Good morning, everyone. It's wonderful to see you all, and thank you for joining us.

2025 has been a pivotal year for Hiscox. In May, we set out our strategy, going deeper into our retail business and making several important commitments.

We're executing on that strategy and delivering on those commitments with pace and energy. Our diversified portfolio is built for this market.

Growth is accelerating, with premiums up $275 million, or 6%, year over year. This is high-quality, profitable growth across each of our businesses, driven by product innovation, expanded distribution, and customer growth, built on our specialty expertise and technology capabilities.

We're expanding our margins. Our undiscounted combined ratio of 87.8% is the best in a decade, and our record insurance service result is the fifth consecutive year of underwriting earnings growth.

Growth is translating into a larger asset base, underpinning a record investment result and contributing to a third consecutive year of record profit before tax. We are delivering excellent returns, with a 12% growth in book value per share and an operating ROE of 21%, materially above our target.

This strong performance, continuing momentum, and execution of our strategy enables us to reward shareholders through a new $300 million share buyback and a further 20% step-up in the final dividend per share, as we announced at the CMD last year. This excellent performance, combined with our diversified portfolio, makes our business strongly capital generative.

Indeed, over the last three years, we have organically generated over 100 points of regulatory capital, enabling us to deploy capital in an unconstrained way to pursue profitable growth in each of our businesses and reward our shareholders with returns of $1.1 billion over the last three years. Now, turning to our results by segment.

Retail added almost $200 million of premium as the pace of growth increased to 6.3%, a continuation of our multi-year acceleration. This growth is broad-based across each of our retail businesses, driven by strong customer growth of 7.5% and, crucially, not rate dependent.

Most importantly, this is profitable growth. The retail undiscounted combined ratio, at 92.6%, is the strongest since 2016.

In London Market, we are successfully navigating a competitive environment, returning to growth through product and distribution innovation, while delivering a combined ratio in the 80s for the sixth consecutive year. In reinsurance, we selectively deployed additional capital to support 6% growth, mostly in specialty lines.

The quality of our reinsurance business is demonstrated by a combined ratio in the 60s for the third consecutive year. Now let's take a look at how we delivered that growth.

Frankly, the pace, energy, and innovation of my colleagues has resulted in premiums from growth initiatives increasing fivefold in 2025 compared to the previous year, supported by the launch of more new products than in the last five years and expansion of distribution. As we set out at the CMD, there is a huge structural growth opportunity in retail, and we're capturing this through entering more segments, launching more products, expanding distribution, and more markets.

Retail is on a multi-year growth acceleration journey. We grew 4% in 2023, 5% in 2024, and over 6% in 2025, and plan to step up growth to 8% for the full year 2026.

We have set the course to achieve double-digit growth in 2028. In London Market, we are leveraging our deep underwriting expertise to expand into new adjacencies while deploying AI-augmented technology platforms to access new markets.

In reinsurance, we have captured the opportunities of the hard market, increasing our net premium by 180% since 2020. Now, the ability to innovate is a crucial part of our Hiscox DNA.

It has and will continue to open up new growth opportunities in every part of our business. Now let's take a look at innovation in action at Hiscox.

Now, what you can see here is a sample of the initiatives we've taken in the last year to expand our business and drive growth. We're executing on these with pace and energy, launching new products at an excellent rate.

Some of these you may remember as work in progress at the half year. These have now been launched, and we have refilled the pipeline with new products and opportunities that will begin production in 2026.

For instance, in the US, one of our largest DPD partners has expanded our access to their agent network. In the UK, we followed up on the signing of one of our largest ever distribution deals in 2025, with an even larger opportunity that will begin producing premium in the first half of this year.

In France, we successfully launched our new cyber product in the fourth quarter. This will be rolled out across all of retail in due course.

These actions and many more are accelerating retail growth and enabling us to capture more of the $317 billion target addressable market. In big ticket, our innovation is moderating the impact of cycle management in certain lines.

During the year, we leveraged our existing technologies to grow into SME cargo and US middle-market property. In addition, using our underwriting expertise, we expanded into new adjacencies, such as tech E&O and financial institutions.

The blend of technology and underwriting expertise gives us the confidence to pursue new opportunities, with more initiatives set to appear on this list over the coming periods. Now let's turn to the transformative force that is beginning to reshape our industry.

Now, with the advent of generative artificial intelligence, we are seeing the beginnings of profound changes in society and our markets. The way consumers and small businesses are buying insurance is beginning to evolve.

Large language models, LLMs, are increasingly a key part of the buying process. Now, with decades' experience of providing specialist insurance directly to customers, we have an established competitive advantage from our trusted and distinctive brand to our leading Net Promoter Scores and high-quality service.

These objective strengths stand out even more in the world of AI, where AI agents can evaluate a policy quickly on more than just price. We've been investing in technology for many years, building out our core systems and improving data quality.

We have a leading global digital platform for small commercial insurance, now approaching $900 million of premium and almost 900,000 customers. These investments enable us to implement AI tools relatively quickly, at a modest cost.

We're excited about the efficiency and growth opportunities that AI brings. We're not standing still.

This year, we will begin to roll out new, more powerful customer and broker portals in the US and in Europe. These will enable us to personalize the purchasing journey and help customers identify their insurance needs and simplify and speed up processes for brokers.

As of this month, in fact, I think it's today, we are deploying AI agents into our US customer contact centers to create real-time feedback loop for our operations and marketing teams on customer experience and sentiment. If a customer wants to make a claim, an AI agent will be there to help.

We are embracing generative AI for the benefit of our customers, our colleagues, and our shareholders. I believe Hiscox is well positioned to win.

Now turning back to today's results. We've delivered on our promises in 2025.

Retail has grown 6.3%. This growth will accelerate in 2026, building to 8% for the year before reaching double digits in 2028.

Our operating ROE of 21% is materially above our mid-teens through-the-cycle target. The change program has delivered a P&L benefit in-year of $29 million, and is on track to deliver $75 million of benefit in 2026.

Paul will provide further details on this. Our shareholders benefit from our growth and earnings with a 20% increase in the final dividend per share and a new $300 million share buyback.

With that, I'll now hand over to Paul.

Thanks, Aki, and good morning. It's great to be here with you all today presenting another strong set of results.

We have achieved high-quality growth across each of our segments, with ICWP up $275 million, or 5.9%, against the backdrop of falling rates, demonstrating the strength of our diversified growth. Importantly, we have delivered excellent profitability alongside this growth.

The undiscounted combined ratio of 87.8 drove a record insurance service result of $614 million. The group's profit is supported by the record investment result of $443 million, underpinned by increased AUM following stronger premium growth.

Our superb underwriting and investment results have translated into a record profit before tax of $733 million, up 6.9%, and delivered an attractive ROE of 20.9%. This is despite a 2.5% drag from the increase in the effective tax rate.

The group's excellent profitability has driven substantial capital generation, with a year-end estimated BSCR of 233%. This is after returning over $400 million of capital over the course of 2025.

