrophe protection with approximately $1 billion now placed. This has helped us not only hedge our cyber risk but also bring more capital and third-party capital into the market, which is what the cyber market needs to keep evolving. Another area that Adrian touched on was Quantum. We launched Quantum this year, which is a consortium of insurers, which can write the primary $100 million line. Our share of that is 50%. And what that ultimately is large clients looking for that confidence, looking for large capacity, looking for larger limits from their primary carrier for long-term stability because I think a lot of the large clients realize that the risk is constantly changing and morphing and that cyber is going to be with us for a long time. Despite significant activity, the team has delivered a fantastic undiscounted combined ratio of 68%. We had good premium growth, predominantly driven by Europe, which is what we had expected, and we've been signaling for some time. However, we do think that although we are relatively flat in the U.S., this is a great result and demonstrates how we can navigate market conditions well. Our rates are more than adequate during the year. One factor that helped us to deliver the combined ratio that you're seeing is the liability of reserves we added earlier in recent years. So the liability losses that we've been talking to about was something called pixels, which I know we spoke about previously. What you saw in 2023 was the strengthening of our cyber reserves for pixels. More broadly now, the market is estimating that it's a $3 billion plus loss for pixels, and we recognize this on our balance sheet early. This means that we're now showing releases in more normal course of business. With that being said, as I've alluded to, things can move incredibly quickly in the cyber space, and we have to have an agile business. We've been saying that for a long time, and I do think that the market is going to need to grapple with increased frequency and severity. We've been hearing about these are increasing for the market for some time. We are seeing that, but less than the market see. Liability reserves coming through on things like pixels, we've reserved these prudently in prior years. Smaller cat events, I think we'll continue to see this. We don't have any major impacts from this year but I'm sure they will continue. Rising systemic coverage, driven by business interruption coverage, which we know every cyber policy contains. And for that, we need to continue to bring third-party capital into the market to be able to hedge at scale. And geopolitical situation can impact cyber threats. It could be positive, it could be negative. But what we do know is geopolitics will increase frequency and severity at certain spots. Based on these, we do believe that market rates will need to show positive movement, which could alter the landscape for the cyber market going forward but it's going to be a function of how all these different threats come together and crystallize that will drive that. Again, on this slide, you can see the growth in Europe, which the team is incredibly pleased with, and North America again. If we were to normalize this for the movement of business to our E&S carrier, you would see that in North America, we actually had a reduction of about 5% with wholesale having growth of about 1%. Specialty risks. So as everyone is aware, the D&O and M&A market suffered from a competitive rate environment and some demand shock in 2022, which is another good example of how conditions and how challenging they can be and how quickly they can change. In addition, specialty risk is an area of our book, which is most exposed to social inflation. We continue to work actively to manage these key lines. It's a big focus for us, and we're constantly thinking through how to shape and evolve the book and make sure that we are underwriting correctly for cycle management and social inflation. We have a strong diversified book of business in Specialty lines, and that's the one thing that I've learned over the years. We are able to navigate the challenges because we have other products providing profitable growth at times when certain lines are in cycle management mode. We've been exercising underwriting discipline, taking some risk off the table, deploying capital in areas where conditions are more conductive to delivering our cross-cycle return on equity. And as mentioned by Adrian at our half year results, our aggregate reinsurance has an adjustable feature, which has impacted by premiums we paid this year and recoveries booked, which has a negative impact on Specialty Risks . However, I think it's really important to underscore that this program remains intact. It's the performing the role for which it's intended. And this is very much a one-off impact for us this year. Since the half year, we've seen a reduction in the combined ratio for Specialty Risk from 98% to 87%, which is predominantly driven by prior year releases as we continue to reserve prudently and see reductions in prior years over time. We also, as we discussed, increased the loss pick for the '24, and this was already in the half year numbers. So that further shows how that reduction has come through. When we look at Specialty on a platform basis, we can see that actually in a more realistic basis, the growth in North America was 6%, and wholesale was 4%. So again, there, we have both engines running and providing good growth. The Europe reduction is driven by cycle management, and I think this is a really good example to show good cycle management. We have a big financial lines and D&O book in the European market. And what we've been doing is actively managed in that cycle as we see market conditions start to come off. And then finally, MAP, we continue to see a good demand for our suite of MAP products. Again, it's a very diversified book of business. It includes everything from marine, energy, contingency, satellites, and that increased demand drove growth of 10% without the impact of business to our E&S platform. A higher proportion of MAP business is now seeded to third-party capital providers. And the effect of this is that Group premium appears to be down year-on-year but the Group number is not reflective of the division's underlying performance which has been excellent in 2024. This is the team where our transition business will be housed. And we have a new renewable team that's joined us recently, and we're very excited about supporting clients with transition risks and the opportunities for growth that, that presents in the future. Some parts of the book are driving more rates than others but it's very similar to specialty in that respect. Overall, we're very pleased with the performance of the divisions. We have some geopolitical uncertainty and considering that backdrop, this is an incredible performance by the team. And here, you can see what MAP looks like on a platform basis and on a more effective basis, North American wholesale both grew equally by 9%, which again shows that we have a 3 platform model where we are actually able to drive our products and growth across all of our platforms. With that, I will hand over to Barbara.

