Hannover Rück SE (HNR1) Earnings Call Transcript & Summary

Thank you much, and good morning, everyone. Welcome to our conference call presenting our results for the first half of this year. As usual, I'll start with an overview before our CFO, Clemens Jungsthofel, goes over the financials in detail. I'll then comment on the outlook for the year thereafter. For the Q&A, I'm additionally joined by my Board colleagues, Klaus Miller on the Life and Health side; and Sven Althoff of P&C. I'm pleased to report that with a group net income of EUR 671 million, Hannover Re has successfully taken the next step towards achieving its full year guidance. Additionally, we continued to grow our business at attractive terms. At 12.2%, the return on equity returned to pre-COVID levels even though the results of our life and health business group were still impacted by the COVID-19 pandemic. Gross premium increased by 14.2% adjusted for currency effects. This is mainly driven by our property and casualty business group, where we recorded continued strong top line growth on the back of improving market conditions. The price improvements in P&C markets also supports the technical profitability of our portfolio, which is in line with expectations at a very healthy level. Overall, large losses stayed within the budget. Thanks to a benign impact from natural catastrophes in the first half. In addition, our net estimate for COVID-19-related losses remained unchanged compared to year-end 2020. Hence, the combined ratio of 96% is a good reflection of the underlying profitability in the first half year. And additionally, we have built up a further buffer of EUR 150 million for large losses in the second half of the year. As mentioned, the ongoing global pandemic is still having an impact on life and health reinsurance results. The main insurance market affected by COVID-related excess mortality continues to be the U.S., even though as expected, the numbers decreased over the course of the first half year. Outside of the U.S., we recorded losses, in particular, in South Africa where Hannover Re also has a strong market position. All in all, losses connected to COVID-19 amounted to EUR 263 million in the first 6 months. As already disclosed in Q1, the restructuring within our U.S. mortality portfolio led to a positive one-off effect of EUR 129 million, partly mitigating the COVID impact. Finally, we recorded pleasing premium growth of 7.3%, adjusted for currency effects. At 2.7%, the return on investment is ahead of our expectations, driven by favorable ordinary income. The capitalization according to Solvency II continue to be excellent, confirmed by our strong solvency ratio of 250% at the end of the second quarter, well above our threshold of 200%. The operating cash flow in the first half of 2021 was particularly strong at EUR 2.7 billion, mainly driven by attractive reinsurance growth as well as very favorable results on the investment side. The figure for the first quarter included a positive one-off from this restructuring within our U.S. mortality portfolio of EUR 640 million. Driven by this positive cash flow, total assets under own management increased to a record high of EUR 52.8 billion. This growth was additionally supported by ForEx effects and the issuance of EUR 750 million in hybrid capital in March this year. This new bond issuance is also visible on the next slide, bringing our total hybrid capital to EUR 3 billion. We still have flexibility with regards to our total hybrid capacity, and shareholders' equity is up by 0.5%, which is quite positive, bearing in mind that we paid the dividend in the second quarter. However, the group net income in the first half of 2021 was already sufficient to comfortably cover this dividend payment. Finally, the change in OCI was only slightly negative because negative valuation effects were mitigated by a positive currency translation. On that note, I'd like to hand over to Clemens, who will explain the figures in more detail.

