Good morning and welcome from Hannover. We are here at our little studio at HDI-Platz in Hannover, and thank you for the time you're spending with us this morning to go through our numbers for the second quarter of the financial year 2026 and the first six months of the financial year.

I'm next to my CFO, Jan Wicke, who will as always take you through our numbers in more detail. After his presentation, we're happy to answer all the questions you have in relation to our numbers.

We are on MS Teams today, if you want to pose a question to us after Jan's presentation, please use the hand raise feature and I will slot you into our Q&A. All the supplementary information material to our presentation is published on our website, including but not limited to our comprehensive financial data supplement.

With that, I hand over to you, Jan.

Thank you, Bernd, and good morning, everybody, and thank you for attending our earnings call. I'm glad to provide you with some insight how Talanx has performed during the course of the first six months.

To start with, we were able to achieve a net income of roughly €1.5 billion after six months, which is the highest result in Talanx' history. Even better than that, we have record results in each and every segment, in all the four of them.

52% of our profits were derived from primary insurance, 48% from reinsurance, this is a well-balanced mix. This has driven our confidence to increase the guidance already after the second quarter.

We now expect to deliver a net income significantly above €2.7 billion for the full year. As usual, let me start to provide you with an overview about top-line and bottom-line.

Top-line, insurance revenues are stable in euro terms, and currency-adjusted, we are growing by 3%. The net income is up 9% to €1.5 billion, and the high profitability of our business is displayed in a return on equity of 21.5%.

The slight decrease in the return on equity on this outstanding level is driven by a higher equity, which I will explain later a little bit more. Looking at the top-line, where is the growth derived from?

Primary insurance is growing currency-adjusted by 4%, reinsurance by 1%, and this combines then to a currency-adjusted growth of the group of 3%. With regard to the bottom-line, primary insurance was able to increase their contribution to the group net income by 12% to €780 million.

Reinsurance is up 7% to slightly above €700 million, and for the group, this adds then up to 1.499, to be precise in the numbers, for the half year. Looking at the diversification in the group, there has not very much changed, we are very well diversified with regard to both top-line and bottom-line.

On the left side of the chart, you see the split of the insurance revenue, which is very well diversified throughout the world, and on the right side, you see the earnings contribution by segments, where we also have a nice diversification. Looking at one source of our results is the development of large losses, and there, we want to draw your attention to the fact that we have had a very benign first half year with regard to large losses.

Far, we have just reported losses of €942 million. We have booked, as usual, the higher of large loss budget or reported losses, we have booked €1.4 billion in our accounts.

This means there is a difference of €474 million, which would translate into a net income effect of €265 million. Very benign large loss development during the course, but not yet reflected in the bottom-line numbers.

Obviously, this drives also our confidence to increase our guidance to significantly more than €2.7 billion for the full year. This would translate into a return on equity of slightly above 19%.

Let's dig a little bit into the segments, and as usual, we start with Corporate & Specialty, HDI Global. With regard to the top-line, in euro terms, we have a decrease of 2%.

Currency-adjusted, we are nearly flat above €5 billion. The group net income, despite a super-prudent accounting, is up 7%.

We have very strong technical results, which is reflected in the combined ratio of 90.7%, and we have a growing investment income, which is driven by that we've sold in the past some fixed income with lower coupons and bought some with higher ordinary income, and so we see a growing investment income here as the second drivers of the earnings increase. Return on equity stands at 16.5%, and we are very, very confident that this segment, who is really performing very well, will deliver a return on equity in this area also for the full year.

Coming to Retail International, which had an outstanding first half year of 2026, here we see in euro terms a growth of 9%, currency-adjusted even above 10%. For the first time, they have already achieved more than €5 billion insurance revenue after the first half of the year, and we now expect them to hit the €10 billion mark by the end of the year in this regard to insurance revenues.

Even a higher growth rate is seen in the bottom-line. The net income is up 16% to €387 million, and the drivers of this really really outstanding development is a very strong technical result with a combined ratio of 91.2% and also rising investment income, which supports the profitability of this segment.

