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

Good morning. We shall now begin with this presentation of results of year-end 2024. This is Clara Gomez Bermudez. You know me from previous presentations, I am the Financial and Risk Management Officer. And on this occasion, I also wanted to welcome to this results presentation Isidro Lapeña, CFO of the group, replacing Carlos Gonzales, who on the 31st of December joined the voluntary dismissal plan. And I would like to thank Carlos Gonzales for his more than 30 years in the group and his contributions to the success of the group. As usual as well here with me in this presentation is Nawal Rim, Director of Investor Relations who, besides coordinating this presentation, as you know, will proceed to collect all of the questions that you will post throughout the session and we will answer them in a grouped manner -- or individual manner, depending on the topic, at the end of the presentation. And of course, before we start, I wanted to, of course, thank you for joining us in this session, this presentation, which is a remote one. And I would also like to thank you for the interest -- your interest in our group, our business and the evolution of the share price. A purely regulatory matter before we start, we would like to remind you that the information included in this presentation is presented and formulated under our management information. It is the accounting that we've always used, but you know that since this is a yearly presentation, an annual presentation, we will also offer you the details of the impact of international accounting on the numbers of the group, IFRS 17 and IFRS -- for provisions and IFRS 9 for financial investments as well as the main indicators and mainly the differences with the current accounting system. And starting now with the presentation of results and the main magnitudes of 2024, I would say it's been an excellent year. I think we can say that we finished the Strategic Cycle 2022-2024 with more than satisfactory results, where I think we should stress the good performance of our 2 main lines of business. On the one side, Occident. You know that all of our traditional business is there. We end the Strategic Cycle with 2024 results that go back to the usual path of growing profit after a few years being impacted by inflation costs. And on the other side, Atradius. You know that under Atradius, we group together our credit business. And for 1 more year, we are seeing excellent results. If we break it down in different lines of business or different chapters in terms of growth, we are close to the EUR 6 billion with 3.5% growth, which incorporate our 3 businesses, where I would mainly stress the growth of the Occident business, which is better than the industry, above the industry. We will see this when we compare with the industry. And I would stress 2 things. On the one side, the growth of our mass products in Occident and the good performance of the Life business. As you know, in 2023, there were significant savings premiums issues due to the good evolution of interest rates that we'll be unable to repeat during the 2024 year. As to results, if we talk about profitability, I said it before, more than satisfactory consolidated result with more than EUR 688 million, growing by 11.9% versus the previous year. And I would like to stress again, I already mentioned it, but I would like to stress the more-than-favorable result of Occident. It reaps the benefits of all of the other actions of our Strategic Cycle that ends now, 2022-2024. But the most important aspect of all initiatives has been the streamlining of the corporation efficiency and cost cutting, which has an impact on this combined ratio of 90.9% in Occident, a reduction of 1.7 percentage points as compared to the previous year, and also the good result of the Atradius business with the 76.3% combined ratio. And once again, we will see this later with the breakdown, but with more than satisfactory results after this Strategic Cycle -- at the end of this Strategic Cycle. And finally, in a summarized manner, the good performance of permanent resources at market value, more than EUR 6.5 billion. And later, we will see the breakdown of the history of this figure. You know that after going through the main lines of the year, we like to give you some context in 3 main areas: first, looking into world economy, also the performance of the different markets, and finally, as couldn't be otherwise, regarding -- or as compared to the Spanish insurance sector. So on this slide, you can see a few indicators of the evolution of the economy throughout 2024. The truth is that 2024 has been marked by the war conflicts in the Middle East and Ukraine. This always introduces geopolitical uncertainty. Economic growth has been moderate, in some areas very moderate. It's true that Spain has done better than other European countries with the 3.1% that you can see on screen and with an inflation level that has dropped, but slower than expected. And this financial situation has seen substantial changes throughout 2025, so far, where the economy has been more impacted by the new leadership position of the government, the United States, protectionist policies and the uncertainty that these create in global economy and specifically in European economy. And as we already mentioned, a brief summary of the evolution of financial markets. You know these perfectly well. But well, the truth is that on the left-hand side, you can see the performance of fixed rates. This is something that was foreseen in 2024 with a drop in rates, especially in the second half year due to the Central Bank policies, but less reduction than forecasted initially. It is also to that the interest rate curve has normalized from the point of view of performance of short-term and long-term rates, offering better long-term rates than short term, which should be the usual, should be the norm. But it's also important for insurance companies and