Yes. Thank you, Jean-Jacques. Good morning, everyone. I hope you are all well. As Jean-Jacques mentioned, the performance of our P&C business group was very pleasing in the first half of 2021. Gross written premium grew by a remarkable 17%, adjusted for currency effects, which accounted for 5 percentage points. The growth is highly diversified, with particularly strong momentum in North America, Germany and Southeast Asia. And on top of this, we successfully expanded our structured reinsurance book, where we continued to see a very healthy demand. As already reported in the first quarter, the recognition of premium from the underwriting year 2020 supported the growth but as mentioned also in the first quarter, this effect will dilute over the course of the year, bringing the premium growth closer to the growth numbers we reported for our renewals. Major losses came in at EUR 326 million, clearly below our half year budget of EUR 476 million. And as you know, in line with our usual practice, we have kept the unused part of the budget within our IBNR as a buffer for the remainder of the year. Additionally, we still feel comfortable with the overall net loss estimate of EUR 950 million for COVID-19 and hence did not see a need to change anything on this front. The runoff of our reserves was at normal levels in the first half of 2021 development. The second quarter was more favorable than in the first one. As we have not changed our conservative reserving approach, I would expect the confidence level of our reserves to be stable compared to year-end 2020. Altogether, the 96% combined ratio is fully in line with our expectation. Net investment income increased based on the strong ordinary income and lower impairments. Other income and expenses amounted to minus EUR 109 million, mainly driven by negative currency effects, as we've seen in the first quarter, of EUR 77 million. Altogether, the EBIT increased strongly to EUR 778 million, thanks to the improved underwriting result, which was heavily impacted by COVID losses in the previous year. Finally, the tax ratio was slightly below the normal level due to a favorable earnings contribution from lower tax subsidiaries. As mentioned, the total net large losses accounted for EUR 326 million in the first quarter, EUR 150 million below our budget. Together with the regular budget for the second half, this means we have a large loss budget of EUR 774 million available to absorb losses in the second half of this year. This is a comfortable starting point, I would say, but as we all know, that we have already seen significant losses in the third quarter, with the biggest impact expected to come from the flooding events in Germany and neighboring countries, as well as impacts from the riots in South Africa. There's still uncertainty around the flood losses but our initial estimate would be in the range of EUR 200 million to EUR 250 million for our net position. For the riots in South Africa, we expect net high double-digit million loss. Adding up those losses, this means that we have started to utilize our actual Q3 budget, but more importantly, that we still have significant buffer available for the remainder of the third quarter. On the next slide, you can see that the largest individual event was the Texas winter freeze with a total net loss of EUR 136 million. This number reflects an increase compared to the end of the first quarter, which is mainly the result of late claims notification. Still, the overall impact from natural catastrophes was below expectations. On the man-made side, we have seen an above-average frequency of losses. Altogether, we have already used up around 2/3 of the full year budget set aside for man-made losses. The next slide, as usual, shows the technical profitability of our P&C portfolio by reporting line. Picture is a mixed one, as usual, for our highly diversified portfolio yet we also do see material deviations. We do not see material deviations from the target combined ratios. Large losses like the Texas freeze and man-made losses had an impact on the combined ratios in some of the segments, as you can see, but the overall 96% combined ratio is fully in line with our target. On the next slide, let's move to life and health. The pleasing business growth is reflected both in premium and in value of new business. We were particularly successful in expanding our financial solutions business in the APAC region. And in longevity the growth is starting to also come from outside the U.K. As Jean-Jacques mentioned, the technical result was still affected by losses in connection with COVID-19. The main impact is visible in our U.S. portfolio, where we have recorded losses of EUR 167 million. As expected, the impact in second quarter was lower than in the first, given the progress in vaccinations. Apart from the U.S., the bulk of the losses are from South Africa. And as explained at our Q1 conference call, the restructuring of parts of the ING portfolio in our U.S. mortality book led to a positive one-off effect affecting different line items in the P&L. In total, the positive impact was EUR 129 million, partly mitigating the COVID-19 losses. Furthermore, the underlying mortality experience in the second quarter was more favorable than in previous years. The ordinary investment income was, I would say, in line with expectations. The fair value of financial instruments that decreased materially and the negative impact was driven by the valuation of the derivative embedded in a life insurance contract in the first quarter as we've reported in the first quarter already. While in the second quarter, the valuation increased slightly. Other income and expenses are mainly driven by a further increase in the contribution from our financial solutions business, a large portion of which is recognized according to the deposit accounting method. Currency effects were slightly positive in the first half year, and altogether, the EBIT of EUR 179 million is satisfactory and adjusted for the different positive and negative extraordinary effect, actually slightly better than expected. On the next slide, as usual, we also have a look at the non-IFRS metric for business growth in life and health, the value of new business according to Solvency II. On this slide, you can see that we were quite active in all reporting categories and also the pipeline for new business remains healthy. The business opportunities we have seen and are seeing going forward are highly diversified, but the opportunities are particularly good in developed markets and by reporting categories in the area of financial solutions. Looking at the indicator for new business value, at the bottom, we have achieved roughly half of the full year target. But as you know, transactions in life and health are often rather bulky, and the value of new business is also closely linked to the duration of the business written. In any case, I think it's fair to say we are well on track in terms of new business protection in life and health. The next slide, the investments, the development of our investments in the first quarter of 2021 was very satisfactory in the first half. The ordinary investment income is particularly strong. This is mainly driven by increased contribution from our alternative investments. I wouldn't say that these contributions are extraordinary, but the distributions of our private equity funds can naturally be volatile from quarter to quarter. This also means that one should not simply extrapolate those returns for the remainder of the year. Further drivers for the strong ordinary results are the increased asset volume and the slight strategic shift in our asset allocation, which is certainly helping to stabilize the book yield in our fixed income portfolio. Realized gains are mainly the result of normal portfolio management, and around EUR 50 million are linked to the partial disposal of listed equities in the first quarter. Impairments and depreciations decreased compared to the previous quarter, where we had recorded some impairment in the volatile market environment. So this year's number is more or less at expected low levels, I would say, to a large extent, comprising regular depreciation on our real estate investments. As explained in my comments on life and health, the derivative valuation was negative. The overall return on investments was 2.7%, meaning that we are on a very good path to achieving our full year target of roughly 2.4%. Unrealized gains decreased by around EUR 500 million, mainly due to the increase in interest rates and particularly in the first quarter. In second quarter, we've seen some reversing trends, bringing the total to a very high level of EUR 3 billion. On the next slide, a quick glance on the asset allocation. I think it's -- the asset allocation has developed pretty much in line with our strategy. The most notable change, as you can see, is that we've slightly increased the share of corporates to 32%. Here, we invested according to, I would say, a broad-based approach with a focus on developed markets. The contribution to ordinary investment income is diversified, as usual. The highlight is probably the recovery, as mentioned in the contribution from private equity to the very strong levels we had seen before the market volatility caused by the pandemic in 2020. On the next slide, for the first time, we have also included the final results of the 2020 annual reserve review by Willis Towers Watson, which we usually, as you know, publish for our Investors Day. This year, the report was available ahead of the Q2 publication, and hence, we thought it would not make sense to withhold that information until October. So looking at the numbers, the overall redundancy level and the increase by EUR 80 million in the year 2020 should not be surprising because it's fully in line with our comments from March. There still, it confirms again that the results we achieved in a challenging year 2020 was not at the cost of our reserving quality and that the buffer of more than EUR 1.5 billion remains to be very comfortable. To conclude my remarks, the overall results for the first half of 2021 does include a few larger extraordinary effects, but both the reported net income and the underlying business development very much support our guidance for the full year. And I hereby, hand back to you, Jean-Jacques, for the target matrix and for the outlook.

