Unipol Assicurazioni S.p.A. (UNI) Earnings Call Transcript & Summary

[Interpreted] Good afternoon, ladies and gentlemen. Okay. They told me you couldn't hear me so far. Okay. No problem. So I will be even shorter than I was before. Again, good afternoon. Now this introduction is a very short one, just to say good afternoon because, of course, as you know, we are here today to take your questions. Thank you. .

[Interpreted] [Operator Instructions] Question number 1 is from Elena Perini from Intesa Sanpaolo.

[Interpreted] Mr. Cimbri. My question is on your premium mix. Really your press releases and presentation, there's been a strong contribution from bancassurance. Can you please well, just give us some color on your strategy concerning I mean, this part of the business, I mean, on the Life business, but also on the non-life business, let's say, for the next months or year, if at all possible. Then also wanted to ask you, well, I know that the combined ratio is 92.8%. So at the end of the lockdown, there was recovery so an increase of claims. And I believe that we also had other effects the last quarters. Now what do you think can happen within the end of the year. So do you confirm your 93% target? It was written in your plan. Can you tell us something about the trends that you see in the fourth Q?

[Interpreted] And again, thank you for your question. Okay. Let me answer the question, and then I will also let Matteo give you information. So you're right, the banking channel, if you will, during the long lockdowns has suffered the most, in my opinion, in terms of production capacity. Let's say, this is due to our organizational choices and, of course, less contact with customers, if you will. So it goes without saying that in the past months, thanks to the vaccination campaigns, reopenings I think we can say that we are back on, let's say, full capacity, including the network of our agencies. So of course, the collection has increased. So as you know and as you can see from the market, there's plenty of demand because the lockdown means that people haven't spent their money, savings went up. And today, we have more investments, safe investments with quite a good profitability, right? So this is why the life part went up anyway Matteo will tell you more about this. Now as for the banking channel, it is right at the center of our strategy. So you know about my positions and our choices in terms of the capital of banks. So the only value that this has as an industrial well-being. So again, it's a channel we would like to develop. And we will do this very strongly in the future. So this is why we have ideas and projects fit, I mean, for our strategy. So I have to say this is going to be one of the key parts, if you will, or drivers of our next business plan. We will be able to talk thoroughly about this in the near future. Now as for the CR or combined ratio, well, as I said before, and in terms of bancassurance so we're going back, let's say, to a full operation and even full mobility of people. So it's a normal situation, if you will, that we have been missing for almost 2 years. This means there's more traffic. And then based on our metrics in the past weeks, we can say that basically traffic is back to the -- well, to 1 year ago, so same period 2019. Because you can also count on the data from black boxes. Now as for the claims, now claims frequency is not back to the previous, let's say, pre-COVID level. There's a difference, which is positive for us. But we want to be very cautious and prudent though we think we may go back to the same levels. This is the reason why if you consider, I mean, next year, and of course, I'm going back to your question. I have to say that in the past 2 -- in the last 2, well, there will be some specific assessments, if you will, on how to close our balance sheet. Now when I say assessment, I mean, we will be very cautious or prudential assessments. As I said yesterday, and you know that, well, we are very close to the end of the plan. So it's -- it will be closed in 2 months. We will close these 3 years by doing much better than all of the targets we set before in terms of general result, remuneration of shareholders, for example, reconfirming UnipolSai and also the remuneration for the entire group. Now as you know, we are are sticking to a specific engagement or commitment that I keep repeating. We want to pay dividends as soon as the, let's say, lockdown time is over due to what authorities told us to do. This is what we have done in October. Of course, I'm talking about the 2019 dividend. Our results are almost consolidated for the end of the year. And I have to say that we confirm the fact that we will be able to pay out dividend. So as you have highlighted, we also have the combined ratio target, 93%. Again, we have already reached this target. Now from now on, the, let's say, financial year closes and there will be, again, cautious potential assessments, because, of course, we want to on the same, save some money and allocate resources for the next 3 years. So once again, I'm saying this, I mean, to help friends to make some forecasts on our closings. Okay. Let's say that if you consider figures today, okay, don't consider, let's say, that every single quarter is worth one, okay? So the end of the year won't be a total of 4, okay? Matteo any other topic?

