Swiss Re AG (SREN.SW) Earnings Call Transcript & Summary

Good morning from the Swiss Re offices here in London, at the Gherkin. My name is Thomas Bohun. I'm the Head of Investor Relations, and I would like to welcome you to our management dialogue event this year. We will kick it off right away. You will hear from our CEO, Andreas Berger; followed by our CFO, Anders Malmstrom. That session will take around an hour and 15 minutes. We'll then show you a short video on AI, 2 minutes, before we head for a short coffee break and then reconvene for the Q&A, where we will take questions here in the room. So with that, Andreas, over to you.

So, a warm welcome for the people here in the room. It looks very cozy and intimate, so -- and a lot of familiar faces, but also a warm welcome for everybody who's dialing in. The sun is shining. The markets are tough, but there's a positive outlook. And it's about strength and resilience. That's my key message. Remember, when I stood here last year, I was talking about closing the gap to #1. But before I go there, I wanted to say there are so many temptations, temptations around in the market and huge expectations, obviously, because there are temptations. What is the temptation? Temptation is growth at the moment. Everybody thinks we have to grow. There are so many opportunities. There's so much demand in the market. So let's go and grow. In our business -- sorry to say, it's a recipe for disaster. I have lived through many, many cycles. We could actually make a vote here in the room, at least how many cycles you have lived through. The characteristics are always the same. People go into markets, grow at the wrong time. I've seen this movie before. And we are also guilty because in the past, we have grown in certain areas at the right time. No, actually, not at the right time. It was the wrong time. You see -- so we have to be very conscious about this. For me, when I ask about what is closing the gap #1 actually mean? First of all, it means we have to come to the party with humility. We have to admit that we were not #1 in the past. That's what we said internally. We recognized there are some things that we need to change. Why? Because we're market leaders. We're market leaders and people are looking at us. So, the right behavior from market leaders also contributes to the stability in the market. So number one, people ask me what is #1? I said, you define what #1 is. By the way, you in the room define what #1 is. And the outcome is actually determining what #1 means. But I said to our colleagues, #1 is actually a mindset. Closing the gap to #1 or wanting to be #1 is a mindset. And it's not just growth. At the end of the day, we are in a volatile cyclical business, and it's about managing volatility. It's the fine art of good underwriting, good claims management and good cycle management, and we call it the Smart Circle, where all functions play their role, work together and come to the right conclusions, except the actuals in the market, but then adjust the expectations if they're not aligned, if the gap is widening. This is something. That's a muscle that we were working on for now quite some time, and you see certainly things coming through. And you see me here very confident also, because we see it coming through. We see it in the numbers. We see it in the behaviors of our colleagues in the market, in particular. Maybe we're going to talk about this as we go into the renewals. So, I'm not here to squeeze the lemon. I came here to build a lemon tree, let's call it the lemon tree. It's not about squeezing the lemon. It's about long-term stability, resilience. It's about delivering year-by-year-by-year-by-year, consistency. And you won't achieve that if one gets too excited, if people think there's an opportunity that we need to chase. But on the other hand, I'm also not intimidated by what people say about markets and rate developments. That is cycle management. That's normal. So, we have to grow up and behave in the right way in each and every part of the cycle. That's our job. Now let me quickly start with -- I think we did have here the key messages that I wanted to send to you today. So we were too fast with the slide here. So, we want to grow the Swiss Re franchise. So, listen to my introduction, the sentiment that I wanted to send, we want to grow the Swiss Re franchise at the right time when the right opportunity is there. And we need to be ready for every part of the cycle. And I'm very positive about the market, because there are areas where you can still grow today. But again, you have to adjust your portfolio. And near term, we're focusing on cycle management and on margins. That's very important. Second takeaway, we're going to talk a bit more today about the data foundation that we built over years now. There's over 8 years where we have built a solid data foundation and tech foundation, where we believe we are AI-ready with a now state-of-the-art leading AI platform that we can deploy into the business. Remember, I said Life & Health is the last business unit that we are going to address. In 2019, we started with Corporate Solutions with a fundamental turnaround, introducing a new reserving philosophy, solidify the business. And you've seen over, I think it's 21 consecutive quarters beating consensus, really delivering on what people were promising to deliver. And then obviously, we went to the P&C Re business. And the same applied to the P&C Re business. And you can see suddenly the underlying quality of the portfolio is really coming through now very nice. Finally, we said this year, we're going to address Life & Health Re as a business unit. And remember, there were three phases, two large portfolios at the beginning when we introduced the IFRS balance sheet, critical illness and U.S. mortality in particular. Then we went to the midsized portfolios, and now we have addressed the smaller portfolio. So now, we have looked at all portfolios. And we can say it's materially completed now. Last year, when we talked about Life & Health -- sorry, liability reserve increases, you asked me and I said, I can sleep easier now. Now, I can say it for Life & Health, too. So, we set all three business units now at a level where we say it's a successful foundation now for the next phase. And then, this also will justify the increased targets for the Life & Health business unit for 2026, as you can see later. We have also achieved an excellent portfolio quality across the P&C businesses. We've said that. You can see that in the results that were coming through the quarters last year -- or this year, sorry, we're still in '25. And I'm very happy with the performance of both business units as we speak. There was a bit of luck also, obviously, in the P&C Re business with a pretty benign cat season, in particular in Q1, we felt we had a very heavy Q1, wildfires in Los Angeles. We always know about this. But Q2, Q3 were actually quite favorable for our book. So, it didn't reach our budgets. Expenses, I put out a USD 300 million or more cost reduction target by 2027. This is a net run rate number. So, inflation and investments are being taken out. So, that's a real saving, and we are very well on track this year alone, USD 100 million we will definitely achieve. We expect to deliver on our 225 (sic) [ 2025 ] net income targets of greater than USD 4.4 billion. At Q3, I already said we are very well on track. We were 90% there. So, I would expect us to be confident about this target. The aim for 2026 will be at USD 4.5 billion net income target. You might say it's underwhelming. Again, I repeat, the market is not easy out there. USD 4.5 billion is an attractive outcome for us. It's more than this year, but also you can translate that into roughly a 20% ROE. So this is a pretty good outcome. Could we do more? Maybe. But again, remember, I don't want to squeeze the lemon. We need some dry powder for further strengthening our position in the market. And finally, we will announce now today that we will have a sustainable annual share buyback program. It will be a starting point of USD 500 million, and we will start in 2026, obviously subject to us making the target for 2025 and obviously also subject to Board approval in February. This, again, you might say, underwhelming. But if you look at the market, there's not just rate down decline, et cetera. There's also opportunities. It's a very dynamic market at the moment. There's not 1 week where we are not being approached about potential inorganic opportunities, but also organic opportunities. We're open for that. There are international opportunities that present themselves that are not baked into yet. Those are new ideas, new platforms, regional platforms that are being created. Swiss Re as a leading reinsurance group is always at the forefront. We've always been invited to the party. So, expect something more to come at this front. So I'd like to keep some powder dry. There are great opportunities out there, and we want to be there to capture on those. So that's -- those are the key messages I'm going to send. And we will separate our presentations today in the more strategic part. And then Anders, our Group CFO, will come with the finance part of the presentation. And then obviously, we're going to engage in the Q&A. We're coming from a strong foundation. We have addressed the areas where we looked -- we found drag, drag, negative distraction. And now we could uncover the quality of Swiss Re with a great leading brand reputation with more than 160 years of history. We've got fantastic access to clients and brokers, actually privileged access. This is reflected in very, very good feedback that we measure on a regular basis. We have top-tier market positions in all three business units in the addressable target market that we're operating in, we have leading positions, if not the leading position, #1. And this obviously is underpinned by a very, very strong continuously performing asset management unit that we're very proud of. We have a strong balance sheet, strong capital position with a fantastic diversification. I'm going to come to that point in a bit. Risk knowledge. I think, when people talk about Swiss Re, that's what comes to mind. It's reflected in Sigma, the publication, where we channel our knowledge into our stakeholder groups, not at least the customers. And again, state-of-the-art data foundation and technology, that's something that we want to be known for as well going forward. This all makes the world more resilient. That's sort of the frame that we set as a foundation. And if you look deeper now, you can see that Swiss Re is actually very well positioned with a strong capital position, of course. But the diversification of the book is going across the business units, Life & Health, not correlated to the P&C businesses. I think the clean setup of the businesses, the business units is helping. So, we have a clear mandate for each and every business unit to deliver upon. I think that clean setup is not -- it's almost unique in the industry. At the same time, we've got a clear diversification when it comes to lines of business, that we look at lines that are not correlated to the negative pricing cycles that we want to focus on when we talk about growth and then manage, obviously, the cycle in the areas where the rates are going down. And then the territorial mix, I'm very happy with. We have reduced the share of the U.S. business, for instance, to the benefit of, for instance, EMEA or Europe. So, I think I feel much better with the mix that we have. The capital strength, solvency ratio, 268% as of October 1 in this year. The rating is very strong, AA-. We've got the risk expertise that I just mentioned, 200 -- around 200 proprietary cat models that we have with 50 scientists feeding those models every day with data points that are coming in as the events are happening and other models are being created. So, all this is fed into our models and being deployed into our underwriting, but also into the market. Client feedback and NPS of 50, I was told is really excellent. And you can see here, and this is the latest feedback that we get from our customers, we are increasing year-by-year-by-year in the Net Promoter Scores or in reinsurance, you have the NMG scores. This is very, very promising. People see the change coming through and also the positive attributes like speed of decision-making. That's what our clients want. They want the risk expertise and insights, but they also want speed and clarity, clarity and consistency of risk appetite. You want, obviously, also consistency, consistency in delivering our targets and not producing surprises all the time. And by the way, the public sector is also a big client group of ours. They're also looking for stability for stable partners with a strong resilient balance sheet. They deserve to have a resilient Swiss Re in order to increase their resiliency. We see this with governments that we engage when we talk about catastrophic events and how to help governments also protect their people. We do that also with parametric solutions, for instance, and the Caribbean is a discussion point as we speak. How can we help prevent situations like that or at least when it happens, have a payout mechanism so that governments quickly can help their populations. Our priorities for 2025 are very clear. I always said there are two priorities. One is, hit the targets, meet the targets. The group net income is the overarching objective that we want to pursue. Secondly, increase resilience of the group. Those two priorities you should always have in mind when you look at our actions and when you look at our communication when we put our actions out there. Increased resilience is one topic. And by the way, they're not mutually exclusive, those two priorities. So, meeting the targets is for me is always important. But should we have wiggle room to increase resilience, we would use that and still make the target. And that philosophy, you have seen in Q3, and you will see it also as we go into Q4. Now Life & Health portfolio reviews, and I spoke about it. I'm really very happy and proud that the teams really pulled up their socks, went through all portfolios and came to a landing not only for Q3, but now also for Q4. Anders will talk about this in a moment. We have reserves for current year attritional losses in P&C Re. We have seen certain claims activities or seasonalities. That's something that we addressed. We could also afford it, obviously, funded through a very good Q2, Q3, where the nat cat losses really not were hitting the budget. I think that's something that we do now on a continuous basis when things are affordable, when we can strengthen resilience and still make the targets, think about that. That's how we manage cycles also. The allowance for claims reporting, I mentioned that, but important is the initial loss pick. We have a prudent initial loss pick across the P&C units. And we introduced, obviously, also the uncertainty allowance for new business. You have heard that before. But I think it's important that we have that discipline that the costing gets right. The costing is determining at the end of the day whether the actuals versus expected gap is widening or not. And I think we've done a very good job in the meantime since we introduced the new reserving philosophy for the P&C businesses. And now, this is now also being introduced in the Life & Health business. USD 100 million cost savings in 2025. I spoke about this already, contributing to the USD 300 million cost savings by 2027. And again, this is a net run rate -- cost run rate reduction for Swiss Re. You will see that we have had significant investments also into AI capabilities and use cases. That's all factored in. So, this is really net of inflation and obviously, the investments. Now that's a recap only because I wanted to set the stage. Everything I was talking about now was about getting ready and setting a successful foundation now for the next phase so that we then can see the benefits coming through of having three clean business units, each and everyone playing its role in the group and not having all these distractions that always keep us busy and keep us away from the core of what we are about. I'm very happy and very proud that in this period where we call this program NEXT, close the gap to #1. This period, and it's not a long time. We started with a transition phase when it was announced that I will become the group CEO, my predecessor and I already took a tough decision on ETQ, the B2B2C business that we would exit this business. That triggered then obviously a whole series of other events. That was the transition phase. And then, when I started in July, we went into the immediate actions. We reset our solutions business. We're cleaning the whole portfolio, focusing really on the portfolios where we have the right to win and then expanding from there. Secondly, and you know the U.S. liability reserve increase was the decisive moment, and this was a moment and remember last year, I said, after this action, the world was a different one. It was a different one for you. It was a different one for our customers, but in particular, for our employees, our colleagues who have to go out and in this very difficult market, go and fight for their rates. There can leave the drag behind. It's very important to just see that this was now something that changed the world. So, you can see in the bottom, we say we were addressing all the areas and key improvements -- improvement areas to set the foundation now for the future, and that's where you see where we are today. And now, we can say with this foundation, we can look into a refreshed strategy, which we call "built to lead". But in order to do that, just