Talanx AG (TLX) Earnings Call Transcript & Summary

Good morning. This is Hannover calling with the Q1 results of the financial year 2025 for the Talanx Group. You already know what the net income is from our talk release 2 weeks ago, and today, you get the details. I'm together here with my CFO, Jan Wicke, who will take you through our presentation. As usual, you can find all the documents, including, but not limited to this presentation and the financial data supplement on our web page. And if you have any further questions that are not addressed by either our Q&A or the documents, please don't hesitate to call my IR team, and we are happy to assist you. We do the Q&A session after the presentation from Jan. We are on MS Teams today, so we can see each other. [Operator Instructions] And with that, I'm happy to hand over to Jan. Jan, the floor is yours.

Thank you, Bernd, and good morning from my side, and thank you for attending our call. I'm very happy that I can present you very strong numbers for Talanx for the first quarter. To start with three messages. First of all, we kicked into the first quarter of 2025 with a super strong balance sheet, which is reflected in the actuarial review of the resiliencies, which are embedded in our best estimate reserving. We were able to increase the resiliency by roughly EUR 1 billion to EUR 4.7 billion by the year-end. Second, we continue to monetize our growth for our shareholders. Return on equity stands at 20%, and this translates into EUR 604 million group net income, which is a record result in the Talanx history for the first quarter. And third, with regard to the components of our strong group net income, we can just observe that the diversification within our group is working. So the share of the primary insurance from the group net income is 60%, whereas the share of reinsurance stands at 40%. And this is due to the fact that we had a very, very specific first quarter, which was driven by the large loss development. So in the previous year, in 2024, we had a record low large loss burden in the first quarter, just EUR 76 million. In this 2025 first quarter, we had EUR 880 million, so eleven fold is the large loss burden. And this was due to the wildfires in California, which accounted for EUR 640 million out of this EUR 880 million. And the majority of this large loss burden was allocated to reinsurance. And this is why what you can then see in the earnings contribution, primary insurance, which was not so much hit by as the wildfires was able to increase their profit contribution to close to EUR 360 million, whereas reinsurance stands at EUR 240 million after accounting for the wildfires. Digging into more detail with regard to the diversification within the primary group, there are two things to mention or even three things to mention. First of all, Retail International contributed 29% to the group net income, which is a record high level. And they benefited from two facts: first, from the acquisition in Latin America; second, also from the buyout of the minorities in Poland, but had also a very strong technical result. Second, Corporate and Specialty delivered a very strong 24%. Edgar Puls and his team did a very great job in organically grow their business and also grow the net income contribution to the group. And also Retail Germany delivered 8% to the group income. So a strong result from all parts of the groups. Having said that, I want to dig into the numbers in the usual format you are familiar with. So first of all, we were able to grow our insurance revenues by 5% to EUR 12.360 billion insurance revenue. Group net income, despite the large loss burden, we were able to grow at 5% to EUR 604 million. Return on equity stands at excellent 20%. Let's dig a little bit into the split in between primary and reinsurance. So the growth in primary insurance was 5% adjusted for currency movement, 7.2%. Reinsurance was at 4%. And in the group as a total, we have 5% growth for the first quarter. With regard to the bottom line, the majority of the earnings growth or the earnings growth in total is derived from primary insurance. So the profits are up 32% here, EUR 359 million. It's a very strong first quarter for the primary insurance. Reinsurance was down due to the wildfires. But as a group as a whole, we were able to grow our profits. And to put this large loss burden a little bit into context, we have provided you with this slide where you can see the large losses in the first quarter for the last 10 years. And as you can see with 8.4% of the P&C premiums, it was really an outstanding first quarter in terms of loss burden. Only the one in 2020, where we have to deal with corona was some which had a similar burden in the last 10 years. And what is the result out of that? As you are familiar with it, we are booking either the highest of incurred or budget. So in this first quarter, we exceeded our large loss budget quite substantially by EUR 280 million. And so we booked more than EUR 880 million for large losses in our balance sheet for the first quarter. And on the right side of the chart, you can see the wildfires in comparison to other nat cat large losses we had in the past, and you can see this outstanding number here as well. With regard to the full year, we are very, very confident not only to achieve a mid-single-digit growth, but also, and this is more important, we have the ambition to exceed EUR 2.1 billion net income for the full year. With EUR 604 million, we have slightly above 1/4 of the annual result realized already in the first quarter, which is quite normal. We used to have a strong first quarter. If you look for the last 5 years, it was on average 28% the first quarter of the full year result. So we are well on track to deliver a result above EUR 2.1 billion for the full year. Return on equity currently standing at 28%. We expect it to be a little bit lower for the full year. If you do the math, put in EUR 2.1 billion group net income and take the equity out of our balance sheet, then the return on equity should be around 17% for the full year. Let me now give you some color on our segments. To start with, as usual, is Corporate and Specialty. In Corporate & Specialty, we were able to grow our business organically by 10% to close to EUR 2.6 billion insurance revenue. It's a very strong result, what we see here, but even stronger than the top line growth was the bottom line growth by 35% to EUR 141 million net income contribution. This translates into a strong technical result. Combined ratio stands at 91.1%, which is 0.7% better than the [indiscernible] very strong previous year. And this