SCOR SE (SCR) Earnings Call Transcript & Summary

If you take the Japanese rebalancing, it -- we've reduced the [ lower layers ], but we've wanted to move across the programs and to be better balanced. So -- it was much more driven by portfolio actions, specific clients than cat as a theme in itself.

So that concludes the second Q&A session with P&C. We're running absolutely spot on to time. So that's good news. Thank you. So now we'll take a 5-minute break, and we'll return promptly for the SCOR Global Investment presentation at 2:30 Paris time, 1:30 U.K. time. Thank you very much. [Break]

Okay. That's greenlight to the operator.

Please go ahead.

Okay. So thank you very much, everybody, for coming back so promptly. I would now like to introduce François de Varenne, the CEO of SCOR Global Investments; and François is going to talk about how SGI is navigating COVID-19 and to the low-yield environment. François, over to you.

Thank you very much, Ian. Good afternoon, everybody. I want today during this presentation, to demonstrate our ability to navigate through the COVID-19 pandemic, in particular, thanks to a very resilient portfolio and to show how we are executing on the Quantum Leap road map for SCOR Global Investments. I will develop 3 main points. The first one, even if this is a very difficult exercise, given the current level of uncertainty on the financial market, I will give you a sentiment about the economic and financial environment. Second, I will explain how SCOR Global Investments is facing the current crisis and how we intend to position the portfolio over the coming months. As you will see, we are maximizing value creation while safeguarding the value of the investment portfolio. Lastly, I will show you how we are delivering on the Quantum Leap road map. I hope that this presentation will make you as confident as I am in our investment portfolio, especially regarding the resilience of our credit portfolio in case of a significant deterioration of the credit market, and regarding as well its capacity to bring in the future a strong financial contribution. What about the global economic and financial outlook? The COVID-19 pandemic has had an unprecedented impact on the global economy with massive GDP contraction all around the world due to the lockdown decisions. Nevertheless, the dislocation on the financial market at this stage has been much shorter than anticipated. Financial markets are now characterized by a risk-on environment. Despite better economic recovery perspective, interest rates are trading near their lowest level with no significant reassessment of inflation expectations. The Jackson Hole confirmation of the Fed, clear prioritization of employment through a flexible approach, targeting 2% inflation on average and over time, should mean that interest rate will potentially stay lower for longer. The massive support of both central banks, and this is new from government as well, has delivered on the economic challenges posed by the lockdown, with trillions in money creation and unprecedented public guarantees. The shape of the recovery is still unclear. We still don't know if this is U, or W, or a square root or even now there is a new letter, [ a key ]. Nevertheless, in line with the vaccine scenario described by Paolo a few minutes ago, we believe that as soon as vaccine will become available and stop the pandemic, economic activity will recover quicker and stronger than what the market is pricing today. The most likely scenario for us is that global growth in 2021 will be above the current market consensus the vaccine, making the recovery, faster than expected. Thanks to massive central bank and government support, potential credit market turmoil has been avoided, and key credit indicators are already improving. We observed a significant downward revision of the initial default rate estimates released in April 2020. Most financial assets, prices followed a V-shape pattern. First, we saw a phase of panic with one way sell-off in stock and debt issued by companies with already high leverage ratios or exposed to sectors directly impacted by COVID-19. This was shortly followed by a normalization phase. Valuation of most financial assets are now close to or even higher than pre-COVID era. All in all, the positive effects of massive central bank and government support should continue to drive market sentiment. Low yields, volatility stabilization and normalization of credit spread are now expected over the next few quarters, even of course if idiosyncratic risk will remain. Let's look now at the way we are navigating through this financial turmoil and how we are going to position the investment portfolio by the end of the year. As I already explained in the first and second quarters of the year, SCOR entered the crisis in March with a very defensive and very resilient investment portfolio, thanks to voluntary derisking action undertaken since last year. The portfolio has demonstrated its resilience and its capacity to absorb this major shock. In reaction to the crisis, we took immediate measures to protect the value of our portfolio. This was notably achieved through a full reinvestment phase of the financial cash flows between March and May. As a result, the financial impact of the crisis is very limited. With virtually no credit impairment and very limited impairment on our listed equities and real estate portfolios. It is also worth noting that our level of unrealized gains has materially increased since the beginning of the year. Where are we investing today? In light of the more positive market outlook, I presented a few minutes ago, and our conviction that the recovery should be stronger and quicker than expected, we decided before the summer to resume our reinvestment strategy. This means that we have stopped keeping financial cash flows emerging from the investment portfolio in cash or very short-term govies. We have initiated the reinvestment program, targeting credit markets and value creation assets. On credit markets, we are focusing mostly on U.S. investment-grade credit, where we believe some value could be still extracted. We are reinvesting very progressively and cautiously mostly on the primary market where we can grab yields above 2%. Our objective is to converge towards 45% of corporate bonds by the end of the year and to reduce our allocation of cash and short-term investments. Of course, we remain very disciplined, and we are staying away from the riskiest sectors affected by the pandemic, for which the outlook is uncertain. I will come back to value creation shortly. Moving now to the financial contribution. I would like to emphasize that we have generated strong returns over the last couple of years and in the first half of 2020. Indeed, we had good timing on the real estate market and managed to sell several assets last year and in the first weeks of 2020, just before the COVID-19 outbreak. This translates into a return of invested assets of 2.6% for the first 6 months of 2020. What should we now expect for the remainder of the year? Our return on invested assets should be affected in 2020 by the small cost of the reinvestment freeze between March and May. But again, there is a price to protect the value of the portfolio. Very limited impairments, thanks to the resilience of our portfolio and the decrease of interest rates. Our current forecast for the return on invested assets is around 2.2% for the full year 2020. Let's now move to the last part of the presentation. 