quickly, let's recap. Because everything we did under NEXT is not going to stop. It's going to be part of business as usual. And I'll start with technical excellence. This is so fundamental. Remember, I always said technical excellence, we're an underwriting company, and we have to be proud to be an underwriting company. We introduced -- reintroduced the Group Chief Underwriting Officer. Regulators around the world love this move. Because now they're sure that underwriting is really the core of our activity, underwriting claims, risk expertise, that's -- risk insights. That's what we have, and that's what we're proud of. So, we need to invest into it and solidify it. The A versus E is the central focus KPI for us. It goes through the whole company up to the Board, the risk committee, everybody is looking at that KPI. That's why I'm confident that we can manage the cycle, because the whole company now is looking at this. Should we have a too broad deviation or widening of the gap actuals versus expected, there will be discussions in the group. That would trigger discussions even with the risk committee if this widening of the gap is not going to be addressed. The reserving philosophy I was talking about it. And then we've got the data platform and then also the AI readiness that I'm going to talk about this a bit in a moment. I think it's very important. It's fundamental. It's not about AI for AI or tech for tech. It's really for business, where we come from, we embrace data and technology for many, many years. And I think now you can see it's harvest time, and we're very happy about this. The people and talent aspect is very important. We invested into the capability models of the future. The gaps that we identified, we set up a strategic workforce planning, it's approach and tool. It's a strategy where we can simulate developments into the future and address where should we invest, where do we have the gaps that we need to close in order to be successful in the future. It's a tough labor market out there and talent market. Everybody is fishing in the same pond, in the same pool. But here, I think it's important to have the attractiveness as an employer where the young people also with the new capabilities feel that this is an attractive industry to work in. And finally, the culture aspect, I'm really proud of how the adoption ratio was. And you will see a few stats later about the engagement of our people, the understanding of the culture and embracing it. And this is something that I haven't seen in the industry personally so far. But remember, it's not a sprint. It's a marathon. As a CEO, I realize that after 12 to 18 months almost, there can be fatigue, because the changes are so fundamental, and we do it at speed. So you continuously have to reenergize our people, and this comes with very successful milestones that we could produce that we could report on. For instance, the iptiQ exit strategy that we are implementing, when you see the engagement service coming through from the iptiQ people, it's something that surprised me how positive it was because it's clear, clarity is important. The journey is clear, the trajectory is important that everybody understands it. And then you celebrate the individual successes coming through like selling a portfolio to a credible party where it's a better home for the people. So they acknowledge this. Everything like that needs a team. It's the first time that I'm showing the team in this form, and I've got a lot of people sitting here based in London, I guess, or in the U.K. at least. So just imagine a Premier League team. And I'd like to use that analogy, because it's really about who's playing what role and why do we think this could be really the winning team. We've got a combined 250 years of experience in this team. And we've got a healthy mix of people who came through the ranks, long-serving Swiss Re colleagues. But we also have colleagues from external that really strengthened the team. So, you see -- take the analogy from a Premier League, you see the manager and the right-hand man of the manager on the left, so that's the group CEO and the CFO. And then, if you go then to the team, and I hope it's the team that scores a lot of goals. So, the first line is the offense, I would call it there, they are the interface to the customers and to the brokers. And that's where the market decisions are being taken. Those are the business units and asset management, yes. We cover the liability and the asset side. That's for me the first line and call it the offense, if you want, because they are there to score the goals. And then you've got the mid-field. So, you've got the business units that are working very closely with the Group Chief Underwriting Officer. That's where we steer the business. And the Chief Underwriting Officer also works very closely with the Chief Investment Officer because here, we optimize gross and net. We look at how do we want to position ourselves. We have the hedging strategies that come together with the Group Chief Underwriting Officer. And then the execution of it when we go into the retrocession markets or capital markets, it's done executed by the team underneath the Chief Investment Officer, the Alternative Capital Partners team. So I think this is a fine combination. We've got on the right -- in the mid-field, you've got the Chief Data, the group Data and Technology Officer. That's the enablement. And remember, that's part of business. AI is not run by the tech people. It's run by business. But tech is critical here. And in the middle, you see, we call it now the Group Chief People Officer, because it's not about HR functions alone. It's really about HR for the business, for the people. It's broader. We need to bring the people to the next level. And as I said, capability gaps need to be closed. We will see with AI that will be a transformation of how teams are being composed in the future. You see here a new name, Nicole Pieterse. She will join us as of 1st of January. Sad news, Cathy Desquesses, she decided to leave because she needs to look after her health. It's very sad. But we, as a company, stand behind her and really thank her for everything. So, that was announced yesterday, by the way. And Nicole Pieterse, that's why we put her name there already, is part of the future team, an internal that came through the ranks. I'm very proud of our succession plan in this case. And then you've got the defense. So you only see two people. There are some teams who have more people at defense, but they are very critical, there's the Chief Risk Officer. He joined us 1st of October. And we have Hermann Geiger, our Legal and Compliance Officer and General Counsel. These guys are keeping our goal clean. I always say, keep us out of prison too, but keeping the goal clean is probably the right thing. Everybody has a role, a responsibility and accountability. It's very important. Single accountability is important. Healthy challenge, great team spirit, collaborative team spirit. And this will help us to unlock the power of Swiss Re. We have changed the company. We have set the foundation to be successful. We eliminated the drags. There's always continuous improvement, obviously, but the big positions we have addressed. And now, you can come back to what Swiss Re really stands for. Swiss Re also in the eyes of the industry is a leader. And Swiss Re is built to lead. That's it. That's the center piece. It's built to lead. That's what we have to recognize all the time. But we need to earn that right every day. So that's the challenge for ourselves. But in order to give credit for the Swiss Re brand and everything we have, we say Swiss Re is built to lead. Our team is built to lead. That's what we have to say with all humility. This is now fostered by three principles. You always heard me saying the core is important. Maybe we were neglecting the core in the past a bit. We will amplify the core, which means we will make it stronger, even stronger. We will invest into the core. Investing into the core means the three business units that we have will be strengthened. If you think about inorganic growth or so, yes, that's part of it. It's not innovation. It's strengthening the core along the liability portfolio, the target liability portfolio approach. We invest in strengthening where we think it makes sense for the group. And once we have strengthened the core, we also need to think about experiments, innovation. Swiss Re is known for innovation. It's a very strong intellect in the company, but we said we need to apply the intellect -- apply the intellect to an outcome. And the outcome is obviously also financials, in particular. So, when we talk about advancing the core, advancing reinsurance and insurance, it's always coming from the core, same customer base, cedents, insurance companies, corporates, public entities. This is core. And the risk transfer offers that we have for the core customer base is the core of us deploying the capacity, bringing the balance sheet, the strong balance sheet to the customers. But then also innovate -- innovate, and that's where we have Swiss Re Institute, the knowledge base, risk insights that we have to translate into solutions for customers. But it's also AI. And it's not only Gen AI-driven new products. It's also how we do, how we run our business. It's mostly where we see the biggest impact at the moment in Agentic AI, and I'll come to that. And thirdly, achieve more together. That's our people. That's our people, and we're very proud of that. Because, we have designed a new architecture, leadership and also learning and development architecture that helps to support the core, that we have healthy creative pipelines, solid pipelines in our company for the next generation, that we have the pipeline that also is, for instance, M&A ready. Should we go into an inorganic action, we need to be M&A ready. So what are the principles that we have? What gaps do we have in departments that matter? That's everything we're working on as well as we speak. And then obviously, it has to support the advancing the core. We need to have the right capabilities on board to also complement the new AI use cases, and we're going to see what that really means. So, our ambition is to make them more resilient. Our purpose has not changed. Strong purpose resonates with the external world, but also internal world. Graduates like this. They come to Swiss Re because of that. We'll be -- to be ready to advance our industry by shaping its future and creating lasting value. That's the entry point of the refreshed strategy. Let's quickly go through each and every component. We're well positioned to generate value. We've got clear defined customer groups. There's no confusion there. We're not going into B2B2C spaces, hunting for customers that are not part of our DNA. Cedents, corporates, public sector -- combined, it's an addressable target market of USD 750 billion. That's big. And in those addressable target markets, it's not the full market, it's the addressable target market. We have a leading market position in all three business units. So, we've got the scale. We've got the position. We've got the offerings. And then, this will be complemented by transversal capabilities. I mentioned already Alternative Capital Partners expect more to come. We have a leading position in the ILS market. It's good. We're working on future ideas here, not to be disclosed yet, but we're busy. Public Sector solutions, I think we were pioneers in this field. We're market leading in this field, more than 1,800 transactions since 2011. And then we've got now this reset solutions unit that we call Risk Data Solutions, where we consolidate all digital assets that the Swiss Re Group has where Swiss IP -- Swiss Re IP sits on, and that we deploy in particular to our customers, but also internally. We have a strong foundation. The improved portfolio quality positions us well. This is so important. That was NEXT. So you can see in P&C Re, we shifted the portfolio away from the long tail towards the shorter tail, mainly driven, as you can see here, U.S. liability and casualty in general. We're still a big player in this field, as you can see. But it's much more risk-oriented and healthy in the whole overall composition. You see that property and nat cat, we extended, is good. It's a healthy market. Demand is high. Just watch the margins. We're still in a very healthy environment. And specialty, in particular, we're very happy also with the expansion of specialty. In Corporate Solutions, a similar picture. Property heavy, we exited the U.S. casualty market completely. We have some international programs with some U.S. exposures on local policies. That's the design of the program. That's intentional. That's good, but it's managed. We are now a very short tail Corporate Solutions, corporate commercial company. We now are managing the cycle, and we're investing in the growth of in de-correlated lines of businesses. De-correlated to the property cycle. That's very important. That's cycle management, and that's growth in areas where there are more attractive opportunities. And then we have differentiation -- differentiated assets, where in a market with a lot of bespoke solutions for customers and with a hardening of the market that we experienced, the very professional corporates who buy insurance were taking out more premium out of the market, because they felt it was too expensive and brought it into captives. And here, we have alternative risk transfer where we are the market leaders in providing solutions also for captives as an example, parametric solutions as another example. But then also international insurance programs, we are probably the only late entrant into that oligopolistic market where you only have a handful of carriers who can provide those global solutions for corporates that span across the world, international or global corporates. And as we were a late entrant, we were benefiting from little to no legacy, IT legacy and also process complication. We have a state-of-the-art platform that we were deploying internally, but are also offering to externals. So, I think that worked out very well as a strategy. Because with this focused strategy, you avoid to be drawn into the commoditized parts of the business where it's very price sensitive and we can't show the differentiation because it's just about capacity, providing capacity. Last but not least, you see Life & Health reinsurance on the right-hand side. We came with a heavy U.S. mortality book. We're market leaders in U.S. mortality. You have seen the impact of COVID. And we -- and this was a very focused area, as I said, when we introduced the IFRS balance sheet to address U.S. mortality and then China critical illness, but U.S. mortality was the big topic where that was addressed then. We -- the in-force book, you have to know, it's basically 90% of our net income is influenced by the in-force book management. So that matters. So that's where we're focusing all our action to relieve the balance sheet actions on the in-force book and the teams have done great in 2025, and that's obviously more to come in 2026. When you look at the new business CSM, you then see suddenly that we're going -- diversifying away from the U.S. mortality side. I mean, it's a big book. It will take time until you build up the alternative options here. So, mortality in other parts of the world, health is pretty stable. Longevity is an area that a lot of people are looking into. It's an area that need to be very careful. People always think it's low margin. So you got to be very selective, but that's another area that we're looking into. And this is all underpinned by very, very attractive and increased recurring investment income from a very, very strongly performing asset management team. And again, cost discipline. We say it out loud now also in the reinsurance industry matters. So, that's the foundation. And this is obviously amidst a constructive market environment. And this is -- and very important to note, the Swiss Re Institute predicts an overall growth of the overall insurance market in Life & Health and P&C between 4% to 5%. So, at GDP or slightly above levels. Now if you then talk to the markets, they obviously always talk about individual areas and they say, all the rates are going down and the market is shrinking. Actually, on a more mid- to long-term perspective, we don't believe in this narrative. People overemphasize a certain moment in a cycle, in particular, in property and cat, because we had cat events and people were getting nervous and were looking for capacity, and they suddenly realize there's a price tag to it. And so, the 4% to 5%, obviously, the flip side of the coin is the bottom part of the slide, where we say you see suddenly that after a prolonged period of hardening of the market, suddenly you see plateauing. Now again, it's not in all lines of businesses. And even in property, in lines of businesses that are distressed or occupancies that are distressed that you still see rate increases. But overall, the whole market accepts that we are in a very comfortable margin space. And that's why, in particular, the more sophisticated buyers, obviously supported by the broking market are fighting for reduction of rates. We are looking now into 1/1 renewals, as we speak. I know we're looking to your eyes now, you're all very curious. You see I'm not nervous. I'm not intimidated by the narrative. And I always -- personally, I always take the figures that brokers put out there. And then, I use this as a challenge to the reality when teams are going out. In a lot of markets, I haven't seen this coming through, the negative view coming through. We see reductions, but still at a very healthy level. We're still