Thank you, Clemens. A look at our target matrix confirms the successful business development in the first 6 months of this year. Growth is significantly ahead of the strategic targets and our main profitability target for the group, the return on equity is well above our minimum target. The EBITDA growth targets in P&C and life and health are somewhat distorted by COVID claims. The targets are more oriented towards normalized growth over the course of the strategic cycle. The midyear treaty renewals were again successful for Hannover Re. We were able to further grow our business at improved pricing. One could argue that the price increase of 3.2% in total and 6.4% in nonproportional business is a slowdown compared to the January and April renewals. However, I'd like to point out that the rate increases in the midyear renewals in 2020 were the strongest in terms of rate increases for Hannover Re, and therefore, the 3.2% rate increase achieved this year comes on top of a higher basis than in January and April. In North America, one important driver is the continued positive trend in primary insurance markets both in terms of pricing and volume growth. Both factors have a direct positive impact on our proportional portfolio because we wrote the business at overall stable commission levels. In Australia and Latin America, rate increases were most visible in loss-affected areas. The development in credit and surety was slightly more stable. But here, too, the quality and volume of our book went up. Altogether, the growth rate of 14.7% is the highest in this year's P&C renewals, and I'm very pleased with the overall outcome of these midyear renewals. This brings us directly to the next slide. Looking back at all important renewal dates in 2021, the expectation for the full financial year looks quite favorable. The volume in most areas is going up at attractive profitability levels for the entire portfolio. Clemens already flagged the pickup in loss activity in the third quarter, which together with the outcome of the hurricane season and other loss activity, will determine the profitability levels and also the momentum for further price increases in 2022. In general, I'd expect the underlying pressure for rate increases in reinsurance to carry on to the next year, mainly because interest rates are expected to stay on a low level and also climate change-related loss trends, which again became visible with the recent flood and drought events will not only further support the need for pricing discipline but should also act as a driver on the demand side. Finally, the currency -- the currently higher inflation levels will also have to be reflected in the upcoming pricing negotiations. In life and health reinsurance, growth is expected to be well supported by our strategic initiatives and most pronounced in financial solutions and longevity. In both cases, the profitability expectations are clearly above the cost of capital. In mortality, there remains uncertainty around the further development of the pandemic. Excess mortality will be most visible in countries where progress with vaccination programs is slow. However, the trend in deaths in countries where vaccination programs have slowed at a higher level is also dependent on the management of the pandemic in the respective countries. In particular, in the important U.S. market, we have not seen a reversal of the decreasing numbers of COVID-related deaths. The premium in mortality is expected to be stable and the same applies for the overall development in morbidity. As mentioned earlier by Clemens, the business development in the first half of 2021 is in line with our guidance for the full year. The improved technical result in P&C is fully in line with expectations, and our COVID-19 reserving in P&C is confirmed to be adequate at EUR 950 million net. Additionally, the losses already impacting the third quarter do not have an immediate impact on the guidance because we have a large loss budget of EUR 774 million available for losses occurring in the second half. COVID losses in life and health were slightly higher than expected. But on the other hand, the performance of our investment portfolio is ahead of expectations for the full year. So even though some factors within our guidance deviate from our initial planning. We continue to feel comfortable with the guidance for group net income and have kept it unchanged. Also unchanged is our positive view on the dividend policy and the potential to pay a special dividend, if profit targets are reached and our capitalization remains strong. This concludes my remarks, and we would be happy to answer your questions. Thank you very much.