As a result of our strong capital generation and balance sheet, the board has ratified the 20% step-up in the final dividend per share announced at the CMD. In addition, we will be returning $300 million to shareholders through a new buyback, resulting in total returns of over $450 million in respect of 2025.

Delving into these results a little further, starting with our retail segment. In line with guidance, retail ICWP grew by 6.3% in constant currency to over $2.6 billion.

This growth has been broad-based across all markets as management actions delivered results. Growth has been accompanied by an improvement in the undiscounted combined ratio to 92.6, partially due to early benefits from the change program.

Importantly, retail growth is transforming the shape of the group's earnings profile, with retail representing nearly half of the group's PBT, up from just over 40% in 2023. Moving on to London Market.

London Market returned to growth, with ICWP increasing by 1.6%. In a competitive market, the business benefited from product innovation and opportunities arising from London Market's diverse portfolio.

Profitability continues to be strong, with an undiscounted combined ratio of 85.9. This is testament to our underwriting discipline, risk selection, and pricing as we navigate the market's micro-cycles.

Turning to reinsurance. Net ICWP grew by 7.9%, driven by growth in pro rata and specialty lines, including our climate resilience portfolio, mortgage, and surety.

The quality of our risk selection is demonstrated by an insurance service result of $189 million and an undiscounted combined ratio of 67.4. Fee income of $109 million is very healthy, above $100 million for the third consecutive year.

We continue to see strong interest in our ILS funds, with more than $330 million raised in the last year and a robust pipeline for 2026. ILS AUM on the 1st of January 2026 is $1.5 billion.

As we continue to see strong capital inflows from third parties, while managing our own net exposure to property cat perils, the earnings mix between fee income and underwriting will continue to evolve. Moving on to our change program.

We're making strong progress. On this slide, you can see examples of achievements against our ambition, and some of the actions that will deliver benefits in 2026.

We have significantly increased fraud detection rates through new capabilities, representing a real cash saving in 2025. However, given our conservative reserving philosophy, much of the benefit is yet to be recognized in the P&L.

We have insourced over 100 roles in our Lisbon tech hub, enhancing the capabilities that drive our competitive advantage, while leveraging the use of a lower-cost location. In 2026, we will build on this, rolling out more centers of excellence and further extending the scope of outsourcing, where we benefit from the greater scale that specialist partners provide.

In procurement, we have reduced our property footprint, and continue to consolidate our suppliers, enabling us to negotiate better terms. Over the coming year, we will double down on this, increasing the number of strategic partnerships and preferred suppliers, while better managing demand within the group through improved cost governance.

Finally, in technology, we decommissioned 20% of our applications in 2025, while launching new automation tools across the value chain, which will help to drive scale into the business. This will continue in 2026 as we launch new automation tools that will deliver efficiency benefits alongside driving revenue growth.

Looking at the benefits. We're on track with our change program, and we have achieved the benefit of $29 million at a cost of $24 million.

While we're slightly ahead of our 2025 benefit guidance, there is no change to our targets. We remain on track to deliver a $75 million benefit in 2026 as we optimize processes, sourcing and procurement, fraud detection, and recoveries.

We expect the cost to achieve to be $75 million, which includes costs associated with insourcing and outsourcing, legal expenses, and tech implementation costs, including some of the exciting new capabilities that Aki referred to earlier. These will help to deliver a $200 million P&L benefit in 2028.

Let's look at how this is impacting the P&L. Disciplined cost management and savings from our change program means that our underlying expense base has increased by just $6 million.

This is despite inflation and changes in variable comp, and the investment in growth and technology initiatives highlighted by Aki. This, in turn, is driving improvement in our operating jaws, with a 0.8% increase in underlying expenses comparing favorably to a 5% growth in premium in constant currency.

Overall, this is very pleasing progress. Now turning to investments.

Our record investment result benefited from strong yields and increasing assets under management as growth in the business translated into more assets on the balance sheet. As we go forward, that increase in AUM will help to offset the small reduction in the reinvestment yield to 4%.

As such, strong investment returns should continue to provide a tailwind for the group. The quality of the fixed income portfolio remains high, with an average credit rating of A, and the business is conservatively positioned on the asset side.

Looking at reserves. Our conservative reserving philosophy is unchanged, with a risk adjustment of $345 million, representing an increase in the confidence level to 86%, slightly above our target range.

This is despite a healthy level of prior-year releases, and reflects the point where we are in the cycle, the quality of our underwriting, and the conservatism of our reserves. Over time, we expect the confidence level to return to within the 75% to 85% range.

The conservative nature of our reserving has enabled us to release $293 million, or 7.2% of opening reserves, for 2025, continuing our long history of uninterrupted, positive reserve development. All accident years are below the initial estimate, and continue to run off favorably.

Finally, an update on capital. The group has delivered outstanding organic capital generation of 34 points.

This has supported both investment in the business and returns to shareholders of 22 points of capital, resulting in a year-end BSCR of 233%. Following the payment of our final 2025 dividend and our new $300 million share buyback, we have a pro forma BSCR of 211.

This compares favorably to our through-the-cycle operating range of 190 to 200, providing us with the flexibility to capture opportunities as they arise in a rapidly changing market. Thanks for listening, and with that, I will now hand over to Jo, who will provide you with an update on underwriting.

Thank you, Paul, and good morning, all. Our underwriting results reflect disciplined cycle management, profitable expansion, and a strategic investment in both data and capability to continue to build a balanced and diversified portfolio, which you can see on this next slide.

Our retail compound growth is anchored in profitable underwriting, delivering a COR of 92.6. In the UK, private clients is up double digits as we continue to benefit from our market-leading expertise.

Commercial growth is due to an expanded customer base and a sharper sector focus. In Europe, France and Germany are leading the charge as we continue to go deeper into our chosen segments and deliver new products tailor-made to our customer needs.

In the US, digital direct is continuing its excellent growth, momentum in partnership is building, and broker is once again expanding as we have delivered improved service delivery and a slightly broader appetite. Turning to the London Market, where our ability to manage those micro-cycles has remained a key differentiator, and we've once again delivered a combined operating ratio in the 80s.

Property has seen some growth fueled by a US high-net-worth portfolio and a tech-enabled expansion into mid-market, and this is offsetting some intentional cycle management in major property and commercial lines. We've seen some modest growth in casualty.

We've had some rate tailwinds in general liability and a successful launch of financial institutions and technology E&O, and this is mitigating some declines in cyber and D&O as those markets continue to soften. Then lastly, reinsurance.

A slightly softer market in 2025, but still a really favorable market, and despite another year of over $100 billion in industry losses, our risk selection, our robust reserves, and a benign second half has enabled us to deliver a COR in the 60s. Where are we in the cycle, and how favorable is the market?

This next slide, hopefully a familiar slide to you. The chart on the left is our rates indexed back to 2018 for our segments.

