Helvetia Baloise Holding Stock

So let's start with the first speaker, and let me welcome our Group CEO, Fabian Rupprecht. Before joining Helvetia, Fabian came from NN Group, and he previously held various leadership positions at AXA around the world. At both these companies, he was responsible for significant M&A transactions. These included the PMIs of AXA Life in Switzerland, Delta Lloyd in Belgium, AEGON in the Czech Republic and Slovakia and MetLife in Poland and Greece. Fabian was CEO of Helvetia before the merger, and he will now share his strategy for the new Helvetia Baloise Group. Fabian?

Thank you, Peter. Good afternoon, ladies and gentlemen. Thank you all for joining us today. It's a great honor to welcome you to our 2026 Capital Markets Day and the first one as the newly combined Helvetia Baloise Group, a leading European multiline insurer with Swiss roots. While the last 12 months have been very busy for us as management, we're more than ever convinced about the merits of the merger. It's a great opportunity in so many ways. I hope that in today's CMD, we will be able to transmit our enthusiasm to you, too. To start with, let me please summarize my key messages for you on Slide 5. First, building on strong results in 2025, the new company is already fully operational and advancing fast with the integration. Second, we are a rock-solid company pursuing a highly disciplined financial approach with a clear focus on maximizing shareholder value.

And third, over the next 3 years, our priorities are clear, delivering the announced synergies through a clear and well-controlled integration, completing our combined efficiency program, leveraging AI and further advancing on technical excellence. These are the key levers to reach our announced targets, and they are in our hands. And finally, this is more than a synergy story. As a combined group, we offer sustainable long-term profitable growth beyond the integration phase. Helvetia Baloise will leverage its closeness to customers and partners, build on its expertise and specialties and strive for excellence in its capabilities. Let's start on Slide 6. The new Helvetia Baloise Group has a strong base in Switzerland, a market that is known for its stability and its profitability. At the same time, we have a balanced multiline insurance portfolio with more than half of our profits and 60% of our business volume coming from our international markets and activities. Our focused strategies allow us to reach top positions in the targeted activities.

In addition to our #1 position as a multiline in Switzerland, we're, for example, #2 in bancassurance in Spain, and we rank well in the broker markets in Germany and Belgium, as you can see. The diversification is not only driven by the geographical footprint, but also by our business mix with strong positions, both in Life and in Non-Life. Finally, the new company benefits from a strong capital base with an estimated pro forma combined SST ratio of around 260%. Our portfolio is reviewed on a regular basis with regards to capital efficiency and strategic fit. Let's go to Page 7. 2025 was a strong year for both companies, and they were able to deliver on all the strategic targets set for the last year. These targets were defined as part of the individual company strategies and were, therefore, fully relevant for 2025. To give you concrete examples, the underlying EPS growth of Helvetia was 20% and well above the range of 9% to 11%.

And the return on equity of Baloise ended at over 15%, also above the target range. We are proud that these targets were achieved in parallel to the preparation efforts for the merger. Thanks to the intense preparation, up to day 1, we kept the time lines. We moved immediately to a joint organization with clear targets and fast decision-making. At the same time, we established a strong new brand with international reach. This allowed us to keep employee engagement high and to minimize disruption for our customers. Let's continue with Slide 8. Helvetia Baloise starts in a new setup, but there are defined strengths that we will keep and even grow and which will form the bedrock of our company in the future. As a strong base for our value creation, we will continue to leverage our powerful position in Switzerland and our specialty know-how, which we consider as a driver of future growth. The focus on disciplined performance steering will remain, technical excellence as a central initiative will continue to raise the bar in our insurance operations going forward.

And we will keep the IFRS-based financial steering and reporting that you know from Helvetia, apply it rigorously in the new company and complement it with the cash focus you know from Baloise. As part of the shareholder value maximization, we commit to an active portfolio steering based on return on equity and strategic fit. And we will, of course, continue to deliver a stable dividend growth in the future as we did in the past. As you can see on Page 9, for the next 3 years, we have set 3 clear priorities and all focused on execution. First, an obvious one and at the center of our efforts, to deliver on the merger and realize the synergies. This will be our full focus throughout the integration period until 2028. As a result, we have been very selective about adding further priorities. Second, as we believe that the evolution of AI gives many opportunities going forward, we want to stay at the forefront and use AI to deliver on our efficiency targets.

And third, we are convinced that continuing our progress in technical excellence is essential to combine competitiveness and margin improvement. All 3 priorities have been decided based on their direct contribution to our bottom line in the coming years. They are the 3 dominant levers in achieving our underlying earnings growth and thus, an obvious choice to maximize shareholder value. Now the good news is these levers are largely within our control, which gives us a high level of confidence that we can deliver on them even in more challenging market environments. Focusing on our priorities allows us to present to you an ambitious and attractive plan as outlined on Page 10. We expect to grow our underlying earnings per share at a CAGR of 10% to 12%, even though we are starting already from a very, very high base. And we aim to achieve underlying return on adjusted equity in the range of 16% to 18% and attractive payouts are core part of the plan. We are committed to delivering dividends of more than CHF 2.8 billion over the next 3 years from 2025 to 2028.

In 2029, most of our integration work will be completed, allowing for a sustainable dividend that is more than 50% higher than the one we proposed in respect of 2025. The financial objectives show why this merger makes economic sense. We are creating a group here that can grow faster, operate more efficiently and return more cash to shareholders than either company could have achieved alone. Our CFO, Matthias Henny, will give you more details about the financial objectives. On the next couple of slides, I want to give you some more detail on the 3 short-term priorities, which I just mentioned. As I shared with you before, the execution of the merger is our #1 priority. On Page 11, I show you that from day 1, we put a disciplined integration approach in place with clear governance, fast decisions and full accountability. And it's working. Synergy progress is on track and initiatives are being tightly managed and monitored.

We've already realized 21% of our synergies and efficiency benefits by 2025. And 100% of all the initiatives are underway with detailed implementation plans. We've also made bold decisive choices such as selecting one existing IT target system per domain to avoid unnecessary complexity. Of course, a merger of this scale comes with risk. We have identified them early from IT, cultural interrogation to synergy realization, and we have put mitigation measures in place from the start. We will come back to these topics in more detail shortly. Our Chief Integration Officer, Michael Müller, will walk you through our integration road map and risk management. And our Chief Human Resources Officer, Esther Roman, will share how we are building a strong unified culture. And our market unit CEOs, Martin Jara and Jürg Schiltknecht will give you a closer look at how we are preparing for the joint merger launch in Switzerland and Germany because integration is not just about internal alignment, it is about getting ready to go to market as one.

And finally, A great example of our ability to execute complex integrations is Spain. In Spain, we're currently bringing together 2 former Helvetia companies, Caser and Helvetia Seguros to create operational synergies as we had already announced in Helvetia's CMD in 2024. So this integration is not part of the Helvetia Baloise merger, but it's a powerful proof point of our integration capabilities. In Spain, we are already ahead of plan, and we have delivered tangible financial results. By the end of 2025, we had already initiated around 50% of the measures required to deliver the targeted CHF 50 million in cost synergies by 2027 on a run rate basis. In P&L terms, this corresponds to roughly 1/3 of the synergies already realized. And we will realize some capital synergies in addition. So we are managing this integration with discipline, speed and transparency and we are confident we are on the right track.

Next to our integration efforts. We are committed to delivering on our combined efficiency target of CHF 300 billion. AI will be an important lever to achieve them going forward. Moreover, leveraging AI will allow us to accelerate the integration while at the same time, reducing integration costs. Let me now share with you our approach as outlined on Page 12. Helvetia has been an early adopter of AI. There is a proven scaling track record. AI had already been stated as a key lever in Helvetia's CMD in 2024 to achieve its efficiencies. The basis of our AI strategy is our operating model. We develop reusable AI capabilities centrally and scale them group-wide through local business and IT use cases. This hub-and-spoke model allows us to reduce and scale solutions efficiently rather than reinventing them market by market. This approach ensures a strong central governance and regulatory compliance while at the same time, enabling market-driven development and efficient usage.

We deliberately focus on specific high-impact areas selected for their high transaction volumes, complex decision-making requirements, diverse data needs and clearly addressable efficiency potential. With this, we have a scalable and value-driven approach for AI. While I am convinced that there is a very dynamic future ahead of us with many opportunities. I would like to give you tangible examples of impact already now. For example, in France and Italy, AI automates the intake of incoming documents and e-mails or in Spain, AI-based self-assessment for motor claims estimates, repair costs directly from uploaded images, increasing straight-through processing rates. And across specialty markets and additive reinsurance, AI helps us to automate the extraction and analysis of complex unstructured data across claims, underwriting and reinsurance accounting. The result is less manual work, faster turnaround times and seamless straight-through processing into our core systems.

Later, Martin Jara will walk you through our Swiss business and share further examples of AI use cases in Switzerland, showing how the scalable approach is applied in one of our core markets. As mentioned earlier, I'm convinced that improvements in technical excellence must continue going forward. This is necessary to stay attractive for our customers to remain competitive in the market while we ensure attractive returns for our shareholders. In concrete terms, the 2025 loss ratio of former Helvetia improved by 1.5 percentage points, meaning Helvetia already achieved its 2027 ambition 2 years earlier than planned.

This progress is the result of a few clear and scalable levers: portfolio management, underwriting and pricing discipline, nat cat risk management and claims excellence. Across all 4, we have implemented concrete actions, and we are seeing a measurable impact. In 2025, this translated into fewer unprofitable portfolios, a 5% average effective rate change across our retail markets while maintaining our respective retention levels, robust nat cat budgeting and a clear uplift from AI detected claims fraud cases.

Building on this proven delivery, scale now becomes an additional key enabler. As a company double the size, we simply have access to more data and increase our negotiation power with claims works, thanks to more volume. In addition, we can better leverage necessary investments. This gives us the confidence that we can further strengthen our pricing adequacy, compensate for adverse impacts and actively manage our customer retention in our core retail markets. At the same time, this setup ensures that we are well prepared for more challenging market conditions. To fully realize this potential, we continue to invest, combining short-term improvements with long-term capability building. We systematically benchmark performance, ensure structured know-how transfer and build expertise where it creates the highest impact, both locally and centrally. And of course, here again, AI will further accelerate that journey.

With these levers in mind, we decided to increase our ambition and to go for at least another 1% reduction of our current year loss ratio, excluding nat cat and discounting. In this context, I want to highlight specialty markets as we observe a softening of the cycle in some of the business lines written in this segment. We steer this business through the cycle with a clear margin focus as we show on Page 14, and our results have demonstrated that in the past. While we grew our business with a 13% CAGR over the last 10 years, our combined ratio never exceeded 100% despite a soft cycle between 2015 and 2019, despite severe nat cat events and COVID. To further maintain this proven underwriting discipline, we need to act selectively and be ready to reduce exposures in lines where we consider price is insufficient and grow in lines where we see opportunities.

For example, in 2025, we grew in aviation, while we reduced our exposure in property or U.S. liability. We're therefore, pursuing the rigorous portfolio management. It goes without saying that this is fully aligned with increasing sophistication in our technical management. Specialty Markets participates in the technical excellence initiative has made progress over the last years and will seize further opportunities to raise the bar going forward. Our objective is to keep volumes overall stable in the short term and to return to significant growth as soon as we experience a hardening of the market throughout most business lines, in line with our long-term ambition.

However, our primary goal is to keep our margins throughout the cycle with the normal volatility coming from nat cats and large losses. So far, I've shared with you our priorities, which will receive the full focus of management to deliver on our ambitious targets over the next 3 years. Let me now look beyond the integration phase and turn to the longer-term perspective for Helvetia Baloise on Slide 15. Helvetia Baloise will be more than a synergy case, a company with potential to grow sustainably and profitably. Let me share with you our ambition here that is structured under close, focused and excellent.

Close means we have direct access to more than 5 million retail customers who we serve through our direct businesses and through our more than 6,000 agents. Additional 5 million customers are served through around 4,000 brokers with whom we have relevant sizable relationships across different markets. We will maintain the close relationship with customers and brokers that we have built over many years. By increasing our share of wallet and raising productivity through targeted investments in digital enablement and AI, we will be able to outperform market growth in our retail markets. Focus means our specialty know-how offers the opportunity for growth in this focused segment in and beyond Europe. The enlarged footprint also adds some revenue synergies. Altogether, we expect a growth with a CAGR of 5% to 10% in this segment through the cycle, of which 1 to 2 percentage points come from revenue synergies.

Finally, excellent means delivering profitable growth. Maintaining our margin and ensuring high capital efficiency requires striving for superior capabilities in technical excellence, efficiency, AI and financial steering with the ambition to be top quartile among our peers. We need to be excellent in these specific areas. Our performance and trust culture will support this, striving for excellence in what we do. And Esther Roman will give you more insights here. Let me now close by bringing it all together. As Helvetia Baloise, we are fully operational and well on track with integration. We're financially disciplined, and we're fully committed to maximize shareholder value.

We have set clear priorities fully in our hands, and they will allow us to achieve ambitious financial targets. And we have a vision beyond the integration phase. This merger will allow us to grow even stronger going forward with our strategy building on close, focused and excellent. The confidence that we can reach our goals comes not only from the strategic logic of the merger and the disciplined approach. It comes from the strength of our newly joined teams of our people who put all their enthusiasm and commitment every day into their work to serve our customers better and to build a successful and profitable company. The merit goes to them. And with that, I will hand back to Peter.

Thank you, Fabian. Next, we move on to financials with our group CFO, Matthias Henny. Matthias was Chief Investment Officer of Baloise before the merger. Indeed, after an initial stint at McKinsey, Matthias has spent most of his career leading either asset management or finance functions at Winterthur, AXA and at Baloise. In his own words, he's therefore been dealing with insurance balance sheet for his whole career. He's been CFO of the merged group from December. So Matthias, please tell us how the new strategy fits into numbers.

Ladies and gentlemen, good afternoon also from my side. Fabian has outlined where Helvetia Baloise is heading strategically. I would now like to focus on how this strategy translates into sustainable long-term financial value for the group. My 4 main messages for today are: First, we start from a position of strength that is reflected by the high-quality earnings shown in our 2025 results. Second, we steer shareholder value creation across 3 new targets and aim for sustainable earnings growth, capital efficiency and a sustainably growing dividend. Third, we have a clear plan and levers to deliver on our promises. And fourth, we remain focused and disciplined. That will be reflected in attractive and reliable payouts to shareholders. Let me begin with our starting position on Page 19. The financial results for 2025 for both Helvetia and Baloise clearly demonstrate the high quality of our businesses.

Helvetia as well as Baloise showed strong results across the board. Helvetia's underlying earnings are 20% higher compared to previous year. Baloise's stand-alone results based on Baloise's previous accounting assumptions showed a similar increase of 20% on a like-for-like basis. This comparison takes into account that the 2025 profit of Baloise was affected by significant merger-related costs and that 2024 included a significant negative one-off related to the write-down of ecosystems. On a pro forma combined basis, the group achieved strong underlying earnings of more than CHF 1 billion. The pro forma combined figure results by assuming the merger had happened 1 year earlier and by carrying the Baloise result over to underlying earnings according to Helvetia accounting principles and assumptions. In addition, the merger-related accounting effects that affect underlying earnings are considered. For these reasons, the pro forma combined result is not just a sum of both individual results.

We outlined this already in December after the legal closing of the merger, and we have more information on this in our full year 2025 results presentation. The combined balance sheet is very strong with an excellent solvency ratio of about 260%. That is about 20 percentage points better than the pro forma value we mentioned at the merger announcement. The combined cash remittances amounted to almost CHF 1 billion. And as promised, we will continue the strong track record of dividend increases of both companies in the last years and propose a dividend of CHF 7.70 per share for our shareholders for the financial year 2025. This corresponds to a total dividend payout that is 5.4% higher than the combined payout of both companies in the previous year. Looking ahead, we are introducing new financial headline targets for the group for the integration phase from 2026 to 2028. They are shown on Page 20 and are targeting disciplined shareholder value creation.

Our ambition is to: first, deliver underlying earnings growth of 10% to 12% per annum to 2028, underpinned by cost savings, technical excellence and disciplined growth. Second, achieve an underlying return on adjusted equity of 16% to 18% in each year from 2026 to 2028, supported by an efficient capital allocation and the continued commitment to disciplined portfolio steering. And third, payout of a cumulative dividend amount of more than CHF 2.8 billion for the financial years 2026 to '28 founded on a sustainably increasing cash generation. In addition, we confirm the 20% dividend uplift from cost synergies of the merger by the financial year 2029. That translates into our intention to pay a 2029 DPS, which is at least 50% higher than the dividend proposed for financial year 2025. Let me continue on Page 21 with the underlying earnings growth ambition of 10% to 12% and explain where the growth will come from.

The growth is driven by 3 main levers and underpinned by the 3 priorities that Fabian outlined at the beginning. First, disciplined growth of our core business. This will contribute about 2%. Second, margin improvements in our underlying business. This will come from technical excellence, in particular, the cost efficiency program of CHF 200 million that Helvetia launched in 2024 and the cost efficiency program of CHF 100 million that Baloise launched also in 2024. Together, the margin improvement will contribute about 4% to the growth. And third, the CHF 350 million gross cost synergies from the merger. These are the largest driver in the period to 2028 and will add about 5%. Note that the growth ambition applies to a tough starting point since 2025, benefited from a very benign nat cat environment. Of course, there are other effects. We showed this morning that the starting point is also made lower, thanks to merger-related effects, but higher due to accounting effects.

It is important to bear in mind that the definition of underlying earnings is different to the one Helvetia previously used. The new measure is more conservative as it includes items such as the cost of external debt. Let's look more closely on the cost efficiency programs and cost synergies on Page 22. We combined the existing Helvetia efficiency program, the existing Baloise efficiency program and the cost synergies from the merger to one joint cost program. The total gross run rate savings amount to CHF 650 million. We are slightly ahead of track with this ambition. By the end of 2025, we had already captured 21% of the targeted amount that corresponds to run rate savings of about CHF 139 million. We are convinced that we will have achieved about 90% of the target CHF 650 million by 2028. That translates bottom line after policyholder and tax into a net benefit on underlying earnings of about CHF 290 million for the financial year 2028.