1 year after the launch of Quantum Leap, I would like to follow-up on the road map for the SCOR Global Investment Business unit. This road map was structured around 5 points. The first one, acting as a sustainable investor to better manage risk and generate superior long-term returns. Last year, we reaffirmed our commitment to finance a more sustainable world with the objective of achieving carbon neutrality for our investments by 2050. Let's be clear, decarbonization is an emergency, but it is also one of the main challenges a responsible investor has to tackle. To speed up our journey, we have joined the UN backed Net Zero Asset Owner Alliance. The alliance will be instrumental to progress on this highly technical topic. Together with the other members, we are actively working to make carbon neutrality happen. In May this year, SCOR announced its complete phase out from coal by 2030 in the EU and the OECD and by 2040, for the rest of the world. Beyond commitments, we have taken concrete and immediate actions. Investment in companies planning new coal project is no longer permitted, including mines, plants, power station and infrastructure. The 30% threshold on coal has been lowered to 10% for turnover on thermal coal and for power production. Today, we announced that we are extending the scope of our exclusion and moving also from what I call negative screening or exclusion to best-in-class strategy. We strongly believe, indeed, that the low-carbon economy cannot be achieved from scratch and that transition has a key role to play. It is our duty to support companies engage in this transition. As a first action, we will no longer invest in companies operating in upstream oil and gas, except companies committing to decarbonizing their business with a credible pathway. Let's move to the second point of our road map, enhancing portfolio diversification towards value creation assets to increase portfolio returns. What do we mean or what do we call value creation assets? Basically, this denomination covers non-fixed income assets. It includes equities, real estate, private equity, infrastructure equity, private debt, ILS and other alternative investments. Accelerating the diversification of our investment portfolio toward this type of asset classes is even more relevant than 1 year ago in the context of a lower interest rate for a longer period. Indeed, this is the only way to limit the erosion of portfolio returns in the long run. It is also a very nice way to diversify away from pure credit risk. We've been quite active in deploying this strategy. Since the beginning of the strategic plan, we've notably committed around EUR 300 million to private equity, infrastructure, real estate and private debt funds. Those investments have only been partially drawn so far, and therefore, are not fully reflected in the current asset allocation. We currently have undrawn commitments on those asset classes representing 1.7% of the portfolio. These undrawn commitments are not reported under IFRS since they are off-balance sheet items. I already mentioned that reinvestment were put on hold between March and May, and we have resumed this since June. Let me confirm here that we have also resumed investment in value creation assets since the beginning of the summer. Most of this investment committed in 2019, 2020 and in the next few quarters, will be deployed post crisis, post-COVID crisis, which mean they are expected to be good millésimes with good return prospects. With this in mind, we expect that our overall allocation to value creation assets should reach around 10% by the end of Quantum Leap. Third point of the Quantum Leap road map, maximizing value creation while safeguarding portfolio value. I have already mentioned how defensive in the investment portfolio was early March when we entered the financial turmoil. I would like to note, given the size of our corporate bond and loan portfolio, I would like to show you that this portfolio will be very resilient if there is a significant deterioration of the credit market. Why? Because this portfolio is very granular, is of very high-quality in terms of issuer and is defensively positioned with a strong bias toward quality. The first table on the left-hand side shows the rating split of our corporate bond portfolio against the addressable investment universe. We can see that our portfolio overweight high ratings with, for instance, a proportion of bonds rated A and above, which is 10 percentage points above the benchmark. Our exposure to the high-yield and nonrated segment is 10 percentage points below the same benchmark. Let's now focus on the BBB segment on the right-hand side of the screen. This segment is the largest in terms of size, albeit 7 percentage points below the benchmark. And by definition, this segment is the most exposed to rating transition risk in case of downgrades. Our BBB bucket is very well diversified with 241 different issuers. Our average exposure to a single issuer is limited to reduce idiosyncratic risk as much as possible. This comment is even more valid when we zoom into the third categories as evidenced by the average exposure of only EUR 5 million for BBB minus issuers compared to EUR 60 million for BBB issuers. Let's now look at the industry sector exposure of our corporate bond portfolio. This topic was widely discussed during the outbreak of the pandemic due to the magnitude of the impact on certain sectors like airlines, retail, leisure, hotel and entertainment. The key message is that even zooming sector by sector, our corporate bonds are biased toward quality for each sector. This translates into higher average rating and generally shorter duration positioning. So in case of a significant deterioration of the credit market, what type of risks would we be facing? I would say, 2 potential main risks. The first one, rating migration risk in case of a wave of downgrades, which could decrease the average quality and the average rating of the fixed income portfolio. And the second risk, that's a wave of default, leading to significant credit impairments. Even if we have a positive sentiment overall on the credit market, as mentioned at the beginning of my presentation, it is very difficult to estimate the size of a potential wave of downgrade or default, given the magnitude of Central Bank's stimuli and government actions. In order to quantify potential risk, we have applied a footprint scenario derived from the great financial crisis of 2008 and 2009. I would like to draw your attention to the fact that this event, the great financial crisis is viewed today as more severe than what economic and financial forecasters expect for the current COVID-19 crisis. So let's look first at the rating transition risk. Applying the great financial crisis footprint scenario of corporate bond portfolio today, the excellent news is that the average rating of the fixed income portfolio would remain stable, very high at A plus with a limited decrease of the average rating of the corporate bond portfolio from A minus to BBB plus. Looking now at projected credit impairment, the impact of the same footprint scenario, so the great financial crisis would be EUR 20 million above what we expect in a normal credit environment over a 2-year horizon. This makes me feel very confident about the resilience of our credit portfolio in the coming quarters and confirm the relevance of the prudent investment decision we've made in the past. Before I conclude this presentation very quickly, let me update you very quickly on our developments within SCOR Investment Partners. We drew up Quantum Leap 1 year ago, while we were actively accelerating the development of our insurance-linked security franchise with the acquisition of Coriolis Capital. Let me say first that the integration of Coriolis is well on track. We should have a fully integrated platform by the end of this year with enhanced sourcing, analysis and portfolio management capabilities. In the meantime, our ILS assets under management have undergone very healthy growth, which was made possible by the superior and stress tested track record of our investment solution. Today, we manage USD 2.4 billion in ILS, which position us as a leading player in the industry. We have a strong pipeline to further develop this business and improve our competitive edge even more. The joint developments that we have initiated with our global P&C colleagues are bearing fruits. To conclude, despite the challenging interest rate environment we are facing, you can rest assured that my team and myself are fully mobilized to make the most of our investment portfolio. I confirm the Quantum Leap assumption with an average return on invested assets over the course of the plan in the 2.4%, 2.9% range. We will extract all the value from the financial market that will benefit our shareholders, clients and stakeholders, in line with the group profitability, solvency targets and in line with our controlled risk appetite. And with this, I come to the end of my presentation on SCOR Global Investment, and I will be happy to answer to any questions.

Good. So thank you very much, François. Let's go to the Q&A.

[Operator Instructions] We will take our first question from Vikram Gandhi from Societe Generale.

Vikram from SocGen. Just 1 question for François. Given the 2.6% RoIA in the first half of this year, the FY '20 expectation of 2.2% seems too low. Now I imagine this might be related to updated assumptions on impairments. But it would be great if you can share some insights into what is really driving this? What are the areas of stress? And on the flip side, the 2.4% to 2.9% assumption that you confirm for the planned period looks a bit too high given where the interest rates are. So if you could perhaps explain where this confidence is coming from? That would be great.

