Hannover Rück SE (HNR1) Earnings Call Transcript & Summary

Good morning, everyone, and welcome from sunny Hannover to our earnings call on our results for the first half year of 2026. Today's speakers are, as always, Clemens Jungsthofel, our CEO; and Christian Hermelingmeier, our CFO. And for the Q&A, we are joined by Claude Sabre and Sven Aerso. With that, I hand over to you, Clemens.

Thank you, Carl, and good morning, everyone, from Hannover. So let's start with Slide 4. So Hannover's business performance has been very satisfactory in the first half of 2026. We have seen, I'd say, a continuation of the positive developments from recent quarters, particularly the underlying profitability in the business was very pleasing in both business groups. Our balance sheet and the resilience have been further strengthened. The market environment in P&C reinsurance was characterized by benign losses from natural catastrophes. Nevertheless, I think it's fair to say this is simply good luck, if you like, for the insurance industry, the earthquakes in Venezuela, recently in Japan as well as extreme weather with heavy rain, heat waves, wildfires, they all serve as a reminder that this does not reflect any change in the risk landscape. On the contrary, risks are increasing driven by rising insured values, by climate change and by geopolitical uncertainty. And this clearly highlights the need for protection and reinsurance protection can only be offered at a price that adequately reflects the risks. But despite the softening of reinsurance rates, this still holds true on a broad basis for the current underwriting year. Hence, we have been able to broaden our footprint in P&C reinsurance, supported by higher shares on programs with existing clients as well as new business. I'm therefore pleased to report year-to-date premium growth of plus 7.2% in the compound renewals in 2026. Looking ahead, I do remain confident that we will see continued growth while strictly adhering to our margin-oriented underwriting approach. Our competitive position is well supported by our strong client relationships and a lower cost ratio compared to our peers. So let me come back to our overall performance in the first half of 2026. With the group net income of EUR 1.4 billion, we are well on track to deliver on our group net income target for the full year. In P&C reinsurance, the combined ratio of 83.2% is well within our target range, below 87%. In line with our usual approach, as you know, we have booked the full large loss budget for the period. So despite actual large losses coming in clearly lower. On top of that, the strong underlying profitability gave us room to further increase our reserve resiliency. The top line growth in P&C has been impacted by currency effects and the lower volume in structured reinsurance. And as explained already in our Q1 earnings call, this is really mainly driven by the anticipated reduction in recession rate for some individual large reinsurance programs. While currency-adjusted revenue in our traditional business was broadly stable year-on-year, the underlying premium grew by around 4%. Looking ahead, the additional premium growth achieved in the 2026 renewals will increasingly feed through into the reported revenue during the second half. So our internal projections compared to the revenue development in 2025 do give us confidence that the lower end of our target range for growth in traditional business in '26 remains within reach. The new business CSM of EUR 1.7 billion mainly reflects our successful renewals in 2026 and fully supports our planning for the year. The very small new business loss component confirms the continued high quality and attractive profitability of the new business we've been writing. The business performance in Life and Health reinsurance is in line with the positive trends seen in recent quarters. We were successful in further growing our portfolio and the new CSM generation of EUR 385 million increased compared to the previous year. The reinsurance service result in Life & Health of EUR 478 million is moderately ahead of the 50% of our full year target, which also reflects the healthy underlying profitability of the business. So the investment performance also was, I'd say, really satisfactory. The ROI, the return on investment of 3.7%, comfortably above our 3.5% target, and it was not driven by any material extraordinary items. Finally, capitalization remained excellent with a solvency ratio of 254%. Operating capital generation was strong at around EUR 1.8 billion in the first half of 2026. This was sufficient to cover both the increasing capital requirements from the successful expansion of our business and the quarterly accrual of the dividend. The moderate decrease in the solvency rate compared to year-end 2025 can be explained by movements in foreign exchange rates. On the next slide, the shareholders' equity rose by 2.6%. In addition to the positive contribution from our half year results, currency effects were also a positive. The CSM grew by 11.4%, mainly reflecting our successful new business generation across both business groups. The risk adjustment increased by 5.8%, driven by new business and assumption changes in Life & Health. Altogether, developments on this slide really show continued positive value creation for our shareholders and an improved foundation for future earnings growth. And on that note, I'll hand over to you, Christian.