Thank you very much. So for those of you who don't know me, my name is Barbara Plucnas Jensen, I'm the group CFO here of Beazley since the 1st of May last year. But thank you very much, Paul. I will now take you through the financial results of 2024. It's great to be able to share such a fantastic results with you today, reflecting both our underwriting expertise that Paul just take you through, delivering very strong numbers as well as a year where we've had a very strong investment result. Firstly, as Adrian alluded to, I want to start off by providing some details on our insurance written premium growth, which was 10%, slightly higher than our guidance for the year as it includes the impact of a recategorization within our accounts. The group participates in the underwriting of syndicate 623, on behalf of our staff underwriting incentive scheme and the return generated from this participation has previously been recognized in other income. From 2024 year of account and onwards, this participation is fully consolidated into our group accounts on a line-by-line basis, given the increase in the relative materiality of return generated. This recognition is effective from year-end 2024 and onwards, and contributes to the overall 10% growth achieved on the insurance written premium in 2024. Excluding the impact of this line item, the preinsurance written premiums grew by 8.5% in '24, which is more comparable to what you're usually looking at. We're incredibly pleased with these results, given our growth at Q3 was 7% and noting the moderating rate environment. Q4 delivered an exceptionally strong underwriting performance, particularly within our Specialty Risks that Paul just mentioned. For the Hurricanes Helene and Milton, we provided an estimate range of $125 million to $175 million at Q3. And overall, we experienced a more normalized claims environment in the second half of 2024 compared to '23. This means that the claims ratio has increased from the prior year to 43.1%. However, our strong underwriting expertise and robust risk selection supported an undiscounted combined ratio of 79%, very much in line with the improved guidance we provided at half year. In addition to this, our total expense ratio has reduced from 40.1% to 39.6% as we continue to focus on efficiencies and realizing the benefits of our modernization program. Overall, this is a brilliant underwriting result. When looking at our investments, these delivered an extraordinary return of $574.4 million, equal to an increase of almost 20% compared to the prior year and the combination of a strong underwriting as well as very strong investments mean that we have delivered a record year in profit before tax of $1.4 billion. This slide shows the movement in our prior year claims estimate position, which is made up of both best estimate as well as the risk adjustment movements. You can see from the chart that we have reserved releases from all segments with the exception of MAP. Cyber Risks saw a small strengthening last year with the increase in the reserves related to pixels that we've just spoken about. And this year, we have then seen 6.8% reserve leases in cyber as we benefit from the years of suppressed ransomware activity as well as release of cyber catastrophe loads. The strengthening in MAP reflects an increase in the risk adjustment during the second half of the year as we are very cognizant of global geopolitical uncertainty and hence, choose to take a cautious approach. Despite this, MAP still delivered an undiscounted combined ratio of 83.2% and remains highly profitable as part of our business. For Property Risks, we've seen reserve releases in both '23 and '24, which again is reflecting the favorable attritional claims experienced throughout the year as well as benign movements on historical property catastrophes. Specialty Risks. Despite the reinsurance top-up that Paul mentioned before, we have seen an increase of reserve releases compared to '23 and this is due to sustained favorable attritional claims experience on books where underwriter actions have been taken in previous years. At the overall group level, there has been a release of $144.5 million releases in claims, representing 2.9% of the net insurance revenue compared to 2.5% in the year before. From this chart, you can see that our reserve strength remains consistent, well within our preferred 80th to 90th range. As a reminder, the risk adjustment percentile indicates the strength of our reserves held across the best estimate and risk adjustment. At year-end '24, this was at 84%. Here, we do a deep dive on our investments. And you can see that we have a very strong investment return of 5.2%, which is the highest ever absolute contribution. The investments delivered a very strong result in '24. And for the second year in a row, our investments have provided, as mentioned, the very strong results of $574.4 million. This was driven by strong performance across most of the asset classes, in particular, our equity, credit and hedge fund exposures as well as the level of risk-free yields available in the market where the interest rate risk on our assets closely matches our liabilities. Both the match or the core portfolio as well as the capital growth assets achieved higher returns than in '23, with the core portfolio delivering 4.7% and the capital growth assets delivered 9.9%. On this slide, you can see that our portfolio grew to $11.5 billion compared to $10.5 billion the year before. As a new thing, we made an allocation to securitized credit for the first time in many years, investing in the highest quality tranches, so AAA or AA rated tranches of collateralized loan obligations. The portfolio was initiated in the second half of the year and has been ramped up to its target allocation of group assets. The yield of our fixed income portfolio as of 31st of December was 4.6% with a duration of 1.6 years. So nothing changed compared to what we've talked about before. This provides a positive start for '25. However, there remains plenty of risks as economic growth is diverging and geopolitical risks are elevated. Our investments portfolio remains diversified and well positioned for a range of market outcomes. And now to one of our favorite topics. Here, you can see more split information on the insurance finance expense, which we also talk about as IFE, which is the line item showing the movements resulting from discounting over the period. I know this has a lot of attention, so let me walk through the components of this line item. Firstly, we do discount for the time value of money and as we move forward in time, we unwind the discounting benefit. This discount unwind is shown in the first purple bar in the waterfall and that will always be an expense. For the full year '24, you can see that this is an expense of $292.1 million. Secondly, we need to account for the impact from the change in yield curves and this can be both an income or an expense depending on what yield curve movements we have actually seen. Yield curves have fluctuated throughout the year, where early in the year, we saw a rise before rates were falling throughout Q3. And then we saw a rise again in Q4, albeit generally to lower levels than at the half year. The shape of the yield curve has also changed throughout the year. So what we've seen is that yields on short-term maturities have been falling, whilst the longer maturities have increased. At half year, this resulted in an income of 64.4 -- sorry, $64.6 million, which has reduced to an income of $62.6 million at full year and can be seen in the first pink bar on the chart. Finally, we have seen changes in other financial assumptions, which is shown in the second pink bar. Again, this can be both an income or an expense. For companies reporting under IFRS 17, there will be a difference in this line item depending on whether the approach the companies have chosen is the PAA model or the GMM model. Companies using PAA will not have the discounting on unearned cash flows, whereas if you're using the GMM model, which is the model that we're using, we discount for both the earned and the unearned cash flows. These other changes in the financial assumptions can include differences between actual versus expected cash flows as well as changes in the underlying payment patterns profile. We've seen both of these occur in '24, which has driven the $173.6 million change in other financial assumptions for the year. The net position for the IFE is an expense of almost $56 million for the year, which you can see in the gray bar to the right. I appreciate that this is a challenging area of the financial statements to model, especially in fluctuating economic conditions. And in order to increase the transparency and support the market in forecasting this line item, we will begin to disclose the insurance finance line item at each of the quarterly trading statements starting Q1 this year. So hopefully, that will take out some of the volatility in the modeling. On this page, we want to remind you of our approach to capital management. As a specialty insurer operating in structurally growing areas, either by product or industry, our priority is to deploy capital for growth. This includes our business plan for the year ahead as well as the opportunities, which may emerge in the subsequent one to two years. In addition, given the nature of our business and how quickly opportunities can emerge, we need capital flexibility to take advantage of unforeseen opportunities. We consider these elements taking into account the current market conditions when deciding how much capital to retain to support growth. Furthermore, another important factor in our considerations on capital distribution is the ability to support the sustainability of our long-term financial performance where we need to ensure that we can absorb volatility. Where surplus remains, we return this to our shareholders as we did last year with the $325 million share buyback. So this year's capital position, we have tried to show you here. At the year-end '23, our solvency capital ratio coverage position net of the returns, so net of the ordinary dividends paid out last year as well as the share buyback of the $325 million, was 219%. During 2024, we have seen a reduction in the solvency capital requirement with two predominant drivers. First of all, we have seen continued favorable reserve experiences resulting in reduced capital charges as well as looking at our business plan, it reflects softening market cycle in line with the broad market expectations for '25, resulting in less of an uplift in the capital requirement than we have experienced in previous years. This change in the SCR together with the capital generated from the very strong 2024 profits, has resulted in a group SCR for the year-end of 2024 of 302% gross of any distributions. Given this capital position, it's obvious that we have surplus capital available and in line with our capital strategy, we're able to make special returns to our shareholders. As Adrian highlighted in his introduction, we have decided to launch a $500 million share buyback on the back of these results. And as a one-off, we have decided to rebase the ordinary dividends to 25p. Net of these distributions, our year-end 2024 capital position is 264%. And bear in mind, in total, what we will be returning to our shareholders is a total of $700 million this year. This leads our capital coverage higher than last year. And as we've previously explained, the nature of our business means that we require capital flexibility and hence do not have an upper limit as such on our solvency ratio coverage. There is an expectation of gradually more competitive markets and softening rates, which is currently reflected as mentioned in our '25 business plan. However, as you've heard from both Adrian and Paul today, with the evolving risk environment that we experience, conditions can change very rapidly. We are seeing potential pockets of opportunity emerging in certain areas and want to ensure that we have sufficient capital to act quickly, as the environment is brittle and significant uncertainty remains. The recent wildfires highlight how quickly rate expectations could evolve. And should these opportunities not emerge, obviously, we're committed to demonstrate disciplined capital management and will return surplus capital at the end of 2025. Finally, on this slide, you can see that the strong capital position means that we are able to absorb volatility, which is an important part of delivering long-term sustainability in our results. On this chart, you can see that even after allowing for a 1 in 250 event either cyber or nat cat, together with a 50% decrease in interest rates, the capital cover ratio remains in excess of the 170% floor and provides the ability to react quickly to the opportunities that are seen in the marketplace. These sensitivities remain broadly consistent with those that we disclosed at the half year '24, with a reduction in the 1 in 250 from -- in cyber, which has gone down from 31% to 29%, following the increased protection we purchased for our Cyber book as we presented at our Capital Markets session on the first of October. The nat cat scenario increased from 26% at the half year '24 to 31% at year-end, noting the growth in our Property division; however, this still remains very balanced with the rest of our portfolio. This concludes my additional comments on the financial performance, and I'll now hand back to Adrian to conclude our presentation, including the outlook for '25.