in the midst of negotiations. Let's wait and see what's happening. So, our teams are working hard. And everybody, obviously, in the heat of the moment in negotiations is nervous and then you see that nervousness coming through in language. But when I look at numbers, we're still in a solid market, very constructive, as we always say. As long as the attachment points are stable and as long as terms and conditions are stable, people need to know where their walk away line is on rates. And that can vary depending where you position in the market. So, the midterm trend depends who you ask. If you ask a very scary conservative person that is fighting now over the rates, we'll say actually, it's going further down. Structurally, we have invested a lot in governance. I mentioned before, the KPIs are being monitored and tracked instantly and the reaction is quicker. So, when you saw in the past, the A versus E gaps widening, even though people were addressing the costing, well, it was not decisive enough. People were still thinking maybe it's going to be fine. That positive biases went through the market and the reactions were too late. This we need to stop. That's about the discipline. And that's what we want to stand for. Nobody gets an incentive to just grow for the sake of growing. That's very important also in the incentive structures in our company. Now let's go to advancing reinsurance and insurance. And I'm going to give you three aspects. One is risk insights through Swiss Re Institute and data. The other one is obviously the role that solutions plays and then the role that AI plays. Let's start here. Why am I showing you this slide? I'm going to show you the slides, because it's 160 years plus experience with data, dealing with data. That's what we're known for. And then, we have -- and I can say it to myself, I grew up in the industry with Sigma. When I speak to students at university, when I speak to analysts, by the way, when I speak to consultants to investment bankers or to clients, everybody always refers to Sigma. That's the channel. We channel the risk knowledge and the data in analytics and insights that we produce through Sigma. We reinforced that channel just recently. Just to make clear, this is the flagship publication that we have. That's where risk insight and risk knowledge comes from and all major topics that trends in the industry, our people work on and put it through the Sigma channel. That's Swiss Re Institute. It's to the benefit of our clients to increase their resilience. It's for our underwriters and claims managers and risk engineers out there. By the way, they feed their knowledge also into the scientific teams to complement their research. And also, it strengthened the resilience of society. 17 million individuals reached out that we could reach through Sigma, and that's very good. This is the foundation that we call data ready. And now we complement the data readiness now with tech. And that's what we've done 8 years ago. 8 years ago, we entered into a partnership with Palantir. I think we were the first ones in our industry sector. But we definitely are the ones who use it most extensively. As the foundation, we always call it powered by Palantir, because then the Swiss Re Analytics and Swiss IP is coming to fruition. So, that solid foundation to manage data to go from standard data interfaces from one program to the next one and having to leave native environments all the time, which is cumbersome. We have now one way of translating data through the foundry, creating the Swiss Re analytical data model and front to end, everybody is working on this analytical data model. I haven't seen any example in the industry. I ask you, please send me the examples if you see them. That's why we said technology is very important to us. We embrace data, as I said, and technology. And you see the adoption rate. Out of 14,700 employees, we've got roughly 11,000 or more than 11,000 who are actually using this -- we call it Stargate, this analytical data model approach in our company, powered by the Palantir partnership. And this is also unique. So on a daily basis, they use this. And we are rigorous and we have to be more rigorous to decommission all the other little tools that are still existing in the Excel sheet, might be loved little personal Excel sheet, et cetera. That's the way we operate and we use data now at scale. So, we have access to enormous amounts of data in our company, files in our company that before we couldn't extract value from this in a meaningful way. So, it improves actually the way we use data and technology for decision-making. And here, this is the illustration what you should keep in mind when you think about AI. We said this data and technology approach makes us AI ready. Why? Because we used to always work with structured data. But now we complement it with a way to manage unstructured data. So, if you imagine you're an underwriter, and you do underwriting, you operate 90% of the data or information you use is based on unstructured data, e-mails, handwritten notes, Excel sheets, PDF or whatever. It's tough. And I feel for those underwriters, but they're used to it because they did it every day for many years. So, we now have a seamless integration of those structured, unstructured data, and then we complement it. We use the common large language models, and that is now being powered by this Palantir AI platform. And this platform allows us to immediately integrate it into our data and tech foundation. It's a global integrated infrastructure. That's the beauty. Because we don't have this IT legacy with a very fragmented tech and data landscape, which makes difficult to gather data, to do data cleansing, to prepare data to make it usable for the AI use cases. This is the problem in our industry. You've got the hype of AI, and you've got the problem to demonstrate concrete use cases. Because the hype gives you a use case, and it's a stand-alone use case. It's a very exciting little solution, but it's not integrated into your data and tech foundation. So, it adds complexity, which is cost. And the underlying IT legacy and tech debt still needs to be paid. So, the benefits are not coming really through. And that's something we are working very hard on to demonstrate, to prove also that there's real benefit. Every use case goes through a proper governance process. There's no release of funds if there's no articulated and quantified benefits. And these are two buckets. And I'll come to them in a moment. But ultimately, this will all lead to robust cross-functional AI governance. The human in the loop is very important. Humans always take decisions. It's not AI, it's not Agentic AI. The humans need to have oversight. That's important. And we have developed an approach towards code of conduct. We have an AI council with leading experts who feed us, who challenge us and who keep us informed about the latest trends. Obviously, we have to accept that there's also a risky part of AI, and that's why we need robust governance, and we are in regular interactions with regulators also to get that alignment also from a regulatory side. So, what happened? In a summary, from 2017 to 2025, we were investing into this tech foundation. We have built the data and tech platform. You saw the users, the amount of users. We have already worked with scalable AI use cases. Admittedly, they were mostly generative AI use cases in claims and document management, et cetera. That was until today. In the past 2 years or so. So, we used the tech foundation, and then we worked already on Gen AI cases. But now this year, we embarked on a very large program called AI, Agentic AI. Because we see the biggest impact at the moment coming from this Agentic AI space. And here, we have reimagined core processes in our company. We integrate the Agentic AI capabilities into our business. And this is the transformation program that we have that goes into the next phase now. Again, this is a real fundamental change. And I want to run you maybe quickly through examples. This is an example for single risk underwriting. So, you would typically see it in facultative business and in Corporate Solutions. And here, we've got an example of construction engineering underwriting in Corporate Solutions. I'm not going to too much detail, because you're going to see the video later, which gives you a very clear illustration that it's real. It's not fantasy. It's not a consultant giving you a benefit aspiration. This is a real case, a pilot that we did. And it's about managing the unstructured data from submission, when the submission arrives to quoting. You will see in the video how cumbersome it is today. We have identified 25 different process steps, with plenty of applications being used, and this ended up in, depending on complexity, 3 weeks of time from submission to quote, 3 weeks. And we could reduce it to maximum 1 day and even reduce the number of applications. I'm not going to go deeper into it. So just if you think about the impact and then apply this now to other similar use cases and lines of business with similar characteristics, you will then suddenly see how the impact will come through. We've got two buckets that we always look at when we talk about benefits. One is the cost side, the productivity, freeing up underwriters' time. This is measurable, pretty good, pretty well measurable. And the second one is actually eliminating or avoiding leakage, which means what we do with Agentic AI will translate into maybe a better loss ratio. There, it's much more difficult to quantify. And if you look at attribution, not everything is always 100% tech. It's a lot of process reengineering and tech AI helps. So at the moment, we see it's 80% process reengineering and process management and 20% roughly is really then the coding. But you see that's the weakness of our industry, because productivity gains were never possible really to demonstrate to that level. And here, it's an opportunity. On the reinsurance side, the cases were frontrunners on P&C Re. So, we have looked at a life of an underwriter in treaty P&C underwriting. And the P&C underwriter typically focuses on one event. That's the renewal date when we're in the midst of it. So, everything is concentrated around this date. Poor underwriters need to work with a lot of unstructured data. You could argue sometimes data accuracy could be questioned. But that's -- everybody is working towards that one day, let's say, 1st of January. It comes 1st of January, inception date, there's a bit of work behind that. But it's important also to note that the rest of the year is completely unstructured. So after renewal, each and every underwriter does something different. And we identified this as an opportunity, and we call it always on. The underwriter needs to be always on, not just until renewal, everything concentrated there and then everybody does something. Now, there will be a structured process in between where you can even generate also ideas and more business, for instance, together with the Risk Data Solutions. And we have real cases where this is -- has been proven now, and that's something to look into, and I'm very, very happy to see that. On the claims side, you see that in P&C Re, the claims are pretty automated up to a certain level. We defined the threshold. So it's a no touch. And the rest is very bespoke, very complex claims handling on the very large ones. We have identified in our pilots that when this AI, Agentic AI does the matching with the policies, we have identified that the human beings were not as accurate as Agentic AI is. We have identified cases where we were paying out claims that we shouldn't have paid out. That's a huge future impact. That's our expectation. So, those are the cases that we're working on at the moment and call it as a one-stop shop for structured and unstructured data. And we, in P&C, in particular, went from the first pilot, the sprints that we do. There's always an 11-week sprints. And then either it shows the results and then it goes into the MVP. And we're implementing this now in '26 now and testing it for the next renewals. So, that's going to be a real life experience away from the sprint and MVP. Risk Data Solutions. I'm very happy that this team went through the reset. We discontinued the portfolios where we didn't have really any traction. So we concentrated on the products where we had a right to win. You can see it here, everything around physical assets, cat, property, et cetera. That's the starting point for us, now the Property Solutions. And we deploy this to our customers, all customer groups across. And RDS is the data platform that we use. Even here, we deploy the data and technology that we have, and make it available. So all the models, the cat models are available on this data platform and the clients ingest their information onto that platform, we call it the digital twin. And then, we stress test it with our models so that gives them insights. And then, we complement it with risk consulting and analytics teams that help prime insurance companies reposition themselves. Here's one example. We had the Gherkin here. And we just took the Gherkin as one example and put it on the data platform as a digital twin. And then, we ran our cat models through it and ran the scenarios as well. So, likelihood of a natural hazard, you see it's pretty well positioned here. So don't worry. But we also do projections. This is the current view, but we do the projections up to, for instance, 2080, yes, so including financial impact, financial projections. And you could see, okay, there's an extreme precipitation is going up. Drought is going up also in future. So this is a measurable, quantifiable impact that we see. And then, it gives you actionable insights to mitigate or prevent. So, it informs CapEx, et cetera. This is a tool that's live. Corporates have this, public entities work with this in New Zealand, in Australia, in the U.K. and household corporate names in the U.K. are working with this. So that's deploying really data, risk insights to increase resilience before you think risk transfer. So, that's done on the corporate side, in particular, that we've started in public entities and now the scenes are being using as well. All of this is underpinned by people. As I said, it's achieved more together, the third pillar, strategic workforce planning, learning development. Those are new things that we introduced to make scenarios quantifiable. So it informs our planning. It informs our talent actions. And the culture transformation obviously is underpinning all these changes. I'm really happy to see that we have higher-than-industry employee engagement. So the employee engagement survey, we call it Pulse Survey that we do regularly came out just now. So, we have greater than 8% engagement. More than 70% of our people embrace the target culture, the culture change. I think that's good. That's massive. And the last point I'm very, very proud of, and this is showing also the data and AI readiness. More than 85% of our employees integrate new data or new tech well, 30% more above industry benchmark. I think this is fantastic, and our Chief People Officer is central to bring this enablement into the company. I'll close with what you are waiting for, obviously, and you have pre-informed what is to be expected for 2026, the financial targets. We will aim for USD 4.5 billion net income. I know, some people say it's underwhelming. I think it's very attractive. This translates into roughly 20% ROE. Yes? And again, don't squeeze the lemon. We're ready here for the long term. The P&C businesses confirm the target that we had in 2025. This is a very ambitious, I think, achievable, but very ambitious target in the market environment that I was describing at length. Life & Health Re, with all the actions that we took now finally in Q3 and Q4, this allows us to go to USD 1.7 billion. And in addition, we have an adjustment on the capital management ambitions. Remember, we have -- we are now in year 2, going into year 2 of our dividend policy, greater than 7% per annum growth. And this will be complemented by a sustainable annual share-backed program. We will start with USD 500 million. We will do this if we achieve our targets. We will start with this in 2026. The Board has to approve it in February. So, if I say sustainable, then think of it as annual. You can choose the words you would like to choose, you can say, recurring. With sustainable, I think we want to underline that it's an important step, but also sustainable means we need to make a group target. Why do I think this is a very attractive package? Because if you think about the payout, we're going to give back -- give you USD 10 per share. That's what that translates to. It's a USD 3 billion payout. I think it's very attractive, very attractive, which underlines the solidity that we created through the transformation in NEXT, set the foundation to be successful in the future. The discipline that we have introduced into the business, in particular, in the core competencies of underwriting, claims management, risk expertise, underpinned by strong asset management. But this also gives us optionality, keeps the powder dry should there be an opportunity that we want to look into when we think about inorganic growth. That's why it's important for us to see it as a package. And I close by saying I'm not here to squeeze the lemon. We're planting a lemon tree and looking for long-term sustainability and resilience for our customers. And ultimately, investors and you analysts will benefit from this, too. So thank you very much. And I would like to hand over to our Group CFO. I went a bit longer, but I think it was important for me to make those points. Thank you very much.