Michael will cover the post-merger integration in more detail, but it is important to me to underline that these cost savings are clearly defined, are tracked centrally, and we will report progress on synergies and efficiencies as well as on integration costs on a half yearly basis. Let me come next to our 2 main business segments that drives our earnings growth of volume and earnings growth. Non-life, as shown on Page 23, remains the primary driver of volume and earnings growth. The key measure for technical profitability in non-life is the combined ratio. Both companies have strong combined ratio track records with limited volatility even in adverse claims scenarios. Pro forma combined, the combined ratio for 2025 stands at a strong level of 92.8 percentage points. Technical excellence remains a key priority for us, as Fabian has outlined.

The priorities are clear. We will focus on technical excellence that means pricing adequacy and claims excellence and on active portfolio management and disciplined underwriting to support the cycle management and to protect the combined ratio from volatility. Based on these levers, we anticipate a further improvement of the current year loss ratio, excluding nat cat and discounting effect by at least 1 percentage point compared to the already very strong 2025 starting point. In Life, the focus is on capital efficiency and reliable contributions to underlying earnings and cash. We are steering new business according to new business value, and this is closely linked to the CSM contribution of the Life segment. At the same time, we are improving the return on the in-force book through active portfolio management, in particular, cost reductions and the continued shift towards capital-efficient products. In Life, individual business made up 78% of the group's 2025 total new business volume. More than 85% of this is capital-light business.

Excluding Swiss Group Life and active reinsurance, we guide to a growth rate of at least 8% in our life new business value from 2025 to 2028. Swiss Group Life makes up about 15% with the largest part coming from Switzerland. Here, we expect further decrease in volumes due to the ongoing market trend towards semi-autonomous solutions. However, we are well positioned with our semi-autonomous offerings that have significantly grown in the last years and can now benefit from the scale advantage of the merger. Since earnings growth alone is not sufficient, I now turn to capital efficiency on Page 25. We aim to deliver an underlying return of 16% to 18% in each of the years 2026 to '28. We expect it to rise over time and reach about 18% in 2028. The return is calculated based on the underlying earnings adjusted for noncontrolling interest and interest on preferred securities and on an adjusted average shareholder equity.

We adjust equity for goodwill and for the intangible assets from the merger to avoid a purely accounting-driven tailwind in the coming years from the amortization of the intangible assets. The return will benefit in the coming years from underlying earnings growth via volume margins and cost synergies. These positive impacts are expected to more than offset the expected growth in equity from retained earnings. We continue the disciplined capital efficiency steering framework and are in the process of harmonizing the steering concept across the group. Our objective is that all business units meet the internal capital efficiency hurdle rate by the end of the strategic phase. We expect the cost synergies will provide some tailwinds here. Where businesses cannot realistically reach these hurdle rates within the planning horizon, we will actively consider portfolio measures. Today, most of our capital is already allocated to businesses that exceed the hurdle rate, and we see encouraging progress compared to the previous year.

However, we are very transparent that some capital is still tied up in areas where we consider that returns are too low. Addressing this is an explicit management priority for the next strategic phase. Turning to capital synergies. As we have stated at and since the merger announcement, capital synergies are not the primary value driver in the merger. That is the cost synergies. The reason is that both groups were already well diversified. In addition, the capital requirements of the groups are driven primarily by the same market risk drivers. Therefore, no material additional diversification benefits should be expected. For the local entity mergers, it is too early to be more precise, and we will come back as soon as the solvency models are combined. But be assured that we will look closely into the topic. A good example that Fabian already mentioned is the merger in Spain of Caser and Helvetia.

We are expecting capital synergies from this merger that will contribute to cash remittance with a high double-digit million Swiss franc amount that will be spread over the next 3 years. Let me briefly turn from capital synergies to our balance sheet on Page 27. You can see that our starting point for the next strategic phase benefits from a high-quality balance sheet and strong solvency position. I would like to mention 4 points. First, in Asset Management, we are building a unified investment and asset management platform with enhanced scale. We have about CHF 120 billion in assets under management and progress to the top 5 position in institutional Swiss real estate management. The largest part of our assets stem from the insurance investment management. More than CHF 20 billion results from our third-party asset management, and this is enabling capital-light fee growth with investment solutions embedded across life, pension and banking businesses, complemented by focused institutional real estate funds and mandates.

Our asset allocation is high quality, well diversified, risk optimized and with a focus on reliable recurring income. Second, the capital structure is well balanced. Combined, our leverage ratio amounts to 27.5%. We calculate the leverage consistently to our underlying return on adjusted equity definition. That means we adjust for intangible assets and goodwill from the merger to avoid accounting distortions. Third, the capital strength is also reflected in the Swiss solvency test. The pro forma combined SST ratio stands at about 260%, reflecting improvements at both groups in 2025 basis points. The SST ratio remains comfortably above 200%. And fourth, this conservative balance sheet underpins our strong credit ratings with both S&P and AM Best confirming A+ ratings with a stable outlook. Looking ahead, our clear ambition is to maintain at least an A+ rating across our core entities.

This shows we remain fully committed to a strong capitalization and the balance sheet resilience will remain a key strength of the group. In times which are characterized by high volatility, this and the strong market position in the highly profitable Swiss P&C market makes us a particularly reliable investment. Given the ongoing conflict in the Middle East, it is perhaps worth a comment on that. I can confirm that we do not currently expect any significant claims as a result of this conflict. We have war exclusions in place on our active reinsurance and specialty lines business, and we have not been materially impacted in respect of the damage so far. Via our French business, we insure vessels, cargo and crude oil, but we have a net retention in the single-digit million Swiss franc amount. Thus, even in the event of a prolonged closure of the Strait of Hormuz, we do not expect significant direct claims.

On the asset side, about 0.1% of our shareholder exposed assets relate to the Middle East, including Israel. We see some second order risks, both from lower asset values, including wider spreads and via higher financing costs. However, here, we clearly benefit on a relative basis from our high solvency ratio, high-quality asset portfolio and Swiss domicile. I next turn to cash on Page 28. Cash is the foundation of our capital management and dividend payment. The chart shows the phasing of the expected cash impact of cost synergies, efficiencies and integration costs. I first compare the integration costs from the merger with the cost synergies from the merger. During the integration phase, integration costs temporarily outweigh cost savings. This is fully planned and financed, including through the retention of Baloise's share buyback that was suspended last year with lower-than-expected integrated costs, partly financed by capital synergies in Spain, this could open the door to a first dividend uplift already in 2027.

From 2028 onwards, cost synergies are expected to more than offset integration costs and translate into high cash generation. And by 2029, exactly as announced in April '25, we will have achieved a sustainable additional net dividend capacity uplift of CHF 220 million. Note that this comes on top of the benefits of the efficiencies. We quantify the cash impact of the efficiencies to be about CHF 130 million. In total, our operating net cash remittance, that means the net remittance after holding, financing and integration costs will more than cover our dividend target. This leads me to our dividend policy. Our commitments are clear and shown on Page 29. Dividends will be at least equal to the prior year. We aim to distribute more than CHF 2.8 billion in dividends in respect of the financial years 2026 to '28. And we target a '29 EPS more than 50% higher than the one we are proposing for 2025, given the benefit we will get from synergies. That exactly translates to the 20% dividend uplift we promised with the merger announcement.

Share buybacks can complement our payout, but our focus in the next years is the dividend and the financing of the integration cost. Share buybacks are considered on a case-by-case basis. We would take them into consideration if a strategic event, for example, from portfolio management would release excess capital. Our dividend policy builds on a long and credible track record. Over the last 22 years, the dividend has never been lowered and has steadily increased. Let me conclude. First, we start from a position of strength as reflected by the 2025 results. Second, we see a shareholder value creation across 3 new targets and aim for sustainable earnings growth, capital efficiency and a growing dividend. Third, we have a clear plan and levers to deliver on our promises. Its execution will continuously be measured and shared with you with the regular financial results reporting. And fourth, we remain disciplined and shareholder-focused that will be reflected in reliable and attractive payouts. Thank you for your attention, and I will now hand back to Peter.

Thank you, Matthias. You explained that a large part of the financial benefit comes from cost synergies. So let's look into those in more detail and into the wider integration with Chief Integration Officer and Deputy CEO, Michael Müller. Michael was CEO of Baloise before the merger and before that, CEO of Switzerland. He, therefore, brings with him significant experience of the relevant markets and the integration demands. Please, Michael.

Thank you for the introduction, Peter. Ladies and gentlemen, in a few days, it will be 1 year since we announced the merger of Helvetia and Baloise. Even before we formally closed the transaction, we found small teams that could work together within legal constraints to pave the way for the actual post-merger integration. And finally, on December 5, we successfully completed the deal and built a top 10 European insurance company. Since then, we have continued to work hard on integrating both companies, their structure and bringing together people and culture. At the end of '28, we will those have completed the bulk of the integration of one of the most promising deals in recent European insurance history. At Helvetia Baloise, we put the highest priority on a successful post-merger integration. We have set ourselves ambitious synergy and efficiency goals. Delivering such ambitious goals required that we follow a disciplined integration process, which we have established.

We focus on tight control of implementation expenses, a close tracking of the synergies and a reduced complexity in the IT landscape over time. And I'm proud to say that first key integration milestones have already been achieved. To ensure the success of the post-merger integration, we established a dedicated organizational structure centrally and in the integrating units to manage all critical tasks. This allows us to ensure clear governance, accountability and disciplined risk management for the delivery of the cost savings and to control the integration costs. Therefore, we are confident of achieving synergies and efficiencies in scope, in time and in budget, and we are looking forward to making this merger a success. So let me focus on how we deliver on integration savings while also reducing complexity. Matthias already pointed out that we will report on one joint cost program going forward.

We choose to combine the efficiency programs that Baloise and Helvetia each announced independently at their '24 Capital Markets Days with the synergy program announced with our intent to merge in late April '25. We indicated that we would realize CHF 350 million of benefits through merging the companies. These benefits translates to an additional recurring cash generation of about CHF 220 million per year just from the synergies alone post-merger. Today, we confirm this target and feel comfortable in achieving it. Combined with the 2 efficiency programs, the combined program sums up to CHF 650 million run rate synergy and efficiency gains before tax and before policyholder participation in total. Baloise's efficiency initiatives aim at improving the cost ratio by 2 to 3 percentage points by the end of '27. This translates to improving the earnings by about CHF 100 million gross before tax.

Similarly, Helvetia aims to reduce its cost run rate by CHF 200 million with initiatives like merging Helvetia Seguros and Caser or nearshoring to the Spanish hub. We can already show the first success of our initiatives. By the end of '25, we had already realized CHF 139 million in savings from the efficiency and synergy programs. This means that we had already achieved 21% of the overall run rate savings by the end of '25. We are currently implementing our planned workforce reduction programs. Based on the defined synergy targets and existing efficiency initiatives, we expect a reduction of about 2,000 to 2,600 FTE by '28. By the end of the first quarter of '26, the cases in which employees have left the organization or notice has been received or given corresponds to slightly more than 1,100 FTEs. Based on this FTE development alone, we estimate the achieved run rate by end of March '26 to be slightly above 30%.

This FTE reduction has been achieved through a combination of measures, including early retirement programs, natural attrition and where unavoidable dismissals. Overall, workforce reductions are being managed responsibly and with care, balancing the achievement of our synergy and efficiency targets with fairness, transparency and support for the employees. We will have achieved around 90% of the saving benefits by the end of this strategy period '28. It is important to note that the benefits will materialize gradually over time with 50% already achieved as a run rate by end of this year. As already mentioned, we will report on the progress of synergies and efficiencies as well as on the integration cost of the merger at every result release going forward. We built a disciplined integration process, including progress tracking. Our units and group functions were given top-down savings targets and then had to develop initiatives bottom up. With this iterative process, we defined the target benefits by unit, which you can see on the right-hand side of the slide.

Martin will provide you with more information on how Switzerland will contribute to the overall target, and Jürg will give you more insights into Germany's plans. You see that a large part of the savings will also come from the unit corporate. This includes shared functions such as IT, finance, asset management, just to name a few. We track and control the various initiatives step by step in a separate tool. On the next slide, I would like to put the focus on our ambitious cost-saving targets. We conducted benchmarking analysis across the integrating units. This way, we identified the areas in which we could optimize the most. It is important to note that our identified cost base does not take commissions into account. This is because Baloise and Helvetia have always exceptional strengths in their strong distribution networks. We are focused on upholding our high standards of customer service and will not compromise our distribution channels. This results in an addressable cost base of roughly CHF 3.2 billion on which the efficiency measures will have an effect.

Achieving CHF 300 million in efficiency gains will equal about 9% reduction on the respective cost base. When we look now at the benefits of the merger, the saving targets are even more ambitious. As you can see, the addressable cost base for the merger synergies does not include any of the nonintegrating units, that is Spain, Belgium, GIAM and our specialty markets. They are not directly affected by savings related to the merger. The targeted benefits of CHF 350 million equal a reduction of the cost base by an impressive 21%. In some areas, cost will even be reduced by 40%. Having in mind that the efficiency programs and the synergies are adding up demonstrates how ambitious these goals are. Matthias already pointed out that the cost synergies are expected to outweigh integration costs and have a positive impact on cash from '28 onwards. Integration costs are classified as nonoperating items and excluded from underlying earnings as they are considered one-off and exceptional related to the merger.

We manage the integration cost with discipline to ensure that we deliver cash benefits as early as possible. When we announced the merger, we said that we expected merger-related costs to amount to CHF 500 million to CHF 600 million. Since then, we have conducted in-depth planning of the initiatives and made fast and far-reaching decisions while always keeping cost in mind. Thanks to this, we now estimate total merger-related integration costs to be in the lower half of the initially announced range. On the left-hand side of the slide, you can see the expected phasing of the costs before tax and any other effects. A large part of the integration cost has already been incurred by '25. This is especially because of provisions we had to book under IFRS to account for social plans. The FTE-related provisions makes up around CHF 150 million out of the CHF 189 million total cost incurred in '25. In future periods, we expect a curtailment from pension plans, which will be partly offset the social plan cost and this also integration costs. In '26 and '27, much of the outstanding expected integration costs will be incurred.

These costs will mostly cover IT and other non-FTE-related areas. Further, the nonpersonnel costs partly relate to IT expenses. I have a dedicated slide later to explain the details to the IT integration. Lastly, most of the integration costs are borne by the segment Corporate and Switzerland, which reflects the amount of expected benefits I showed you 2 slides earlier. So let me talk now about our key decisions we already have taken and our integration road map. Even though the legal merger took place barely 4 months ago, we are already proud of several achievements. Our new purpose and values are in place since day 1 and give us clear guidance. Esther will come back on this topic. We have already nominated all 5 management levels, meaning 700 leaders. Thanks to the work of many employees, we successfully unveiled our new brand in February. We also defined our IT target landscape and set up IT systems for collaboration between our employees.

We had a successful start, and we are looking into the future with clear integration targets. I will restrict myself to mentioning only a few of them. We are looking forward to the sales start in Switzerland and Germany, which are key milestones in the whole integration process. Starting from the 1st of January '27, we will also have harmonized working contracts for all our employees in Switzerland. Looking further ahead into '28, we will be a fully integrated organization and the consolidation of all group platforms will be done with further decommissioning works afterwards. In essence, we laid out the integration road map early on and took the most important and decisive actions fast. This helps us to reduce complexity over time and brings more clarity to all of our stakeholders, including our valued employees. The IT integration is one of the more complex challenges we face for this merger. We aim to avoid the complexity of a best-of-breed approach by selecting and reusing just one IT landscape per domain.

The goal is to have a unified IT backbone across core insurance and group functions. For example, in our group functions, we reuse the Baloise ERP in finance, and we implement the front office and joint real estate solution from Helvetia in asset management. In Switzerland, we integrate Helvetia systems and in Germany, Baloise systems for the sales starts ahead. This ensures we work effectively and efficiently towards these 2 very important milestones in the market units. We also have ambitious goals for our IT landscape. The most important changes for the organization will be made by the end of '28. But the IT integration will last longer, especially for the decommissioning of the different IT systems. This will take time then also after '28. The main value drivers for IT are: first, a reduced IT footprint and costs with around 67 core group systems and core systems in integrating units remaining post integration compared to 125 systems before the integration. Second, developing and relying on robust and scalable IT platforms.

And third, a focused AI strategy with shared data and AI platforms. Our AI strategy is based on our capabilities, which were elaborated by Fabian and leads to impactful use cases in all business focus areas, which will be further elaborated by Martin later. Therefore, IT is and becomes even more a structural enabler for long-term synergy and efficiency delivery. A merger of this scale naturally brings several risks with it. Being aware of them and implementing mitigation measures early on is a key factor for a successful integration. With a thorough and effective bottom-up as well as top-down risk assessment, we identified and assessed key risks and implemented mitigation measures. The risk of not realizing synergies is managed and mitigated by clear governance and accountability. Our post-merger integration team works closely with the decentralized teams while being in control of steering the integration costs and synergy capture.

As mentioned before, by using already existing systems per domain and having IT and security controls in place, we mitigate the risk of implementing new IT systems. Esther will further elaborate on people and culture risks, which will also be reduced by a clear and transparent communication. With our disciplined integration process, we are confident that we reach our ambitious goals and the post-merger integration teams work hand-in-hand with the business units and group function to ensure a successful integration through clear governance and accountability. With this said, I'm proud of what we have achieved so far, and we are fully committed to delivering on the targeted savings. We are well equipped for this challenge. Thank you very much, and I hand back to Peter.

Thank you, Michael. As well as bringing together 2 cost bases, the merger also unites 2 cultures. So our Chief Human Resources Officer, Esther Roman, will now address the people, leadership and culture-related risks and opportunities. She brings over 2 decades of international HR leadership experiences across regional and global roles. This includes executive committee responsibility in multinational organizations prior to joining Helvetia in 2024. Esther, please.