Okay. So if you look at what we did over the last 6 months and compared to last year as well, so that's true that we delivered a return of 2.6% in the first 6 months of this year. That was supported by a significant capital gain we took on the real estate portfolio early March, as I disclosed it during the Quantum Leap -- the Quantum Leap presentation. We are affected. You know that something I commented at the end of July, and that's also on this slide here. We are affected by interest rates that are decreasing. The reinvestment yield is decreasing quarter after quarter. So if you compare the recurring yield in 2019, it was 2.6%, but I mentioned that we had a positive one-off in this income yield in 2019. So it normalized of those one-offs, the income yield was 2.4% in Q4 2019 and for the full year 2019 as well. So we have the effect of this. We have no significant capital gain on the real estate portfolio plan between now and the end of the year. That will be the case more probably for 2021. So we are just supporting the effect of the decrease of the income yield and the reinvestment yield. Impairment should be very limited in the second part of the year, subject to the evolution of the financial markets.

And François on the 2.4% to 2.9%?

For the assumption on the cycle. So the assumption of Quantum Leap is return on adjusted assets of 2.4% -- between 2.4% and 2.9% in over the strategic plan. So which means that's an average. It is still too early to predict what will be the real level of return on invested for 2021. I'm confident on the fact that on an average, we will deliver return on invested assets, compatible with the assumption. Keep in mind that for next year, even if there is still high level of uncertainty to predict what will be the level of interest rate and the level of spreads on the credit market. We have in the pipe, a significant capital gain to take on the real estate portfolio. And we have some mature assets, some assets that will be mature in 2021 and the following years. And we have something new, we have recaptured our ability to manage actively the fixed income portfolio, given the size of annualized gain on this portfolio. That's something that we lost over the last few years, of course, with the increase of interest rate in the previous quarters. So we are more on the biennale mode since we recaptured this ability to trade on the fixed income portfolio, you could see also as well contribution from the fixed income portfolio to maintain a yield compatible with the strategic plan assumption.

Okay. Just -- sorry, just to come back on what you said in the initial remark is, you said we shouldn't be expecting a lot of capital gains in 2021 as well. Is that what you said? Or did I?

You should not expect capital gains on the real estate portfolio in the second part of 2020. So we took a big 1 early this year. We sold 2 assets also last year. So you should expect contribution from the real estate portfolio in 2021 and in 2022. What I'm saying is that we recapture the ability to manage more actively and to trade on the bonds we've got in the portfolio, so which means that you could see a contribution from the fixed income portfolio in the next few quarters.

Thank you very much, Vik. So let's move on to the next question.

Our next question is from Kamran Hossain from RBC.

Just a follow-up on Vik, maybe one and a half. It sounds like you're suggesting that on average, it's a 2.4% to 2.9% return over the course of the plan. 1 more year to run you're at 2.2% this year to suggest it's [ doing ] kind of 2.6-ish at a minimum. So maybe a clarification there. And I guess, on the potential for realized gains in the real estate portfolio next year, how concerned are you by the impact of, I guess, property prices or commercial property prices in the current working-from-home environment, I live [ very centrally ] in London, it feels like nobody is working from their office. So any thoughts on that would be very helpful?

Yes. So that's a good question, at least. I mean the evolution on the real estate market is still uncertain. I would say we were lucky. We have decided to sell a mature asset in December last year with the ability to lock and to execute the transaction early March. You know usually, that's a long process to sell real estate assets. So we are able to sell this asset early March, so just before the lockdown. So that's true at least in Paris, what we saw during the last few months is a market that was totally stopped. So no transaction on the market on both sides. What we see today is investors are coming back. And so far, real estate prices are relatively stable. So which means I'm confident that we could maintain the contribution from the real estate portfolio over the next few quarters. Given, again, under current market conditions, there is appetite, market prices are relatively stable, at least on the type of assets we own, which are usually offices in prime location and where we had our DNA, which is to add value on those assets. So we like to buy assets to get rid of the tenant to fully restructure the building to find and to lock a new tenant for a long period of time. And then to sell it to recognize the value that we created on these assets. So this market is reopened with again, prices that are quite stable. That's not the case, but we are really not exposed or only a small fraction through the MRM listed companies where we own 59%, but that's a very small portfolio. That's not the case for retail assets. But again, 100% of our portfolio is made of prime location and offices.

Okay. Thanks very much, Kamran. Should we go to the next question, please?

We'll take our last question from Vinit Malhotra from Mediobanca.

Just on the Slide 80, the one which shows the value creation assets, please? I mean I'm just curious that you're focusing a bit more on things like private equity, real estate funds, whereas I think just a few weeks ago, we heard one of the peers, Hannover actually, mentioned on their slides that they took impairments for private equity, and these kind of assets. So I mean, are you seeing -- yes.

Go ahead.

Just any comment on your strategy on this area, please, would be great.

Yes. So that's the case on private equity and infrastructure. I mean the type of commitment we took over the last 18 months. Are mostly on really big and flagship funds managed by big external private equity asset manager. So that's not done internally we select asset, external asset managers, and we select after strong due diligence, the funds in which we invest. That's exposed in the U.S. and in Europe, where we feel confident, that's what I said during the presentation, where I feel confident, if you look back to historical data, usually millésimes that are committed during a crisis, but invested, I would say, drawn the next 3 years after a crisis are very good. Since usually asset manager find very good opportunities to deploy the capital of the fund. So that's why I'm pretty confident on the fact that we have good return prospects on those future investments.

So thank you very much, Vinit. And thank you, François. Let's close the SCOR Global Investments Q&A there.

Thank you.

Thanks. Now you will recall that digital transformation is a key element of the Quantum Leap plan. I would now like to introduce Romain Launay, SCOR's Chief Operating Officer, to give us an update. Romain, over to you.