Great stuff. Thank you, Barbara. Thank you, Paul. So on to outlook -- I thought I was going to sneeze, it's going away. It's a difficult year to provide guidance, this one -- because the market equilibrium is quite unstable. On a macro level, prices are good, generally speaking, and it's a risky world. So demand for what we do is growing. And we think there's lots of opportunity out there that is unlikely to go away for a while. The things that are making the world risky are persistent, be they climate change, societal change, geopolitics, et cetera, et cetera. And so I think the opportunity set is exciting for a period of time. However, as we've mentioned, many insurers and reinsurers over the last few years have been rebuilding and growing the capital basis and are looking to grow. And this has made the market more competitive and made it more difficult for us to grow when everybody else is looking to do the same thing. And we did lose a little rate in the second half of 2024. And our central thesis has to be that the market will continue to soften this year. But we are in a period of heightened and accelerating risk and one which is generating shocks, unexpected shocks, fairly regularly from COVID, the war, climate change, society change, technology change, and geopolitical instability. And as we have seen this year, with the wildfires in California, large events are occurring, which are unexpected. So we need to prepare for that, for the unexpected. And the marketplace does feel a little uncertain. It's difficult to predict the impact that the wildfires will have on the property reinsurance or insurance market, although we do know it's having an impact. It's difficult to predict what concerns on casualty insurance will have for U.S. liability markets or worries about cybercrime and increasing issues with cyber liability will have in the cyber market or indeed how the industry will react to the unprecedented macroeconomic and macro geopolitical uncertainties that we have. However, as we think about guidance, we have to base it on the central thesis. And our central case at the moment is that the market will continue to be more competitive and the growth will be a little more difficult and that prices will soften a little. Alongside that, of course, we have to make provision for the wildfires that occurred in the first quarter of this year. So with that then, we're forecasting a mid-single-digit growth for 2024, 2025 even, and a mid-80s combined ratio. So if we take a step back, the guidance this time last year was for a low 80s combined ratio. The claims experienced in the first half of the year was better than expected but the claims experienced in the second half of the year was pretty much as expected. So if we revert back to the early 80s combined ratio that we gave last year, we add to that the provision for the wildfires, and we add to that the fact that we believe rates are going to soften a little, you get from a low 80s combined ratio to a mid-80s combined ratio, and that forms the basis for our guidance. And we're trying very hard to be consistent in our logic year-on-year. So there's a nice obvious pathway as to what guides our thinking. We will, of course, try to beat this, both in terms of growth and combined ratio but we want the logic behind our guidance, to be clear. We have a diversified business, by product and by platform as we have demonstrated, I hope, and that gives us the opportunity to get access to business when the time is right. The complex conditions that I have described really suit a company like us, a specialty company that can deploy capital quickly when the times are right. And there could really be some opportunities of some scale, which could emerge very quickly. As I said, I do think the elevated risk environment will persist and there should be ongoing opportunities for us to continue to grow well over the next few years. And we will be ready for those opportunities. If they occur this year, we will adjust our guidance as well as our behavior accordingly. And that sense of an unstable equilibrium, a heightened risk for businesses across the world forms as Barbara said, the basis for us keeping a little more capital back than we might otherwise have done. This time next year, if conditions feel less unstable, and we think there will be less opportunity to deploy that excess capital, we will return it as per the framework that Barbara set out. So thank you for your time, and we'll open up to Q&A.

