Zurich Insurance Group AG (ZURN.SW) Earnings Call Transcript & Summary

Good morning, everybody. I'm Mitchell Todd, Head of Investor Relations and Rating Agency at Zurich. A very warm welcome to Zurich Insurance's Investor Day for 2025. I'll just take a quick moment to run through the running order for today. I'll shortly invite Mario Greco, Group CEO; and Claudia Cordioli, Group CFO, to provide a strategy update. We'll have a very brief break after that to get the stage set for a fireside conversation with our new Global Head -- Head of Global Specialty and Mario and myself. That will be followed by 3 breakout sessions. The first will be Middle Market before lunch, followed by Retail and Farmers. You will have opportunities to ask questions both in the fireside and the breakouts, and then we'll convene at the end of the day for a broader Q&A session where we'll invite Mario and Claudia back on to the stage as well. Some logistics around the breakout groups. We'll divide you into 2 groups. So those of you with a yellow badge will be staying in this room in an auditorium. This will be webcast live for the entirety of today. Those with a green badge will be guided to a room just adjacent to this one. Plenty of people on hand to help you get across here, but it's not too far of a commute. For Q&A sessions, we ask you please keep to 2 questions just to make sure everyone else can get a chance to engage with the leadership team that's here today. Thank you very much for your participation. I know a number of you have traveled in early morning flights to get here. We really appreciate it. With that, I'd like to hand you over to Mario Greco and Claudia Cordioli. Thank you very much.

Good morning. Thank you so much for coming over. It's a real pleasure for us to have you here. Remember, this is really a presentation to provide you information details, so ask any question. Now Claudia and I will try to do this with 4 hands, which we never tried before. So let's see how this works. But the purpose of our session is to give you an update on where we stand 1 year after we launched the new 3-year plan. So we feel good about it. First of all, we kept ourselves highly concentrated. We kept working on the strategy, no matter the noise around the world and the dangers that emerged. We kept working on what we needed to deliver. And the way we see it mid-November, so still 40 days to go to the end of the year is that we feel very good against our targets, and we feel ahead of where we wanted to be by this time of the year. The growth is coming, and the growth is coming where we wanted to go for that, which is mid-market, specialty, life protection. All 3 lines of business are, I cannot say surprising us, but they are delivering what we expected. The profitability is coming. So the margins are improving as we expected. Retail is back as honestly, we expected it to be this year in '25, is back with an excellent profitability, but it's also back with very strong growth. And we still see that the liquidity, the cash creation is very supportive of great shareholder value at the end of the year. So that is a very good first year. But let's now understand what happened and how we got at the end of this first year so strongly. What are the targets? I mean, we indicated the 4 business targets last year. Commercial, which, of course, was in focus when we presented the plan last year. We committed to deliver in excess of $ 4.2 billion of BOP by '27 and we are committed to surpass the $10 billion mark for Middle Market gross written premium. Both are still seen very much as achievable targets at this point in time, 1 year into the plan. Retail return to long-term profitability. It is what we see today. Retail will continue improving next year. But again, we see that this is very much achievable. And then accelerate on customer loyalization. We have some interesting data on customer loyalty retention even if we kept improving -- increasing the rates and improving the profitability. Life Protection. Life is growing nicely. You know that there is some noise, as always in Life, especially for the Brazilian performance of our partner, Santander, but that's a temporary issue. The growth that we see coming is very, very strong and supportive of this target. And then Farmers. Farmers, just as an introduction to the job of Raul later. Farmers is not a turnaround story. Farmers is a transformation story. What's the difference? The difference is that what you see today is the beginning of an improving speed to benefits, changing results of farmers over the time because this transformation will produce more and more benefits over time. So again, it's an impressive start of the year, and it's an impressive delivery of a full transformation of an organization by Raul and his team.

So what does it mean in financial terms? When we launched the plan a year ago, I was keen to stress that all the targets that we've defined for 2027 were not a series of financial KPIs that we defined in top down. This was the product and it's still the product of bottom-up plans that have been prepared by the business leaders with very concrete and tangible actions in the background to execute. And this is the exciting thing about today. You'll hear directly from those business leaders in the breakout sessions about what their plans are, how they're executing and the progress that they've made to date. So we'll hear about Middle Market, and Mario has just talked about that and how it's driving superior margins in our commercial franchise. We'll hear about specialty, which is already 1/3 of our book, and we want to grow further. We hear about the transformation at Farmers and how from here, the team around Raul and Ken are going to deliver mid- to high-single-digit growth. All of this is fueling the targets that we talked about. And we are absolutely confident in 2027 that we will achieve them. EPS compound growth above 9%, cash remittances accumulated of above $19 billion, and I'll come to that afterwards. An ROE in average of above 23%, and we'll keep doing that, staying above -- comfortably above the 160% SST threshold floor that we define. So very comfortable about that and the progress is what we are going to take you through in the course of today.

Now what is the market that we see out there today. And again, strip off the noise, strip off the worries and the news. That's the market which is out there. There is strong growth out there for infrastructure and construction, even in Europe. Yes, even Europe has a long opportunity, long weighted opportunity for growth. And now this is growth that we know very well what it is. Claude and I will touch on this because construction and infrastructure is our core competence and core business. Energy demand and energy transition. Again, renewables are something that we've been investing heavily. These are competencies that we have in the team. This is good news for us. AI data centers, U.S., Europe, Asia, business that we have been opening, developing, following. We'll give you data on how much of this business we have already insured and developed together with the clients over the past years. And this is a great opportunities for us in the future. Supply chain repositioning to regions, same story. It's about creating infrastructure, construction in the different regions of the world. And then the increased risk complexity means that our services to prevent, mitigate and anticipate are in high demand and our customer service is highly appreciated. And finally, we're living in a world which remains also interesting for protection demand because welfare is coming down everywhere in the world, but worries and concerns of people are not, and this is boosting the protection. Now what has been the answer that we gave it to it? And let me, first of all, clear one thing that could be in mind because I'm going to spend a few minutes on why we did the organizational changes? What was the reason? What's the purpose? And why is that related -- why was that related to what I just mentioned? The organization changes have nothing to do with the '27 targets. The '27 targets are kind of already in the books. You will see at the end of year how strongly we perform. The results of '27 by this time next year will be in our books. What is not in the books will be just the natural catastrophes of '27 that we cannot predict and some action on the costs. And these trends here, they will last much longer than '27. And so we start today acting or with the new organization of 1/1, we start acting for the future of the organization past '27 to give us further drive and further advantage after we finish the '27 target. Now, Specialty is the core of all these things here. This is where the growth is. It's going to be in Specialty. And it's going to be in Specialty crossing mid-market too. So we thought about what do we need to really build today a competitive advantage, to really be the beneficiary of this growth in the next years. We need a different organization where we can invest more in skills, where we can deploy more resources where needed and where we can create a real competitive advantage in a skill-based business like specialties against the peers. And so thinking about how we do that, we said, okay, let's revolutionize our current organization. Let's organize Specialty as a global business, which I said, we're sitting there and then you'll see it in the fireside chat. We'll take the lead of it starting 1/1. And then we also strip off and simplify the commercial insurance organization in 3 divisions. Specialty, International division and the U.S. business, of course. Sierra takes direct responsibility also for the U.S. business. And of course, she maintains the commercial insurance responsibility side in Specialty. International divisions will be led by Luciano Chirina, who has many years of experience and competence in the commercial space. Again, the purpose is to capture a significant portion of this growth and to create an unbeatable competitive advantage for us in the market. We also changed the organization in Life. Going back in a sense into history, even though not precisely like that, by creating one responsibility for Life under Alison Martin because it's, again, it's a skill issue. We need to buy, bring, develop Life skills more than we have done so far. If we want to continue creating again the success story that we want to create for the next many years, we need to have the skills that we need in Life. And in order to do that, we need to centralize it and to start investing from the center. And on Retail, we progressed on the pioneering development that Carsten and the German team has done on retail and underwriting, and we want to bring it globally. And after we tested -- I mean, initially, I started asking Carsten and his team, can you do it for us? It doesn't work. A country cannot do it. The country has to run itself and doesn't have the time to run the rest of the organization. And so now still with the help of the German team, who is more advanced than anybody else, but we want to standardize retail and underwriting on a global level under Kristof Terryn leadership of the retail organization. These are the most important changes in the organization. Again, it's a long-term view of where the market is going, and it's adapting the organization up to the market opportunities. If you have any other questions now or later, please ask questions on that. Let's move on now to the businesses. If I can make the clicker work. Okay. Let's start with Commercial Insurance. Commercial Insurance is naturally our biggest business, and it's also where we have the biggest market share, the biggest leadership position worldwide. It's a highly diversified as you see it in the center, it's diversified. This is practically how the organization will look like a 1/1 out of, let's say, $30 billion of premiums at the end of last year, 1/3 roughly is in Specialty, $9 billion. International, it's a roughly $6 billion of premium. And then the rest is the U.S. business. So roughly 50% of it is in the U.S. business or you can read it by customer size mid-market, it's roughly 1/3 of it. The other part is a combination of direct and captives, which fall under Alex in the U.S. So you'll see them also in the mid-market U.S. numbers and crop. And then corporate is 49%.

In terms of profitability, coming back to something that Mario has said, it's extremely important. We want to build an unbeatable competitive advantage. And this is done not by being static and just following what the market is doing on rates and loss trends. This is done by dynamically managing the portfolio through peaks and lows in a way that it brings competitive advantage and it brings superior margins. And I'm looking at Sierra, who's here in the audience today. The team around Sierra has done an impressive job over the years, as you see on the screen, right, to improve the combined ratio step by step, year-by-year, just shaping the portfolio in a way that was able to capture the best part of the market. Was able to build a franchise, right, like Mario has explained around Specialty, around Middle Market and we want to grow further, in places where the margins are higher and more stable and predictable. So this is not by chance. This is not just going with the market. This has been a conscious strategy of building a competitive advantage. And this is why Specialty, Middle Market are so important for us right now in Commercial because this is what we want to do, we want to dynamically and proactively manage the cycle. And I would expect the combined ratio to continue to improve and stay on a very high level -- on a very good level because, as I said, the team is managing this proactively and choosing the parts of the market that are more stable, bringing better margins and have high barriers of entry, so it require unique and very deep knowledge like Specialty does.