Yes. Thank you, Clemens, and good morning or good afternoon, everyone. Our P&C result is based on the strong quality of our diversified portfolio. And as we fully booked the half year large loss buffer, this result does not reflect the benign cat environment. On the loss reserves booked so far this year, I would also add that, in particular, the initial estimates for potential losses in connection with the Iran war and the earthquake in Venezuela are deliberately prudent with no meaningful claims notifications received to date. Furthermore, the combined ratio of 83.2% includes a further increase in our resiliency reserves. And as you know, we can only provide exact figures and numbers based on the full reserve analysis at year-end. But what I can say today is that the underlying runoff result was again positive and our decision to add additional prudence is the reason why the reported runoff result is negative at minus EUR 62 million. Therefore, the underlying combined ratio is clearly better than the reported 83.2%. And Clemens already explained the main drivers for the reinsurance revenue. So to a certain extent, this is simply a reflection of IFRS 17 accounting. In a softening market environment, the likelihood of upward trends for commissions and other contract features such as profit or sliding scale commissions is naturally higher. And under IFRS 4, this did not affect the premium. Under IFRS 17, though, it directly reduces reported reinsurance revenue growth in addition to the price changes. And this can be meaningful as we see for our traditional business. This is the main driver of the difference between the around 4% premium growth and the flat revenue development. Importantly, we are successful in growing our traditional treaty portfolio. The expansion recorded in the recent renewals will also support the revenue growth becoming increasingly visible in the remainder of the year. The investment result increased mainly driven by a higher contribution from our fixed income portfolio. And the other result does not include any unusual items. The currency result was neutral. Looking now at the IFRS 17 components of the P&C service result. The main contributor is the CSM release fueled by the successful renewals in 2025 and 2026. And our prudent reserving approach is the main reason again for the negative experience variance and the negative runoff result. Additional prudence for business earned from recent underwriting years is reflected in the experience variance, while additional prudence for prior underwriting years shows up as a negative runoff result. The very low new business loss component confirms that rates remained adequate on a broad basis despite the rate decreases in the recent renewals. And the increase in CSM is mainly driven by the new business written in the successful '26 renewals with a diversified contribution from different regions and lines of business. The new business CSM amounted to EUR 1.7 billion. And compared to the previous year, this is a decrease of EUR 265 million. Around EUR 175 million can be explained by different foreign exchange rates and interest rates. The rest, so close to EUR 100 million reflects the combined effect of price and volume changes in our portfolio. So compared to the Q1 numbers, this is a clear improvement. And apart from the successful growth, the Q2 number is also supported by an updated and more positive reflection of our retrocession program, which was not entirely included in Q1. In Life & Health Reinsurance, recorded a strong top line growth of 12% adjusted for currency effects. This positive development mainly came from U.S. Financial Solutions and diversified growth opportunities in traditional business. A large part of the gross revenue contribution from U.S. Financial Solutions does not end up in the net revenue. Furthermore, the revenue contribution might be lower in the coming year due to its shorter-term nature. The reinsurance service result of EUR 478 million for the first half is slightly more than 50% of our EUR 925 million target for the full year. Hence, we are also very well on track with regard to the profitability of our portfolio. And looking at the details, the contribution from our Financial Solutions book was particularly strong and our traditional portfolio also performed well in many areas, leading to a positive experience variance. As usual, not all trends are developing in the same direction. Within the overall positive experience, we have recorded some negative effects from claims volatility in our Australian disability book in the second quarter. And I would like to point out that this is connected to business, which can be repriced regularly, generally allowing us to react rather quickly to any development. The investment result mainly reflects the ordinary income from our fixed income portfolio, but also includes a negative impact from the valuation of an equity participation. The currency result was minus EUR 47 million, driven by a mix of currency movements against the euro. Looking here at the IFRS 17 profit drivers, the main contribution comes from the CSM release. This is actually slightly above our expected range, mainly driven by our Financial Solutions business, including some deals with a rather quick release pattern compared to the rest of the book. The risk adjustment release was in line with expectations. And as mentioned, the experience variance is overall positive. The main reason for the loss component are assumption changes for onerous business and the prudent increase in the risk adjustment for morbidity business. A larger part of this can be attributed to critical illness business in China, but other regular assumption reviews also contributed to the overall number. Business growth is well reflected in new CSM generation of EUR 385 million with a diversified contribution from financial solutions and traditional business. Changes in estimates are mainly driven by some model updates for longevity and regular in-force management actions for the traditional business. And including positive currency effects, the CSM increased by 6%. The development of our investments was again very satisfactory. The return on investment of 3.7% is comfortably ahead of our 3.5% target. The increasing ordinary investment income reflects the continued rollover in a higher yield environment. And as you know, we accelerated this with active loss realizations in 2025 and are now benefiting from these actions. So to conclude my remarks, the first half of 2026 has been very successful for Hannover. Group net income provides a strong basis for delivering on our full year target. The further strengthened balance sheet provides additional confidence in future earnings and more than EUR 200 million of unused large loss budget is a significant buffer for large losses with the peak hurricane season ahead of us. On that note, I hand back to you, Clemens, for comments on the outlook.