The purple line, which is retail, it's just less sensitive when it comes to the rate cycle. Rates were up in aggregate 2%, and pricing across UK, Europe, and the US remains strong.

Now 2025, for the first year in many, saw aggregate rate declines for both London Market and reinsurance, although we remained in an attractive market. The blue line is our property cat reinsurance.

Rates came down 4%. This moderated as we went through the year, as our mid-year renewals, particularly those loss-affected, attracted some rate increases.

Across the whole of the reinsurance segment, rates were down about 5%, but still up 83% since 2018. We saw a similar story in London Market: a 4% dip in 2025, but still up 67% since 2018.

That softening has continued in 2026, our January renewals saw London Market come down another 4% and reinsurance down 13%, particularly in the areas of property, cat, and retro. The chart on the right gives you an indication of what we believe that does to the rate adequacy of our portfolios.

As a reminder, adequate means we believe it's adequately priced to deliver a good return in a mean loss environment. Adequate plus means we've got margin in addition, and low, still profitable, but just below our target underwriting reserves.

You can see, despite the softening, we believe that much of the portfolio is still really well positioned to deliver a good return, and we've benefited from some tailwinds in our own outwards reinsurance purchasing. Mastering changing markets and managing micro-cycles is not new to us, and we continue to have many different portfolios in many different parts of the market, and you can see this on the next slide.

The London Market rate environment is highly nuanced, both at a line and a divisional level. You can see the divisional picture on the right-hand side is quite different to the London Market headline.

During this period, casualty rates have declined, whilst property rates have seen significant gains, and we've acted decisively. During the same period, our average exposure per policy in casualty has reduced by 20%, and more recently, we've added over $100 million of property income.

This laser focus on exposure management and profitable expansion has been the key to that consistency in that combined operating ratio. We've learned from lessons of the past, and our enhanced cycle management is really focused on four things: Firstly, a forward-looking view of risk, really understanding those inflationary trends, whether they be economic, societal, or climate.

A market-in-transition framework. This is a framework that's honed to capture the position of each one of our lines in the market and proactively respond to evolving conditions.

Exposure management. We absolutely need to know when to trim, when we don't believe we're getting paid to take that risk, but also when to expand, when we believe the expected returns justify the exposure.

Lastly, new. Of course, we want to actively manage the portfolio that we have, and seize new opportunities for profitable growth.

This next slide gives you a little bit more information on our market-in-transition framework. What you can see here, each bubble represents a line of business in London Market.

This is a proprietary framework. We've built it around 10 quantitative-type metrics, things like technical index, exposure, deductible, and we add to that five more subjective metrics on the market.

These could be things like broker interaction or terms and conditions. For London Market, we're monitoring 285 metrics on a quarterly basis, and we have a very similar framework for our reinsurance business.

Now each metric has an expectation or a tolerance, and flags for investigation if it's outside of that. Now not all investigations will result in underwriting action.

Most often, when we look, the underwriting action has actually already been taken, but when it is required, responding really quickly is key, and that could be reducing your line size, as an example. In summary, a transition in market, but a largely attractive market.

Unlike our big-ticket businesses that flex with the cycle, in retail, we're looking for compound growth through the cycle, all anchored in consistent, profitable loss ratios, and you can see that from the chart on the left-hand side. We've built out a specialist underwriting ecosystem from risk selection through to claims management, all underpinned by investment in brand, technology, and capability.

Our focus is squarely on customer value. We invest in our segments for the long term.

We maximize value through market lead and retentions and product penetration. After decades of investment, the majority of our retail customers already benefit from being auto-underwritten, but we have ambitions to go much further.

Lastly, new. We want to deliver new products and services to existing customers, go deeper into our segments to attract new, and boldly go into new markets.

As I look forward to 2026, my three priorities are clear: Firstly, a relentless focus on managing our portfolio, knowing when to trim, but also knowing when to expand when the outlook is compelling. Turbocharge innovation.

We want to find quicker ways to bring new products, new services, and expanded appetite to market. Lastly, capability.

We want to blend the best humans with advanced technology to really amplify our specialist underwriting expertise, and we want to train our underwriters for skills for the future, they've got data fluency and a practitioner at their core. Thanks very much.

I'll now hand back to Aki.

Thank you very much, Jo. Looking ahead to this year.

As a result of the pace, energy, and innovation we've generated, this year is positioned to be another really exciting year for Hiscox. Retail growth momentum will continue into 2026, building to 8% for the full year, and on track for double digits in 2028.

In big ticket, we expect innovation and new opportunities will moderate the impact on growth from our disciplined cycle management activities. In reinsurance, following strong growth in recent years, in 2026, we expect to maintain our natural catastrophe exposures broadly flat on a net basis, while we are continuing to seek out growth opportunities in specialty classes.

Finally, as you've heard from Paul, our change program remains on track to deliver $75 million of P&L benefit this year. In closing.

2025 has been a pivotal year: a year of record underwriting results, record investment results, record profits, and momentum has been building over the last few years and is set to continue. The group's combined ratio is the best in a decade.

Retail's margin continues to expand. London Market has delivered a combined ratio in the 60s sorry, in the 80s, I wish 60s, 80s for the sixth consecutive year, and reinsurance in the 60s for the third consecutive year.

In our change program, we are delivering expense efficiency and a significant build-out of capabilities, with more to come. Our operating ROE of 21% is materially above our through-the-cycle target, and our capital generation has been strong, enabling us to deploy capital in an unconstrained way to pursue high-quality growth in each of our businesses, and to reward our shareholders with capital returns of $1.1 billion over the last three years.

We look forward with confidence and optimism. These are exciting times at Hiscox.

Thank you for listening, and now we'll take questions. Why don't we go right to left.

Shanti?

Hi, it's Shanti from Bank of America. The first question was just on the retail growth outlook, that step-up to 8% in '26.

Where is that really being driven from, by region? A walk of how to get there from the 6% that you've done this year would be quite helpful.

Then I was just looking at the claims ratio in retail this year, and it looked like that deteriorated a little bit year on year, based on the restatement. Is there any reason for that deterioration?

Is that really on more conservative initial loss picks? That would just be helpful.

Thank you.

Okay. Kind of taking each of those in turn.

In terms of the growth outlook, look, I think context is important as well. We've already taken the business from what was 4% growth in 2023 to 5% and then over 6%, and as you say, we're guiding to 8%.

This is broad-based growth. There's no one single action that's driving this.

It ranges from the effectiveness of our distribution teams and our distribution functions, and as you've heard me say many times before, we are increasingly winning positions on broker panels. We're winning new opportunities, new distribution deals.

In fact, the UK has been leading the charge across the group on that. In our US business, we're adding more partners.

This year, or in 2025, we added a further 23 partners. As those gain traction and build production, as well as growth from our existing partners.

We continue to invest in marketing. In 2025, we increased the investment by 9%.

I think we're now at about $109 million. You can expect that to go up by a further 10%.

This is great investment. We get very good returns from the step-up.