then results in a return on equity of 18.4%. The colleagues, the management team in Corporate and Specialty are doing very, very well and they will continue to do so. So we are quite confident with the future development of this segment. With regard to Retail International, in Retail International, we see a growth of 4%. If you look at it in original currency, it's above 9% growth, FX-adjusted. With regard to the bottom line, the growth is much, much stronger, 39% to EUR 172 million. Within that is at no surprise, already the acquisition in LatAm, the profits derived from Latin America, but also the profits are increased due to the expected buyout of the Polish minorities by EUR 16 million is the contribution in the first quarter here. And this is a very specific situation because we already have fixed the price, which is due to be paid. And when the transaction is closed in the first quarter of 2026, we already have to account for profits and losses of this minority, which is embedded in those numbers. And this has also a very positive effect on the return on equity development where we have an outstanding 21% in Retail International. Here, this 21% in Retail International, if you look at it for the full year, you should take into account that we haven't injected the equity, which is needed to finance the transaction, which is due in the first quarter of 2026. And so -- but they can collect already the profits in this year. So this is an effect for the full year of 3 percentage points in 2025, and it will be an effect of 1.5 percentage points in 2026. And after that, this will normalize out for the years to come. Nevertheless, we are very happy with the strong result of Retail International, which is driven by an excellent technical performance, which we were able to achieve in the countries we are operating in. Coming to Retail Germany, there, there is a decrease in the insurance revenues by 6%, which is due to the fact that the bancassurance cooperation with TARGOBANK and the bancassurance is ending. And this has led already to a strong decrease in revenues starting from the beginning of this year. The group net income is stable. The contribution within the group net income is that we have a higher share of P&C and a lower share of life business given that the bancassurance cooperation with TARGO was life dominated. And the return on equity stands at 13%. There's one additional comment really needed. If you look into the details and the financial data supplement, you see an outstanding combined ratio of below 85%. This is driven by one-off effects in winding up outstanding claims. This will be not -- we cannot repeat that every quarter. It was just in the first quarter. So this will normalize over the course of the year. So in total, we expect the combined ratio to be around 92% for the full year. And we expect this segment to deliver return on equity above 12%, which is above the internal target. So looking at with reinsurance, most of you might have heard the call from Clemens and Christian and the colleagues yesterday. They had also very strong numbers. They are growing. The group net income is impacted by large losses. Besides that, they had very strong results and a return on equity of 16.4% despite the large loss burden is a strong result, and we are very happy to be the majority shareholder of Hannover Re. Having said that, I want to dig now into the capital management. And as always, in the first quarter, I would like to start with the development of the resiliencies. For those of you who are not familiar with what we are doing there, in an insurance balance sheet, you have to set estimates for booking your liabilities because you never know exactly what you will have to pay for a claim when the claim is still winding up. And therefore, you have actuaries, you have specific methods to do these estimates. We have quite prudent actuaries in our house. And in order to have a good governance in place, we reassess the estimates of our actuaries, which are embedded in our balance sheet by an external actuarial company. This assessment is always done on the year-end numbers. And the review of Towers Watson is now due and what have they found out. They found out that we were able to increase the resiliencies, which are embedded in our best estimate that we have. They are now EUR 4.7 billion, which is roughly EUR 1 billion more than in the previous year. So we have a very, very strong and prudent reserving here. On average in relation to the total net reserves, it's 7.1% is the resiliency, which is embedded in our balance sheet. And this really reflects a very, very, very strong balance sheet. And you might raise the question, do you really need to have such a strong balance sheet? We believe in the world with all this geopolitical uncertainty to have a strong balance sheet is exactly what our customers wants to see. They want to have a strong partner for the insurance business, and we are a strong partner because we are in a position where we can absorb all kind of shocks, which is also reflected here in this assessment. The very good capital situation is also reflected in our solvency numbers according to our internal model and also accounting for future dividends. We have a number of 229% for the first quarter. We have seen an upgrade in the rating to AA- through the course of the first quarter. We are very happy about that. And with regard to the sensitivity of our capital situation based on the internal model, you can see that we have rather low sensitivities with regards to capital markets development. So if the equities are down 30%, it will just touch us with 2% lower solvency ratio. So overall, a very strong capital situation for Talanx. And the driver behind that is that we take less market risk as some of our peers, which is reflected in our asset allocation. We have more than 80% of our asset allocation is allocated to bonds, whereof 93% are in investment grade. And this translates into a book yield return on investment of 3.5% for the first quarter 2025. Reinvestment yield currently stands around 4.1% -- so having said that, I would like to provide you also with an outlook. In total, we are very happy with the first quarter, and this is why we are very confident that in total, we can deliver with regard to growth, a mid-single-digit growth with regard to the bottom line result above EUR 2.1 billion for the full year. And we are also very confident that this translates and into a return on equity of around 17%. And with that, Bernd, I would like -- do not hesitate to raise any questions you have. And I hand over to Bernd to handle the questions.