[Operator Instructions] And our first question comes from Vikram Gandhi, Societe Generale.

I've got 3 questions all related to P&C. Firstly appreciate the COVID loss estimate is unchanged at EUR 950 million. But if you can shed some light on the moving parts within that EUR 950 million, whether some of your estimates are going down, some are going up, let's say, credit and surety coming in a bit benign, BI going up. Any color there would be appreciated. Secondly, can you help us with the overall level of IBNR, so within that EUR 950 million? And thirdly, if you can help us understand how the runoff result has developed over the second quarter on P&C, that would be great.

Thank you. Sven will address your questions.

Yes. Happy to give you a little more insight into our COVID numbers. So you already heard from Jean-Jacques that the net number stayed at EUR 950 million as the -- at the year-end closing 2020. We had very little movement on the gross side of the loss. We saw some additional claims coming in from the contingency event cancellation business, which was roughly EUR 30 million higher compared to the previous quarter. All other areas, they developed very stable so this is the only remarkable increase on the gross loss. The reason why the net position stayed unchanged is that due to senior advisers, more of the property claims moved from bulk IBNR into treaty-specific reserving so that we could book those losses against our retrocession of the structures, keeping the net position overall unchanged. On the credit and surety side, you're right. What we have seen so far is a relatively low level of reserves coming in, in relation to the EUR 235 million we have booked on that side, but we have not decided to reduce that number in the second quarter. We will obviously closely monitor that situation. But I would say that in that EUR 235 million, we are starting to see some prudency by now. When it comes to the distribution of paid versus IBNR losses on COVID, we saw an increase of the paid number going from 15% from the first quarter to 21% in the second quarter, which, of course, is fully in line with expectations. The overall level of IBNR, be that bulk or be that treaty-specific IBNR, is still at the level of 54%. So we currently feel rather comfortably reserved with our EUR 950 million on the P&C side. When it comes to the runoff result in general, the first half of the year and the second quarter, in particular, does not show any development which were outside of expectations. So the runoff -- the ordinary runoff result for the second quarter stand-alone was a positive EUR 190 million, as I said, fully in line with our expectations.

And our next question comes from Andrew Ritchie, Autonomous.

First question. Apologies if I ask this every renewal, but I wonder, Sven, if you could just recap again how we should think about the reflection of pricing changes on proportional business. I guess, I think effectively, you're not obviously reflecting the underlying original change in pricing, you're just reflecting any changes in seeding terms. But maybe you could just give us a bit of color again around that to the extent to which the headline price doesn't necessarily reflect the underlying economics of the business. Second question. Related to pricing, I guess I'm just interested in opinion on European cat pricing and then the outlook. I mean for years, it's been regarded as a diversifier. And therefore, it gets heavily subsidized and the pricing doesn't necessarily react too much to loss experience. Do you think that's going to change with the effect of these losses and/or higher profile or higher awareness of risk? And the final question was on the reserve surplus for the year-end '20, how is COVID reflected in that? I'm assuming the COVID claims are not part of that reserve surplus. There's no assumed surplus on the COVID claim within the reserves. But I'm more interested in the good news that COVID helped, particularly in terms of benign frequency because I think everyone experienced an increase -- a technical increase in reserve surplus in 2020 because ex COVID claims, notifications were benign. So how have you -- how has that been sort of reflected in the analysis?