Yes. Thank you, Christian. So before we have a look at the outlook, let's just briefly look at the renewal slide on Slide 15. So the successful conclusion of all major treaty renewals in 2026 is another reason to be positive about the future based on our strong market position and the long-term client relationships we were able to further expand our traditional treaty portfolio. Year-to-date premium growth, as you can see here, is plus 7.2%. Despite increased competition and clearly pressure on pricing, reinsurance remain -- rates remained at least adequate on a broad basis. Hence, we are providing -- willingly providing capacity to our clients and programs that do meet our margin requirements. The mid-year renewals, I'd say, fit well into this picture. The premium volume of our traditional treaty portfolio increased by 12.3%. The growth is rather broad-based with good contributions from the Americas, from Australia and within the specialty lines from credit and surety and our digital business. The volume of dedicated cat business up for renewal in June and July was broadly stable, reflecting continued underlying exposure growth for well-priced risks. The volume in Asian markets decreased as a result of our disciplined underwriting approach in mostly competitive markets. Competition continued to center around pricing with moderate discussions on terms and conditions. The overall risk-adjusted price change for our diversified portfolio was minus 4.5%. Rate reductions were most significant for loss-free property cat business. As in previous renewals, price pressure in other parts of the portfolio was less pronounced. So on a year-to-date basis, this brings the price change for our traditional portfolio to minus 3.9%. So based on the business performance in the first half year and the outcome of recent renewals, we do confirm our guidance for 2026 without any changes. As explained, delivering on our IFRS growth target in P&C will be ambitious, but the lower end of our target range remains achievable. More importantly, the strong quality of our P&C portfolio with a combined ratio of 83.2% in the first half, including the fully booked large loss budget, as Christian mentioned, puts us in a very good position to deliver on the combined ratio target of below 87%. Finally, even based on a normal large loss experience, we should remain in a position to build additional resiliency reserves in 2026. Also in Life & Health, we are well on track to achieve our target for the reinsurance service result of around EUR 925 million. And the target for return on investment remains at 3.5%. So altogether, we are confident that we will deliver earnings growth in 2026 and in the following years. This concludes my remarks, and we would be happy to answer your questions now.

[Operator Instructions] And the first question comes from Will Hardcastle from UBS.