Specialty has been the focus of our growth efforts and development since 2016. For those of you aware at our investors presentation, the first plan back in 2016, you remember that we mentioned growing Specialty and property and growing mid-market. This is where we are today. We are presumably #3 globally on Specialty size, $9 billion of business, progressively growing year after year. This is in a highly fragmented market. You see that the top 10 companies barely control 25% of $0.5 trillion of the business. So there is a huge space for growth for us, for consolidation, for a brand and for the experience and the skills of a company like ourselves. Now what is Specialty? Because Specialty is a big bucket where the definition matters because every company has a different definition. And I will be even more detailed in a second about it. So this is the composition of Specialty today. For us, the most important line in Specialty, as you see, is Construction. Construction in engineering is $3 billion out of $9 billion. This is also the -- where we have a clear lead in skills and expertise. Energy is the significant, financial lines, as you can imagine. And then I'm going to list what is comprised in these definitions, credit and surety. A part of it goes together with construction because we sell it together when there is an infrastructure project, a development project, you also have a credit line together. Cyber is 4% of it, but of course, there is a high demand for Marine, significant E&S. It's a very U.S.-based business, which is -- which allows us to do non-admitted business. And so it allows us to rule our conditions and contracts to the customers instead of being -- applying and being approved by the states and then accident and health is 6%.

The reflection of it is obviously a superior financial performance. So going back to what Mario was saying before, we want to grow in Specialty because it's a line that requires specific competencies. It's much more difficult to attack a player in those areas that require very highly skilled underwriting workforce, and we'll go into that later on, and you'll hear more in the fireside chat, right? You need highly skilled and writing capabilities. You need the right locations. You need to have the right relationships with the customers and with the brokers. This translates into superior financial performance. So as you see in the graph on the right, Specialty has been performing on a superior level compared to the rest of the commercial book, and we expect the profitability to remain in this mid-80s combined space. Why we are growing it? So remember that this is a $9.5 billion book, and we want to grow it from there.

Now what is the definition of these lines? And so let's spend a second just to align ourselves. Let's start with financial lines. Financial lines says some coverages that you would expect there, like managing liability, but has some very innovative ones like transactional liability. Now you might have seen that at the beginning of the year, we acquired an MGA specialized on transactional liability, which is a way for us to internalize the underwriting competencies that's an MGA, which has been in the market for years. And Sierra and her team have been chasing the quality of the business that they were writing very carefully. Then we've got comfort that, yes, these people know what they do, then why don't we acquire them and we transform them in our underwriting department for transaction and liability. Very specialized business. You need lawyers. You need accountants. You need experts to write this kind of book. You can't just get the capital to go and write it. That's a suicide. You need to know what you're doing. Professional indemnity, of course, you know what that is. Crime, M&A, which is part of transactional liability. It's a huge new line of business, very interesting for the customers and very profitable. Energy. This is the classical energy, up and downstream, but it's also renewables. On renewables, so we've been investing a lot to creating hubs. There is a huge demand. And again, you need specialization. You need to know the techniques. You need to know how they work. Otherwise, you are insuring blindly and you shouldn't do, of course, do that. Construction, the core of our competencies, is construction of risks, erection of risks, building risks. We'll come back on how sizable is our experience on that. Accident and health. I'm going to skip that because I think you will understand it. Wholesale is E&S that I mentioned before, the non-admitted. Marine, I think, again, Marine is pretty straight forward it is. Credit lines. The credit lines are often related to construction and energy. And surety also is about the financial guarantees for the obligation of the parties. Cyber, you know what it is. We're very careful in cyber, but we like cyber for SMEs for mid-market. We're roughly 100 underwriters specialized on cyber today. We want to grow the size. If you want to provide cyber coverages, you need specialized people to do that. And you need to keep building their competencies and their knowledge and keep them motivated. Beginning of next year, we will also have a different compensation scheme for all these underwriters. The Specialty people have -- need to have long-term incentives. Their portfolios develop over time and they must be participating to the success of these portfolios. They must have clear incentives, but equally, they must have clawbacks and/or financial penalties if the portfolios don't perform. So that's another reason why we kind of created an independent unit for them because they will be treated from 1/1 in a different way than the other underwriters even financially. It's a competence skill-based business where you can't just enter and leave. You have to be there. You have to know what the risks are, and you build it year after year over time, which makes it very sustainable for us. This is not a transactional activity. This is a business that stays there for long. Now as I said, there are global trends, which are very important on Specialty. Infrastructure investments in Europe, in the U.S., in Japan, in Korea, all the Western world is rebuilding itself. And the amount of cumulative investments is impressive, and it's an opportunity for us to lead and do business with that. Technology developments. AI is clearly changing, not just the way we live, but it's also changing the investments made by the companies. We can participate to this investment as we have done already by contributing with our knowledge to the infrastructure and constructions needed. And then energy demand in transition, as we said before, and these are the lines which are impacted. Construction. I kept repeating the market leader there. This is the size of our U.S. construction. This has been growing at a 9% CAGR over the past years. This is in excess of $2 billion of business construction in U.S. only. We have to add more than 250 underwriting experts in the U.S. We have 90 risk engineers. These are all people who have been working for years, senior people known in the market with a unique wealth of experience. We are a leader in construction ensuring in the U.S. For what is relevant, we've been awarded Insurance Construction Team of the Year in 2025. We are the first one to offer a parametric solution to construction projects. This has a lot of innovation, competence, experience, history and this is what we can bring wherever these needs appear to be, in Europe, in Asia, wherever they are, we have the people who can provide an answer to that. Hopefully, we will not stay for the day long on the stage. Yes. Okay. And finally, you had a significant risk here that you will spend the next 4 hours on construction. Middle Market. I guess, we have been talking Middle Market for a long time. I think Alex has presented in a couple of Investor Days, our journey through Middle Market, how we grew our business from close to 0, it wasn't 0, but it was a tiny business to be today one of the leader, not just in the U.S. but globally, and we applied the same recipe in all the different markets. So first of all, this is a $300 billion business worldwide. This has been growing 5% as business altogether, we have been growing close to 10%, 9%. And pretty much the '27 target is the same rate of growth, right? So it's not -- I mean, when we presented, I got comments, is this overambitious? This is just banking on the fact that we will continue what we have been successfully doing over the past years. The business that Alex directly leads is 60% of this portfolio. But then you see that we do it in the U.K. significantly where we started years ago delondonizing our business and opening branch offices and deploying underwriters in the countryside, not necessarily in London City. And now it's 10% of our roughly $9 billion of business that we have today. And this is highly profitable.

Yes. It's interesting, and please ask Alex and Drazen all the questions that you've got on the progress they're making on the growth. But don't forget that there's another very strong franchise in Continental Europe, only the market that's growing nicely. Countries like Italy, France, Spain, they're growing double digit and with all the infrastructure spend and the support that is coming as well on large initiatives, for instance, in Germany, but also in Italy and other places. This is a segment that for us is poised to grow globally. So as Mario said, 60% is U.S., 40% is the rest of the world. And while the U.S. is growing very nicely, I would expect also the rest of the world to at least grow at the same pace, if not in a quicker fashion. Profitability, I mean, you see the combined ratio there, highly profitable. It has all the characteristics that we like. For obvious reasons, it's a market that's more fragmented. So it's also less exposed to large losses. So frequency is a different topic. Severity is much lower compared to large accounts. We continue to like large accounts and underwrite large accounts. But compared to 10 years ago when our balance sheet and our exposure was dominated by very, very large customers on the corporate side, we've been changing and reshaping the portfolio. And now as you saw before, 26% of our portfolio is made of Middle Market, and I would expect that percentage to change and increase as we go into the execution of our plan from here. While obviously, we see that margins are holding better than the large corporate space, right? There's less pressure on prices, market rates are more stable. And we believe that we have, again, back to the point we made before, that competitive edge that allows us to be able to continue to perform at a superior combined ratio.

There is a lot of underwriting work behind these numbers. I don't think that the market runs Middle Market at 87%. You can ask Alex, you can ask Drazen, how much underwriting pruning actions that they continuously do. When we started back in '17, for us, Middle Market was above 100%. It took us years to understand where to target, who are the underwriters, how to run the business. And so we're very pleased today, but there is a ton of underwriting work behind this market. This is not what the market does per se. This is what we extract from the market with the actions of competence and underwriters. Good. This time, we moved quickly. So quickly on Retail. Retail is delivering what we have been expecting and waiting patiently for 3 years to see coming from Retail, which is growth, and it is profits. Now we have changed, however, a number of things in Retail. We've introduced a lot of pricing sophistication. This, as I said before, has been piloted by our German colleagues and then has been progressively extended and still has to become a global tool. We have worked a lot on claims on steering the claims and make sure that we take initiative and we direct the claims where they need to go. And still, there is work to be done there and benefits to be extracted. And you will see later that we have started using artificial intelligence to deliver better results on the retail performance. And all through this, we have improved retention which is a very significant benefit that we are extracting these days or we are delivering these days because we manage through the improved retention to have the customer accepting in much higher rate prices and still they're willing to remain with us because the service was outstanding for them.

