Assicurazioni Generali S.p.A.

Hello, everyone, and thank you for joining our first quarter 2026 results call. Here with us today, we have the Deputy Group CEO, Giulio Terzariol; the Group General Manager, Marco Sesana; and the group's CFO, Cristiano Borean.

Before opening for Q&A, let me hand over to Giulio and Cristiano for some opening remarks.

Hello, everyone. Good morning, and thank you for being with us today.

The first quarter 2026 results marked another step forward in the successful delivery of our Lifetime Partner 2027. We are now in the second year of our plan and our focus on excellence in core capabilities continues to deliver tangible value for our customers, employees and shareholders.

We have reinforced the role of the group centers in the implementation of key initiatives, especially when it comes to technology and artificial intelligence. This approach allows us to scale best practices more effectively and read the benefit of our fully integrated group.

Overall, we have delivered strong growth in both operating and adjusted net results, thanks to contribution from all segments. Let me highlight a few achievements from the first quarter that clearly demonstrate the success of our strategy.

Starting with P&C, gross insurance revenue grew by EUR 575 million or almost 7% year-on-year. This top line growth has a lot of quality needs.

While revenue growth continues to be mainly driven by price effect in both motor and non-motor, volume growth is increasing its positive contribution with volumes [indiscernible] in motor growing 1.8% and we need even faster growth in Accident, Health and Disability at 3.4%. Let me also mention that Europ Assistance has increased its consolidated gross turnover to EUR 1.2 billion in the first quarter marking almost 15% year-on-year growth.

Looking at Motor, following 2 years of deep [indiscernible] and the recovery in profitability achieved in 2025, we saw positive development with risk in force growing about 1%. Let me tell you that we could have achieved a higher volume growth in Motor by expanding the book through more aggressive pricing.

However, as we have said previously, we are squarely focused on cycle management. Therefore, we deliberately have made a strategic decision not to grow the numbers of contracts faster at a time where price is slowing down and without further clarity on the implication of the Middle East situation, the cost of claims.

In this context, we are disciplined and continue to explore additional growth opportunity only in very selected markets. A quick comment on the Nat Cat load, which has been rather significant in this quarter.

This was most related to the heavy storms that hit the Iberian Peninsula and particularly Portugal, which represented almost 70% of our gross Nat Cat losses. This is broadly aligned with the most recent insured industry losses for case reserve before IBNR that amount to approximately EUR 1.3 billion for Portugal only.

In this context, our underlying performance was very healthy, with a more than 1 full percentage point improvement in the attritional current year loss ratio, thanks to both motor and non-motor. As highlighted in the press release, the amount of manmade losses was almost double that of last year at around EUR 65 million, amounting to 0 percentage points of the loss ratio.

Therefore, the underlying improvement of the attritional current year loss ratio, excluding manmade, is close to 150 basis points year-on-year. As you know, our target for P&C efficiency is the [indiscernible] ratio, which improved by 60 basis points year-on-year to 13.7%.

This ratio represents a productivity improvement journey in a more targeted way than the full expense ratio, capturing what we are doing to transform our core function, including claims, IT, customer operation underwriting. We have a strong focus to push forward the extensive deployment of AI agents that automate workflows, augment employee decision-making, improve service quality and drive operational efficiency at scale.

Reported expense ratio of 29.3% is up 40 basis points, reflecting higher acquisition costs and also the business mix. If you look at the expense ratio, excluding Europ Assistance, it will be basically flat year-on-year at 28.7%.

Looking at acquisition costs in isolation. The reported 21.2% in the first quarter would be 20.3% excluding Europ Assistance and the year-on-year change will be in the order of 20 basis points as opposed to 60 basis point increase.

As we mentioned previously, we are implementing actions that will enable us to achieve not only better [indiscernible] ratio, but also an improved expense ratio. Let's move now to Life, where we have achieved very strong net inflow of EUR 4.3 billion, driven by contribution from all lines of business and benefiting from further improvement in lapses.

Compared to the first quarter last year, we recorded higher inflows in traditional savings. This has been achieved with a strong level of new business margin and enabled us to record a very healthy growth in new business value.

The first quarter production is fully aligned with our underwriting discipline. The weight of non-guaranteed business is 75%.

The overall guarantee is stable at 0.73% and the share of capital-light business is 83%. The overall development in new business value is clearly very satisfying.

To be noted, the first quarter benefits from positive seasonality. So I would caution not to stipulate these numbers for the next quarters.

But the key message here is that the Life business continue to grow profitably and is growing without compromising our underwriting discipline. I'm also very pleased that Protection, Health and Accident, one of our key strategic drivers of profitable growth showed a premium increase of 6% year-on-year, while recording also a better profitability.