Thank you, Peter. Good afternoon. Let me start with a simple fact. M&A success is not just about strategy. Value is realized when people and culture execute with certainty. And that execution certainty comes from clarity in direction, aligned leadership and trust across the organization. Integration gives us a rare opportunity to do things differently to introduce new systems, challenge legacy ways of working and accelerate change. My message today is we have built the organizational stability, leadership capacity and cultural operating system that gives us exactly that. I'll take you through 3 things: stability built at speed, how we mitigated the top PMI risks and why our performance and trust culture gives you scalable, repeatable value creation. Let me start with what we have achieved so far. In any merger, speed matters, and we moved decisively.

As Michael mentioned before, we nominated over 700 leadership roles and finalized the definition of the whole organization across the 5 levels by the end of Q1. That is a full organizational backbone defined within a few months, not years. We established a clear communication and change framework with frequent candid updates across all countries and units as well as group-wide change support. We are seeing early signals that this integration moment is enabling change in how we challenge, decide and execute. At the same time, we are very conscious that this pace of change creates pressure, new roles, new processes, high workload, which is why we complemented speed with targeted change support and manager enablement across the group. Culturally, bringing together 2 strong cultures creates momentum for faster and more intentional culture change. And we start with a strong high-trust foundation. Out of the culture analysis that we did last year, we saw that 2/3 of attributes of the perceived current culture across Helvetia and Baloise were already aligned and 90% of the future desired attributes are identical.

This gives us confidence in our chances to manage a successful culture integration. We also provided clarity early on by launching a new purpose and new values on day 1. And importantly, engagement scores increased by 6 percentage points after the merger announcement, which is a strong sign of trust and confidence. This early clarity and stability mean we are not losing time, leaders or know-how the 3 biggest reasons why integrations slip. In a context like ours, we need to be mindful not only of the risk of split organizations, but also of integration fatigue, uncertainty and operational overload. We address this head on. Our structure is designed for execution efficiency and customer closeness. Decision rights are clear, spans of control are streamlined, and we see high leadership cohesion. This approach has mitigated the 3 main integration risks, uncertainty and dissatisfaction addressed through transparency and fast clarity. Second, unwanted departures controlled through targeted retention and strong engagement and cultural misalignment neutralized through aligned values and a common operating system.

Because we moved fast, communicated transparently and provided clarity early, we have not seen an increase in unwanted attrition in Switzerland, including talents. Absenteeism remains stable and sick leave hours per employee decreased compared to previous years. And because leadership alignment was established rapidly, decision-making latency is low, enabling faster synergy execution. We see encouraging signals that execution discipline and alignment are taking hold across the organization. In other words, we have created a stable, trusted organization that can now focus fully on value creation. Now let me turn to the future. Our performance and trust culture is the operating system that ensures sustainable value creation. And why does this matter? Because it increases predictability in delivery and reduces execution variability, 2 drivers of synergy certainty and cash conversion.

We focus on 5 levers, each with a tangible business outcome. Clarity, producing faster decisions. Leadership and collaboration, ensuring more leadership bandwidth and cross-border teaming. Talent mobility, bringing the right people in the right roles faster. Reward alignment, that is incentives tied to strategic impact. Our long-term incentives balance shareholder returns and operational profitability, each weighted at 50%. And our short-term incentive is tied to annual group and market performance, combining collective results with individual accountability to ensure pay reflects delivery against financial and strategic priorities. And finally, a lever with focus on continuous improvement and entrepreneurship, allowing for efficiency and productivity gains over time. This culture is already visible in how the organization works. We see shared behaviors, cross-functional collaboration, a fast operating rhythm and leaders who drive clarity and accountability.

And we will see the impact of this not only in synergy capture, but in the long-term scalability of the group. Now let me close with a few key messages. We have built a stable organization at speed, 700 leaders nominated quickly, an aligned culture, high engagement and talent secured. We have mitigated the most common integration risks. Clarity, trust and retention are high and culture integration is ahead of expectations. And we have an operating system that increases execution certainty. Our performance and trust culture drives faster decisions, disciplined performance and leadership capacity across the merged group. This is why we are confident about delivering the merger value, reliably, predictably and at pace. Thank you very much.

Thank you, Esther. Now we come to our first Q&A session, and I'd like to invite all 4 speakers on to the stage that we've just heard from. As a reminder, please could we focus this afternoon on the content that we've presented here. If there are any follow-ups from this morning, then Investor Relations will be very happy to take those afterwards. So we'll start with questions in the room. And anybody, please, Farooq. Sorry, mic is coming to you.

Get your mic.

So Farooq Hanif from JPMorgan. You mentioned looking at return on capital as a guide to keeping portfolios. And obviously, over time, that ROCE profile might change as you deliver. But are you also looking at size and scale? I we take a market like Italy, you may have niche businesses, but you're never going to be really big without M&A. So would you also consider size as a criteria for looking at portfolios? That's my kind of first question. My second question is the kind of -- when you look at your kind of earnings growth profile, you have 2% CAGR from business volume growth and then you've got integration and efficiencies. I mean, what do you see -- when you think about some of these additional synergies beyond the first kind of goals, including revenue synergies, what do you see as a sustainable run rate? Or what kind of qualitative things can we keep in mind that will help us about long-term earnings growth?

Thanks a lot, Farooq. So the first question was on how do we manage our portfolio and do we size and scale for Fabian?

Yes. Thank you. So first of all, we look at our portfolio with clear criteria, return on equity against the hurdle rates and strategic fit. That will be always the first criteria. Now the question is, do you need to be -- can you do that in various markets even if you're not #1? And the answer is we're able to focus our strategy, where we're in a focused segment and we are there playing as a top league, we can do that, and we're confident to do that. But again, the proof is in eating the pudding. So we will always look at the return of equity at the end, so we can do it. But we have in most of our -- in all of our markets, basically very strong positions, be it overall or be it in the respective niches.

And then the sustainable synergy run rate realization for Matthias.

Yes. So you mentioned that 2% CAGR is coming from volume growth. 4% is coming from margin improvement, including efficiencies. It's not only efficiencies, it's also technical excellence and both components, so volume growth and margin improvement, we consider to be sustainable even beyond 2028. Whereas the synergies, the 5%, that is limited to '26 through '28.

Yes, Tom?

Thomas Bateman from Mediobanca. Just on the combined ratio, I know that you haven't given a kind of total core guidance there, but 1 point loss ratio improvement, about 1 point from cost synergies. That kind of gets you into the low 90s. Is that the right kind of guidance you're giving on combined ratio? The second question is just on capital synergies. I was surprised and happy to hear you identify the capital synergies in Spain seems about CHF 80 million or so. You alluded to the other local entities being a bit too early, but what could we get from that basically? I think you're probably talking about Germany and the Swiss Life entities, but what are you waiting for there? What might come out? And the final question is just on holding company cash and the outlook. It feels like you've got more confidence in the outlook for cash. I think that's probably the integration costs have come down a little bit. But what's the kind of outlook there? Maybe what's the cover above the dividend at the moment? So gross cash provisions is offset by holding company costs. How much of that is above the dividend?

Thanks, Tom. So the first one, can we say anything more about the combined ratio going forward?

So actually, we give 2 guidances. One is on the loss ratio current year, excluding nat cat and discounting and the second one on the absolute cost savings through synergies and efficiencies simply because we believe these 2 measures are the most efficient way to capture what we're going to do over the next 3 years. Now obviously, this translate into combined ratio. Loss ratio of 1 percentage point improvement, excluding nat cat, yes, that will translate into combined ratio. And also the cost savings will translate into expense rate reduction. However, have in mind that the cost savings do not only relate to P&C. We also have life business. We have noninsurance business. We have the group. So this needs just to be taken into consideration. But overall, something in the low 90s is not completely wrong. I would put it like that.

The second would be on capital synergies, if there's any more that we can say on that?

Yes. So we identified the capital synergies in Spain. There, we are further ahead in the integration. For Switzerland, we will combine the models during this year, but we explicitly want to manage expectations. I mean we have the 2 or the biggest drivers for target capital is market risk. And these are the same levers that we have both on Helvetia and Baloise Group. And the business profiles are very similar in Switzerland. That's why we don't see significant capital synergies for Switzerland.

Great. And then the third one was on the holding cash and the buffer we have for the dividend.

So first of all, our plan foresees enough operational cash generation. So only operational -- no capital synergies, enough operational cash generation to finance both dividends and integration costs. And we take the dividend targets very seriously. They're 1 of the 3 top targets. And that's -- we have built the plans with enough safety margin to deliver the dividend path, although under adverse scenarios. So that's the likelihood we need to touch to liquidity reserves like the free deployable funds that this likelihood is small.

I think Iain has had his hand up next.

Iain Pearce, BNP Paribas. Just one on the cash remittance. I mean, you haven't given an explicit cash remittance which you had at Baloise definitely booked before. Just wondering if you could give us some guidance on what you view as the sort of run rate cash remittance level post integration and sort of what headroom you have versus that dividend cover? And then second one, slightly linked to that is on additional capital returns. You mentioned you might look at share buybacks mainly in the event of a portfolio event where there might be a disposal. But with the SST where it is and potentially sizable headroom on the cash remittance versus dividend, what might the level be where you begin to look at additional capital returns on a more ordinary basis.

Thanks, Iain. Probably both for Matthias. The first one on the cash run rate, what do we expect?

I mean we have given transparency about how the cash remittance will improve through the synergies and efficiency over time. And we will enhance disclosure on a net and gross basis. But I would like to reiterate once more that with the operating cash that we produce and which we upstream to the holding level, that's sufficient to finance the dividend path, including the integration costs.

And then the second one, does the high SST ratio influence our share buyback ambitions?

So the high SST ratio, that's a sign of a strong balance sheet that we have. It's also reflected by the A+ rating of the 2 rating agencies. We, however, don't see the group SST ratio as a binding constraint for capital upstream. It's more the local constraints, so the local solvency or regulatory constraints that are in place. So our focus is on generating synergies and efficiencies over the planned period to finance the dividend uplift over time. A potential share buyback, as mentioned, could be taken into consideration in case of a strategic event.

Thank you. I think Nasib, you had your hand up.

Nasib Ahmed from UBS. So firstly, just following up on the cash. You haven't given kind of the Baloise split, but can you give kind of some kind of percentages on where is the cash remittance coming from or some guidance around how to track that? Is underlying earnings the right metric? I kind of went through the pack and you're giving some numbers for Switzerland and Germany later on. Is that kind of the level that we're expecting from Switzerland and Germany? And if you can kind of give more color on the remittances from each of the subsidiaries, that would be great. Second one on capital efficiencies is coming back on kind of your framework.

I believe it looks at portfolio and you're giving the businesses until 2028. If the business isn't performing today, would you still look at actions? And particularly, I'm interested in Swiss Group Life and Germany, those businesses are performing in that framework? And then just finally on kind of integration. What would it take for you to complete the integration quicker? It seems like IT is the blocker when I look at kind of the slides, 2028 is the IT infrastructure. Is there any way -- or what would need to happen for you guys to kind of complete the IT integration 6 months earlier, 3 months earlier?

So the first one was, again, on cash from, how do we think about cash by country?

So you asked about the underlying earnings we consider the underlying earnings as the main financial steering metric to follow on as it strips out the one-off effects. So that's the first point. Then obviously, cash follows underlying earnings. Payout ratio is below 100%, obviously, from a cumulative viewpoint. And looking at the cash remittance, I mean, we got this overview of cash, which is coming from which market unit. So you can see what is coming from former Baloise and former Helvetia.

And the second one was on portfolio management for Fabian. What if we just look at the position today, how do we think about that portfolio?

So what we look at is the plan towards because you have seen that some of the businesses do not fulfill the hurdle rates. So we give them until 2028 to achieve the hurdle rates. Now when we see on the way that there is no way that this plan is realistic, of course, we will not wait until 2028 to decide. We'll do that earlier. That is what you can expect. Now you mentioned 2 businesses, perhaps just to say a few words to them. So we have group life where full insurance is now a very consolidated and concentrated market. We're one of the top 2 players. We can use economies of scale in that market, and Martin will speak about that later. So I will not be too expensive on that.

But I can tell you that it's very attractive as well to be able to offer the full range and to accompany our customers in that market trend, which happens currently from full insurance to semi-autonomous foundations, which are highly attractive from a return on capital point of view. And on Germany, Jürg will speak on Germany, so I don't want to take away his story, but he will tell you that from -- since 2023 in the last years, we have significantly improved our profitability in our German businesses. And now going forward, we have CHF 70 million of additional synergies, of which we want to achieve 90% by '28 that will add on the result in Germany. So those businesses are really overall attractive businesses in the way they are run.

And then the third one was for Michael on integration. What's the main variable affecting the speed of that integration?

So first of all, we have this CHF 650 million. We are committed, and we are also comfortable to reach that in the 3 years. So 90% of that, which is already an ambitious goal overall. Also the ramp-up, if you're looking at the ramp-up already having a run rate at the end of this year of 50% of that is quite a fast ramp-up that we are driving there. You're absolutely right about IT takes longer in some areas, but we are fully the focus on realizing as fast as possible. That's also why we are starting like that and also having sales start, for example, already in this year, which means at the moment, really, we have this ramp-up, which is quite fast, and we are very comfortable also to reach that.

Thank you very much. Any more from the room? Yes, Iain.

Just on the loss ratio improvement. If you could give some guidance on what you're assuming in relation to pricing in that 1 percentage point loss ratio improvement? Or is that purely internal metrics and anything from pricing will be additional to that?

So on pricing assumptions, Fabian, would you like to answer that?

Yes. So the assumption is in pricing that expected inflation over the next years will be fully compensated by price increases. But I want to position technical excellence, that's not just price increase. It's really many of the things which we explained in the presentation. So it is pricing sophistication, micro pricing, pricing more often, managing and handling our claims networks, using our purchasing power, steering our customers into repair shops that give better service to them and lower the claims cost. So there's a lot of things happening behind that, and that will allow us to stay competitive and not only to have to go through price increases going forward.

Okay. Farooq?

On the specialty growth, these are very ambitious targets. And I think a lot of us might be healthily skeptical that growing in a weak pricing environment to get that level of growth that you want to achieve is challenging. Can you tell us what it is about, for example, synergies where you're trying to grow in a new market, where you think you have an advantage? Is it just the presence of the local business? I mean, how confident can we be that you do this in a disciplined way?

Yes. So let me first start to say that we are currently experiencing a softening cycle, not surprise to anyone here in a few business lines in specialty markets. In that period, we shared with you that our focus will be on margin and not on growth. So we manage your expectation that during a softening cycle, it's not -- we are not the ones who grow at the cost of profitability, the other way around. We'll make sure that we keep our volumes stable and we keep margins. But through the cycle, we see the growth, which we put into our ambition. Why are we convinced of that? So first, specialty is not a new business for Helvetia. And we have identified quite a few interesting and attractive pockets of specialty business on the Baloise side. And of course, we can combine our market presence, which we now have in Germany and in Benelux with the know-how we have in specialty markets.

We had that as a strategy already in the 2024 CMD on the Helvetia side. But of course, we did not have access to those markets, and that's why we're confident that from that, we can generate some additional revenue synergies, which were not part of the package in the past. There is strong know-how. There is as well a clear focus on what we know and what we don't know. And we will keep that focus because we go there through our know-how and are convinced that this is the base for a future constant growth. And let's not forget, we have a good track record. We have a 30% CAGR over the last 10 years in that business through the cycles. And of course, the growth was not always the same, but we were smartly riding along the cycle. And I think that's important to take away as well.

Okay. Yes, Tom, please.

Just on revenue synergies, is there anything to mention in asset management or private banking given the, I guess, the broader life insurance customer base you have? And then the second question is also on -- the 8% new business value CAGR is fantastic, but I noted there were some exclusions there. I don't know maybe you could simplify it for me and just tell me what the CSM growth might be. And then finally, I was interested in your comment, Esther on talent, sick leave and absenteeism. Is there any financial impact you could help us quantify or maybe just qualitatively, what has your experience of this merger been in comparison to other mergers that you've gone through?

Okay. Thanks, Tom. Just to clarify your second question, you're after the CSM normalized growth essentially.

Yes, something like that because the 8% new business value growth is fantastic, but I feel like that's not what I'm going to the numbers in the CSM growth.

Would you want to start?

I can quickly explain to that. I mean, why did we exclude active reinsurance and group life business in Switzerland. So group life business in Switzerland is in a market situation where the full insurance business, traditional business is decreasing. So customers are switching to semi-autonomous solutions. We offer both and the additional revenues that we create through semi-autonomous solutions are not captured on the new business value. Therefore, it's it doesn't really make sense to capture this in the life new business CAGR target. And active reinsurance is a separate business anyway. So we thought it's sensible to use individual life as such. But even if we would include the other 2 business, we would still have positive growth over the planning period.

Okay. And then Fabian, do you want to comment on revenue synergies more generally and also on the merger experience?

Yes. So -- and of course, you have Andre Keller here amongst us. So please use as well as the break to discuss that with him on asset management. Given that we have both a strong presence in Switzerland. Now the combined company is, for example, in real estate, one of the top in Switzerland. So it's hard to quantify. But of course, that is a much stronger position. And Martin, and I will not talk about that, but Martin will as well talk about how we combine the product offers of the 2 companies. And of course, that will make us more attractive for the customers. Again, here, quantification, we have been more careful of doing that, but it will all contribute to our ambition to, at the end, grow the business overall. That is the answer to that question. And then?

And then -- sorry, the third one is on the merger experience more generally. Michael, would you take that?

So the question was whether it's on a cost base of [indiscernible] to cost. And I think it was also about the question of absenteeism and the question of this part of the talent view we have. So about the ambitious goals we have, I mentioned this 21% that we have. You always have to have in mind that it is calculated on both sides of the cost base. So it is calculated as a merger from 2 companies. So it's on both sides. Normally, if you look at similar transactions, you take one part of the company. So the smaller or the lower cost base normally, which then means also it would double this part, which is also quite am.

My question was more actually -- the way that you described it was that you were you kept your talent, less people were going off sick. And I just wondered how we could quantify that because it sounded like -- actually, I'm not going to say that. It sounded like the quality of the business has improved. I was just wanting to understand that a bit better.