for insurance companies that operate in the life business, where the evolution of long-term interest rates is of great importance. At the center of the screen, you can also see the evolution of stock markets. It's been an excellent year for markets, better in the U.S. at year-end due to the rise of BIG tax and also good behavior in European markets. You can see the evolution of the Ibex with 14.8% growth at year-end, promoted by the performance of the financial system. In 2025, so far, circumstances have changed relatively with more volatility and with the disparity of performance between Europe and the United States. United States, more affected by the [ 7 large ] values, mainly tech. And just to finish with the context, as usual, we give you an overview of the Spanish insurance sector. It does not go back to the growth path in turnover with a drop of 1.6%. As you can see on screen, the turnover of the insurance sector is very much impacted, as we've said in previous presentations, by the decrease of savings premiums, 17% drop. As you know, in 2023, due to the positive evolution of interest rates, there were significant issues of savings premiums. But I would like to stress the good performance of general insurance. You can see on screen 7.8% growth. Good performance in mass lines: Motor, 8.9%; Multi-risk, 7.4%. But it's true that's slightly below what we saw in the first 9 months of the year. And comparatively, we will see these later in greater detail, but a better growth of the group all around Occident as compared to the sector in several areas, in savings premiums, we will see this later in more detail and also a better behavior of the mass lines, both Motor and Multi-risk. In Motor, we grow at 9.4% versus the 8.9% of the sector, and Multi-risk at 8.1% versus 7.4% in the industry. And we absorbed the drop that we experienced that we already mentioned in the quarterly presentations of industrial risks that we have repositioned and that have an impact on the turnover of Multi-risk. And all of this together with historic retention levels in general insurance. And once with the context, as usual, we will give you a brief summary of the performance, both of turnover and profit -- income and profit to summarize P&S. In terms of growth, I already mentioned it a minute ago, as compared to the rest of the sector, so I will not stop at that. I will just stress main aspects. The turnover, which is the milestone of almost EUR 6 billion, with a 3.5% growth. And to stress here the good performance of Occident with 5.7%, as you can see on the first line, and the good performance of mass lines that I just mentioned as well and in recurring premiums, which are the ones that we can see there contribute more value of it as an insurance company, but they also contribute more value to our customers. And having been able to, again, have a good year in savings with issues very similar to those of 2023 with -- which had relevant issues due to the good performance of interest rates. And in Atradius, as you can see, almost EUR 2.5 billion income in Atradius, very similar to the previous year. I think what I would stress here is that we've gone from less to more throughout the year. We've had a first half year which was more impacted by -- in the comparison with 2023 more impacted by inflation, which has an impact on the sales of our policyholders. And we already said that this would correct throughout the year and this is what happened. We end 2024 with a very similar income to the previous year. As to 2025, we do foresee it will be a challenging year vis-à-vis Atradius' growth due to the evolution of economic activities, more complex in Europe, where you know we have a big presence. But we can also already say that we are happy with the renewals in the portfolio this year and the trust of our customers. Finally, we can also see on screen the contribution of Mémora, which is the umbrella under which we have the final business of the group, to a bit over EUR 262 million income, comparing very positively with the previous year. It is true that in the previous year we can only see 11 months of the year because we acquired Mémora in February 2023. Later, we will see you more in-detail comparison. And then our results, if we talk about the big lines, I would like to stress the positive performance -- more than positive performance with -- of the consolidated results, EUR 688.7 million, a growth of 11.9%. And if we look at the attributable result, discounting the impact of our minority partners, it's EUR 623.2 million, which means a growth of almost 13%. I will talk about the main aspects of each of the businesses. Isidro Lapeña, CFO of the group, will give you greater details of each of them later. But in the case of Occident, you can already see it, 2-digit -- double-digit growth in Occident; 7.3% in Atradius, which already compares with extraordinary results in the previous year; and a very good performance in terms of the Mémora result with EUR 18.1 million, as you can see on this slide. If we break it down a bit more under Occident, I would like to stress the positive evolution of the combined ratio that we just saw before for several reasons: very positive evolution of the income that we just saw in detail in the summarized P&L above; and on the other side, the significant effort made in cost contention and cost cutting. We have reduced -- dropped the efficiency ratio 1.3 points versus the previous year. And this, of course, has an impact on the good performance of the group. And it's been -- there has been less impact of weather claims. However, especially in the last quarter of the year, for us, it was a priority to care for our customers regarding systems and operations, to care for tragically affected by the heavy rainfall in Valencia. It's been one of our priorities. But in terms of quantitative impact in the income statement, most of the impact was claims affected [ by ] the coverage of the consortium. So this has allowed us to come