In Asset & Wealth Management, you have already seen a few days ago, the very good numbers from Banca Generali, where we continue to deploy the joint insure bank initiative with a positive initial development. In Asset Management, as we indicated in the press release, there is a positive contribution for nonrecurring fees of around EUR 50 million.

That reflect the successful business positioning of our infrastructure business. Although transaction fees can be less regular in terms of frequency, the recurring management fees, they are indicative of sound investment capabilities and also reflect the success of our infrastracture business in originating and executing deals.

Before I hand over to Cristiano, some closing remarks on the overall macro environment. Financial markets have been pricing in an increase in short-term inflation indicators due to higher oil prices.

And while we are monitoring the situation very closely, we are confident in the strength of our business model. On the Life front, the business is capital light and the high-quality investment portfolio, combined with disciplined ALM, ensure stability and resilience.

Additionally, we have proven many times that we're capable to adjust to different cycles and match consumer needs in all kinds of environment, also thanks to our strong distribution footprint. For P&C, we are very focused on preserving the excellent level of profitability, and we are watching very closely the development of severity and frequency.

And in some cases, we are already preparing to take pricing actions. Also, please keep in mind that 2/3 of our P&C book is non-motor and of this ,50% is inflation indexed.

In addition, investment yields are higher than originally projected which also benefits the P&C operating results. Lastly, an environment of our inflation is also likely going to support the P&C pricing cycle towards a new hardening phase.

And of course, this overall context creates an even stronger reason to push ahead with our key initiative on digitalization and automation. To summarize, the Lifetime Partner 27 plan execution is progressing very well and showing tangible results.

Looking ahead, we remain fully committed to delivering on our planned objectives, maximizing profitable growth in P&C, leading Life through quality production and expanding assets in Wealth Management. We are proactively managing the cycle to ensure a strong performance, enabled by an effective center steering, combined with disciplined local execution with a focus on technical excellence and productivity improvement.

Thank you for your attention, and let me now hand over to Cristiano.

Thank you, Giulio, and good morning, everyone. Thank you for joining us today.

As Giulio mentioned, our first quarter 2026 results demonstrate continued strong momentum in the execution of our Lifetime Partner 27 plan. We are delivering robust growth across all segments with a clear focus on quality, resilience and profitability.

This exemplifies our ability to navigate a complex environment while advancing our strategic priorities. Let me share some key highlights before we open the Q&A.

Giulio spoke about the Life new business production. Let me focus on the Life CSM, which recorded a 1.4% normalized growth.

The end of the first quarter marked a peak in financial market volatility and the low in equity markets. As a result, the CSM recorded slightly more than EUR 900 million of economic variances.

The key drivers of this EUR 900 million movement were the widening of sovereign and corporate bond spreads accounting for around EUR 400 million, the increase in interest rates by around EUR 200 million, which impacted in particularly Germany and Italy, the decline in equity markets around EUR 200 million. And finally, higher volatility, especially in the equity markets, with around EUR 100 million impact.

Clearly, the economic variances in the quarter were also a reflection of the single measurement date. If we were to apply the disclosed sensitivities and use financial market level of May 15, the CSM would be around EUR 500 million higher than the EUR 33.2 billion shown in the press release.

Moving to P&C. Giulio has already mentioned the improvement in the attritional current year loss ratio.

Let me emphasize that this improvement was achieved while maintaining the conservative booking of initial loss picks, which was a key feature of our 2025 results. Concerning Nat Cat, Storm Kristin exceeded our preventive insurance protection set at around EUR 300 million, we -- this means that in the second quarter, we will book around EUR 19 million as reinstatement premium, which will be recorded in the current year attritional loss ratio.

I would like to elaborate on the prior year development. Last year, at the 9 months 2025 call, I emphasized how a dynamic interplay between Nat Cat and prior year developed is the sensible approach for managing the business over the long term.

This is why I indicated that we would calibrate our prior year development dynamically, always within the boundaries of the best estimate approach. This approach enhances earnings predictability and mitigates the year-on-year P&L volatility throughout the year.

The first quarter has seen significant Nat Cat events, and as a result, you saw a higher contribution from prior year development in our numbers. I feel very comfortable with our ability to manage the combination of Nat Cat and prior year development this way in the long term.

This confidence stems from the very strong level of reserving from the ongoing conservative initial loss picks. It is also reinforced by the new reinsurance structure that we negotiated at the last renewals where we used the favorable market conditions to significantly strengthen the contractual features of our Cat aggregate program.

Staying with P&C., let me also highlight that the investment result growth was led by high quality factors and also thanks to the volume growth recorded last year. As you have read in the press release, this quarter is impacted by around EUR 50 million one-off tax component.

This stems from the new French finance law that extended through 2026, the so-called surtax, which is based on the average taxable basis of 2025 and 2026. As such, the accounting rules requires us to recognize the 2026 surtax in the first quarter 2026, considering the whole amount of the 2025 related surtax component.