All right. So don't be shy to fire questions at us. I see 2 hands raised. The first one is Hadley Cohen. Hadley Cohen from Morgan Stanley.

Hopefully, you can hear me, okay. A few questions, if that's all right, please. So firstly, Jan, with regards to the reserve buffers, I mean, incredibly strong, very impressive. I guess, Jan, how much further can they go? I'm assuming not that much. And if that's correct, sorry, does that combined ratios to be better going forward? And two, presumably, you will still be conservative elsewhere, but I'm just wondering where you're thinking about that, particularly in a lower bond yield environment and your ability to realize losses is in more challenged. So that's the first question. Second question is around on the rating environment in Corporate and Specialty. Can you give us a bit of an update on pricing trends there? I think you've mentioned Specialty was a bit softer previously, but we're seeing a lot of negative commentary from some of your peers in the commercial space right now. So what you're seeing there and how it compares with loss cost trends? And then thirdly, on the German retail combined ratio, I mean, incredibly strong even after adjusting for the management actions, it was around 92%. I mean, is there anything that we should be particularly -- are there other one-offs within that sort of 92% that we should be mindful of? I mean, how should we think about that in the context of the less than 96% guidance that I think you're giving for that division? And then finally, a very quick one, if I may. There's a lot of talk in the press around the potential for a German pension reform under the new government. Just wondered if you had any thoughts on that and how Talanx might be able to sort of be positioned in that scenario?