to a good year-end figure in this aspect as well. For 2025, we foresee an improvement in Motor, the line of business with a more modest behavior throughout 2024. Why do we foresee an improvement in 2025? Thanks to the measures adopted over the years, mainly cost reductions, all of these in line with the good control of claims and a good expected evolution of the income because we will be reaping the benefits of the measures adopted in 2024 and the good evolution of 2025. In Atradius, I already mentioned it, a growth of 7.3% as compared to the previous year. We already insisted that for more than 3 years we've been having exceptional results and all of this despite the lower commercial activities, which mainly have an impact on the top line with a claims ratio that is slightly below prepandemic levels. And we always stress this -- all of these while maintaining a very conservative provision system because Atradius has a cyclic component and we consider it important to maintain cautious conservative provisions. It's true that there have been no key relevant claims. In 2025, in Atradius, we trust the recovery of commercial activities, especially in certain geographical areas. We know that the forecasts for Spain are better than those of the rest of Europe and we do not foresee a relevant impairment in claims ratio. I will not stop to talk about the EUR 18 million of Mémora, the result of Mémora, throughout the session. We'll offer more detail about that. And I will not focus on the EUR 14 million of the non-ordinary result that you can see on screen because this does not have a significant impact. It compares well against the previous year. But I would like to say that out of those EUR 14 million that you can see, most of it is due to technological projects that we consider are essential only in the Strategic Cycle [ that is ] ending, but also looking into the next strategic year that starts now in 2025. And just to finish talking about results, I would like to make a comment that is not included here, which is the good performance of consolidated financial results, EUR 224 million, which means a growth of 27% versus the previous year. So EUR 688 million, almost EUR 689 million income and growing at a rate of 12%, as you can see on the slide. And even if you know this perfectly well, I do like to stop and talk about this slide because in the end, it is what sustains the good results of the group. And one of the key elements of the strategy of the group throughout the year is the diversification of our business. As we already reminded you of in previous presentations, we consider this to be one of the key elements of the good performance of the group throughout the years, a balanced weight of Motor with this 12.6% that you can see here versus Multi-risk, 14.9%, and a significant Life business, 19%, as you can see. Diversification, not only regarding Occident products, but also when it comes to our international business. As you know, it is basically developed through Atradius and also diversification which includes the Mémora business, which makes up 4.4% of the group's business. In our results presentations, we always like to remind you of our commitment to sustainability. You have all of the information in the sustainability report that accompanies our management report. It's been verified by our accounts auditors. And we would like to again stress our commitment with sustainability, a commitment that we divide into the 3 sections. And you can see on screen, environmental, social and governance. Our commitment to the greater governance structure, social commitment that we channel through our activities in the foundation, the contributions of which we increase on an annual basis. And from the point of -- the environmental point of view with numerous initiatives, I will not stop to talk about those, but I would like to remind you that we have recently acquired building in Méndez Álvaro, which is where we locate all of our employees in Madrid with the highest energy efficiency standards. And all of these, you can find in the information that we published in the nonfinancial disclosure sustainability reports that our rating agencies acknowledge. And you can find there all of our information about emissions, carbon footprint and measures that we have implemented. A few comments now about share price performance, you know this perfectly well. It's been a good year regarding the share price. We are very happy with it. And at year-end, EUR 35.9 per share, as you can see on the slide. If we were to look at the average price of the last 12 months, it would be closer to EUR 37 per share. But it is also true that you know -- that we like to look at price performance, not only from the onetime point of view of the year but its behavior throughout the years. You can see this on the right-hand side with this compounded evolution from 2022 to 2024, this 11% above the reference indexes, both Ibex and EURO STOXX Insurance. Also better than reference indexes, better than Ibex this 18.5% growth with Ibex 14.78 -- sorry, GCO, 16.18; Ibex, 14.78. And as you also know, because it's been published through a relevant [ event ] communication, a comment about the impairment charge to results of 2024. The Board of Directors yesterday proposed the AGM an increase of 10% added to the 7.5% increase of the dividend of October and July vis-à-vis the previous year, which takes us to this increase in dividend charge in 2024 of 8.7%, as you can see on the slide. A dividend per share of EUR 1.22 you can see also on the screen. We already insisted that we've doubled this in the past few years, confirming the commitment of the group with our shareholders, a commitment that we've been able to maintain throughout the years even in the worst crisis years. And without further ado, I'll pass the floor over to Mr. Isidro Lapeña, CFO of the group, who will give you more details about the evolution of the year and the main indicators and a break down by business.