Just coming on to that new business CSM. You touched on a few of the key moving parts there. But if only EUR 100 million or so is the year-to-date impact, that's sort of 5%. And perhaps given where premiums have come in this year maybe implies just less than 1 percentage point of a combined ratio impact year-to-date. It seems maybe a little generous given the pricing declines. And how do I comp that with the risk-adjusted price change of minus 3.9%, recognizing that's not quite apples for apples on timing. And then just thinking about 12% premium growth in that midyear renewal. I guess if I -- we can paint this in a couple of different lights. If I -- some might question that from a cycle management perspective, I guess. And can you help us to understand why you guys are so comfortable with the extent of that growth into what with the price declines, it looks like diminishing margins, perhaps discussing which of the competitive advantages you're really leaning on here, that would be helpful.

Thank you, Will. So let me start with the second question. So as you can see, the majority of the growth has come from renewal business, so business we know really, really well. So we are obviously very comfortable pricing that business. So it's clear that given how the market is developing, the pricing levels are not as attractive as they were last year. And last year was a deterioration on the year prior. But still, I mean, despite the fact that the attractiveness of margins has reduced, it's still attractive in the sense that it's making our hurdle rates. And therefore, growing in these lines of businesses is value accretive also in a softening market environment. We also have to keep in mind that the extent of the softening is not happening to the same extent everywhere. So Clemens already highlighted that property cat is the area where we see most softening and that many other parts of our portfolio are significantly more stable when it comes to the terms and conditions. So therefore, when it comes to new business, I mean, it has been a diversified picture. We have written some more cyber nonproportional business, for example, which was new demand. So business that was not previously purchased to give you one example. Same goes for credit and surety, where the surety products become more prominent in some of the more emerging country environments. And both businesses certainly not subject to the kind of pricing pressure we see on the NatCat side. Still on the NatCat side, we are also growing a little bit, but we are doing that with strict profitability criteria. So whatever we wrote new despite the rate reductions is making our hurdle rates, and we were also prepared to write letter positions on business where the pricing did not work so well any longer. And the reason why we still find some new business in NatCat attractive, of course, has to be seen in the context that our relative market share in natural catastrophe business is significantly lower compared to our average market share across all lines of business. And as we explained on previous occasions, we are prepared to engage a little more capital to write property catastrophe business. So if you take that all together, we are comfortable in growing in this market environment as we still see that as an attractive market environment. And you can also see that by the still very limited loss component we are showing after the first half of the year, which clearly demonstrates that the growth will be value creative over time when we release the CSM. On your first question, yes, you're right. I mean, what we said on previous occasions, we reckon that with the pricing reductions that we have experienced to date and there was a little bit of an acceleration quarter-to-quarter that the impact on our combined ratio should be roughly 2% on the entire portfolio. So that is certainly holding true. And I guess the reason why in the new business generation, you are not seeing that so directly is also has to do with the growth we are showing because that growth comes with a positive CSM margin, as I have just explained. So therefore, somewhat reducing the effect from the dilution of combined ratio on the renewal book of business. And then on top of that, as Christian has explained, there was also some interest rate and foreign exchange movements, which give us certain volatility quarter-to-quarter to the new business generation number.

The next question comes from Andrew Baker from Goldman Sachs.

First one, can you just help me just pick apart your confidence in, I guess, the catch-up of the growth in P&C reinsurance for the second half? Is it purely the strong renewals? Or are there also some base effects at play given all of the noise around the NDIC in particular last year? And I guess more specifically in the current period, were the year-on-year NDIC headwinds on revenue growth higher in 1Q or 2Q this year? And then secondly, on the Life & Health Re side, are you able to help us think about the growth outlook for U.S. Financial Solutions? And given obviously the strong growth that you've achieved here so far, should we expect an uptick in the CSM release rate going forward? Because I believe Financial Solutions has a faster runoff profile than the rest of the traditional business.