We expect that the residual component of the surtax will affect the group by less than EUR 10 million per quarter for the remainder of 2026. Moving to cash and capital.

As you know, we scheduled most of our remittance inflow into parent company coffers ahead of the dividend payment. We have already received around EUR 4.5 billion of remittance so far in 2026.

And as a result, the cash at the holding company after the EUR 2.5 billion dividend payment we made yesterday, stands above EUR 5 billion, of which slightly more than EUR 3 billion is available. Finally, a word on solvency.

As I mentioned this morning during the press conference, the estimated Solvency II ratio increased around 2 percentage points as of May 15 compared to the end of March. Let me provide you the moving parts during the first quarter.

We benefited from healthy normalized capital generation, adding 4 percentage points. This is basically stable year-on-year as the higher contribution from Life and Financials is offset by the impact from Nat Cats.

The noneconomic variances include both the prior year development effect as well as the solvency capital requirement increase from business growth and SAA optimization. The end of the grandfathering period reduced the own funds by EUR 1 billion with our 4 percentage points impact on the Solvency II ratio.

Capital movements in the period shed 2 points, including both the accrued pro rata dividend and the subordinated debt operations. Finally, market variances impacted solvency for around 5 percentage points.

This reflected, of course, the movement of equity markets and the widening of sovereign and corporate spreads as well as higher volatilities. Similarly to the CSM, the Solvency II ratio is also a reflection of the single measurement day.

March 31 was closed with bottom of financial markets during the recent bout of volatility. Looking ahead, during the second quarter, you should factor in 3 elements on top of the normalized capital generation and the dividend provision for the period.

First of all, we expect to receive the regulatory approval for the EUR 500 million share buyback with a 2 percentage point impact. Secondly, as we indicated that full year 2025 should factor in 2 points stemming from the higher SCR following the SAA optimization.

And finally, please consider that the downgrade of the Belgium sovereign from AA to single A occurred in April and will have a 0.5 percentage point impact on our Solvency II ratio. In summary, the quarter's performance highlights the strength of our diversified business model and our ability to generate profitable growth.

I am particularly pleased by the quality that I see in the numbers when I look through the quarterly noise of Nat Cats and the financial market movements. This quality makes me very confident in the ongoing delivery of our plan.

Thank you for your attention, and now we are happy to take all your questions.

The first one, just on the Life Insurance Services result. Are you able to tell us how much of the 1Q result was from experience variances and other?

And then I guess, if possible, are you able to break that out by sort of the portion that you wouldn't necessarily project going forward? And any items that you would expect to repeat because I believe the PAA business runs through this line.

And then secondly, again, thank you for the additional detail on the higher acquisition costs in P&C. I guess, should we assume that there's a broadly offsetting impact from the higher acquisition costs in the current year attritional loss ratio from the same mix effects?

And any comments around that would be really helpful.

Thank you very much Andrew, the first question is for Cristiano and the second for Giulio.

So breaking down the operating insurance service result into the CSM release at EUR 828 million, which by EUR 55 million compared to the first quarter of '25, you should then have a couple of extra elements which create movement. We had a slightly higher amount of loss components, EUR 31 million loss component with negative impact versus EUR 11 million last year, so EUR 20 million more which impact -- which reduced by EUR 20 million, the result as well as the experience variance and other technical results had a EUR 32 million positive contribution up going to the EUR 97 million amount in the operating insurance service result.

And in end, the other operating income and expenses decreased to positive sense at minus EUR 37 million, which is an improvement of EUR 17 million versus previous year. I would tell you that there are no particularly one-offs in the first quarter '26 number apart from slightly higher sensitivity on some loss components of interest rate up coming from our country, Italy, but there is a very healthy contribution in the other operating income and expenses of the so-called contribution from the investment contract under IFRS 17 accounting.

So I would say pretty much good quality as was I hinting in the initial speech.

So Andrew, to your question, whether there is an offset in the loss ratio, I would say it depends. If you look at the numbers, including Europ Assistance, definitely.

In that case, you see an increase in the expense ratio, and there is an offset in the loss ratio. When we remove Europ Assistance, actually, the expense ratio is relatively flat.

So in that case, I will say there is not much of an offset. So it depends how you look at the numbers.

Congratulations. So I have got 3 for me if I may.

The first one is 93%, the new -- I think you have 94.5% as a undiscounted combined ratio target. It feels like you're there and you're protecting margins.

So I would say, yes, but you're probably going to say no, but who knows. On the cash, thank you for the explanation, Cristiano.

I just wanted to add, the EUR 4.5 billion you've collected so far. I've forgotten the figures from last year.

I just wanted to ask if you could help me on that, that would be amazing. And then I'm being greedy.

The cash aggregate cover, I'm really interested in that. I think you did mention it at the full year, but I can't remember the details and how much more protection it provides.

And I'll stop here.