Thank you very much. Good morning, everyone. As usual, we will start with Occident. At Occident, thanks to our good customer retention, we managed to get very good turnover, EUR 3.2398 billion, which means an increase of 5.7% versus the previous year. If we now talk about recurring premiums increase, as Clara Gomez said before, 6.5% stressing Motor and Multi-risk with 9.4% and 8.1% growth, respectively. In result, the ordinary result is at EUR 292.3 million with an increase of 11.9%. And the technical result has increased by 20.9%, reaching EUR 297.2 million. If we look at it by business, in Non-Life, the combined ratio has improved by 1.7 points going up to 90.9% with a significant improvement in Multi-risk. And in Life, the technical financial result shows a favorable evolution with an increase of 1.1% as we will see later on. And now divided by lines of business, Multi-risk, EUR 894.2 million turnover, strong growth of 8.1%, very much in line with the increase experienced by the sector, which has been 8.6%. I would like to stress the growth of mass premiums, above 10%, a consequence of combining good customer retention and care with premium increases, which have been necessary to absorb the [ increase ] in the claim ratio due to the inflation. Combined ratio is at 88.8% as a result basically of the combination of 3 effects: the increase of written premiums reaching 7.2%; improvement of productivity, which translates into a drop of almost 0.5 point in the efficiency ratio; and improvement of the claims ratio with a lower impact of mass claims associated to weather events. Due to all of this, the result has been increasing notably by 73.2%, going to almost EUR 96 million. If we now move on to Motor, again, a significant increase in turnover, 9.4%, above 8.9% in the industry, EUR 755.5 million. Competitive environment, prices are going up, but this does not translate into increasing cancellations on our side. Combined ratio, 96.4%, slightly above last year, which was 96.3%, affected by written premiums, which align with -- slowly with the increase in turnover, also the increases in claims ratios due to inflation. We can see on screen that even if we have 3% less claims, technical cost goes up 2.4 points; and with an improvement of the efficiency ratio, a drop of 2.4 points versus last year. The result of the line has increased about 5% -- 5.2% versus last year with a technical result of EUR 26.1 million. As to Other, in written premiums, an increase of 6.6% going up to 8.5% if we talk about written premiums. But if we look at the screen, we can see the number of claims drop slightly. As a consequence of this, the line maintains an excellent combined ratio of 85.6%, very much in line with previous years, which translates into a technical result of EUR 58.6 million. And now on to Life. Life as a whole grows in periodic premiums, 2.4%, with an increase of turnover in all lines with the only exception of single premiums with a flatter development with a slight increase, as you can see on the slide. Regarding results, technical financial result improved by 1.1%, coming up to EUR 187.4 million, as a consequence of the better technical result, 6.7% above the previous year. I would like to say finally that the financial performance has been lower than in 2023 due to a greater contribution of financial margin to our policyholders. As a summary, for Occident, the increase in turnover and written premiums, the improvement of 1.3 points of the efficiency ratio, leading to a reduction of EUR 25 million, which are more than 8% of expenses. And improvement of claims ratio has allowed us to improve the combined ratio to 90.9% and profitability of the business reaching an ordinary result of EUR 292.3 million with an increase of 11.9%. Additionally, the contribution of EUR 3.6 million of non-ordinary results coming mainly from realized technological projects leads us to a total result of EUR 295.9 million with an increase of 24% as compared to the previous year. Now on to Atradius. In Atradius, we see that earned premiums go up to EUR 2.287 billion with an increase of 0.4% despite the downward pressure in renewal prices in 2024 and the lower commercial activities of our customers being impacted by a slowdown of the economy in certain geographical areas and the measures implemented by governments and central banks to contain inflation. In terms of results, the ordinary results amounts to EUR 392.3 million with 7.3% increase. And the technical result is at EUR 578.5 million with some drop as compared to the previous year as a consequence of the normalization process of claims ratios still at very contained levels. Actually, despite this logical increase in the number of claims, claims ratio is still below prepandemic levels. And if we now take a quick look at the geographical distribution of premiums, we can see an increase of earned premiums in Asia and rest of the world and especially in Western Europe. Whereas in the rest of geographical areas, we see a drop as a consequence of the economic context and the drop in the price of renewals. Regarding profitability, I would like to mention that we continue with our conservative provisioning criteria, already described in previous presentations, and the combined -- gross combined ratio continues to show a favorable evolution with a ratio of 76.3%, where even if the number of claims increases, the claims ratio, as we said before, stays below prepandemic, pre-COVID levels, specifically, 1.6% less claims ratio than in December 2019. As to risk exposure, an increase of 6% while we continue to maintain strict selection criteria and we continue with an adequate risk diversification by country and sector, which allows us to have an excellent quality of our portfolio. Then to finish as a summary, income increases slightly despite the economic -- general economic situation. There's a normalization of the business with a moderate income inflow of claims reinsurance improves the results, a consequence of 2-point increase in business retention. And the financial result also improves as a consequence of reinvestment at new interest rates of fixed income and liquidity and a direct investment in variable income instead of using mutual funds with an increase of 7.3%, a result of EUR 392.3 million. The total result is impacted by nonrecurring losses of EUR 14.6 million focusing on technology projects coming down to EUR 377.7 million with an increase of 3.3% versus the previous year. And that will be all from me. I'll pass the floor back to Clara Gomez so that she can tell us about the results of Mémora.