Thank you, Ian, and good afternoon, everyone. At the core of Quantum Leap is our ambition to harness technology in order to improve our insights and risks, broaden our client offering and boost operational efficiency. Another priority, which is dear to our hearts, is to contribute to a more sustainable world. So let me update you on where we stand on those 2 goals. Last year, we announced a EUR 250 million investment in technology over Quantum Leap. Today, we're on track. We have deployed EUR 113 million. We have launched all the projects in the Quantum Leap portfolio, and we've already delivered important landmarks. As you may recall, Quantum Leap identifies 5 technologies on which SCOR wants to focus. You can see here on the screen a few examples of the achievements made since last September. For the sake of time, let me single out 1 particular area, ebusiness. Quantum Leap sets an ambitious target for increasing the volume of data exchange electronically with our business partners. Over the last 12 months, this volume has increased by 25%. And maybe most importantly, in more than 50% of the cases, this is achieved via straight-through processing, meaning that the entire chain is covered. All these developments are optimally supported by a powerful and efficient IT infrastructure. We are progressively moving all our IT assets to a few selected public clouds, which allows us to improve performance, which is particularly important for complex computation and client services, while being 20% more cost efficient. Reinsurance used to be the preserve of actuaries. To a large extent, it's a [ risk ]. But they are now joined by an increasing number of data scientists. We currently have around 50 of them at SCOR. They don't use the same techniques or the same tools as actuaries. And in Q1 of this year, we equipped them with a data science platform to prototype and develop data services for both internal and external clients. Concrete use cases didn't take long to emerge. To give you an example, this platform was used by our live teams to develop new models, projecting the evolution of death due to COVID-19 and he was also used to share these insights with our clients, in line with our mission to spread knowledge. As we've just seen, technology is important for improving our insights on risks and delivering new services to our clients. It also has a role to play in boosting operational excellence. When unveiling Quantum Leap last year, we said we had 13 processes handled by robots. This figure has now risen to 36 and there are 25 more to come by the end of 2020. A great example is the way we monitor MGAs using robots. Doing it manually would swamp any operations team. But with robots, it becomes possible. At SCOR, robots handle the entire change from importing [ borderlands ] using data capture technology to mapping, cleansing and validating data. After a process involving multiple steps, alerts are sent to underwriters whenever an anomaly is spotted. Remediation actions can then be taken in good time. As we further develop robots, a new frontier is emerging. The orchestration of processes that still require some form of human intervention. With the COVID-19 lockdown, our life claims team in the U.K. could no longer coordinate their work around paper-based forms and needed a solution to address this. In just 5 weeks, we rolled out a business process management solution that allowed them not just to process claims, but also to save 44% of their time compared to before the lockdown. We plan to extend this to many other processes. Technology is key. But there is another factor that is even more important, the human factor. We are proud of the outstanding resilience and dedication shown by SCOR employees since the outbreak of COVID-19. This has enabled the group to be fully operational to serve its clients. We believe that this is down to the values we all share throughout the world, embracing diversity, caring for each other and supporting our communities. On gender diversity, possibly the biggest challenge facing the industry is to help women access the highest leadership positions. By promoting more women than men through our partnership program in the last 2 years, we are actively building a strong pipeline of female leaders. The SCOR community was filled with sadness, frustration and deep emotions over what happened to Mr. George Floyd just miles from our Minneapolis office. We are more than ever committed to relentlessly fighting against behavior and attitudes that do not respect the rights of all citizens. And we want to make a difference for local communities in all cities where we operate, which is why this year, we launched the SCOR for Good Volunteering and Charity Program supported by more than 50 local champions across the world. Quantum Leap sets 2 goals for reducing SCOR's carbon footprint: to cut our carbon intensity by 30% compared to 2014; and to offset all residual CO2 emissions. We have already achieved these 2 targets. There is much more to our journey towards sustainability, which is still at the group's highest governance level by a fully dedicated committee of our Board of Directors, setting objectives and reviewing progress every quarter. This momentum can be seen in the evolution of SCOR's nonfinancial ratings and there is a huge amount of energy within the group to go much further in the years to come. Thank you for your attention, and I'm happy to take your questions now.

Thanks very much, Romain. In fact, we don't any questions in the queue, but I've got 1 for you. So you're not off the hook. The delay in IFRS 17, can you explain whether that's going to introduce any increased cost in what was committed?

It is not expected that it will because actually, the bulk of the build of the new systems will be achieved well in advance of the go-live of IFRS 17. And what we actually want to do is to use the additional year that was granted by the IASB to test those tools and to become more familiar with the figures. So the answer to your question is that we will use that time to really use those tools and see the figures and gain more business and financial insights based on what we see.

Good. Thank you very much, Romain. And that concludes the section on the digital transformation and sustainability journey of the group. So now I'd like to introduce Frieder Knüpling, the Chief Risk Officer of the group. Frieder will talk to us about the ERM framework of the group and also highlight what we're learning about COVID-19 and how that impacts on the framework. So Frieder, over to you.