Thank you very much, Michael. So the first question is for Giulio.

The second one is for Cristiano. The third one is for Marco.

So Michael, your question whether we are better than 94.5%, yes, we are better than 94.5%. I would tell you that already at year-end 2025, we were better than that number.

And what we see right now is still very strong performance. So from that point of view, we always say we want to run as fast as possible, knowing also that the environment is going to become more challenging moving forward.

So from that point of view, we know that as we move forward, inflation and risk premium is going to be more aligned with the average premium. .

So from that point of view, we are very well positioned. And moving forward, we will try to get additional improvement coming from actions that we can take always, on the portfolio and also the productivity improvement that we can realize.

But to your question, are we better than 94.5%, yes, we are definitely well below the 94.5%. And I will tell you, we're also below the 94% level.

Michael, happy to give you some additional detail on the aggregate cover. So as you remember, our aggregate retention is at EUR 1.2 billion in the range of 3.2 points of combined ratio, and we have a capacity of EUR 550 million.

So at the moment, what we have seen is just -- clearly, we are commenting the first quarter where there was one big event but I would say we still have a lot in -- as a coverage in the aggregate. So at the moment, we have just seen the first quarter.

Clearly, it's a first quarter that is higher, significantly higher compared to the first quarter that we had in the last years. The first 2 years -- the first 2 months of the second quarter are in line with expectations.

So I would say that at the moment, we are still fine with our aggregate cover.

Michael, regarding cash, if I just take the picture as of today, I think compared to last year, we have already remitted around EUR 200 million more compared to the same period of last year as of today. I think we are between 90% to 95% total remittance.

So if you make some math, you should expect compared to last year, slightly more remittance contribution in the second half in 2026 than what we had in 2025. So I think it is good news for you.

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Could you please provide more detail on any changes in the scope of consolidation that might have affected the volumes and Life gross written premiums on a year-on-year basis, if any? Because when I divide the Life gross written premiums for the first quarter of 2026 by those of 2025, I obtain a growth rate of 6.2% compared with the reported growth of 7.5%.

And second, even the first quarter -- strong fourth quarter results, do you see scope for an acceleration in the coming quarters that could lead to an upgrade of the full year guidance?

Thank you, Gabriele. The first question is for Cristiano, while the second one is for Giulio.

So overall, the only perimeter consolidation change is related to the IFRS 5 allocation on our Irish activity, but it is as a branch. So you should not have any impact in the GWP as you are trying to hint.

So in my personal opinion, I don't really probably catch the point. It is a true like-for-like for what regards to the GWP.

Look, maybe I kindly ask if you can follow up with the IR team to better maybe grasp what is your question because I just would like to confirm no change of perimeter when you look at the GWP. There is no material effect in the consolidation.

To your question about expectation top line growth for the second part of the year, I would tell you the following. If I look at volume, let's set aside price increases, volume in -- as I said, also in the introduction, the speech, volume in motor was plus 1%.

I don't expect this number to get stronger. Considering that we are prone to really manage technical profitability, this number will stay at this level.

Potentially, if we need to increase prices, we are even willing to lose a little bit of growth to protect profitability. When we look at non-motor, we see a very strong development both in non-motor without Accident & Health and in Accident & Health.

So if you ask me, I would expect that we're going to see this momentum continuing. Maybe we can accelerate a bit.

But fundamentally, I don't expect a much different outcome. Coming back to motor, we see what kind of rate increases might be needed, maybe more towards the end of the year, and that might influence a little bit the trajectory of growth on the motor side.

But fundamentally, the answer to your question is, I would expect to see more of the same as we go into the second part of the year.

Gabriele, maybe just if I add on the first question, just to be sure, if you all ask, when we define like-for-like, our definition embeds as well a constant FX rate versus the first quarter 2025. I don't know if that could help you in making your exercise, but is the standard approach.

Thank you for providing the detail on P&C and [indiscernible] Motors. So I was just wondering in terms of motor and the outlook.

What was the price effect just for motor in Q1? And how you expect that to develop?

And on the Life business, could you possibly break out the impact on margin from the higher interest rates. And I'm sure it's in your comprehensive finance deep dive Investor Day.

But could you remind us again when you strike the updated assumptions, is it H1? Or is it at full year?

Could you please repeat the first question? And just to make sure the second question is when we update interest rates in the new business margin of Life?

Yes. When are you updating those market assumptions?

Do they get updated H1 or the full year? And the first question was just looking at the price effect in motor in Q1 '26.

Yes. Perfect.

Perfect. So the first question on the price effect on motor is for Marco, while the other question is for Cristiano.

So as Giulio was saying, so we had still a positive development of motor on the price effect. So I would say, overall, we look at the growth that we are having on motor, mainly on price.

But there is this time also around probably 1/3 of the growth would come also from volumes, so around that. So we are seeing these -- the more we go into the year, we see that this increase in average price are broadly in line with what we see on the risk premium development.