We've stepped up our product innovation and expansion into adjacencies, and you can see that reflected in the 5x growth from new initiatives. We've turned around the US broker business; that is now growing.

It's a range of different factors that are achieving that growth, and as I mentioned earlier, and this is not rate dependent. In fact, rates have been going the other way.

We have now come off the rate step-up that we were seeing in the retail business as a result of inflation, as inflation has abated. If you go back to 2023, the rate increase was about 7%.

Now the rate increase is 2%. At the same time, growth has gone from 4% to 6%.

You can see what the underlying is doing here. This is a volume-driven growth story here, and it's largely about the effectiveness of the management actions we've deployed over the years.

In terms of the loss ratio, look, we don't land this on the head of a pin. That is a market-leading loss ratio for the retail business.

We're very pleased with it. Andreas, then we'll go to Will, and we'll keep going.

Thank you. Andreas from MD Peel Hunt.

Just on cycle management, it sounds like we're going to continue growing exposures into a softening cycle next few years. I just wonder, if you take a three-year view, and through this planning cycle, what are your assumptions about the increases in capital requirements across the business?

Is that going to be a gentle sort of rise over time as you grow exposures, or will you at some point de-risk that property cat book, and will capital requirements come down again? That's the first question.

The second question is on your reserve buffers, at the top end or slightly above the top end of the range. Is this something that will be released in the future?

Are you being sort of extra cautious, or will inflation eat into those buffers so it will naturally erode within that 75%, 85% range? Thank you.

Okay.

Thank you, Andreas. I think there are kind of a number of parts to that question.

In terms of how we expect the big-ticket business to evolve over the next period, I think we've spoken about the fact that our product innovation and expansion into adjacencies will moderate the cycle management activities. I think Jo can provide a little bit more detail on that.

In terms of capital requirements as we expect them to evolve and the reserve buffer, Paul will address that.

Thanks, Aki. As I said, we are a disciplined underwriter.

You can see that in terms of our track record. What we didn't say was we're looking to grow exposures.

There's lots of lines where actually we have actively and decisively shrunk exposures. We talked about some of the casualty lines where the rate has been decreasing.

We've been actively reducing our exposure during that time. As we look forward, we're seeing some softening in our property lines, and clearly, if that's continues, we will trim.

First and foremost, we are a disciplined cycle manager in our big-ticket businesses, albeit we are still in an attractive market today. Obviously, the rate adequacy slide showed that in the majority of the portfolios, we still have rate adequacy.

I think what we did say is what we've managed to do, particularly in 2025, was we've just mitigated some of that intentional cycle management action by some of the new things that we've been doing. That's the launches of adjacencies.

We mentioned a couple in casualty. I mentioned the mid-market property expansion, as an example.

That is offsetting some intentional reduction elsewhere. In casualty, we launched technology E&O.

Now we've been a tech E&O writer for a couple of decades across all of our retail business. It's a real heartland for us.

We launched a new product in our London Market business. This is to capture the slightly larger customers, find the way to London, written on a subscription basis.

That's what we were talking about in terms of that cycle management. Of course, we are a disciplined writer.

If, I always say our job is to make money in the market that's in front of us, not the market that we'd like to have in front of us. We'll react accordingly, and we're looking for new opportunities to profitably grow.

It's the combination of those two things. It's actually really underpinned that consistency you see, particularly in the London Market with an 80s combined for the last few years.

Building on that and how that translates into capital. I think there's kind of three drivers.

One is market conditions, looking ahead of us. The second is the retail business, and the third is cat P&L.

I think if you look at sort of consumption over say the last two years, it's started to moderate. Now the reason that's started to moderate is we've really held our cat P&Ls constant, and that's off of obviously a very high base as rates have strengthened, and you heard that we've increased our premium income 180% from a capital perspective over the last 5 years.

We've sort of held that constant. What you've seen is the retail business accelerate in terms of its momentum, and, looking forward, we've talked about 8% in 2026 and double digit for 2028.

Now clearly, that requires more capital. Retail is the least capital-intensive part of the business, but it still requires some capital on the balance sheet to grow.

What I'd expect is that degree of moderation looking ahead. Now clearly, the third dynamic is what happens with market conditions, and also what happens about these opportunities that Jo's talked to around innovation.

That will dictate whether we sort of need less capital and reduce exposure, or actually need more because we're taking advantage of these opportunities. That's sort of the outlook ahead of us from a capital perspective.

I think from a reserving perspective, I think the important aspect around inflation is it's built into our loss picks. We do have a cautious approach to reserving.

We have a cautious approach to our loss picks, and that does obviously generate redundancy coming forward. Now our positioning at 2025 from a year-end perspective has been quite deliberate.

We obviously have built on that sort of conservatism that we've talked about by increasing the confidence level. We are at 86% from 83%, but we've also increased the level of margin in the reserves.

I think that puts us in a great position in terms of where we are at this point in the cycle. You're absolutely right, Andreas, that, looking prospectively, we've got a range 75% to 85%.

I'd expect us to trend back within that range, and I don't think inflation, as we currently see it, is an issue because it's already built into the loss picks.

Will?

Thanks. William Hardcastle, UBS.

If I can try and pin you down slightly on one of those answers, Paul. You mentioned there capital consumption, I think it was 13 points in that solvency bridge last year.

Just linking it with Andreas's question, is that likely to be a relatively stable number? I know there's a bit of a range around that, or is it likely to go more likely down than up next year?

Then on the LLM impact into the SME distribution, I guess you touched on it in the conversation, Aki, but I'm really trying to understand what are the risks, what are the threats, and what are the opportunities for Hiscox to really take advantage and why. It's really thinking about broker disintermediation via the LLMs.

Okay. Paul, if you address the capital point, but let me cover the LLM point first.

I guess, first and foremost, we are pretty excited about the ability and the prospect of using LLMs and frankly the emerging world, which is not quite here yet, of agentic e-commerce. We have a long track record of investing in technology and being on the front foot, particularly when it comes to that small commercial business segment, which is a heartland for the retail business.

Again, if you look at the context, we've been investing in that business in terms of technology, etc., for decades. We have a market-leading global platform now that covers 12 countries: UK, US, and Europe, with $900 million of premium flowing through it and serving 900,000 customers roughly, which is highly automated, with all the underwriting automated.

In excess of 99% of the risks that flow through that platform are auto-underwritten. We've invested in the technology.

We've been ripping out core systems and replacing them with new. We've been cleaning up the data for many, many years, and actually that puts us into a fantastic position now that with the advent of GenAI, we can actually build our own or adopt the AI tooling relatively quickly and for a relatively modest cost.

That's exactly what we've been doing across the business. We're excited about the efficiencies that this will bring, but we're also really excited about the growth opportunity, the expansion of our reach into our prospective customer base, and also the opportunity to develop new products that frankly just did not exist before, and I think that's going to be a real opportunity for us as well.

I mentioned earlier that we're deploying AI today, right? There's things that we've just done, there're things that are in development that we are doing.