Thank you, Isidro. As Isidro Lapeña, CFO of the group, said, a few notes on Mémora. You know the fees where we develop our funeral business, different from the insurance businesses that Isidro Lapeña talked to us about, both traditional and credit. And we would like to offer the main magnitudes of Mémora. At the center, you can see the 2024 year comparatively with 2023. As we reminded you of, 2023 incorporates 11 months. So we've also incorporated, on the right-hand side, the results that we would have had in 2023 with 12 full months in order to favor comparison making. And under this comparison, I would like to stress the good evolution of income, almost EUR 263 million turnover, which compares well with 2023. If we compare 11 or 12 months, it's a consistent EBITDA with a margin over EBITDA slightly above the 24% that you can see on screen. And in the end, it takes us to the ordinary result of EUR 18 million, growing by 33% as compared to the previous year and which compares well both with 11 or 12 months of incorporation of the Mémora Group. And as key elements of 2024, I would like to stress the following regarding 2024, but also the Strategic Cycle that starts now. We want to continue focusing on the business -- on the growth of the business with 2 main lines: on the one side, taking care of our customers long term; and on the other side, inorganic growth in the geographical areas where due to our -- due to their position are interesting to us. We would also like to focus on efficiency and cost reduction, as we've already said in previous presentations. Now you are seeing a slide on the evolution of permanent resources at market value. You know these very well, too, because we show it on every results presentation and we can only say that they are very, very satisfactory. EUR 6.562 billion permanent resources at market value growing by 14.3%, as you can see, due to 2 main effects: the good consolidated results, which is, in the end, what marks the positive evolution of permanent resources at market value with the EUR 688 million; and also this year, the incorporation of some valuation adjustments mainly due to the performance of market values -- stock market evolution. And you know that the good evolution has been due to -- or the reason for the transactions that have improved the group. And image is worth a thousand words, you can see it here. Graphically, it's very easy to see the excellent evolution of permanent resources at market value throughout the past 25 years. And as I already mentioned before, we do want to offer you an explanation of the result of the group under the new accounting standards, IFRS 17 and 9. I will not talk about each of them in detail. These are the accounts with which we have formulated the year because in the end what they do is they confirm what we've already discussed, which is the robustness of the results of the group's business. You can see this in ordinary, EUR 728 million consolidated ordinary result under the new international accounting standards, which is an increase versus management information that we just presented. So in the end, these confirm the robustness of the results of the group and the caution in our current accounting criteria. This is not due to extraordinary results or financials, this is due to the robustness of our technical rigor that you know is in the DNA of the group. In the 2 main businesses with a different system of accounting under international accounting as compared to current accounting, which is Life that you can see on the right-hand side at the top, and credit results. In both businesses, the technical result does better under international accounting than under our current system of accounting. So in the end, this confirms the robustness of the results of the group in all accounting systems. It is offset with a worse evolution of financial results, EUR 18.1 million. But we -- as we insisted on, we have very good results of the group in the international accounting with EUR 728 million that you can see on screen. At the bottom, you get the main indicators, combined ratios, et cetera. I will not stop to talk about those. And all of this is also confirmed by our solvency, solvency ratio at 241.5% at year-end. These are estimated solvency ratios. We will publish all of the solvency information in the financial and solvency report that will be published in May, and it compares more than positively with the 232% of the previous year. And additionally, this is also confirmed by our rating agencies with the rating they grade us. AM Best gives us an A for all operating entities of the group. And Moody's gives us an A1 for operating entities of Atradius. And what's important is not just the rating, but the parameters that they stress. They stress our strong competitive position, our excellent combined ratio, our robust capitalization and our conservative investment portfolio. And finally, a brief summary of the group's investments, this EUR 16.8764 billion in managed funds with an increase of almost 10% as compared to 2023. And you will see something that will not surprise you, the breakdown of our investments. You can see fixed income, as usual, as couldn't be otherwise, our main asset with a growth of 9%. And it grows because we have invested more in fixed income. We have made use of the good situation of interest rates as compared to previous years and we have made larger investments in fixed income, which we believe will lead to positive financial results in future years. In equity, you see a growth of 14%, not so much because we've invested more, but because of the positive evolution of stock markets that we already talked about. We feel very comfortable with our treasury position, cautious, comfortable. We did EUR 2.1 billion in our real estate investments, plus 7.3%, not so much because we've increased it, but because of the acquisition of the Méndez Álvaro building, where we've grouped together all of our teams in Madrid at the moment from all of our businesses. And with this, we come to the end of the presentation. As in previous occasions, now we will answer the questions that we have received. We would like to thank you again for your interest. The volume of questions we've received, we've had to group them together in groupings that are similar to what we've done in previous presentations with the main lines where we operate. And of course, you know that whatever is not answered during this presentation, we will answer via the regular channels. Nawal Rim will give us -- will post the different questions to us. And we would like to stress again, our thanks, our words of appreciation for attending this presentation of results.