Thank you, Andreas. So, good morning also from my side. I'm quite excited to be here. It's my first time with Swiss Re. And I was just thinking because this is now almost -- my first year is almost finished now. Because I started in January 1, I then took over in April. And so, we're closing the loop here. And maybe just a bit of reflection. So what I did, I actually visited several markets. I went to the U.S., I went to Asia, I went to Australia. I talked to, obviously, a lot of employees. I talked to clients, talked to regulators. And you could really feel kind of the positive spirit that's really going through Swiss Re. So, this momentum that we have overall internally, but also externally was very visible and clear for me. And I'm actually -- I was even more energized after coming back from these trips than I was before, because I was always energized about being part of Swiss Re. Now let's go a bit into the numbers. And this way. And I start, as Andreas did as well, I start with CorSo. I think CorSo has become a true reliable, sustainable contributor of earnings, of results. And what you just see on this slide is that when you look at the combined ratio since 2021, I think you just see now a constant result coming through. And this is clearly the result of the heavy restructuring that was happening before. The average combined ratio now since 2021 is 90.6%. So, and we see it very, very, very stable. Also, it has really established to be a true core business unit. We have a reinsurance program. We place 80% of CorSo's reinsurance externally, 20% we keep internally. We also have on the reserving side, I mean, we introduced the uncertainty load. We have also an IBNR reserve that's quite supportive to make sure that I think we can continue this steady process and steady growth. And also, I think Andreas mentioned that in the beginning, 5 years ago, about 50% of the business was -- 25% was de-correlated with the cycle. Now it's 50%. So also that, I think, a nice shift towards de-correlation from what we call the cycle, knowing that there's many cycles, but call it the big cycle. So, a strong performance here. Moving to P&C Re. A similar story. A year ago, the U.S. casualty was obviously the key topic. And a big focus was reducing the dependency and the exposure to U.S. casualty. But also another aspect when you look at these numbers, the initial loss pick that was put into the reserves increased over the last few years annually by 10%. That's significant. That shows you the prudence that we are kind of putting into the number. It's really driven by the inflation model that we had the inflation assumptions, the model updates, but also then the uncertainty load that Andreas was mentioning. And you see that it's throughout. It's 11% in casualty, it's 11% in property, it's 5% in specialty. But when you actually compare that with the, call it, the true inflation, it's much more. The true inflation or the CPI in the U.S. was about 3%. If you go into Construction, it was also 3%. Wage growth was about 4%. Healthcare, even less 2%. So, if you compare the 10% with the true inflation, this really shows you the strength that went into the reserves. And if I look now at the reserves themselves, and you go on the left-hand side and you see the split of the total reserves between the case reserves and the IBNR, you see a nice development how this -- how the overall reserves actually increased to 48%. But you also see that this ratio stayed stable over the year, even though you would assume when you reduce long-term business, long-tail business, you should actually see a reduction in IBNR relative to the full reserves. And you didn't see that, which is a clear signal for the strong reserves we have. On the right-hand side, what you see is the -- just the breakout of -- from a U.S. liability, ultimate loss, how much is IBNR, how much is case and how much has been paid out already. And you see the overall reserve is about USD 12 billion from '16 till '25, 81% of that is IBNR. That's a very strong number. That actually increased by 1% year-over-year. So, I think to Andreas' point about, can we sleep well on this topic? Yes, we can sleep well on this topic. Now moving over to Life & Health Re. We talked a lot about this. This portfolio review was really crucial that we get that fully done now. This is now fully done. We've reviewed 100% of the portfolios. Again, just repeating what you already heard, but we did it really in three phases. First phase was when we transitioned to IFRS, the really large portfolios U.S. worse mortality, China critical illness, they're all performing in line with expectations. Then we went into the more midsized portfolios. And now the last step in 2025 was the remaining portfolios, which represent about 10% of the portfolios when I take the present value of claims. It's about 10%. All the other 90% were already kind of reviewed and were in line with expectations. And on this 10%, you see on the box here, the impact that you saw in the first 3 months, which was about USD 400 million in on the P&L. Now for the remaining for Q4, I think I can confirm the number that we already gave you on the Q3 call. It's around USD 250 million on additional impact. And then on the CSM, it's also around USD 400 million. And I think with that, we can really conclude that chapter as well and really look forward on a steady income, because Life & Health is a key pillar of the overall Swiss Re franchise. It's not correlated to the other cycles. So, it really contributes well to the overall results. Maybe just last comment. I mean, as Andreas said, if we was -- if you have room at the end of the year and we are above the USD 4.4 billion net income, we could always think about strengthening IBNR reserves to the extent possible. Don't expect that to be big because, I mean, we've done it now, but that's always something where you can even increase the resilience of the book. But I'm very pleased now with this result. So, this is now fully reviewed and we go into what we call normal BAU. Now going a bit deeper into the markets. That's why it was also so important for me to actually visit some of these markets and I actually talk to the people, because what you see, we not only took financial actions. Of course, we have to. We have to strengthen the results, but we also took business actions, which are critical. And I take Australia. Australia, we strengthened the disability assumptions, because this was concerning. It's mostly coming from mental health claims and also work patterns. People not coming back to work. And we clearly said, look, this is not sustainable. The environment there is not sustainable. We're going to pause new business. And we put out a press release. This sent a very strong signal to the market, because that's what people don't expect from Swiss Re to bail out in a way. But the feedback we already got from other market participants was very positive. And this goes in line with this built to lead. If we believe in a market, it's not sustainable, the environment is not sustainable, we have to show also business actions, not just financial actions. Israel, a very similar story. It's more on the medical side, but also disability. Much higher-than-expected drug-related claims. We strengthened reserves and we placed these treaties in runoff, because they're just not sustainable. And then last but not least, South Korea. Also on the health side, assumptions driven by higher expected utilization of new products, and we just stopped these products. So, I think it's important. Yes, there's a financial aspect, but there's an important business aspect where we just have to lead the pack in a way to say, look, we want to support here, but the environment needs to be sustainable and needs to be predictable. And if not, then we were just not part of the game. Okay. So, this then led to the updated target for Life & Health Re. We increased the target from USD 1.6 billion to USD 1.7 billion. I think, that's a nice increase. It is also driven by a change one other change, I think we can confirm just the CSM release is now between 8% and 9%. And why it's coming down relative to what you've seen during the year is really because we reduced the shorter tail business in the CSM. So, the CSM of the shorter tail business got reduced. And by that, you should naturally then see a reduction in the CSM release. The risk adjustment release stayed very stable. And also this business is obviously nicely supported by the recurring investment income that is performing very well. This leads me then also to the investment income. I think, what you see here is we have a well-positioned portfolio. It's conservative in the sense that this also allows us to take opportunities when they are in the market. I think right now, it's -- say, I think also when you look at credit cycle, I think it's an area where you have to be a bit conservative. But if you see opportunities, we actually have room to take these opportunities. You look at the credit impairments over the last 10 years, very de minimis. And also, I think the high-yield credit bond portfolio is also de minimis. So, this is a very strong portfolio that allows us then also to deploy capital when there's opportunity. On the yield, you see here the reinvestment yield that at Q3 was about 4.3% is approaching the recurring income yield, which was at Q3 4.1%, I think. And so this coming together, and we expect that this then stays pretty much at that level going forward. The other aspect that is really critical when it comes to manage, the balance sheet is expensive. Andreas mentioned it. And we put out the USD 300 million cost target. We're well on track with achieving this target of USD 300 million over 3 years. We have the USD 100 million -- we're going to nicely achieve the USD 100 million for the first year. And this is really important for me. I really don't like hockey stick assumption. I like hockey, but I don't like hockey stick when it comes to these plans. And so, this is really important that we get every year, we get expenses down. And yes, of course, in the beginning, I think we had some easier areas, easier in bracket. The iptiQ withdrawal obviously gets push, but also we took a lot on the group function simplifications. And this absorbs already, because this is a net number, so net of inflation, but also net of all the investment that Andreas was talking on AI, which are significant. And that's something -- that's another important framework. When we talk about investments, we say, yes, we have a certain budget. And if we want to invest something new, we have to take something out. We're not just adding on the investment budgets. And then, you clearly see that it's nicely coming down. Now for the next years, we now go into areas like legacy systems. We still need to get all remaining legacy systems out of the infrastructure, and we're also going to rightsize some selected services and look at outsourcing, off shoring, near shoring. These are the areas. Yes. And the benefit, obviously, then is this really benefits all business units. So, all business units are benefiting from the reduction in the core cost when it comes to their cost ratio. So that's going very well. Moving over to Swiss Solvency Test. Swiss Solvency Test is at a very strong level, 268% at the end of Q3. What you see here is this is -- you see the net capital generation of about 20 points or in dollars is about USD 4.4 billion on SST capital or RBC as we call it. So this is in line with the USD 4 billion that you've seen on the IFRS net income. All the other items are pretty neutral. And then, you see the capital repatriation assumption. That's the dividend only right now. So that just assumes the dividend as we announced it. That doesn't assume any buybacks. So, buybacks of about USD 500 million would represent roughly 3 SST points. That's not reflected in here. So this is -- I think it's a good solid SST. It's right above the range of 200% to 250%. I think that's where we want to be. So, that's working well. Now moving over to how we manage capital. And also -- and I take the example here of the nat cat exposure, because it's a really good one when you then also see how you can manage gross versus net and how much capital we actually want to deploy and how much we want to and retro back to the market or hedge back to the market through third-party capital investors through ACP. What you see here is that the gross exposure increased over the last 6 years from USD 1.7 billion. This is the expected loss or the expected claims from nat cat, increased from USD 1.7 billion to USD 2.9 billion over the 6 years. The net after hedging and taking out the, call it, the small nat cat losses, the below USD 20 million nat cat losses, it increased from USD 1.3 billion to USD 2 billion. So quite significant increase. And this was really then supported by what I call the third-party investors, because that's where you have alignment. They're interested to take some of the risk through cat bonds and similar instruments. They have full alignment with us, and you can manage the actual capital exposure that's risk we have. And that's a strong asset that we have, a strong tool that we have. And what you can expect now going into '26 is actually that we probably reduce a bit the external retro, because we can keep more risk on our balance sheet than in the past. And that's a good tool for us then to fine-tune the actual capital that we want to use, that we want to have on our balance sheet. So, that's a very nice development. At the same time, I think it's also good, we have a really strong relationship with this third-party capital investors, and they have also done very well over the last few years. So now coming to my last slide. I think we talked a lot also in past investor meetings about how do you want to deploy capital. I think we replaced -- we updated the capital management priorities. Here, you see that in this slide, we replaced the opportunistic return of excess capital with a complement, the ordinary dividend with sustainable annual share buyback. And I think for us, for me, this is quite an important change. Because what it tells you is that we think in totality. We think that we generate capital. We want to be well capitalized, but we generate a significant amount of capital every year. We obviously want to pay an ordinary dividend, and that is stable, that grows now with the 7% for the next 2 years. But in general, it just should grow with the underlying earnings. Then when there is opportunity to invest capital into new business opportunities, is it organic or inorganic? Yes, let's do it this way. But then the rest should be part of -- should then be deployed through buybacks. And so, you have a package then of dividends and buyback that you always should see together where you have a stable part and the volatile part that then goes with the actual results. If you have a great year, you give more. If you have a big event, you give less, but you always give, always relative to the result and achieving the target. So, I think that's a really -- that's a fundamental structural change that we're going to introduce here. This does not prevent us from -- if we are in a true excess position to give back buybacks in addition. That's not preventing us. This just gives us the framework how we should think about buybacks that before wasn't there. So that's an important change update that we want to give you. And of course, we still have the very attractive capital -- the dividend growth that we are now going into the second year with a 7% increase year-over-year. So this concludes from a financial perspective, my presentation. Overall, I'm very excited about where we are. I think the results are -- the targets are strong targets. I think they will put us on a good foot going forward. I'm pretty confident that we can meet or exceed these targets. And with that, I hand back to Thomas. Thank you.

