Good morning, and welcome to M&G's full year 2025 results. I'm Luca Gagliardi, Group Director of Strategy and Investor Relations.

If you don't know me, this is not my real voice. I just chosen the right day to be sick, but I'm going to keep a safe distance between me and all of you today.

I'm joined today by Andrea Rossi and Kathryn McLeland, our CEO and CFO. As usual, we'll go through a short presentation, and then we'll open up for questions from the analysts.

With that, thank you very much, Andrea.

Let's hope my voice holds, huh? Because I have...

You have spent too much time with me.

I spent too much time with you. Good morning, and welcome to M&G's 2025 full year results.

It is a great pleasure to be here with you today. 12 months ago, we announced new targets and moved to a progressive dividend policy, underscoring our confidence in the outlook for the group.

Over the course of last year, that confidence has been matched by solid progress against our strategy. Our investment for growth has paid off with excellent momentum on sales and record net inflows across both asset management and life annuities.

Now, we are translating this success into profitable growth, which will be our main focus in 2026. Today, I will cover our operational progress and explain what gives me confidence in our growth trajectory.

Kathryn will then take you through our financial results before I conclude by recapping our investment case. Let's start by reviewing the main highlights from last year.

We are committed to three strategic priorities: financial strength, simplification, and growth. Of these, growth is where we made the most significant progress in 2025.

The £7 billion net inflows from external clients in asset management is an outstanding result. It represents nearly 4.5% of opening assets, a remarkable achievement as we won business in high quality and high margin propositions.

M&G has also become more international as we welcomed Dai-ichi Life as our strategic partner and largest shareholder. Our work together is off to a great start and has already generated £400 million of net inflows in 2025.

Momentum in our life business was also good. We scaled our presence in the BPA market, achieving sales of £1.5 billion and returned PruFund to consistent net inflows in the second half of the year.

Finally, we moved all with-profits new business to a fee-based model, accelerating our shift to capital-light growth, which we will cover later. I am in no doubt that our synergistic business model continues to be our main competitive advantage.

With the support of our life business, we have built a first-class asset manager, which delivers superior investment performance and which is scaling through external clients. In 2025, assets under management grew to £345 billion, of which £81 billion is in private markets.

We won high-value external business. Third-party clients now account for over half of total assets, testament to the quality of our proposition.

We also continue to expand internationally and to improve our profitability, with more to come in 2026. At the same time, we are growing again in life, with PruFund net inflows over £400 million in the second half of the year and good BPA volumes, doubling our market share.

We also expanded our proposition and distribution channels, launching a retail fixed-term annuity solution and our with-profits BPA here in the UK. Let's now take a closer look at our asset management results.

In the second half, net inflows from external clients accelerated further. We had continued success in wholesale and internationally, but the most notable change was the £1.4 billion of net inflows from UK institutional clients.

Headwinds from UK DB pension schemes have reduced since 2023, with more clients considering run-on options. While we remain cautious about the long-term prospects for this segment, we don't expect it to be a material drag going forward.

With our UK business in a stronger position and continued momentum abroad, we will deliver sustained net inflows from external clients. Our continued international expansion is a real success story for M&G.

Over the last six years, we have nearly doubled our assets outside the UK to £107 billion. This equates to a consistent double-digit growth rate.

With nearly 60% of external assets from international clients, we are becoming a leader in European and Asian asset management. Our partnership with Dai-ichi Life will further support this progress.

Partnering with our clients remains key to our success. On this slide, you can see some of the partners that are powering our international growth.

When I joined three years ago, we had around 800 institutional clients globally. Now this number has grown to over 1,000.

There are some of the most sophisticated allocators in the world who have chosen M&G for our compelling offering and commitment to investment excellence. The strong relationship between our asset management and life business is a crucial advantage to win in this space.

We understand the needs of these institutions and can deploy capital at scale. We think like them, co-invest with them, and develop innovative solutions for them.

It is exactly for these reasons that Dai-ichi, now M&G's largest shareholder, has chosen us as a long-term strategic partner and preferred asset manager in Europe. They are not the only ones who value our investment expertise.

Last year, we completed large transactions with CVC and PGGM, while also entering into an agreement with Guotai Haitong for the distribution of our fixed income funds in China and Hong Kong. The quality of the business won in 2025 also makes me confident in our revenue outlook.

The £7 billion of net inflows came mainly from private markets and public equity mandates, which are of high quality and high value. The net new revenues from these flows equates to £23 million annually, a fantastic outcome that helped us increase our overall asset management revenue margin by 1 basis point.

Net inflows of £3.9 billion in private assets lifted total assets in this area to £81 billion. We are extremely confident in the quality of our private markets capabilities, thanks to our focus on Europe and Asia and discipline in asset sourcing.

With strong client demand in structured credit, an £8.2 billion capital queue, and a healthy new business pipeline, we are well positioned for the year ahead. Within public markets, our equities team delivered £5.6 billion of net inflows, a stellar achievement.

Their investment performance is second to none in Europe, with a scaled offering which is diversified across geographies and strategies. Active asset management is still very much in demand, and our public equities team have again delivered a superb performance, with investment returns exceeding client expectations.

Let's zoom in on our public equities business. We have excellent research capabilities, a rigorous investment process, and seeding from our life business.

Through this, we have built a diversified proposition with a remarkable performance. 90% of our assets rank in the top two quartiles on a five-year basis.

Demand for sustainable strategies remains strong. As investors increase their allocations to Europe and Asia, our high alpha solutions are well aligned to our client needs.

As you can see on the right-hand side of this slide, over the last five years, this team has delivered nearly £12 billion of cumulative net inflows, with a positive contribution in every single year, despite extremely volatile market conditions. Let's now turn to life, starting with the retail market.

PruFund is our flagship proposition here, and I'm pleased to report that it has been back in positive territory since last June, with seven consecutive months of net inflows, totaling just over £400 million. This trend is encouraging, and we expect to see continued progress as PruFund's smoothing mechanism remains very much in demand given the volatile market environment.

Improving PruFund sales is only part of the solution as we build a holistic retirement proposition around this unique product. In doing so, we continue to expand both client access and our product offering.

To expand client access, last year, we integrated PruFund on FNZ technology. We will launch PruFund on the first FNZ platform in Q2 this year.

It is our first step to access the large and growing digital platform market. From a product perspective, we added retail fixed-term annuity solution, which will be followed by a lifetime version later this year.

We also signed an agreement with Zurich Group for the distribution of a PruFund-like proposition in the UAE. All this activity will attract more assets to the With-Profits Fund and channel them to our asset manager.

Moving on to the corporate segment. Here, we continue to invest in our BPA capabilities, a market we are targeting annual sales of £3 billion to £4 billion by the end of 2027.

In 2025, we completed the build-out of our team, adding resources across origination, proposition, and pricing. As a result, we closed 11 deals, totaling £1.5 billion, a 65% increase in sales and doubling our market share.

