Grupo Catalana Occidente, S.A. (GCO) Earnings Call Transcript & Summary

Good morning. It is a pleasure to be here with all of you to talk about the performance of GCO during the first quarter of this year. This is Francisco Arregui, CEO. And I have here with Carlos Gonzalez, the Finance Manager; our CFO, and Nawal Rim our Analysts and Investor Relations Director. First of all, I would like to thank you for being here online and the follow-up that you conduct of the proceedings of our business, the process of our business. You can ask any questions you may have online. We will answer as many as we can at the end of the session, and the rest of them will be answered via the regular channels. I will now explain how things evolved during the first quarter of the year 2021. The accounts were drafted by the Board of Directors yesterday. And without further ado, I will tell you already that in the context of health care and economic crises, we've been doing significantly well. The growth in recurring premiums as compared to the previous year has been very significant improvement of results at 3.1%. And in credit insurance, closer to the cycle and therefore, more sensitive to the crisis and honestly, well, we've been continuing with good turnover and an improvement of 40% of the result of the recurring result because of very low claim ratios. We will get to it in more detail in a minute, but the truth is that our consolidated result increases by 25%. We'll follow the order of the presentation, as you see on screen, starting with the economic and sectoral environment, and you all very well know that everything changed overnight in 2020 due to COVID. We came from years of growth in almost all geographical areas in low grade, low inflation environments with deceleration of growth in Europe and especially in Spain in 2019, but that was the context at the beginning of that year. The COVID crisis came, the lack of supply and production chains and then in the second half of March, we had the lockdown, the stopover of the stoppage of the industry in 2020, GDP has dropped. The global economy, as you can see on screen, minus 3.3%, but even more so in Europe, some 6% and in Spain, a record-breaking figure, a reduction of 11%. The growth forecast, you can see them on screen. They have changed slightly in April and all of these is the consequence of the health care situation over the summer and the second half of the year. In a context, the Spanish insurance sector, which had an exemplary behavior during the previous financial crisis, 2008, 2009. In 2020, there was a significant drop, 8.2% pushed by savings premiums and in the first quarter of 2021, the behavior has been somewhat better, minus 0.3%. As you can see a screen, life is decreasing, savings is decreasing less and nonlife lines with this plus 1.5%, despite the fact that this is the motor for the reasons that you know is decreasing at a rate of minus 1.8%. And in that context, I said at the beginning that things have been going well, honestly, very well in the traditional business, despite the very competitive nature of the sector in Spain, the adverse weather conditions and later, we will tell you about the adverse weather events Hortense and Filomena and the COVID crisis. And in credit insurance, I said exceptionally well with a stable turnover, very low claims ratio and honestly, very good result. Just these summarized P&L can help us see what I'm describing in traditional business, we grew by 1.1% better than the industry, which is decreasing 0.3% as we just saw, but the important growth is the 1.6% in recurring premiums. Drop of 4.4% in single premiums life, which are the ones that contribute less value to the company and even more so in this context of very low interest rates. And in trade insurance, in the framework of the crisis in 2020, the turnover dropped for several reasons, but especially because of the reduction of sales of our policyholders. And in this quarter, we're already growing in turnover by 1.4% as you can see in the statement that we are showing on screen, different effects in different geographical areas. The CFO will talk about that later. But it is based on different reasons, very particularly because the average tariff has increased around 8% in the accretive first quarter in renewals, a good rate of cancellations around 9% and an increase in sales of our policyholders of 6.2%. And in terms of results, you can see at the bottom, the consolidated result increases 25.4% and a bit less, 22.5%, the attributable result. Truth is that, as you can see, nonrecurrent results continue to damage us minus EUR 2.1 million. However, less than in the previous year and a very good behavior of operational results of the 2 businesses. Traditional business an increase of 3.1% with a very good general performance. I would stress the exceptional performance of motor with about 8% increase, still affected by mobility restrictions as compared to the first quarter of last year, which was pre-COVID expect the half -- the second half of March. Also the result of multi-risk as a result of more claims, more usage of the home in these contexts and a greater impact of weather events, Hortense and Filomena. However, very similar in terms of net reinsurance result to what we saw last year to Gloria and several one-off events. Good behavior of the rest