Thank you, Anders. Thank you, Andreas. So we'll -- just before we go for the break, we'll show a 2-minute video and then we just ask to reconvene here at 11.50 to start the Q&A session. So, if we could just have the video, please and then please feel free to have...

All right. Welcome to the Q&A session. I think we have time to do more than one round. So, if you could just limit yourself to one question at the beginning, and then we'll just come back. And also for the benefit of the people who are following the webcast, if you could quickly introduce yourself before asking the question, that would be great. Ivan, do you want to start?

It's Ivan Bokhmat from Barclays. Andreas, my first question would be, I think, on the mentions of the inorganic growth that you made several during your presentation. So, I was just wondering whether you could talk a little bit more about the potential timing of it, what phase of the cycle do you think it will be appropriate? What type of expertise or particular gaps you want to address? And maybe what are you waiting for?

We're not rushed. We're not desperate. We're very well positioned as Swiss Re. Can you hear me well? Yes. Very well positioned as Swiss Re. Now we always said, once we have addressed all the areas during NEXT, it should set us in a situation and a position to benefit from a successful foundation. That's built on the technical view of our portfolio and of the market. The technical view can be summarized in the target liability portfolio approach, where we look at the current portfolio mix, then we look at all the trends that we see in the markets and see what's the future optimal portfolio. And we always have a 5-year forward-looking view. So, the plan is always a 3-year period, but that is a bit longer, because we want to see how markets really behave. And then we say, when we see -- take an example, property or cat, when we see a rate decline, we don't want to wait. So we say, okay, what are the lines of business that can help us compensate? At group level, have a nice diversification of Life & Health and P&C businesses. And if you looked at the stand-alone, let's take nat cat, natural catastrophes. If you look at the stand-alone capital return on cat, that's 8%. That increases to 40% when you look at it at group level. So that's the diversification benefit that I'm talking about. So, then go back into then the individual business units, because at group level, we look at what areas do we want to deploy capacity or capital. That's the group view. And then we go into the BUs and say, what is the optimal BU mix? And we remember, we already said in the past, Corporate Solutions is an area that's quite obvious on the P&C reinsurance side and Life & Health reinsurance side, we didn't see so many opportunities. So CorSo, if you take that example, you say, look at the portfolio, what is de-correlated to the property price cycle. And certainly, you have a list of lines of business where you say, do I want to strengthen them. That's more a bolt-on acquisition approach. Because we didn't believe really in this transformational one, the lack of opportunities probably and attractive opportunities. So, that's the ingoing strategy that we have. And what we have done internally, we have done an exercise at the Group Executive Committee and when we looked at the overall strategy. And then we said, okay, what is the option space that's out there. So, we look basically at the full option space, and then we narrowed it down to the attractive parts and we derived M&A principles from there and linked it to what we call the M&A readiness approach to strengthen the muscle also. We haven't done M&As for sometimes, yes, smaller bolt-on acquisitions, yes. So get ready, get ready for what's happening out there in the market. It's a very dynamic market. Your colleagues on the investment banking side, I'm sure, are telling you how dynamic it is, but it needs to be for the right reasons. That's why there's no timing aspect to it. There's no distressed situation here. We're looking at the readiness, yes. It's not only the readiness to do a deal, to do the right deal. It's also the readiness for post-merger integration scenarios. So, all of this we're doing at the moment. We're well on track. And there are small opportunities that we actually as we speak, look into. So there's more to come. And if it's not happening, then it's for the good reasons.