I'll let Adrian sit down first. I guess the first question I'm sure everyone's going to ask about the same thing. Combined ratio your guidance for '25, having heard you just explain it, I just wanted to play kind of maybe come up with accounts or argument to some of it. So last year was low 80s. You talk about rate decreases, nearly 0.5% for the year. So some of that will come through into '25, but not very much, so not very much different. You've got the LA wildfires, which on consensus is something like 1.5 points on the combined ratio. I see it's above your nat cat budget. For January, but, you will have some nat cat budget for January and February seems to be going -- February has kind of gone okay, I think. So just interested in kind of those 2 points whether actually this is Beazley track record of conservatism coming through in the guidance. You've had a good record on this. If I remember your predecessor, he or she used to say it will get worse next year and it never did for quite a few years. So just trying to understand that on the combined ratio. The second question is just on the capital return. $700 million is a huge number to come back in terms of capital. How -- the 264%, this time next year, if we do have those conditions that you talked about that maybe the environment isn't as exciting, it is a little bit more stable. Can you actually do more in terms of buyback? Or would you have to think about other mechanisms? So it would have to be ordinary, the rebasing, I think is great. Will it have to be a buyback plus some kind of special? Or how do you think about that? I guess, it's a nice problem for next year but just interested in these.

Thank you. So I'll do the first one. If you want to do the second one?

Absolutely.

Superb. So thank you for comparing me to Andrew Horton. It's -- that is high prices indeed. We obviously try to make sure that we underpromise and overdeliver. And we like our guidance to be something that people can rely on. And to that end, I think what we're really trying to be is consistent with the logic, right? So if we start with low 80s, we add in a bit, as you say, 1.5 points for the wildfires. And we factor in some rate softening, that's just going to move us back up a notch. So all we've done is note that and move our guidance up a notch. Now, one of the reasons why we say low or mid all that sort of thing is because there is some flexibility in that. But I think it's important to give the message that with the wildfires and with the expected market softening, everything else being equal, our guidance should be a little higher than it was last year. And that's essentially the message that we're trying to convey.