[Interpreted] Yes. Just a couple of points, Elena, if I may, on the premium mix because as Carlo said before, the car market, well, of course, the car insurance market is still a very competitive one, where the average premium -- well, in the past 2 months, it got a little bit stable. So it's stabilized a little bit. Because of the end of the campaign that we had to the name was #UnMesePerTe, so 1, 3 months for you. So those who didn't use the vouchers can use the voucher now. Again, average premium is becoming more and more stable. Anyway, it went down by 6% since the beginning of the year, and it's very competitive. So the premium evolution has still a dynamic development. And on the noncar business and independent from the distribution channel because in that case, also the agency channel is growing. So this is the consequence of the Italian economy, which is now going very, very well. As we all know, it's a cyclical business. So it follows, if you will, the request for insurance coverage that follow, if you will, the improvements of the economy. As for the Health business, this is one of the fastest growing business, and the same happens for small and medium enterprises SMEs for the dynamic is very favorable. So within this framework, the bancassurance level of premium is much lower. So the growth, if you will, promises a much better, also mid-long-term as Mr. Cimbri said before, of course, we will be talking about this thoroughly during the presentation of the next business plan. As for the natcat, 2021 was quite a heavy year for natural catastrophes. And especially I have to say during summer, hail storms were the problem versus 2020 because 2019 was much, let's say, harder. Now the difference is that the reassurance comp ratio versus '19 and '20, this year, this coverage presents a maximum levels which are much more protective for the reassuring companies. So we will recover less than what we were able to recover throughout 2020. So if you break down the impact of natcat, which is what you see Page 7 of the presentation, if I'm not mistaken. You can see we have in 2021 of 4.5%. This is the so-called natural catastrophes versus 4.1% in 2020. So this has increased a little bit. We have less severe claims less than 2% versus 2.5% in the previous 9 months and the remaining part to reach 7.3% has to do with active reassurance business. Also in this case, there was an impact generated by natural catastrophes, of course, it's impossible to make forecasts on Q4. And also from the seasonal point of view, Q4 is characterized by a high level of, unfortunately, of this type of claims that meet natural catastrophes. But of course, it's really too early to have a forecast on Q4. As for the Life business, as Carlo said before, these are investment products. So in this channel, we only sell the so-called multi- [ awarno ] products. So it's a mix between, say, the first type and third type so multi-type products. In our strategy, we want to limit, if you will, the so-called , well, GS or separated management because what we want is the right financial balance. I mean there's a slide in the presentation, where you can see the margin we withhold versus the margin we give to the insurer which is around 90 basis points, 9-0. I think this is -- our key milestone that we want to comply with. And again, we would like to keep this kind of -- this level of profitability on a multiyear basis.

[Interpreted] Next question is from the conference in English from David Amber.

The first one is on P&C and on the nontechnical results. Can you help us understand what the drivers are in the quarter, please, on the investment margin in P&C and on the other items? And then secondly, on capital, can you break down the movements of the solvency position in Q3, please?