What we've done, we're already using AI agents in our marketing analytics. We're using it to triage broker submissions in the UK, and that's going to be rolled out across the whole of the group.

We were first to launch an AI-augmented lead underwriting platform in London Market. That was a first for Lloyd's.

Again, we were able to do that because we've already invested in the tech and the data. The emerging things that we are doing, which are really going to open up the funnel for growth, they'll take a bit of time because it does require customer adoption as well.

We have I think it's today or yesterday we've launched AI agents into our US call centers. That will give us, I think as I mentioned earlier, real-time feedback, immediate feedback to our operations teams on customer sentiment and experience, and also feed directly into our ads platform, right, which then dictates how we then market back to those customers.

If you think about the strength that we've built up over the last decades, which is having a trusted and distinctive brand, market-leading claims service, we have an NPS score which is in the 70s and 80s, the market average is materially lower than that. Our world-class customer service, the tailored coverages that we provide, these are all objective strengths which, in the world of AI agents and agentic e-commerce, stand out, right?

In the current world, really, if you go online, the only thing you can really compare on is price. We don't trade on price.

In the prospective world, as a new person who's buying insurance for their small business, you can get much more information. In that world, I think we open up the platform.

I think we will stand out much more, and we are readying our platform for the world of agentic e-commerce. As I said, we're in the process of building, for deployment later on this year, new, much more powerful portals.

If you think back about the strategy that we've had, we have an omnichannel distribution approach, right? We are building leading platforms to enable us to access and trade with brokers, we trade with partners, and we go direct.

This agentic e-commerce channel, as it were, certainly for the moment, will just sit alongside, depending on customer's preference. We're pretty excited about it.

A lot of the hard work has been done, and now it's about implementing these new tools and seeing how they're adopted, both internally and externally.

Just on consumption, yeah, to knock that one off. Based on the conditions we see ahead of us today, consumption will be lower.

Ivan?

Thank you very much. I've got one big AI question and two small finance questions, please.

On the big AI question, I'll start with that. I think there's a perception that for reinsurers, the underwriting edge is essentially the moat that can protect you from being disrupted.

I was just wondering if you could maybe provide some of your views on this, and if you think about your data and what's out there in the market available for underwriting, how much of it is publicly available, like CAT models, or cyber models, or whatever it might be? How much of it is proprietary, and how much of it is unstructured proprietary that you can still tap on, or maybe where you are in that journey versus peers?

That's question one. Then question two.

I noticed that across your growth initiatives, and this has been a trend for a little while now, you don't really have AI CapEx data centers and all that. I was just wondering what your thoughts on that might be.

Is it the next leg for you to expand in, or is there a reason why you haven't really been pushing there? The third question is, on the capital ratio, obviously you have 211 now, 13% stress that gives us 180 post-stress ratio, which I think in the past was a good guide for how you would manage your capital.

Is that still the case or any developments there?

Okay. Excuse me.

Thank you for those questions, Ivan. What's our underwriting edge in reinsurance?

I think that's one for Jo. In terms of underwriting appetite, then in terms of data centers, etc., again, another one for Jo.

Paul, if you want to address the question on capital and how we manage that within the ranges.

Thanks, Aki. I think, in answer to the question, it is a combination.

What we rely on is, of course, and why I talked about it, we we, of course, rely on, in that reinsurance world, the the best external models as a as an example. We take what's available, but then we blend, and we put overlay what we call a Hiscox view of risk.

We do that across both our reinsurance and indeed all of our other insurances. That is really important, and that is proprietary, where we are utilizing our own proprietary information, our own bespoke data sets, building in things like that forward-looking view of inflation.

It's really important for us to get ahead of some of these sub-trends and and price forward. I'd say in terms of, the edge, it is a combination.

We are utilizing the best external data, but also blending that with with our own internal data. Of course, we're using, technology, have been for for many years in that underwriting process to do, one of three things: either to make us easier to do business with, take the reinsurance example, how can we consume submissions quicker?

Clearly, the advance of technology enables us to consume more submissions in a in a in a much shorter shorter time, much better in terms of response time, back to in that instance brokers, or or indeed more broadly, customers, we're utilizing it there. Absolutely utilizing it to make better decisions.

Whether that is ingest in third-party data, make us make better underwriting decisions, underwriting sort of pricing decisions, that sort of the second area that we're utilizing it. Clearly, making us more efficient.

I'd say it's a combination. It definitely is looking outside and taking the best external information there exists, and then blending into that our own proprietary data sets.

With regard to data centers, yeah, absolutely. Data centers is definitely becoming a significant, area.

We talk there's a lot of talk about it being a structural growth opportunity, and it really is underpinning that that that digital economy. We're really thoughtful.

We're really thoughtful. We have, leaned into that.

We're curious. We've deployed some capacity in both our primary, in our London Market business and in our reinsurance business.

At the moment, we're thoughtful because one of the significant areas that we need to get ahead around is accumulation. We're also investing, at the same time deploying a little bit of capacity, we're also investigate investing in building our own accumulation modeling, we're really clear around where these accumulations lie, and we can actually manage them manage them ourselves.

Watching it, deploying some capacity, but also thoughtful in terms of accumulation.

On capital, at the CMD, we announced our target operating range through the cycle of 190 to 200. You'd see the 211 on a pro forma basis is a bit outside that.

Sometimes, you can expect through the cycle we will be outside it. I think it's a small amount above.

I think we've struck the right balance between the increased share buyback that we've announced today of $300 million and retaining the optionality for further opportunities for growth. We are a growth business.

If you look at our capital management framework, the first priority is growing the business. Let's keep going along.

Abid?

Thank you. Morning, Abid Hussain from Panmure Liberum.

I've got three questions. The first one is on the pricing cycle.

Just wondering if you could talk to your past experience on previous soft cycles and that move from adequate pricing to inadequate pricing. Is that typically gradual, or does it happen in a sort of cliff-edge moment?

If so, are you looking forward, are you sort of seeing potentially any cliff edges on any key lines of business? That's the first question.

The second one, just coming back on the reserving philosophy. You're reserving now at 86%, above the 75% to 85% confidence interval that you set yourself as a target.

It sounds like you're saying you're just being conservative because pricing is softening. Just wondering if there were indeed any areas where you saw loss picks deteriorating, any sort of concerns at all, or is it just genuinely just being conservative?

Then just sort of how quickly would you expect yourself to trend back to around 80%? That's the second one.

Then just finally, very quickly, the final question on M&A. Are there any areas where you'd benefit from participating in M&A?

I'm thinking really sort of adding new capability, new sort of product sets in adjacent areas to help you accelerate growth in adjacent areas. Thank you.

Okay. Thank you, Abid.

In terms of the evolution of the pricing cycle, Jo will take that. In terms of reserving, Paul can provide commentary.

In terms of M&A, I guess the first thing to say for our business, as you can see from the results today and from previous years, and the diversification within our portfolio is we don't need M&A for growth. We have a fantastic retail franchise, where I think last year we set out the extraordinary growth opportunity.