Thank you, Hadley, for your questions. To start with this reserve buffers and the philosophy we have with regard to resiliency, which is embedded in our best estimate. So first of all, we look at this resiliency from 2 sides. First, we never want to have a reserving which is very close to what the external actuary provides us with. So that would mean more or less a minimum reserving on my point of view. And this will cause questions with local regulators and so on. So we always want to have a certain buffer at the lower end. This is the first thing because this helps us as a decentralized company that the local management, they can focus on customers and distribution partners and do not have to have discussions with the regulators. So the regulators love our approach with regard to our prudent reserving. Second, is there an upper limit? Yes, there is an upper limit. And so the upper limit is derived from two factors. First of all, it's about accounting. You have to fulfill the accounting yard step. And there, you have a certain range where you can put your reserves to, but it can't be excessive. And so this is the first thing. And the second thing from capital efficiency. So from a capital efficiency point of view, it's not good to have too much resiliency. And therefore, we have also internal upper thresholds for the resiliency, which is embedded in the various actuarial segments, which we have in the group. And to give you an insight what's happening when the actuarial segments reaching the upper limit, this is what we experienced last year in Poland, then they have to release resiliency, the management gets an extra bonus for the good performance. But then they have to release resiliency and it's agreed on in the planning period when you reach the upper limit. So we do that. And we have executed that in the past years as well. So -- and now to give you -- that's a little bit about the philosophy, which we have with regard to resiliency. Second, where do we stand? We stand now at very, very comfortable levels of resiliency and you're assuming are we already at the upper end in some segments, actuarial segments, we are at the upper end, and we require then more cash to the holding in those entities. This is right. And this translates in a slightly better combined ratios. This is also true when this happens. But we are not there in all segments, so this is to provide you with some insight there. So the second question was with regard to the rate environment in Corporate and Specialty. This is -- overall, it's a little bit a mixed picture. Overall, we are still happy -- still we have very profitable rates. But compared to the past, we still can -- overall, we can compensate for claims inflation, but there are some lines in specialty business where the rate increases were below claims inflation. So slightly lower profitability in some cases. But overall, we are still very happy. There are nice margins, which we can earn with good underwriting. Third question was with regard to Retail Germany, whether there were other effects in Retail Germany with regard to this combined ratio. So overall, for your own assessment, so what is our own assumption with regard to Retail Germany is that we expect the combined ratio at the year-end to be around 92% leveling out this first quarter effect. And we are very happy about that because the management did a good job in cleaning up the as the P&C portfolio. We have now a healthy profitability and this -- and the higher contribution of the non-life business to the overall profit in Retail Germany helps to compensate for the end of the TARGOBANK corporation. And the last question was with regard to as a new government in Germany. So within Corporate and Specialty business, we have a higher share of revenues derived from Germany and it's rather simple story. If our customers are doing well sooner or later, we also see a positive effect with us. So if the German government is successful in reducing bureaucracy, if they are successful in setting up new investments in infrastructure, then the German Mittelstand will benefit from it. And if the German Mittelstand benefits, that will be also a positive for us. So these were the questions I've noted Hadley. Is that okay for you?

Just coming back on the last question briefly. It was more to do with the potential for a pension reform in Germany and if there's any potential sort of implications there for the insurance industry and how Talanx might benefit from that or be positioned in that scenario?

I think currently, it's still pretty unclear what's the path with regards to a pension reform is within the new coalition from my point of view. If the path is towards insurance-linked solutions in the employer benefit environment, we are very well positioned. If there are paths who are more linked to asset management, mutual fund business, then obviously, asset managers are in a better position.

All right. So next in line is Michael Huttner, Michael Huttner from Berenberg.

Another set of lovely results. I had three. The first one is Retail Germany. It's almost unbelievable to -- I think a couple of years ago, you were at above 100%, now at 92%. It's quite extraordinary. Given it's so profitable, when would you start thinking, oh, now we could grow again. And I think that have been kind of maybe me. I was hoping that you would say something that you could be buying businesses, which might be for sound. The second one is on the solvency. The numbers are also extraordinary. And the -- a, can you explain why full year was up 8% better than the original guidance? And then I think you did something very conservative about the dividend. So excluding -- if I normalize for the dividend, I think Q1, you'd probably be at 233 or something, which is way, way above your target range. So -- and you did discuss the resiliency, but I don't think the resiliency is in your solvency. So that's another kind of excess capital. And I'm just wondering, will you raise the target range? Or what will you do with that? And then a really kind of almost silly question. You built up more buffers by reserving or booking nat cats higher of actual and budget in every division. I just wondered what the kind of figure in hand is and how much is left in the budget for the remainder of the year?