Yes. I mean one of the critical focus points in the merger is to not lose capability and talent. So it's just absenteeism, which is important. It's also staff turnover, so attrition, but also presenteeism, so which we are combining with the measurement through an employee listening strategy of our engagement across the organization throughout the pre day 1 planning phase and also now going forward. I mean we're putting a strong focus on retaining critical capabilities and roles in the organization. We have targeted retention programs. So the financial impact will definitely be associated directly to the business continuity and also the and the intellectual capability that we need to retain going forward, which is one of the greatest risk of a merger. If that answers your question.

And I have one proof point to add because we are combining both distribution forces in Switzerland and in Germany. And Martin can later on confirm that we're not losing any critical talent in the distribution force. Even though we know that competitors were very eager to get some of them, we can say that there is no -- so we see that distribution force fully continuing in the -- with the same talents going forward. And I think that is a very, very strong proof point, which shows how we can with that in this situation.

Thank you very much. I think we better leave it there for -- give you a chance to have a bit of a break, and we'll reconvene here in 20 minutes at 3:35 U.K. time. But thank you very much.

Thank you.

Thank you.

[Break]

Perhaps if everybody could take their seats again to restart. Okay. Welcome back, everybody. So now we'll hear about 2 of our most significant markets, starting with Switzerland. We think our home market is a very attractive one, and it's one where we enjoy a leading position as the largest multiline insurer. Let me welcome CEO, Martin Jara, previously also CEO of Helvetia Switzerland, to tell you about our plans there. Martin brings with him over 30 years of insurance experience, in particular at Winterthur and Allianz, with over half of these being at Board level. Martin, please update us on what is happening in our home market.

Thank you, Peter, and good afternoon, everyone. Our home market has always been the backbone of both former entities. With the merger, our strong base in Switzerland becomes a unique strength of Helvetia Baloise Group. Together, we have a leading position in one of Europe's most profitable markets, and we profit in that market from broader customer access and from scale to leverage our capabilities. This creates reliable underlying earnings and positions Switzerland as a stable value anchor for the group. Let me start by outlining the fundamentals. Thanks to the merger, we strengthened our market position and now hold the leading position as the #1 multiline insurer in Switzerland. We serve over 2 million customers and more than 200,000 small and midsized enterprises. The strong trusted reputation in the market helps us to further develop the exceptional customer proximity of the 2 former companies.

Brand awareness for each company was above 93%, which means more than 9 out of 10 people in Switzerland are familiar with Helvetia and Baloise. This closeness enables us to monetize the direct access to every third household and every third SME in the Swiss market. We do this by focusing at one hand on our strong tied agent channel with more than 1,700 agents at roughly 150 regional agency locations across Switzerland. At the other hand, we build on our broad and successful partnerships with more than 800 brokers and long-term partners like the Swiss Touring Club. In addition, we leverage our powerful digital presence, including Smile, Switzerland's leading digital insurer with more than 220,000 customers. When it comes to technical excellence, both companies have already demonstrated outstanding performance. Both have reported highly attractive loss ratios over the last 10 years, thereby outperforming the market.

Together, we will now amplify that strength. It is important to understand that for our Swiss business, scale is not only a matter of size. It is a strategic advantage. It allows us to leverage our capabilities while keeping our closeness to customers by our now much broader customer access. This combination of size and customer closeness is exactly the strategic sweet spot we are aiming to position us in our attractive home market. Combining the assets of former Helvetia and Baloise enables new horizons for our value propositions in the Swiss market. To illustrate this, let me elaborate a bit further on the example of our future comprehensive value proposition for financial advisory. With the merger, we integrate a broad range of services and products in the areas of life, of wealth management and as well as in real estate and in mortgages. That combination supports our customers across their entire life cycle from building assets, securing their families, taking property-related decisions to preparing and navigating retirement.

This integrated one-stop offering for financial advisory is truly unique in the Swiss retail market. To deliver it, we built on our broad distribution network with over 150 locations in Switzerland. And our new scale enables us to operate at least 14 financial expert hubs, where specialists from individual life, real estate, mortgages and banking work closely together to provide tailored multidisciplinary solutions for our local customers across Switzerland. Our most recent figures clearly reflect our strength and the future market potential. In individual life insurance, we increased our new business volume of recurring premium last year by around 6%. We also made good progress in Wealth Management with a robust increase of 8% to around 6,000 wealth management mandates with over CHF 6 billion assets under management. The strategic focus of Baloise Bank is thereby shifting towards capital-light and interest rate in different grows.

And the volume of signed mortgages via our mortgage brokerage increased to around CHF 2 billion last year. As Fabian already explained, besides our market opportunities, the execution of the merger is our first priority. Since December, we achieved significant progress in Switzerland. Already prior to the official date of the merger, we appointed the management teams at the first 3 organization levels. This gave our employees clarity and orientation. We unveiled the new brand shortly after the merger, and we aligned numerous processes in our joint customer service entities. As a result, we see in the early phase of the integration, very similar customer attrition rates as last year despite the premium increases we executed. We also see positive effects on employee engagement with 83% compared to 78% last year. And we see stable attrition and strong commitment in the tied agent channel with already almost 100% of the new working contracts signed. We are fully prepared for the next major steps. On 1st of July 2026, we will be present in the Swiss market with one joint sales force.

This comprises a joint market presence under the new brand, a unified offering, a joint physical agency network across Switzerland and a simplified legal structure due to the local merger of our Life and Non-life entities. and our sales force, and it brings the potential of the merger to life in our home market. A crucial part of our integration is the rigorous realization of efficiencies and synergies. This slide shows that we are firmly on track to achieve our ambitious cost saving plan. In 2025 and 2026, efficiencies and synergies are mainly driven by reductions of the workforce based on the elimination of overlapping functions, the optimization of our target operating model and process automation, including the adoption of artificial intelligence. In '27 and '28, value contribution increasingly shifts towards the consolidation of locations and facilities towards shoring and nearshoring, IT harmonization and system decommissioning and the broad realization of AI-driven process solutions in our core business.

Our synergy plan is very front loaded, which results in cost savings ramping up significantly over the next years. Almost the entire value of CHF 250 million will be captured by 2028. A core element of our group strategy and in our Swiss business is the use of artificial intelligence. What sets us apart from competition is our capability-based approach, as explained by Fabian. Instead of just implementing single use cases, this approach enables us to exploit the full potential of AI across geographies and across functions. A very valuable asset are our deployed and validated solutions from both former companies that are already generating measurable impact and will do so at scale in the future. I would like to mention 4 examples. First, the AI concierge. The solution analyzes competitor contracts in real time and automatically generates personalized ready-to-sign counter offers. We will use this capability in the future at scale in our partner business and in our own distribution network.

Second, AI for underwriting. The use of AI for the complex preparation of complex underwriting offerings significantly reduces manual workload up to 2 hours per case, and it shortens the response time towards brokers and distribution partners. Third, voice and chatbot Clara. Our 24/7 digital assistant Clara is available in 4 languages. It automates inquiries. It improves response times and frees up capacity in customer service. In self-service interactions, the automation rate for Clara Chat has already reached 95% and Clara handles more than 250,000 chat conversations in 2025. Fourth, AI for coding. It's a highly effective tool within our IT organization. It supports every step from code translation to code completion. The figures speak for themselves, a productivity increase between 11% and 25% and a 6% rise in user satisfaction. These examples for capabilities and use cases show that the adoption of AI does more than just enhance efficiency. It reinforces qualities that are crucial to strengthen our competitiveness in today's market environment.

Technical excellence is and remains fundamental to the Swiss business. We have one of the strongest non-life portfolios in the market. Also, the latest figures speak for themselves. Our Swiss business is highly profitable. And now through the merger, we have at our hands a unified toolbox for all areas of technical excellence. Our focus areas are, as Fabian already mentioned, portfolio management, which means disciplined profitability-driven portfolio steering to secure enhanced risk return profiles and active reinsurance management to limit technical volatility. Pricing excellence that is supported by the large combined data foundation of the merged companies, nat cat risk management and forest claims excellence, which includes especially AI and data supported claims steering, advanced fraud detection and disciplined claims procurement, for example, in our network of car repair shops. The impact is visible.

We have a proven track record over the past few years, as you can see in the chart on the left-hand side. Please keep in mind that the nat cat burden was exceptionally high in 2023. Adjusting for nat cat losses above our nat cat budget, this would imply a combined ratio of around 95% for 2023. And by contrast, as Matthias already mentioned, 2025 benefited from a benign claims environment with low nat cat load. Taking this into account, we see an improvement of between 2 and 3 percentage points from 2023 to 2025. Our task is now to build on this outstanding performance. Based on the normalized combined ratio, we plan to realize an additional improvement of 2 to 3 percentage points by 2028. We anticipate to achieve a sustainable combined ratio of roughly 90% by then.

Our measures from technical excellence will contribute by 1/3 to this improvement. Everything we do ultimately will secure that we deliver on our financial targets. In Switzerland, we are targeting CHF 250 million in synergies and cost efficiencies. We see our combined ratio at around 90% by 2028. And in combination with our unique value proposition in the Swiss market, this will result in sustainable underlying earnings of more than CHF 700 million by 2028. We are building a Swiss business that is larger more efficient, more digital and more resilient than ever before, while preserving our core strengths, being close to our customers. Let me close with 4 key messages. Switzerland is one of Europe's most profitable markets. We have a leading position in it, and we leverage our combined strengths in this attractive market.

We will leverage our combined strengths by creating unique integrated value propositions that are delivered by an exceptionally strong distribution network. Our Swiss business is a key contributor to synergies and efficiency gains. We are fully on track to deliver with the support of AI and a strong focus on technical excellence. And fourth, in the early stage of integration, we have seen neutral to positive effects on customer retention and on sales and employee engagement. This is very positive. Switzerland is the main engine and a stable value anchor for the group. We will reinforce this role during the integration phase and deliver strong, reliable and sustainable results. Thank you for your attention, and I hand over to Peter again.

Thank you, Martin. So now we move on to Germany, the other country with significant synergy potential from the merger. Jürg Schiltknecht was CEO of Germany at Baloise following her career at various management positions at Zurich Financial Services as it was then, and then Baloise. While primarily focused on Germany, he has also been responsible for other European countries. He's been a member of the Group Strategy Board at Baloise since 2014. So please, Jürg, tell us about Germany.

Good afternoon to everyone. We have one more presentation, and we will now turn to Helvetia Germany. And this merger is a great opportunity for us and has a lot of potential. We have changed our strategic position. We are now a top 10 broker insurer in the German market, and we have a solid foundation. Over the last few years, we have strongly improved our financial performance with a disciplined focus on technical excellence. And as a result of this merger, we will realize significant synergies and become an even more attractive value contributor to the group. So let's start by taking a look at Helvetia Germany. Two companies of similar size came together. We have roughly doubled our size and have now a premium volume of around CHF 2.5 billion, and we serve around 3 million customers in the German market. But as we all know, size is not everything. Portfolio quality is also crucial. And both companies have significantly improved their financial performance.

For the last 3 years, Helvetia and Baloise combined had on average a loss ratio of below 62% and a combined ratio of around 93%. So both companies had a focused strategy in place. This means we both made decisions in which target segments we want to be active. And interestingly enough, and as we will see later in the presentation, we both came to very similar conclusions. And both companies have a very strong focus on the broker market with around 80% to 85% of all business coming from this distribution channel. And Helvetia and Baloise both achieved very high broker satisfaction. For instance, former Ball was constantly ranked among the top 3 non-life insurance companies in terms of broker satisfaction over the last few years. And former Helvetia received the Silver Prize Award as a broker champion. So this clearly demonstrates our ability to convince brokers with both our product solutions and our service offerings.

So thanks to this merger, 2 companies came together in Germany of similar size, similar portfolio quality, similar target segments, similar distribution mix and similar distribution partner satisfaction. And exactly this similarity is a very good starting position to leverage the merger-related potential. The only question now is how will we unlock this potential. And our answer is straightforward. We will exploit this potential with 2 strategic priorities. First, a clear focus strategy, strong positions in the broker market and the disciplined execution of technical excellence; and second, an ambitious integration plan and a fast realization of the synergies. So let's start with our strategic priorities, our focus strategy and our strong positions in the broker market. For us, it is clear that we actively steer our portfolio and that we're focusing only on those market segments that we consider attractive and where we have the ability to win.

The attractiveness of a segment depends on several factors, including growth potential, capital intensity, profitability and also competition intensity. So when you look now at the overview, you can see that we consider 7 target segments in non-life and 2 target segments in Life to be attractive. And with this strategy, we are focusing with our target segments on only around 30% of the total German insurance market. And you can also clearly see on the overview that both companies pursued very similar focus strategies prior to the merger. The dark shaded bars indicate the business volume that former Baloise had prior to the merger and the light shaded bars show the business volume that former Helvetia had prior to the merger in each target segment. And as a result of the similar focus strategy, we have roughly doubled our premium volume in almost all target segments.

And we have now even stronger positions in the broker market. For example, in non-life retail, we have a #3 position or in the capital-efficient retirement business, we are #7. And overall, we are #10 broker insurer in the German market. So we can say thanks to the merger. We now have highly relevant positions with brokers in our target segments and a very strong foundation to further develop our business successfully into the future.

However, to maintain our strong foundation and as Fabian has already outlined before, technical excellence will continue to be of utmost importance. Baloise and especially Helvetia have undergone major restructurings of their portfolios over the last few years, and the results speak for themselves. The graphic on the bottom left-hand side on the slide illustrates the significant improvement in our combined ratio by around 5 percentage points from 2023 to 2025. To maintain this strong level of technical excellence, we will focus on 4 decisive levers: portfolio management, underwriting and pricing discipline, NatCat risk management and claims excellence.

So let's have a look at the underwriting and pricing discipline as well as claims excellence in a little bit more detail. In underwriting and pricing discipline, repricing and re-underwriting are constantly executed, resulting, for example, in an average price increase of more than 7% in our target segments in 2025. And in claims excellence, through AI supported fraud detection, we could improve fraud recognition and acceptance rate by around 15% to 20% [Technical Difficulty] confidence that we can achieve a combined ratio of around 90% by 2028.

So moving on to our second strategic priority for unlocking our merger-related potential. We will now look at our integration plan and our fast synergy realization. And as you can see on the integration overview, we have a very ambitious integration plan in place and are working at full speed to implement all important milestones. When you look at people and organization, you can see target operating model. And we have our target operating model in place since closing. That means we had our entire new management structure from the executive team to team leader level, including all nominations, and we had over 80 nomination processes to go through. We had this entire new management structure in place from day 1 of the merger. And that provided a lot of clarity and orientation within the organization.

You also see our employee voluntary program. And this employee voluntary program by end of January 2026, we have already had enough volunteers that have signed a termination contract so that we can achieve our FTE reduction target. And in these contracts, we have agreed with each volunteer a clear termination date somewhere between 2026 and 2028. Therefore, we have certainty that we will achieve our FTE reduction targets by 2028. And this obviously reduces a lot of uncertainty within the organization and allows us to focus on what matters most, the market and profitable growth. And still on the people and organization, by end of 2026, we have completed our relocation. We have already started right now in April with the relocation from Frankfurt, the headquarter of former Helvetia in Germany to Bad Homburg, the headquarter of former Baloise and the future headquarter of Helvetia Germany. And thanks to our agile workspaces that we have in Bad Homburg and our modern ways of working, we can accommodate all former Helvetia staff in Bad Homburg without renting any additional space, which results in significant cost savings.

On the products and services, you see that we will have a joint sales starts with our harmonized product offering in the broker market in May for both non-life and life. In non-life, for example, that means that we will reduce our non-life product portfolio from over 200 products to around 100 products, a significant reduction in complexity going forward.

Under entity and systems, you see portfolio transfer and legal entity simplification. Already this year, we work to complete the portfolio transfer of the former Helvetia branch into Baloise, and we will continue simplifying our legal structure in 2027 onwards, again, with the goal to reduce complexity. And it will also come as no surprise that our IT synergies will follow later in the years. IT migrations and IT simplifications take time. Nevertheless, we are already preparing intensively to migrate the portfolios as quickly as possible. And thanks to the merger, we can now leverage our investment in Guidewire, our modern and new IT non-life system much more effectively by almost doubling the volume on this platform.

So you can see that we have an ambitious integration plan in place. We are on track, and we are moving forward at full speed. But even the best integration plan creates little value unless the synergies are actually realized. And as you can see on the slide, we aim to achieve our synergies by 2028. And as Michael already mentioned, we have defined many measures within the group to realize these synergies. In Germany alone, we have identified close to 100 measures to realize our synergies. When you now look at the right-hand side of the slide, you see the breakdown of our synergies. You will notice that around 45% of all synergies result from our FTE reduction program. And as already mentioned, thanks to our employee voluntary program that we have completed, we have certainty that these synergies will be realized.

Within the remaining 55% of the synergies, a few initiatives are expected to contribute significantly to the overall synergy target. One of these is the relocation synergy. As mentioned before, we have already started the relocation and hence, we also have certainty that we will realize these synergies by end of 2026. Another one is our efficiency synergy. Thanks to the strong growth in 2024 and 2025, we have also already locked the growth-related efficiency synergies in. So in total, Around 70% of synergies are already secured today. And we are confident that the remaining 30% will be delivered by 2028 at the latest. So we are very well on track to achieve our synergies and these synergies will have a material impact on our financial results.

When we look now at these financial results, we see that this merger has a positive impact on Helvetia Germany. We are confident that we will deliver in total CHF 70 million of synergies. More than 90% will already be achieved by the end of 2028. We are also confident that we will further improve our combined ratio to an excellent 90% by 2028. And we are also confident that we will improve our underlying earnings to around CHF 180 million by 2028. And with these financials, we are a sustainable and attractive value contributor to the group.

So to conclude, I would like to summarize the 4 most important key takeaways. First, the merger has changed our strategic position, and we are now a top 10 broker insurer in the German market. Second, we have a solid foundation. Over the last few years, we have materially improved our financial performance, thanks to our disciplined focus on technical excellence. Third, we are well on track to realize our synergies and efficiencies. And fourth, with this performance, we are a sustainable and attractive value contributor to the group.

So thank you very much for your attention, and I hand back to Peter for the Q&A session.