of lines. We could stress the increase of 40% in health and 12% in Miscellanea. And in credit insurance, honestly, very good results. As I said, 40% increase versus the first quarter of 2020, which was still good and which is based on a very low level of claims with gross claims ratio from reinsurance at a very low level, 28.2%. We'll see it in a minute, and I can assure you that we continue to lobby and to push forward in the face of a potential increase of default when governmental aid to businesses. And as you know, we have a global system for calculation of provisions, calculating claims ratio from the moment we make the sale. Based on the parameters, we adjust according to circumstances, and you'll see later that aside from that, this is affected by the fact that the reinsurance comes at a considerable cost more than EUR 100 million. Almost 70 of those come from government agreements of reinsurance. And as you know, these have been extended until June this year and since the business is yielding profit. Of course, we have offered positive results to the government. And finally, in a general manner, I should, of course, mention the long list of actions that we have conducted to support our stakeholders, both in 2020 and 2021 in the context of this health care crisis, all of these were basic and essential for the maintenance of the business. Some of them, you can see on screen, and we have already discussed them in previous presentations from the point of view of the portfolio. The makeup of the portfolio, there are no significant changes. The wave of credit insurance is obvious since the incorporation of a trade, 60-40 and there isn't much more to add in terms of geographical presence. We are international, even if it's limited to credit insurance, in more than 50 countries. But as you can see, Spain continues to make up 2/3 of the total and the rest is mainly Europe. Finally, I wanted to stress that even if it's obvious that in the current health care and economic context, which is so very difficult, we are absolutely focused on the ordinary business, but we do not lose focus, focus on strategic aspects of the group that our future depends on the first one is innovation, but I wanted to stress at this moment, sustainability. As you know, we have underwritten the -- signed the principles of the Global Compact and the principles for sustainability insurance as well as principle, we have adhered to the principles of Responsible Investment. And this year, the Board of Directors approved the new sustainable policy of the group orienting our strategy to the creation of sustainable value in the long term. On the other hand, on February 25, the Board of Directors approved the document of sustainability for 2020, the sustainability report approved by an independent advisory and it is available to you on the website of GCO. Third message that I wanted to convey to you, we have a strong capital position, a sound solvency position as well that I will refer to later. And fourth message, we have a dividend policy that you know, which is certainly conservative, but with an increasing dividend in absolute terms and always maintaining our strong commitment to shareholder remuneration. The evolution of the share price. You know it very well, very good in the long run, as you can see on screen with an internal rate, which is much better than that of the index is closer to us and in the short-term after a batch 2019, where the share price dropped more than 4% in context of the stock market going up after year in 2020, we dropped some 6%, but a bit better than the indexes. And at this moment, we are above indexes with this revalorization at the end of the first quarter of 16.6%, as you know perfectly well, I'm sure. As to dividends that I anticipated earlier, it is true we have a dividend policy, which is conservative, but an increasing dividend in absolute terms an evolution of the dividends, which is very satisfactory between the year 2000, 2008, in 2008, 2009 years of deep financial crisis that had a great impact on results of credit insurance. We were even able to slightly increase the dividend and since 2010, we've been having consistent dividend increases, which in the past few years have been around 28%. And the dividend charge to last year following recommendations of the European and Spanish insurance management insurance regulation bodies, they advise to reduce dividends in the framework of the health care crisis. So the total dividend charge to results of 2019 was EUR 81.5 million, 17% lower than in the previous year. However, things have been going well for the dividend also in this past year. The year 2020, financial year 2020, where we paid out 3 interim dividends. As you can see on the screen, the same amount as last year that is EUR 19.06 million and the Board of Directors in February proposed and the AGM held yesterday approved a complementary dividend of EUR 48.68 million, which is twice as much as last year that is an increase of 100%, which entails a total dividend charge to 2020 results of EUR 105.85 million, with an increase of almost 30%, 29.86%, the largest dividend, the greatest increase in the history of the group. So of course, we could do it due to our solvency and at any rate, we want to maintain our strong commitment to shareholder remuneration. Carlos, you have the floor.