Okay. Michael, I'll kick off with the German figures when will we start to grow again in Germany. So first of all, we have to compensate for the end of the TARGOBANK cooperation. So we expect a decline in revenues in Germany simply due to the end of this cooperation and growing the business, profitable growth. So you know within our company, we have the saying you're familiar with volume is vanity, profit affinity. And this is a key also for growing the business. We are happy if Retail Germany will deliver return on equity above 12%. And they are working hard to do that, and we are very confident that they will deliver that. Second, with regard to the solvency number, yes, you have identified correctly. We have -- we had to adjust for the future dividend, our Solvency II number. But this is just 1 to 2 percentage points. It's not so big this effect for us. Why is this not so big? Because those part of the dividend, which is allocated to the mutual is not deducted because this is then in the mutual. This is why this effect is lower than if you compare that to our peers. With regard to the resiliency, yes, the resiliency makes the balance sheet pretty, pretty strong. And we believe in the current world with this geopolitical uncertainty, it's really good to have a strong balance sheet. If you look at our business mix, more than 70% of our business is allocated to wholesale business where balance sheet strength really matters for our clients. And so we want to have a strong balance sheet. We feel very comfortable with our AA- rating because this will help us to capture growth opportunities also in the future. And with regard to steering options, which we have besides resiliency, this is one question Hadley had also, and as I skipped that so I forget about that as we have abilities to steer results still on the asset management side in the bond portfolios. And to set out a little bit the philosophy here, for [indiscernible] first priority is that we can deliver to our shareholders growing dividends. This is first priority. Second priority is that we want to deliver earnings growth. And so we are managing our results that we can say with full confidence we will deliver earnings growth to you. And so this is what we are doing also with regard to the bond portfolios and so on.

And I don't think you addressed the question about full year solvency being above the original estimate or...

Yes, we are -- to be honest, Michael, you are pretty right. We should consider to adjust the target range for the solvency. So it's above 200. Where do we look at? We do look at our solvency ratio in comparison to our peers. This is where we look at, and we want to be well positioned compared to our peers because we are acting in a competitive environment and resiliency and also solvency capital ratios really matter given that we have the majority of our business in the wholesale business. And so it will be always a strong number compared to our peers.

And 228 versus 220?

Yes. Yes, that's good, isn't it?

No, no, I know. I thought the last published was 220 and it jumped to 228. I was just wondering where the jump came from?

Yes, I see that. Now this is a specific. We have to distinguish, unfortunately, between the Solvency II internal model ratio, which we have published here and the regulatory one, which is driven by a specific set of rules. We have to adjust for regulatory reporting, the capital requirement derived from the internal model by the sum of the minimum capital requirements in the group. And given we are a little bit the victim of our success, given that we have a group structure where we have a quoted Talanx and quoted Hannover Re, we have to take into account the share price and that the share price is going up. As this minimum capital requirement rule gives us an add-on, which accounts for negative. The BaFin always, if we have discussions with BaFin, it's about the internal model figure. It's not about what we have to publish as a regulatory number, which was a 220 at the year-end. It's just because of our structure and the nice share price development, which we have in both entities, Hannover Re and Talanx.

All right. So next question is from Roland Pfänder from ODDO BHF.

First of all, I would like to come back to Retail Germany, the Life business. You had new business declining by close to 50% due to the distribution agreement cutoff. On the other side, the CSM stock increased by 5%. So I'm just wondering which drove this up? And could you provide an outlook for the insurance service result on the Life side, which is down by 20%. Will it decline over the next some years? Or do you see some counterbalancing effect that you can compensate for the distribution agreement loss in the future? Second question on Corporate & Specialty. Could you split your 10% growth in price and volume effects? And also what is the growth of the corporate side and the specialty side?