The return on equity stands at 20.8%, and even if we adjust it for the buyout of the Polish minorities at the beginning of this year, then it's 19.9%. This is a really very good number for a retail business, and Wilm Langenbach and his team, they are really proud on what they have delivered so far.

Coming to our smallest segment, Retail Germany, which accounts for slightly below 7% of the overall net income. With regard to the insurance revenue, we would have expected a stronger decrease of the numbers, but given that they are quite successful in the distribution in non-life and also in the other life areas, it's just a decrease by 1% despite the fact that we had to compensate for the end of the TARGO Bank agreement.

The group net income is up 19% to roughly €100 million, and this is despite the fact that they had €15 million large loss budget overshoot, and in this segment then, we have booked the reported large losses. This translates also in a combined ratio of very good 93%.

Return on equity stands at very good 13%. Coming to our biggest, by far biggest segment, Hannover Re, the reinsurance.

Here, we have a decrease in insurance revenue of 3%. Currency-adjusted, we are growing close to 1%.

The group net income contribution to the Talanx Group result has been increased by 7% to more than €700 million, and this is driven by an outstanding low combined ratio of 83% here. Return on equity stands at 21.9%.

As most of you might have listened to the call of Clemens and their colleagues, I do not have to comment further, but Hannover Re is constantly delivering good results. Coming to capital management.

With regard to the solvency ratio, we are standing at 246%, we have a very good solvency situation. The equity development is very pleasing.

We have an increase of the equity despite paying a dividend of €930 million by roughly a little bit less than €1 billion. Overall, from a shareholder perspective, we were able to create roughly €1.9 billion value through the first half of 2026.

This translates into more than €7 per share. Also, we see a very good development in the other shareholders' capital components.

Overall, if we add to the equity the CSM and the risk adjustment after minorities, after taxes, then this adds up to roughly €23 billion for Talanx as a whole. This is not too bad.

Coming to the investment portfolio, we can report that we haven't changed a lot, we are still predominantly investing into fixed income. More than 80% of our assets are in fixed income, and out of that, more than 90% in investment grade.

It's a low-beta investment portfolio approach, and we have added some other asset classes, which are on the pie chart on the right side of the charts, in order to achieve a little bit yield pickup here overall. Nevertheless, looking in the accounts, you will see that we have increased our investment income quite substantially.

The investment income for own risk is up 15%, return on investment 40 basis points, and the finance and investment result, which also takes into account the unwind of the claims reserves, is even up 21%. What is reflected in this development is, and you are all aware of it, in the last year, we have sold fixed income with low coupons out of the low interest rate phase and bought some new fixed income for it with higher coupons, and therefore, we have now a higher ordinary investment income, which we can report and which flows here through the results of the Talanx balance sheet.

Coming to our outlook. Overall, we are pretty, pretty confident with regard to the Talanx business model.

Looking at the business model in more detail, with regard to diversification, at the beginning of the presentation, you have seen our split of revenues and earnings, we are very well diversified. We have a P&C focus, more than 80% of our business is in P&C.

Looking at the quality of the portfolio, I just want to draw your attention that we are always booking the higher of large losses incurred and reported and the large loss budget, and we have booked the budget. Despite the fact that we have booked the budget, the combined ratio is below 90%, we have a very high quality in our P&C book.

Thirdly, we are cost leader, and may I draw your attention to the appendix of this presentation. On page 31, we have updated our cost advantage towards the peer with the year-end figures by 2025, and there, you can easily find out that we have a significant cost leadership compared to our peers, and this gives us a competitive edge in an increasingly competitive market.

Last but not least, we are all living in a world of uncertainty, and therefore, it's really useful to have a lot of resiliency to cope with this uncertainty. As you are also well aware of, we have a super-strong balance sheet, and this drives also our confidence with regard to our outlook.