Thank you, Jurg. So as you say, now we move on to our second Q&A session. They're already coming up, but Fabian, Matthias, and Martin, please join us back on stage.

Thank you very much. Who would like to ask the first question?

Farooq Hanif from JPMorgan again. Just on the full value insurance in Switzerland. I mean obviously coming from Winterthur group, they moved very radically to change how they approach to autonomous, semi-autonomous structure. I mean I gather that Helvetia Baloise is not going to do the same, but what can you do to accelerate the shift to semi-autonomous? Are there actions you can take simply because of your scale and your brand. I just wanted to understand that.

The second question is on -- and I don't know if it will be covered in this session, but just could you talk about the ROE of Baloise Bank and where that is and the strategic importance of that in individual life. I know that Baloise Group emerged from the bank. And so just how much of a sacred cow in a sense is that?

And my last question is actually more of a probably a risk management question, but just I thought about your very high solvency ratio versus the restrictions on cash remittance, but you're 60% of non-life business. So I was wondering, when it comes to cash pooling, internal reinsurance structures, have you -- is there an ability to improve remittences that way? And is that something we can look forward to?

Okay. Thank you very much Farooq. So the first one on the semi-autonomous shift, Martin, do you want to comment on that that?

Yes. It is not our target to accelerate this shift, but there's a clear market tendency towards semi-autonomous schemes. And I'm really convinced that it's much better to accompany our customers on their way and to have the full range of offering for our customers because there's also a certain segment. They don't want to bear the risk, and we want to give them solutions that we can do a 360-degree in the SME. But it is clear that it's the #2 in the life market. We also have our footprint in the semi-autonomous. So if I give you 2 figures, we have above CHF 4 billion assets under together with [indiscernible] invest. We have more than 40,000 insured now. So we are well prepared to shift our customers towards our own solutions. But I would to elaborate a bit more on it because it is not only B2C. It is also B2B, we are in a good position to also take our part of the market in the B2B segment, which means reinsurance for other semi-autonomous in the biometric in the risk part of the market. We have asset management offerings. Andre, can also say more to it where we support semi-autonomous and autonomous foundations in their asset management.

And we have the ability to do mortgage servicing where we can give semi-autonomous and autonomous foundations, the ability to also invest in mortgages because we take the whole servicing. So we have a full range of services and products in the second pillar, and we shouldn't look just at the full insurance as a single question. But it is clear that this is not our segment of the market where we want to grow that's also clear.

Yes. Thank you very much. And then the second one was, yes, [ Andre ] how does banks fit into the strategy?

If I go to the bank, I mean, I just elaborated on the really huge strategic possibility we have in the market with the 360-degree financial advisory for our retail customers, including wealth management. From a strategic point of view, we have a huge opportunity that we have a small to midsized bank with a huge, very efficient distribution power across Switzerland, and we should use this to increase the part and the earnings from wealth management in the bank and with this, we also increased the ability of the bank to get to deliver -- to increase their cash remittance to the group because this is very capital-light growth. So this is the strategic background of the bank. And apart from this strategic background, the bank is still working on getting their targets done, which is also the reduction of the cost to income ratio as you know it from the former Capital Markets Day.

And because you asked there are no sacred cows. So bank as any other activities is part of portfolio management and will be looked at with the criteria as we said before.

And then the third one was on cash and what levers do we have available to us to improve that. Matthias?

Yes. So we look into all levers. That's quite natural. As we are in the process of merging the solvency models that will take place this year. We're also looking into reinsurance, both external and internal. External reinsurance last year when we did the renewal season for 2026, obviously, we had to do it on a separate basis because we were still competitors at the time. But nevertheless, we could exploit the benign environment for a reinsurance buyer. And this year, we're going to combine the reinsurance programs, define a new reinsurance strategy and obviously, we'll benefit from the larger scale that we have by buying reinsurance.

And we will use internal reinsurance even more than in the past to further optimize the structure. I think this is still at a very early point. We will look into this during 2026. But currently, as mentioned in the first Q&A, the cash is not the limiting factor. So given our plan, including the safety margins, there is enough operating cash remittance without such optimization structures to achieve the dividend path and integration costs.

Michele?

Michele Ballatore from KBW. I'm afraid I'm going to insist on cash, cash remittance in particular. I mean, specifically on Germany, I mean the cash remittance in the previous years has been quite low. And if we look at the solvency report of both the Helvetia and Baloise in Germany, I mean, I think there is a pretty sizable chunk of capital there. So you would expect a much bigger contribution in terms of cash remittance, a multiple of what has been in the past. So I guess my question is, is there upside there in terms of all this capital that you are holding? Is there a reason? There are more risk? What can you tell us about this dynamic, which has been quite weak?

Okay. Jurg, do you want to answer that German cash position?

I think we don't disclose really on an entity level, the cash situation. But certainly, this year, the cash situation was affected by merger-related impacts quite significantly. So going forward, we can certainly see a different one than the synergies, which will come, which also will have a material impact will also be cash, which can be dividend out. So from that point of view, we're quite confident that the cash contribution going forward, we significantly increased from the one, for instance, for 2025.

From the capital position, I think one has to pay a bit attention in the Life business. There's a lot of policyholder capital in it. So if you take it away, then in Life, the situation might not look as much capital as maybe you have a thought. And in non-life, I think the capital situation is you have on the local cap, you have the equivalization reserve, which you have to have, which is quite substantial. But as Fabian mentioned, in our calculation for the hurdle rate, the capital will be taken into consideration and Germany has to deliver on it.

Thomas Bateman from Mediobanca. It sounds like you're ahead of plan in Germany with the cost synergies and the fact that you've already secured the number of FTEs. How can I get excited? How much bigger can these cost synergies get? Second is I get that you're the #10 insurer in Germany, in the broker division, but you're still not a big insurer there. There's more competition in that space. It feels like we've had a really good year anyway and you are expecting to improve your combined ratio another 2 points. I guess I'm struggling to marry a modest size player in Germany getting to a combined ratio of 90% in Germany, which is 10 points better than the market almost. And with more competition, some of your peers are looking to expand in Germany because it has become a much better market. Maybe you can give some color on why I'm being too pessimistic here on your maybe your ability to meet those targets?

Thank you. Both of those for you, Jurg. The first one, given our strong progress to date and what's position on synergies?

Yes. I would like to dampen your excitement level a little bit. I think we have made really good progress. We are very fast in the implementation of the synergies. It's not that everything is already implemented, but we have certainty that we will implement it by 2028. We had a very good collaboration with the unions, which is important for the FTE reduction and also for all the other changes, which will happen in Germany. So I think it's -- we are really targeting the 70, and we feel very confident that we will achieve it by 2028.

The second question you had was about our size. I mean, at the end of the day, in the German market, there are 300 insurance companies, and we are now a top 20 insurance company, we are a top 20 insurance company. I think we have a 5% market share in the broker channel, for instance, in non-life, which is a decent market share. I think also now with the synergies, we will even become more efficient and actually the synergies are mostly the reason why we can further reduce the combined ratio by 2 percentage points. So we assume that our claims ratio remains stable, and we have proven it over the last few years that this is a reasonable assumption. It's not a one-off. We can manage our portfolio with our target segments on that claims ratio level. So if we get a bit more efficient in the cost ratio, so I think 90%, I totally agree, it's ambitious, but it's something which is feasible.

And maybe one last point, yes, sorry, for the market, the market at the moment is at 96%, 97%. So yes, I mean, it's not 100%. So it's a slight difference also.

And if I can complement on what Jurg said. So when you're very selective and very focused, you can as well allow to not be present in businesses which traditionally have very low profitability. When you're broader in the market, you have to be everywhere. And just as a broker insurer that is exactly where you can more smartly choose your niches, and that is what Jurg is doing and doing going forward. So there's never a guarantee for what we want to achieve. But I think there is a logic behind that, which we presented to you today.

Thank you. Nasib?

Thank you. So firstly, on revenue dissynergies, we talked about revenue synergies, but have you thought about any revenue dissynergies, particularly in Germany, given the broker-led distribution, they wouldn't have both products on the panel. I know you're kind of halving the product, but also in Switzerland, have you thought about any revenue dissynergies or are they baked into the plan?

Second question AI disintermediation of the broker. Again, you talked a lot about brokers in Germany, do you see over time that distribution channel being disrupted, moving towards more direct or AI-enabled distribution? And then finally, on kind of the rate increases in geographies, 3% in Switzerland, 7% in Germany. What's the outlook looking for those in '26?

Okay. Thank you. Nasib. So the first one on revenue dissynergies, what we can think about?

Maybe I'll start with Swiss. In Switzerland, we are very based on retail business and SME with a huge part also in the tied agent channel. So the dyssynergies would come in Switzerland from an increased fluctuation in the tied agent channel. And as Fabian already explained at the beginning, we don't see this at the moment. So which is a very positive signal that we have a very stable sales force, which means we have stable customer service, and we don't see any dissynergies on this level. So I think that's a very positive development because also, as Fabian said, there were lots of attempts to get our sales force because we have very strong agencies and strong agents, and there's a lot of activity in the market. So this is -- this is, I think, very positive.

On Germany?

In Germany, we also don't see a massive revenue dissynergies. I mean we are checking at the moment, the portfolios, and we see maybe in property, we have some concentration risk, which we need to handle, but it's not a big issue in Germany.

And then the second question was what disruption we're seeing in AI. Do you like to comment again on each individual market. Jurg, first?

Germany if you -- when you also look a little bit back, direct channel maybe 10 years ago, everybody was totally excited, check, '24, this is the new channel to come. Reality is it's still a very small niche, the direct channel. In the motor business, it's growing a little bit -- it's growing a little bit, but in the other business, it's not of much relevance.

Nevertheless, I think artificial intelligence is moving so fast. We really have to observe it. I see more as a lead generation and supporting the distribution channel. But also going forward, we don't have any signals at the moment that the physical distribution channel will reduce. And also in Germany, over the years tied agent channel, even though it -- the numbers are taking -- going slightly down or going down, the volume remains relatively stable. Broker channel is slowly growing. So at the moment, we don't see anything happening, but obviously, we have to observe it.

We really focus on using AI where it really helps now which is GenAI and which is agentic, for example, in claims where it is important for the notification, for the coverage and examination and also for the steering to the repair shops. So there we use it now.

On the broker channel, yes, I think, yes, there will be also a certain part of the work that will be done also by AI because comparing the different coverages, different prices and so on. I think it's a typical field for AI. And that's why it is important that we already have in place, and we work on to improve these capabilities like the concierge, which has the automatic counter offers because you can use this now in partnerships. You can use it in your own sales force, but you can also use to answer to broker requests in the retail business. So we have to be very attentive there that we monitor and address the trends in a proper way and be ready when something really turns in the market.

And to complement on those 2 descriptions of what's happening. When we say that we are at the forefront of AI, that means as well that we understand how customers now will use AI in the way they approach insurance product. And that we prepare for that. So the best example is that traditionally, there was a keyword search on Google. And based on that keyword search, you would get to certain web pages. Now you would ask -- now that when you use AI, there will be very different criteria being used to get to the right offer, and you need to understand that you need to anticipate that and then use it how you position yourself. And that is, of course, part of the things we observe and react to and there will be changes as Martin and Jurg said, and we will, of course, use that going forward to position ourselves in the right way.

Great. And then the third question was on what our expectations for rate changes or outlook? Again, Jurg, do you want to start the Germany?

Yes. At the moment, we see more sideways movement. So we don't expect really the significant increases you have seen maybe in the past because of also inflation in Germany in the motor business. It's more -- it will slow down. In the commercial line of business, it's also -- we're probably at the top of the cycle at the moment. And we see first ones who are softening a little bit the market or the rate reduction. But note, we cannot say across the whole market, so we are more stable, slightly increased price. That's our expectation at the moment for the market going forward.

It depends also on what happens with interest rate and inflation, obviously, now with the whole geopolitical situation. But at the moment, that's the situation for Germany.

Except some lines of business in retail, where we have monthly expiries and we monitor the situation constantly and do adaptations, for example, in the online business also, the Swiss market is very focused on the 1st of January. So we now did the sanitizations and we did the rate increases. We see the result, and we assess this to decide before -- in May, June to go to the renewal round with the SME and then to the new -- to the tariff adaptations in -- for the 1st of January next year, but I can't give you an expectation. I really have to see the results and the inflation effect I have in the portfolio. So that's a regular process where we are going through now.

[indiscernible] Cannacord. Just a question on Smile. Could you maybe give us a bit more color on how that plays into the AI strategy that you've outlined, especially, I think you slightly touched upon it in terms of search. But as the world changes and customers change behavior, is that something where once you've incorporated with new tools, if we can put it like that, it will also potentially be an opportunity for other countries?

For other countries, I would then ask Fabian to give a bit of insight. In Switzerland, it's very complementary to the online presence of Helvetia. The online presence of Helvetia is meant be a part and integral part of the interplay between online, tied agents and telephony. So we play in this triangle. So this is the Helvetia. The other side is for the more digital customer segment. It is Smile. And Smile -- that's the beauty of Smile in Switzerland. Smile is really a digital brand. So we have a very low part of business that comes via aggregators, which is very unusual in the online business in Switzerland because normally, you have a high share of aggregator business, where you pay quite high distribution cost on it.

So in Smile, we really managed to have a digital brand where we are not dependent on aggregators. So that's the complementarity of Smile towards -- with Helvetia and we also use Smile to do some experiments to have a look how we can adjust prices, how we can address customers because it's more limited than if we do it on the whole customer base or portfolio of Helvetia. And for the international part, I would ask you to comment.

Yes. I think I would build on what you said is that the strategy of Smile is a very, very excellent and particular strategy in the way that we focus on building a brand and that we have a strategy where we're not dependent on aggregator business in a large scale. And so looking at that, we had identified Austria is another market in which we're building that, and we would look into markets where we can build something similar and be open to that. What we don't want is to go into a market where we're purely me-too where is most of the direct business coming through aggregators. We don't see there a big profit pool, and that's why I would exclude those markets. Some of that markets.

We got time for one last question, if there is any? Otherwise, thank you. Thank you, everybody, very much. For those in the room, obviously, there is an opportunity to discuss topics further outside over [indiscernible], as we say, in Switzerland. For those of you online, I hope to meet you soon. Before we wrap up, I think Fabian just hand over to you for some closing remarks.

Yes. So first of all, you saw today that as a management team and I think I can speak here as well of our Board of Directors, we are fully convinced of the merits of this merger. We are well on track with the integration. We showed that to you today and demonstrated that to you today. And we have an attractive financial plan, a 10% to 12% CAGR in underlying earnings, a 50% uplift of our dividend is an attractive plan on which we are confident, highly confident that we can achieve that because the levers are clearly identified, and they are in our hands, and it's now time to deliver and make it happen.

And with that, I hope I can bring across some of the enthusiasm we have as Helvetia Baloise for our new setup, for our new company going forward, and looking forward to that journey, which we have ahead of us. Thank you very much for your attendance. It's a pleasure to have you here, and thank you for these many and a really, really good questions. Thank you.

Ladies and gentlemen, welcome to the Helvetia Baloise Group Conference Call Full Year 2025 Results. I am Valentina, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Mr. Peter Eliot, Head of Investor Relations. Please go ahead.

Thank you very much. Good morning, everybody, and thank you for joining this call on what we appreciate is a very busy day for you as well as for us. In our call today, we have Fabian Rupprecht, our Group CEO; and Matthias Henny, our Group CFO. The purpose of this call is to answer any questions you might have on our full year results. We look forward to discussing the new strategy and financial targets at our Capital Markets Day this afternoon.

You'll have seen, we published commentary on the results slides on our website, so we won't repeat those here. Nevertheless, I invite our Group CEO, Fabian Rupprecht; and Group CFO, Matthias Henny, to say a few words before we open for Q&A. Fabian, please.

Thank you, Peter, and good morning to everyone. It's a great pleasure to welcome you all to the first results presentation of the new Helvetia Baloise Group. Both companies had a very strong year in 2025 individually, and have also made an excellent start as a combined company. Both companies delivered on all the targets they had set as part of their individual strategies. We're very proud that these targets were achieved in parallel to the preparation efforts of the merger. And indeed, thanks to the intense preparation up to day 1, we were then able to move immediately to a joint organization with clear targets and fast decision-making.

We've also established a strong new brand with international reach. We've kept employee engagement high and minimized disruption for our customers. We will tell you more about all of that and about our new strategy and targets at our Capital Market Day this afternoon. However, this morning is now about the full year '25 numbers.

So I hand over to Matthias for those.

Thank you, Fabian, and good morning, and welcome, everybody, from me. We appreciate that we have provided you with a lot of names today. A merger of this size under IFRS 17 provides some accounting challenges. However, we have tried to be as helpful as possible in our reporting of these. It is my intention as CFO of the new group to be as transparent as possible in our communications. Firstly, we have provided the company's audited accounts. These include a P&L contribution from Helvetia only. However, we wanted you to also be able to assess the 2025 performance of Baloise. So we have provided Baloise's 2025 results based on its previous accounting assumptions. These have not been audited and they do not reflect the accounting changes arising from the merger with Helvetia. However, they do include certain merger-related expenses incurred in 2025. We have, therefore, also provided you with an assessment of what the Baloise's results would have looked like without these costs. You see these in the Baloise's adjusted results.

Finally, we appreciate that you want to know what the income statement might look like in the future, and we need a starting point for our new financial targets. Therefore, we have provided you with pro forma combined information. This is also unaudited and is provided for illustrative purposes only. We would urge you to treat the numbers with caution, and we direct you to the disclaimer on Slide 43 of the presentation. The important thing is that we are extremely pleased with the results that both Helvetia and Baloise achieved individually in 2025. Helvetia's underlying earnings rose 20% far above its targeted growth rate. Meanwhile, Baloise's net profit was also up 20% if one adjusts for merger-related one-off impacts.

ROEs were correspondingly satisfying. The main driver of the good results for both companies was the non-life underwriting results.