That's the key point -- well, there's 2 key points, I think, to take away from a financial perspective. One is the fact that we've been able to improve rates where it was needed, right, in Germany but also in other countries, from Japan to Spain, Italy and a number of -- Switzerland, obviously, and we've done that while increasing retention. So this is -- this goes to credit of the teams that have done a very strong work on segmentation of the customers, putting rates where it was needed and making sure that the book goes back to profitability again. The other thing which is remarkable. I'm pleased with Carsten and Peter here for the breakout session, ask them how they did it. They managed to grow the business so that we've got not only better retention on the existing customer book, but they've also been adding a lot of new business through their direct and through other initiatives, right, beyond motor. So a very interesting journey that the German team has been on, and now we are sharing this -- these learnings and the strategy more broadly across Europe.

The other difference that we have, yes, is in distribution. We have a very different distribution mix that any of the peers that you can think of. And I would say that our distribution is really future oriented, and it's not built into the past. We do have agents, but not as the predominant force of distribution. We use very well bank partnerships. We're very, very effective and successful on the bank partnerships. We use, of course, brokers, especially for SME business, but we also have grown very successfully a direct business. And today, you will hear especially from Peter Stockhorst, what's the experience because in a number of years, we have changed the profile of distribution in Germany and being very much now led by the direct growth and profitability. The opportunities for us continue to remain important because even the best bank partnerships like the one with Santander has so far hit a very strict minority of their customer potential. And so there is much more than we can achieve with the banks. Equally, the direct growth is so reassuring that now from Germany, Peter and his team are expanding into the rest of Europe. On Life. Life is important in matters. Life is close to the same profitability of Farmers. I understand that it takes a little bit more capital than Farmers does, but not that much more. It's completely undervalued. When people talk about Zurich, talk about Commercial Insurance, Farmers and everybody forgets Life. Life matters. It's a bigger addressable market. It's growing very nicely for us. Now look at what is the contribution that we have. Of course, we have the bank partnerships, Santander, but also the Sabadell partnership in Spain. But then we have Australia, which is a very strong market for us where we have a leadership position. U.K. historically, U.K. has always been a very strong Life market for us and highly profitable. Switzerland itself. We do incredibly well in Japan. Now we're growing with unit-linked business. Life can grow more than it did in the past years and can produce more BOP and that's the purpose of the changes in the organization regarding Life.

Here as well, highly comfortable business that we like. And unlike some other Life books that you might see from the rest of the industry, highly cash generative. A large portion of the book is short term, and you'll hear from [ Claudia ] afterwards directly on Santander, the performance and how he plans to continue to grow that. 17% BOP margin is extremely high, and we want to continue to grow the business, keeping that margin at that level. So a very important franchise for us. It is 1/4 our BOP, as you know, and we expect it to continue to grow in the years to come.

Right. Farmers has said it's a thorough transformation of a big organization, which needed a thorough transformation, not a fix. So what were the issues that Raul needed to tackle management, balance sheet, distribution, cost basis and quality of the product. Am I forgetting something, Raul? Claims, maybe, even claims management. He tackle all of these things at the same time. So what you see today is the initial impact of the changes that he has brought into the business by tackling each one of these single issues at the same time. This will continue to drive the growth improvement of Farmers for a long time. They changed completely the balance sheet positioning. They changed completely the profitability of the business. So renegotiating aggressively with the states but also changing the product mix and the product conditions. They changed the distribution model by growing very effectively the independent agents, but also working on the captive agents and the exclusive agents. We're finally starting in the last months to come back to positive in-force developments. The growth of the top line, it is significant and will accelerate because now it's based on the policies in force growth. I think the -- where we see today, Farmers is delivering 40,000 new policies per month on a net basis. This is a significant increase, not just against the past, but it's a significant increase against the basis of the policies in force. This means that there is roughly 4% of growth that comes from the increased number of customers on a net basis that they are generating. Progressively, this will become kind of the basis of the growth for the next year, on top of which you will have the rates. So this is why when we were at H1, we kind of uplifted the expectation for Farmers that Farmers will be growing the business, not at single digit, but at high single-digit numbers for the rest of the 3-year targets and then for the following years. We're moving. Okay. Now you stay with Farmers.

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And staying with specialities or mid-market. Look, so what is -- at this point in time, one year into a 3-year plan, what is our assessment of these targets. We feel very good about it. On the core ROE, we're clearly running ahead of these targets. This year, if nothing catastrophic happens in the next 40 days, we will clearly deliver well ahead of the 23% mark. Then if we look at cash remittances, Claudia will comment later on that. We gave the message already in H1 that we were running ahead of our plans for the year. And so great confidence that the $19 billion will be achieved or exceeded. Core EPS growth, again, the development of this year is very, very positive for us. And Claudia will comment about it again. And on SSD, okay, I don't see anything on SSD because you know the story, and I don't want to have questions on SSD.

So going back to what I consider to be the most selling KPI on our performance between now and 2027, core EPS. I mean, as you know, this is a reflection of what BOP does, right? As Mario mentioned, we have made a great progress 9 months into the year on all targets, all indicators and EPS is one of them. In terms of what happens between now and 2027, what gives us confidence that we will be hitting our target. 80% of our achievements is expected to come from underwriting, which is what we do best, right, as you know. And there are 2 areas here. One is the work that the teams have done and will continue to do on underperforming portfolios to make sure that they perform better. So all the work that we've been talking about on reshaping the portfolio, re-underwriting parts of it, pruning other parts of it. This goes into here, and that's 40% of the delivery. This is like it's indicated in -- on the right, this is the part that I think we are advanced in a way that's probably beyond what we had expected in 2025. And that's a reflection of the retail work that has been done by the teams in Continental Europe, but also the advancement in the commercial space. If I think of commercial auto, the crop business in U.S., there are some areas that are really, really progressing well. Then Insurance growth. We spoke at length about Middle Market and Specialty not only that, but obviously, the resale piece that you'll hear more about later on, that overdrove the top line to grow 8% in P&C at Q3 and more to come in 2026. Life, 11% top line growth to date. And again, as we said before, Santander is coming back to stronger growth. We have all the reasons to believe that this will pick up even more strongly. Farmers, Mario mentioned already the transformation, and you will hear more directly from Raul and Ken afterwards. The positive turning point on top of all other aspects on the PIF has been remarkable. This has come earlier than we had expected and the Farmers team had expected. Already in the second quarter, so between Q2 and Q3, effectively 6 months, the team has been able to add 103,000 new policies. And we have indications that October has accelerated further compared to September. So all of this underpins Raul's target to grow mid- to high single digit from next year on. We expect also contribution from investment results. As you know, we are in a very conservative, very prudent asset liability allocation. This will continue to be the case. We expect a solid contribution to our BOP from the investment activities with obviously the expected as well increasing the unwind that will come through. Perfect. So giving -- diving a bit deeper into the portfolio quality point, right? So the 2 biggest contributors to the EPS growth that I mentioned before. We've been talking about profitable growth at length on Middle Market, Specialty and Retail. I will now go back into that. I want to spend just a moment on the portfolio quality actions because, as I said before, I believe that here, we are on track, if not ahead of our targets in a number of areas. You'll hear more about the German -- from the German team about the work that has been done to reshape the motor portfolio. EMEA at Q3 has been improving 5 points year-on-year, and Germany was significantly ahead of that. So that's definitely a place that while it's improving for the whole market, I believe Zurich has been at the forefront of that. In the U.S., the commercial auto portfolio has seen a lot of actions as well. As we've been open with you last year, we wanted to fix a number of areas. We were overexposed to some commercial auto relationships in U.S. program and the captives area. The work to prone this exposure is 95% complete as we speak. So this has been a drag to the commercial premiums in the U.S. for 2025, we do not expect to see the same extent of drag in 2026. This has also been a very important contributor to the commercial combined ratio improvement that you saw before. We've been growing lesser than expected in some areas in E&S, specifically large customers in property where we saw that the rates were not up to our expectations. In crop, also a lot of actions have gone into reshaping the portfolio, making sure that the outside exposure that we had to certain state, certain underlying exposure like hail, livestock has been decreased. Right now, the exposure to the private part of the portfolio versus the MPCI has decreased. And as you see, 20% of the premium have come down there. We expect it to be compensated on the more profitable side of the book. So I will resist the temptation to make any comments on the crop profitability at this stage. It's too early for us to do that. But in terms of underwriting actions of the portfolio work expense control, everything that the team has done has been really, really good and allow us to progress well on the substance of the portfolio. Last but not least, and I made the comment on that also at H1. Natural catastrophe exposure was obviously one of the drivers of the good performance year-on-year. But this is not just good luck. So while everyone in the market had less events or financially impactful events in 2025, there has been a lot of work from a portfolio management perspective to reduce the exposure to natural catastrophes. And as an indicator, we've been reducing our average annual exposure to U.S. hurricanes by 1/4 in 4 years. By the way, in the deck, we've also put one slide on farmers, who has been on a very similar journey and actually has been reducing significantly the market share. You can see it on the example of the wildfires in California which is low, significantly lower than the rest of the market, in proportion to the market share that farmers has. This is the result of underwriting work. One comment on our balance sheet and the cash generative nature of the business. We mentioned before that we are running a book in life and in P&C that is generating cash quickly and in a reliable way. As you can see on the left-hand side, this applies to all the businesses we like -- we run. And this is really the result of a lot of work that has been done to shape the portfolio and the business model in such a way. So for every $100 of news that we generate, roughly $85 generate cash in a very quick traction, and that's an average number. The point that I think is important for today, well, it's twofold. On one side, Mario said that already, we have a very good line of sight to where we stand on cash at this stage of the year, as you would expect. And we are executing very well against our $19 billion target for the three years. We are ahead of the target as we speak in terms of the portion that we had allocated for this year. The other important point for us to consider is that the core contribution to the $19 billion target over the next three years is coming from the core earnings generation so there is less reliance on extraordinary projects and management actions on things that are on top of the ordinary cash generation. There will be some for a balance sheet of our size, you always expect, obviously, that there are opportunities for us to repatriate excess and surplus capital. There will be regulatory changes, there will be transformation in the entities structure. But the core of it is generated by earnings, and we have obviously a very robust plan between now and 2027 on how we exceed that $19 billion target. Okay. So I think we're adding up, this is to introduce the next session which we have already done, I would argue, Mario. So you'll hear from the business leaders that represent and are responsible for 50% to 60% of our [indiscernible] and the initiatives that most relevant in terms of achieving our three year target. So you'll hear from Mario and Saad on Specialty in the fireside chat in a moment. You'll hear from Alex [indiscernible] on the middle market growth. You'll hear from Claudio, [indiscernible] and Peter on the retail space, P&C and life and then last but not least, Raul and Ken on farmers. Take the opportunity to understand the business, understand the progress and what the plans are for this plan period, but also beyond.