Yes. Christian speaking. Thanks, Andrew, for the questions. So let me take the first one on the catch-up effect that we expect for our traditional P&C Re top line. And you're absolutely right. The main reason is the strong renewals and the volume change that we saw. So the year-to-date 7%. It's clearly above the 4% in premium that we saw. So this will help us to move upwards. And secondly, indeed, there is also a baseline effect as the second half of 2025 was a bit weaker last year. And together, this will have a positive impact and supports our unchanged guidance. And part of that is the NDIC component that is not completely stable over the year in the earned pattern. So in 2026, the NAIC effect, so the downside effect was a bit stronger in Q1 than in Q2. That also is part of the positive momentum we see in the figures.

Maybe on your Life & Health questions. On the U.S. Financial Solutions, we don't expect to see further stronger growth on Financial Solutions business in the U.S. because the competition is quite strong over there. You also mentioned the CSM release uptick that we have seen from Q1 to Q2 right now. Also there, we don't expect further upticks because when you look into the new business generation that we have done, the new CSM of 3 Hive, I can tell you that the biggest part this time is not coming from U.S. Financial Solutions, but it's coming from our traditional business across the world, including LatAm, France and also traditional business from the U.S.

The next question comes from Ivan Bokhmat from Barclays.

I've got a few questions. Maybe the first one, I'll just start with about the third quarter large loss experience. I think Clemens, you mentioned that there is a fairly high frequency of events. But I'm just wondering if that actually filters through the the insured losses given the benign hurricane season? And how do you think about this kind of potential benefit from -- if there is one from the hurricane season? Is that another opportunity to add the buffers over the second half? And my second question is actually related to large losses. I think on your slides, you booked those losses almost gross to net. So I can only calculate the recoveries at about 7%, which I think is the lowest since COVID. Why is it so low? And how do you expect this to develop later in the year? Maybe you can expand a little bit here and talk about the changes to your outwards and inwards book. How should we think about your retro spend and retro recoveries?

Thank you, Ivan. Well, when it comes to third quarter loss experience, it's certainly a very busy quarter with quite a number of wildfires almost on every continent, you could say, flood events. We had a recent earthquake in Colombia and typhoon hitting China. So from that point of view, clearly, a busy quarter. And when it comes to the U.S. hurricane season, I mean, let's wait and see, I would say. Maybe the forecast on frequency is down, but it only takes 1 category 5 hurricane to make landfall in the U.S. to change the picture completely. So from that point of view, I wouldn't like to talk about buffer building in the context of Q3 excellent quarter experience as of yet. So from that point of view, as Clemens highlighted, we have definitely enough losses in the system to highlight what the macro drivers for our products are and why having risk adequate pricing remains very, very important. When it comes to your second question on the major losses, I mean, in the context of retro, I mean some of the losses happened relatively late in the quarter. So look at Venezuela that happened very late in June. Therefore, we have taken a more prudent approach. And as part of the prudent approach, we have decided that we have booked a gross for net number. You can also see that elsewhere in the major loss list like our position we have taken on Iran. So this is not saying that there will not be any retro recoveries on those losses in the end. But as we knew when we closed the books that we are well within the major loss budget, which we are booking in any case, we just decided to take a more prudent approach here and there. On the other hand, it's fair to say when you look at all the natural catastrophe losses, they will be too small for us to make recoveries on our event tower for them individually. So from that point of view, the main retro vehicle that will come into play is going to be our K facility. And as you will remember, K is not covering on a global basis, but it's covering on a peak scenario basis. So the territories where we do have the protection from K is North America, it's Europe, it's Japan, it's Australia. It's not everywhere in the world.

Probably one addition on the large losses and on the budget. Just to remind everyone that we don't evenly distribute the large loss budget of EUR 2.3 billion to the quarters. So there is an allocation of roughly EUR 1 billion for the third quarter. And as [indiscernible] rightly said, way too early to speak about that. But let's just look at it the underutilized budget for the first half year plus the remainder of the year leaves us with EUR 1.5 billion of remaining large loss budget for the remainder of the year.