Thank you, Ian, and good afternoon, everybody. SCOR has a very robust ERM framework, comprising a set of risk management mechanisms, which are tailored to its risk profile, a clearly articulated risk appetite framework, an effective capital shield program, which protects the group's capital base and limits key risk exposures, a stringent limit system, which is closely and continuously monitored and a well-established and clearly defined solvency scale, setting out the target capitalization level and the steps the group would envisage in case its solvency deviated from the optimal range. This framework is very mature and well recognized by its stakeholders, including all rating agencies. At the same time, the group and the risk management function, in particular, are constantly learning and improving their expertise and understanding of the risks the group is exposed to. As an example, this slide provides a snapshot of how we are beginning to factor the learnings from COVID-19 into our thinking about pandemic risk in the future and how this may evolve in the post COVID world. It's important to note that the pandemic is not over yet, and we will need to analyze and digest all its aspects properly before drawing final conclusions. However, some important items appear to be crystallizing already now. Until the beginning of 2020, pandemic risk was mostly considered a risk to human lives, predominantly leading to higher mortality and health claims and some limited P&C and asset impact. Compared to this, the strong and unexpected government reaction during the current pandemic have significantly reduced the potential death toll of the COVID-19 virus, whilst causing a stronger effect on P&C and the economy than previously expected. In the post-COVID era, we expect that the likelihood of similar government interventions is going to be permanently higher as the value attributed to human lives is so high as explained by [ Denis ] in his opening speech. Given this and the huge improvements in public health and R&D, it is likely that mortality and health risks linked to future pandemic events are going to remain at a substantially lower level than what has been assumed before COVID-19. On the P&C side, clarification of exclusions, strengthened terms and conditions and careful exposure management, unlikely to reduce the P&C exposure to potential future pandemics, maybe not to the level we had expected in the past, but it is certainly going to be lower than what we have experienced during COVID-19. The outlook on market and credit risks resulting from future pandemics is still uncertain and will strongly depend on how the economic fallout from the response to COVID-19 is going to evolve and be managed, which will take considerable time to fully emerge. Last but not least, we think that it is likely that certain operational risks, in particular, business continuity risks are going to be permanently lower, given the very strong resilience and remote working capabilities, which SCOR has developed and demonstrated during the crisis. COVID-19 has strongly impacted the development of our solvency position during the first half of 2020. The epidemic has caused significant market movements, and SCOR's solvency position has been affected by the sharp reduction in interest rates, in particular, swap rates, the rise in credit spreads and FX movements. In addition, SCOR has fully reflected all known and expected future excess claims from COVID-19 and its Solvency II estimate as of Q2. And of this, the group's solvency position has been highly resilient. SCOR has absorbed the pandemic shock, thanks to very strong operating capital generation of its business, maintaining a solvency position well in the optimal range. Zooming in on operating performance has been driven by strong contribution from both new and in-force business with overall favorable variances. This recurring capital generation is providing the momentum which helps SCOR ensure superior security for its clients despite external shocks and provide the basis for a further expansion of the business in line with our Quantum Leap objectives. SCOR's risk profile continues to be very well balanced with an almost equal contribution from Life and P&C underwriting risks and a lesser contribution from market, credit and operational risks, in line with our stated risk appetite. This carefully balanced mix is the basis for a superior diversification benefit, which in turn ensures high capital efficiency and an optimal risk return balance. SCOR's solvency position is resilient to market and credit stresses, ensuring that the solvency position would remain in the optimal range after each of the stresses applied. The sensitivity of SCOR's solvency ratio to interest rate movement has increased somewhat during the first half of 2020, which is mainly a consequence of the fall in interest rates. The decrease in rates, in particular, for the U.S. dollar has significantly increased the Solvency II risk margin. It has also further increased the duration of this highly interest rate-sensitive balance sheet item, which in turn has driven the rise in sensitivity of the solvency ratio to interest rate movements. Together with the entire insurance industry, SCOR has, for a long time, had the view that the level of the cost of capital rate used to drive the risk margin is too high, leading to an uneconomically large risk margin. The design of the risk margin makes it overly interest rate sensitive. And the fact that no diversification between legal entities can be reflected in the risk margin of the group solvency calculation in contrast to the SCR is a methodological flaw, which should be corrected. As part of the ongoing review of Solvency II, the introduction of a scaling factor, which would reduce the annual cost of capital charge for long-term risks is currently being tested. If implemented, this would lead to a material reduction of SCOR's risk margin, increase SCOR's solvency ratio by about 20 percentage points and reduced the sensitivity to future interest rate movements. All these proposals would only address some of the underlying issues and only partially, we believe they would provide a welcome step in the right direction. SCOR continues to carefully and continuously scan its environment for potential future changes to the risk universe in which we are operating. We're adding new topics to our emerging risk radar on a regular basis and intensifying our analysis of those risks, which might be particularly relevant for SCOR. Biodiversity losses have become an area of focus for SCOR for which we have set up a dedicated research program. We're also further intensifying our efforts to assess the potential impact of climate change on SCOR, about which we have provided detailed disclosure in the climate report, which we've issued earlier this year and on which Jean-Paul has also provided a bit more detail in his speech. With this, I'd like to thank you very much for your attention, and back to you, Ian.

Thanks very much, Frieder. So let's move on to the Q&A, please.

[Operator Instructions] We will take our first question from Vikram Gandhi from Societe Generale.

Vik from SocGen. One from my side. I see a reasonably large increase in one of the scenarios on Slide 103, and that's the one from terrorist attack. The figure of EUR 350 million was EUR 230 million last year. So can you shed some light on what your underlying assumptions are and what has really changed versus last year? And also, if you can elaborate on the casualty scenario that has been introduced this time around?

So both are scenarios which -- the exposure is measured on a range of different scenarios. We run them in addition to what we already have in our internal model. And we evaluate across the whole portfolio. We update these scenarios on a regular basis. As I said, we look at a range of scenarios, not a single one. And then we -- the exposure is simply the maximum scenario, which we've evaluated future of those risks. There's not a particular single driver for those exposures being larger than last year. It's a combination of business growth, exchange rate movements and updates in this scenario methodology. But as you see, they're all well below our risk limit and well within our capacity limits, which we are attributing.

Our next question is coming from Kamran Hossain from RBC.

Frieder, just one question. I guess we've been through probably the worst crisis in our lifetime. Have you revisited, I guess, the diversification between Life and Non-life at the tail, given the impacts we've seen, you've had huge amounts of business interruption losses. But at the same time, you've had kind of pretty severe impact from Life side. So have you revisited those? Or is that probably something to do post crisis?

Yes. Maybe we can go back to the slide on pandemic risk, which is attempting to address this question. We really -- no, thinking particularly about pandemic risk, we are really thinking about -- the slide at the beginning of my presentation, a bit further up. Yes. Yes, thank you. So we're really looking at pandemic events in an integral way. And as I tried to explain, in the past, we would have assumed that pandemics would lead to impacts across the whole risk profile, but primarily on the mortality and health side. So these would be driving our tail scenarios for pandemic events. But there are asset and P&C impacts in those scenarios. Looking more into the future and taking the learnings from COVID-19 into account, I think there's a strong likelihood that the same type of emergence of infectious diseases like COVID-19, for example, we would see lower mortality claims because of everything society has learned and improvement in public health and so forth. We might still see a bit of higher P&C claims than what we maybe would have thought a year ago. But as we are trying to explain here on this slide, we think that's not going to be at the same level as now this year during COVID-19 because again, the insurance industry is clarifying terms and conditions and exclusions and managing their exposures more carefully with a view at what we have all experienced this year. So I think when you look at pandemic events in the future, I think there will be areas in our risk profile where we see maybe slightly higher loss scenarios, but other areas, in particular, mortality, which is very important for us where we'll probably see a significantly lower exposure for the same type of events. So overall, for our risk profile, the outcome doesn't need to be worse than in the past. And in fact, I think there's a fair chance that the same type of events, we might see lower scenario losses in the future. The distribution across the risk profile might be a little different. But I think there's a fair chance that the aggregate amount of scenario losses for the same type events might actually be lower. The [ capital ] ramp is the economy. As I said, we need to wait the economic recovery to really happen and to understand what the longer-term consequences on financial markets and so on after the very quick recovery, which we have witnessed. But that's how I would look at this in the future.

Our next question is from Thomas Fossard from HSBC.