Thank you all. And let's move to the fireside chat.

Thank you.

So thanks for that. I have now failed my Swiss proficiency test by losing track of time. So I think citizenship is now dead to me. But a good session and thanks for the good discussion. I suggest we take a 10-minute break to get the stage set up so that we can proceed with a fireside chat. If you want to grab a very quick coffee rest break, please do so, but make sure you're back in here 10 minutes sharp, please. Thanks very much. [Break]

Okay. Let's get started. Welcome back, everybody. Really pleased to welcome Mario and Saad Mered back to the stage. Saad, our new CEO of Global Specialty. And as you heard in the earlier session, a really interesting and exciting opportunity for Zurich Insurance in the months and years ahead. We thought it would be interesting just to start with a very brief fireside conversation, introduce Saad to the group and then also just tee up the discussion that comes after. We will open the floor to Q&A. That will be open to those of you who are joining on the web as well. So please submit questions and we'll put those to my colleagues to the left.

Maybe just to kick off, Mario, on a question for you. Zurich created this new Global Specialty unit. Can you talk to the reasons why and just share what you think is so special about Specialty.

So first of all, Specialty means for the next years, an impressive amount of growth in the market. And in order to capture this growth, you need to have the skills, the size, the investments, the resources now in order to capture the growth in 5 to 10 years forward. Second, Specialty, we like Specialty because it's a very sustainable business where you cannot simply enter. You need to plan, you need to invest, you need to create the conditions. So the composition of the market, it's a very, very interesting and stable. And this is why we prefer Specialty to other lines of business.

And Saad, turning to you. First, congratulations on leading this exciting new unit. You've passed the interview, but you still got your boss with you here, so no pressure. Can you tell us about your priorities in this new role and just the vision for the Specialty business you can from here?

Thanks Mitch. Thank you. First of all to note, this feels like coming home to me, Specialties is where I started my career, and it's been an important part of who I am today as an insurance executive. So I'm super excited to lead this journey for Zurich and leading this great business forward. Our priority is actually fairly simple. The first and foremost is really to focus on strengthening the Zurich franchise globally on Specialty. We are, as Mario mentioned earlier, we're a top three player, but we still feel that -- and we believe that we have room to grow and improve this business. The second priority is around our people. We have an amazing team, world-class talent, but we need to keep investing in that talent. We need to expand that talent, invest in them, invest in the technology to support them so that they can thrive out there in the marketplace and grow Zurich for us out there. Third, I believe that we need to really foster a greater culture of innovation and collaboration. And I think the global business model that Mario described a few minutes ago, will help us bring a sense of cohesion to that team globally and to allow us to really be more compelling for our customers and, therefore, strengthen our franchise globally.

And one of the points that we touched on in the prior presentation was just the attractive margin that we see in this business. Claudia talked about a mid-80s level. I guess one of the questions we've received more recently, just how do we think about the medium to long-term margin profile of Specialty? Maybe you could talk us through that.

Yes. Specialty is a bucket of many different things. So what makes the margins there is not the market trend, but it's a composition. So every year, you accelerate some business and you decelerate or even shrink other businesses. That's the case, for example, this year [indiscernible] which is clearly an important part of the Specialty buckets. But this year, we decided to slow it down because we didn't see the same margins that existed in the past years. And vice versa, should the condition change, we will be ready to accelerate again. So you have to understand that the Specialty that per se is not a uniform line of business. You don't have a Specialty price, you have a combination of many different trends, which are pretty much independent of each other. And what you have to decide is how much you want to push on one or the other in order to keep the margin steady. Over the past five years, we kept pretty much the margin steady by playing on the acceleration, deceleration of the good products and the less good products on a yearly basis. And this is not about the long-term trends, it's just about the claims experience of the past year that then increased the condition to accelerate the year after and vice versa.

So Mitch, I would just add to that, that Mario earlier and just now just mentioned a number of what makes Specialty special and what's unique about it, but I think all those contribute to barriers to entry as well that gives us sort of a bit of a defense. And I think those barriers to entry based on the secular trends that Mario discussed earlier, are actually getting higher. First and foremost, it's really around talent. And we have 1,200 great underwriters around the world, expert underwriters, super experienced. They're backed up by 400 risk engineers supported by over 4,000 claims examiners and claims experts. That team is supported by a decades-long investment in data and a huge amount of progress has been done on our data lake in the last few years and the use of that data lake. That's become a true sort of super power for us and a clear differentiated IP for us. And of course, leading on to our multinational account servicing, our ability to serve customers globally. It's really uncontested in terms of our leadership in that space. So all those really contribute to a moat around that business that really gives us confidence for the future.

Just before we move to the floor and online for questions, I mean this is a business that's existed for a long time for Zurich, but we did talk about some of the sort of newer more secular structural trends. Maybe you could just help frame the growth opportunity for this business and the different drivers, again, over a medium to long-term perspective. How should investors and analysts think about it?

Yes. I think intuitively, your value, what's going to happen on infrastructure and construction all around the world. and it's also needed to understand the power of the data center opportunity that exist in the market. Kelly Kinser, who is our Head of Construction and Surety globally in SaaS organization from [ 11 ] I think she told me that last year, we did 250 data centers in the U.S., construction of 250 data centers. I don't think that there is another company who has such a track record. And I don't think that there is another company who has such an experience and credibility to bring to the customers. So I see this as huge opportunities, which, by the way, it's a theme that I want to repeat. I mean everybody is scared of what's happening in the world. Everybody asked me about geopolitics, I see immense opportunities instead. I mean geopolitics is something I can do nothing about. But I was born during cold war. And what I remember when I was a kid is nothing compared to the anxiety that I hear these days. These are cycles and the world is not a safe place. It's not a stable place, but it's not a safe place either. I don't consider this world a very dangerous one, I've seen worse conditions, but I consider this situation as full of incredible opportunities. And this is what we want to go after. These are [indiscernible] things that we want to go after. One final thing. We had a session with the Board on energy and can an energy transition exist or is that just impossible? I don't know what the answer is, and I don't know if Michel has an opinion on that. But for sure, there is an immense amount of investments in energy. And again, we know what to do there. We know how to tackle it. So we have the risk engineers, we have the people. This is what Saad and the team have to take as an opportunity for them.

Okay. Good jumping off point. Let's go to the floor and see if there's any questions for -- okay. Lots of hands. William, should we just start on the bottom right-hand side here, Patricia? William Hawkins?

It's William Hawkins from KBW. I'm still -- you've done a fantastic job defining how you see Specialty business. But I still -- when you're looking inside the business, how straightforward is the distinction between what is Specialty and what is non-specialty? Presumably there's quite a gray area, and that could lead to a lot of management tension in terms of the -- there's still the great stuff we want to grow and there's other stuff we're not so keen on that. And I can imagine a lot of people are going to be saying, "well, this is this Specialty", Oh, no, it's not. So how do you manage any internal channel conflict at the front end between standard and nonstandard lines? And then secondly, please, on Slide 8, the pie chart that you showed, the mix that you walked through. If you look forward in five years' time, how might that pie chart be different? I mean you've implied that E&S near term could be a bit smaller but I'm wondering if there's a big shift in that pie chart or if it's going to look roughly the same.

Look, on the telecon, William, it's a very good question. So first of all, Saad is not going to run an independent P&L independent from the countries. The purpose for us of doing this is to have the capability to simply invest in direct investments and where we think this investment should be that the business will be run on the country's papers. The underwriters will sit in the countries. So Germany has the biggest surety business, credit and surety business today in Europe, and the team stays there and continues to run it on German paper. But if we will believe that it's an opportunity to hire five experts in renewables for Germany. Now Saad will have the capability to do that and today, we will have to go and negotiate space in the German expense budget and in the German priorities while -- sorry, if I'm using Germany, but just because you are in the first row. That's why people sit in the back. So that's the advantage for us. So I don't imagine that we are creating conflict on who's going to do this because it is the team who have done it so far, they continue doing it. It's more about the new investments. It's more about saying, if we want to have 20 more cyber experts, underwriters, where we want to deploy them, that's Saad's decision. And Saad will send the people with the budget covered already to the countries, and these people will write the business that Saad wants them to write. So I don't really imagine that. And so far, this hasn't been raising conflict issues or worries in the countries. On where this will be in five years, to be honest, I don't know. I mean I presume that we will get some surprises. I think cyber is going to grow much more than it is today. I think businesses like energy will grow even more than they are, but I still think that construction and infrastructures will lead our pie. But this is just a guess. It's fascinating to see this happening for me, for us. And so let's just play along with it.

It's Kamran Hossain from JPMorgan. Two questions. Just really interested in what you think about whether a Lloyd's business would provide value like a franchise there. I know you used to have like a physical box at Lloyd's, not a syndicate, but you used to have a a box of [indiscernible], kind of your thoughts there, whether the corporation seems to be encouraging people and whether that would make sense? And the second question is just, I guess, in terms of the Specialty business, how much of it is syndicated and if there's any of it at all, how much of it do you lead?