So we are there. We don't see tailwinds.

We don't see headwinds. We are more or less in line overall country by country there are differences.

But overall, we see that the average premium is developing in line with the risk premium. So as Giulio was saying, looking forward, we will adjust our posture portfolio by portfolio, making sure we maintain the level of profitability that we like to have in every different market.

So we will look at the sign of inflation, if they're going to appear; we're going to look at the different effect of frequencies. So all the component of the risk premium.

And we are going to decide portfolio by portfolio in the second part of the year, what is the posture that we need to take, making sure that -- and I want to reiterate that we manage each portfolio for technical margin and not for any component of it, so not for growth or not for premium.

Regarding the methodology, our new business value is calculated with the beginning of period assumptions. So the number you have seen here reported for the first quarter '26 is the year-end 2025 actual number.

Just for you to be aware, had we had the benefit which this first quarter reflected because of the improvement of the market condition was 26 basis points in this quarter. But if I take the end of period of March 31, and we calculate the new business margin for first quarter '26 backward, let's say, there will be another 15 basis points.

So I hope this helps. Every quarter, we use the beginning of period.

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Both my questions are kind of on AI technology-related areas. The first one really was to -- I just wanted to get a bit more insight into the productivity of the agents.

I know the acquisition costs are very high, including or excluding Europ Assistance. Are you able to share any productivity metrics amongst those agents?

And also what the pipeline is in terms of rolling out AI-related CRM tools and perhaps any expectations there? And my second question, forgive me if you disclosed this, but I know you have digital investment plan of EUR 0.5 billion to EUR 0.7 billion over the plan.

Can you just remind me what your total technology spend is in the group? But I'm not sure that EUR 0.5 billion to EUR 0.7 billion would be included in it.

And if you're able to split that into kind of keeping the lights on versus other, that would be very helpful.

Thank you very much, James. Both questions are for Marco.

Yes. So maybe before going specifically into one part of the topic, I would remind the effort that we are making on AI is broad and deep on any area of the group.

So we are working a lot on scaling our use cases. So what we have presented in our strategic plan, the 16 use cases, and that's a big effort because we want to make sure that we get scale.

One big topic for -- one big topic for us is getting scale in everything we do. So this is an effort that we constantly do.

At the moment, we -- I can say we are around 55%, 60% of implementation of those use cases, and we plan to go to more than 90%. So some of the use cases are technically related to the productivity in the agency.

We want to make sure that we decreased the time spent by agents or by people in working for the agent, so inside the agency on back-office activity, on reconciliation, on discussing with us the different topic of a specific claim or something similar. And so what we are doing, we are also improving the productivity of the agency.

Now some of this is going to be direct impact for the agencies. Some of these use cases are going to be inside our company.

We are going to make sure that in the end of the year when we are planning to have a full deep dive on AI here in -- like in the whole group, we're going to discuss more in that also about this topic. One thing that is really promising, by the way, it's also all the development that we are having in -- on claims because this is actually helping the agency in managing the claims much, much better and therefore, talking to the client much better.

For the overall total technology budget for the plan, I think this is one big topic that we are tackling. So we see a lot of potential for reducing the development activity, in particular, coding that we do inside the group.

So we have -- this is one of the big items that we have in our cost base. So we are targeting an improvement -- significant improvement on this spending.

And even here, probably we can give you more detail by the end of the year when we do the deep dive.

A couple of questions for me, please. One is on the EUR 4.3 billion inflows in Life.

I think if it's not the best result ever for the quarter, it's very close. I was wondering if you can give us a bit of color on how Q2 is going, if you're keeping the same pace or slightly lower than that.

The second, I think Cristiano already gave a bit of an anticipation, but I was wondering if you can share with us a guidance for new business margin for full year '26, considering the current level of interest rates?

Thank you Gian Luca, both questions are for Giulio.

Yes. So maybe I'll start to also give you some color on the first quarter on the inflows.

The question was on the inflows. So basically, we saw strong inflows in France, where we are up 45% compared to last year.

Also, we see that in our unit linked. We sell a lot of unit link as part of the hybrid.

We also outperformed in the market. So that's a nice development.

We saw also from an inflows point of view, a good trajectory in Germany, where we have doubled the inflows of 2025, the first quarter. And then also CEE, Eastern Europe is not a major, let's say, contributor to the inflows, but we see positive inflows also there.

And then clearly, Asia has always contributing to the growth being clearly a growth area. So that's the picture that you see in first quarter.

Italy has been relatively flat, a little bit negative, which is also the reflection clearly of the strong quarter that we had at the end of the year. So there is always some sort of seasonality.

If you ask me what we're going to see in the second quarter is similar, but clearly, there is some seasonality, as I said before. So usually, Asia tends to be less strong as we go into the second quarter; France, I would expect to be more of the same; Germany, the same.