I've got a catch-up -- a follow-up question for Frieder on Slide 105. On the underwriting part of the charts, I can understand the starting point for the Life business. But I'm not sure to understand the starting point from the P&C business because I think that in such pandemic situation, no one would have expected a complete shut down and probably, the impact on the underwriting -- the impact of the crisis on the P&C underwriting was not -- maybe not expected at all. So I'm a bit surprised by the starting point. And then I'm still bit wondering if at the end of the day, what you're presenting on this slide should lead to some capital relief or at the end of the day, maybe the regulator will push for more capital requirement on the P&C side because maybe mortality on the P&C was not well captured in the model previously?

Yes. Thanks, Thomas. What you said about P&C is completely right. And that's what this graph here at the bottom left-hand side is trying to depict. So starting from left before COVID-19, if you'd asked me a year ago, I would have told you, yes, we do expect some P&C losses in pandemic events. We expect that there will be consequences on credit insurity on potentially bank cancellation, which is not an important line for us, liability lines and a few others, but relatively small compared to the Life exposure. During COVID-19, we've seen that the losses we've experienced the industry as a whole are bigger, and that's the little bump in the middle. Looking into the future, we believe that underwriting risk management, clarification of times and conditions and so on will lead the risk exposure of the P&C in case of pandemics to trend down again, maybe not fully back to the level we thought it was at a year ago, but probably somewhere in between, not as -- as low as pre-COVID, not as high as what we've experienced during COVID, but somewhere in the middle. And then in regards to your question on capital, I think that's a question which the whole industry will have to carefully consider. What are the implications of what we've learned on our pandemic models and capital requirements and so on. I think it's important to note that, first of all, this is one data point, and we model pandemic risk stochastically with thousands of potential scenarios. So this is an important data point, but it's not necessarily changing everything in relation to pandemic risk. And as I said, we'll need to wait for the crisis to really play out. And we understand all the consequence, make sure we properly factor them into the overall picture. But we think there's a fair chance that in a post-COVID future assessment of pandemic risk, mortality risk will be structurally lower as a subset of our event losses for pandemics. Other areas, maybe a little higher, but given our specific risk profile and the strong weight, which mortality has in our risk profile and in pandemic events, I think there's a fair chance that the overall capital requirement the score will not necessarily increase or potential could even decrease if we factor what society has learned about how to deal with the mortality impact of pandemics properly in.

And actually, at the 1-in-200 year event, there is a EUR 1.4 billion 1-in-200 year event, probably not so much positive impact from what you've described because I guess, we'll be really in the tail, tail, tail. And so probably we should expect maybe government intervention to be less significant is the way to look at it?

I think government intervention is there to stay. What we've experienced is probably not a 1-in-200 year event. I would expect that a more severe pandemic would, if anything, lead to stronger reactions by governments and society. So I think the lessons we are learning now from COVID-19 will definitely be also applied. Now to some extent, to very, very extreme tail events. They will probably shift the balance of the contribution of different loss components to pandemic risk. But again, given that in this number which we see here on this slide, mortality risk currently is the main driver. This is in all likelihood going to reduce. So we think there's some scope for the overall number to either remain more or less the same or potentially even go down.

Thank you very much, Thomas. Let's go to one final question for Frieder and then we'll move on.

We'll take our next question from Paris Hadjiantonis from Exane.

Yes. Frieder, basically, I'm trying to understand how I should be thinking about the capital position of the company going forward, given what we've learned today? If I look at the P&C front, obviously, there's going to be more growth, more capital consumption there. On the investment side, François wants to deploy a bit more capital towards value-creative assets, which I assume come with a higher capital charge. And on the Life side, the mortality developments on COVID are probably slightly better than what we were thinking about at the H1 results level. So given you're moving, it seems to a bit of a growth phase in P&C should I be thinking of the level of capital that you currently have, 205% or somewhere in the middle of the optimal range as more or less the level that you will be operating for the next couple of years? Or is there something that I'm missing there?

Thanks very much. I mean first of all, 205%, that's exactly where we'd like the solvency ratio to be. It's right in the optimal range, slightly in the upper half. So we're very comfortable with it. And that's where we'd like it to be really. And that's the sweet spot also in terms of risk-return balance and managing stakeholder expectations and so on. Is the -- trying to predict this forward, it's going to be affected by everything which has also moved our solvency ratio up and down over the past quarters and years. I think what's important to understand is that if you exclude COVID-19, operating capital generation is providing a strong underlying support, which is generating capital over and above what we need to fund new business growth. So it provides scope for capital management and for expansion of business growth or the absorbance of shocks, which is something which we've demonstrated this year. But there is this momentum and there is the support, which has been supportive of our solvency position over the past years. And with this, if you look at a longer time horizon, and Mark has a very nice slide on this, you'll see that we've managed our solvency ratio in a fairly narrow band, and it's been really very, very stable in the range where we'd like it to be.

Okay. Thank you very much, Paris. Let's close Frieder's session there and move on to the last session of the day. Now you've heard a consistent theme throughout the day of how the SCOR Group is both absorbing the impact of COVID-19 and yet is also very well positioned for profitable growth. Mark Kociancic, the CFO of the SCOR Group, is now going to talk to how the financial strength and agility of the group supports those key themes. So Mark, over to you.