[Interpreted] First of all, thank you so much for you question. As for question number one, so the question on investments. Well, I have to say that in Q3, no, we haven't experienced major changes in terms of the investment policy of the group. And by this, I mean that the investment policy we have is aimed towards maintaining an asset allocation, characterized by an exposure to Italian govies around 40% during Q3. In some cases, we also went under 40%. We would like to have quite a very good liquidity level so that we can do investments on real assets. Now the real assets item is the item that really gives a strong contribution to the increase and the strengthening of the profitability of the portfolio. Now this being said, no, once again, we haven't had any special action also in terms of what may have characterized the quarter. And I have to say that what happens in the quarter was, if you will, an increase of the interest rates and objectively, well, the value is really very, very low. I mean absolute values are really very low. So the percent of reinvestments of cash flows in the P&C area very small. I mean they are around 50 basis points, only once again, very extremely low values. It goes without saying that as soon as we reach maturities of securities, they are reinvested with yields which are much lower than the previous year. So fortunately, the duration of the portfolio is 3.5 years. The financial duration. I mean. So the gap, if you will, is there, but it takes place very gradually, of all of the operations and the investments we made during the quarter. But on the other side, they also depends, if you will, on an increase of the interest rate risk. In the past months, the curve, if you will. So the 30-year rate was frozen and the 10-year rate went up. So because of this special movement, what is being created is a bigger absorption of capital generated by or depending on the market risk again. So this is to justify the variations we went through.

[Interpreted] Next question is from the original conference from Michele Ballatore, KBW.

[Interpreted] I have a couple of questions. Now first and foremost, can I have the data on the provisions that you have released or used for the 9 months. Second question is on the pressure made by inflation. I mean do you have evidence of this pressure? Is this something you see? And if so, what worries you for the motor business but also for the nonmotor business. And so again, if you see this, how will you manage it?

[Interpreted] Thank you for your questions. Now as for the use or release of provisions, okay. Just give me one second. I can get the exact figure now. So EUR 147 million motor business. Of course, I'm talking about the entire, I mean total product liability and the entire car business, which is very similar to the same season 2020 where we had EUR 116 million. Also in this case, it's basically the so-called recoveries, I mean, so this is not actually the direct provisions. As for the nonmotor business, I'm talking about EUR 170 million. So the total is, let me check EUR 320 million basically. So EUR 170 million. And again, this is almost exactly the same figure we had back in 2020, where we had EUR 160 million instead of EUR 170 million. And so once again, we're just looking for one of my personal notes. So once again, still working on the so-called RCG. We keep paying by saving around 43% basically. Payment is a part of the EUR 450 million, which is worth -- for example, on the -- once again, TPL, this is what we have saved when we paid the claims. So all the rest net of the EUR 137 million that you can see now in the statement and basically the so-called recoveries or some new openings, but again, all the rest has been used to reassess again the provisions. Now the same happens. If you consider the 2 biggest areas. In this case, we have a so-called RCG. In this case, we paid by saving 68% versus the figure, I mean, we have in the provision. So in this case, the saving was EUR 390 million versus provisions. So in terms of RCG only EUR 78 million well, both the statements are the rest of this money or of this amount has been used in order to reassess provisions. Now as for the inflation pressure, which is what you asked in your question, well, I have to say, yes, definitely a this is an issue. We have to take into account and to do so, we need to look at the future because the economy is absolutely back on the right track. Of course, I'm talking about the global economy, which is what you're going to see in many, many different industries. And the consequence of this is that we may have some bottlenecks in terms of supply chain because what you can see now is this kind of slowdown of deliveries or bottlenecks because of the lack of components, the manufacturing industry recovery is not the same for every single country around world. So in Italy today, we are enjoying a very good situation. But of course, we also heavily depend on components and spare parts coming from the 4 corners of the world and in some areas of the world what's happening. So organizations are closed or maybe they have a reduced production capacity. Now this means there's inflation on spare parts and raw materials. In our opinion, this situation is here to stay. So raw material costs are increasing, just like consumption costs. So this is a major trend today. So we have to consider it will be one of the key issues also for the next financial years. I think we have to consider 2 different points of view. So on the one side, and in terms of investments, well, definitely is a benefit. It's an advantage that may also become a big one. On the other side, we need even more rigor or discipline in terms of paying damages or claims. We have quite high quality in terms of the payment of damages and cost control. It depends on many choices we made in the past. For example, we provision directly with Auto Presto&Bene our repair shops. In terms of the materials, we have the user, but also the business model UniSalute so they pay directly, they have, let's say, cost control, which is upstream, not downstream. Anyway, you're right. There's definitely pressure on the control, the so-called discipline, as we say here, we need to strengthen the discipline on cost control. What we expect is basically 2 consequences, on the one side is some pressure on costs. And I'm sure we can manage this with the execution capacity that we have on every single project. We will also take advantage of our synergies. So with all the companies that you can find now into the claim settlement value chain.