Yes. Okay. On the Lloyd's, look, [indiscernible] and I have been in touch with Lloyd's for a long time. Look, we don't need distribution. We have every access, one of the typical reason why people go to Lloyd's is that because they don't have distribution. We have distribution. We don't need that. But we also appreciate that there are businesses that don't go outside the Lloyd's platform, right? And so by not being present on the Lloyd's, we might be missing a portion of the business. That has to balance against the costs of the Lloyd's platform and the time needed to set up and start the syndicates. We're hoping to consider, but we're not -- we have not concluded any decision. If we will eventually find out that the benefits in terms of a business that we don't have an access to today are bigger than the cost and the time needed to start it. We will start to syndicate. If not, we will continue as we're doing today. But it's a very, I would say, practical consideration that we're giving it to. On leading conditions...

I'll take that. So look, it's hard to be a top three player in this world with $9.5 billion in premium with that being -- having a propensity or even a majority of our programs where we are delayed. And so that percentage will change from specialty lines to specialty line, obviously, and from market to market, geography to geography. But by and large, we are a lead underwriter, and we take pride in doing that. And that's how we deploy our resources, our skill in the town and that's what we have invested so much in those resources.

Yes. Vinit from Mediobanca. So two questions, please, again. But -- so one is on competition and one is on just a bit of strategy. So I mean, you emphasize very clearly that the entry barriers are quite high in specialty lines. But somehow -- and forgive me from the outside, a lot of insurers say that they want to focus on these areas, Specialty lines, middle market as well. But is there a sense that competition is also seeing some of this -- or is that -- is your position that, yes, for example, construction, we are the leaders by far, so we can relax [indiscernible]. So how do you see the competition from the outside [indiscernible]? And second question was just for Mario as well. Like last year, we spoke a lot about middle market. And now this year, we're talking a lot about Specialty lines. I just want to check, is it just because you think there a shift in how you think between these two buckets? Or is it just the same, but you want to just emphasize another aspect of your strategy today?

Yes. Let me start from this because this is maybe more fundamental. So first of all, specialty in mid-markets, they are overlapping each other. A big portion of what the mid-markets colleagues do it is in specialty. The reason we are talking more specialty this year is it is because we felt we needed to make an organization a change about specialty and run it in a different way. That's the only reason. But since 2016, we have been pushing to grow mid-market in specialty, and we continue looking at this as a [indiscernible] not as one or the other. And so there is no shift in emphasis at all. On competition, look, I think everybody can claim whatever they like. But I think we show you the numbers. I mean today, we are #3 globally on specialties. So everybody can claim the #1, #2, #3. I mean, they're just two bigger than us. It cannot be 10. And everybody wants to come feel free to do it. It's a market where the top 10 make less than 25% of the total so I'm not afraid of whether it wants to grow. I want to quickly start growing ourselves even faster in order to concentrate more of the markets because this is a market about skills. And so the bigger you are, the better. It's not a market where you can invent much. You need the size, you need the numbers. I don't know how many of our competitors have more underwriters than we have? How many have more than 250 underwriters for constructions? How many have more than 100 underwriters in cyber? This is a -- just it's a size game. You can play if you have five, you do nothing. When we started renewables years ago, [indiscernible] and I said, "Okay, let's go into renewables". So we started hiring the underwriters in dozens, not in units. I mean you do nothing with one or two. So no, I'm not afraid of competition. In mid-market, again, Alex has explained many times how you need to go for mid-market. So you need to establish local presence. You need to not just have an office and not just deploy the people there, but you need to be intimate, you need to be local there. It takes time, you don't establish yourself in Denver and you get the business the day after, right? Because you need to get to know the brokers, the customers, establish the claims service, the risk engineers. It takes time. I mean, we have gotten where we are today 9 years after. The numbers you see are 9 years after. As I said many times, everybody can be better than us, but they won't make it in a year. If they're better than us, they can make it in 8 years, in 7.5. But that's the time frame, which you see our numbers is 9 years after. Just have that in mind almost.

Just to add a couple of comments. One, just quickly, you used the word relaxed. I think that's something we don't -- that's the word we don't use at Zurich, especially under Mario's leadership. Just want to make sure that's clear. But the mid-market Specialty is we're interplay, we look at it as mutual support. And then Alex and [indiscernible] we'll have some great examples. One of the sort of the strength of our mid-market offering, which you'll see is the [indiscernible] verticals, for example. And it's hard to be compelling in industry verticals with the Specialties being at the table and sometimes forefront of the table. So you'll hear more on that at the breakouts.

Just William who's patiently waiting beside you [indiscernible].

Thank you. Just by separating out the specialty, will this change your approach at all to the reinsurance buying? Any extra leverage this could maybe drive or manage volatility? Or are you going to keep managing volatility of the total P&C level? And I guess, just within that, what is sort of a normalized cat for specialty? Or is it zero?

So on reinsurance, honestly, we don't know yet. This is something, especially [indiscernible] and I considered in the past months. We discussed it also together with [indiscernible]. Yes, you can also go into different reinsurance protection schemes for Specialty. But it's too early and Saad still has to start and sitting here, but it still has 45 days to go as ahead of Canada. So let's talk in a year time about that.

Great answer.

And Normalized cat?

It's not zero for sure, but it's the same approach that we use for the rest of the business. I mean the construction infrastructure part of the business, of course, it's got exposed, [indiscernible] Energy is, [indiscernible] marine is, and we apply the same principles that we apply in the rest of the business. So it's definitely not categories immune, not at all.

Yes. As Claudia mentioned earlier, I mean, the robustness of the framework in terms of how we manage cat right now is working for us, and that's something we want to lean into in a major way.

Dominic O'Mahony, BNP Paribas. Can I just follow up on the data center point? I mean, I didn't even know that 250 centers are being built. Could you help us just size the opportunity here, can you give us any sense of the percentage of the construction book that is data centers? I'm trying to work out, given that's going to be a massive growth area for the economy, how big a tailwind is this for your business?

Yes. It is massive. I have in mind something that this was -- yes, it's here on the page. It's $350 billion worth of investments. Now the question is how much of this is business that we will capture ourselves, right? I mean we're not the only insurer ready there to make an offer to the construction to the builders. And so I can't really speculate on that. But it's a gigantic opportunity for us. And it's an opportunity that we don't want to miss.

So that 10% policy count is actually 14% of our builder's risk in the last period on average. The -- what's Interesting about what we've done in the U.S., for example, which is the biggest source of the investment right now and that's projected globally, by the way, at $7 trillion by 2030 which is around the corner, literally. So all these products have been announced, sometimes already permitted. And a big chunk of the $7 trillion is in U.S. for obvious reasons. What's super interesting for us is that we've been -- because of our proposition, because of our reputation, because of the skill sets that we have, we've been on every hyperscale project as well. So -- and we can't mention names here, but I think you know who they are. And that's really a testament to the team and the testament to the brand.

And part of this, by the way, is the benefit -- it's the ultimate beneficiary of the Geopolitics tensions because since nobody wants to be at risk of losing their data and have the data stranded or hijacked somewhere, every country wants to build their own data centers to storage, to have local clouds. And again, that's a fantastic opportunity for us, that's business, and it's a good business.

So we've got a question online and we might be able to squeeze one more quick one after that. So it's from Andrew Crean, who obviously were missed today. I hope your ankle gets better. How does the Specialty market concentrate? We talked about the Specialty market being fragmented. So how does the Specialty market concentrate? And what role do we play in that hiring underwriters, et cetera? And then the second part of the question is are there any Specialty lines that we're not exposed to that we would like to have exposure to?

Yes. I mean, on the second one, not really at the moment. I mean we can assess it frankly, also, we're opportunistic in growing or shrinking. Years ago, we had no presence in E&S, and now we are a decent player in E&S but at the moment, we don't plan to enter into other specialty lines. How is the market going to concentrate? A lot of this is underwriters acquisition is hiring, retaining, growing, maintaining your underwriters. This is the competitive advantage. This is where the value is. It is in the people. This is a people business. And you hire underwriters, not only because you can pay them but also because you can give them credibility. You give them a brand, you give them systems, you give them reinsurance, you give them capital capacity, you give them an ecosystem where they can work well. And I think we're pretty competitive on that side.

So we've got three minutes left, which probably means half a question. James Chuck, if you can do half a question for the last three minutes I saw your hand up earlier.

Whatever that is, James.

It's James Shuck from Citi. So a have half a question in three parts from me. Actually it is just one question, and when it comes to Global Specialty, there's a number of different business models out there that have been successful. And in particular, I'm thinking about the use of third-party capital. So my question really is, does it make sense for Zurich to always retain the underwriting risk? Or could you do more by offering them more holistic offering in the specialty space and introduce third-party capital into that? And I suppose the second part of that question would be, Mario, how are you thinking about the potential use of reinsurance captive rather than reinsurers?

Maybe is the half answer to the half question. Yes. I mean -- these are all things that we've been considering. And again, behind the decision to create a Global Specialty unit, we saw that opportunity now to use these tools ourselves. And then we thought if we have a Global Specialty unit that we can really make these kind of decisions without it. It will be practically impossible. So these are things that we will consider next year and then let's see how far we go with that. Yes, spot on.

Great point to finish on. We have a short break for 10 minutes coming up after this session. Just a reminder, the green badges will move to the next room for the breakouts, yellow badges stay in this room, please. So on your way, collect coffee, et cetera. And just maybe a short appreciation to Saad and Mario for the session. Thank you. [Break]

Okay. Welcome back, everybody, and thank you for keeping on time as well. I really appreciate that. It helps us keep the day moving. So a real pleasure to introduce the first breakout session, we'll have about 45 minutes, so we'll finish on 1:00. And the first session up today is middle market. Alex Wells, who heads up our U.S. business and Drazen Jaksic who heads up our U.K. business. we'll talk for 10, 15 minutes or so -- 15, 20 minutes, sorry, and then we'll break for questions after that. So over to you guys.