Helvetia improved its combined ratio by 1.8 percentage points, with a loss ratio, excluding discounting a nat cat that was 1.5 percentage points better, and an expense ratio that improved by 30 basis points. Baloise also improved its combined ratio by 1.6 percentage points on an adjusted basis, including a 20 basis point improvement in the expense ratio. Both companies reported very strong gross cash remittances and SST ratios. The combined SST ratio is an internal indicative estimate. This stands at about 260%, which is about 20 percentage points higher than the level we indicated at the time of the merger announcement.

The strong results of both entities and the combined group support attractive shareholder remuneration. We proposed a dividend for the 2025 financial year of CHF 7.70 per share. This equates to a total payout, which is 5.4% higher than the combined payout of both companies in the previous year. The strong results also mean that we have given ourselves a very high starting point for the next plan. You will see that we have not adjusted the number when using it to set our targets for future earnings growth, which we will discuss this afternoon.

With that introduction, we are happy to take your questions on our full year 2025 results.

[Operator Instructions]

Ladies and gentlemen, we have no questions at this time. I would now like to turn the conference back over to Fabian Rupprecht for any closing remarks.

Okay. So that's a little bit to our surprise that there are no questions. I assume that this has to do with the fact that you just received that information quite early and that there is an overload of information. Our IR team will be at your disposal during the day to answer all the questions, so please don't hesitate to call them. Looking forward to having you around in our CMD this afternoon with hopefully many more questions on the strategy. Thank you so much.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Ladies and gentlemen, welcome to the Helvetia Baloise Holding Ltd. Conference Call and Live Webcast. I am Sandra, the Chorus Call operator.

[Operator Instructions]

The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Peter Eliot, Head of Investor Relations and Founding of Helvetia Baloise. Please go ahead.

Thank you very much. Good morning, everyone, and thank you for joining the first conference call of Helvetia Baloise. We're excited to have come together after months of planning, and we look forward to telling you more about our combined vision in due course. For today, the focus is on guiding you through the accounting impacts of the merger and the pro forma financial information that we published this morning. We do appreciate this is a bit of a specialist subject, and today's presentation is necessarily a technical one.

Nevertheless, we'd ask if you could restrict your questions to this topic for today. We look forward to presenting a broader range of subjects in the future, including at our Capital Markets Day on the 15th of April. To guide you through today's presentation and answer your questions, I'm pleased to introduce our new Group CFO, Matthias Henny. Matthias, the floor is yours.

Thank you, Peter, and good morning also from my side, and thank you for your interest in Helvetia Baloise. Let me briefly introduce myself. I have dealt my entire professional life with finances of insurance companies, first as a consultant, later as an executive in the investment management and finance functions. Up until last Friday, I was the Chief Investment Officer of Baloise Group, in which function I've been in touch with many of you over the last few years. I'm now very much looking forward to leading the finance function of the new group. I am fortunate in being surrounded by a strong team selected from 2 very strong individual organizations.

I will start on Slide 3 with the key messages for this morning. We successfully closed the deal last Friday, 5th of December, and the preparation for the operational integration is well advanced. The top 3 management layers below the Group Executive Committee have already been fully appointed and are working well together. We have much work behind us and a lot of work ahead of us, but there is huge energy and ambition in the team for the tasks ahead. Our ambitions have not changed since we first announced the deal back in April. And everything we told you then still applies. It is early days, but we are highly confident of delivering on all the targets previously set.

The most tangible of these is probably the cash and dividend uplift we indicated, but the wider benefits remain equally valid. As Peter said, we look forward to elaborating on those with a full update in April. We are breaking new ground with a merger of this size under IFRS 17, and we are aware that you will be seeing some of the accounting consequences of this for the first time. I will explain these to you today. Acquisition accounting, in particular, will have a significant impact on the balance sheet and P&L that we report. I am sure you all understand that this is accounting only and it will, of course, have no impact at all on cash, on solvency or on our ability to pay attractive dividends.

As part of the Swiss listing rules, we have this morning published pro forma financial information in respect of full year 2024 and half year 2025. These PFFI include a preliminary purchase price allocation with a pro forma combined balance sheet and income statement. I would urge you not to treat numbers in this disclosure as guidance. However, we are committed to providing you with as much disclosure as possible, and we'll come back with more help with the full year '25 closing at our Capital Markets Day.

Why do I say not to pay too much attention? There are many reasons, but the calculations behind the numbers you see today were carried out at the high materiality levels and the assumptions used are as of different dates. They will be reset to the 31st of December 2025 assumptions when we calculate the actual pGAAP numbers, which form the basis for the 2025 annual report. However, this disclosure does at least enable us to reference some numbers to help explain the accounting concepts. I will refer predominantly to the half year '25 numbers in this presentation. This is because there were additional elements that distort the 2024 result because half year '25 is more recent and because some of the economic assumptions such as interest rates are closer to those we see today. However, you will also find the full year '24 numbers in the appendix.

In the balance sheet, the most material impact comes from the creation of significant goodwill and intangible assets. In the P&L, the most material impact is the amortization of these intangible assets. While this means the reported net income will be distorted, we will define underlying earnings and other KPIs to adjust for acquisition accounting effects where appropriate. These will aid visibility on the underlying performance of the group.

Turning to Slide 4. Before we get into the numbers, let me briefly remind you of what this merger means. We are now a leading player in Europe with attractive positions in 8 markets as well as a global specialty business. We are also now proud to be Switzerland's largest multiline insurer, offering a broad range of products and services. Overall, we rank as the second largest insurance group in Switzerland with around 20% market share. The deal brings significant synergies with attractive value creation for all stakeholders. We told you we would achieve CHF 350 million run rate pretax cost synergies.

We also said this will lead to an extra CHF 220 million in cash generation and an uplift in dividends of 20% by 2029. This comes on top of the roughly CHF 300 million stand-alone cost efficiency programs of Helvetia and Baloise that were already communicated. The 2 companies have similar DNA and deep mutual knowledge. We have a highly experienced management team already in place, committed to delivering on our goals and ensuring a smooth integration.

Returning to today's topic on Slide 5, I will briefly outline the main assumptions used to calculate the pro forma financials and explain some of their limitations. Under IFRS, the absorption merger is an acquisition of Baloise by Helvetia, achieved by Helvetia doing an equity increase equal in size to Baloise's market cap. Baloise's assets and liabilities are recognized at fair value in the consolidated balance sheet of the combined entity. As I mentioned, the pro forma financials were carried out at high materiality levels, not a proper bottom-up calculation. And in the case of full year '24, it assumes that the acquisition happened 2 years earlier than was, in fact, the case.

The assumed purchase price is taken from the 27th of November, but for the opening balance sheet, we will use the lower 5th of December market cap. You should not assume any roll forward in the numbers you see. The individual PFFI P&Ls are mostly based on fair values as at the start of period, 1st of January 2024 for the full year '24 numbers, while intangible asset amortization is based on values as per end of period, 31st of December 2024.

The full year '24 balance sheet is based on fair values as at 31st of December 2024. It is not rolled forward from the start of the year. The PFFI for full year '24 and half year '25 and the eventual opening balance sheet, therefore, represent 3 separate revaluations, all on different assumptions. You cannot roll one forward to get the next. Because of the absorption merger, Baloise also moves on to Helvetia's accounting policy. So for example, discount rates are adjusted. Once again, please keep in mind that this is all accounting only and that these assumptions will differ from those used for the final financial closing.

Slide 6 summarizes the main accounting impacts you need to be aware of. I'll briefly explain each in turn. The letters in each box link to topics to where you see them later in the presentation. First, in a business combination, we need to recognize all identifiable intangible assets. This includes brands, customer relationships, technology and software. These assets are typically amortized. Within the PFFI, the newly identified intangibles are amortized over about 10 years on average.

Then we have goodwill. This represents the future economic benefits arising from the value that is not individually identified and separately recognized. It is the excess of the purchase price over net asset value. The goodwill and other intangibles are like the other effects you see, purely accounting with no impact on cash generation or dividend paying capability.

Next, under IFRS 17, acquisition accounting requires that the liability for incurred claims or LIC is recognized as a liability for remaining coverage, LRC, which is relevant in non-life. This reflects the fact that the entity essentially provides coverage for the adverse development of claims. After the acquisition, the LRC along with any CSM is released into insurance revenue over time. This process increases both reported insurance revenue and service expenses compared to the previous accounting treatment.

In the half year '25 PFFI, the insurance revenue is increased by CHF 1 billion and the insurance service expenses rises by CHF 0.9 billion. The next topic is that Baloise acquired non-life insurance contracts still in their settlement period will now be measured using the building block approach. This change is required by IFRS 17 for some of our business, and we felt it was cleaner to treat everything the same way. This results in the recognition of a small CSM, which will gradually be released into the P&L. The non-life CSM of CHF 0.4 billion is relatively small in the context of our balance sheet.

Given the short duration of the business on average, we expect a relatively quick release into the P&L. As a very rough guide, this might be about a quarter in the first year. This comes in addition to the normal non-life earnings, it is not a replacement. However, as with the other accounting effects, this is not backed by economic value or cash.

Moving to topic E. For the calculation of investment income, Baloise's assets are considered newly acquired, so amortized cost adjustments apply. The new locked-in interest rates impact the income. Bonds and mortgages are most effective. Finally, as Helvetia's accounting policies are leading, we see some other effects as we move Baloise onto these policies. Both Helvetia and Baloise assumptions were perfectly valid. However, there will always be differences in a principal-based accounting standard. One example is that, as you are aware, Helvetia used lower discount rates than Baloise. Hence, you see an increase in the fair value of insurance liabilities. This also impacts the discount benefit and insurance finance expenses in non-life. Again, this revaluation has no impact on statutory valuations, solvency ratios or on cash and dividend capacity.

So now let's look at the numbers, starting on Slide 7, referencing to half year '25 PFFI. I mentioned earlier that the accounting assumes an equity increase for Helvetia equals in size to the market cap of Baloise. Helvetia's total equity of CHF 4.3 billion thus increases by CHF 9.7 billion to get the pro forma combined equity of CHF 13.9 billion. Of the increase, CHF 3.5 billion represents Baloise's stand-alone equity position before any adjustments. Like the Helvetia equity, this is after payment of the 2024 dividend. As part of acquisition accounting, Baloise's existing goodwill of CHF 0.2 billion is eliminated from the balance sheet to avoid double counting when new goodwill is recognized for the combined group.

The alignment of assumptions, notably lower discount rates result in a net increase in the insurance contract liabilities of less than 3%. This corresponds to a remeasurement impact of CHF 1.4 billion. On the right, we have an F against this number as this was one of the accounting topics I mentioned on the previous slide. Intangible assets such as brand, customer relationships and technology are identified and amount to CHF 3.4 billion. The next item aggregates the effects of deferred taxes and other minor adjustments that arise from the remeasurement of assets and liabilities during the acquisition process.

Tax and other reduces equity by CHF 0.3 billion. If we now compare the CHF 9.7 billion equity increase with the items I have just explained, the residual amount of CHF 4.7 billion is recognized as goodwill. The market has assigned this goodwill via the share price. However, we can easily justify it, given the value of the business. The NAV does not recognize Baloise's high returns, its CSM or any future efficiency or synergy targets. As I mentioned earlier, this CHF 4.7 billion is based on the 27th of November share price. Based on Friday's closing price, the goodwill is CHF 4.2 billion. As already mentioned, we have conducted a first assessment of the goodwill and consider the headroom to be substantial. We, therefore, feel very comfortable with the level of goodwill we have.

On Slide 8, we give you a bit more detail on the CSM, which is part of the insurance contract liabilities. Baloise's reported life CSM of CHF 4.9 billion is CHF 0.8 billion lower after applying the fair value adjustment. This is driven mainly by lower discount rates and by revised assumptions for future bonuses. However, we also expect the CSM release ratio to be higher than Baloise reported before at about 7%. Hence, we don't expect a significant change in the life profit. The newly created non-life CSM from the Baloise acquired business only at CHF 0.4 billion. This non-life CSM will be released much quicker than the life CSM with we estimate about 1/4 being released in the first year. Please note that as I mentioned earlier, no roll forward is modeled here. These are not the opening balance sheet numbers.

Finally, let us look at the P&L for half year '25 on Slide 9. Before we look at the IFRS net income pro forma combined and how it is composed, it is important to mention that there is a lot which is not intuitive or useful for you. Therefore, we will focus on the numbers that we think are most useful on the right-hand side. A positive number here means that the pro forma half year '25 is more positive or less negative than Baloise reported. We see most of the effect in non-life. The new CHF 0.4 billion CSM will be released into the P&L over the next few years. We think there is a bit of positive seasonality in the CHF 62.3 million you see here. Hence, I would not quite double that number.

But the run rate is not too far off what we would expect initially. The move to Helvetia's lower discount rates has a recurring negative impact of high double-digit Swiss franc million per year. However, over time, this will be fully offset in the insurance finance expenses. It is not intuitive that insurance finance expenses start off lower by CHF 33 million, but this is due to some Baloise locked-in rates from historical years being very low. The rates at the opening balance sheet assumed date are higher, creating the initial negative unwind delta of minus CHF 33 million as we move on to these rates.

As I say, this is a temporary effect and the number will turn positive. The non-life investment income is lower, possibly by a mid-double-digit Swiss franc million amount when annualized. This is because the assets are revalued using lower Swiss franc interest rates. This drag will reduce each year as maturities are replaced with new assets. Life insurance is much easier. Here, we do not expect a material change in the CSM release, as I just mentioned. Other items, including investment income are distorted, but are buffered in the CSM. So you also do not see any material P&L effect.

The largest item is then the amortization of the newly identified intangible assets, which you find under other expenses. The average period of this amortization is assumed to be about 10 years. The amount you see here is slightly less than 1/10 of the total because we no longer amortize Baloise's legacy intangible assets. In summary, you see many effects in the P&L that are one-off in nature, some effects which are recurring, but decreasing fast and very little that is fully recurring.

However, all accounting changes have no impact on cash or dividends. I remind you that the PFFI numbers make no allowance for the synergies we expect from the deal of CHF 350 million run rate savings on top of existing efficiency plans, translating into an additional CHF 220 million cash generation. These are spelled out again on Slide 10. We said 80% of these synergies would be realized by 2028, and we expect a 20% uplift in dividend capacity by financial year 2029. We signaled likely integration costs of CHF 500 million to CHF 600 million, mostly to be incurred by the end of 2028. These will, of course, fall outside of underlying earnings.

To conclude, let me briefly remind you of our next steps on Slide 11. Between the public announcement of the merger this April and closing last Friday, we completed many milestones on time, including extraordinary general meetings where shareholders voted overwhelmingly in favor of the merger. Now we are beginning to implement the new group structure and functional organization as planned. We look forward to giving you more insights at our Capital Markets Day next April. Here, we will present the strategy and targets for Helvetia Baloise together with the full year 2025 results. With that, we are happy to take your questions.

[Operator Instructions]

Our first question comes from Iain Pearce from BNP Paribas.

The first one was just on statutory earnings. It might be a bit early to talk about them. But just thinking about the amortization charge and the intangibles, do you expect a similar impact in the statutory earnings is what you're seeing in the IFRS?

And then the second one is on the useful life. Thank you for disclosing the useful life of the intangible assets. Do you expect that the amortization charge will be linear across that useful life? Or are you expecting any sort of distortions in how we can expect -- assume amortization in the P&L over the course of the next few years?

Thanks very much, Iain. So the first one was on statutory earnings. How does the amortization translate into those, if at all?

So there is absolutely no impact on statutory earnings. So what we just presented is purely IFRS accounting. And this is also the reason why all these accounting impacts have no effect on cash or dividends. Statutory is not touched at all.

Yes. On the useful life intangible, the roughly 10 years has been the assumption for the PFFI. When we present the opening balance sheet on the Capital Markets Day, we will do a new assessment over the useful lifetime. And there it might be different for different components, but more to come at the Capital Markets Day.

The next question comes from Ahmed Nasib from UBS.

So first one on the fair value changes in the balance sheet, the CHF 1.4 billion. Is it right to kind of assume that CHF 0.8 billion is coming from the CSM and the rest is best estimate liability, so CHF 0.8 billion CSM, CHF 0.6 billion impact to make up the CHF 1.4 billion?

And then the second question on, Fabian, you kind of mentioned there's a change in Helvetia amortization. So what I'm trying to get at is [Technical Difficulty] closer to the 340, 340 is basically CHF 3.4 billion divided by 10. So is that the normal run rate? And then finally, at the Capital Markets Day, have you thought about maybe if you can -- you've been executing at pace. Can you accelerate the time line for that? Or maybe I'm front-running some of the stuff that you're going to say at the Capital Markets Day?

Thank you, Nasib. You broke up a little bit on your second question there. I think the second question was essentially, should the amortization be the CHF 3.4 billion divided by 10? And why is that not the case on the slide? Just to remind you, the slide shows the delta in amortization. So that might answer that question. But do come back if we misunderstood that. Otherwise, the first question was on the fair value changes of the CHF 1.4 billion and is the CSM included in that?

Yes. So the CHF 1.4 billion is calculated based on CHF 1.8 billion in fulfillment cash flow change and CHF 0.4 billion of CSM, where again, CSM is the difference of the CHF 0.8 billion life CSM change and CHF 0.4 billion non-life CSM change. On the second question, can you rephrase that again, the intangibles, Peter?

What's left?

No, I think Peter answered that and...

And the third -- yes, on the Capital Markets Day, no, we cannot accelerate. There is a whole lot to do to get everything done with this very complex business combination and all the calculations for the opening balance sheet.

The next question comes from Thomas Bateman from Mediobanca.

Could you just remind us what the duration of the non-life portfolio will be now with the combined entities? And the second question, just -- I think I just missed this. You talked about the LIC and LRC changes. Could you just repeat what you said one more time? And then finally, does the IFRS net income and the potential dividend cover or maybe slightly thin cover at the moment, does that have any impact on your ability to pay dividends going forward?

Thanks a lot, Tom. So the first question was on the duration of the non-life portfolio. What further information you can give there?

Yes. I mean, roughly, you can assume something around 4 to 5 years for the Baloise book, which is here under consideration as a rough guideline for the duration of the book. And the LRC changes, so first of all, there is a shift from LIC to LRC. And so from the liabilities for incurred claims to liabilities of remaining coverage. And this will inflate the revenues and expenses. So that's one effect that you will see.