Yes, let me start with your question on the pricing side, Andrew. The pricing effect on the property side is, it's of course, mainly driven by the expansion commission 150. So reduction in seeding commission, for example. But we are also reflecting some of the price increases we are seeing from our seeding companies, so in this primary market when we are looking at price-adjusted improvement. We always take a haircut on the -- we are seeing on the interim side for the simple reason that we are not in full control of what are the underlying factors when our seeding companies are reporting about their rate increases, we not always have full transparency to what exact those reported numbers are risk adjusted. So therefore, we are taking a haircut. But the combination of the 2 would be roughly giving numerous information on the change in pricing on the [indiscernible] When it comes to your question on European cat pricing, we, as Jean-Jacques already said, we still see positive momentum in both the insurance and reinsurance markets. So our general assumption would be there will be a slight upward trend in European cat pricing in general revenue. But of course, we expect higher increases on the loss-impacted business. Could we expect at this stage that this is going to be much more significant increases than we saw for 2020? I would say we don't have that expectation right now. And lastly, yes, of course, you're right. General benign environment in 2020 in many classes of business due to COVID, like for example, in motor business, but I would say, given that I don't have a precise number for you, how much that played into the increase in redundancy that we have reported that, that reduction in frequency is mostly involving very young underwriting years, where normally we are not really reflecting any redundancies in our reported numbers, or if we do, we would carry very limited expense. So this should not happen that the main driver of us showing a higher redundancy in the Willis Towers Watson study.

Our next question comes from Kamran Hossain, RBC.

Just wanted to ask about the life and health business. You've pulled out, I guess, for the first half that South Africa was a major part of the claims that you saw in the life business. Could you maybe talk about how this is weighted Q1 versus Q2? Because you didn't specifically call out just South Africa in Q1 but you did at the first half. Just eyeballing a chance of kind of COVID deaths in the first half of the year. It was pretty bad at the beginning of Q1 and it didn't really tick up until right at the end of Q2. So just interested in whether there's any late reporting factors or something else going on there. And I guess, given the ex U.S. component of the life claims in Q2 is about EUR 50 million, I think, just kind of back on envelope, is that a reasonable number for us to pencil in for the third quarter?

I'm happy to take that. First of all, most of our claims have still been from the U.S., so 60% of the claims we have seen this year is from the U.S. About 20% was from South Africa. And this picked up, especially with the Delta variant, in the second quarter. Main issue is that the vaccination rates in South Africa are still very low although they are now picking up. And this is what I would expect around the world in most of the countries where we currently have been, let's say, a little bit surprised about the COVID claims. Latin America is one other example. Vaccination rates will go up significantly in the next couple of months in these countries. So I'm not really concerned for the full year. I'm still concerned for the next 1 or 2 months. But in total, this is a small part of our bottom line result. Sorry, what was your question about the EUR 50 million? I didn't quite get that.

It really is eyeballing the ex U.S. COVID claims in Q2. They looked like they were around EUR 50 million. Given that South Africa is now going at a higher pace now in terms of death than it was or pretty much in line with what you saw at the beginning of Q1, just want to get an idea whether EUR 50 million for the quarter is a reasonable number for us to pencil in.

There is certainly a little bit of late reporting here. We have, even in developed countries, the late reporting of 4 to 6 weeks for the cause of death, and you can certainly expect this in South Africa as well. What is especially -- very special in South Africa, a lot of our business in South Africa is cash financing business. And this has a certain risk which comes with lapses and with mortality, but there is an implicit buffer for these cash financing deals. The client usually wants to have the option to recapture the business after a certain while and especially when he believes he has paid back the initial financing amount, and this has a buffer implicitly built in. And as long as we ultimately get back our money, higher mortality claims even increase profitability because the treaty just runs 3, 4, 5 years longer. As long as we still get back our money, and so we have absolutely no negative from this. But it might take a little bit longer. So this can be seen as just an additional financing because in certain years like this year, there was a loss and there was no repayment or recuperation of the initial amount. But if the treaty just runs 3, 4 years longer, we might not even have a claim there.