Okay. Thanks, Ian, and good afternoon, everyone. Let's begin with the resilient financial profile of the SCOR Group. COVID-19 is a very manageable event for SCOR. The strong shock absorbing capacity comes from the very strong resources of the group compared to the COVID-19 exposures. And we have a strong shareholders equity position, a strong solvency position after taking account of all known COVID-19 exposures, strong liquidity, which is also supported by strong financial cash flows and a strong and prudent reserving position under IFRS. On the next slide, we can see the evolution of the strong shareholder equity position, which, over the last 15 years has shown a consistently positive trend from EUR 1.8 billion to EUR 6.4 billion today. And despite the series of shocks shown here on the slide, whether they're man-made or from natural catastrophes, SCOR has been able to leverage the strength of its balance sheet and absorb these shocks, allowing a consistent and successful execution of its strategic plans through the years. So even though we cannot predict the future, we have an excellent track record. And this proven ability to succeed, I think, is a testament to the quality of that strategy and is also demonstrated by the consistent increase in the credit rating profile of the group over this period to a best-in-class AA- or equivalent level. On the next slide, we show how the solvency of the group remains strong even during shocks. And across the recent years where we've seen some very significant events, regardless of the issues, the group has maintained a strong solvency position in the optimal range and above 200%. And this is the slide that Frieder was referencing before. So let's move on to cash flow. Over the last 10 years, SCOR has generated over EUR 9 billion of cash flow, and that's positive in every year despite the volatility that may come from natural catastrophes or other shocks. And the business model produces consistently positive flows from both business engines. Moving to the next slide. It's because of the ability of the group to absorb shocks, including COVID-19, that SCOR remains committed to the Quantum Leap targets of profitability at 800 basis points above the 5-year average risk-free rates and a solvency target in the optimal range of 185% to 220%. There are certainly challenges in the current environment, but SCOR has a strong and profitable franchise. Both the Life and P&C business units can grow and capture additional price increases and the group can further optimize its capital structure. Let's move on to the capital management policy of the group. So on this slide, you can see the strong value creation story of the group with more than EUR 6.8 billion of shareholder value created since the "Back on Track" plan back in 2002, and that shows a significant contribution from dividends and from market capitalization increases, leading to an annualized total shareholder return of 8.6% at the end of 2019. If we go to the next slide, the group is committed to an attractive capital return for shareholders. And the dividend policy of the group remains unchanged. Regarding the fiscal year 2019, the group complied with the EIOPA and ACPR calls, and we withdrew the dividend resolution for the 2019 fiscal year that we have presented back in March. And the group will regain its capital freedom starting the 1st of January 2021. On the next slide, I wanted to show you the comparison between our shareholders' equity under IFRS 4, which represents approximately EUR 6.4 billion of shareholders' equity at June 30 relative to where we would be under the Solvency II regime of eligible own funds. And you can see here in the green box, there is really some value that is not well recognized in the current IFRS 4 accounting framework. So we have a very significant balance of almost EUR 8 billion of value that is not carried in the current IFRS 4 balance sheet, predominantly from the Life business. And offsetting that, we have a risk margin approximately EUR 5.5 billion of prudence under Solvency II. All things being equal and our best estimate liabilities being in line, run off at the best estimate would see this prudence, find its way into the P&L and shareholders' equity over the life of the portfolio. If we move on, I'll give you a small update on IFRS 17 briefly. We've talked about this before, how the accounting standard is a step to where we really want to get to. And that's a full economic value management framework. Where we are considering the underlying economic value of the risks we're writing against the return that we are receiving. So IFRS 17 is a good step in that direction. But for us, it's much more than just an accounting standard change or compliance exercise. It fundamentally changes the management of the business, impacting how we plan, how we reserve, how we price and so on. So we have a global implementation underway, and we are at present working on modeling the impacts, and we're on track for delivering the project, and we've spent a significant amount of time, resources and money on this project so far. Let's move on to the final section of the presentation on financial strength and our ability to grow in the positive environment that we're in. There are several points in our favor. First of all, that the scalable nature of our platforms, which are global. This has given a strong track record in the past, and we can continue this with profitable expansion in Asia Pacific on the Life side and strong P&C growth in the new hard market environment, particularly in the United States, and the EMEA region. And the credit ratings, they are key elements of our value proposition in the Life and P&C franchises get real benefit from a best-in-class credit rating that reflects the group's financial strength. Our AA- rating has been affirmed by the 4 rating agencies over the past year. But importantly, Fitch, Moody's and most recently, S&P have all affirmed their rating since the commencement of the COVID pandemic. Moving on to the next slide. SCOR has flexibility in the resources of capital available to the group. We have the ability to raise equity if we were to need it, but we absolutely do not see any need for a rights issue in the foreseeable future. We have well-defined debt principles, which I'll detail in a moment. And we have further innovative solution such as the contingent capital facility, which is quite efficient. And by the way, even with the current and projected COVID-19 costs is very far away from being triggered. Next slide on capital fungibility. We have 3 main pools of capital in the Americas, EMEA and Asia Pacific, with 93% of our capital in major currencies. We're very conscious of where we place our capital. We favor mature markets, stable regimes with stable regulatory and legal systems, and we have a limited number of subsidiaries, which enhances our capital fungibility in that. I don't think we can overstate these points enough about our organizational structure and design. Our dividend plan is set up on this basis, looking at each of these pools to provide us with flexibility for supporting the external dividend at the mother company level, the SCOR SE level. And at the SCOR SE legal entity level, we do have more than EUR 2.5 billion of distributable reserves. On to the next slide on productivity. This is a clear demonstration of the scalability of the group's operations, and we see it in 2 parts. First, the operating leverage is visible in the strong consistent growth in premium per employee. And then second, this is combined with the reducing cost ratio. This increased efficiency results from a strong focus upon investments in technology and talent attraction and retention policies. So if we move on, here, we lay out the debt principles I mentioned earlier. We issued high-quality debt, typically subordinated hybrid debt, long duration, stable currencies and then meeting stakeholder needs, including rating agencies. And we do expect to remain close to the 25% leverage mark over the remainder of the Quantum Leap strategic plan. On the next slide, you can see that in terms of duration, we've taken a laddered approach. And so this has given a very manageable maturity profile with no refinancing pressures. We do have a small debt maturing in the fourth quarter of this year, which we expect to call. On the cost side, we benefit from the competitive advantage of a low weighted average cost of debt compared to our peers. That structure provides the group with flexibility in its capacity. 85% of our capital is in the Tier 1 category. So we have ample capacity to issue from any one of these 3 tiers. We are not forced into issuance from a particular category. And we have no intention of issuing from the Tier 3 category during Quantum Leap, it's really there as a potential shock absorption capacity in the event of an extreme natural catastrophe event, which could trigger deferred tax assets on the balance sheet. And then Denis mentioned resilience in his introduction, and I'm going to close on this with a picture of the resiliency of the group's return over the last 10 years with an average return on equity at 8.7%. So we confirm our commitment to our strategic targets, and it's through this consistent application of the strategy throughout the strategic plans supporting these targets that has given the group its resiliency. Thank you very much.

Thank you very much, Mark. So we can now move to the Q&A session. As this is the last Q&A session of today, please, by all means, ask Mark, about the capital management aspects of the group. But the rest of the comments are on hand, should you have any questions that you didn't manage to get in from earlier during the day. So -- and please to limit yourself to one question each. So we'll take the first question.

[Operator Instructions] We'll take our first question from Kamran Hossain from RBC.

I've got one question basically about dividends. I mean I guess, from everything you've said, you've told us and what we know about the balance sheet, I guess, the decision not to pay the 2019 dividend was choice, not a necessity. Now you've mentioned that you regained freedom for capital management from the 1st of January. Do you -- should we completely forget about that 2019 dividend? I mean you chose to not pay it, you could have paid it? Or is there just simply too much kind of French government pressure not to do that? So do you have the flexibility to catch up? Or should we just forget about that at this point?