Great. Thank you, Mitch. All right. Let's talk about middle market. And as Mitch said, I'm Alex Wells, and I run middle market in the U.S. I'm joined by my good friend in Cali, Drazen, the CEO of our U.K. businesses. Together, our businesses represent over $5.4 billion in middle-market GWP or about 70% of Zurich's middle market business globally. I joined you last year in London to discuss the success we had in the U.S., middle market and the platform and capabilities we had built. Drazen and I are here this year to give you an update against our progress on the 2027 strategic plan and give you a view into our two largest middle market books of business. Spoiler alert, we are executing globally against our strategies, and we have some double-digit growth in a majority of our middle market businesses this year, including in our core U.S. and U.K. business, and we feel good about achieving the $10 billion target that was laid out in the 2027 plan. As Mario mentioned, the global middle market is a large segment with higher growth, better margin and less less volatility than other market segments. In many places, it is also experiencing broker consolidation that offers targeted opportunities for accelerated growth. Zurich has built a strong technical and operational foundation and expanded geographic footprint and distinctive capabilities that create a competitive advantage in many of our markets. We also have a demonstrated record of success, and we are executing against a strategic plan to gain market share, both in a consistent and disciplined manner. Zurich has an established global middle market franchise with nearly $8 billion in gross written premium and a combined ratio in the 80s, since Mario laid out the original middle-market strategy almost a decade ago, we have consistently grown this book at an above market pace and with strong profit margins. And we're confident in our ability to continue that trajectory through this strategic cycle with a 9% CAGR. We are continuing to invest in smart middle market growth around the world and our technical expertise, strategic portfolio expertise and disciplined expense management will continue to provide a differentiated combined ratio that's accretive to our overall commercial book of business. So let's talk a little bit about the middle market and the U.S. The U.S. has the largest middle market with a conservatively estimated $120 billion in GWP and a strong projected market growth of nearly 6% annually. The top six carriers only control about 25% of the market, we have no one carrier in a dominant position. Zurich sits among those top six carriers, and we've been gaining market share consistently over the last five years with an outsized 14% CAGR. Zurich is an acknowledged leader in the U.S. middle market with differentiated growth. However, we still see significant market opportunity with only a 3% to 4% market share currently. The fragmentation of the market that Mario spoke about, combined with broker consolidation and the regulatory and operational complexity to entering this market give established top carriers such as Zurich, a natural growth and margin advantage in the next cycle. As you can see, we have nearly doubled our book of business in the last five years while improving the margin in our book to a consistent sub-90s combined ratio, and we're now committing to growing this book by an additional $1.4 billion during this market cycle, while maintaining a strong profit margin. 2025 has been another proof point year of execution in the U.S. with projected double-digit growth in our core business and a combined ratio once again in the 80s. Zurich is one of a few carriers with a consistent demonstrated execution culture and a full suite of capabilities necessary to have success in the competition for individual accounts and book consolidation. We have outperformed the market for the last five years. We're outperforming the market this year, and we expect to outperform the market in the next strategic cycle. Geographic expansion and specialty underwriting are core pillars to our strategy in the U.S. middle market, creating local relationships by putting more underwriters closer to the broker and customer have been crucial to our success. The value of local underwriting is a uniquely middle market proposition with accelerated growth and improved profitability consistently the result. Our expansion offices have grown 3 to 5x as fast as our mature offices with a better portfolio mix that leads to better profit margins. Since 2020, we have expanded the number of offices in the United States from a core of 13 to now nearly 35 and now generate almost half of our new business from those expansion offices. 2025 alone saw us add five new offices in the United States, and we have plans for five additional offices in 2026. The key to our geo expansion is hiring talent. We talked about that a little bit last year as one of my friends just reminded me. We've hired over 70 new underwriters in 2025, 30% of those came in our new expansion offices and 40% came on our focused industry specialization. Focused industry specialization is our second strategic advantage that we've leaned into. As we discussed last year, we've built 12 industry verticals that cover nearly 90% of the U.S. economy. All 12 of these industry verticals bring unique insights and value to both our customers and our brokers. But the 6 focus verticals that you see on this page are those in which we've made outsized investments including a dedicated underwriters and unique claims and risk engineering capabilities. These are the verticals that are both growth engines to the U.S. economy and have shown that they value differentiated expertise and service in their financial partners. Our growth in these focused industry verticals over the last five years have been nearly twice as fast as the rest of our book of business with a loss ratio of 5 to 10 points better in each one of those verticals. We lean into these industry verticals and they give us differentiated growth, but they also help drive our combined ratio lower year-over-year. This slide gives you two examples of how we combined our geo expansion strategy with our industry vertical strategy. On the left is one of our first expansion offices, Charlotte, North Carolina, we've established that in 2021. Charlotte started as a $5 million office and we'll finish 2025 above $20 million. That's a 32% CAGR through 2024 with continued growth this year. Charlotte is a financial and banking hub in the United States, and one of our recent successes is a good example of the types of accounts that we're writing out of this territory. This is a financial consulting firm with about 100 employees. We have a dedicated financial institutions underwriter based in Charlotte, and they knew this account solicited from one of our new relationship brokers and we were successful in securing the order, taking the account from a 20-year incumbent because of our local relationship and our dedicated specific underwriting expertise. On the right, in San Diego, a newly opened expansion office this year in 2025. We've always managed our San Diego territory out of our Los Angeles office. But because of our new product capabilities in our life sciences industry vertical and our knowledge of the concentration of that type of business in the San Diego territory, this year, we decided to base several underwriters physically in the San Diego office. Our new business this year is 6x the production we had experienced last year when we were trying to handle San Diego out of our Los Angeles branch. And this account is an exact example of the type of business we expect them to write by making this investment in the San Diego territory. Lastly, I want to give you a little bit of a sense of what we're doing with AI in our middle market operation in the U.S. We touch over 10,000 middle market accounts which is about 50,000 lines of business annually in the U.S. Our success is often predicated upon our ability to bring smart solutions to our clients and our brokers faster than our competition and with less questions. We know that our underwriters spend a lot of time collecting, summarizing information, waiting for data. And lastly, trying to reconcile that against our underwriting appetite and our underwriting guidelines. The three AI-driven solutions you see on this slide were specifically developed to address nonproductive friction points in that process. The work was done collaboratively with both internal and external AI specialists and with our underwriting community. It was developed, piloted and rolled out inside of the last 12 months. These are all live tools that we're using now to make our underwriters and UAs more efficient. We expect that this is going to add 20% to our efficiency for both underwriters and UAs without having to change our customer-centric and consultative underwriting model. This is the future of what we will be doing in the United States by using AI. In summary, we've built a multibillion-dollar franchise in the United States in the middle market. What we've built is special and different. We have a proven track record that our model and our culture is successful. And we have room to continue to grow without giving up margin. And with that, I'm going to turn the mic back over to Drazen who'll talk to you a little bit about the U.K., and then we'll be back for questions afterwards. Thank you.

Thank you, Alex. So you heard from Alex in the U.S. and now I'm going to tell you how in the U.K. through our service delivery capabilities and then a particular focus on international and regional brokers who are looking to outperform the market. U.K. mid-market is a large and growing and conservatively, it was valued at $15 billion 2024. And Zurich have about a 5% share, and we are in the top 5 providers. The market is fragmented as you would imagine. And the top 10 carriers have about half of the market. And the rest is spread amongst numerous providers. It is not uncommon to see a broker panels as many as 30 providers of capacity. Alex obviously talked about why middle market presents significant growth potential, but it's obviously due to rate resilience. That's a critical one, profitability, but also due to this fragmented nature of the market, which, of course, gives us an opportunity to increase our share of growth or market share. However, to succeed in this market, it is just not enough to compete on price and product. You have to have a really great technical and operational capabilities and service, which is particularly critical. And of course, that is difficult to build and creates a barrier to entry, but it also provides a competitive advantage for us. Brokers now expect to transact very quickly and often digitally and sometimes even self-service. We're using the self-service platform, which is more aligned with the SME segment. But at the same time, they also want the ability to speak directly with technical experts and have more tailored solutions from the corporate segment as well. So in reality, they're really looking for the best of both worlds in this case. So we've been building these capabilities over the past several years. I think just like in the U.S., we also expanded geographical presence, we increased central offices from 7 to 11 offices. But then again, support with increasing our technical -- local technical expertise and we are proud to say that 99% of all of our underwriting decisions are made locally, which means that it really enables us to respond very quickly to broker queries. We've also invested in building digital solutions and now have the ability to quote and buying policy within 24 hours. We'll introduce also a rapid renewal process where at a request from broker or a customer, we can renew and bind and issue of policy within the same day. And to give you a sense of scale, in 2024, about 1/3 of our mid-market portfolio was renewed through this rapid process. So all of these improvements have led to a strong growth both in our London and regional portfolios over the past few years. But particularly a regional portfolio has grown at double the rate of our London book with combined ratio consistently below 90%. And if we look at 2025, it's another strong year with double-digit growth across the board despite the competitive market. So how do we know the brokers like what we do? So if you look at our [indiscernible] scores, particularly for us, original business, it has improved from plus 33 in 2021. to plus 75 in September this year, which is considered world class. All of this was driven by this buildup of capabilities and service. And to top it up, this year also, we achieved a 5-star rating in Insurance Times commercial lines survey, which is conducted by 850 U.K. brokers. And we are one of the only three insurance in the U.K. who have that rating. So now that we established the strong foundation, we are ready to capitalize on this drive to grow further. Overall, market is projected to grow 4% to 5% CAGR over the period. And we aim to outperform the market with the most significant opportunity again in our regional and mid-market portfolio and still maintaining our sub 90 combined ratio. The main focus will be on increasing share of wallet with international and regional brokers, particularly in the regional areas. But we're also making further investments into online broker submission tools to enable them to submit their requests through their normal usual trading tools as well. And just like in the U.S., we're piloting some of the AI capabilities such as a [ sixfold all guideline IQ ] as well. But I also talked a little bit about how brokers want the best of both worlds. And we want to leverage our SME servicing capabilities, just to differentiate our service further. And I'll give you an example of a live chat, which we use as the SME, we handle about 10,000 live chats with brokers every month. And we respond -- 60% of those live chats are answered within 30 seconds. So brokers love as they can get an immediate answer to some of their queries. So just to close this slide off, if we could grow the share of the market with international share of the wallet between international and regional brokers to the same level that we have with our major global brokers that would present significant material opportunity for us for growth for the next few years. And just to close off, so you've had it. So you had the U.S. story and then, of course, now the U.K. The middle market for us is a large and growing, it's profitable and it has lower volatility. And in most markets around the world, it is fragmented, which, of course, gives opportunity for growth. Zurich has an established profitable franchise of almost $8 billion and have built -- we've built platform and capabilities to create competitive advantage and barriers to entry. And we have already proven that we can grow middle market book profitably. And in 2025, we're going to have another strong year with double-digit growth in all of our major countries, including, of course, the U.S. and U.K. with sub-90 combined ratio. And with that, we have every confidence in our ability to leverage our competitive advantage and meet our 2027 target.