What you can see is over the years, we are accelerating the pace at which we're capturing that opportunity, and we're very confident and optimistic, frankly, about getting to 8% in 2026 and extending that to double digits in 2028. In our big-ticket business, again, we've demonstrated we are leading class in terms of cycle management.

At the same time, we've stepped up that product innovation, and we are expanding into adjacent classes to moderate the impact of cycle management. Now, again, you look at the history, we're approaching $5 billion of premium.

That is almost exclusively organic growth. That is the predominant form of growth that we will achieve.

What you also saw from 2025 is where there's a strong strategic rationale and the financial metrics make sense, we will consider small bolt-ons. Of course, we purchased a very small entity called Lockton in Italy, which we closed in the second half of last year.

That gives us a toehold into the country, frankly, no premium, but it gave us a system, and it's given us 23 people who understand the local market. It was a pretty new startup, and we're now consolidating that, and that will move forward from there.

Pleasingly, we are getting premium in 2026. Then we also deepened our presence in the US, where we made a again, very small acquisition.

Just building on your point, Abid, that did give us access to a couple of classes of business that were on our to-do list, but it's given us quality underwriters, some engineering capability, and access to life sciences and tech startups. It's also given us the beginnings of a tech platform for our broker intermediary channel as well.

Over to Jo on the pricing cycle.

Thanks, Aki. Maybe if we can just bring up that pricing chart, because I think it's a helpful backdrop.

Look, I'm not going to give any predictions on the pricing cycle going forward, but just maybe just some observations on the cycle that we've already been in. I think this has been a very different hard market or hardening market than we've had historically.

I think, if you look at that slide, we've had gradually increases over many, many years across different lines. I think that's because it's been driven by lots of different things.

It's not just been driven by a significant cat activity. It's been driven by lots of things, whether it be low interest rates, whether it's high inflation, geopolitical uncertainty, emerging risk, climate change.

There have been so many different factors that have driven this current cycle that it's been really, really prolonged. It's difficult to see one thing disappearing and the market changing overnight.

I think the other thing about this cycle which has been very unusual is it was actually primary insurance-led. Normally cycles are reinsurance rates led.

Reinsurance rates go up, and then you have to put your primary rates up. Actually, you can see that red line, which is our London Market lines, they moved significantly quicker than the blue line, which is property.

Actually, during that early period, '18, '19, '20, we were calling for a harder market in reinsurance because we just didn't believe we were getting paid to take the risk. We were actually very vocal in terms of that.

The other thing on the red line, and that showed you with the sort of underneath, is that's an aggregate view. What actually was happening was those early rate rises was casualty.

Casualty was the early rate risers. Casualty is now softened, but rates went up 200%, 300% for some lines, and now they're moderating.

Property lines really started to move in sort of 2023. I think the other really important thing about rating is what you can't see on the slide is terms and conditions.

We all talk about the rates going up or down, we talk about rate adequacy, but actually terms and conditions are really significant. The biggest driver of the 2023 blue line, yes, of course, rates went up 30%, 40%, but actually, terms and conditions materially changed, particularly attachment points in reinsurance and terms and conditions tighter around the coverage, and those have largely been maintained.

When we look back at this softer part of the cycle as in 2026, where rates have come off, actually, it was a price-led softening. Terms and conditions, attachment points have largely maintained, That's why I talked about it being a really active year, over $100 billion, $120 billion of industry losses in 2025, but a lot of them didn't make their way to the reinsurance because of that attachment point.

No predictions for the future other than to say it's difficult because it's been driven by so many different things. I can't think of if one thing changed overnight that obviously the cycle would dramatically change in one go.

I think it's a good segue across to reserving. What I'd say is, and what we've said consistently, is our conservative reserving approach remains the same.

It's unchanged. We have a prudent best estimate, and we build upon it.

I think the important point for 2025 is we're coming at this from a position of strength: the increase in the margin and the increase in the confidence level to 86%. That really builds on what Jo's just said, we're coming at this from a point where we've got high-quality underwriting.

Look at the loss ratios that we've delivered across each of our business segments. The quality of the underwriting, the diversity of the portfolio enables us to do what we've done in 2025.

I think in terms of the pace of getting back within the range, I'm not going to guide to that, but we will be back within it.

Just to add to Paul's point. If you flip back to the slide which shows the reserve releases, you can see we're, I guess, in a fantastic position where you've seen stronger reserve releases predicated on, frankly, every accident year showing a positive trend, and at the same time, increasing reserve redundancy.

That's something just to kind of factor in as a package. That's what you're seeing here.

Daniel?

Hi, Daniel, Morgan Stanley. Encouraging to see the change program coming through as expected this year.

I'm just wondering, the actions you've put through this year, do you see them as quick wins or easier than the actions that are to follow from here? Or, another way to phrase the question, is there anything that's been harder to achieve this year than you expected, or anything that's coming up that you think will be harder to achieve than what you put through this year?

Okay. Paul will cover kind of the detail of that.

Let me just give you a kind of overarching comment. The overall program, I think we laid out the categories last year, it's tech rationalization, capability build-out, procurement, and operational excellence.

The program is underpinned by tens of initiatives. There's no one single initiative that's going to kind of drive the savings.

Reality is, not everything is going to work, right? That's kind of factored into the number of initiatives we have, which if they all worked, the savings would be a little bit more than what we've set out.

There's some contingency built into that. I'll let Paul get to the meat of the issue.

Absolutely. Thanks.

I think the important thing to bear in mind is what we're trying to achieve. It is all about really driving scale, improving productivity across the business, and the $200 million falls out of the back of that.

If you look at what we've done for 2025, the $29 million gives us a really good baseline going into 2026, and we've got a clear line of sight of that $75 million that we'll deliver by the end of this year. There are, of course, some quick wins within this.

Setting up a procurement function is one aspect where you can renegotiate some contracts. I say it's easy, but there's obviously a lot of work in understanding how you get to that point.

I'd say, to Aki's point, the number of initiatives that we've got on and the strong sponsorship and the program management around this gives us strong confidence in those areas. We talked about the benefits and the visibility that we're seeing around say fraud and recovery.

We have insourced, as you can see there, more than 100 roles to Lisbon that is at a lower cost. That is already sort of underway.

We're sort of in the middle of outsourcing certain components, and again, good clear line of sight on track in terms of that component. I'd say the program is well-established.

You can see the areas that we are tackling. It will give us a business that is much, much more scalable than it is today.

Okay. James?

Thanks. It's James Shuck from Citi.

I just wanted to ask about the Google Cloud relationship. It's a multi-year relationship, and up to this point, it's really been focused on kind of efficiency gains and underwriting.

The pace of change that we're seeing, it's not clear to me what else they can bring to the table or the large language models that are emerging, whether it's agentic AI. Since you kind of started that agreement, just sort of what are your views on how far that relationship can develop and what else can they bring to the table?

Will you start to use unstructured external data? Where else can it be applied to?