We now expect to deliver for 2026 significantly more than €2.7 billion net income, and this translates into a return on equity of slightly above 19% for the full year 2026. With that, Bernd, I hand over for you for the Q&A.

All right. Pleasure to do so.

Let's dive into our Q&A section. The first question comes from Kamran Hossain from J.P.

Morgan. Kamran, good morning.

Fire your questions at us.

Hi, good morning. Hi, Jan.

Hi, Bernd, and congrats on a record first half. The first question is probably something lots of people are going to ask about, but the guidance outlook is very good.

Can I just ask, this time last year, you increased the guidance. That went from €2.1 billion to €2.3 billion, you were confident enough to put a number on it this time last year, and then it increased again at Q3 last year.

What's driving the rationale to not give another number at this stage in the year? Is there anything behind that?

Do you think the upside is probably even more than we might have seen last year? Just interested in kind of what does significant mean and why didn't you put a number on it this time round?

The second question is when I look at the earnings, clearly investment income was a benefit, and you've highlighted that in the slides. How much of the beat versus being significantly above €2.7 billion is sustainable into 2027?

I think quite a bit of it will be, but just interested in your take on that. Thank you.

Okay. First, with regard to the outlook, I have to admit it is very unusual that we already reassess our guidance after the second quarter.

As you are all aware, the third quarter is a hurricane quarter, yeah, with the largest consumption with regard to large losses. We have a lot of confidence that we have already increased above 2.7 or significantly above 2.7 at this stage in the year.

We will reassess our guidance after the third quarter when we have more knowledge about what has happened with regard to large losses in the third quarter. Then we can put that into comparison to our last large loss budget.

In the current outlook, obviously, it's included a full consumption of the large loss budget for the full year despite the fact that we have a huge buffer if you look at the numbers after the second quarter. I just want to highlight also, we haven't said above 2.8.

At the current stage, we feel comfortable to say clearly or significantly above 2.7. We will reassess this after the third quarter, and then we will also deliver an outlook for 2027.

Second question with regard to the investment income, how much is sustainable in this investment income? I believe the higher coupon, which we see in the ordinary investment income, is sustainable.

Let's assume the following: we have not a very high large loss consumption in the third quarter, let's just assume it for a while, then it could be also used to realize a little bit more hidden losses on the bond portfolio in order to ensure that we can show earnings growth also in the years to come. This is also in our mindset on how to steer year-end results.

This comes down to our priorities. The first priority for Talanx is dividends always up, and we will deliver on that one.

The second priority is we want to provide our investors with earnings growth with lower volatility. This is what we always keep in mind when we are steering our results.

Excellent. Cheers.

Okay. Next in line is Hadley Cohen from Morgan Stanley.

Good morning, Hadley. What questions do you have in mind?

Morning, everyone. Thanks very much.

I think Kamran's asked the key question already, but if I could just ask on the C&S combined ratio, you're still building buffers there, I think, but at a slower pace than you were, which means more is flowing through to the combined ratio and the bottom-line. How should we think about the outlook from here?

Are you basically saying that because you're building buffers at a slower pace incrementally, the combined ratio should continue to get better from here, or should we assume that the slower pace of buffer build is effectively offsetting pricing pressure that you're seeing in those lines, the combined ratio remains broadly stable? That's my first question.

Second question is on Retail International, please. Very strong, around 10% top-line growth there.

Can you give us a sense of the mix of volume versus price in that respect, please, and just to get a sense of the sustainability of the growth trajectory there? Jan, you've been very useful in the past with respect to giving us some guidance around full year earnings for this division and what have you now that restructuring costs are largely behind us from the integration of the acquisition.

Is the first half print, for example, a good proxy for something that we should extrapolate into the second half, and is the sort of volume growth a good indication for the earnings trajectory from here? Thank you.

Thanks, Hadley. First question was with regard to the resiliency development and combined ratio development at Corporate & Specialty.

Obviously, we try to deliver a stable combined ratio through the cycles, and in this area, to have a combined ratio below 92 is already a good number. Here we shouldn't forget about that we are currently in very benign environment, but this is also already a very good number.