And the second topic is the CSM, which is built in non-life business, given the switch to building block approach. And that will produce some CSM relief in the P&L statement that will decrease, however, very fast over time and will have no impact on cash or dividend. And the third question was again?

The third question, I think, was the payout ratio. The fact that the net income might change, changes the payout ratio. Does that have any impact?

Yes, that's right. I mean all what we have shown here is IFRS only, doesn't affect the dividend coverage. However, if we have the impairment of intangible assets under IFRS without touching the dividend, it might lead to actually a high payout ratio if you just compare the dividend with the net income of IFRS without correcting for this.

The next question comes from Matteo Lindauer from Vontobel.

I have a quick question on the non-life CSM of CHF 0.4 billion. So the assumption of a release of about CHF 0.1 billion for the next year is right. And so we can assume that the non-life CSM of CHF 0.4 billion will be released over the next 4 years. Is that the correct assumption?

Yes, it's right that about -- we expect that about 1/4 will be released in the first year. That's one thing. It also means that over 4 years, most of it has disappeared, not everything because you have also long-tail businesses covered here. But in any case, this has no economic relevance. I mean it's just accounting, which will be eliminated from underlying earnings. So all these accounting effects that we discussed here, it's just important that you know them, that you're aware of them, how to treat them, but they have no economic value or implication on cash or dividend.

We have a follow-up question from Iain Pearce from BNP Paribas.

Just in the slide, you mentioned you've been working obviously on the operational integration, and that's going to get started as of now. I'm just wondering if you can give any insight to any sort of findings or anything you've learned as part of that work you've done to this point since the merger was announced.

I mean what I can -- I mean this call is mostly about accounting. But what I can say from the work that has been done so far, the culture is very similar. So the integration is going on in a very smooth way. And the teams are highly motivated and committed to deliver on the targets that have been laid out.

The next question comes from Anne-Chantal Risold from Octavian.

Just one question on the Life part. As you mentioned, since it's Helvetia acquiring Baloise, the assumption will maybe trend towards Helvetia assumption. And on the Life side, we always had this release pattern that was quite significantly different between the 2 companies. So what can we expect for 2026 in the P&L of Baloise -- Helvetia Baloise?

Yes. So it's right that we are aligning Baloise's insurance contract liabilities to Helvetia's accounting policies. So that's just a matter of fact of how this business combination is reflected. In the CSM Life, this means we have a lower CSM stock to start from. But as we're going to adjust to the accounting policies of Helvetia, it means that also we expect a higher release ratio of around 7% for the Baloise book. So that in the end, we can expect a similar amount of CSM release in absolute terms. And again, to reiterate, also this is purely an accounting effect. Also, the dividend paid out from the Life business is not relying on the CSM release.

Gentlemen, so far there are no further questions. Back over to you for any closing remarks.

[Operator Instructions] Yes. I would like to thank you for your participation in today's call and for your interest in Helvetia Baloise. If you have further questions or require additional information, please reach out to our Investor Relations team, who will be very happy to help.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Ladies and gentlemen, welcome to the Helvetia Half Year Results 2025 Conference Call and Live Webcast. I am George, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Mr. Peter Eliot, Head of Investor Relations at Helvetia. Please go ahead.

Thank you very much, and good afternoon, everybody, or good morning to some and welcome to Helvetia's conference call on our 2025 half year results. We appreciate your time on what we realize is a busy day for you, and we regret any clashes, but we've tried to manage those as well as possible. We have on the call today our Group CEO, Fabian Rupprecht; and our CFO, Annelis Luscher Hammerli. Fabian will start by going through the development of the business, before Annelis then takes us through the financials in more detail. There will then be an opportunity for Q&A.

So with that, let me hand over to Fabian.

Thank you, Peter, and welcome, everybody, from my side. We're pleased to present our half year 2025 results to you. The focus today is, of course, our stand-alone results. However, we remain focused on completing the merger we have announced with Baloise. This remains on track and we're excited about the potential combined future together. We will come back to you in due course when the deal completes. And with a Capital Market Day at the same time as our full year 2025 results to outline our new strategy and targets as a combined group.

Let me now start on Slide 5 with the highlights. We are delighted to report a 5% increase in our underlying earnings and a 7% increase in our underlying earnings per share. Improvement has been largely driven by our technical excellence initiative, and we see a strong underlying improvement in our combined ratio. The year-on-year improvement comes despite the first half of 2024, already providing a very strong comparative. We consider we are fully on track to achieve our 3-year targets, to which we remain committed. We'll, of course, come back on these if our intended merger with Baloise completes in light of the additional opportunities that the merger will provide. Of course, one significant event impacting our earnings in the first half of the year was the horrific landslide and flooding in the Valley village of Blatten. This is a good example of how important it is to us as Helvetia to be there when it matters for our customers. And we are very proud of our speedy response to the affected customers there.

Despite this significant event, on a group level, we are well within our normal expectations for nat cats, and we have made a material improvement in our underlying underwriting profitability. Our balance sheet remains in excellent shape. Our SST ratio is estimated to be at broadly the same high level that we enjoyed at the end of 2024. We continue to enjoy high ratings and low external financing costs. That AM Best rating is under review is a natural consequence of our possible merger with Baloise. We expect this to close in the fourth quarter of this year, so the under review rating will continue until AM Best has assessed its impact on Helvetia's credit rating fundamentals.

We have again demonstrated strong growth supported by our non-life business. Here, we are observing contrasting trends in our different markets. In our retail lines, we observed a continuation of the recent hard market. We're continuing to grow our profitable lines in this environment. As part of our technical excellence initiative, we've also reviewed our other segments and being ruthless at pruning the portfolio where necessary. For example, deliberately lost low double-digit million Swiss francs at Caser and in Germany combined. Our reported growth in retail is lower than it might have been due to some onetime negative effect. For example, in Switzerland, we changed the policy due date for motor policies. And because of Brexit, we temporarily did not have a B2B2C license, but this has since been restored. These two temporary effects combined account for a further mid-double-digit million Swiss franc.

Going forward, we expect the market trends to continue with a further hardening of the retail market. For example, the Swiss press has recently commented extensively that industry consensus is for motor premiums needing to rise significantly further. Our top line will benefit from this, even though we will also likely do a little bit more pruning in some areas. Longer term, we see significant growth opportunities. In our Specialty and Reinsurance businesses, we're seeing more competitive pressure. We have responded to the market pressure in specialty and reinsurance, especially in property, engineering, nat cat and energy for reinsurance and corporate risks. We will already be aware of our decision to stop our U.K. marine portfolio. And we are shifting our business mix. For example, during the last 12 months, our active reinsurance cover has significantly shifted from proportional to nonproportional where we see higher profitability and less complexity in the underlying risks. And we're expanding our share in life reinsurance.

In Specialties, we have increased our share in construction where profitability remains high. So in the short term, with a softening market, our focus will be on margins rather than top line. As announced in the CMD, we see nevertheless, new opportunities for growth with the expansion in the mid-market in Europe and new lines in our global business. Now in half year 2025, our specialty volume growth is inflated by some one-off impacts like in new policy management systems. And for the reason just mentioned, I'm more cautious on the top line development going forward.

Turning to Slide 6. We see strong improvement in margins, consistent with the higher earnings. At group level, our underlying ROE is already well within our target range. There is some first half year seasonality in the numbers, but it remains a very solid result on which we can build. Our combined ratio has also recovered and for the first time, is well within our guidance range of 92% to 94% with a very strong improvement of 1.2 percentage points in the current year claims ratio, excluding nat cats and discounting. We think this can improve further, as I will explain shortly. Our Life new business margin is maintained despite a 13% increase in new business volumes. Annelis will later provide you with many more details on these results.

Starting on Page 7. Over the following few slides, I will provide an overview of our strategy implementation. I will begin with a brief reminder of the key points which we presented at the end of last year. We have defined our 4 strategic approaches. In the medium to long term, our goal is to leverage our customer access to achieve further profitable growth. As part of this, we focus particularly on the 50-plus target group. We summarize these strategic initiatives in the retail market under Local Customer Champion. A second mid-to long-term approach is to grow globally in selected lines of the specialty and commercial business by adopting a smart follower approach. At the same time, we intend to promote these lines of business more strongly in our European markets. We call this initiative Global Specialist.

Our short-term focus is on margin improvement. We're committed to improving this through enhancing our technical capabilities and via efficiency gains. On the following slides, I will show you what we have achieved in these 4 areas so far. I will start with the Local Customer Champion on Slide 8. In order to achieve our long-term ambitions in our retail markets, we have established an ambitious group-wide target picture that defines how we want to use data and technology to maximize the value of our own customer base. The aim of the target picture is to make full use of our direct access to customers. To achieve this, we intend to adopt even more state-of-the-art practices in customer knowledge, advice and experience across all market units. We're currently developing locally tailored pathways in each market unit in order to achieve our target picture. We can draw on a large portfolio of initiatives to strengthen direct customer access. You can find some examples on this slide.

As mentioned on the previous slide, the age group of over 50 is one of our areas of focus. This group is becoming increasingly important. We already have many customers in it, and we're seeing greater demand for insurance and pension products. We've also implemented initial initiatives in the market units to provide this group with an even better service. Examples of initiatives from Switzerland, Spain, Austria and Italy can be found on the slide. Our goal is to learn from successful initiatives and to scale them across market units.

Now I would like to talk about the implementation measures in the Global Specialist area. So let's move on to Slide 9. As mentioned previously, we're pursuing 2 main strategies here. Firstly, we intend to continue growing with our -- within our existing global lines using a smart follower approach. This approach enables us to prioritize profitability. We achieved this through rigorous cycle management. As mentioned at the beginning of my presentation, rates have come under pressure in some lines. In such cases, we are very selective when it comes to underwriting the business. Thanks to our lean structure, we have no pressure to underwrite additional business. Nevertheless, we have ambitions to grow in the specialty business. And as the slide shows, this has been possible in certain areas.

Secondly, our goal is to achieve a leading position in the local market for specialty and commercial lines in our European markets. We have laid a solid foundation in Spain and made good progress in other units. Key enablers such as dedicated technical support, capacity and access to an international network are being put in place. The establishment of an Underwriting and Claims Academy will further enhance capabilities. Defined gross written premium targets across markets support ambitions and set the stage for future growth of market units.

Turning to technical excellence on Slide 10. I would like to emphasize that measures are already visible in our results with a significant improvement of 1.2 percentage points in the current year claims ratio, including nat cats and discounting. Our focus within the field of technical excellence is on portfolio management, non-life pricing and claims. For portfolio management, we have established a set of common standards for all market units and lines of business. We have implemented virtuous circles and common guidelines in all market units, aligned a prospective portfolio steering approach, for example, using loss ratio works and developed an annual portfolio management review framework between the group and market units.

Finally, we rolled out an updated nat cat budgeting process. Our portfolio management is based on this framework. One example of this is the adjustment of tariffs for underpriced sub-portfolios, which we are prepared to lose if the targeted profitability is not achieved. Another example is general tariff adjustments in motor and household insurance to compensate for adverse cost developments. All measures are defined in advance and their success is regularly monitored. The second area of focus is pricing non-life. Here, rate changes are reported quarterly according to a new group-wide methodology, which allows for a view on exposure adjusted rate development. Furthermore, we rolled out common group pricing software and implemented a technical risk price framework.

With regards to claims, we conducted a benchmarking exercise and compared 4 market units with the wider market. As a result, we have increased the proportion of claims that are actively managed in our partner networks in certain markets. This has led to a further reduction in claims costs. We've also expanded our systematic fraud detection capabilities, thereby increasing our earnings. Finally, we're using AI in our market units to implement applications that will increase efficiency and many more things to come.

I will now move on to operational efficiency on Slide 11. At our Capital Market Day last December, we announced plans to improve operational efficiency by over CHF 200 million between '25 and '27. To achieve this goal, we have defined more than 360 initiatives. Many of these initiatives are already underway. For example, Spain implemented an internal sourcing model, leading to an annual run rate reduction of CHF 1.4 million. Group IT optimized capacity in relocated workloads, achieving a similar reduction of the run rate. France optimized the office space utilization, which resulted in a reduction of the run rate by almost CHF 1 million.

In Austria, we have reorganized the structures and processes of the regional sales force. As a result, the annual run rate will be reduced by CHF 0.4 million in 2025 and by CHF 1 million by the end of 2026. As I said before, these are just a few examples. For all initiatives, we have established a group-wide rigid tool-based tracking process to ensure that goals are met by each market unit and group function. We guided that 20% of the savings would be achieved by 2025. Progress in the first half of 2025 is in line with that. We will continue working hard to deliver on the remaining savings, which, of course, will sustainably improve earnings at the expense of some one-off costs. You see these in the half year numbers in respect of these operational efficiency improvements, our Spanish integration and M&A activities. We expect more of these one-off costs at the full year. One of the measures we have taken to increase operational efficiency is the planned integration of our 2 companies in Spain. Here, we have made good progress during the first half of 2025.

The merger of Caser and Helvetia Seguros has been approved by the local general shareholders' meeting. Minority shareholders who will remain shareholders, albeit with lower participation have also expressed their support. And we have submitted the merger application to the Spanish regulator. Approval is expected by the end of this year. We have defined the target operating model for the merged company and selected and communicated the members of the new Executive Board. The following slide, Slide #12, will provide a brief update on the planned merger with Baloise. We're extremely confident that this merger of equals is the right step for Helvetia's future. Following the announcement and approval by both extraordinary general meetings, we are working on obtaining the necessary approvals from supervisory and antitrust authorities and regulators.

In August, the European Commission approved the planned merger of Helvetia and Baloise. Further approvals are still pending, including at European level and from the Swiss Competition Commission. We're confident that we will receive all the necessary approvals in the coming weeks and months, enabling us to complete the transaction towards the end of the year. Until the closing, as you all know, we operate under the restrictions of the antitrust law and continue to behave like independent companies. We're well on our way in the preparation for post-closing day 1 readiness through a structured approach. Dedicated teams are actively engaged in this process. A comprehensive plan has been prepared to facilitate a seamless transition post closing with full adherence to all local and regulatory obligations. As soon as the formal merger has been completed, we will implement the new group structure and functional organizations. We're very confident that by closing, we will have determined candidates for all positions down to a level of Group Executive Committee minus 3.

This disciplined planning process underscores our commitment to operational continuity, compliance and long-term value creation. We'll provide an update on the financial targets of Helvetia Baloise at a Capital Markets Day together with our full year 2025 results. We would like to remind you that we promise that both IFRS and cash remittance will remain important KPIs.

To conclude my presentation, I would like to give a brief outlook on Slide 30. Firstly, Helvetia has reported strong half year results for 2025. Above all, we are proud to have supported our customers, particularly those in Blatten. We're continuing our track record of sustainable earnings growth. All key metrics are improving. We have further enhanced our diversification and maintained our excellent capitalization and liquidity. Despite pruning in some more difficult markets, Helvetia reports further strong Non-life growth. Secondly, we're successfully implementing our new strategy. We made good progress on Local Customer Champion and Global Specialist. Our initiatives to improve technical excellence are already having a significant impact, and we're seeing the early signs of improved operational efficiency.

The integration of our 2 entities in Spain is underway. Overall, we remain very confident that we will achieve our targets, including the underlying earnings per share growth of 9% to 11%. Thirdly, we're working hard on the intended merger with Baloise. We're all excited about the new opportunities it will offer our customers, employees and shareholders. We're making progress according to the plan we previously communicated. Subject to regulatory approvals, the closing is expected to take place towards the end of the year.

With this, I hand over to Annelis, who will present the financials in more detail.

Thanks, Fabian, and welcome also from my side to our call. I will explain our financial performance in half year '25, starting on Slide 15. We have made a few changes to the slide set to try and lead you better through the results, so we hope this help you. Helvetia generated underlying earnings of CHF 301 million, up 5% on the already very strong prior year, driven by an excellent technical result. At the net income level, which includes the volatility from capital market developments and other nonoperating effects, the result is up 24% to CHF 320 million. The main reason for the increase in the underlying earnings was a better non-life underwriting results. non-insurance business also showed a big increase, but that is largely due to a change in methodology. Intercompany interest payments within the same legal entity are no longer paid. This has transferred CHF 12 million of earnings from non-life to non-insurance, and this has no impact at group level.

A major feature of the H1 results, as Fabian has already mentioned, was the tragic landslide in Blatten here in Switzerland. In this half year, we, therefore, again benefited from our diversification with improved other segments. In the case of our second and third markets of Spain and GIAM, the improved underlying earnings were driven primarily by very strong improvements to the attritional loss ratio. Other than Blatten, the first half of the year represented a relatively benign period for nat cats. This means that overall, we consider it to be close to a normal first half, bearing in mind that H1 is typically lighter than H2. Overall, the underlying return on equity was 14%, bringing it already well within our target range. There is some seasonality in this number from both the numerator and the denominator, but we remain confident of further improvements.

Outside underlying earnings, we again benefited from a very strong performance by our investment funds, supplemented by positive real estate revaluations and realized gains. FX also contributed positively. This last point may surprise some given the strong devaluation of the U.S. dollar. Economically, we are fully hedged. However, we experienced some P&L volatility due to IFRS hedge accounting rules, which can result in some shifts between OCI and P&L. The key message you should take away is that our economic hedging strategy has proved very effective as can be seen in the consistently higher hedge ratio in the appendix slide.

Now let's turn to Slide 17 on volume. The business volume was up 1.6% at constant exchange rates to CHF 7 billion, again driven by non-life, which grew at 4% currency adjusted. Fabian has already explained the drivers of this non-life growth, our pruning actions and the various one-off effects. There were also some FX headwinds even within the reported adjusted number. We are, therefore, very pleased with this growth, which was supported by strong renewals. More than half of our growth in business volume stems from rate increases, reflecting our solid pricing discipline across markets and key lines of business. Our online insurer Smile also continues to perform well and grew its business volume by 7.8%, proving the benefits of this unique digital business model. Life volume overall was down 2.5%, mainly coming from Switzerland, where we continue to shift our business from full insurance to semi-autonomous solutions with lower premiums but higher capital efficiency.