Okay. So on my side, and as we normally do in these meetings, I will explain in a bit more detail, and I will stress some of the ideas that our general manager already mentioned. We will start with traditional business, and we will start with the bit of a summary. First, turnover, here, I would like to say that our diversification of products and the high retention of our customers has allowed us to maintain growth. As you can see on screen, an increase of recurring premiums of 1.6%, up to EUR 802 million. In terms of results, we continue with a positive trend and increase of technical result of 3.9%, which translates into an improvement of the recurring result, which amounts to EUR 57 million, which is 3.1% increase, as Mr. Arregui already told us. The reason for these increase is a positive evolution of the results of the general insurance business, especially motor, we'll see it in a minute, positively affected by the reduction of mobility versus pre-COVID quarters, especially in 2019. And the improvement of the technical result in life, where we will also describe combined ratio has improved 0.3 basis points with an improvement of the technical cost and maintaining, therefore, our positive differential vis-à-vis the industry. Now we will analyze the different lines, multi-risk first. Multi-risk is growing by 4.8%, a bit higher than the level of the sector, which is a bit below 4% and this is mainly due to the high retention of our customers. The combined ratio is at 95.4%, 4.8 points above the year before as a consequence of factors that have already been mentioned. The first one is an intensive, more intensive use of the home. And another factor is the comparative effect as compared to the year 2020, in which in the second half of March, there were virtually no claims due to the locked down. And additionally, there's been one of claim, and since it happened at the beginning of the year, the impact in the ratios is more notable then if it had happened as it normally does throughout other quarters. These -- additionally to these factors a high level of claims ratio is also conditioned by the weather event Filomena. It affects total profitability as compared to 2020. However, it does not have an impact on this increase of 4.8% that I mentioned because at a comparative level, we need to compare with the weather event Gloria and both had a net impact, which was quite similar. In the end, as a summary, the technical result drops in a relevant manner, this 7 -- EUR 27.9 million. As to motor business, a drop in turnover of 2.2%. Here, the drop is similar to that of the market, 1.7%. And here, we should stress that we continue with the net increase of the number of policyholders. The combine ratio dropped significantly 7.3 points going down to 83.9%, slightly below 84% with a reduction of 7.6 points in the technical cost, where we can see a reduction of the number of claims as compared to a pre-COVID quarter in 2019. This drop in the number of claims, the credit claims, has allowed us to increase the technical result up to EUR 25.8 million, with almost 80% growth. Regarding other lines you can see turnover increases of 4.1%, positively affected by the capturing of certain agreements with different collectives. However, we can see a bit of a decrease in lines that are more linked to economic activities, such as accidents, industrial risks, which are closely related to the turnover of the companies that we ensure. And here, as you can see in earned premiums, the growth is not that large. In the meantime, in terms of results, we can see that we continue, as you can see on the slide that we continue with very good levels of combined ratio. This year and the year before, and historically speaking, we stay below 85%. This means that we get technical results of EUR 11.8 million, slightly lower than the year before. In Life, Life continues to grow in periodic premiums in the case of health and funeral, around 1% and in risk premiums, around 5%. Remember that life risk products in health and funeral are the products in the Life business that give us more profitability, whereas periodic and single premiums have a -- sorry, single premiums have continuos drop. Historically, we've seen this in the year 2019 and 2020. And this is due to how unappealing, commercially speaking, they are in the current context of low interest rates at historical minimum. Improvement of the technical financial result of 13.2% up to a EUR 25.7 million with the combined ratio, 2 points below last year and a combined ratio in funeral stabilizing around 84%. As a summary for the traditional business, the increase of invoice premiums, the reduction of the combined ratio, basically due to the lower frequency of motor and the good behavior of Life has allows us to increase the technical result in this 3.9% to almost EUR 64 million, proving once again, the resiliency of the business, the traditional business in the phase of the COVID crisis. On the other hand, the financial result stays at levels similar to the year before despite the lengthy period with low interest rates, as I mentioned. And finally, and to finish with the traditional business, the recurrent result increases by 3.1%, up to EUR 57.1 million. We now move on to the credit insurance business. And here, the turnover has already been mentioned increase of 1.4% and premiums are at EUR 453.5 million with a flat growth in terms of earned premiums. But if we see it from the perspective of constant change ratio, the increase is higher. And here, we are seeing that we are breaking this dropping trend that we saw last year, the causes have already mentioned. The renewal of rates based on risks, a change in our risk appetite, and we will now mention how our exposure to risk has changed, and these 2 positive effects have allowed us to offset the lack of -- the general lack of economic activity that we are still seeing. On the other hand, the technical result of the direct business has gone through the roof almost EUR 192 million due to the low claims ratio. And all of that allows for a growth of results of 4% up to 40% -- yes, 40%, up