This business was written at attractive return levels, delivering double-digit IRRs above our cost of capital. We have a good pipeline for 2026 and are on track to achieve our 2027 target.

Importantly, we can now leverage our with-profits BPA, which we have recently launched. This proposition is very competitive, benefiting from the With-Profits Fund lower cost of capital and its £7.1 billion surplus.

We executed our first with-profits BPA transaction a few weeks ago, and more will follow, fueling our growth and attracting flows to the group with a meaningful allocation to private markets. From this year, nearly all new business in life will be written by the With-Profits Fund, with a simpler and more transparent profit signature.

All with-profits solutions, such as the with-profits BPA, PruFund, fixed-term, and lifetime retail annuities, will operate on a fee-based model. We expect that these products will grow to at least £50 billion in assets by 2030.

M&G will service this business, providing customer admin and investment services in exchange for fees to both life and asset management. Through this innovation, we are transforming traditional insurance into a capital-light business that generates two streams of fee-related earnings, with minimal balance sheet risk and shareholder capital requirements.

Over time, this will improve the quality of our earnings, making them more transparent and predictable. From a strong financial position, we will deliver attractive dividends and business growth.

This is the focus of our capital framework. Taking into account our business momentum and earnings trajectory, we're declaring a total dividend of 20.5 pence per share for 2025, a 2% increase year-on-year.

To support our profitable growth, we will consider targeted investments to drive further simplification efforts and potential bolt-on acquisitions. AI will be a key enabler for business growth.

We're focused on increasing AI adoption across M&G, with a clear strategy to transform our processes, improve productivity, and drive better customer outcomes. Focused capital deployment will be instrumental to deliver on our ambition.

While we remain committed to return any excess capital over time, we're prioritizing disciplined investment that can deliver attractive returns above our cost of capital. Our commitment to investors is clear: yield and growth.

Our capital allocation in 2025 closely aligned with our stated framework. More than half of operating capital was distributed to shareholders as dividends.

This was complemented by simplification and growth investments targeting double-digit IRRs. This includes £90 million for the acquisition of P Capital Partners and £163 million to support life new business.

Going forward, we will maintain this disciplined capital allocation, underpinning long-term growth and attractive progressive dividends. Now let's turn to our financial targets.

Here, our commitment remains unchanged: to be highly capital generative, improve the efficiency of our business, and deliver sustainable earnings growth. Over the course of 2025, we have moved forward on our targets, but more work is needed.

The £928 million of capital generated before new business strain is a good start to our three-year ambition. I'm also pleased by the progress on our transformation program as we once again beat our cost target by delivering cumulative savings of £250 million, a great result.

Progress on the cost-income ratio and group profit was marginal. Here, I expect a significant improvement, supported by the strong momentum I see across the group.

Over the last 12 months, we have invested for growth, adding distribution and investment capabilities. Now, we will realize the benefits of these investments.

We remain firmly committed to delivering profit growth of at least 5% on average between 2025 and 2027. Therefore, you should expect a meaningful acceleration in our operating profit for 2026 and beyond.

Profitability will improve in asset management, where we will achieve a cost-income ratio of 70% by 2027. We are confident we will meet this target thanks to strong top-line growth and cost control that Kathryn will cover in more detail.

By generating capital, being disciplined on costs, and growing profits, we have set in motion a positive cycle. This means we can invest in the business, secure its long-term success, and deliver attractive returns.

With that, I will hand over to Kathryn, who will take you through the financial results.

Thanks, Andrea, and good morning, everyone. I'll now take you through our results, which highlight steady momentum across the group and disciplined execution.

Covering first, the key highlights. We delivered £7.8 billion of net flows from open business, reflecting the strength of our asset management performance, the progress we continue to make on our international expansion, and improved sales in life.

Group adjusted operating profit of £838 million highlights the resilience and balance of our business model. In asset management, fee-related earnings increased by 12% year-on-year, while in life, higher contributions from PruFund and traditional with-profits more than offset lower earnings in annuities, leading to a 2% increase in profits.

The corporate center result deteriorated by £8 million, impacted by lower investment income. Operating capital generation of £765 million reflected the higher strain from our strong BPA volumes.

Excluding new business strain, capital generation was £928 million, in line with our £2.7 billion target. Supported by this strong operating performance, the Solvency II ratio reached 242%.

Let's now turn to our flows. Closing AUMA stood at £376 billion.

This reflected the £7.8 billion of net inflows from open business, which improved by nearly £10 billion year-on-year, favorable market movements, and the acquisition of P Capital Partners. You've just heard from Andrea about our very pleasing asset management flows, with our institutional franchise recording net inflows of £4 billion, supported by the continued international expansion and easing headwinds here in the UK.

The wholesale franchise also contributed meaningfully, delivering £3 billion of net inflows, underpinned by excellent investment performance. Importantly, the continued growth in our international AUM further improves our diversification and resilience.

Life open business also made a positive contribution of £0.8 billion, and this reflects the strong growth in the BPA market, where we recorded the first net inflows since 2016 when the business was closed. We also saw improved momentum in PruFund, with gross inflows in the second half up nearly 28% versus the first half at £3.6 billion and with £400 million of net inflows.

Moving on now to profits. At £838 million, operating profit was stable year-on-year, with the key features being: first, higher revenues and improving operating leverage in asset management, continuing to support a gradual reduction in the cost-income ratio; second, an increase of 2% in life profits to £764 million, with a stronger contribution from both PruFund and traditional with-profits offsetting a £25 million reduction in annuities due to lower returns on excess assets, which we previously flagged.

Finally, the corporate center outcome was impacted by lower investment income, which was down by £17 million, more than offsetting a reduction in debt interest cost of £12 million following our 2024 deleveraging actions. One important feature of our results is the quality of our earnings.

Today, 73% of operating profit comes from capital-light businesses. This proportion will continue to rise over time.

You'll hear from Andrea shortly on how we also expect to grow the proportion of fee-related earnings across the group. Finally, it's important to note that in 2025, we delivered after-tax profit of £314 million compared to a £347 million loss in 2024.

Let's now look at each of our businesses, starting with asset management. Our asset management business delivered a 12% or £27 million growth in fee-related earnings, driven by higher average assets and resilient margins.

Looking ahead, the £23 million of net new revenues delivered last year will provide a solid underpin to top-line growth. At £345 billion, assets under management ended the year up by £30 billion, supported by strong net inflows and favorable markets.

Our average fee margin remained resilient at 33 basis points as we continue to prioritize high-value solutions for our clients. Higher average assets and stable margins resulted in revenue growth of 6%.

On costs, we continue to exercise discipline while making targeted investments to support our long-term growth. Most of the 4% increase in cost was driven by a broader perimeter of our asset management operations.

In fact, 28 of the £31 million increase related to the acquisitions of responsAbility and PCP, together with the reclassification of our direct book into life, which we had previously highlighted. PCP and responsAbility bring new capabilities to the group, further improving the quality of our earnings.