Okay. Thanks, guys. We will go straight to Q&A now. [Operator Instructions]

Its' Andrew Baker Goldman Sachs. So I guess, both on the U.S. sort of growth in underwriters, 100 added by 2026. So I guess if you add that -- if you count the full 100 in, do you have a sense of whether the market share by underwriters will be higher or lower than the 3% to 4% market share that you show in the slides, which I'm assuming it's GBP? And then second, I guess, is the 100 million, is that a net number, so it includes added and underwrite left, you able to give us a sense of sort of how that breaks out? And then how we should think about premium added on a go-forward basis? I appreciate or take up takes some time to ramp up sort of premium per underwriter, any metrics there would be really helpful.

Yes. So it is in that number. That number that we gave of 100 new underwriters was not across the 3-year cycle. So not in the U.S. we still have, as Mark said, 40 days ago, so fingers crossed, but we're sitting a little bit above 50 net new underwriters in our core middle market business, that as we talked about earlier, there are some other parts of our business that are also defined as middle market and they sit in specialty. So we've added 20 net new underwriters in our construction space as well in middle market construction. So the 70% is really a net from those 2 combined areas. And it does, it does take a little bit of time to ramp up our underwriters. We actually dedicated 2 staff positions during 2025 because we knew we were going to add this type of new underwriters. We had [indiscernible] unit positions specifically to help onboard our new underwriters and get them productive faster. And we've cut in half the amount of time that it takes for a new underwriter, an experienced new underwriter that's coming to work for us to get their letter of authority. So it was about 6 months, and now it's been about 3 months over the last 2 quarters. And we've really shortened the amount of time that it takes for our underwriters to become productive in the market. And so I think that we've changed that cycle from about 2 years to get fully ramped up for an underwriter to something under a year. But yes, a lot of these underwriters that we invested in, in 2025, they're built for '26, '27, and as Mario said, really beyond even cycle. We're investing in strategic talent in order to grow differently. I didn't mention we also have an underwriting trainee class that we add every year. This year, we had the largest trainee class we've ever had. In the middle market. And that's something that many of our competitors have done away with over the years. It's -- it takes a lot of time and effort to bring new people that do nothing about insurance into the world. But we believe in it. We believe we get better underwriters over time by having those folks. We really started that almost 6 years ago. And the people that have graduated through that program and are now some of our top-performing underwriters in the U.S.

Dom O'Mahony, BNP Paribas. So first, just 2 questions. So I wonder if you're reflecting the growth of the mid-market business has delivered very significant GWP growth, also growth in offices and people. Is the driver really people? Is this really about growing the number of people because actually the amount is being done by each individual underwriter or each individual office is essentially the driver? Or have you also been getting the operational leverage of more business per one. Could you just help us break down number of people, volume and price of things. And then the second question is, I think one of the messages that you folks have given us over the last few years is mid-market, a lot of it is about location, just by being in San Diego not just in L.A. Can you just help us understand why that is? Because I mean, a lot of the people here are based in London, we serve international plans. And when you were just to fine away from our clients, why is it you need to be that local? And indeed, what -- so firstly, what's the value of that from a commercial perspective? But what is losing the fact that if you are in San Diego, you're not sitting with the health care colleagues in State Pennsylvania.

So we make strategic growth decisions on people knowing that we have to earn into those over time. We earn into them fairly quickly. But as we're on a growth trajectory, we have to have more individual underwriters in the marketplace against the new business that they're writing. And then as they mature in a market, they gain enough market share relative to their book size for that to make sense. So we -- I'm a finance guy, so I measure both of those things, right? I know I have to have more bodies in the marketplace to drive that type of new business growth but we also measure the efficiency of our underwriters and our ability to handle bigger books of business over time. We have a number of tools that we've put behind that. So we know we have established underwriters and if we take our established underwriters and look at the average premium that they're handling on an ongoing basis in a mature market, we've actually recognized about a 30% efficiency gain over those 5 years against those underwriters. Now when we invest into a new underwriter in a new geography, we see them with some part of a book of business, but most of their time and effort is spent on new business and being relevant in that marketplace. And so that brings back the average. But if I look at the established underwriters, I understand where we will be once we mature into all of those businesses. Now with regard to your question about the importance of [indiscernible]

Just jump in. Slightly different story in the U.K., for example, where we don't recruit anyone near as large numbers as they do in the U.S. But our focus is completely on service and some digital aspects of it. So where we get to when we get -- even when we get new underwriters in, we're able to expand the portfolio that they're writing over a period of time. So it's not for us, it's not so much of putting tens of new underwriters in. But training, of course, we'd always add new ones, training them and then just plugging into some of the digital services. So I think that's a lot of slight news. It's a different market.

Absolutely. The second part of your question about the regionalization or the geographic expansion. There are 50 city jurisdictions within the United States that have over 1 million people in them, right? So when we start looking at the geographies across the United States, there are a lot of opportunity in places that we don't have any of our large competitor sitting in them, right? And so when we look at the opportunity to add a physical presence in more of these locations, we see greenfields. We see competition. I mean, we compete and take business from our major competitors, and we have to, and we're good enough to do that. I think we've got a differentiated model. But when we go into some of these smaller markets, we're competing with far lesser levels of competition relative to sophistication, ability to handle business across even Stateline it's much less multinational or international. And even in the middle market in the U.S., as you think about the size of individual accounts. Often, most of the time, they're doing -- they have multistate exposures and often, they're going international, right? And so we bring a differentiated level of expertise into those marketplaces. And the brokers that are based there are provincial. They want to do business locally whenever they can. They will do business at a centralized level going into another city if they have to, but their preference is to stay local. And their preference is always to give local relationships their best business, right? They protect their best business locally because they believe that if they know the person that's providing that underwriting that, that underwriting is going to be more consistent and more stable over time, which helps them manage their relationships with their customers individually.

Hadley, I think is ready for a question now. So, Hadley?

Hadley Cohen, Morgan Stanley. Just on the theme of around hiring talent have you -- can you -- can you just give us a bit more color around where you're hiring these people from how they're incentivized to come over to Zurich and I guess, how they're remunerated, what are the KPIs that they're focused on? And does that vary by line industry presumably. And then the second question is around AI. It's always very interesting to hear companies talk about their AI initiatives have you but from an outside perspective, it's very difficult to see what's different to what other companies are saying. Do you have a sense of how you are differentiated from an AI perspective and to what extent -- or is it just that you need to be doing this to keep a pace with your larger peers in the space?

So I'll talk about the talent management first, right? I mean we've built a reputation, and that's the first thing that we go into any hiring situation around, right? So we build our reputation as being a place that good underwriters can be successful. And unfortunately, in the middle market broadly, that's not true with all of our competitors, right? There's a lot of expectations in other places that on rate just follow rules. Just go and follow these portfolio rules and write this business, just colored by numbers, right? And we talk a lot about the fact that we expect underwriters to be professional decision-makers and that's appealing to the best underwriters in the market, particularly the specialists in the various industry specializations that we've built. We've taken folks from our major competitors. We take folks from regional competitors when we go into a new market, sometimes we're hiring somebody that's worked for a regional insurance company in the U.S. and is looking to expand their footprint and work for a bigger company. So it really kind of depends in the major markets. It's often the top 10 carriers have folks that we go after. But we look for talent, drive and an ability to think about their business differently, and that's how we hire. And we've been very successful. I don't think that there's another middle market carrier that's hired as well as we have or as consistently as we have over time. In terms -- we have an underwriter scorecard that we use, and it's differentiated by specialization. We've got 15 to 20 factors that we talk to people about. Certainly, growth is one of them, but there's a lot of book mix and technical components to it. And I think we pay very fairly for a Marriott based type of underwriting approach. So I'm sorry, what was the second part of the question? Yes. Yes. So I mean, there is a certain level of AI, you have to start to embed into your business that I think everybody is doing. Again, I think we think about it a little bit differently in our middle market space than some of our competitors do in I'm looking to enable smart decisions by my underwriters. I think some of my competitors are trying to make decisions for their underwriters using AI and I think that the secret sauce in the middle market is this combination and Jason touched on this, there's individual account underwriting, there's portfolio underwriting, and you need to give underwriters insights into both of those things. I need to give people a better understanding of the individual account that they're working on and how that fits in the portfolio. And then the trick is whether those underwriters can combine that information through their own expertise to make good decisions, avoid bad accounts and good portfolio classes and write good accounts in maybe some struggling portfolio classes, right? And that's how you differentiate yourself from a sub-80s combined ratio versus 100 combined ratio, which is where the general market runs. I mean, Claudia touched on this, right? This isn't just happen sands. This isn't just the market runs where we run. We run much better than the general market does.