Italy, also for the second quarter, I don't expect to see much of a different trajectory where we expect to see a different trajectory in Italy towards the end of the year. So bottom line is you're going to see something similar, but clearly, you need to adjust a little bit for the inflows because of the seasonality coming from Asia.

But overall, I would say we are very pleased with the development. I would like to point it out also to the growth in value of new business, which is 19% and the strong new business margin.

So I will say that, once again, we have delivered good results on aggregate in the Life side. The other one is?

Guidance on new business margin.

Yes, sure. So our guidance is 5.5%.

I will say based on where we are right now, it's not difficult to imagine we might be better than 5.5% by the end of the year. This said, look, it's really not important that we're going to be at 5.6% or even a 6%.

I cannot even exclude that we are going to end up there. We are very much focused on growing the value of the business.

So clearly, we want to keep a high level of business margin. Fundamentally, when we make our decision, it's about making sure that the value of the business is growing.

You saw that this quarter, and when you look at the CSA normalized growth, we are north of 5% for 2026, if you do a sort of a run rate, and that's clearly a good level because eventually, this is what is sustaining the operating profit growth. So to your question, guidance, we feel very good about meeting or exceeding 5.5%, but the focus is on growing value of business in a consistent manner.

Expenses, please. KBW has been doing work on admin expense leverage across the European insurers.

And one of the things I've noticed is that the loss ratio component of your GEX ratio is only about EUR 800 million from the presentation you gave a bit earlier this year. And as I understand it, that is only claims handling expenses that are not allocated to specific claims.

So my question from that is, why would you take such a narrow measure? Because presumably allocated claims handling expenses are just as addressable, if not more so, as what is central.

And then secondly, if you were to take an all-in claims handling expense ratio, consistent with the 7% or so admin that you've got in your normal expense ratio, what would that figure be, please? And then secondly, if I could ask a strategic question.

Could you gauge for me Generali's long-term interest in London and Global Specialty business? So if it's a bit left-field, but at the moment, your business there is negligible.

And I've always assumed that it's completely off the agenda because your focus is more European personal lines and maybe Asia. I just want to make sure I'm not missing something in terms of your portfolio ambitions for that part of the business.

Thank you very much, William. Both questions are for Giulio.

On the GEX ratio, I would tell you, it's pretty normal to allocate the unallocated loss expenses to the loss ratio. So anything which is different will be totally new to me, honestly speaking.

So that's what usually is done in accounting. Now when we look at our GEX ratio, we include in the GEX ratio, the unallocated part of expenses, and this is usually 2 to 3 percentage points of our GEX ratio will be there.

So we are capturing the unallocated loss expenses in the trajectory, the GEX ratio, which is going down. By the way, in this quarter, we had 20 basis points of improvement in the GEX ratio, which belongs to the loss ratio.

If you talk about normal accounting, to the best of my knowledge, I'm 100% confident without hesitation that you need to put the loss adjustment expenses in the loss ratio. If somebody is not doing that, I don't know what to tell you, but that's what accounting has always been, by the way.

So it's not even a new development. So that's on that problem.

On the question about the specialty business, London. I would say, you said we have a negligible presence.

I would say we have 0 presence actually at the moment in the Lloyd's market. What is important for us, we have a company called GC&C, which is basically a virtual entity, but we are running a GC&C operations.

It's about EUR 3 billion of operations. They are delivering very good results.

So we are very pleased with the performance that the company is getting. And we want clearly to expand the company, diversify this business, which means we are clearly going to look also for the opportunities.

They don't need to be in the Lloyd's market, but they could also potentially be in the Lloyd's market, knowing, however, that the Lloyd's market is a very peculiar market, which is very much prone to specialty, maybe complex specialty and also with a lot of U.S. business.

We definitely don't have appetite for the kind of business. So to your question, in reality, it's more our intention to try to strengthen our commercial business to diversify that business, but it's not that we are targeting the Lloyd's market in a specific way.

The first one was just on Banca Generali, and they were flagging in their results that the Alleanza partnership has been performing very well. Could you just touch on what you're seeing from your side in terms of the Alleanza benefits, how that's impacting and how that is performing and if the sort of run rate in Banca Generali that you're seeing is sustainable?

The second one was just on your comments on if you see higher inflation, you expect or anticipate seeing a hardening of P&C markets again. I'm just trying to understand what you think -- what you're trying to say there.

Do you mean that you expect to be able to price for that inflation? Or would you see -- expect that would lead to stress in the market again and pricing ahead of inflation?

I just want to understand those comments.

Thank you, Iain. Both questions are for Giulio.

I mean from Banca Generali and Alleanza, I can tell you the insurance banking is going actually pretty well. We are very encouraged by the results that we're getting.