to almost EUR 68 million. Yes, 40 and not 4. So the improvement in the rate of revenue is very significant in Europe 6.7% aided by the capturing of new customers globally, 27.6% in Western Europe. And in Southern Europe and Spain, we continue to see drops of around 3%. In terms of profitability, the combined gross ratio drops to 62.3%. As you can see on screen with a decrease of 25.1 points in terms of claims cost. And this is due to the drop in the claims, even lower than expected. As a consequence, obviously, due to the external factors that you already know, due to the fast application of expansion tax policies and the support of the economy by the government and central banks, but also internal factors, none other than the risk management strategies conducted by the company in terms of risk capturing and the pricing. I would like to mention that we continue to be cautious in the booking of provisions as we did in 2020, as Mr. Arregui also mentioned. As to our risk exposure, positive development as compared to the end of last year. 3% as a consequence of our support to existing customers and the capturing of new customers that are relevant to the business at any rate. Here, we should mention that our risk selection is still very strong. Despite this increase of 3% in performance of risk exposure, if we compare to the year 2021 with a reduction of risk of around -- we have a reduction of risk of around 5%. So our level is still below pre-COVID. As a summary and to finish my presentation, we will go through the drivers of the quarter. An increase of turnover in the North of Europe, as I already mentioned, a technical result has been promoted and pushed upwards by the lack of claims, even if we continue with the cautious provision policy. And with these better expectations for the business with the current claim levels, we transfer to reinsurance part of these very significant results that we've gotten in the direct business, specifically, EUR 103.4 million that we are transferring to reinsurance from the result, of which EUR 69.3 million are due to the government contracts that have been extended until June this year. On the other hand, the financial results drops due to the low interest rate scenario and the impact of foreign exchange, which is not as positive as last year. And finally, the recurring result increases by 40%, as we mentioned before, up to EUR 67.6 million. And the total business result goes up to almost EUR 70 million with a growth of 60% due to the nonexistence of impairments in our investment portfolio in this quarter. Okay. So we continue, after having analyzed the P&L account, a few words about other aspects, capital investments, solvency. As in every presentation, I always show you the drivers of the increase of permanent resources at market value. They are at EUR 4,138 million, you can see on the right-hand side, the magnitude has had an incredible evolution x14 in these past years in the century. And this has all been possible without capital increases, without asking shareholders for money, without diluting by asking third parties for money, just by retaining a significant part of the results by the application of a cautious dividend policy, a conservative dividend policy that our shareholders have allowed us to conduct -- to fund all of these expansion periods. This is what you can also see in the quarter on the left-hand side, consolidated result of EUR 122 million, dividend paid EUR 19 million. And in this quarter, we have the assistance due to the evolution of financial capital gains. The change in valuation adjustments by EUR 65.3 million, in total a growth of 3.7%. A few words on solvency, it is an essential magnitude for the entire insurance group. We have not yet published yesterday, the Board of Directors approved the report on 2020 on solvency. But I can already tell you that, as we said in previous presentations, the closing ratio will be 216%, an improvement of 3 points, approximately as compared to the closing of the year before when we published the report. We will give all sort of details about this evolution. At any rate, the factors contributing the most have, of course, been the retention of results with a payout in the year before of around 40% and 2 factors that have a very particular impact on credit insurance. As you well know, this is the most demanding in terms of capital requirements. And these are, on the one hand, reduction of exposure to be risk of around some 8% in the framework of measures taken throughout the year 2020 as a consequence of the crisis. And secondly, the government reinsurance agreements which involve the transfer of a significant part of risks. At any rate, we are positive that this is an excellent ratio better than that of most of our competitors. All companies are above 160% and our solvency stays at around 160% even in more adverse scenarios, own funds, as you know, are of high-quality, 95% are Tier 1. The solidity of our balance sheet, together with the trust in our business model is what makes rating agencies, A.M. Best for all entities of the group and Moody's for credit entities in the framework of this crisis have maintained an excellent rating of A and A2, as you can see on screen. And now on screen, you can see the evolution of our investments EUR 15,125.7 million, plus 2.5% compared to the funds managed at the end of 2020. I don't want to bore you with the details. You can see the distribution here, the breakdown. We have all sort of details in the annex in the annual report and the annual accounts of last year. And I would just like to say, as I always do, as a message, that we have a cautious and conservative investment policy, which is stable. Our investments are diversified in the terms that you can see on screen. And mainly, and this is essentially an insurance group. We have adequate assets, adequate in terms of our liabilities in terms of liquidity, profitability, et cetera, in all the terms related to the joint assets and liability management. And that will be all. Thank you very much. Nawal, we are now going to take a look at the questions posed.