With regard to the resiliency building, I come back of something with what Christian at Hannover Re has said. There are three phases of resiliency building: strong resiliency building, what you have seen in the last year, then there is mid-building, a little bit building of resiliency, this is what you should expect for the current year, and then there is a phase where there's no resiliency building, but I want to ensure you, we are still building some resiliency, not at the level of 2025, it's not too bad.

Second question was with regard to Retail International, which had really an outstanding development in the first half of the year, and you asked for mix and volume and should provide you a little bit, I guess, some more color on where the growth was coming from. Looking at the first half of the year, the growth was derived from Poland, from Brazil, from Mexico, from Turkey.

This was the main growth drivers in the Hint portfolio. The markets there also there is a little bit balance in the markets in terms of softening and hardening from the markets.

My view on retail business is, if you deliver a combined ratio around 93%, you are already very good in the retail business, and they are now currently in outstanding, very very good. What is the earnings trajectory for Retail International?

If we look at the current run rates, that's looks really very pleasing. Obviously, we will try also to manage the earnings volatility in the segment, I'm a little bit reluctant to multiply it with two.

As usual, also if you look at the Talanx history in the last years, the second half year was always a little bit weaker than the first half year. Keep that in mind.

We are a little bit trying to steer the results here, but the underlying trend of what Wilm Langenbach and his team is doing is very good. You are absolutely right, we are behind the curve with regard to the costs for migration.

They are achieving and working on cost advantages here, and this cost advantages, they will provide us with a competitive edge, which will be also useful for the years to come. We will provide you with some more insights on the outlook for 2027 in the next quarterly call, as usual, when we provide you with the full year outlook on 2027.

Thank you.

Okay. Next question from Michael Huttner from Berenberg.

Michael, good morning.

Good morning, thank you very much, and yeah, congratulations, seriously, congratulations. You must be very happy.

Just on Germany, top-line beat in a funny way. I just wondered if you can talk a little bit more about that.

Then the €15 million kind of excess large losses, when I spoke to wonderful IR team, they said it was mostly SME claims, I'm just wondering, is it what I would call recession claims, when you have an insurance policy, you can transform it into cash by having a claim? I have a third one.

Top-line currency-adjusted 3% in H1, you're saying you're still maintaining the 5%, kind of 5% for the full year. Just doing the maths, it would imply 7% in the second half.

Where would that growth come from? Thank you.

To start with Germany top-line development. We had to compensate in the first half year roughly for €80 million insurance revenue of TARGO, yeah?

If you see this minus percent minus 1%, and then you really can see that we have growth in the other areas of Retail Germany, and it was above our own expectations. With regard to the large losses, well, they have been fire claims, I should follow your idea whether there's anything, but it doesn't seems to be fraudulent.

It's normal delivery in the property lines, and we have had these losses, and we are delivering to our customers. This is key to us.

Third question, Mike, could you repeat it?

The group top-line, if you maintain the 5% for the year, it means you're expecting more in the second half.

When we are talking about mid-single-digit, then we have a range in between 3% and 7%, and this might be below the average, 3% to 7% despite the fact that we see some nice developments in both reinsurance and also in Corporate & Specialty, and in particular in Retail International.

Thank you.

Chris Hartwell from Autonomous with more questions. Chris, good morning.

What's on your mind regarding our numbers?

Good morning. Thank you for giving me the opportunity.

Can I come back to, I guess really Cam's question, just on the net income target? It's interesting that you've changed the phrasing around the net income sort of target for 2026, but the return on equity target is unchanged.

Sort of if I do sort of the maths around that, 19% ROE is just above 2.7 if I assume the sort of the June 30 shareholders' equity is a good proxy for average across the year. And 20% would be, I guess closer to €2.9 billion.

I'm sort of wondering if you can sort of help me I guess with the phrasing of around 19%, I guess the around bit on the ROE guidance. Secondly, just coming back to the cost leadership point you were making.