It's Kamran Hossain from JPMorgan. Two questions. The first one is just coming back to the M&A point. What do you think your firepower is for M&A? And should we think -- also think about this as an ever-expanding part? If I look at this year, USD 4.4 billion of earnings, you probably beat that USD 3 billion of capital return. Same again next year-ish, you're adding USD 3 billion to a potential firepower. So, just interested in what you think the firepower is for M&A. And then the second question, on the Life & Health side, I think, the thing I'm really interested in is that you said you want to -- you think you can draw a line underneath the Life & Health issue for Swiss Re. When we think about Q4 and next year, Q4 in particular, what -- you're saying now there will be no negative experience variance in Q4? Just trying to understand whether this is done and that we should expect experience variance to be kind of neutral or there is still potentially something in Q4 that could hurt a little bit. So just interested in any thoughts there.

I'll give it to Anders and I'll complement it afterwards, if necessary.

Okay. So, maybe I'll start on the firepower. So you should not think about that we -- because when we go back to the capital management philosophy that I laid out, I think it's clearly that you generate capital and then you deploy the capital. You can assume now with -- I just take the numbers in the targets. It's about USD 3 billion would be given back to shareholders. USD 1.5 billion we would keep. That doesn't have to be stable going forward. We would not build that up. So, because we have a capital target of being between USD 200 million, USD 250 million, we feel we're very comfortable at that upper end of that range, but we will not go to, call it, USD 300 million to basically have a buffer to then buy something. So, that's not how you should think about it. So, we will deploy the capital either into the business, new business growth. It's also when I talked about the retro that consumes capital if I reduce that, and we will not keep firepower as capital. Because as Andreas said, you never know when things come, do they come at all? We don't know in what size. And so that's not. I think if the right opportunity comes, we will always find the right way to deploy and to pay for that.

I was just interested in whether you had like a number so that if we wake up on Monday morning, there's a deal that's $8 billion, we would be that surprised if it's $2 billion or bolt-on and whether you do have a kind of capacity number.

Yes, I don't think right now that we're in a position -- I think as Andreas said, I think right now, we're talking more about the smaller bolt-ons in -- particularly in Corporate Solutions. This is what we talk about it since a long time. It's about strengthening the core. It's about getting the de-correlation from cycles, reducing the exposure to the cycle by adding -- and that's more on the specialty side. We mentioned Credit & Surety and Accident & Health that de-correlates. You should say, I think, that's the -- and that really complements the core. That's really -- because we're not doing something out in space. It's about strengthening what we already have in the core. And you should not expect then particularly on the P&C Re side that we would do something that would evaporate quickly.

That's the exercise we did in the beginning, as I said, the option space. We really looked at everything, even also the transformational ones. But then we narrowed it down to really something where we said this can make sense. And that's then the outcome that Anders was describing.

Exactly. Then back to the Life & Health, your question was about the impact in Q4. I think, what I have here is the assumption update. We went through all the portfolios. The impact for the assumption update. I can't give an impact on experience variance, because the quarter is not over. Not that I expect anything right now, but I don't know where experience comes when the quarter is closed. So I would be a magician if I would be able to tell what's happening for the future. But I think what you always should assume is that, if the result -- if the assumptions are set the right way, you only have normal volatility, which is normal in both ways. It should be neutral overall. The problem -- and I could have mentioned that before, but what you see on the Life & Health and some of our peers have actually put that out. Usually, when you have positive experience, it goes into CSM. When you have negative experience, it goes into the P&L. That's IFRS 17. But we don't expect now a trend. So, we expect that the underwriting experience is going to be neutral over this portfolio. That's why we did all the assumption change.

Will Hardcastle, UBS. I'll ask a boring one first, if that's okay. Just on the combined ratio for P&C Re 85%, better than 85%, flat year-on-year. Can we just do a bit of a walk year-on-year on how you're thinking about it? Discounting is 1 to 2 points higher year-on-year. I guess, any PYD assumed and then thoughts on the underlying. And I know it's an extension to it. So obviously, it's within your net income guidance for P&C Re result is in there. Maybe a net insurance revenue discussion as well to help us get to that because we've linked it there with holding more retro.

Yes, maybe let me start and Anders, you can then chime in. You could, already in 2024, see the underlying quality of the book from an underwriting perspective. That's why we said we could afford to take the hit in Q3. This quality is coming through. It's a structural good underwriting portfolio. We had obviously good Q2, Q3 quarters on nat cat. And I think that was a driver also of a very good low combined ratio, by the way, not just with us. It was a good Q2, Q3 for the industry. But we always said, don't take this as the new normal. It is volatile. There is volatility. And that's why we feel it's prudent to confirm the targets. The structure of the portfolio, you've seen it. I think in our rate expectations, we priced in, obviously, the difficult market. That has to do with, yes, the combined ratio outlook that we, from the planning perspective, from the bottom-up planning perspective could see. We still see then there's some room, and that's why we added some positive basically, some expectation into the combined ratio when we thought about, okay, how to think about '26. We also have to think about earning patterns when is the premium earned and through. So, we still see some earning through from the previous renewal year. And all of it combined gives us comfort to say the 85% number is an ambitious one, but still achievable. All things obviously being equal, if there's a major natural catastrophe year that will impact the whole industry. But even with the shape of the portfolio, I think we can absorb a lot. We still see that the portfolio is positive. The assumptions are sound. And that's why we believe that the portfolio overall can produce the nice outcome with the positive outcome. And that informs, obviously, our hedging strategy and the retrocession strategy. So, that's why we believe by reducing it and benefiting basically from the good underwriting and from the structure of the portfolio makes sense. Maybe I'll leave it here.

Maybe just to add on the revenue -- because you asked also about revenue. We don't give revenue guidance, because we really don't manage to the top line. I think we're pretty clear. I think you can still take probably then full year '25 as a starting point and then start from there. I think that's clearly what you then should do. When you look at the PYD development, again, I don't give -- we don't give a numerical guidance there, but you should expect the positive development in a normal environment where you have kind of normal claims. You've seen that in the first two quarters -- you saw that in last quarter -- last year, you saw that in the first two quarters this year. In the third quarter, because we had room, and we were very explicit, we used -- because we had the risk adjustment and release, we used that to strengthen resilience. But other than that, you would have seen kind of a similar effect. And so that's -- without giving you a numerical guidance, I think that should give you kind of an expectation.

Darius Satkauskas, KBW. So two questions for me. The first question is just on the buyback. So you joined one of your large peers with the buyback program. Buybacks clearly create value when done right, but clearly, buying back shares at any price is not an ideal capital allocation policy. So, could you share your thinking on why the buyback is the right tool to return capital going forward -- for Swiss Re? And do you have some sort of hurdle rates in mind that the buybacks ROI needs to clear? Or how are you measuring the value creation in doing the buyback? My second question is just on the CorSo combined ratio stability. So you guided to the same target that you had last year and yet the rates came down mid-single digits. So, are you suggesting that you'll be baking in less prudence in open loss picks? Or is this based on you releasing more from the back book? How are you able to keep the guidance stable?

Okay. Maybe I'll start on the buybacks. So look, I think for me, it's important that the dividend and buyback for me go together. In the end, this is how I return capital. The majority comes back as dividend, stable with -- should grow with the underlying earnings development. And then, for the remaining part, you use buybacks. This gives you the flexibility because you don't want to -- I don't want to run -- jump around with the dividend. You could do extraordinary dividend instead of a buyback. I prefer the buyback, because this allows exactly to your point, you can stretch that over a period of time and then see how -- you obviously give it -- you don't -- we don't do it ourselves, we give it to bank, but you can give guidance how they should execute over time. So that gives a positive impact overall. We're not that -- I would say, I'm not a big fan of gaming in the end the market. We just give a guidance out how they should execute that, that form of capital return. So, I'm not sure if that fully answers your question, but -- and I'm definitely not giving you the hurdle rates, but yes.

I mean, in terms of hurdle rate, it's more about clearly you got different options in how to deploy capital organically, you can give a dividend that is neutral, you can buy something. So clearly, you set out [indiscernible] the buyback that you want to achieve.

The buyback is always -- the buyback is subordinated. That's how you should think about it. Buyback is subordinated. I have the dividend, if I have business opportunity that have a higher hurdle rate, so the mid-teen hurdle rate, that's what I would expect, then you do the business opportunity. And then the remaining part, if you don't have an opportunity, you give it back. That's the -- that's -- but I don't play the share price over time with the buyback. That's what I mean.

So quickly CorSo combined ratio. Again, when you look at the reserving positions, we are adequately comfortably reserved. Should there be the need to obviously release some of the reserves, then you look exactly, is there a need also to redeploy, because the situation allows it and actually demands it. Then you redeploy and that's obviously subject to also the auditors approving to this. We see a continuous situation where we say, in particular, in the shorter tail lines, are the reserves, are they really still suiting the purpose? And if not, obviously, there is a release. And that's something that you will see then in the development, prior development. So that's as much as we can say, because a little bit of it is also a crystal ball, and it's also depending on also the accounting consideration, but the shape of the portfolio and the shape of the book gives us enough indication to have that optionality.

Back to that side, Hadley.

Hadley Cohen, Morgan Stanley. With the guidance for USD 4.5 billion versus the '25 initial guidance of USD 4.4 billion, the uplift is effectively driven from the increased guidance for the Life Re business of USD 100 million. Given you've got the combined ratio guidance is effectively unchanged. I mean, the moving parts within that are different, but the guidance is unchanged. All else equal, I think you should still have some FX tailwinds going into next year. Investment income should be better. And you've got cost savings coming through. You're retaining more on your own book. And presumably, there's a benefit from iptiQ coming through in '26 versus '25. The only conclusion I can come to is that there's a decent reduction in the top line for P&C Re and CorSo as well. Can you just help me, sort of, square the circle there to help me understand what I might be missing in that context? And in that context, I think on Slide 14, I think Swiss Re Sigma is talking about the 5% annualized CAGR in the reinsurance premium base over the next 6 years, starting from 2024, your '25 revenues were lower. By implication, your '26 revenues could be even lower. So, how we think about your market positioning and your ambition to close the gap to #1 in that context?