Thank you very much. Francisco, thank you very much for your presentation. Now we will start with the Q&A session. [Operator Instructions] We will start with the traditional business questions, specifically multi-risk. And the question says, the combined ratio of multi risk has with notably, even if you've explained that there have been weather events, could you speak about this in more detail, should we expect this ratio to stay for the end of the year to stay the same?

Well, there's an easy answer, which is what has happened and a bit of a less easy answer, which is what will happen. Of course, the combined ratio for multi-risk has increased by 4.8 points basically and solely, I would say, because of the increase of the claims ratio. What is this due to what we said it during the presentation, basically due to an increase in the claims frequency due to a greater use of the home, the state of emergency started during the second half of March. So last year, there was basically -- there were basically no claims during that period and there were no impacts deriving from the greater use of the home. These claims are of a moderate amount normally. But due to frequency, they have an impact on claims ratio. And this year, as compared to the previous year, we had a big effect and impact of reinsurance of around EUR 2 million. The CFO mentioned it a minute ago. And on the other hand, even if the impact of Gloria last year was very significant, our greatest claim in multi-risk, EUR 38 million gross reinsurance. The net impact of reinsurance though was approximately EUR 13 million, EUR 12.8 million, and it is quite similar to the impact of Hortense and Filomena during this year. We are aware of the exposure to weather events. Normally, as you know, this takes place during the first quarter of the year. And therefore, we've always covered our -- we've hedged our exposure to risks via nonproportional reinsurance contracts, which allow us to reduce volatility in the P&L account and income statement. However, given our retention and the cost of renewing this, they have, of course, an impact in the combined ratio. With all of that and trying to answer the second question, I can only say that we understand we should expect a normalization, a moderate normalization throughout the year of the claims ratio, looking at the end of the year.

The second question is about the motor business. Regarding the combined ratio, it is still very good, but the impact in the turnover seems not to be relevant. What should we expect for motor in 2021?