Thank you very much, Clara Gomez, Isidro Lapeña for your presentation. We shall begin with the Q&A. You know that we've grouped them together by topics. And as usual, we start with Occident, especially Motor. We have the following questions. The invoice -- premiums increased by 9.4% in such a competitive line. Don't you fear losing market share? Is this a trend going up from 97.1% from the previous quarter?

Yes, regarding the first question. As you've seen before, on the screen regarding the Spanish insurance market, Motor is growing by 8.9%. So as with the 9.4%, I think we are quite in line with the sector, not very much away from it despite the competitiveness that you mentioned that may be between -- may exist between different companies. Motor is facing a significant increase in the cost of claims, both in material damage, consequence of inflation and bodily damages due to adjustment of the scales. The sectorial ranges at 101.4 at losses. So if the situation does improve, both the sector and ourselves will need to continue adjusting rates, these or tariffs. These tariff adjustments are difficult for us. We are placing special care in the long-term relationship with our customers who are always at the center of our strategies. So we are historically low levels, which is leading to the highest levels of policyholders. As to the profitability of the line of business, I must say that in a situation in which we are adjusting the valuations of claims to inflation, looking at stagnant quarter generates volatility. So it might be better to look at the year-to-date. If we look at the annual figures, we maintain our gap with the sector. We would like to have a combined ratio closer to 95%. We believe that 96.4% is not a bad result, especially bearing in mind that earned premiums are growing only at 6.7%. So we will still expect a greater growth of these premiums in 2025. Because as you all know, the turnover increases have a time gap, a delay, so they are not seen as quickly as the earned premiums, which are in the end what we calculate the combined ratio with. And the technical result of our expenses increases by 5.2%. And due to the current context, we feel quite satisfied. So in Motor, and as was said by Clara before, we will continue to work to improve these results of 2025. And we would like to already say that we expect to see increases in the earned premiums, and on the other side, cost reductions deriving from the efficiency measures adopted.

For Multi-risk, we've also received several questions. They're summarized in that we continue with a low combined ratio and actually we end the year with an 88.8%. Should we expect a worsening of the combined ratio in 2025? If so, will it be gradual? Isidro?