The next question comes from Kamran Hossain from JPMorgan.

Two questions from me. The first one is on, I guess, the part of the P&C insurance revenue where you don't have guidance. Clearly, traditional, you've explained the underlying growth there. It doesn't look quite as good on a reported basis. But structured was really one of the really big headwinds for you in the first half of the year. Can you talk about whether we should expect the reduction for '26 to continue at kind of high teens levels in structured? And can you just confirm, I think it should be, but does the drag completely disappear from structured in 2027? Or does it continue slightly further than kind of end of the year? The second question is for Sven. Clearly, kind of everything seems to be going in the wrong direction from a good starting point in P&C. Do you think when we get to Monte Carlo, brokers will push for kind of improved T&T cedents? I guess it feels a little bit easier to go back to your boss and say price declines weren't as big as last year. And then kind of forgetting to mention kind of T&T softening. So just interested in whether you think that will be a key battleground and kind of what the outcome might be at Monte Carlo, I guess, kind of more importantly at 1/1.

On the structured side, Kamran, I mean, the development we have in this calendar year is that we have a very few clients reducing their session rates. Those clients have to see big volumes of premiums. When we look at the entire portfolio, we can say we have added to the number of contracts, we are growing on the new business. So we don't have to show all the reduction in the premium that we would have on just the renewal book. So we are compensating a good part of those reduced sessions. And in general, the pipeline for surplus relief solutions and also earnings volatility protections is still very good and positive and our number of contracts continue to grow. So in that sense, we remain positive when it comes to the development of our structured portfolio. It's too early to make any comments on where will this go when it comes to the '27 calendar year. As I said, this year's development is driven by less than a handful of individual decisions at the client level. So we have to wait and see where they will go with their decisions, and we are not in a position to guide you in that respect yet. Hopefully, that gets a little clearer when we meet for our Investors Day in November when we will certainly talk about that development. When it comes to what to expect for 2027, and you mentioned Monte Cardo, where the industry is meeting. I mean, our experience with the softening of the market so far has been that it's really concentrating on price only. The very few discussions we have on terms and conditions in general are client specific, so very bespoke discussions -- it may be an hours clause here. It may be the reintroduction for strike right promotion coverage there. But really individual cases, no trends, no general pressure that reinsurers are now supposed to cover something which they didn't cover before in a very broad sense. So from that point of view, price only retention levels are holding at nominal 2023 levels, also very little pressure here. And when it comes to the aggregate protections, yes, some clients are buying a little more than they did in the past. But it's very often clients that have always purchased aggregate protection. So again, the market is not a wash with this kind of product. And quite frankly, as we talk today, that's the general picture we would expect also going into 2027. And of course, we would say, particularly on the property cat side, the base level from which we are starting in many cases is now through 2 renewal cycles with meaningful discounts. So therefore, the room for further discounts is certainly no longer the healthy 2023 levels. And therefore, logic would tell you that we would see a certain deceleration.

Can I just ask on where clients have asked for slightly widened terms conditions, house clauses, et cetera. Have those been things that you've maybe accepted? Or you just we've given you enough price. We just like kind of broaden the terms.

Well, the discussions often enough happen in the context of property cat reinsurance, which will not surprise you. And our response has been different case to case depending on what exactly it was.

Next question comes from Iain Pearce from BNP Paribas.

The first one is just on the development of the P&Ls in H1. Obviously, you've had quite a bit of growth in NatCat, but expansion in the retro program at the start of the year. So just trying to get a feel for how you see PMLs trending over the first half of the year now the renewals are all done. And the second one is just on the impact from the equity participation in the life book. Can you just give us a bit more details about what that is and if this is something we need to look out for going forward?