So Alex, thanks for the underwriter battle for talent feel that you're giving us. I'm just curious that the your outperformance on combined ratio versus the market? I mean how much of that is a little bit being put at risk by aggressive hiring practices or not aggressive, but enthusiastic hiring Sorry, capital. So that's 1 quick one. Second one is just -- sorry about the Chart '26, but I seem to remember that middle market was 7.5 7.3 -- 7.5 billion in '23 with 7.7% in '24 I mean that doesn't look like a growing fast-growth business unless the definitions have been revised differently from last year. So maybe more.

Yes. I think maybe we have to reconcile those numbers for you. I mean, we've seen a 9% CAGR globally against our middle-market books in 2016, and that's a continuation into the next strategic cycle. And I think we're comfortable with that.

Why don't we pick that one up today. When we do the group and stick to the U.S. and U.K. for Okay.

So U.S. has 1 question for you. And then second question on the U.K. was you left a said that these are about how it could get much better. I'm just trying to take your word for it where you said if you could grow the share of wallet for international and regional as much as the global I mean is that something like an upside? Or is that part of your assumptions for planning think.

I mean it's absolutely part of our strategy. We have a number of quite strategic relationships with those brokers, and you would have seen consolidation of the expansion in the market. And by virtue of their consolidation, we automatically kind of get opportunity to write more business with them. And it goes beyond just new business. We do a number of other things with joint professional developments, et cetera, et cetera. So there's a much deeper relationship with those brokers. But it's a -- our share of wallets with international and regional brokers is about half of that, that we've got with our major global brokers. It's a really significant opportunity for us as we go forward.

Yes, you did this the talent. So whenever you new people into the organization, you have to train them and make sure that they're doing things the way you want them to do it. I mean we're hiring experienced talented people, often referrals from people that already work for us. And so -- our job is to bring them in and train them and make sure that they're able to do what they do well according to the sort of Zurich model. And again, we're just trying to do that faster. Right? And so we don't give somebody a letter of authority as soon as they show up and let them go do whatever they want to do. They have to go through a process, and they -- and we check and make sure that they know what they're doing. But we're hiring talented people and we need them in the marketplace. And so -- we're trying to do that faster

Will Hardcastle with UBS. I guess you touched on just quickly on the U.K. broker consolidation. I think the broker consolidation was more broad as a first point. So just thinking about that in the U.S., perhaps you do highlight that it's working in your favor are you specifically saying there versus detail of the competitors? Or are you also saying versus your bigger competitors, and I guess why? The second one is there seems to be a lot of businesses talking and trying to grow U.S. middle market. It's clearly got a very strong franchise here. I guess, how can we be take sure that the increased supply capital won't drive more competitive pricing in the environment and therefore, deteriorate margin? Or is that somewhat assumed with the efficiency benefits being eaten into. So

I think the broker consolidation -- there's certainly the tail to all of the carriers out there. I mean, when I talk to our broker friends, they'll tell me that they do business with hundreds carriers in the United States, and they're trying to shorten that tail to a couple of dozen, right, that they really want to do business with. So certainly, I think there is an automatic opportunity that happens because of that. I think that we also can compete -- we can be very competitive with our top carrier competitors, and we expect to win more than we lose when we start talking about that -- also that top of the consolidation chain. I think it's easy to just let the trend happen, but we expect to outperform the trend as we think about it. With regard to the competitive nature of the marketplace and the capital, I think there are different trends that are going on in the U.S., and I think there's capital coming in on the property side, and I think there's a lot of pressure in the liability lines to raise rates, and we're seeing uplift on that and profitability increases against the casualty lines of business. And I think on balance, the middle market is more stable than most other market segments. We still see rate above overall trend across all of our lines of business for 2025. There's pressure, but this is what we do. And the reality is good carriers beat the market on up cycles and down cycles. And my expectation is that we've hired the right people, and we're -- and we're managing them in a way that we're going to beat that cycle as we move forward as well.

Stay on this side and then we'll move after. So Will, just over here, Patricia.

William Hawkins from KBW. Could you talk a bit more about how you're managing growth versus profitability with regards to the investment spend that you're implying in all of this growth? So I guess the first question just -- is all of this investment spend immediately booked in the combined ratio? Or are you capitalizing it in some way. And I have no idea about the scale. Is this a big deal of investment were just lost in the rounding. And then related to that, when you're thinking about the balance between the 2, it's likely to have a combined ratio in the 80s, but you could be sitting there saying, why don't we have a combined ratio in the 9s and then we could open 10 offices a year rather than -- so I don't know how you're thinking about the optimal growth rate. And depending on how you answer that question, does there come a point when you sort of say, okay, investment has now reached its maturity so we can step down the combined ratio? Or is it always going to be a continuum in how SP-11 Business evolves?

Yes, sure. So the immediate investment that we're making these underwriters probably impacts our book 0.5 point to 1 point, something like that in terms of the expense ratio. We'll grow into that. I'm not really concerned about the initial investment against that. Your question about growth versus profitability, I mean those -- that's what we do as underwriters, right? We're constantly balancing and looking at our book of business and saying, should we be growing faster? -- how do we grow faster in the most profitable parts of our business because our business is in a monolith, right? We have a lot of different sub segmentation strategies. We talked a little bit about the focused industry practices. The faster I grow those and the better I am at delivering that expertise to that clientele, the better my combined ratio is going to be, right, because those inherently have a better combined ratio in my underlying book of business. So we lean into those. And as you saw, a lot of our investment in people is in places that we think have a better combined ratio in other parts of our business. And we think about that strategically -- every time we hire a person, we said is this accretive to the book of business

George, just in front of you there. James?

James Shuck from Citi. Interest mid-market is defined on the slide earlier for the market as a whole was turnover of up to $300 million. Just curious if that's the same threshold that you have for mid-market and kind of moving on from that, how important is it to have a cyber product for the mid-market offering? Because I know [indiscernible] reticent to underwrite side. But I would think that having a holistic product that is anchored around cyber would be an important unique proposition that's kind of increasingly needed. And then sort of just a final point is just what's the opportunity? I'm not sure if this is a question more for larger corporate. But is there an opportunity in AI in insurance? So obviously, it's a massive market and growing, and it's a liability line, but actually some quite attractive numbers in terms of the size of that market and time.

Yes. So I mean, I think your question about cyber, we want to write cyber in the middle market, right? Like that's the target area of our cyber initiative, and we certainly partner between our P&C lines of business and our cyber line. So I don't think that that's -- I don't think that's at odds I think we've got the right appetite in our cyber space for the middle market and especially in the U.S., and I know the U.K. So I don't think that there's any problem with that. I think I don't know that there are a lot of accounts where cyber is the lead line on a relationship or a discussion. In the U.S., it usually centers around the traditional property and casualty in the middle market and then the cyber is an ancillary and supporting line of business. You asked about the size of account in the middle market. Yes, there are different definitions around the world. In the United States, it's generally under $1 billion in turnover revenue would fit within the middle market space. Some of our competitors will define it a little bit less than that. We certainly have some very straightforward more vanilla risks where that turnover is a little bit higher than $1 billion. I think in the U.K. is related...

It's 100 and then you will find it in Asia Pac in many countries, it will be up to 150, for example, just because of the nature of the local markets. And I would just say we're looking forward to working with Sam cyber for mid-market in.

And I think the AI space, we're -- I think everybody is still trying to figure out what the ongoing AI exposure and opportunity to provide insurances, right? Like right now, it's all about how do we build it? And then we'll see if that becomes a more mature operational exposure, how we participate in that. But I think you're right. It certainly starts at a large global corporate level that we're going to have those conversations. But a lot of our business in the U.S. is tech business, and we see an increasing number of fact middle-market accounts that are AI oriented, right? Like they're all shifting into this, and we're understanding it as we go along

James, just a reminder that they put this slide in the half year with the breakdown of the specialty business mix and circa 4% of that $9.4 billion was Iber dedicated. So in and of itself, it's a pretty large number. and also within a market context as well obviously goes right across the business.

Is that ever take us [indiscernible]

[indiscernible] So I was just mentioning that -- this is 1 of the reasons why we've made investment in Cabell, which gives us the foundation not only to be good on underwriting to support middle market, but also cyber services.

Okay. That is taking us up pretty much to the close. You will get an opportunity to speak to the team, obviously at lunch and at the end of the day as well. Thank you very much for the questions. We have good questions from the floor. Thanks for the guys for a good presentation as well. we're going to truncate the lunch. So we will come back at 1:40. We're conscious that some of you have got flights to catch, so we don't want to be responsible for not getting on to see families and friends and so on. So can I ask you to be back in the room at 140 sharp, please. And for everyone online 1:40 European time will be back online live. But thanks very much for the guys for a good presentation. Thanks for the questions.

Okay. Welcome back, everybody, to the second half. Hopefully, you have been well fared and water, good conversations. We move on to the second breakout session. And to give you true value, we're giving you not 1, but 2 for the price of one. We have Carsten Schildknecht and Peter Stockers to talk about our German retail business, and Claudia to talk about Zurich Santander. Hugely interesting part of the world, demographically, obviously interesting in terms of medium and long-term growth profile and not something that we get full questions on all the times, it would be great just to get interest in both of these sessions and good questions after. So with that, I'll hand over to the team. Thanks very much, guys.

Great pleasure to be here today. Peter and I would like to share with you how we succeed in the German retail market through leading digital and technical capabilities and how this ultimately leads and translates into doubling the BOP in the next 3 years in the German retail business. My name is Carsten Schildknecht and I'm the CEO [indiscernible] Germany.