And if I take the Capital One. I think, alluding to the 264%, which is a very strong level to have at this point of time. I think it's important to look back at '24 and what got us to where we are right now. And obviously, you could more or less describe it as the perfect storm because we've seen interest rate movements. We purchased additional reinsurance for the cyber book, as we discussed. We have seen prior year releases. And as you can see, obviously, some of this is also in some of the more capital-intense lines of business. So that is also providing a relief. So overall, we are in a very good position at the end of '24. We think that the share buyback as well as the rebasing of the ordinary dividend is the right thing for us. And the combination is both signaling, you can say, our own comfort with the sustainability in the results as well as making sure that we return to the market what we think is a reasonable amount. And where we are next year, we will have to assess at the back end of '25, I mean, '24, the profits were extremely strong as well, supporting capital. And we will have to see next year, how does it look and how do we return the funds at that time. I think the important thing for us is to retain the flexibility on deciding how we actually do that.

So there were 2 things, I think really one was that -- it does feel as if the market is a little bit unstable, and we want to be able to have dry powder to react when we spot an opportunity. We also consider that when we looked at the buyback program from last year, how many shares a day we could buy without interfering with the intraday price? And actually, $500 million is probably about how much we could do without interfering in the price. So there seemed a little point in declaring something bigger than that because we probably wouldn't get it done before the end of the year, by which time we'd be talking about 2026 anyway. So there was a nice confluence in the way that it all came together with rebasing the ordinary dividend of $500 million share buyback, which seemed doable, sustainable and giving us that flexibility. So it was a nice confluence of events, really.

Will Hardcastle, UBS. First of all, just thinking about the SCR and the reduction there, I guess, the excess, if we call it excess, we'll discuss that maybe in the question. That's gone up maybe over $0.5 billion year-on-year, if we think about it in that context, I guess. What's the binding constraint now? Would it still be solvency? Would it be rating agency? So maybe that's dampened a little bit. And then how should we think about the cyber bonds benefit to that, if it is anything? And then on the second point, just maybe mention again what happened on the MAP prior year releases. Is it all IBNR -- sorry, strengthening, is it all IBNR? And then just as a simple math, is there an easy way to say if we kept the percentile exactly the same, what would the PYD be?

I'll do the math one.

Okay.

What was math question again?

It was around the...

Yes. No, it was -- so it wasn't an increase in our pure loss pick. There was an increase in the risk adjustment, which is, as we said, a reflection of the fact that the geopolitical risks have increased notably in the second half of the year. Then that division underwrites the wall business, the terrorism business, the political violence business all the stuff that can be impacted by that sort of thing. And it seemed like a sensible thing to do. It's where we take that risk. As we pointed out, the combined ratio for the team is still extremely strong. It's a sort of thing that we have to contemplate. And we like to do these things early.

Yes. And on the constraints on the SCR, I think it's -- basically, we want to assess how does it look? We mentioned how we work with our business planning? How we look at what are the opportunities in the future? What do we need of capital in order to invest in the growth areas that we see ahead of us? So I think it's down to our own risk appetite and how we want to see the capital allocation on that front.

Just to build on that for a second one. I think if there was a question there about -- are we keeping more capital back because of rating agency concerns, the answer to that is....

The answer is no.

What [indiscernible].

I think it's -- I think probably the approach we have is we look at what supports the continued development of our business in order to deliver the sustainable results. That is the overarching point where we start. Yes. And then you were asking about the Cyberbond benefit. So was that whether it's repeatable or...

How much is the SCR[indiscernible]?

I don't think we have provided that in any detail. It's one of the 4 components I just mentioned.

It's not when we bought it.

No.

But it did have a benefit.

Yes.

It's Abid Hussain from Panmure Liberum. I've got 3 questions. Going back to the capital position. Are you willing give to -- are you willing to give a range in which you would typically want to operate the solvency ratio? And I understand the lower end is 170%, but would you be willing to put an upper end to give us a sense of the excess and how much you're holding back for the dry powder and the opportunity that you see or perhaps sort of if you talk to how much capital you might think you will consume in the next couple of years versus how much you might generate? So that's the first question. And the second one is somewhat related. It's on the PMLs. Are you -- given the strength of the balance sheet, are you willing to increase the PMLs if there is an opportunity at this level? And if so, where would the risk rewards be most favorable? And then just finally, on the wildfires, just curious to understand how you've avoided much of the losses relative to some of your peers. If you could talk to your product coverage and your risk selection, that would be helpful.

Do you want to start with the wildfires, Paul?

Sure. Wildfires is something that the property team has been working hard on for the last -- or since 2017, really. And I think it's a combination of understanding the shifts we wanted to make in the portfolio. So for example, if you heard that most of the loss that we've given today is driven by our reinsurance treaty business, we do write high-value homeowners though we don't have a big portfolio in that region. That's definitely one driver. When you look at some of the historic losses from '17 and '18, there were a lot of things impacted on infrastructure that drove a lot of loss and other things as well. We're not insuring those this time around, just because the market and the risk and reward didn't make sense from the team when they were looking at the exposures versus what we could achieve in the market. So it's a combination of underwriting focus, thinking about the secondary perils broader than wildfires. Actually, there's other secondary perils that have been working very hard on bringing some of those exposures down, growing the premium where we can as we've lent in very hard on the direct side. And I think when you put all that together, that demonstrates the result that the team has returned.