[Interpreted] Let me add to the fact that -- well, you know about the current level of inflation and it hasn't transformed into salaried wages inflation. But I think there may be a structural component of today's inflation. So it may have an impact on salaries and wages. So the average cost of TPL, well, basically, you have the cost of labor and the cost of spare parts. We do this with our company Auto Presto&Bene, but the main target for us is to have quite a large gap between the market labor cost on the one side and the labor cost of our repair shops because, of course, we'll give them plenty of business, and this is why they have a lower cost. If the absolute cost goes up, of course, it will increase less than proportionately for us. But of course, it will be, once again, one of the key items of the market dynamics. If you consider the evolution of car making technologies, this means that when you have to repair the damage the number of spare parts and both increases progressively stepwise. So the price or the value of the spare part is more and more important, I mean, as time goes by.

[Interpreted] I'd like to go back to your question, Michele, because Matteo told you about the effects and the consequences of the inflation and the forecasts we have for the future, especially in terms of the cost of labor in the near future. This is what I said before on the stronger, if you will, discipline we want to implement if you really want to have a clear vision for the future. I mean, after all the measures implemented by the government which is, of course, what we stick to here in our company. Well, as a group, we would like to go back to, let's say, business as usual as quickly as possible because this has an impact on our capacity and also the possibility to offer services and managing costs. All of this heavily depends on the fact of going back to normal life on the normal business. So as I said before, just -- I mean if you check the traffic so the number of cars on the road, so we are back to the same -- I mean, to the pre-COVID level. So lockdowns were an exception. There have been quite a long exception, because if you think of the future, the inflation and then the cost of raw materials, in our opinion, I mean, companies and organizations, I mean, what they need is to go back to full operation, full capacity. So under this point of view, we have speeded up the come back to office. Of course, there's are new technologies and then all of the tests made during the work-from-home period. Of course, this is one of the new thoughts or one of the new ways of modes of organizing the way we work. If you want to be serious about this, you need to have a general 360 degree vision. Because if you do something different today, well, this is a steady increase of the labor cost, we would freeze productivity. And in my opinion, companies cannot afford to do this now is, especially in the motor business. So may this translate into stability for the entire industry, I mean, or an increase of tariffs. Even if you don't consider inflation, I mean inflation just adds to what I said before. So the trend, as I said before, takes place even without considering inflation. If you consider, for example, the reduction of prices in the past 5, 6 years, I mean, more than 20% price decrease when it comes to TPL and the same happens on the market actually. Now this is forcing the entire industry, if you will, to look for a new technical balance. So if claims go back to the ordinary frequency, but also considering the inflation pressure that you have mentioned, well, I have to say that this is something that cannot happen today. So this is what we think. Tariffs or I mean prices gradually will become higher because, of course, we have to make sure the entire industry goes back to our technical balance.

[Interpreted] Next question is from the conference in English at Peter Eliot at Kepler Cheuvreux.

A few questions from me, please. First of all, I just wanted to come back on the motor pricing. Because I think you said last quarter that prices were down 4.6% year-on-year. And now you seem to be saying minus 6% to the start of the year, which seems like an acceleration to me. But then you also said that you've seen some stability the last couple of months. So I'm just a bit confused. I was just wondering if you could clarify what seems like a contradiction there? And second question I appreciate you can't give Q4 guidance, but I'm just wondering if you can give us any estimate of the cost of the recent bad weather in the south of the country. And then third question is on UnipolReC. It looked like the recovery rate has been much lower this quarter, about 21%, I guess, I was just wondering if you could give us a sort of outlook there and whether we can still see the same level of profitability that we had seen or whether the lowest -- the best part of it is now done. And maybe if I can just add a little comment as well or a quick follow-up on David's question on the runoff gains, I got quite confused by all of the different numbers you said on the runoff gains. I was just wondering if you could give us a percentage, what the impact on the combined ratio was? And to be honest, it would be very useful to have that in the press release or the presentation. But if you could give us that number, that would be very helpful.