Our next question comes from Vinit Malhotra, Mediobanca.

So maybe 3 questions and a quick follow-up. The first one, so firstly on P&C, piece. The profitability outlook on Slide 23 today has America is a bit lower and Asia Pac a bit improved. And also, Asia Pac, you mentioned somewhere, significant premium growth under APAC growth initiatives. Could you just help us understand what's the magnitude here, I mean, and what's the rationale for the Americas lowering as well? That could be important. Then just second question on credit and surety. There were EUR 20 million large loss mentioned. Also the combined ratio 1H is much worse than 1Q, 94% in 1H, 83% in 1Q. Is it all coming from this large loss or is there also something else? Because I think I also heard you Sven say that credit and surety is still benign for COVID. Then third question is, as see in your report, a comment about EIOPA's harmonization policy for a third country reinsurance as part of the conversions plan. And you highlighted it as a risk. Good to know whether you -- I mean, how big a problem you think this could be? And just very, very quick one. Fourth one is there's a mention of another layer of extreme mortality cover placed. Simply comment on whether any life mortality has seen in recovery from some of these points?

Thank you. So Sven will address the P&C question; the mortality with Klaus. On EIOPA, we don't have an immediate answer to your question. I think we might need to come back to you thereafter on exactly where the information comes from. So Sven first.

Yes, the reason why we changed the profitability outlook from plus/minus for APAC to plus and in the Americas from plus to plus/minus is just a reflection on the combined ratios we are reporting after the first half of the year. You can see on Slide 10 that the Americas are currently over and above their target combined ratio. The main driver here, of course, is winter storm Uri, whilst at the same time, the APAC region, is significantly below its target combined ratio in the first half of the year. There are no structural problems in those portfolios from a profitability point of view, but we just felt it appropriate to switch our -- to guidances around particularly for the U.S. because we still have the full hurricane season ahead of us. So it's always a little difficult to predict how much of a positive catch-up we will have for the remainder of the year to eventually bring Americas into line with the target combined ratio. On credit and surety, here, you're right. As I said, we actually reported losses from COVID so far have been below or significantly below our expectations. We have nonetheless decided, going into the underwriting year 2021, to have a relatively high ultimate loss ratio picks compared to the historic average for the simple reason that many economies are only just starting up after a long lockdown periods from COVID. We still have positive government measures in place in many countries, which are bound to go into runoff at some stage, which, of course, is leaving the question, will we see a heightened level of insolvencies later in the year? So out of precaution, we have therefore decided to start the year conservatively from an ultimate loss ratio point of view. And of course, you're right, one of the ingredients here is the credit loss that we are reporting due to payment delays for a project in Africa. I hope that answers your question on the P&C side.

Yes.

Then I will continue with the retro cover on the life and health side. I guess you're referring to our increase of the pandemic cover we have recently placed again. So far, we had, or for this year and last year, we had EUR 255 million cover, which is about to attach or has already attached. And we have placed another EUR 80 million starting with first of January 2021. That means we are covered this year. Same terms and conditions as previously, but the reference here is always the last year. So we need a significantly worse experience for this EUR 80 million compared to last year. And last year obviously was higher than the year before. So it's still attached at 110% but the reference here is last year. So it's a little bit more out of the money. But the EUR 255 million we have in place already are covering us for this year.

Right. And we have recorded some benefits already in the, [ quick money ].

No, no. We have not taken that into account. The reason for that is we have an expectation that currently, the index is at about 112%. But if the mortality is significantly lower in the rest of the year. And we're not talking about population mortality in general. We talk about the weighted average of the population mortality in the U.S., U.K. and Australia and weighting is according to our portfolio. If this is significantly better and, for instance, in Australia, that could be the case because they are all keeping their distance, they don't let anybody into the country and they keep mortality very low, this also keeps infections very low and maybe mortality in Australia could even be better than the attachment we currently see might disappear by year-end. That's possible or it grows if there is another variant of the virus. So this is the reason why carefully accounted for -- we didn't take that into account so far.

And we'll come back to you. We had a generic statement on EIOPA more to comment on the development of Solvency II rules and the different discussions with the commission, which is going to look at it. There was more of a general statement, but we'll follow up with you on the specific topics which are under discussion.

This is already useful, [ it's taken ] from generic comment, that's also helpful to know.