Our cost transformation program facilitated these and other targeted investments, strengthened our operational efficiency, and helped us lower the cost-income ratio to 75%. The operating profit was down £9 million year-on-year due to lower performance fees and investment income.

Before moving on to life, I want to address our cost-income ratio target. Over the past three years, we have reshaped the cost base, demonstrating that we can continue to invest for growth while improving our fee-related earnings.

That gives us confidence that further progress is achievable as revenues scale. We are absolutely committed to our 70% cost-income ratio target.

Achieving this does not depend on a single initiative or assumption, but on continued execution across a number of levers that we are already acting on. Our focus is firmly on delivery and on demonstrating steady, repeatable improvement over time.

Let us now turn to life, starting with PruFund. Here, operating profit increased by 17% to £265 million, reinforcing its role as a growth engine within the group, supported by a higher opening CSM and slightly higher amortization rates.

Profits from our traditional with-profits business of £258 million were up 16% year-on-year, reflecting the same positive dynamics. We're encouraged by this performance, particularly as it was achieved against the backdrop of lower expected returns and risk-free rates, which we previously highlighted.

Both PruFund and traditional with-profits continue to provide resilient earnings for the group, underpinning the sustainability of our profits. Let's now turn to shareholder annuities.

Annuities profits were down 8% year-on-year to £283 million, which reflected the guidance we gave last March, specifically the combination of a smaller pool of surplus assets and lower expected returns of 5.2%, down from 5.6%. These headwinds were partly offset by a higher CSM release, supported by the large longevity benefit we recognized in 2024 and a modest increase in the amortization rate.

Turning to other life. The loss of £42 million was primarily driven by a £26 million provision in relation to our Polish business, which we do not expect to repeat.

Before moving on to capital generation, I would highlight the strength of our CSM, the details of which you can find in the appendix. Total CSM entered the year at £6.6 billion, representing a meaningful store of future value and benefiting from £144 million of new business generated from PruFund and annuities.

I'll now cover capital generation, which supports the strong outcomes we continue to deliver for our shareholders. Our operating capital generation, excluding new business strain, was £928 million, and this represents a solid start towards our cumulative £2.7 billion target by 2027.

The underlying result was £529 million, £115 million lower than last year, which largely reflects capital deployment to support the strong growth in our BPA volumes. Asset management contributed £14 million more year-on-year, supported by the stronger fee-related earnings, together with a small SCR reduction, driven primarily by lower market risk requirements.

In life, both PruFund and traditional with-profits benefited from a higher opening PVST, which partly offset the anticipated impact of lower expected returns. As noted earlier, the annuities contribution declined due to the £134 million we deployed to support the £1.5 billion of new BPAs and due to the lower return on surplus assets in the in-force book.

The corporate center benefited from a £12 million SCR reduction, largely driven by reduced treasury lending activities. Management actions totaled £236 million, just above our recurring long-term target of £100 million to £200 million per annum.

Thanks to our strong operating performance, the Solvency II ratio closed the year at 242%, and our surplus increased to £5 billion. Own funds remained stable at £8.5 billion, including £4.6 billion attributable to the with-profits PVST.

The SCR improved largely due to management actions, including model and data enhancements, and a higher level of deferred tax loss absorbency capital, reflecting more favorable stress outcomes. After refining our estimates, we expect only a modest impact of less than 3% on our solvency ratio from the government's proposed changes to ground rents.

This reflects the benefit of our prudent reserving approach. You can find more details on this in the appendix and also in our annual report.

I'm very pleased with the continued strength of our balance sheet, underpinned by disciplined risk management in what remains a volatile and uncertain geopolitical and macroeconomic environment. I'll briefly cover the successful delivery of our cost transformation program.

This slide shows the tangible progress we've made in delivering strategic operational efficiencies while continuing to invest for growth. Since 2022, we have delivered £250 million of cost capacity, exceeding our upgraded target of £230 million.

You can see here on this slide, an update on the types of savings, together with the targeted growth investments they have enabled, while holding our cost base stable over time and materially improving the scalability of the group. As we look ahead, we see significant opportunities to create more capacity, led by our new Chief Transformation Officer, for example, with further refinement of our organizational structure, including greater integration of our recent acquisitions, more functional centralization, and optimizing our partnerships with outsourced suppliers.

We're also continuing to refine our location strategy while driving AI adoption. Just a few words on our AI strategy, which is focused on three primary objectives: firstly, enhancing our engagement with our clients; secondly, improving our productivity; and thirdly, transforming our end-to-end processes.

By increasing AI adoption, we're giving our clients more time—more time to focus on what really matters: our clients. Examples of where we see AI driving a step change in efficiency include across our research teams, our financial advisors, and the staff in our contact centers.

Thanks to AI tooling, almost 40% of our code is now generated by AI, meaningfully increasing the productivity of our engineering team. I want to reiterate that we are firmly focused on maintaining a disciplined approach to operating efficiency and on achieving the 70% cost-income ratio target for the asset manager.

Looking ahead now to 2026. While, of course, we remain mindful of the volatile external environment, our focus for 2026 remains consistent: delivering strong outcomes for our clients, executing our plans with discipline, and sustaining the growth momentum we have established.

Asset management is set to deliver a meaningful improvement in its operating leverage, underpinned by a robust £30 billion increase in opening AUMA, resilient fee margins, and our unwavering commitment to cost efficiency. These factors combine to give us confidence in achieving a step change in our cost-income ratio target and in unlocking further profitability.

Life is similarly well positioned, with a substantial 9% increase in our opening CSM balance, which will drive improved operating profits, more than offsetting lower expected investment returns. These strong foundations, taken together with disciplined cost management, means we're confident of achieving strong profit growth in 2026 and an average growth over '25 to '27 of at least 5%.

Finally, on capital generation. Here, we expect to deliver an improving underlying result, new business strain of up to £150 million, and management actions returning to our usual long-term range of £100 million to £200 million per year.

This means we're well on track to deliver on our £2.7 billion cumulative target by 2027 as we support new business growth while maintaining a strong balance sheet. These strong tailwinds, supported by the strategic building blocks we've put in place, give us the confidence that we're well positioned to deliver sustainable values to our shareholders.

With that, I'll now hand back to Andrea. Thank you.

Thank you, Kathryn. Before concluding, I want to summarize the key elements of M&G's investment case.

Today, we are a growing and diversified savings and investment business. We leverage our unique With-Profits Fund to gather insurance assets in a capital-light way.

We grow in asset management by externalizing funds that we seed with internal capital. This combination gives us scale and resilience.

We operate in markets supported by strong client demand and are well placed to capitalize on this growth thanks to the strength of our franchises. The way they work together, our synergistic business model sits at the core of our right to win.

The outcome is strong financial returns. Life underpins our attractive dividend, and we are driving growth in fee-related earnings across asset management and with-profits.

By combining an attractive yield, growth, and improving quality of earnings, we will deliver consistent returns to our shareholders. We will continue to do so as we unlock opportunities across several attractive markets.