[Interpreted] Okay. Let me answer right away on the claims, all the -- okay, natural catastrophes, well, now as for natcat or natural catastrophes, I have to say that it's difficult to make a forecast at the end of the year. But if you go through the trend we have -- more or less, we should have the same cost that we had because of natural catastrophes in 2020. So in 2020, we had EUR 390 million of costs due to, let's say, consequences of natural catastrophes. So what we have recorded at the end of September, we had EUR 270 million. So our prudential estimate is to reach a total cost which is -- will be very similar to the one we had in 2020, around EUR 319 million. Okay. Of course, we will see what actually happens. So as for the recovery rate, UnipolReC, you're right that there are minor changes, minor variations 25% on average, if I'm not mistaken, of recovery on the gross assets versus the 29% that we had in 2020. Also, in this case, it depends on which kind of files have been processed. At that time because, as you know, we have multilayer portfolio. We have different types of credits with guarantee, with no guarantee. And for example, one of the components is that in this part of the year. So in the second half, I have to say that we basically focused on the portfolio -- customer portfolios, I mean, acquired by BPER. It was almost EUR 1.2 billion gross, which is what we have paid EUR 0.08. If you consider, I mean, the money paid, the recovery, if you will, percent rate is even higher than the previous portfolio. It was exclusively the Unipol Banca portfolio that we paid EUR 0.20. Now these percent rates, I understand much higher than what we paid for, but also then what we may have recovered by selling them as a whole block on the market. So we continue, let's say, driving along the pathway because it has given us the possibility to completely remove -- to start at 0 Unipol net financial position, they have already reimbursed all the loans that they had received from Unipol and those who are small part from UnipolSai. So the total amount at the beginning was EUR 300 million. So now as far as UnipolReC is concerned, we have a gross portfolio, which is now worth EUR 2.8 billion. We also have some net amounts in the balance sheet totaling EUR 370 million. So total coverage is 87%. Let's say that the value we need to recover in order to neutralize the effect of the loans, well, the minimum level is 13%. Now we have more than double. So we will once again keep implementing this strategy because we think we will quickly recover the capital invested and maybe we can also -- well, do even better than this in the future. Now as for the impact of the runoff concerning, I mean, the provisions on the combined ratio, let me check. It's basically 5 points on the car business and 5.9 points, by the way, when I say -- okay, I mean, the motor business and the CVT and then we have 5.9%. The average is 5.4%. Okay. Back to Matteo for the motor pricing.

[Interpreted] Now as for the average premium, let me be even more accurate and precise. I've now talked about the entire portfolio, okay? So the so-called individual but also the group level. There's a comparison within September 30. Reduction is between 5.5% and 6%. You mentioned 4.5%. It depends on the seasonal used-to-make comparison because from the 31st of December 2020, the reduction is 3.3% on September 30, 2021. On the third quarter, so from the end of June, we see a stability of the average, and this is due to what I have said before. So if you have already used the voucher well, the renewal price does no longer take the voucher into account. So let's say that in this case, there's an upfront, let's say, increase -- of course, you also have to consider discounts administered or managed by agents. But in general, that part of customers, I mean, they have a monthly, let's say, payment there's a tariff increase versus what has been paid the previous year that does no longer take the voucher into account. There's a small number of customers. I mean smaller and smaller they can use the voucher and these are the customers who didn't use it, let's say, with the first opportunity. Now they have a second chance until the end of the year. So they use that voucher once again, that has an economic value, which represents 8% of the premium paid. So that part, I mean, that component determines the reduction of the average price but there's a renewal without voucher and renewal with voucher, the one without voucher will be even more important. So this justifies the stability of the average premium from June today.