On PML perspective, we are growing our PMLs to CFO on the nat cat side and on the cyber side. So in dollar terms, they're going up. In percentage terms, they're going up but not very much in terms of a percentage of profits or capital depending on the particular stress. And it's the second one that we really pay attention to is how much of a profit are we willing to risk or how much of our capital are we willing to risk in an extreme event. And generally speaking, we don't grow those particularly unless the risk reward is very good. So they're going up a bit but not very much in percentage terms. So we think the risk reward is good, but not good enough to dramatically alter our exposure profile. From a capital perspective...

Again, a range, I would probably be reluctant to give but I would still steer to the fact that if you look at last year's decision and this year's decision, we are in 2 very different spots but so are the markets and the conditions and the opportunities. So I think it's coming back to we take a measured assessment of what are we looking into, what flexibility do we want to retain? And how do we then distribute capital to shareholders?

So you're going through the 3 steps, right? The floor is 170%. Then we add the stress test on top of that, which is what Barbara was demonstrating earlier. The size of those stress tests does change, right? So according to interest rate volatility and...

[indiscernible]

According to our PMLs on cat and non-cat and also how we've invested? How we do our investments? We'll change our exposure to interest rate risk. We add that on top. And then we think about growth and where we want to keep behind. So there are three quite distinct steps, I think, the first two are less judgmental, if you will. So we want to keep the 170%. We want to make sure we've got our stress test covered and then we think about surplus capital of that.

Andrew Sinclair from Bank of America. A few for me, if that's okay. First, you've mentioned mid a few times, and I know you like the flexibility, but if I could be so bold as to try and tie you down by what you mean by mid. When you're talking mid-80s, is that 83% to 87%, is that 84% to 86% likewise mid -- worth a try, always. Second was just on your reinsurance purchase program and retro. You talked a lot about an uncertain world today. Just if you can tell us a lot about your program for 2025. What change has been made and also just how much is completed already for the year versus how much is still to be renewed? And third, just looking at those opportunities you've mentioned when you're thinking about keeping that capital back where you might be kind of trigger ready to deploy if those opportunities come? Do you have particular areas in mind? Or is it just let's see where the world changes. Where are you closest to really pushing harder?

Great stuff. So we've answered the mid one quite clearly, I think. From the reinsurance, our main Cat treaties renew 14. So we are going through the renewal process right now. We're going to be buying a little bit more on the property insurance program. And I think it's all coming in within the plan that we put together. So no issues with the renewal of either the retro or the reinsurance program. I don't think the issue with reinsurance or retro is not one-off, is it available? It's really about what the price is. And as we keep -- as we've been saying a few times now, a well-priced reinsurance market is good for us. It's good for us because we write a bit of reinsurance, but it's also good for us because it keeps insurers honest. If reinsurance starts subsidizing insurance, it encourages unhealthy behavior from the insurance market. So a properly functioning and well-paid reinsurance market is a good thing as a whole, I think. And then your last question?

That was on the opportunities.

Opportunity set, yes. So I think if we're going to get excess growth, it's most likely to come from either MAP property or Cyber, I would think. And we can see opportunity across all those segments. The businesses that Paul mentioned we're growing within Specialty Risks are very exciting. They're not yet at a scale where they can really move the needle if they explode. So they'll be good but not noticeable in a way that a big opportunity in cyber property or MAP could produce.

Faizan Lakhani from HSBC. Firstly, congratulations on very good set of results. Coming back to the combined ratio guidance from a slightly different angle. One item that wasn't discussed was mix change. And as you've highlighted in the last answer, the growth opportunity is probably stronger in some of the property side where the combined ratio is naturally lower. Is there an element of that feeding through? Should we think about that whether this forecast for next year? Secondly, on the prior year releases, very strong cyber and in specialty. Just want to understand how sustainable is that going out coming next year and how much is embedded within your guidance? And just as a partial point as well, looking at the underwriting year triangle, it appears 2023 strengthened [indiscernible]

Okay. So on the first one, the -- because the growth rates have come down, so if we're predicting a mid-single digits growth, there isn't much of a change in business mix. So the impact on business mix aren't as marked as they have been over the last few years. So that has led some impact on combined ratio guidance. When we think about cyber and Specialty Risks reserve releases, there are two things. On the cyber, the first is we released Cat margin over time. So that will persist or not, depending on whether there are cyber catastrophes and also on the attritional side. As Paul said, the more recent cyber years have generated very good attritional loss ratios. We have seen frequency go up a bit last year, not as much as in the market as a whole, and we're still pleased with our attritional loss ratios. So cyber releases should be sustainable. Likewise, on the specialty line side, we've been bearish on the classes we think that are exposed to social inflation for a while. We grew our D&O book and our financial lines booked very strongly, '19 to '21, '22. And there's still a lot of IBNR there. So we remain comfortable on both those classes. And 2023 strengthening overall?