We have an £81 billion private markets business and have raised £107 billion from international clients. In both these areas, we have grown at double-digit rates.

In the UK, PruFund has now reached £70 billion, and we continue to scale in the BPA market, with sales increasing by 65% year-on-year. This scale matters as it drives relevance with our clients and improve our operating leverage.

Our businesses work together and will grow together. Over 80% of our life assets are managed in-house, with around 30% of new business being allocated to private markets.

We attract this new business, deploying surplus capital from the With-Profits Fund. We also have the partnership with Dai-ichi Life, which supports our continued expansion in Europe and Asia.

This integrated model gives us greater control, stronger economics, and a more resilient earnings profile. Since listing in 2019, M&G has delivered annual shareholder returns of over 15%, a remarkable achievement, with £4.2 billion returned to investors through dividends, buybacks, and deleveraging.

We have achieved a double-digit returns through a mix of yields, growth, and quality. Looking ahead, we will extend this track record.

The stable and predictable contribution from life underpins our attractive yields. Asset management and fee-related with-profits will drive the group's growth.

The quality of our profit mix will improve as we shift to a greater share of fee-related earnings. Our message to investors is simple: we are operating in growing markets, we have the right business model to win, and we will deliver attractive returns.

To conclude, 2025 was a strong year for M&G as we laid the foundations for profitable growth. New business momentum was fantastic, and we continued to expand internationally.

We are now focused on translating this growth into higher operating profits in 2026. As we deliver profitable growth, we also shift life new business to an innovative fee-based model.

Finally, we will achieve our capital generation target and remain disciplined as we invest in the business. We have started 2026 with good momentum.

We are in the right markets, investing in the right asset classes, with industry-leading investment performance. I am energized by our strong performance and want to thank all our colleagues for their hard work.

I am confident that we will continue to deliver, generating value for our clients and shareholders. Thank you.

Q&A, right? Move this.

Take that... How about that?

Okay. Good.

Kathryn, you have your glass here. Yeah.

Here is a glass, paper. You want to take the glass.

Thank you. Okay.

Perfect.

Before we start with the questions, Larissa and Michael were first. I've already seen your hands, there we go.

I think Larissa beat Michael by about half a second. Remember to pull out the microphone, pull hard and press the button, keep holding it down, otherwise the people on the line won't be able to hear you.

Please introduce yourself before asking the questions.

Thank you. Larissa van Deventer from Barclays.

Two questions, please, from my side. The first one, you mentioned that you want to use the very strong capital position that you have for growth.

Kathryn also mentioned that you would like to focus your earnings on capital-light businesses. Can you give us a little more color on which areas you would like to grow in and also if there are any areas within M&G that you believe would benefit from enhancement?

The second question covers ground rents. Appreciate that it is a sensitive topic, but are you able to give any more color on the direction of thinking, and could you please help us understand what is included in your provision and what remains, what still remains?

Thank you.

Should we take both?

Thank you, Larissa. Probably, Andrea, do you want to start with where are we focusing on our growth efforts and if there's any area where you, if I read the question, whether we think we should invest a little bit more heavily?

Then maybe, Kathryn, if you want to go on the ground rents side of things?

Yeah. Obviously, you've seen in 2025, we have been investing for growth.

We both have invested in the asset management business in distribution and investment capabilities, and hence also, I would say, the good momentum that we saw in terms of net new money and net new revenue. Same thing, of course, in the life business, where we invested in order to support that growth, both on the corporate side, because we strengthened our team, proposition, pricing, and origination for writing BPAs, but also to support our PruFund.

Obviously, we are going to put PruFund on third-party platforms in the second quarter of this year, given that we have integrated with FNZ technology. Very, very pleased with that.

More importantly, we also have supported PruFund in terms of marketing. Let's not forget that PruFund during the liberation day month in April performed as it was supposed to perform.

We smoothed the volatility. Clients, unfortunately, they took out their money, and then they came back, of course, afterwards.

They should just have trusted us more. Clearly, we want to continue to make sure that we support all the capital-light business, in particular on the asset management side.

I remember when I arrived three years ago, our investment performance was still very, very strong. I said, "Listen, the way we're going to grow the asset management business is by investing in distribution capabilities."

That's what we have done. That's why you see the stellar net new money that we have delivered.

Delivering 4.5% of external net new money over opening assets under management, I've been in the industry for decades, that's a stellar achievement. That's not money market, that's not passive.

This is true active asset management. I look at peers, this is top decile, if not top percentile.

We will continue to support, I would say, the capital-light businesses moving forward. I would say most of the investment has been done already in 2025.

I think just obviously, there's going to be some more spend as we continue on the simplification program as well, just just to add that as well as these capabilities that Andrea talked about. Larissa, on ground rents, obviously, the announcement by the government came out at the end of January, and you saw the RNS that we put out on the morning of it.

Now, clearly, there's a lot that needs to happen as it goes through committee stages and through the whole legislative process. That's still quite uncertain and will take, over the next couple of quarters.

I think the most important thing is you see an update today. It's on it's in the appendix, and it gives an update of all the numbers, which are very much aligned to what you saw at the end of January.

This is also in the results, and you can get a bit more detail. You can see that I made mentioned in my script that the solvency ratio is up to a 3% impact on the ratio.

You see that the day one IFRS impact and the own funds impact, which obviously impacts leverage. We guided also in the RNS that the AOP impact very modest, £10 million to £15 million in 2028.

Larissa, just on the provision side, these numbers are net of the provision. After you take into account the provision that was already into balance sheet, this is the residual impact.

I don't know, in your question on capabilities, maybe, Andrea, do you want to talk from an asset class perspective after responsAbility, PCP, do we feel that we are in the right places?

We have obviously we when we're looking at investment capabilities, and I said this already in previous full-year results, we want to expand our private assets franchise. We see significant demand, of course, in Europe in private assets.

By doing both responsAbility and PCP, we strengthen already a very strong franchise, both on the private credit side, where we have a £27 billion franchise, but also on the real estate side, where we have a £35 billion franchise. We think we're well placed there.

I think there's going to be another asset class where there's going to be a lot of demand in Europe in the coming years, given also what's happening, I would say, in in the Middle East. I think Europe is going to have to rely a bit less maybe on fossil fuel and accelerate on renewable energy, and therefore there's going to be more infrastructure projects into the sense, and so that there will be more interest here.

If we had to look at additional capabilities, probably that's where we would look to expand. Overall, you look at our private assets franchise, it's doing extremely well.

£4 billion, no, £3.9 billion of net inflows in 2025. A lot of that was private credit and structured credit.

Private credit still continues to be a very strong asset class in Europe, where there is strong demand. I'm sure we're going to talk about private credit in general, but Europe still remains very much in demand on private credit.

Michael, and then we David, Dom, and Tom.

Hi there. Michael Hartnett from Berenberg.

Just two questions. You said there are more platforms.