[Interpreted] Next question from the original conference is from Andrea Lisi from Equita.

[Interpreted] I have one question on the contributions you expect for the fourth quarter. In the first part of the year, I mean, things went very well. So considering the plan but also considering the past data. In the fourth quarter, can we see further write-ups in terms of real estate? And then back to the net financial position that I can see in the slide, does it include the payment of the dividend in October? And can you also talk about the discount because of the Unipol Security right now?

[Interpreted] Okay. Let me answer on the Life business. Now the Life business had an ordinary development. I mean the upper normal behavior because the 2020, there was a strong variation in asset allocation. So on the Life business, I mean, on the assets, there were capital losses around EUR 100 million. So the Life margin was taking down to a very low level. This year, this didn't happen. So Life business went up to ordinary profitability level, so in line with our expectations. Now the variability of this component basically has to do to the operations on financial assets. So unless you have strong peaks of volatility in the financial markets, we do not expect any change in terms of the ordinary profitability level of the Life business. Now as for your question on the real estate, I have to say no. We don't have any evidence on possible adjustments to be carried out. There was, by the way, an adjustment than in the previous quarter. But it was a functional one. I mean it concerns the ideal we are working on now in order to transfer to sell buildings. So it's a very specific case, and hopefully, it will be a successful strategy. For the time being, we don't have any evidence of adjustments on real estate. There was also a question on the net financial position in FP. So as of the 30th of September. It should be included, by the way, in the presentation, but anyway, this is the situation at the end of September. Maybe we forgot a point because here in the list of liquid assets, we also have EUR 150 million of loans to companies belonging to the group. So this is one of the ways we use to allocate some of our liquid money. So it has to be considered a financial asset because this can be replaced by direct funds or the UnipolSai bank system, I mean, overnight, for example, alone or the business of Unipol rental. So again, at the end of September, the position is EUR 1.1 billion. Of course, I'm talking about the net financial, I mean, positions, okay, sorry, because this is a missing point in the presentation. This is what happens before the dividend. If I'm not mistaken, dividend was EUR 200 million. So we go back to EUR 1.3 billion plus the accumulation of the benefits and profits. But on a pro forma basis, end of June -- sorry, end of September, EUR 1.3 billion. You also asked about the discount. Well, you know what I think because I keep sharing this personal of mine. I think this assessment is very irrational from the market. It is not rational at all because -- in this case, the note of any security is still traded with a 40% discount. I've been doing this for 30 years. I believe there's no technical reason behind this because the NAV of the holding company is the following, okay? So let's -- it takes 1 minute. Now UnipolSai holds 85 -- sorry, Unipol, would say 85% of UnipolSai based on the current price, I mean, the total capital is EUR 7.1 billion. So 85% Unipol portfolio, market price, okay? No other consideration, well, the value is EUR 6 billion. The same happens for BP Unipol holds 9.35% the value is EUR 260 million on the market. Unipol also has liquid assets, which is what we've seen previously. When we talked about cash flow and the value here is EUR 1.7 billion, that's EUR 2.8 billion. Net financial position is again EUR 1.1 billion. Now the deferred taxes amount to EUR 300 million. And there's a residual equity value, all the part of debt, as I said before, has already been reimbursed UnipolReC, EUR 377 million. So if you put all of these components together, well, the value is at EUR 5.8 billion maybe EUR 5.9 billion. If you also want to think of the holding company costs in the next 30 years, the cost is EUR 30 million a year. Net of taxes multiplied by 10 years, it will be around EUR 210 million. So it's again same final value, EUR 5.6 billion, price per share is EUR 7.9. Now I don't know why people exchange or sell them for EUR 4.6 instead of EUR 7.9. So once again, as I said before, this is a technical lack of rationality. So this is the best comment I can find on the, well, holding discount. So once again, I simply think it is a nonrational, say, behavior don't forget the Unipol Group, I mean, all the assets are here. I have just described them. We don't have any direct risk to undermine our position. Maybe the only one is the investments in stakes that we did in the past. So the only item which is not listed, UnipolReC, you may take it down to 0. So from now on, you can say, okay, I won't recover any euro from UnipolReC. Well, anyway, we have EUR 5.3 billion, while the capitalization is EUR 3.4 billion. So the difference is EUR 2 billion, and I don't know how this can happen. So again, I think it's an opportunity for those who make investments because the provability of Unipol Group, well, it's something you are very much familiar with. It may change in the next business plan, but of course, it won't be lower than the level we had in the previous industrial plan. This is it.