Well the motor ratio is quite good, honestly, quite good. And I would say this is mainly based on the fact that there is still mobility restrictions. If we compare the combined ratio of motor of this first quarter with last the -- first quarter of last year without an impact from the lockdown, except for the last 15 days, the improvement is as we've seen, but if we compare to a normal quarter, for example, the first quarter of 2019, the improvement is even greater of 8.8 points. Additionally, as you know, the extraordinarily competitive characteristics of the Spanish insurance business makes us need to be more competitive in premiums, always focusing on defending our portfolio in order to maintain the satisfaction of our policyholders, which has led to a drop in turnover of 2.2%, as we've said, which is very a bit higher, but very similar to the minus 1.8% of the sector. However, what is a fact is that the profitability of our motor portfolio has been proven before and during the pandemic. At any rate, we have maintained the policy level in this line of business. So many defense measures, we understand have come with the success expected.

We continue with questions about credit insurance now. And credit ratio, the combined ratio has been exceptionally low. Could you tell us the reason for this drop? And toward the close of the year, is it possible to maintain these combined ratio levels? Or should we expect an increase?

Well, as we said in the presentation and as we already mentioned in the presentation at the end of 2020, the combined ratio then was at 94.1%, including a very conservative level of provisions, which make this comfortable vis-à-vis the underwritten risks. The truth is that during the first half year -- the first quarter of 2021, we've had a very low influx of claims, mainly due to the government policies and due to the austerity with which the previous crisis was met so much so that despite keeping a level of provisions, which is still very conservative, the liberalization or the freeing up of previous provisions were risks that have already expired in this quarter, mainly due to, as we said, the low influx of claims has marked as determined an improvement of the claims ratio of 54% in the first quarter of the year before as compared to 28.2% that we've seen in the first quarter of this year. This low influx of claims is not the usual, and we expect for it to increase moderately and continuously in the coming months. However, as we have said, this selective risk management and acceptance of risks that we conduct together with the very, very cautious booking of provisions allows us to say that it is very unlikely that we will go back to combined ratio levels of 2020 at any rate. We should also stress that we've been going through the crisis for a year. We've gone through an entire cycle, a renewal of the portfolio ever since the crisis started, and this renewal has been conducted with very strict criteria and more -- prices that are more adjusted to the risks. We will continue to have the coverage of governmental agreements until June 2021.

We will continue with Crédit insurance. In the presentation, you mentioned the negative impact of government agreements. Could you tell us about that? And what are the chances that the coverage will be renewed for the second half of the year if it's not renewed, and we start to see more default? Do you think the impact will condition your results in 2021?

Well, it is true, and we've told you very clearly that in this quarter, these government agreements have had a negative impact for the group due to the low claims that we've had, the result of the business is positive. So in the end, what we do is we transfer the corresponding parts of it to the reinsurer and to the government. And this is what has caused the effect that the cost in the quarter has been a bit above EUR 69 million the impact of this. However, having these government agreements has allowed us to work thoroughly and commonly on the management and selection of risks throughout 1 year, without having to conduct any drastic reductions in risk exposure. And therefore, we have been able to maintain a solid relationship with our customers, which, as you know, is a long-term relationship. As to the potential renewal of government agreements beyond the end of the first half of the year, I cannot say any final words. The truth is that under the current circumstances, we don't think there will be a renewal. But depending on the situation, it may happen in some jurisdictions.

Finally, about what would happen if there were an increase in the influx of claims in the second half of the year?

As we already mentioned, you should bear in mind that we've been very selective throughout the past year in choosing and accepting risks. We have renewed the portfolio we -- prices that are more adjusted to risk. And we will continue to have the private reinsurance agreement through which we transferred 37%. I would, however, want to add that the agreements with the government apply on underwritten risks. So the claims taking place in the second half year but coming from sales connected in the first half year, it will be covered by government reinsurance. And due to all of this, it is also difficult for me to assume that a potential and I say potential influx -- higher influx of claims in the second half year will have an impact -- a significant impact on results of 2021.