Thank you, Roland. So first question, development of the insurance service result also for the future. Yes, we expect the insurance service result derived from the life business to decrease in a double-digit percentage way, and we expect that a better contribution of the P&C business in Retail Germany will help them to stabilize the results and that we can continue to see a return on equity above 12%. Why is the effect so significant with regard to the new business? TARGO was, in particular, strong in producing credit life business, which was highly -- really nice margins. And so this drives the CSM development. With regards to Retail Germany CSM stock development, we had certain changes in estimates. I assume that our very conservative actuaries, which we do not only have in the P&C business, they had to do their annual reassessment. So it's the increase in the stock of CSM from EUR 2.9 billion to roughly EUR 3.1 billion was driven by roughly EUR 200 million by changes in estimates. To be honest, I do not know exactly which was, whether it was longevity, morbidity or in that one, but there might be also effect of that there is an increase in the risk-free interest rate, which is also helpful when reassessing the CSM. So maybe you have to ask as a team of Bernd later to provide you some more details there. So this was that with regard to Retail Germany. Now with regard to Corporate and Specialty business, where we've seen a strong 10% growth, which was driven by both rate increases and volumes slightly tick more by volume. With regard to the growth numbers in between Commercial Lines and Specialty. Commercial Lines was slightly above 11%. So we are growing stronger in Commercial lines, whereas in specialty business and here, in particular, in the delegated authority business, which is embedded in the specialty business, our growth rates were lower. We have to adjust our portfolio there a little bit. And then this is then reflected in a lower growth rate.

Then we have a question or probably more than one question from Bhavin from HSBC.

I hope I'm audible all right. So I have three on my side. The first one would be on Retail International. Obviously, the combined ratio has come in much better than your full year run rate guidance of 93%. I was trying to understand, is there some sort of seasonality in the first quarter? Or would you say some of the regions performed much better than what you had expected initially? So that's the first one on Retail International. Second one would be on retail German core, again, coming at 92% combined ratio, much better than what you had initially guided. It would be helpful if you could provide some colors around the split of this combined ratio between motor and non-motor and maybe further colors around how the motor market combined ratio is evolving in the first quarter given the rate increase that we have seen in the recent renewal cycle. And the third and the last one would be on your reserve resilience. Jan, you mentioned that some of the segments are already near the upper threshold level. Could you provide some colors around which segments are rather at the upper threshold levels and which segments are the places where you believe there's further room for further reserve stuffing?

Thank you, Bhavin. So to start with Retail International, I fully agree they had a very strong combined ratio. Technical results were better than expected. Are there some seasonality in that one, which we haven't accounted for? No, but we had very strong results in Poland in the first quarter, which was also due to weather conditions, benign weather conditions. So we were a little bit lucky with that one also. And so we do not want to change the full year guidance here to have such, but we expect good technical -- very good technical results for the full year. Talking about Retail International brings me to one other aspect, which I want to touch on here now. Given that we have this contribution from the minorities in Poland also contributing to the overall expect, we expect this contribution to be -- was EUR 16 million in the first quarter. For the full year, we expect it to be slightly above EUR 50 million. And having had a net income of Retail International in the last year of EUR 450 million, we expect Retail International for the full year, for the first time in its history to deliver more than EUR 0.5 billion net income slightly more than EUR 0.5 billion net income for the full year, which is super strong, and we are very happy with the performance of our management team here. Second, with regard to Retail Germany, this 92% and the split in between motor and other lines of business. So in motor, we had an extraordinary good result in the first quarter with an 85% combined ratio, but this one-off effects in motor from winding up outstanding claims. They were exactly in motor, that were liability cases. And therefore, we expect to normalize this combined ratio to normalize also above 90% for the full year. And in the other lines of business, we are also very pleased with very good combined ratios below in the area, 95% to 74%, depending on the lines of businesses we are in. So a very good development, also an indication that the turnaround in the portfolio of P&C Germany was very successful and will help us to have a healthy level of profitability in the segment as a whole. And finally, with regard to resiliency, you asked for some color. Well, we have decided to provide you with transparency on resiliency on the group level and also in between primary insurance and reinsurance. And what you can see here in the numbers is that primary insurance has a slightly higher resiliency compared to reinsurance. And so we are reaching the upper limits rather in some actuarial segments in the primary insurance. And I just want to once again ensure you if they are exceeding our upper limits, then for capital efficiency purpose, we require then higher capital upstream from these entities so that we see -- we call it internally money to money, money as a holding that we have more money to deploy dividends at the holding level.