Yes. I mean on the property side, our PMLs keep increasing. I mean, as I said earlier in the call, we have identified natural catastrophe business as an area where we can still grow our market share. We have done that very successfully since 2023, also in 2026, we are being a stable to slightly growing portfolio, not everywhere in the world because the cycle from a pricing point of view is giving us more opportunities in certain territories, whilst we are happy in others. But the underlying trend is still that the P&Ls are going to increase also in 2026.

And coming to your question around the equity participation. So what I can give you is that's a nonstrategic participation we hold and this is a one-off effect. So going forward, you should not expect any more material movements here.

The next question comes from Vinit Malhotra from Mediobanca.

Very good presentation. Just a few maybe clarifications or queries, if you like. First one, just on the premium underlying growth, 4% in 1H. Could you also provide how 1Q was just to get a sense of whether it's stable, worsening or better than 1Q? Then just on the reserve resilience buildup, could you confirm that should we assume that same 200 to 250 runoff positive per quarter, which would make it between 400 to 500 and we have the number we have on the side. So could that be used as well this quarter? Just -- and if I can throw in one on the large losses, there seems to be a little bit more frequency type of events as a more number of events, smaller losses here and there in the quarter, I know your threshold is EUR 10 million, which is lower than some of the peers. Would you think that is the reason that the numbers are looking different from peers? Or would you just say that this was luck -- or would you say this is part of the business? And when you're saying that you're trying to emphasize that the risk scenario hasn't changed just because of low hurricane clients insurers are your insurance clients sympathic to that view? Or do you think there will be some pushback there? -- loads of questions, but maybe 3 topics really.

Vinit, can you explain this last question in what sense?

The last question is we talked about wildfires, floods and we said -- or you said that it's not that just because hurricanes are milder. So the risks have gone away. So you're trying to create the business scene for the risk still being out there. How sympathetic do you think clients are to that from what you know or what you think they will say...

Well, I'm not aware that clients really have made that argument that we should take this very short-term perspective into account when pricing their business. I mean, as I just said, I mean, the El Nino effect does most likely have an impact on the observed frequency at the end of the day, but it doesn't say a lot about the intensity of those maybe fewer, but still hurricanes that will make landfall at the end of the day. So from that point of view, it's very difficult to have a positive view on this. The flip side is also true. I mean, in a linear year where we expect the frequency to be higher, clients are also not volunteering to pay more for their reinsurance. So from that point of view, we are looking more at the long-term development of those exposure and how does climate change impact them over the longer cycle. When it comes to your major loss question, yes, you're absolutely right. I mean our threshold reporting the losses is certainly lower compared to some of our peers. So it's only EUR 10 million. If you look at the distribution of the natural catastrophe losses, which is a total of 10 losses. 6 out of the 10 is in the band EUR 10 million to EUR 20 million. So a lot of frequency in that respect. And therefore, we wouldn't read anything unexpected into this number. As you know, I mean, we are looking at our major loss budget year-on-year, and we are from a direction of traveling point of view, increasing the number year-on-year given the underlying growth of our portfolio. And that, of course, also takes into account that we will have, given the growth of the portfolio have to expect more losses exceeding the threshold of EUR 10 million compared to previous periods. So from that point of view, nothing surprising for us in that respect. And very often climate change related, the kind of losses we are talking about. So also clearly demonstrating that this is an exposure trend the industry needs to take into account when setting retentions and setting pricing for the product. And on your first question, Vinit, I don't have the equivalent number of the 4% underlying earned premium number for the full half year when it comes to Q1 stand-alone. We would have to get back to you on that.

Yes, -- and then let me take your question on the resiliency reserves. So in general, the logic or the view I talked about also last time is still correct. So we expect a positive runoff result and taking a direction of EUR 200 million would be a fair number. But -- and the second half -- the second quarter in this year was not different. But of course, there is also moving parts below that and a lot of accounting details. So you should maybe not take a completely 100% for your estimate looking forward, but we could in Q2, again, substantially add to the resiliency reserves. And as we also mentioned already in our introduction, of course, we have the full picture only once a year when we have the full actuarial analysis.