I wanted if you I'm particularly interested in PruFund, if you could say the new platform, what that could bring. Also on the growth, the if I'm right, the new business strain last year was £160 million and you're saying £150

million.

That doesn't sound like more growth. I'm asking this in...

Okay. Then

the other question I was interested in is you're leveraging your with-profits surplus. Presumably, that has a cost of capital, but I'd be interested to understand what the benefit is.

Is there a number here you could say, "Well, we're paying them 5% or 2% or nothing," just to get a feel for it? Thank you.

Okay. So...

Maybe, Andrea, do you want to take PruFund,

and then

Kathryn more on the new business strain for annuities and the With-Profits Fund side? I'll take

PruFund. PruFund, and I'm passionate about PruFund and very pleased that it has become a £70 billion franchise here in the UK.

We had positive net inflows in the last seven months in 2025, and you should continue to see positive net inflows in 2026. The product is delivering what it should be.

We see demand here in the UK on it. More importantly, as I anticipated before, we are going to put it on a third-party platform in Q2, and that's just going to be the first one.

By having done the integration with FNZ technology, we are covering roughly 40% of the £700 billion digital platform market size here in the UK. We will put it on more platforms before the end of the year, and that will, of course, increase flows coming in.

Very, very pleased with what we do in the UK. Let's not forget also that we have international as well.

You saw that we finally signed an agreement with Zurich Group in the UAE. This is sort of a blueprint where we are the default option for on a DC scheme there, where Zurich is managing it.

That will also bring flows and potentially also other clients. We see PruFund being one of our main growth engines going forward.

Let's not forget, it's not only about access, but it's also about expanding the product offering. We launched a fixed-term annuity in 2025, and we will launch a lifetime annuity this year as well.

More to come from PruFund, but you should expect positive net inflows in PruFund moving forward.

Covering capital and how we see the cost of capital and hurdle rates for the With-Profits Fund. Yes, it was £163 million of strain across all products last year, £134 million for BPAs.

The key thing for us is, as always, looking at hitting our cost of capital, double-digit IRRs is what really matters for us. I think as you also all know, we've not reinsured longevity on these deals, and we look at everything on a case-by-case basis.

Now, the exciting opportunities for us that you've heard us talk about today with the £7.1 billion surplus is that we can essentially grow life with the diversification of these new products that we are talking about today. This is also in the interest of the With-Profits Fund.

We have a very strict With-Profits Committee. We know all the requirements and rules that they need to follow, and it is a different cost of capital.

They absolutely have to do profitable, good quality business for current and future policyholders. It is very exciting for us to be able to do BPAs and these other products using With-Profits Fund capital.

We have the two fee streams that you see coming into the life and into the asset manager, which will build over time. It is really exciting for us to have the With-Profits Fund to be able to be the main insurance writer of risk going forward.

Yes, they have slightly different hurdle rates, but for the shareholder balance sheet, we've remained very focused on double-digit.

Michael, clearly, while the capital strain that we've indicated is up to £150 million from our shareholder balance sheet, the idea is that the more you do with profits, the more you can leverage up the volumes while keeping that same level of capital deployed.

To be clear, we are committed to write £3 billion to £4 billion of BPA by 2027. We have not changed our targets, if you remember we present.

That's to give you some sort of growth trajectory. Then

we said David, Tom, Andrew, Dom, and Nazib. Just in order of who raised the hand, or maybe just I looked the wrong way, but we'll get there.

David, the microphone is in the seat in front of you. Can you press the button down to speak?

Now that I figure out how to operate the microphone, asking the question should be the easy part. David Tom from RBC.

Thank you for taking my questions. The first one, on the £27 billion structured and private credit AUM, can you tell me what proportion is open to retail investors, and are you expecting taking any actions to NAVs of assets within those portfolios?

Second, on the new business CSM profit, it was only £23 million from £1.5 billion of annuities, the margin is around 2%. How should we think about that in the context of ultimate profit margin and return on capital, and what are your return on capitals for those deals?

As a follow-up, what is M&G doing with reinsuring the risk? If all new deals were longevity reinsured, would this have a meaningful impact on own funds and therefore the leverage?

Then just lastly, on the private capital queue deployment, can you just tell us how will be deployed between private equity, structured credit, and infrastructure? More broadly, what are the characteristics of fundraising and deployment environment in 2026 so far?

Thank you.

Perfect. We have got four in there.

Let's split them between two in asset management and two in life. Asset management was around the retail exposure in our private credit franchise and the capital queue, while in life, we've got the new business CSM margin and the use of reinsurance.

So...

Can I use...

I can

maybe just on you asked the first question, and I want you to talk Joseph, you want to take both? First one is ELTIF, I guess.

I hope you can hear me. On effectively the exposure we have on private credit, we have about less than £1 billion in ELTIF, which is the European Long-Term Investment Fund.

It's a private credit strategy. The regulator in Europe is extremely strict.

No leverage is allowed, which is extremely different from what you can read in the press on what's going on in the US. Indeed, we are probably on a much safer side in Europe than what happening in the US.

I think that's a massive difference. We've been extremely cautious when it comes to private credit.

You didn't ask the question, but I want also to add that when you look at what we're reading in the press in private credit, default rate, some expect default rate to increase. Our default rate has been significantly below the average of the market, which is already at 2%.

We are way below that level. We are extremely cautious.

Andrea mentioned across asset classes the quality of research. We know how to deal with those deals.

We are extremely selective and we don't leverage. We have high quality of selection, ultimately, that helped us have a very low, let's say, level of default compared to the industry.

Again, I invite you to always make the difference between Europe and US in that private credit segment. I'm sorry, I forgot the second question.

The second question was around the capital queue of £8.2 billion, how it grew since half year, how do we think about deployment, and in what asset classes is it focused?

It has grown pretty much everywhere, in private credit, including structured credit, in real estate. I just want to call out real estate because this is an asset class that was probably on the negative side across the industry two years ago.

We've been rebounding extremely well, won a lot of business in that space, with our flagship fund, the European Real Estate Fund, but also with Asian strategies in Asian clients, other mandates, and also here in the UK. Very pleased to see how international clients are now interested more and more into UK real estate.

That has been the second one where we've seen effectively a bigger and bigger capital queue. Also, I remind you that at the end of June, we were not integrating the capital queue of PCP and responsAbility.

That has brought also about £1 billion of capital queue into it. We are extremely disciplined in deploying that money.

We are very well organized into it. Each investment team has a specific team to work on deployment, but we are cautious on how we want to deploy.

Because at the end of the day, clients matter first. We want to deliver the best performance.

That's why we do it very diligently in terms of deployment.

Thanks a lot, Joseph. The other point on the ELTIF and retail exposure, while we have less than £1 billion of assets there, a large proportion comes from our internal client.

Actually, the majority, which is a very, very stable investor, so...

87%.

87%. I think while it is a vehicle that is open also to retail investor...

It's... Yeah.