That's first question. Secondly, probably the only accounting question of today, but on slide 51, just interested in the reinsurance receivables, which remain very elevated.

I presume some of that is COVID-related, in which case I'm kind of wondering at this point why we haven't reverted back down to the 10% average that we've seen prior to COVID. If we did see that 15% reinsurance recoverable come back down to the 10%, does that have any implications for solvency?

Thank you.

Okay. I think the accounting one is directed at you, Paul.

In terms of Google Cloud, etc., we have a strong and deep relationships with a number of, I guess, leading software and cloud companies, including Microsoft and Google. Those partnerships extend to a range of different factors.

Firstly, we have a lot of our applications and software on the cloud. I think with the advent of GenAI and agentic e-commerce, etc., I don't think that's going to change.

Those are facilities that frankly those two companies and others invest billions and billions of dollars in terms of making sure they're high-tech, secure, etc. Where else do we use the skills of those companies?

Those organizations have tens of thousands, if not hundreds of thousands, of software engineers, and what they can help us do is accelerate the journey that we're on. Now what do we bring to the party?

As I said, the thing that we bring to the party are kind of three things: One, we have invested significantly in our technology over the years. This is not something new to us.

It's already within the P&L; you can see it. We have spent years gradually cleaning up our data.

It's never perfect, but it's in pretty good condition. The third thing is ambition and culture.

We have a culture that's a business-builder culture. We're looking for new opportunities, we're continuously experimenting.

We use their state-of-the-art AI tooling these days that they are bringing, but we already have a system where we can integrate it and build it, and start to develop real use cases within our business. For instance, in our London Market business, they're using, was it, Google X, which is again one of the divisions within the Google business, and we're using some of the technology there to help us underwrite some of the risks in the US, some of the property risks in the US, with some really, what we think is high-quality, very granular data with a very long history.

We're using these organizations to help build some of the base technology for the new powerful portals. Now once we've built those, we can do a lot of things ourselves.

That partnership, I think, will continue. The shape of it, of course, evolves over time, but the key thing they bring to us is capability and acceleration of our own ambitions, which we can then amplify with our own capabilities.

Then, I think on reinsurance recoveries, I think it's sort of multifaceted. I'd say I think the first point is around actual reinsurance collections that are COVID-related have gone very, very well.

We're very happy with that perspective. I think what's happening, and what you can see in terms of recoveries versus let's say 10 years ago, is book mix.

One is it's going to be much more shorter-tail business 10 years ago than it is today, but also think about the RI mix. The third-party capital is obviously greater than it was 10 years ago, and therefore, you've got a natural level of additional recoveries on the balance sheet that you didn't have a decade ago.

I think that's that. In terms of implications for solvency, as that comes down, obviously, the credit risk charge comes down.

It's pretty modest in terms of overall sort of capital. It's not a big driver at all, but clearly there'll be a modest benefit as that comes down.

Vash?

Hi, this is Vash Gosalia from Goldman Sachs. I have two questions: one on the retail business.

You've announced you've delivered 6.3% constant-currency growth in '25, but at the same time, you've had benefit on the rate, 2%, and then policy count of growth of 7.5%. Could you just help us square those numbers, and I'm guessing the difference comes from mix shift, but then where exactly or which product line is it that you grew in or what geography, and maybe how are each different from the other?

That's the first one. The second one, just on reserves again.

Honestly, we were a bit surprised by the reserve release that we saw in the second half. Could you unpack as to where those reserve releases have come from, either accident years or any particular events that you saw improve?

Thank you. Okay.

Paul will comment on the reserve releases. In terms of retail, I think you hit the nail on the head: it is entirely mix.

We did see a 2% rate accretion across the retail portfolio and 7.5% increase in policy count. Within the two big kind of segments are that the digitally traded business, largely direct and through partners, there the average premium is kind of $1,000 or slightly less.

That is simply growing faster and therefore adding more policy count than the broker business. I think, as you'd expect, healthy growth in both, but the digital platform is growing a little bit faster.

Just in terms of reserving, H2, it was basically all years, you could see actually on the chart, all years and all segments, really across the business. I think it comes back, and we can't state it enough, that this is a manifestation of conservative reserving, conservative loss picks.

If you're strong on the way in, clearly you're going to be strong on the way out from a redundancy perspective, and you can see that in all of those years trending down. Aki's right, you sort of bear in mind that point about strong releases of a manifestation of increasing redundancy.

Ben, and then Cameron.

Sorry. Just got in there.

Ben Cohen at RBC. I had two related questions.

Firstly, could you say how much kind of good fortune was in the result in the second half of the year? Because that's quite hard to unpack.

Secondly, when we look at the rate declines that you've announced for January renewals, how should we think about that in terms of how that's likely to feed through into the combined ratio over the next couple of years? Thank you.

Okay. In terms of good fortune, well, we all need some, I think.

I think Jo will kind of provide a bit of a commentary on that. I guess my overarching comment is we've not received any more good fortune than anybody else.

We're very pleased with the outcome, but Jo will comment on that. In terms of rate declines and how that might impact combined ratios and so on, let me just kind of deal with that.

Again, just for completeness, retail business, we continue to forecast 8% growth and a combined ratio within the 89% to 94% range, and with a gradual improvement within that range as operating leverage and the efficiency program continues to deliver. In terms of our big-ticket business, look, the eventual combined ratio will be a factor of many, many things.

I think the key thing I would ask you to kind of bear in mind is if you go back to Jo's slide on rates and the quality of the portfolio, the majority of the portfolio, both for reinsurance and London Market, is in a very, very good place. Therefore, the potential for strong earnings growth or earnings in 2026 remains pretty high.

Thanks, Aki. Absolutely, I think when we look at the year as a whole, there was still $120 billion of industry losses.

We started January with the really tragic events in California. We ourselves reserved $170 million for that event, and the majority of that was in our reinsurance.

Of course, when we talk about the sort of benign second half, yeah, absolutely that, particularly the North American wind season was more benign, but looking at the totality of the year, it was still a pretty active year. I think the thing that I always look at, though, is the underlying, because the wind can blow or not, and clearly we respond, but actually it's the underlying health of the portfolio.

Looking at the attritional loss ratio, looking at the risk loss ratio, and across all of our segments, whether that's London Market, reinsurance, and indeed retail, all within expectation, and that for me is the real health of the portfolio is that attritional loss ratio. Pretty pleased with that underlying claims performance being within expectation.

Thank you, Jo. Then Cameron.

Hey, it's Kamran from J.P. Morgan.

First questions on retail. Clearly, kind of 9 months into the new strategy, the new plan, things seem to be going very well.

Just trying to work out whether actually your historic kind of retail combined ratio range now probably looks quite conservative. If I think of the tailwinds you've got, this year seems to have gone quite well.

You're clearly very excited about the potential benefits from AI. You probably should have taken a point off that range anyway for Direct Asia last year.