Yes. So we obviously -- those of us in France, those companies in France, obviously received significant pressure or guidance from our regulator not to pay the dividend. And that's something we adhere to. We wanted to follow their guidance on this issue. And I think that's something that hopefully will clarify itself again in January of next year. We saw some recent guidance last month, indicating that they were extending from the October 1 deadline to centrally January 2 of next year. So having said that, we were prepared to pay a dividend, the dividend back in March and then events unfolded. So the policy itself remains the same. We're seeing today a significant commitment by the group to capture opportunities in the marketplace and then also a confirmation of the capital management policy. So I think the group will balance both of these interests of promoting organic accretive growth and an attractive dividend policy next February is when it would be publicly announced on a typical basis during our Q4 results. But the growth that we're looking for, I think, really enhances the franchise expansion, which has always been a goal of the group throughout its strategic development. And you'll see us favor this as long as it's accretive and clear and strong.

The next question comes from Vikram Gandhi from Societe Generale.

Just a question on debt. I think you mentioned at the first half results presentation that there might potentially be a small to medium-sized debt issuance to fund the growth. Now you are projecting solid growth for P&C, I wondered if you can update us on how the thinking has developed. And linked to that, can you offer some comments on the headroom the group has for further debt issuance from a rating agency perspective? I'm aware there's a lot of room on the Solvency II buckets, but I guess, rating agencies are probably the ultimate binding constraint. So any comments there would be really helpful.

Yes. It's definitely an option being -- when you look at the rate environment that we have today, I think you could easily have an opportunistic targeted small debt issuance to take advantage of rates. I think François alluded to Chairman Powell from the Federal Reserve in his comments in Jackson Hole. So you're going to see, I think, a favorable environment for that to get inexpensive capital to be used for expansion or other reasons. So I could see us adding something small, targeted and just really adding to the capital base of the group to secure the future expansion of the group that much more inexpensively. So it's quite attractive from that standpoint. I think in terms of rating agency constraints, you could certainly add a few more points to the leverage ratio and be in line. There are some admissibility constraints once you get into something that starts to approach the 30% level in terms of the admissibility on Tier 2s, for example. But that's not really something that concerns me.

[Operator Instructions] And our next question is from Thomas Fossard from HSBC.

Since Romain Launay talked about ESG in his presentation earlier today, I was wondering -- I wanted to talk about the G of ESG. And possibly, if you could update on the governance evolution at SCOR, what was the time frame? And also, you're in the process to look for potential successor to the role of CEO to Mr. Kessler. So could you update us on the process and what the time frame and when we should know more about this?

I think, Denis, that's a question directly for you.

You are very smart, Ian, to find out that it's a question to me. So I will try to do my best to answer it. My mandate ends up next spring, late April, early May, is the general assembly. So it's -- we have 8 months in front of us. As you know, we apply corporate governance, and we stick to strict corporate governance. The Nomination Committee is in charge of finding the new governance and the teams that will head core. They've been working hard. The process is a little bit made complex by the pandemic because when you have to meet people and no one can travel, difficult to a face-to-face meeting and so on and so on. So Nomination Committee is working hard, and I talked to the Chairman yesterday, and he told me that we are close to the end of the work. And so new governance starting next April or May, will be announced in the coming weeks. We were supposed to give it at the Monte Carlo Rendez-Vous. As you know, Monte Carlo Rendez-Vous has been canceled. And so we are still well ahead of the general assembly. The resolutions will be given to the market in February. But I believe that in between, we will have the proposal by the Nomination Committee to the Board, then the Board will have to, of course, accept the proposal by the Nomination Committee and therefore, translates that into a solution. And then hopefully, shareholders will approve the proposals by the Board for the group to go forward. What's very important today, I mean, there is no issue or problem. The process is going on with the help of our leader [ headhunter ] company, Headhunter [ Caminar ] well-known around the world. And I can tell you that the job, that the nomination she is doing is absolutely incredibly serious. They want absolutely SCOR group to be in good hands starting next year. After 18 years or close to 19 years of myself being at the -- of the group. So you will have to wait a little bit, but I promise you there will be proposals that will be communicated to the market -- not proposals, the decision by the Board, communicated to the market in the coming weeks.

And can I ask if yourself, Mr. Kessler, you made your mind regarding your role within the group?

The answer is -- I can only answer question by the Nomination Committee, and therefore, we're not yet there. Let me has to come back to the Board and make a proposal about the governance, as I said, going forward. So we're not yet. I'm still alive. It's a breaking news. I'm still alive. I'm still heading the group and spending my time, pushing the group forward. And I will, of course, devote the next 8 months, I can tell you, doing my best for the group to benefit from this phase. We were waiting for this phase for the last 3 years. It's finally here. I want to be part of the fiesta for the next 8 months. In other words, with my team, be sure that we are going to realize Quantum Leap as I committed myself to do 1 year ago. And so until the last day will do my best to head the group and make decisions along the way and the past I just indicated today, so. I'm still alive and energetic. Do you have any other questions?

I think that's the last question that we have in the queue. So thank you very much, everybody, for joining today. I hope you enjoyed the presentation. And as ever, myself and the IR team are available to pick up on any additional questions that you may have, just get in touch with us. So I will just now hand back to Denis to close the day for us. So back to you, Denis.

Yes. Ladies and gentlemen, I hope you have fared throughout the last 3 hours the extraordinary confidence of myself and the management team of SCOR, be it on the finance side, on the underwriting side, on the risk management side, everywhere in pursuing successfully the SCOR journey. I mean it's extraordinary confidence. We know where we go. We know where we are. We did a full analysis of the situation of the group and the situation of the market where we operate. And we are extremely confident that this phase will be quite positive for the group. Therefore, for all the stakeholders and, of course, shareholders. I hope you've had [ prioritized ] confidence [ and ] enthusiasm because our team needs to be enthusiastic when you move forward in such a way with such incredible objectives and incredible opportunities. And so I wish to thank my team really because working hard and being able to handle the pandemic issues as we have done for the last 6, 8 months, continue to operate day after day and to book and to pay claims and prepare for the next phase, quite a job, extremely well done. So I wish to thank all my team for that, not only the management team, but certainly, the entire group. So we're enthusiastic, and we hope that you are going to share enthusiasm. Thank you for attending IR Day. Goodbye, and thank you.

This does conclude today's event. Thank you for your participation. Ladies and gentlemen, you may now disconnect.