...nearly 90% is in the end of our internal client, gives a great stability to that vehicle as well, on top of all the good things that Joseph mentioned. Kathryn, do you want to take...

Just a couple of comments around last year's CSM margin, which you quoted, which you can see in today's numbers. There are probably two comments I'd make around the level.

As we said, we're delighted to have done £1.5 billion and a really pleasing end to last year. We have invested meaningfully to get that platform reopened, and we've got all the capabilities to compete.

We've got a lot of conversations happening at the moment. Obviously, as we scale, we become more profitable.

I think that's and I called out the cost, I think, in one of the slides around how the whole purpose of this simplification program is to invest and supporting that BPA business is one of them. Secondly, we haven't reinsured longevity, that's your second question.

That obviously means we also have a higher risk margin, which clearly will flow into profits over time, but it will also affect the actual CSM margin that we deliver. There is a real meaningful element coming to from our decision.

Obviously, we're lucky on longevity that we can be very selective. We can be very disciplined.

We've got capital. We've got a very strong also using the with-profits balance sheet in the future.

We have deployed it in the past as a management action and will be very thoughtful, and it's lucky that we've got the options around longevity reinsurance. It could be one of those management actions that we use to deliver the £100 million to £200 million to support operating capital generation.

In terms of the impact of longevity, obviously, the relationship between the shareholder and the With-Profits Fund changes with these new fee-related products. Again, how we use that balance sheet, the respective balance sheets will determine on a case-by-case basis.

We have always, as we said, got the flexibility of longevity. Now, I don't think of any impact, meaningful impact on own funds or on leverage.

Obviously, you've seen our leverage ratio today and the progress we've made over the last couple of years. It's more a question of delivering the strong IRRs and importantly now improving our profitability, with given clear guidance around 2026 and building over time these fee-related earnings.

All right. I think, Dom, you were next, and then Tom.

Or did I say Dom and Tom? First Dom?

Dom.

All right. Thank you.

As per usual, three questions, if that's all right. Thank you for the color on the private asset side.

I guess more broadly, it's been an interesting sort of three months in the markets. What is the mood amongst capital allocators?

What are your conversations like? More broadly, do you think you can deliver that stellar level of flows you saw in '25 again in '26?

Second, sort of related question, just on the asset management revenue margins. Luca, you seem to have given me a cold already.

On the revenue margins, great to see them going up. Clearly, the mix is in your favor coming into next year.

How much can revenue margins go up in '26 in asset management? Then third, a sort of technical point.

I think the CSM amortization rate improved in all three of your major life segments. Can you just walk us through why the amortization rate increased?

Is that an assumption change? Are you seeing different customer behaviors, anything going on?

Okay. I'll take the first two.

Capital allocator what's the mood of our clients? That's what you're asking.

Obviously, we only been 10 10 days into the Middle East crisis, but overall, if you look at the beginning of the year and the strong momentum we had in 2025, we continue with strong momentum in 2026. Let's not forget, strong capital queue that Joseph talked about.

More importantly, Dai-ichi Life continues to be a very strong partner with us. We did £400 million sterling in 2025, and we continue strong momentum with them as well.

Then I think it's really a question about institutions are looking to diversify a bit out of the US, and therefore, Europe and Asia is what they're looking at. Obviously, we are both strong on the public side.

I showed the amazing numbers on equities. We actually see mandates, institutional mandates on equities in where we are very, very strong, European, Asian, emerging markets, etc.

Then, of course, on the private asset side, Joseph said, real estate, very much in demand again. Private credit, and this is an important point, continues to be attractive in Europe, and we see appetite to invest in private credit in Europe.

This is not the situation in the US. Let me be very clear here, because I get this question very often.

I got it also this morning at Bloomberg. We are it's a very, very different market, Europe versus US.

US has much larger market, much more in the hands of capital markets, less so in banks, therefore much more mature, more competitive, overcrowded, more exposure to software. Europe is a very different place.

The key point here is, we've been in this market over 25 years. We have a £27 billion private credit franchise.

It's not that we started 5 years ago. We know how to underwrite.

We've extremely vigilant, strong guidance, strong risk management, very low default rates. We see strong momentum here, and a lot of clients want to invest alongside ourselves.

Let's not forget, we have Prudential Assurance Company, our own balance sheet, very often investing in our strategy. Now we also have another balance sheet, the £390 billion Dai-ichi Life balance sheet.

Of course, big institutions want to be together with those two balance sheets. We continue to see strong momentum in for the first half of the year, but obviously, it's only been 10 days into the crisis.

You all see the volatility. No one can predict is it going to be a week, is it going to be two months.

This can all have different consequences. What I can tell you is, we have a strong, diversified business model.

Obviously, the life business, as I said before, providing strong underpin for the dividends. Of course, the with-profits that is growing, asset management, all this is capital-light and well diversified.

I'm relatively confident in the future for us. And

30 seconds on the asset management fee margins?

That's a very simple one. I wish every year we had margins going up like that.

You correctly said, of course, it can be mix, but the reality is, thanks to the fee pressures out there, most peers, it goes down like this. I think you should if from sort of guidance, you should see it more like resilience.

I don't expect it going up. That will be but already at 33 bips, I think it's a very good number.

Then so

and so

on amortization rates. I think they're up by 20 and 30 basis points, very modest.

We've not guided to anything changing in 2026. We gave some other guidance, which is about opening CSM.

There weren't any methodology changes. It was just more the book.

There has been some changes to what we're using for expected returns. I remember you asked about the shape of the curve in 1 year and 10 years.

We've made a few refinements to that, but that's also reflected in the guidance we've given today.

We'll do Tom and then we'll come across.

Hi. Good morning.

Thomas Bateman from Mediobanca. Slide 30, I think you've given the illustrative profits from the with-profits fees.

I think you said there was £50 billion that you're targeting in assets there. What is the fee margin that you're expecting on that £50 billion?

It really would be great if you could give a cost of equity for the With-Profits

Fund. I think

you're saying it's the main risk carrier going forward,

so

that is important. Just a second question.

I think you had another positive tax impact on the capital generation.

Could

you just explain what's happening there, how likely is that to recur? Thank you.

Kathryn, all for you.

Okay. I'll take those.

What you see here is our expectations over the years to 2030 around these new fee-related earnings that we're going to be delivering from this year. Obviously, you still have the bulk of life earnings with the £6.6 billion of CSM, supporting the confidence in our AOP for '26, obviously with the strong performing asset management also contributing.

These numbers are guidance for you. We've given a 10 to 15 basis points of profit for these new products, so that's profit.

We've given the £50 billion, and that's essentially, if you think about the rough volumes that we're doing on a gross basis of about £6 billion in PruFund, £4 billion in BPAs maybe by the end of '27. That's ballpark.

We've obviously got our plan to 2030, but that can tell you why that £50 billion number makes sense. It's 10 to 15 basis points on profit, plus the fees that the asset manager gets, which we've given guidance to what we're currently seeing of around 20 basis points.