Now a question on investments. Regarding the portfolio of investments, each valuation has gone back to levels before COVID. Could you tell us what has been your policy that has made you weather the storm so successful? And what are the challenges that you will face in 2021?

I think, as I said and I say in almost all presentations, we have an investment policy, which is conservative, cautious and stable where we attach key importance to having assets that are matched to our liabilities in all of the terms of the joint management of assets and liabilities, ALM. And we've always paid attention to financial margins. And for many years, we adapt our offering of live products so that the profitability of these are much to market rates. And we also have enough frame of unit linked products with different risk profiles in which the customer may choose the underlying asset based on their needs and goals. And all of this has allowed us to maintain our investment criteria despite the crisis that we've gone through. Also, we have a very low exposure in alternative investments. And this fact allows us to, at some point, somewhat diversify the volumes managed and increase the diversification, therefore, of our portfolios and have a greater profitability. Despite that, we cannot deny that the situation of negative interest rates is a challenge, poses a challenge to the sector and to us. And as I said in the past, we've been managing from the point of view of our commitment to policyholders, joint management of assets and liabilities and low exposure to alternative risks, and this has made us still comfortable despite it all and to have alternatives. At any rate, what is the fact is that as the pandemic becomes controlled, the pressure on profitability of variable income lowers. And I can tell you that we will continue to watch financial margins and promoting the offering of unit linked products.

One final question, which links the dividend, capital management and share management, and it says the share price is at the maximum level over the past 2 years. Can we -- we can say that you've weathered the storm that you have -- the year after the crisis successfully. With the solvency levels that you've accumulating, have you not planned any actions so that this excess capital returns to shareholders in some way?

Let's see if I don't forget anything because that's a lot of questions in one. Well, the truth is it's a fact. You know it just like we do, the share has picked up notably throughout the year, and we're very happy with the performance. We believe that the market at the beginning of the crisis quickly discounted the potential impact of the crisis in credit insurance business. And I think we've proven the capacity of our group to manage risks in a swift and efficient manner. And finally, the market again, places their trust on us. As to the dividend policy, we've already discussed it at length in the presentation, as usual. I think that the commitment with shareholders in the long-term has been clear for many years, with the intention of remunerating the shareholder, our strong commitment there. And truth is that the dividend has always been increasing, and we already said in the presentation that following the recommendations of the supervisory bodies, we were forced to drop the complementary dividend the past year by 45%. But you've seen that charge to 2020 results, we have maintained the same level of interim dividends. And yesterday, at the AGM, as I just said, the AGM approved an increase of the complementary dividend to pay out on the 12th of 100%, an increase of 100% of the total dividend charge to 2020 results will increase by 30%. As to the question related to the solvency ratio, it is true. It has increased by 3 points, and it is at an excellent 216, but we are not yet at solvency level that's so high, so as to think of any special actions. As you all know, throughout the history, the group has taken on different acquisitions of companies, always with the trust that shareholders have placed on us. So the surplus capital has been devoted to acquisitions, which have quickly caused an increase of the value of the group and therefore, an increase of the value of the investment of our shareholders. We are always open and looking for opportunities in the market to make good use of the additional capital that we have accumulated. As you well know, the latest acquisition in the framework of insurance companies was conducted during the 2019 fiscal year, which was specifically Antares.

Thank you very much, Francisco. With these answers, we conclude the presentation of results of the first quarter of 2021. And as usual, the pending questions will be managed via the Investor Relations teams in the coming days. We invite you to the next presentation of results on the Thursday, 29th of July, presenting the results of the second quarter of 2021. And finally, I would like to remind you that you can always visit our website where you have all of the financial and sustainability information available that may be of interest to you. We thank you for your participation and interest, and see you soon. [Statements in English on this transcript were spoken by an interpreter present on the live call.]