I guess how defendable do you think that is, particularly with the industry trying to embed AI and various other sort of efficiency mechanisms across the industry? Do you think that's sustainable?

This relates to that as well, Retail Germany, I guess, is the missing piece on that sort of clean sweep of cost leadership across the group. I'm intrigued to know why you don't have a cost advantage there.

If I can sort of sneak just a little third one in as well. There hasn't really been a great deal of talk on dividend.

I appreciate the message you gave in Q1, but again, if we could have a little bit of thought around sort of dividend sort of outlook, and particularly, I guess, how you sort of think about dividends as cycles get more challenging. Solvency isn't related entirely to top-line growth, sort of more exposure, but presumably, the ability to deploy capital is going to become more challenging, both in C&S and in reinsurance.

Can we expect further acceleration of dividend over the next few years? Thank you.

Thank you, Chris. Let's start with the net income target, and you have very well calculated above €2.7 billion net income, and assuming the equity, it's above 19% if you do the maths there.

We haven't adjusted this around 19% because in our calculation, it's not yet above 20%. This is why we have left this unchanged.

Second question was on cost leadership, and therefore, I think I go to page 31. I hope the colleagues can, yeah, there we are, see to go to page 31.

I hope it's displayed now for you as well. What you can see here is that we have quite significant cost advantages compared to our peers, and this is very difficult to achieve.

I believe that AI, obviously, will accelerate the way how cost-saving is done, but it will take some initial investments first. We are starting from a better position in this race to make use of AI to become more cost-efficient.

Will AI always drive cost efficiency? I'm not 100% sure on that one, and let me exchange my ideas on that one, why I'm not 100% sure.

Let's assume that in the past, you need to make three offers to clients in order to achieve one contract. With AI usage on both sides, with the broker side or customer side and on our side, there may be a future where you have to send out 10 offers to achieve one contract.

The volume which needs to be covered in the operation may increase due to AI. Therefore, the efficiency of the processes will be even more important.

I'm confident that we can keep our competitive edge on costs, and we are starting, as you can see, from a better starting point compared to our peers. On Retail Germany, your questions why don't you have cost advantages in Retail Germany?

I think there, given that I was in the very past, seven years ago, I was also CEO of Retail Germany, let me provide you with two insights. First, with regard to the P&C book, it's a little bit a question of scale, and we had to modernize our IT system, which is done now, and we are already seeing very good progress that we are already on average costs with regard to the P&C book.

With regard to the life entities, there are ongoing migrations to get all the life entities on one IT platform, which will then provide us with cost advantages towards the average market too. This will take us another two, three years, but the colleagues around Jens Warkentin, they are working consistently on that one.

We will improve our cost position also in Retail Germany because we believe cost leadership is really key in the markets we are in. Last question, Chris, was on dividend, and I just want to repeat what we have promised.

We have promised a dividend of at least €4, and I said well above €4 last time. This is what I would expect, and the solvency is very good, and I'm really not at all concerned about the capital base.

I do expect that we will deliver on dividends up also in the years to come.

Thank you very much. Then

we have questions from Iain Pearce from BNP Paribas. Iain, good morning.

Hi, morning. Thanks for taking my questions.

Sorry, I was just going to try again on the net income point. Just because the regulator for a significant deviation assumes a 10% move, and that's the requirement for a pre-announcement in Germany.

When I see the word significant, I sort of immediately jumped to 10%. Is that not what you're trying to tell us with that word?

I just wanted to clarify that. The second one was just on the run rate growth in German top-line.

That looks to be significantly ahead of the guidance for the full year, just wondering if you want to revisit that. Then also just on Germany, just to clarify, the large losses, were they 15, 1-5, above budget or 50?

First with regard to the net income, just to repeat what I've already said, we haven't said above 2.8. We have said significantly above 2.7.

This is what we see as of today. After the third quarter, we will reassess our guidance in the light of the hurricane season and the large losses which have been occurred during the course of the third quarter.