Yes. So,, you can argue whether we closed the gap to #1 already. I believe there are a lot of indications that we did actually. And now, it's how do you behave in this market cycle. And that's the main narrative around this. And remember, I said, could we have done more? Maybe, yes, to your point. But remember, we just came out of a phase where we were reestablishing the foundations and the stability and consistency in the company. I want to see some more track record. I don't want to oversell and destroy the good work that the teams have been doing. And that's what I stand for. Because we know exactly that there's a lot of uncertainty out there. And you were actually listing quite a long list of things that can or need to happen. But just two or three things out of your list when they turn negative in the market, then that will have an impact and you will have to deal with this. So, that's the ingoing, sort of, thought around this. And I can repeat myself, USD 4.5 billion with the market environment is a good number. It's an attractive number. It's around 20% ROE. And I think this is what we want to say that we, through the cycle, want to generate more than 14% ROE, because there could be parts in the business, in the cycle that will not generate the 20%. That is -- the history is telling you this. So, what we're trying to do is, to manage expectations also and also give us the optionality, the room to really deliver on what we said we would do on a consistent basis. So, USD 4.5 billion is good, in particular, when you take the P&C businesses that are under pressure as we have a pretty large part of the P&C in our book, and that needs to be managed. I'm not saying that I'm pessimistic about it. I'm not intimated, but we need to manage it actively. I said that would be my answer to this.

Maybe just to add, I actually agree. So what you listed are all the items that are in our control. And this is what we're going to deliver. They're in our control on the expenses. They're in our control on the retro. This is all in our control, but there's a lot not in our control. And what we want to make sure is that, even if that what's not in our control is not behaving as expected, we can meet the target. I think that's how we think. Because the target is not just there when the sky is blue and the sun is shining. The target is there because it's the real target. And so make sure that what you -- what is in your control, you can actually meet and then be prepared for the volatile piece. That's always how I think because otherwise, I can always give you the blue sky target. That's easy. But a target that works in different environment and you meet it, that's what we really want to achieve.

Iain Pearce, BNP Paribas. Just on the growth outlook, you said you don't want to chase some of the opportunities that might be there and act rationally across all cycles. Well, with returns where they are, the 20% ROE that you're talking about, probably the outlook for pricing and returns in the market not getting any better in the short term is now not the right time to grow. So, just why would you not be more optimistic on growth in the near term? And then secondly, on short term portfolio mix with the target liability structure that you have, how does the current structure compare to that?

So we repositioned already our portfolio. So, you should see that on the casualty side in P&C Re, for instance, we reduced the U.S. casualty market share from 17% at the peak to now 5%. We think we are where we should be. So, there's no need now to correct the shape of the portfolio. And that's going basically also into our plan going forward. On your first part of the question, the growth opportunities. There are growth opportunities, and that's what we say with our TLP. But you have basically two effects. You reduce the share of the U.S. casualty and P&C Re. And if you look just stand-alone on the growth of property, specialty, but even cat also, lower but still there, it's there. It's healthy. And it was just eaten up by the reduction of the U.S. casualty piece. Now that we are where casualty, we think, should be, we see now the downward cycle, but there are still growth opportunities. So what we're doing now is, we look at structural initiatives, actions to strengthen the company, in particular, at the interface of the markets. We increase the empowerment, the authority levels. We strengthened the teams in the market units, as we call, in both P&C businesses. We have various initiatives going on at geographic level, where we have discussions around partnering with market leaders, where we will benefit from their market position and they have a need to complement it, for instance, with the capabilities of CorSo in a market where we -- when we enter it and plant the flag stand-alone, would incur costs that's investments and would take time to piggyback with market leaders that they don't have this capability where we can add it. We have very concretely three markets that we look into it. It's not the time to discuss it, because it's still under NDA. On the reinsurance side, we have a similar approach. Obviously, we already have scale and market-leading positions in most markets, but there are attractive markets that are in a built-up phase, where we have been selected as the partner to build up markets and platforms. Those are all ideas that will generate revenues for the future, but they also have to then scale. So, as it is already a pretty large portfolio with -- we've got USD 43 billion insurance revenue, IFRS insurance revenue. So, you need to start to create those -- I always call it bread crumbs that you lay out, and that will then obviously contribute to future insurance revenue growth.

Shanti from Bank of America. So, I just had a question on the P&C combined ratio target, which includes that discount rate of 9%, which is broadly, sort of, flat year-on-year where you're trending at the moment. And given that you cut back the casualty book, I think, 26% in the first half of this year and rates are expected to come down. I was just curious to know why that is expected to remain so high because naturally, I'd expect that to come down over time.

Yes. Look, I think -- I mean, that's our current expectation based on the modeling. I think it can -- if you would assume that rates are coming down significantly, this will come down as well. I think, we -- in our planning, we don't expect rates. I think we expect rates to stay pretty much where they are. If you know more, then that's different. We don't know.

I'm just curious on how the casualty pruning. I know, it should...

No, no. Yes. Exactly.

Today, but over time.

Look, it should come down over time. I don't think that quickly, because the casualty pruning on the new business has already happened. On the in-force, this will take some time until you will see that in the discount rate. And then, the other on rates, we just assume that rates -- in this forecast, we just assume that rates stay where they are. Interest rates.

Back here, Ben.

Ben Cohen at RBC. I just had questions on the Life & Health side. I just wondered if you could say more about where you see the opportunities in terms of new business in Life & Health. And maybe in the context of the charges that you highlighted on one of the slides, you could talk about whether you see any, sort of, structural issues across health markets globally? Are there sort of inflationary pressures or changes in society that you're not capturing and might lead more of the portfolio at risk?

So there's basically two questions. One is, do you see continuous issues? And the other one is where do you see opportunities. And I would say the first one about the -- I think we -- the reserving is fine. We're good. Now we have reviewed all the portfolios. Absent any material changes, I think that should now reduce the experience volatility drastically. So that's -- of course, you can always have a new pandemic or you can have a new other event, but that's different. Look, I think Life & Health, and you saw that in Andreas' presentation, the market itself is expected to grow by about 4%. And so, we see over the next 5, 6 years. So we will see opportunities, and it's throughout the world. It's in all aspects. It's on the mortality side. Now mortality, we don't want to grow much more in the U.S., but in the rest of the world, that's still an area that we see opportunity. Longevity is a market that is developing, quite developed here in the U.K., Netherlands is also, I would say, the second largest, but you also will see in U.S. -- I always say it's U.S./Bermuda because in the U.S. itself, companies have no benefit of offloading longevity because of the RBC charge. But many PRT players then retrocede that business through Bermuda. And that's where then I think there's an opportunity for longevity transactions. Because the Bermuda regime has a longevity charge. Because what you ultimately want, what most players want, they want to have steady cash flows, and they want that someone takes out the optionality. And optionality is -- can be longevity, but it can also be mortality and can be other options that then we come in and provide a solution for particular PRT writers. So, that's a big, big opportunity that will play out over the next few years.

Maybe let me add to this. Again, 90% of our net income is determined by the in-force book. So there's a lot of work that needs to be done there. On the new business, I think we should also look at the transactions segment, the FinSol, Financial Solutions business. And immediately, people will then drift towards the asset-intensive part of the business. So, we see opportunities, yes, in the asset-intensive business part, where we help with the biometrical side -- the biometrical underwriting side. We are not going to be a big player in the asset-intensive business. We just are complementing it with the underwriting. We have a regulatory regime in Switzerland that is not comparable to the Bermuda system. So, the SST charge that we would get if we would enter into similar kind of deals is significant. But where it makes sense, where there's also margin to be made on the biometrical side, that's what the expertise that the markets then need also. So, that I would see as an area, but don't expect miracles in this area, very margin-oriented, technical -- and then the other areas, Anders already mentioned.

Yes. And they come together these two areas. Yes.

Charles Graham from Bloomberg Intelligence. Two questions really. There have been some interesting discussions about extensions to flood insurance in Europe. In terms of the geographic mix, is it too early to think about that as a potential growth market for Swiss Re? And then just sort of more generally, has there been any or is there likely to be any change in Swiss Re's approach to cyber to AI data centers and the whole of that market?

Yes. First part, flood insurance, I mean, we bought a company called Fathom, attached to Bristol University. They're market-leading in -- with a flood model. So that is integrated now into the cat model, the perils in total in Swiss Re. So, that's an opportunity for us from a pure modeling point of view. We see developments, public-private partnership developments in Europe. There's an active discussion in Germany around nat cat floods also in particular. There's no final decision yet, but I would not be surprised if we would see a vehicle called Element Re being set up for -- we see it as an opportunity in the market. We are an active party in the discussions at the association level, obviously, but also in the discussions in the Tripartite construct. The problem there is evident because the local, in particular, the regional and local insurance companies are exposed with their net as the reinsurance industry have increased the retention levels, where reinsurance then kicks in, then they actually are exposed on the net side. This is predominantly also valid for the semi-private companies owned by the Sparkassen, who have a regional concentration and limitation also. So, they have regional limitations, so they can't diversify away from their net exposure in their region, which is causing a problem. That's why I think it's important that the industry comes together and tries to solve this problem, because diversification is key, and that's where we can help, where we can provide because our diversification works at global level, which is always superior to a stand-alone local or even regional in a country regional exposure. So hopefully, more to come. I think the legislative procedures are ongoing. And I hope it will be a quick solution. That's what the market needs. And we're here, we're providing our data, our models, analytics and capacity also. So we are at the table and discussing with them. So that was the one in the cyber and data centers. So that was a list of distinct high exposure areas. Cyber, we didn't change our view on cyber. We're very careful. Nevertheless, we are one of the top 5 capacity providers as a reinsurer in the cyber market. But we're very careful. We look at the overall deployment of capacity. We have capacity and risk limits that we need to watch. So that tells you that we, again, have a very technical view on it. We have invested a lot into capabilities, also in modeling capabilities, trying to understand that this is a big vast territory. And you have seen just recently also primary insurance companies have reduced capacity and are careful because they see the number of claims, the frequency going up, but also the severity. And almost on a daily basis, you see downtimes of cloud, cloud providers, et cetera. So, this is a dangerous area. And I think it's, again, an area where one party alone is not enough to solve, and we are also supporting the public-private partnership models here, but there's still some way to go. On data centers, that's different. Data centers is a new risk exposure coming into our industry. But again, here, that's a concentration question, in particular, about U.S. There are so many data centers planned and the accumulation topic has to be addressed and has to be managed. The demand, the need for extremely high limits is there. So, you would think it's a great market, because there's great demand. But from a technical exposure perspective, we need to understand where the exposures are, what's the worst-case scenario to think of. So, we're active in the discussion with data center providers, with the brokers, but also with cedents who have specialty and specialist know-how in this area that we complement with our know-how. We need all the capacity available in the world. That's why this is an area where we need to be careful and have an alignment of interest. Europe is a bit behind, but that's why it's all concentrated in the U.S. the discussion, because that's real. So the number of data centers that are being not only planned but built, that's real. And that's why we need quick answers to it.

Vinit?