And the targets for 2026 are to achieve EUR 500 million of Stile Unico, which is the product that is an Alleanza product, but sold through this platform of Banca Generali to achieve 15,000 current accounts. And right now, we are extremely confident that we're going to hit both targets.

To your question, then what are the specific benefits for Alleanza because the benefits for Banca Generali are pretty clear. I would tell you the following.

Of the EUR 500 million Stile Unico, we estimate that 40% is additional because there is always an element of cannibalization. And if you ask us how much of this for EUR 500 million is just replacing other solutions and how much is on top, we will say that 40% of what we sell in Stile Unico is on top.

And the second point, I was personally in the agency of Alleanza, and I'll tell you that the conversation you can have with the clients are very different because they are really holistic. You can give more and more sort of 360-degree advisory.

So I would tell you that, in my opinion, in the midterm, this is going to create more of a -- binding the customers even more. So it's a share of wallet kind of thing because we can access a share of wallet that we don't have, and this is benefiting also Alleanza.

And then also I believe customer retention is going to be even stronger. And I saw that with my own eyes, and it was actually pretty impressive.

On the other one, on the inflation leading to the renew hardening price, yes, it might happen. So we will say that if inflation is going to increase, I would assume that the market is going to react.

We cannot speak for others, but we can speak for us. And as Marco was saying before, our posture is to always -- first is about technical profitability, making sure that we are achieving the marginality that we like to achieve, and we are even willing to a certain degree to forgive volume.

And keep in mind that right now, on Motor, we have a positive balance. So from that point of view, we have even some cushion before we go into negative territory.

So the bottom line is, yes, if we need to increase prices because inflation is going to go up, we are going to do that. And I'll tell you, that in some cases, we are already doing this, not necessarily on the Motor side.

I can tell you in Germany, on the non-Motor side, we are increasing prices in Eastern Europe. We are going to be more cautious.

So we're already preparing in that direction, and then we are going to, as Marco was saying, watch the situation and act accordingly.

The first one is on P&C reserving. If you are already factoring in your reservation in P&C, a level of inflation that is higher and consistent with the current market expectations.

And the second question is on the rate effect that it could have on the inflows in Life. We are observing that the curve is projecting a higher level of rates.

So just wondering what are your expectations there? And if it -- if you do think that at some point, we will see a higher competition, for example, govies?

And very last question, if we have seen that UniCredit was quite vocal in referring to you as a potential partner and there are discussions -- potential discussions for developing partnership in both insurance and asset management. Any indication that you could provide on this point on this topic would be super helpful.

Thank you, Andrea. The first question is for Cristiano, the second is for Marco, and the third one is for Giulio.

So regarding the higher inflation, so we are not seeing a specific spike in inflation versus the normal trend observed so far. By the way, I recall you that our reserving technique embeds a pretty prudent inflation.

And as you know, the difference between inflation -- insurance inflation and CPI or HCPI (sic) [ HICP ] is different and usually, it is higher, the insurance inflation. So we start already from a higher level in the spare parts, what we are monitoring most.

We are not seeing it in the bodily injury. The vast majority of the increase has happened already because of the change, mainly because of judicial and tribunal rules that put them, which were an inflationary factor.

So I would tell you that the huge prudence that we kept in 2025, and we are still keeping in 2026 on our current year number, coupled with the historical level of prudency in the insurance inflation projected in our reserves make us extremely confident to manage it. Our reserving level has never been so high, and I think the proof of our interplay in the first quarter is a pretty much good demonstration out of that.

So I can confirm to you, this is pretty much strong.

So in terms of the effects of higher rates on Life, I think it's interesting to go back to what happened a couple of years ago. So when higher rates were there and inflation then was there, we have seen that the overall portfolio of the group was pretty resilient in terms of development in that situation.

So clearly, it might be that we see higher rates. And as we have seen in the past, there could be more competition, especially on the short-term investment from, for example, Italian savers due to the issuing of more Italian debt on the short term.

I would say unit link is more linked to equity more than interest rate. And I would say protection has proven to be pretty resilient in different environment.

And it's probably what has we have taken away that there is such a strong demand for protection product that this will continue to go and will keep on growing in a nice way. So in the way we are seeing it developing in the last quarter, even in different conditions.

So I also have to say that the type of business that we do, which I remind you is typically multi-line. So it's traditional unit link protection, is developed through -- mainly through proprietary distribution.

And this is pretty resilient in different type of scenarios. We have seen that in low interest rates, we have seen in higher interest rates.

So we are pretty confident that even after what happened in 2022, 2023, this is going to be the case. Consider also that until we don't see a significant increase in interest rate, what we have seen in 2023 already protect us from some of the lapses that already happened at that level of interest rate.

So overall, I would say, we feel that our inflows and our Life business, it's pretty, I would say, resilient in different conditions, external conditions.