If I assume a lot of the expense savings come into that, it feels like the historic range seems a little bit cautious. You're 9 months in, I understand that, just interested in whether you feel kind of more or less confident on delivering and maybe outperforming that number at some stage.

The second question is on share buyback versus dividend. Clearly, the step-up in the buyback was great.

I think it reflects the confidence you have in the business. At some stage, do you expect to change the mix between dividend and buyback?

Because at the moment, I think it's not unlike peers, but at the moment, the buyback is quite a lot bigger than the dividend. One one last question.

I know we talked about AI and data centers. We didn't talk about data centers in space, but that's probably for another day.

There's clearly going to be product demand for AI, AI errors, omissions, hallucinations. What are you seeing in the market for that at the moment?

Thanks.

Okay. Very good.

Thank you, Kamran. In terms of underwriting data centers in space and AI hallucinations, etc., and how we deal with it from an underwriting perspective, Jo will cover that.

In terms of share buybacks versus dividend, Paul will cover some of the detail. Suffice to say, I think, certainly for the moment, we are very happy, and again, this is all about balance.

I think we're striking the right balance in the form and quantum of capital return that we're providing to shareholders, and balancing that against also the investment that we're putting into the business for both near- and long-term growth. In terms of the retail COR, the guidance is 89% to 94%.

We expect to improve within that range. We have had years where we have been at the upper end of that range.

We are providing guidance that we expect over the next few years that we will edge towards the lower end of that range as the business continues to grow and deliver operating leverage and the expense efficiency program and the build-out of capabilities that Paul has laid out delivers. Why don't we go to Jo first on data centers in space, and then Paul, any more color you want to add?

The space bit was slightly flippant.

Yes, absolutely. I think I'll focus on the AI part.

Thought that was the core of the question.

Exactly. Look, we talked a lot today about our own use of AI and maybe our customers' use of AI, but, just to be clear, we have just as much thought going into how our customers are using AI and how that's going to change the nature of the risks that we insure.

This absolutely is an emerging risk. There's going to be some areas of risk that actually gets better, because some of it is still driven by fat finger, and actually with an AI, there is more consistent in terms of decision-making.

Maybe some of those errors and omissions actually improve. There's definitely new areas of risk for sure, and we're being really thoughtful about that.

Certainly from our point of view, we're not going down the route of blanket exclusions. We're being really thoughtful around the risks that they present, understanding those risks and then indeed accommodating those risks, either by pricing for them or providing sort of affirmative coverage.

A good example would be in our UK portfolio, in our technology, we were one of the first to confirm affirmative AI coverage within that policy. I think the other area that we think about is not just the risk, but actually the opportunity.

We are an insurer, a specialty insurer for emerging economies, for new economies. There's a lot of people, there's a lot of investment in AI and data centers and that's attached to this digital world that all need insurance.

We're really well placed to be able to provide insurance for the consultant who happens to be in that AI world. We're also thinking about it from an opportunity point of view: How do we understand the risk?

How do we develop our own products and services to help our customers with that risk? Then also, how do we broaden our appetite to capture some of this more new economy in terms of their own insurance needs?

A lot going on on that space internally.

Thanks, Jo. The nature, form, structure of capital returns fits squarely within the capital management framework.

We will prioritize growth, we'll maintain a strong balance sheet, we'll have a progressive dividend. Now you've seen that we've increased our final dividend per share 20% in each of the last two years and then have a progressive dividend thereafter.

When we've done all of that, then the surplus that's left after that will be returned to shareholders, and that remains the condition.

Okay. Chris?

Thank you. It's Chris Hartwell from Autonomous.

Just two very quick questions, hopefully. Just on the recent reorganization within Hiscox Re, I was wondering if you could talk about what advantages you think that brings, and in particular on Hiscox Capital Partners.

Where would you like to see the fee element of Re going over the next few years, and particularly if it's the right time or a good time in the cycle to be doing that? Then probably my lack of understanding or lack of knowledge rather, just on tax and Bermuda.

A lot of your Bermuda peers have been sort of talking about the tax credits that they will accrue from the recent tax reforms in Bermuda. I guess two two parts to the question.

If you could help me understand what is your I guess on-island expenses or headcount or something where I can sort of think about that, and if there's anything you can do to really take advantage of that? Thank you.

Okay. In terms of Bermuda tax, Paul Paul will cover that.

In terms of Hiscox Re and the sort of reorganization to create Hiscox Capital Partners, look, as we've had a long-term strategy using third-party capital that wants to access, frankly, the fantastic underwriting capability of our Hiscox Reinsurance business. We've had a number of different sort of verticals.

We've had traditional capital in the form of quota share partners. We created ILS funds just over sort of 10 10 years ago, and those have evolved.

We have a number of ILS funds with different sort of risk levels. We have an SPV, we have sidecars, we've also then expanded into cat bond fund capabilities.

Frankly, the Re and ILS was a nomenclature which no longer describes what we actually do. It is much more mature, much more sophisticated in terms of the different capital bases that we're managing.

That's first reason for kind of using the new nomenclature. In terms of, at this point in the cycle, frankly, last year and this year, we have seen increased interest in third-party capital coming to benefit from our underwriting.

I think you heard from Paul earlier, the AUM, which is the one thing we quote, which is ILS AUM, has increased from I think $1.4 billion at the start of last year to $1.5 billion at the start of this year, albeit that deployable capital has gone up a little bit more, because we had some outflows and then some new money coming in. In terms of fees, again, as you heard from Paul, the last three years of fees have been in excess of $100 million, a nice contributor to the reinsurance business and to the overall group.

The fees are structured essentially, as you can imagine, in two forms: You have a fixed component, and you have a profit commission component. Over the last few years, because of the underwriting results, the profit commission component has increased quite significantly, getting us to over $100 million.

What we have done actually over the last couple of years is also gradually restructure some of those fees, now the majority are fixed. In terms of where that fee income will go, well, look, there's two major drivers: One is the quantum of third-party capital that we're able to deploy, and I think that is going to grow, so that will kind of push the fee income up.

Then it's down to the actual results. Whilst the majority is now fixed versus PC, profit commission, the PC is still pretty significant, and that will be determined by the outcome of in-year results.

Paul?

Tax. Yes.

Jumping at the bit. The Bermuda-based tax credits, they're small.

They're sort of single-digit millions. They're absolutely dwarfed by the introduction of the global minimum tax this year, and you can see that our tax rate's gone from 8.5% to 17.6%, so that's a big uplift.

What can we do more in order to sort of maximize that benefit? Essentially, employ more people on island that don't need a work permit.

That's the sort of driver that will trigger more benefits. The reality of it is it's capped at around 150 people.

There is a limit to sort of how much additional benefit you can get out of that. That's the biggest driver for it.

Okay.

I think we're done. Guys, thank you very much.

This is a time of change, right? I think it's time for the nimble and the bold, and those who can really turn imaginative ideas into operational reality.

I think that describes the culture and capabilities at Hiscox. These are really exciting times for us, thank you very much.