Yes. I think nothing specific. Well, it was from MAP right or overall, yes. Let's come back to that.

It's Ivan Bokhmat from Barclays. I got a few questions. So the first one, I think you started talking about sustainability of the guidance and of the bottom line. So just wondering, I think we've covered the combined ratio for a little while. There are two more components that I think in 2024 were quite favorable. Obviously, the IFE benefited from some effects and the investment result. I'm just wondering how we should be thinking about that in 2025. I mean, particularly in the IFE, I think the better disclosure would be very welcome but maybe you could kind of give us the number for the year or a range that we should be thinking about? And the second question, I'm kind of afraid to ask, but you've mentioned some opportunities of scale. Are any of those inorganic? I mean could there be portfolios, some distribution arrangements, anything of that sort?

Do you want to do IFE?

Yes. I think we have obviously spent quite a lot of time on IFE. And I think just splitting out the details as we do now, we started on that for the half year and the full year, I think, is hopefully providing some more insights. We won't, you can say, give out a range for the full year. But as said, the transparency we want to increase is how does it actually develop quarter-by-quarter. So when we go to market with our IMS in the coming quarters, you will obviously have the exact details on that going forward. But it is a good mix. And in particular, the change in other assumption is the important one. It's also, unfortunately, the one which is less easy to model. Because that's where it comes down to development in actual versus expected and so forth and obviously also the unearned cash flows. But hopefully, we'll try it out, and we will see if it gives you what you need. But for 2025, we have decided to provide that additional information.

I could just follow up with that one. If we have some sustainable PYD, let's say, it's another 3%, should that other line also be positive in normal circumstance, as in offsetting the $300 million of regular insurance finance expense.

I would have to come back to you on that one as well. Yes. It's all interlinked. It's all tight. So let us come back to that, Ivan. And then there was the M&A or inorganic growth?

I think you called it inorganic growth. Yes, yes. Yes. So we are always looking at different distribution methods, different ways of partnering with either insurance companies or utility companies or banks. So we'll continue to do that. We don't really call that inorganic growth. But as our products get more demand across the world, those partnerships are useful. And they've been a good tool of growth for cyber in particular. Over the years, we have bought businesses where we think they will add to our capabilities, and we're looking at that at the moment. Are there some products that we would like to add or are there some geographies that we would like to add? We've never been a company that's grown through acquisition, and I don't think we will be a company that grows through acquisition. I think we are a company where we like to have a product set and access to risk that allows the engine of growth to be mostly organic. But as we think about what capabilities we need, bolt-on acquisitions could be part of our tool set, yes.

Yes, I think also taking into account the size we have, it's also one where the ability to take on bolt-on investments is more increased or improved, you can say, compared to before.

This is Anthony from Goldman Sachs. The first question is coming to your growth target. So could you give a bit of view or color on the access and surplus market outlook? Like -- so what is -- what remains cyclical and what remains secular in there? And how does the growth from the E&S segment compared with your mid-single-digit growth at the group level? That's question one. And then question two is focus on the solvency ratio. It seems your solvency sensitivity to the tail risk in cyber that has modestly reduced at full year versus half year. Does that reflect the cat bond issued? And do you plan to issue more that cat bond in this year?

Okay. So we do the second one first. So yes, the cyber cat bond has helped. I think we will look to do more of that as we grow. I think it's a very useful tool for us. Is the E&S market continuing to grow for us? Yes. So I expect the E&S business to grow in North America much faster than the admitted business. I think there have been a few speculations about how -- when the E&S market will stop growing because -- but even though the market has flattened out a bit, the submissions going into the E&S market continue to rise. And I think that will persist for a while. It remains very difficult to underwrite changing risks in the admitted framework. And so I think until the admitted framework changes and allows insurers more flexibility in how they underwrite more risk, I think business will continue to move to the surplus lines market. And we're seeing very live debates about that right now, right? So even after the California wildfires, there are disputes between the regulator and the insurers as to how to respond to that. And if they can't come to a mutually-agreeable solution, more business will move to the surplus lines market. And so I think that will persist for a while.

Will Hardcastle, UBS. Just this is a really simple one. Just to be clear, the starting point of the combined ratio guide is last year's initial guide but the attritional last year was assumed will be better than the guide initially had. Is that right?

So the loss experience for the first half of the year was better. The loss expected -- the loss experience for the second half of the year was as we had thought it would be at the first half of the year.

Better from a full year perspective?

From the full year perspective, it was better, but we're -- because the second half was more in line with expectations, we reverted back to the early 80s that we started with.

Absolutely. And then just the second one, just on this Quantum, the Cyber Quantum or something along that lines. Is it 50% on all business within that product that's going to be shared? And that's the mix of traditional reinsurers? Does that in any way -- I know in the past, you've had a very strong relationship with one of the large German reinsurers. I thought that was also on the large cyber, I may be wrong. Is that any dilution of that relationship or that still is ongoing?

No, we still have strong relationships with all the reinsurers. What you're alluding to there is vector, which was many years ago, a partnership that we had with Munich Re. That ended some years ago. This is based on current market conditions. And what we've been hearing from the large clients is looking for larger solutions, looking for larger primary, large insurers that can partner with them over a number of years and something meaningful from a capacity standpoint. And so we've worked with another insurers to put this together. And so that's where this comes from, these two are unrelated.