So your question about UniCredit. So first of all, I would like also to say we're already working with UniCredit in Eastern Europe.

So we have a successful relationship there. Clearly, we have also -- based on the collaboration that we have, clearly, we are always touch points with UniCredit.

It's a great institution. I would say it's also -- if you take the metro in Milan, you are familiar between Ter Torri and Porta Garibaldi, there are just 5 stops.

So it's easy to have a conversation with them. I think anyway, it's pretty common that the bank and the insurance companies have a conversation about what kind of cooperation we can do on the asset management side, the insurance side, but I will not read more than that it's normal that there is a conversation going on, and this is not the only conversation we have.

Just two questions, if I may, both on non-Life and actually mainly in an elaboration on Iain's questions earlier. So you mentioned further potential pricing actions in Non-Life and you're at least partly linked them to the macro backdrop in the Middle East.

So the first question is just to double check that the linkage there is predominantly coming from claims inflation? Or are there frequency and perhaps even economic consequences you're keeping an eye out for there?

And then second question, what are the triggers for maybe to implement those pricing actions? It sounds like some geographies have obviously already gone through them.

Thank you, Farquhar. Both questions are for Giulio.

Regarding the pricing action because of the situation in Iran. So we need to see first what is going to be the impact because of the Iran situation.

For the time being, we don't see inflation yet. Now according to some analysis, one might assume that if oil prices stays up 25% or 30% over time, we might see an increase, let's say, in the loss ratio before we take any actions in Motor 1% to 2%.

So if this is going to happen and we're going to see this kind of increase, we're going to react. But as we said before, right now, we don't see severity going up.

So for the time being, we are watching, preparing. In some cases, we are taking actions, but because of other reasons, but we are not at the moment in a situation where claims inflation is going up.

Then I would like to highlight that on the non-Motor side, a substantial part of our business is indexed. So from that point of view, there will be a natural, if you want, offset in the case inflation is going up.

So coming back to what we said before, we are monitoring the situation. We're going to take action case-by-case based on what we see.

Since you're asking anyway about the impact coming from the Iran situation on -- one thing because we saw also from calls with other competitors, on the travel side, we don't see a major impact so far. Actually, Europ Assistance in total was up 15% on revenue, and this despite clearly softening, especially in Australia, but the business was very strong in Americas.

So for the time being, also, we have been able to more than offset the weakness in Australia because of the situation. And we're going to continue to look at the evolvement on the revenue side.

It's more the revenue side issue potentially on travel, but I can tell you, there may be a little bit of a headache, but not something that can change our delivery, not even for Europ Assistance. So bottom line, for the time being, so good so far.

If I can add one topic, I think the phases that we went through in the last year of inflation made us learn a lot about where the first sight of inflation come up and show up. So we have a very good monitoring at the micro level of peril and also going market by market, portfolio by portfolio.

If you think about, for example, material damage, we are able to look at the different spare parts, brand by brand, portfolio by portfolio. And also the aggregation of those effects into perils.

So I think this is also a good way of looking leading indicators of where inflation might come up because, as you know, when we talk about inflation, one thing is to think about the general inflation, one thing is to think about the claims inflation, which is completely different.

I had two, and you may have answered one, but I wasn't sure. So on the frequency, I think in the past, it's been declining, but from the way you've been talking, it sounds like it was flat.

I just wondered if you can maybe comment. And then remind me, on the Solvency, you gave us basically the kind of Q2 figure pro forma as of today.

But what is the impact of Solvency II review, which comes early next year?

Thank you very much, Michael. First question is for Giulio and the second on Solvency for Cristiano.

So when we look at the frequency in Motor, we need to adjust for Portugal because in Portugal, we are picking up some attritional frequencies and frequency that is for sure related to the weather event that we had over there. So if we remove Portugal, actually frequency across the portfolio is relatively stable.

We see a little bit of a different nuance compared to last year. Last year, we saw frequency going down across the portfolio.

And now we see countries where frequency is going down. But in Central Eastern Europe, and Central Eastern Europe includes also Germany, we saw frequency going up.

We think this is related to the winter because 2026 winter was colder compared to the winter of 2025. So we see a little bit of a different trajectory depending on the country.

But when we look at the total portfolio, frequency is adjusted for Portugal is basically in line with the prior period level and also consistent with our plan assumption.

Thank you, Michael. So I'm not commenting again that you already done valuation so far of the second quarter.

But referring to the Solvency II review, we can confirm that we are around the 15 percentage points. The important thing is don't forget that it will come into practice at the end of January 2027.

So any decision that has to be taken in beginning of 2027 will already embed this already at the end of January, which is also positive and conducive for resiliency environment and security of cash flow since I know that both of us cares a lot.

Thank you very much for listening to our call. Of course, should you have any further follow-up questions, the Investor Relations team is at your full disposal.

Have a great rest of the day. Bye-bye.