Yes. Of course, we've ended the year in Multi-risk with an exceptional profitability despite the fact that at 9 months we had a ratio of around 83%. We could already foresee the year, and even if there might be weather events, that may lead to the combined ratio going up in the last quarter, closer to 90%. However, and as we've said in the presentation, this has not happened, which has taken us to a combined ratio of 88.8%. But there are also other aspects related to our management and efficiency, which have contributed to these good results that I would like to stress. First, the growth of earned premiums, 7.2%. These we have already mentioned in the previous quarter due to a good customer retention. And if you remember, the price adjustments made in 2023. Second, the risk selection, especially in industrial lines, where we have placed our focus to improve their profitability, not only in the present but in the future as well. And third, the cost improvement due to the efficiencies coming from combining insurance entities in Occident. These will continue in 2025. The earned premiums will continue to increase, leveling up with income. We will continue with a careful selection of risks. And efficiencies obtained with the merger of Occident will not be lost. For 2025, we have the question of what will the weather events be even with the Compensation Consortium and our [ XL ] insurance program. They can always have an impact on the income statement. And there's another factor that could impact us as well, which is that despite our careful risk selection, we may suffer from key events, key claims that will impact our claims ratio. But these 2 questions are part of our sector, these eventualities that our customers want to cover, and we trust our risk management to carry out a good 2025 year.

Okay. Well, now on to Atradius. There is concern about the premium levels, also normalization of the combined ratio. On the other side, they're asking us about the expectation of the financial result for 2025. They ask whether we're thinking of dropping the degree of transfer to reinsurance.

Many questions about credit. I'll start talking about the technical indicators of the business is our premiums combined ratio and reinsurance and I will leave the financial results for the end. Start with earned premiums. We've ended the year with an increase of plus [ 0.4% ] with a drop if we look at 9 months. So how will we do in 2025 since we are in a favorable economic environment, albeit uncertain with mixed behaviors by regions. And in credit insurance, we have a strong exposure to the eurozone. And based on the latest forecast of the IMF, there is an expected increase [ of around 1% ]. We expect our customers to go back to their levels of commercial activities slowly but surely, which will have an impact on our written premiums. Regarding our risk appetite, we continue to be cautious and we perform the strict selection following our regular criteria that you all know. Going back to the combined ratio. Combined ratio is still normalizing upwards. We've already mentioned this in the presentation with year-end at 63.2%, 2 points above [ 9M ], but still below prepandemic levels. So even with a cautious provisioning level, the inflow of claims is still below the levels of 2019. So in the end, we are seeing that these claims levels are normalizing, and this is what we expect for 2025. We expect the consolidation of this upwards normalization. Going now on to reinsurance. Part of the improvement in the ordinary result corresponds with the increase of retention levels because we've gone from a transfer level of 37% in 2023 to [ a percent ] in 2024 that we'll maintain in 2025. We need to be cautious because, as you know, credit insurance is a sector that in crisis times may be more volatile than other modalities of insurance. So we are cautious in this area. Additionally, I would like to remind you that better retention means higher capital consumption, so lower solvency ratio. And finally, regarding the question on the financial result, we've seen how this result in 2024 experienced a strong growth mainly due to, I would say, 3 factors. We're investing directly in equity instead of using mutual funds. So we receive the dividend and we promote results. We are reinvesting our maturities of fixed income at more attractive rates. And finally, though to a lesser degree, we had a positive impact of FX. And we expect, therefore, to maintain in 2025 a relatively stable income level, whereas the impact of FX has a more random character and generates more uncertainty.

Okay. And we will finish the section of questions on the business with one question about Mémora. The question is as follows: the EBITDA margin is expected to be around 25% and you closed at 24.2%. What is this due to? Can we expect improvements in 2025, Clara?