Can I just quickly follow up on Retail International net income? You mentioned EUR 15 million is coming from the minorities share. Would you be able to provide the contribution coming from Liberty business in the first quarter within that EUR 172 million of net income?

That's quite difficult because we have merged the entities. We have now a contribution for Latin America as a whole, but we cannot tell you this is derived from the past of Liberty and this is derived from the rest. But overall, I just want to bring across. We are very, very happy with the development in South America, even though we have slightly softening markets in Brazil and in Chile, which are -- where we are still very, very profitable. And we are clearly ahead of our plans with regard to the net income contribution in those countries. A great job of Wilm Langenbach and his team.

Thanks for your question, Bhavin. And then we have another follow-up question from Michael Huttner from Berenberg.

Three numbers. One, Poland, when you buy the minorities, I think, January next year, can you remind us the cost in solvency? The second resiliency went up in Q1. I think Hannover gave a figure of EUR 267 million. And I think at your level, both Retail Germany and also retailer and also corporate and specialty added a bit. And I just wondered if you can kind of give a feeling for that. And then the cash question, I'm very puzzled by this one because you lost TARGO, which was high profitable business, but the solvency at the group level has improved, which I think is partly due to the German Life business. So I would expect higher cash to come from there. And you just mentioned money to money. I just wondered if you can give a feel for what the cash remittances or how the variance relative to last year might be?

Okay. First of all, with regard to the minority impact on the solvency ratio. So the minority impact on the solvency ratio is first deduction of 5%. And when we have closed the transaction, the deduction is just 3%. Why is that so? We have to account for all the risks, but we cannot account for the minority share of the equity, which we are paying out at the end of the year. But we also have to account for the implicit financing obligation, which is due in the first quarter of 2026. I know this sounds complicated, but overall, if you look at our solvency, it doesn't move the overall solvency ratio not too much. So currently, 5% next year after the closing of the transaction, 3% negative impact due to the business. But we are really happy to have bought out minorities. So since if I just look at the results in the first quarter, that looks really, really good. Second question was with regard to the cash remittance. We steer here entity by entity. And we will continue to have high cash contribution from Retail Germany as a whole, but they will be lower with regard to the TARGO entity, rather simple because they're providing less profit. So we will have slightly higher cash contribution from the P&C book in Germany, therefore, a lower one from the Life book. In total, we expect it also to remain on the high level. So overall, Retail Germany will provide us with cash clearly above their share of net income to the group. And the reason for that is also simple, they are not growing. And so we ask for capital efficiency purposes that they provide us with some payback here so that we can allocate the capital to other growth opportunities.

And the resiliency in Q1?

The resiliency in Q1, the resiliency development. So we do not assess it on a quarterly basis, but I'm very confident that the actuaries haven't changed their general prudence mindset in the group. So I would expect it to have grown also in the first quarter. But we have to look at the ranges, and I want to again, to tell you that we have those upper limits. We feel now very comfortable with the resiliency which we have. This provides us with a very strong balance sheet position, which is good for competition and capital efficiency matters to us.

Okay. So just quickly checking the screens. All questions seems to be answered. If you have any further thoughts, don't be shy to call us, and we are happy to answer that. Given that it is a busy reporting day today as some of our peers are also out with numbers, we particularly appreciate the fact that you spent some time with us. And I would like to hand over to Jan for some concluding remarks. Jan?

Yes, once again, thank you for attending our call. We had a very strong first quarter despite this huge, large loss burden. And we are very confident that we can deliver above EUR 2.1 billion net income for the full year. We continue to focus on both dividend growth and earnings growth. And once again, we are confident that we will deliver on that one. Thank you for attending.