So, 50% is us, but that's growth of our own reinsurance programs. So net of our own reinsurance, it's much less than that, obviously, but we put a 50% line down and then other insurers supported with that.

Andreas van Embden of Peel Hunt. I just have a question about your reinsurance book because you've grown your property book quite materially in the last few years. Could you maybe describe how large that reinsurance book property reinsurer reinsurance book has become in terms of premiums? Could you maybe speak about what you are reinsuring particularly in the U.S., are these quota share type treaties, excess of loss treaties? Are you overexposed to the nationwide accounts or more of the locals sort of insurance companies in Florida and in California? Because what I'm thinking about is that aggregation risk within that book, if I just add up the hurricane season and now the wildfires, and we still have until U.S. renewals, still some time to go. How do you think about that aggregation risk within that book? And is that booked self-funding from the premiums you're collecting or your inwards reinsurance? Or are you cross subsidizing with other lines?

The property book definitely stands on its own two feet. We brought the reinsurance and insurance businesses together a couple of years ago so that we can manage it as a whole. So that we understand and manage those accumulations live. And we do move actually capital allocation between the teams, where we see the risk reward is better. So we're actually quite adept now at moving it between the business that we write in London or the business we write in the E&S market in the U.S. or the reinsurance business or indeed our binding authority business. So that enables that to be done pretty well. Our reinsurance business has grown in premium over the last three years. We haven't really been growing the exposure very much. The exposure growth has been all on the insurance side pretty much because that's where we believe the long-term opportunity is better. So the book itself is bigger, but it's not particularly different. The strategy of the team has been to reinsure companies that we believe perform better in a catastrophe and are here for the long term. So it tends to be -- it's a mixture of nationwide and regional, but it tends to be companies that we've had on the books for a long, long time.

It's also quite well diversified by geography as well. So it has a healthy balance of U.S. and non-U.S. business as part of the reinsurance business as well.

This both quote share and...

It's -- there's very, very little quota share. It's mostly an excess of loss cat book.

So when I think about the size of the book, I just have to go back 3 years, look what you disclosed in this just factor in the rate increases and sort of the same?

Yes.

[indiscernible] so far this year? Is it still as favorable as it was in the last 2 years? And then within the mid-80s undiscounted, what sort of combined ratio are you assuming in cyber? Is it kind of the pre 2023 level or kind of the very favorable 2023 and '24? And I guess, I think you mentioned earlier about you think those sub loss ratios are sustainable. What's your thinking around maybe trading some of those margins for more volumes presumably, you get some operating leverage on the back of that and fees and all the good stuff as well? And then secondly, what are your thoughts on guiding on maybe a group ROE, given the moving parts around IFE? And maybe you can say what is a reasonable range of ROE for this year, given, again, the IFE and the wildfire loss?

Good questions. I'm not sure we're going to answer any of them. But -- so our cross-cycle return on equity is 15%. We are -- as we said at the beginning, we generally think prices are pretty good, right? And the return on equity that we've been generating in the last few years has been above the 15% and prices haven't moved that much. So we should be able to maintain a good level of ROE, but we don't provide guidance that way. I think the combined ratio that we've got for cyber is a reflection of two things. One is that we are comfortable with the attritional loss experience that we are currently running at. We're also harvesting prior year claims releases because the 2021 and post years are very, very good. So it is a little flattered by the prior year claims releases, but we are comfortable with the attritional loss ratios where they are. I don't know whether we know well or are we going to give how's the claims experience been so far this year?

It's -- we're comfortable but it's not at the suppressed levels for the market that you would have seen in '21, '22. When Russia and Ukraine first came out very early on, what we saw was bad actors focus more on attacks on Russia and Ukraine and war than they did on attacking the west. And that's definitely been back for the last couple of years, and everyone has seen that, we've seen it to a lesser extent. But it's definitely from what we're seeing, the activity is up. But it's nothing that we wouldn't have expected to see and it's still well within our control levels. The question is, is that there's a lot of geopolitical uncertainty right now. And what we have seen in the last 2, 3 years, if nothing else, that does impact the cyber threat. And so what we will be doing is working very hard and watching it very closely to see does that mean more attacks by countries, by regions, by industries, that is everything that we're doing on a weekly, if not monthly basis.

[indiscernible].

I think if you look at the growth on cyber and where we're thinking the growth certainly non-U.S. continues to be a big focus. We've made big investments there. And we expect that to continue to grow. We've always said it's behind the U.S. in terms of maturity of the market. So there's still lots of large accounts outside of North America that don't purchase Cyber insurance. We'll continue to think about it and start to come to market. And when you're in an area of geopolitical uncertainty, when you read about CrowdStrike last year, these are the things that focus people's minds on the potential to purchase cyber insurance. And I think we can see that continue, both in Europe, and we have some strong growth in Asia. And then ultimately, in the U.S., where we've really seen the growth coming from and where we think the future growth is in the lower middle market and in the SME space. That is the sector of the market that has probably got the most growth potential as you look forward for the next 3 to 5 years.

Okay. Thank you very much indeed for your time today.

Thank you.