We've said also before, 30% to 40% obviously goes into private markets. Now really importantly, you asked about cost of capital, but this is very, very, very little capital.

The quality of these, it's not just very transparent, very high quality, very recurring, but it is on very limited capital.

Kathryn, I think the cost of capital was more the cost of capital for the With-Profits Fund as opposed to the shareholder.

Yeah. Then obviously, their book and the capital that they take on for this for these transactions, we've in a previous question, we said we've not given an exact number.

It's not the double-digit shareholder cost of capital that we need to deliver for all of the business that we're writing. It is lower.

There's no precise number. Clive's here, and he has a lot of conversations with the With-Profits Committee.

It's really important that all of these products have got very robust governance, and they have to deliver good, profitable business, but at a it will be at a lower cost of capital.

The way to think about it, which is always I find both fascinating and interesting, is that the With-Profits Fund has got two objectives: serve clients as well as you can and deliver the greatest value that you can. If you want to deliver great value, you want to bring down your price towards the clients to give them better outcome.

At the same time, the other objective is that you want to survive forever. If the With-Profits Fund is a business, you want to make profits, otherwise you're not going to exist in 200 years, while the With-Profits Fund is built to exist for another 200 years.

That's why there is a cost of capital. It needs to be a positive number before someone half-jokingly said, "Is it zero?"

It's definitely not zero. It needs to be a profit.

You take down that profit from the double-digit rates that a publicly listed company like us would require to a rate that is more amenable to your end clients effectively.

The second question was you saw that it was a very similar number to last year, you probably noticed, around the loss absorbency of our deferred tax asset. This obviously came from the statutory losses when rates backed up massively in '22, we created a number of DTAs.

Essentially what we've seen, and it is an interesting condition of the balance sheet and profits at year-end '24 and year-end '25, that we've been able to use more of this in the solvency stress due to higher future profits and also some movements in the SCR. We really wouldn't expect anything to repeat of this scale.

It will depend a little bit on this time next year, but you should treat these as largely one-offs impacted by that original DTA that we put on back in '22 and '23.

Are you okay if we do Andrew, and Nasib?

Andrew first.

Good morning. It's Andrew Crean at Autonomous.

A couple of questions. On that sort of £50 billion

of

with-profit going through an open-ended architecture, can you tell us what the counterfactual is? I.e., your With-Profits Fund's 90:10 now in runoff.

What rate of shrinkage in profitability would you anticipate over the next five years as that goes into a runoff situation? Then secondly, I know it's been asked before, the PruFund opportunity within the platform market with FNZ, clearly, I think you said in the second quarter, you do your first position.

Can you give us an idea longer term as to how big this opportunity is, how much do you expect PruFund to be able to sell through the platform market when you're fully up and running?

Good. Can we pass the second question to Clive?

Yes. I want my CEOs to speak, Clive, maybe you want to take the second question, and then, Kathryn, you take the first, right?

Hello. Clive Bolton, CEO of Life business.

What we're doing is following the trend of clients and their advisors wanting to transact on technology, which we call platforms, and therefore we're moving and making it available. I see it as the equivalent of making sure that our brand is in all the supermarkets.

Probably the platform in this example are the biggest versions of the supermarkets. I think in specifically, what that will allow us to do is move further into the affluent market for investors.

We're very strong on the mass market side, and we're actually a surprisingly strong in the high net worth, wealth preservation market, where people enjoy the stable returns. It will enable us to push more strongly into that mass affluent market, which is probably the core market for the advised market.

As we say at the moment, PruFund remains an advised proposition. I think you see we've got what we've got some of the guys.

That'll be a gradual shift, we think, into the platform market. I don't have a number for you today on the precise one.

Clive, we can say, obviously, that market is a £700 billion market with roughly 10% of gross flows a year, £70 billion. We will cover with FNZ technology roughly 50% of those gross flows.

Of course, you need to be on the different platforms. First platform, Clive, Q2, and more to come by the end of the year.

It should be accretive for us. There's no doubt about it, but obviously, we cannot give you more guidance than that.

We are talking to almost all the main platforms. We talk about the first one, the first one is very important, not and we have some experience with that because of our own IFDL platform is already PruFund-enabled from that perspective.

It's a strength of the PruFund franchise that we distribute to those advisors already, but they go through our own proprietary platform rather than their platform of choice where they build their business round. We think it'll be, from that basis, a significant uplift in the amount of PruFund we will sell.

Covering the direction around the CSM and I guess the impact on profits. As we've given the guidance around the AOP margin of 10 to 15 basis points for the £50-odd billion to 2030, and clearly, what we have is confidence in hitting the AOP growth target.

Whilst we're seeing fees that will contribute to profit that will build meaningfully over time, we have already got the 6.6, 9% higher CSM, which will grow with interest accretion and expected returns. There'll be a small element of new business contribution, but that really does underpin a large part, clearly, majority of our earnings and our confidence in hitting '26.

Obviously, we want to grow CSM and have a strong contribution in '27, which will deliver the 5% on average. It's really important this will take time for these fee-related earnings to build, but they will still deliver meaningful AOP growth.

We will still hit our 5% AOP target. Over time, you saw this sort of shaded bar, we know what our fee-related earnings are now, they will move up quite meaningfully by 2030 because we have the additional also fees generated into the asset manager as well.

We're confident, clearly, that, yes, this will build over time, and we've already got the real stock of 6.6 supporting profits this year and the next few years.

In terms of runoff, I think is important to underline how slow the runoff is and how valuable this book is for an extremely long period of time. If you take the traditional with-profits book, which has been closed to new business for, I don't know, 10 years, 15 years, a long time, the contribution to profit in 2023 was £263 million, 263, and this year was 258.

Only £5 million lower. In percentage terms is what, 2% lower over two years?

It's just that because there's that big expected returns, as PruFund, traditional with-profits, all the with-profits products have got this very strong component from the annual expected return, while in annuities, you would only have the interest accretion piece, right? That's really something that extend the life of the product for a really long period of time.

Finally, Andrew, Nasib, apologies. There always needs to be someone last,

so,

Abid, that's going to be you.

Thanks for taking my questions. It's Andrew Baker at Goldman Sachs.

The first, just on flows. Are you able just to be a bit more explicit on your 2026 BPA expectations, and then the mix between traditional and with-profits?

I guess also your Dai-ichi Life flow expectations in 2026. Just curious, no mention of Future+ anywhere today.

Any update there? Second one on ratings migration.

I think the appendix shows 4.5% of ratings migration, which is probably a little higher than I would have thought. It looks like some of it is related to ground rents.

Curious why that came in '25. Then just if there's anything we should be thinking about in '26 related to ratings migration.

Then very just quick one, M&A. We've obviously got Aegon UK in the market.

Is that something you guys are looking at or have any interest in? Thank you.

Okay. Should we start with M&A?

I think why don't you start there, and then.

Let's be clear. You've seen we have presented a clear strategy three years ago.