Thank you, Nawal. While it is true, I think that in the results presentation we've offered a lot of information about the Mémora business. This is the umbrella under which we group together our funeral business. But it is -- well, maybe we have not given so much detail about the evolution of the EBITDA margin. And I think there are other questions related to Mémora, but I think this is the main one. Here, there is an important aspect to be taken into account that we are not so used to seeing from the insurance point of view, which is the seasonality of the business itself. We've ascertained that in November and December 2024 the winter has been less harsh than in 2023 and this has had an impact on this margin over EBITDA, but it has a strictly seasonal component. Harsher winter in 2023 in November and December and then January, February 2025 with the same effect. We could reflect that we need to look at the Mémora business not so much from December to December, but from June to June to include all of the seasonal elements of the business. But since Mémora is included in mostly insurance group, we see the figures from January to December. And over time, we should be able to isolate the seasonal effect, and we will talk about them. It is also true that amongst our priorities is, and we have talked about it, the cost reduction, and we need to use all of the efficiencies that we can get to Mémora in being in a group like GCO, but it's also been impacted by inflation costs. This is obvious and this will correct over time. So in the end, I think that the question if I remember correctly, I will end it with whether we can expect the margin to be around 25%, and I will summarize it with a yes. I think isolated -- isolating the seasonal effect we can expect that margin over EBITDA is at 25%. Yes, we will see improvements for 2025 in the result of Mémora and I insist, thanks to the measures, that we have already adopted in 2024, but that we will frame our Strategic Cycle -- future cycle both in growth and cost reduction and efficiencies. And I think I've answered all of the questions.

Yes, Clara. The next question -- rather than a question, it's a request, they ask for more details on the financial results.

Thank you, Nawal. I've mentioned this, but it's true that we do not have specific slides with a detail on the financial results. It's true that it's been a very good year vis-à-vis financial result, EUR 224 million, growing at 27% with a disparity of performance of the different businesses. In the Occident business, which I insist is where we group together all of our traditional business. Financial performance grows at 10%. We have a financial performance of more than EUR 100 million, almost EUR 105 million. But it is also true that Occident has a very relevant part of Life business, life savings, which for us is essential. And part of our financial performance is shared with our customers. And it is precisely what we offer our customers, which grows more than the financial performance due to a [indiscernible], which this means the evolution of the financial result of the credit business is different from that of the Atradius business. In Atradius, we have an excellent financial results growing at 70%. The CFO, Isidro Lapeña, already mentioned it before, but we can trust that the evolution of interest rates, and the evolution of markets is positive. We will, again, have a good year of financial results. And in the annual report, when we break down all of the financial information, the consolidated information, it includes the ordinary financial result and the non-ordinary financial results. In the financial result -- non-ordinary financial results of the group at a consolidated level, we incorporate reinvestments and the sale of a real estate property in [indiscernible] Madrid, which has contributed capital gains in the financial figures and compares positively with the previous years. It is also true that under non-ordinary, we have included technological projects. And you know this because I've already said, but technological projects that have been strategic and which will continue to be fundamental to tackle all of our digitalization programs, which will be a priority throughout the next strategic cycle. I will now stop to talk about the financial results of Atradius. I think it has been explained by Isidro Lapeña perfectly well and in great detail.

One final question regarding capital management. With a solvency ratio above 240%, don't you think it will be reasonable to increase the dividend or make a specific exceptional or action?

We normally finish our presentations talking about capital management, you know this well. This is a question that is always asked. And of course, as couldn't be otherwise, we always answer and the answer is the one we've been offering you regularly. We have a dividend policy, which is foreseeable, stable over time, growing throughout the years. We've already mentioned it, we increased the dividend by 8.7% as compared to 2023 -- in 2024 as compared to 2023 and this, again, confirms our commitment to shareholders. You know this well. We've been able to double the dividend per share in the past 10 years, and we've maintained this policy even in more complicated periods, such as the crisis of 2008 and the COVID crisis. Additionally, this profitability in terms of dividends distribution needs to be completed -- or complemented with the long-term value management of the group, which impacts the share price. We have already talked about it, so I will not give more details now. As to the evolution of the resources of the group throughout the years, you know that this is what has allowed us to carry out relevant corporate transactions. And our long-term investors have placed their trust in us for the management of said assets. We continue to ask you for this trust because the long-term management of the capital of the group has proven its success.

Okay. So with this answer, we will close this presentation of results of the year 2024, the first one -- the year-end of 2024. Thank you, Clara and Isidro, for your presentations and your answers to the questions. Any questions and answer will be managed directly through the Investor Relations team over the coming days. I would like to take this opportunity to invite you to the next presentation of results, which will take place on the Monday, 5th of May 2025, where the results of the first quarter of 2025 will be presented. Finally, I would like to remind you that you can visit our website, www.gco.com, where you can find all of the financial and sustainability information that may be of interest to you. As always, thank you for your interest and participation. Thank you very much, and see you soon. [Statements in English on this transcript were spoken by an interpreter present on the live call.]