Second, with regard to the run rate in Retail Germany, we are maybe a little bit defensive here. The development in the first half year was really good at Retail Germany, but there we are a little bit defensive.

It could come out slightly better than initially projected. This is what we expect here.

Does this answer your question?

Just the clarification on the large losses, because I didn't get the number, whether it's 15 or 50, because that's quite big for the underlying combined ratio.

In Retail Germany, it was 15, 15, 1-5, above the budget, and the main driver are three fire claims where small plants of SME businesses burned down. Perfect.

Perfect, thank you.

All right. Roland Pfänder from ODDO BHF.

Good morning, Roland. What do you have in mind in relation to our numbers?

Yes, good morning. Thanks for taking my questions.

I would like to come back to Retail International. I reported very strong revenue growth.

Nevertheless, quarter-over-quarter, it came down, I think, from 12% to 8%. Is there anything you could point at?

Secondly, could you comment a little bit on claims inflation in Retail International, what you see here? Maybe you could also compare it to C&S, it's different momentum, for example?

Then regarding Retail International, I think you had a target to increase your non-motor business over the years. Maybe you could provide an update to this target.

Thank you.

Okay. With regard to the revenue development, what we see in the revenue development, this is right, a little bit the very strong growth of the first quarter came down in the second quarter.

It was in particular driven by Poland, but nevertheless, Poland is still the main driver or one of the biggest driver of the positive revenue development in Retail International. The development in Poland is due to higher competition, yeah?

We've gained a lot of market share in the last 18 months in Poland, and this is a main driver. With regard to the claims inflation, that's a difficult question to answer because claims inflation largely depends on the currency exchange rates in the various countries we are in.

Therefore, it's always play claims and price adaption which you have to see in parallel when looking at those markets. Then obviously, the claims inflation in local currency terms in Brazil are different from Poland, are different from Italy, are different from Turkey.

I'm sorry that I just can provide you that's a little bit more noise on that one, but overall, looking at the combined ratio, we are very happy the way we can adapt to claims inflation in our pricing so far, and the combined ratio of Retail International is really at a very, very good level. With regard to the non-motor business, unfortunately also the team which is supporting me is currently short of this answer, but we will provide you the answer after we have analyzed it later.

Thank you.

Then there's a follow-up question from Michael, Michael Huttner. Michael?

Fantastic. Thank you so much.

Just two: pricing in Germany in motor, well, motor is the line I'm most interested in, but generally; and also, what kind of firepower would you have for deals looking out? Thank you.

With regard to motor, the pricing in the whole market is still very disciplined, and I would expect some more price increases due to the claims inflation, yeah? A lower single-digit price increase is what I would expect, but we will see.

The renewal rate, it starts in October, after the third quarter, I can provide you with more insights from the market because this matters then for the market. With regard to deal capacity, that's a difficult one, but I can give you €5 billion, yeah, as a number, which is feasible.

The question is whether we want to do a deal of €5 billion or whether we rather would like to have a few deals in a lower range. We do have the capacity to do the deals to capture opportunities when they are there, but this opportunities, they have to meet certain yardsticks with regard to return on equity, with regard to some other criterias, and we are very disciplined with that one.

The reason for this €5 billion, just to give some more color, is that we also have lending facilities with the mutual. It's not about having €5 billion of war chest within Talanx, but we also can make use of some agreements with the mutual which is willing to support the further growth of Talanx.

Yes. Thank you very much.

Okay. Then final call for questions.

Looking at the screen, no more questions at the moment. Then, Jan, I would ask you for some concluding remarks.

Thank you for your questions, and thank you for attending our earnings calls. Overall, Talanx had a very good first half year in 2026.

We have delivered record results. We have had a very benign environment with very low large losses.

This provides us with a lot of confidence that we will deliver more than €2.7 billion and significantly more than €2.7 billion net income for the full year 2026. With the next quarterly call, we will update our guidance, and we will provide you with a guidance for 2027.

Thank you for attending this call.

Thanks, and bye-bye. See you soon.