[Interpreted] Next question is from the conference in English Sudarshan Bhutra from Societe Generale.

My first question is regarding the P&C expense ratio. So can you just provide some color on why the P&C expense ratio improved so sharply in Q3. I mean if you look at the ratio, it was flat year-on-year in 1H '21. And then in 9-month figure, we see a 20 basis points improvement. So what has happened over there? My second question is regarding the reinsurance program. So can you just provide some color or some thoughts on how we should look at the reinsurance retention for next year. I mean, given that the reinsurance rates are rising, should we expect a higher retention going forward? Any thoughts on that would be very helpful. And my last question is just a sort of a query. I mean I was reading somewhere in the Italian press that the regulator is looking at the Banca -- Unipol Banca disposal because BPER has not fulfilled some of the prerequisites. So does that have any implications for you?

[Interpreted] Thank you so much for your questions. Now as for the expense ratio, usually, the third quarter is sort of misleading, because of some technical reasons. I mean the expense ratio, net of issuance is calculated based on specific premium via the part concerning commissions is paid based on how much money was collected. So Q3, usually, we have low -- I mean not much money, which is paid, but the premium go a different evolution or development versus collections. So if you make a comparison between H1 and then 9 months expense ratio, well, almost always, you think, I mean, the situation has improved. The expense ratio seems to have improved because of the technical issues. But if you make a comparison versus the 9 months of 2020, there are no major changes to comment. As for the reassurance program for next year. Well, right now, we are talking about this with reassurers concerning the renewals. So it's a little, a little too early to imagine the renewal conditions. Let me repeat what I said before. As for 2021, the conditions that we have negotiated at the end of last year are, of course, much more protective for reinsurers than they were in 2020. because, for example, all of the recoveries, all of the collections we managed to have in 2020 and 2021, given to us by reassurers, well, these amounts of money are very big. So reassurance of course, asked us to have more protective conditions for them for the new renewals. As for the -- as for the last question, concerning the -- well, antitrust behavior on BPER. Well, this is something really not material.

Okay. Okay. And just one more...

[Interpreted] Sorry, yes, please go ahead.

Sorry, please complete your answer. I have a follow-up question on something.

[Interpreted] Yes, exactly. So I'd say this is not material because BPER has a market share. So in Sardegna, something like 56% because of the Banca di Sardegna, so the local bank. So 4 or 5 agencies have to be given back and be still waiting because there are no purchases, just waiting to be sold. This is not a new procedure. This is not a change.

Some comments about dividend, sorry the line was very bad, so I missed those comments, but you did make some comments about the dividend going forward and under [Indiscernible]. So I mean, is there anything specific to highlight over there? Sorry, I missed what you said because of the bad line.

[Interpreted] Yes.

[Interpreted] Next question is from Jon [ Lucara ] from Mediobanca from the original conference.

[Interpreted] The first one is, can I have the combined ratio of the covering generation of the motor business in the first 9 months. And then in the holding and other line, can you tell us about the results of the real estate because in the press release, you say that the hotel business is still in trouble, any strategic updates on the Gruppo UNA, so the hotel business? And what do you think you can do about this?