So just the Life, so I hear your confidence in it's been solved. I just wanted to follow up because last year, one of your slightly smaller peers had a big thing about Israel and long-term care. And today, when I hear Israel, I see other things being mentioned, disability, other medical things. And I think it's just, will be helpful to see what you think about whether these two things were the same, whether you addressed them a little later or whether there is something else that potentially is a risk. So, I'm just curious to your thoughts on what's happened there because it was a very, very big -- I mean, topic in our world last year. So just curious on that.

Yes. So look, I think, it in the end, I mean, it's the whole market. And so it's the same issue that has been addressed. Now by Swiss Re, I would say, to the extent that we have now also by the closure of the -- or the stopping of all the treaties. In my view, this is the same market environment that has created this issue. That's why this is not just a Swiss Re reserving issue. This is a market issue in Israel that ultimately then also impacts also consumers, because if reinsurers just withdraw from that market, insurers in the end don't have the capacity to then provide the service or the protection that you need. So it is -- in my view, this is the same. Yes, the same thing.

And to add, we're in active discussions. The regulator has to approve specifically in Israel. So, it's a complicated situation that needs a solution.

Just trying to -- maybe in the back, you haven't had your turn.

It's Andrew Baker, Goldman Sachs. Just hoping -- maybe I've misinterpreted what you're saying here, but can you help me reconcile a couple of points that you're making? So I guess, Andreas, from the opening remarks, I thought that you were relatively relaxed about the P&C Re pricing outlook. But then if I look at the plan, it looks like there is quite a bit built in to sort of protect from the downside risk there. So one, I guess, have I read those two statements correctly? And then secondly, are you able to just be a bit more explicit about where you're thinking 2026 risk-adjusted pricing declines will land versus 2025. So are you thinking they are in line? Or do you expect them to decline materially, I guess?

So when I sounded optimistic or positive, I was referring to the narrative that was out there in the market. that we hear and we have various meetings, I mean, amongst us even in Monte Carlo and afterwards, and it's dynamic. But to be quite fair, I don't see the dramatic decline that some market participants, I'm not saying peers even, were entertaining as a narrative. That is not the reality that I see, which means there's still some discipline in the market, which I see as a positive. Now we planned with some rate declines. And again, why am I not so negative or intimidated? It's because we are within our expectations. Yes, we still operate in a space where there's margin. And as long as that's the case, I shouldn't be negative about this. The second part of the question was?

It was about the risk-adjusted pricing.

Yes, that's basically -- that's what I just said, yes. So, we have a plan, and we're way within our expectations, yes. In comparison to the prior year, I don't want to give you a crystal ball number. We're within our expectations. I think that should be sufficient because we're still in the negotiations.

Chris?

It's Chris Hartwell from Autonomous. Just trying to sort of think about dividend policy. Obviously, the earnings growth -- the growth in net income obviously implied in the '26 and '25 plan is relatively modest versus dividend growing 7%. And if I extrapolate market conditions forward into 2027, again, we've got -- and that's going to be 15% growth in ordinary dividend plus buyback on top with a very modest presumably growth in net income. So, the payout ratio is going to widen quite a bit. So, I'm just, sort of, wondering if you can, sort of, talk a little bit about the, sort of, the broader payout philosophy as we go towards the end of this current plan.

Yes. Look, I think you highlight -- I think you summarized it well. So, we have the dividend, that is, call it, the main part of the payout. And we announced last year the 7% that we -- for 3 consecutive years. I mean that's clear. That's a commitment we're going to do. On top of that, we now added the buybacks as a supplement that then basically closes that. But as a program, not as an opportunistic buyback, as a program going forward that you should expect that continues when result. And we start with USD 500 million, and you should see that as a good proxy. But going forward, if results go up, then you would see that going up as well. Obviously, we talked about the priority. If there's an opportunity in the market, you would use that as well. But if I just look at the overall capital generation, I think there's ample space to continue that program. So it's -- I think with -- in the plan, it's about 60% payout ratio. With your view, it probably goes up a bit, which is fully in line with kind of the capacity that we have going forward. So that's -- I think -- look at it as a starting point. And then going forward, I think we want to deploy the capital at the right level. But if there's no opportunity in the market, we give it back in the form of this program. That's why it's a program to keep then the capitalization at this USD 250 million range around where we want to be. So, I think that should give you clarity.

Anne-Chantal.

Anne-Chantal Risold from Octavian. I just have a question on the slide that you have in your appendix. We haven't talked about it. You say you make a proposal at the AGM 2026, you will move your share capital to USD. So not long ago, you moved your dividend to USD share capital. Will that have an impact going forward also on the currency you will be quoted in at the exchange?

So, the short answer is, no. But maybe I can give a bit background here. So, we manage this company on a USD basis because the vast majority of our exposure is in USD. We have 50% in the U.S. You saw it in Andreas' slides. We only generate about 1% of our revenues in Swiss franc. So that's why I think it's important. We manage and think that the company in USDs. We changed the dividend policy to that because otherwise, we couldn't give a dividend guidance. And how do you give a dividend guidance if your currency moves around? Now, there was a change in the Swiss law that allows that we can also change the statutory accounts from Swiss francs to USD. And this is an opportunity because now -- and you will not see anything of that in the IFRS. And it's not an IFRS issue. But I think it reduces a lot of complexity underneath, also reduces some hedging. So, there's a real cost benefit that we can reduce going forward. It simplifies it. The hedging is gone. And from statutory to IFRS to dividend policy, all of that is in line in U.S. dollars. We're listed at the Swiss Stock Exchange. This is in Swiss francs, and this will remain in Swiss francs. So, I think these are two different things. But the important point is this simplifies a lot. This reduces cost. And so this is really in the interest of shareholders and ultimately, policyholders as well.

Just a second round.

It's Ivan Bokhmat, again. Just wanted to follow up a little bit on the things you were mentioning. One, on the plan to see a little bit less cat risk to external recession. I'm just wondering what's the rationale here? And wouldn't it be more logical to increase the session given the market becomes a little softer? So, you can collect fees from that. And then the second question, I mean, I'm just trying to understand the dividend message a little bit better. But the way I understood it is that extra buyback beyond the USD 500 million that we should consider as recurring would come, a, towards the level of USD 250 million as the ceiling where you would pay down potentially? And secondly, should we think about it with the view of this 14% IRR, if you're unable to deploy capital organically above that level, this is when extra buyback comes in.

Okay. Maybe I'll start on the cat exposure. I mean, you saw -- I didn't mention it, but on cat, overall, we have a combined ratio of 68% over the last probably 10 years. So, this is a very profitable business. So even if prices are coming down, this is business you want. And if we have risk capacity and capital capacity to take more on, this is beneficial. And this is exactly how you should think here. So, this we can reduce a bit the hedging, the retro, because we still believe this is a very profitable business that creates the right return. To Andreas' point as well, I think also when you look at the capital intensity, I mean, it's about 40% return on capital just because of the diversification. So this business with this combined ratio is worth taking a bit more risk increase. So, on the dividend, again, I think the 14% ROE target that we have, you should see that as a through-the-cycle target. So, through-the-cycle being above 14%, that's the objective. Right now, the target that we put out is about 20%, so way above the 14%. So the 14% is really the through-the-cycle view here. The dividend itself -- so -- and then we have the capital band or the capital range where we say we want to be at this between USD 200 million and USD 250 million. Now in normal circumstances, you want to be at this upper end, because then you can absorb any big event without going out of the range. So that's -- but we feel comfortable in that area. We don't need to be way above that. And now introducing the buyback allows us to maintain exactly that level in a normal year and complement the dividend with the buybacks. But on a recurring basis, on a sustainable basis, not on a one-off basis. And as I said, we start next year, start with the USD 500 million. But over time, we will see how this develops.

Time for one more. Maybe, Will, you were...

He was waiting.

Will Hardcastle from UBS. Just coming back to the Life & Health, I understand you've done the portfolio reviews and you guys are comfortable. I guess, as we sit here or as investors look at it, what data points can we sort of grab hold of that we can be comfortable? With the P&C stuff, historically been you've shown, we've seen -- we've seen a 10% hit to CSM effectively over the last 12 months or so. That's a big number. Some companies might do a third-party review. Is there any possibility of that? I guess, as investors or analysts, how do we get comfortable with that? And I'll just be greedy just on one last point on the sustainability of the buyback comment. Am I right in thinking, therefore, that USD 500 million is the minimum, it would be. Would you ever reduce it year-on-year? I'm just trying to understand that. Is it a ratchet type thing?

Yes. So in a normal environment where nothing catastrophic happens, I think you can see that as a guidance that would not go below that. Obviously, if you would have a big earthquake like we had 12 years ago, 15 years ago in New Zealand, that's something you would have to then think about. But in a normal situation, this is -- you can see that as a guidance, absolutely. Yes. On the -- look, I think on the Life & Health, I think the proof will be quarter-over-quarter, how we're going to see the experience variance go through. I think important for you is, we went through three phases. We took the big ones, and we already saw that the big ones are working, because U.S. mortality and China critical illness are in line with expectations. These are the big ones. And you saw in Andreas' pages, U.S. mortality is about 50% of the in-force. So that's big. And that's critical. If this doesn't work, then we have to talk. But this is not -- this is in line. This is as expected. China critical illness is fine. So, all the big ones are fine. The small ones when we went through now, and you will see then in the experience variance going forward, we have to think about if peers do something like the triangles, because that would be the corresponding. I'm not aware of that. So -- but under IFRS, I think you will see them very detailed and how this develops.

And let me add also here, because you had a nice slide where you said, okay, there's a lot that has been done when we reviewed the portfolios, but there's also management actions. And the same here, 90% of our net income comes from the in-force book. And there's a lot that can be done there. Think about recapture, for instance, and we had a very successful 2025 so far already. And if teams are focusing on optimizing, sort of, the in-force book, there's a lot to be done there and to be gained. And now at the end, I'd like to bridge it again to AI because what the beautiful thing is on Life & Health is that I personally see the biggest impact, positive impact and benefit in AI, in Life & Health. It's extremely manual. All contracts are very bespoke. And we have around, I think, 11,500 treaties. And we were looking at sort of a subset of 4,500 treaties. And we were thinking about the rate reviewability clause in those contracts. Today, it's humanly impossible with the team to go through each and every bespoke contract because the rates, the clauses are not even equal, identical in all type of contracts, very bespoke. It's almost impossible to go through and then to activate that clause. With AI, we now suddenly see that scraping the information of those treaties is done in no time. And now, you can actually take management actions, do something that is your contractual right actually that you should do what prime insurance companies are also should do with their policyholders. That's the opportunity here, and that's why we're doubling down on it. And as we speak today, they are sitting in a sprint, the teams from the tech side, but in particular, from the underwriting and the claims side on the Life & Health Re. So, I've got big hopes there. I don't want to oversell it again, but this is clearly an opportunity.

With that, thank you very much for your questions, for joining us today. For those of you here, we still have a lunch snack waiting outside. So you're, of course, welcome to stay. Thank you again for joining the management dialogue event, and have a nice weekend.

Thank you.

Thank you.