We're delivering on the strategy. I think we have a very clear path of what we want to deliver moving forward, we are very much focused on that.

When I see some of the M&A activities around us, what is it that they're trying to achieve? It's either significant scale, you're talking two £3 trillion, £4 trillion, passive, active, everything.

Then you have another activity, which is alternative asset managers looking for permanent capital. Particularly here in the UK, we've seen two transactions.

When I look at that, that's effectively what we are doing already since a long time, with the big difference that we have also the With-Profits Fund, which is a competitive advantage. I think we have a very clear competitive advantage, and given that we're delivering on our strategic drivers, given also that we have come out now with using the With-Profits Fund in a smarter way, we have a very strong independent future in front of us.

We are focused on continuing to deliver what you would like, which is growing profitable earnings. We're not looking at Aegon UK.

Oh no, and we're not looking at Aegon UK. That we can say.

No, we have what it takes. Now, then on maybe on flows.

You asked, first of all, on BPAs. I said it before.

We are committed to the £3 billion to £4 billion of BPAs by 2027. We did £1.5 billion in 2025.

Of course, now with the with-profits BPA, we can do more. We have a competitive advantage from a cost of capital.

Let's not forget also, we also have a diversified offering because we also do what we call the value share BPA. You remember we presented this where we are sharing the economics with the scheme sponsor.

We will see more momentum this year, and yes, we will write mostly with-profits BPAs, but of course, there will be also alignment from the shareholder, and we will align ourselves and write some alongside those deals. Then there might be also cases where we would like to take all on our own balance sheet, right, from a return perspective.

The guidance that we gave you already when we presented, I think it was last year, where we were saying roughly 75% BPA, 25%, that sort of remains the guidance you should think. 25% our capital

and

75% either value share or with-profits capital. Exactly.

Then you asked about flows on asset...

Dai-ichi. Dai-ichi,

exactly, on Dai-ichi. Said before, once again, partnership is going extremely well.

Obviously, they decided to be our partner because they went through all the possible partnerships in Europe and said, "Okay, who's the strongest asset manager?" I think our numbers probably say that we are in terms of investment performance and reach.

Then they wanted also to understand more about the BPA market since that's a possibility at a certain stage in Japan as well. We are really working extremely well with them.

Not only did we see the £400 million of flows in 2025, but we see continued momentum in 2026 as well. Let's not forget that they had a commitment of $6 billion over five years, and we said that it would be good to have $1 billion the first year.

First-year anniversary is in May. I think we will do more than that number by May with Dai-ichi.

Obviously, we will have to see. There's still a couple of months to go.

Good momentum with Dai-ichi and a very, very strong partnership. Then what was another...

Future+.

Future+, oh, and Future+, yeah, I know, Future+. Future+, by the way, we can say Future+ sort of what we're doing in UAE is a bit of Future+ic.

Maybe it's not Europe. Remember what I said before here, Future+ continues to be so Future+ for everyone, it's PruFund in Europe, continues to be a very relevant opportunity, but you need to have the right distribution partner.

I always said that the right distribution partner for us is probably a strong insurance group. We had done a partnership with a strong insurance group in the UAE.

There are others, of course. There are several strong, large, one pan-European ones.

That's what we're working on. It will come.

It will come.

The question on the annuity book credit quality, yeah, you've seen that in the appendix, that's the typical slide we give. It still remains obviously 96% investment grade, 74% single A and above.

We anticipated there'd be a question on this is given the external environment at the moment. The 4.5% net downgrades was driven by that ground rent asset class, as you said.

There were just one or two other small impacts as well on the book, but overall remains very high quality. I suppose given as I think you said because the announcement was in January, what we had what we do and is essentially look at the valuation of that, and when we see either an situation changing perhaps with where the government was in terms of potential imminent announcement coming as we end 2025, there were some ratings moves, so that's what it was.

Perfect. Thank you.

Thanks.

Abid Hussain from Panmure Liberum. Two questions.

The first one was on margins. Thank you for the color on the fee business margins that you've given so far.

I just wonder if you could give us a sense of the margin versus lifetime value on the bulk business that you've written last year, and sort of perhaps compare and contrast that with the fee-based business that you hope to write. I'm trying to dimension the sort of 10 to 15 bips of profit margin on fee-based business versus I think sort of 100 bips of profit margin on the traditional BPAs, which, of course, comes with a higher new business strain.

Just trying to sort of square all of that. Then the second question is on private credit.

Just wondering if you are indeed expecting a tick-up in the default rates across any of the private asset classes, and if you could help us with quantifying what you're seeing perhaps at the industry level in default rates across Europe versus US and any color on that would be helpful.

Okay. I can take the first one, and I think I explained before.

We're talking two very different markets between US and Europe. I know there's a lot of focus on private credit lately.

Most of the problems we see are mainly in the US. It's linked to poor underwriting, overcrowding, but also a lot is linked to software exposure.

We know the UK market is US market is a larger one than Europe. Europe is less mature, smaller, less players.

Then it comes down also to the quality of the players. I don't want to speak about peers, but we've been in this business since over 25 years.

We start as a credit house, let's not forget about that, and then we moved into private credit 25 years ago to private credit. If you look at our default rates, I think the European Loan Fund, we have looked, yeah, it's less than, yeah, 1%, exactly, less than 1%.

That shows the quality of how we are underwriting this. I'm not overly concerned.

Joseph, I don't that we have not seen any trend in Europe of more defaults lately. Yes, of course, there are cases where we have seen, MFS and others.

By the way, we had no exposure to MFS, to be very clear. Once again, it shows how good we are in also saying, I said that number, we turn away two-thirds of the businesses that are offered to us.

I would be, well, cautious, let's call it cautiously optimistic, it's a good word I always have to use, on Europe, given our focus on Europe. We have no real exposure to the US, you should not be overly concerned on this.

Of course, I don't know what's going to happen in the Middle East. Maybe it goes on for another six months and we will see, but these are all things that we cannot control.

Exposure to software for us is...

Exposure to software for us is extremely limited, huh? If you look at our private credit book, it's less than 2% in the asset management business.

Very, very, very low. I'm sure you can see some of our peers came out with much, much higher numbers there.

I think, yeah, just you'll probably get more color as we start to write more of these products. We've obviously talked about the CSM margin and the strain for the BPAs we did last year.

We're really pleased with the start of fixed-term annuity and with individual annuities coming. For now, we've grouped all of these products together in that 10 to 15 basis points of profit.

Obviously, as volumes grow, we'll give more color to support the products that we're writing. We're not going to give individual product by product.

Clearly, what we've said very clearly is that we need to meet our cost of capital, hurdle rates for the shareholder business. The With-Profits Fund has got a different objective for the business that they write, but look, we see this as very high quality earnings, very transparent, very repeatable, that will build over time.

Perfect. I think everyone has asked the question, thank you very much, and see you at our half-year results.

Thank you.

Thank you.

Thank you.

Bye-bye.