[Interpreted] I waited for Matteo, so I can give you the number of the combined ratio or current generation. Now let me answer the question on UNA. So the hotel business, of course, they suffered because of the pandemic. Of course, they suffered in 2020, much less in 2021. If I'm not mistaken, UNA Hotel's 9 months result is negative, minus EUR 12 million. It was EUR 24 million, maybe EUR 25 million negative, I mean, last year. So that being said, I have to say that our strategy on UNA hotels doesn't change. So of course, we would like to go back to full operations on the market. So as to go back to those positive results at the UNA hotel already reached before COVID. Now this is still a collateral, let's say, asset versus the core activity of the group. I have to say that our strategy in the next plan will consist and looking for the best value possible in terms of the quality of the scope of UNA hotels. At the same time, we would like to take possible opportunities. So they give us, again, the chance to increase its value because it's [Audio Gap] that this asset doesn't really integrate with the main core business of the group. But of course, it's an asset that, I mean, whose value we want to enhance at best. So today, the hospitality market is sort of frozen all around the world. We have contact with some global companies and more or less all around the world. The situation is unchanged. Now this is not an issue for us, of course. We would have done without the pandemic, if that was possible, anyway, we will go back to profitability,now from the strategic point of view, we will be very careful and of course, we will keep an eye on the values, let's say, available on the market. Combined ratio, Matteo, please?

[Interpreted] Now the loss ratio, current business, including other technical items on TPL 74%. On the CWT component, it's 72.2%. Now as for TPL, there's also 1 part the longer to the previous financial years, which accounts for around 6%. And on CWT, it's basically is 0, this is the level I wanted to share with you. So if I add the expenses, we reaching 100%.If you reach the expense on the TPL, the total is 97%. Okay. So it's 100% on the CWT? Okay.

[Interpreted] So you also had a question on the holding, the breakdown of the real estate. It's a little complex that I don't have here, but let's say that in the holding, we also have the accounts from BPER. And they have specific components, for example, all of the analysis on the balance sheet of BPER. And then I mean, Adriano will give you details, okay?

[Interpreted] Next question from Alberto Villa, Intermonte, please.

[Interpreted] Just one question of the investment policy. Slide 10, I can see the breakdown of investments at 9 months. Real assets or private equity went up, positive contribution generated also by private equities. So I see here 2.5. Now is this going to be dramatically bigger in the next year or so. So is this one of the key points in the plan -- that would be well presented in 2022? And what's about the policy contribution of this asset class in the first 9 months.

[Interpreted] We explained some time ago all what we wanted to do on the general asset allocations of reducing BTPs, investing in core European bonder and mid high rating buckets. And investing in real assets as well. In terms of contribution of capital allocation, the BTP is one thing for the market they have. A different thing is the real assets because this is a niche market. We have increased or improved our exposure there. But while frankly speaking, this will never be the final destination of all of these investments that we are doing or will be doing in the fixed income universe. So as of today, we're really working or we're doing some in-depth analysis and that we will reveal this during the presentation of the business plan. Real assets do play an important role, but their contribution to the asset allocation from a size point of view, will always be small versus what the fixed income securities may have. Now in general, the contribution from this asset class leads to our profitability, which is then the final one we have today which is around 3% to 4% as a whole. Now in the future, of course, there will be an increase of private equity and a decrease of, let's say, infrastructure, which is characterized by much lower rates. Well, this contribution may be growing. But in terms of asset allocation, in terms of incidents, well, this incidence will never be significant because, I mean, it's a market that may present a relatively limited opportunities you have to carry out careful selection activities. So all in all, the possibilities of investments are reduced.

[Interpreted] We don't have any more questions, Mr. Cimbri.

[Interpreted] Okay, then. So thank you so much for participating. Thank you for sharing those questions with us. And I don't think there will be other conferences between the end -- I mean, before the end of the year. So we will be talking about the accounts at the end of the year, next February. Thank you so much. Enjoy the rest of the day. Bye-bye.

[Interpreted] This is the Chorus call operator. Conference is over. You can now disconnect your telephones. Thank you. Bye. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]