In Swiss Individual Life, last year, we had a successful Helvetia value chain product with single premiums. However, this year, the change in interest rate environment did not suit this product as well, and we are adapting. However, in Europe, especially in Germany and Austria, we have already had significant success showing that our diversification continues to pay off. Spanish growth looks low only because of a large one-off in the prior year. I would add that the low interest environment in Switzerland does help our fee business via our real estate offering. Because it is no longer a target, we don't dedicate a slide to the fee business anymore, but I can confirm that we continue to grow the fee and commission income at 8% currency adjusted.

Slide 19 is one of a few new slides in the presentation this time. Elsewhere, we have also given a bit more detail on our investment portfolio and given some additional disclosure on our hedging costs. Here, we show the change in underlying earnings from last year. The main improvement comes from the operating insurance result via better combined ratio. The operating finance result is lower only due to the change in methodology on intracompany charges I mentioned earlier. We look at both lines in more detail in a second. The operating other result suffered due to the default of a business partner. Normalized taxes are higher given the better pretax result, and we have a slightly higher tax rate this year due to the distribution of earnings.

Moving to Slide 20. Let's dig a bit deeper into the combined ratio, which has improved strongly and is back in our guidance range of 92% to 94%. If you exclude nat cats and discounting impacts, then the current year claims ratio shows a strong improvement of 1.2 percentage points. This underlying ratio does have some volatility, especially with respect to large losses. So we don't expect improvement to be fully sustainable, but we are clearly on a good trajectory. We have seen an especially strong impact from technical excellence measures in Spain and Germany. The other components of the claims ratio broadly offset each other. A lower discounting effect should not be a surprise given the interest rate development and the higher nat cat ratio is driven by the tragic landslide in Blatten, which costs us mid-double-digit million Swiss francs. These 2 headwinds are offset by a higher prior year development, which is always going to have some volatility.

We do not change our previous statement that we expect the sustainable PYD levels to be below 4%. By segment, we see a combined ratio improvement everywhere except in group reinsurance. This shows a higher combined ratio as group reinsurance carried a greater claims burden due to the group's claims distribution. More claims were ceded to the group without being passed on externally. It's probably a bit early to expect an improvement in the cost ratio, and it anyway tends to exhibit some volatility. Nevertheless, it fell by 10 basis points in the first half of 2025 from a prior year level that was already quite flattering. Within this, the acquisition ratio looks very strong, but especially here, there is volatility. In particular, our Swiss B2B2C business, including embedded insurance has a significant impact on the acquisition cost ratio and can be lumpy with a different business mix causing some volatility in this number, and this period was quite good.

When it comes to the administration costs, we did have a bit more seasonality last year with less project expenditure in the first half, making it difficult to compare. The full year '24 numbers are a better benchmark in that respect. We will remain very focused on cost discipline and implementation of our efficiency program from '25 to '27.

Now let's look at the finance result on Slide 22, which was again very strong. The investment results from last year was -- the investment result from last year was already at a high level, but the first half of 2025 would have beaten that substantially if it had not been for a change we have made to the methodology on intercompany interest payments. This is worth CHF 12 million in the first half of the year, and you should expect this to double for the full year. This makes the comparative current income and direct yield on the right-hand side of the slide become a tough benchmark. The operating insurance finance result is, I think, a bit higher than consensus was expecting. The historical discounting is unwinding with a bit higher drag this period than in the past. However, all equal in the current environment and with the current interest rate curve, we consider that this unwinding has now peaked.

In 2025, we also see a higher H1 weighted seasonality than in the past. The number we have reported for the first half of the year is about 2/3 of the total we expect for 2025. This greater seasonality than normal is due to both the claims patterns that we observed in '23 and '24 and due to the shape of the interest rate curve. Given the market volatility we have experienced this year, we think it is worth reminding you that we hold our assets at fair value through OCI where possible. This includes all direct equity investments and, of course, all high-yield bonds. This has not always been the case in the past. Our equity hedges are nonlinear and significantly kick in once markets are down 5% to 10%, so any further falls are well protected.

Turning to Slide 23. We consider the Life result to be broadly flat after adjusting for some normal volatility. The CSM release has increased slightly, and we benefit from the non-repeat of a drag from onerous contract that was in the prior year numbers. The operating finance result is within normal volatility. The main reason for the year-on-year decline comes in the other result. Last year was a bit better than normal as we have previously indicated, and this year was a bit worse. There are various small effects in here, including project efficiency, implementation costs, higher other nonfulfillment expenses and some small reallocations. We used to show a slide on the life interest rate margin. The introduction of IFRS 17 made consistent disclosure more difficult, so we did not show this for the last 2 years. However, there has been demand to reintroduce the slide, so we have included it in the appendix.

The small difference to the old basis is caused by Caser, which is distorted by acquisition accounting effects. This has slightly increased both the average guarantee and investment income. You will see that the margin remained stable apart from an increase in half year '24. This is due to higher reinvestment rates at the end of '23, lower average statutory reserves, partly caused by the higher interest rate and by the H1 seasonality in investment income.

Moving to the CSM development on Slide 24. We have a strong contribution from new business, offset by a lower expected in-force return due to the lower interest rates. Together with the CSM release at an annualized release ratio -- sorry, together with the CSM release at an annualized release ratio of 8.3%, this gives a normalized growth rate of 0.4%. This is in line with what we reported last year, and we consider a strong result given the interest rate headwind. As last year, we expect some adverse seasonality in the second half due to the profile of new business. We continue to focus on creating value outside of the CSM. We had positive economic variances of CHF 214 million. This comes from realized gains on real assets -- on real estate and on fixed interest assets and also from economic assumption changes because of the twist in the interest rate curve. Offsetting these were negative operating variances of CHF 192 million. The 2 largest drivers of this negative variance related to reserves and to a tariff change.

On reserves, the model assumes that we increase reserves to take advantage of the gains we have realized. We have not actually made such an irreversible reserving decision. We may end up doing some reserve increases over the course of '25, but not necessarily for the full amount that you see in the H1 numbers. The other part was due to the tariff on group life policies. We made a small upward revision to the interest rate assumptions in our group life policies. That change on its own means that customers are now charged slightly lower premiums than before. It brings us from being less competitive than the industry to more in line with the industry. We give more detail on new business on Slide 25.

We now use interest rate curves in force at 31st of December 2024, while in the prior year, we used those at 31st December '23. The rise in the new business volume to CHF 1.8 billion is largely due to those lower interest rates and therefore, less discounting. However, we have been able to offset the drag that lower interest rates have on the margin with our improved business mix as well as continued focus on capital-light products, we benefited from a greater share of group business.

Given the H1 seasonality of this group business, we may not see the margin fully maintained at the full year. However, you might argue that our reported margin is understated as it includes the implementation cost of efficiency improvements, while the benefits of these measures will only emerge in future years. The margin in each segment has remained fairly stable other than in Specialty Markets. Here, we grew the new business volumes through a combination of the addition of new treaties and the replacement of material expiring single-year treaties with multiyear. Changes in business mix also yielded an improvement in the new business margin compared to the same period in 2024.

On Slide 26, we show an improved non-insurance result. This is largely due to the reallocation of intercompany interest income I mentioned earlier. However, we are also reporting a sustainably lower level of costs in part due to IFRS 17 project costs falling away. Then on Slide 27, we have the walk from underlying earnings to net income, so the non-operating effects. Market fluctuations were very positive. Last year, the positive performance of our investment funds was largely offset by negative FX effects. This year, the investment funds repeated their strong performance, but this time, we had a positive FX effect, as I explained earlier. Sales of real estate and positive real estate revaluations were also very helpful. Restructuring costs this year should not come as a surprise considering that we have made progress on the Spanish integration, other efficiency improvements and have had M&A-related costs.

We should highlight that we expect more of these in the second half of the year. Zero impairments and other one-off effects are welcome and group charges are in line with the usual run rates and net zero across the group. Our cost of funding has fallen due to the redemption of an expensive or a more expensive hybrid last year and due to FX reducing the cost of our euro debt. The half year '25 number is even slightly above the ongoing run rate due to some prefinancing activity. We always expect a small tax positive in the Life division, but this was a little larger on this occasion than usual due to the real estate sales. Together, these items resulted in our IFRS net income rising by 24% to a very satisfying CHF 320 million.

Turning now to our capitalization on Slide 29, which remains excellent. Not much has changed here other than the under review rating from AM Best. As Fabian has already said, this should not be a surprise given the announcement of our intention to merge with Baloise. AM Best says that its rating is expected to remain under review until the transaction is completed, and AM Best has assessed its impact on Helvetia's credit rating fundamentals. Otherwise, our Swiss solvency debt ratio remains at an outstanding level, similar to that at the end of last year. Our financial leverage has changed only due to timing reasons with the refinance actions in January when we took advantage of the supportive market conditions and issued 2 new bonds of CHF 250 million combined with coupons of 0.8% and 1.1%, respectively. We continue to enjoy a diverse funding base with a varied maturity profile.

With that, I hand back to Peter.

Thank you, Annelis. So we'll now move on to Q&A. And if I could ask you to limit yourself to 2 questions in the first instance. So operator, if we could start the Q&A session, please.

Absolutely. We will now begin the question-and-answer session.

[Operator Instructions]

Our first question comes from Simon Fössmeier with Vontobel.

So really good results, 25% need of consensus. I'm wondering if this has any impact on the merger exchange ratio. And I assume your answer will be no. And then I'm wondering why did you not delay some of the unusual items to next year? And the second question, Fabian, you mentioned in your introductory remarks that you are cautious on top line growth. Could you be a bit more specific what you are referring to?

Yes. Thank you very much, Simon. So I think those are probably both for Fabian. The first one, does this have any impact on the exchange ratio? And why did we not try and be a bit more clever on the timing? The second one, what are our -- we said we mentioned cautious on the top line. Can we elaborate on that a little bit?

Thank you, Simon. Let me start with the top line growth. So I was referring to 2 different trends. So we see a hardening of the -- a continued hardening of the retail market. And there, we are convinced that we will see further growth. And we are slightly more cautious on the commercial and reinsurance because there, we expect that the cycle is or we expect we see the cycle turning. And that's where we say, look, we will focus on margins. Of course, we will grow where we can grow, but our focus will be on margin, and that's why we are more prudent on predicting top line growth in the short term. That's the key message. I've said as well that we're working in parallel on growth initiatives that's under the Global Specialist and that concerns mid-market reach in Europe and further growth in additional lines globally in the specialty business.

Then on your first question, so first, you're right, the exchange ratio is set, it will not change. And we -- our standard is that we report things as they come, I speak here under the control of Annelis. So we always include anything to our best knowledge and at the right time. So I can't say more at that point, but that's basically what's driving us. Thanks for your questions, Simon.

Our next question comes from Nasib Ahmed with UBS.

Two questions. Firstly, on remittances. Can you give an update on the remittances in the first half from life versus non-life and the different business units? Second question on life insurance reserve releases. There was an offset in the CSM, but also talking a little bit more about that and what happens in the statutory accounts, what's your reserving philosophy? You had a peer report today and they do reserve releases, but you guys seem to be a little bit more conservative. And if I can add on another question to that is reinvestment yield. What is your reinvestment yield today on the life book?

Okay. Thank you very much for those. I think they're probably all for Annelis. The first one was on the remittances. We don't usually say a lot at the half year, but let Annelis say what we can on that front.

Yes, sure. Hi Nasib, from my side. So the remittances we get from our daughter companies, so that the collection of the remittances is proceeding exactly as planned and planned as part of our strategy that we communicated last December. So usually, at half year, we do not report any number. But yes, to add that, the remittances, they flow in perfectly as planned. So this is a great year from the remittance side until now.

Yes. Then the second question, I guess, was on reserve releases, if we can give a reminder of our philosophy there and what we expect.

Yes. So our philosophy has been for a long time and continues to be that we are a big supporter of very steady reserve releases. So with the roll-off or -- yes, roll-off of the portfolio, we also release these reserves. And as we have said in the past, these are mid-double-digit million reserve releases we expect every year. What we do not like to do is make big jumps in reserve releases. So let's say, hectically follow any interest rate development in the external world. But we -- our philosophy is really to have a good reserving on life and then release over time.

The third question, I don't have the number at hand. Eventually, we have to come back to you. I'm not sure about this number. Is it because you said on life only?

Yes, Life only. So that's comparing to the...

On the Life portfolio.

Yes, the 2.75% versus what's you're getting.

My team is showing Page 38, but this is total -- sorry. Yes, on Page 38, you can actually see it. Sorry for the confusion. The reinvestment yield on Page 38 is split between non-life and life and also total. And for Life, it's 2.7% direct yield.

Lower than the current investment yield -- on 37, you have 2.75% and then 2.7% on the Slide 38.

Want to check that.

The scope will be very slightly different.

Okay, I can come back. Yes.

Yes, we come back. Sorry for that.

[Operator Instructions] Our next question comes from Iain Pearce with BNP Paribas.

The first one was sort of a clarification and a question. Just trying to think about the -- firstly, do you expect to be in the 9% to 11% underlying EPS growth range this year? And if you do, just trying to understand what you see as driving the acceleration from the 6.8% that you've done in H1 into the H2 performance to get into that range? And the second one was just a comment you made on the attritional. Now sort of pleasing results to see the attritional improve so much and that some of these technical measures sort of earning through already. But I think you did say something about some of the attritional improvement not being sustainable in H1. So if you could just talk about what -- how you expect the attritional to develop into H2, that would be very useful.

So the first question then was we were a little bit below the targeted 9% to 11% in the first half of this year. How do we move up to that 9% to 11% over the term? I think Fabian will take that one first.

Yes. Thank you, Iain. So we gave the 9% to 11% for the 3 years as an average. And so there is a little bit of backloading because some of the measures just take longer, take the expense, the efficiency measures where we said 20% in '25, 40% in '26 and '27. But I say it's a little bit of backloading. We're very proud that there's not a lot of backloading because we're not a big fan of that. And then we gave the 9% and 11% based on the full year '24 results. And what you now compare when you look at the 7%, you compare it to half year '24, which was compared to the full year relatively strong half -- first half year with quite some nat cat then in the second half year. So that is the reason why there, we're speaking now about 7%, but are fully confident about the 9% to 11% over the period as we discussed it.

And then I hand over for the other question to Annelis, is that okay?

Yes. So thank you. Some comments on -- you asked for the attritional. So what we show and what I commented on Page 20 is -- so we take our current year claims ratio and we deduct discounting effect and nat cat ratio. So what is left is we call current claims ratio without nat cat and discounting. So there is, I would say, not a pure attritional loss ratio left. But in this amount that is left, there is also volatility from large losses. That's what I wanted to make clear that, that number can be -- can have a little bit of volatility and will not develop in an absolute straight line from half year to half year.

Okay. No, understood. And I guess what you're saying is that there were some benefits in the attritional in H1 of this year from low large losses in that number.

Not huge benefits, but I just want to make sure that you understand that this number is not without volatility. So in a year where we have a lot of large losses or exceptional high large losses, the benefit will not show so strongly. But of course, we will inform it if that would be the case. Regarding large losses, I would say it was more or less a normal year. Maybe you want to add, Fabian.

No, just that I think the key message here is that the -- we're not saying that the rate is too high or too low. We're just saying watch out, there might be some volatility coming, and we will not have a point-to-point lending every time we now report that ratio. But you know that from the business, and that's due to volatility that could come through large losses. Is that clear? I think sustainability is a little bit misleading. I think it's more volatility.

Understood.

Our next question comes from René Locher with ODDO.

So just first question is on the market and especially the Swiss non-life market. So you have a growth of roughly 4%, Smile is at 7.8%, Zurich is 6.4% and [indiscernible] is at 7.2%. And the underlying market according to FINMA is growing like 2.3% in '23, 3.7% in 2024. So I'm just wondering what's going on in the Swiss non-life market where everybody which reported so far is growing above market average. So perhaps you can elaborate a little bit what's the dynamic in the Swiss non-life market.

Then the second question, it's interesting to see that like 3 to 4 years ago, there was a lot of talk about fintech, insurtech, younger clients and now all of a sudden, I can see that you are launching targeted 50-plus initiatives. So here as well, a big picture. So it's now 50-plus much more in focus than the younger generation. And if I may, just one additional question, but we can also take it offline. I was just wondering in Blatten, this nat cat event, what was the claims ratio -- the claims burden before the natural perils pool came into play? And what was the claims burden afterwards? If you got that number, I was just wondering because I read so much about in the newspaper, I was just wondering what is the impact of these natural perils pool on your company?

Yes. Thank you very much, René. So I think the first one, how is it that everyone is reporting above-market growth in Swiss Non-life? The second one, why the switch from younger to older clients? And the third one, can we give any more details on Blatten? I think Fabian will take all of them.

Yes, I will take all, René, of course. So let's start with Blatten. So what we -- so the elementary pool, it's very hard to guess at that moment. So we currently just assume a net zero. for us on that one. But we only know at the end of the year because they do only -- they calculate that reciprocally towards the end of the year. So it's very hard to guess because it depends on so many factors. What we said is that we are in -- that the overall claims burden, which we got was in the midst of a 2-digit million figure. That's what we said. And that, by the way, is before and after reinsurance, the same because our reinsurance kicks in only at CHF 70 million. Then on the -- on your question, where are we with the non-life market. So what you see -- of course, it depends the individual growth of company just depends as well on how many premium increases they did do in a year.

What I can say for us is that there is -- part of that growth is coming from what we call effective rate changes and part of that growth is coming from real volume growth. And as you said, Helvetia in its overall business grew 4%, excluding Smile, and we consider that close to the market. So not significantly above the market, but rather around the market. And then Smile is with 7%, clearly above the market. And that's why as well, we love Smile because it's profitable and it's growing above the market. But of course, we just don't go for growth. That's important to say. We always make sure that this business stays profitable because that's the idea. And it's meanwhile, quite a substantial business. So we really want it to yield as well.

And then your question on 50-plus -- to be clear, we're not forgetting about the younger generation. And that's often a misunderstanding when we speak about that initiative. What we want to explain is that now when we look into our portfolio, we see already that more than half of our customers worldwide are more than 50 years old. So this share just in our portfolio is increasing. And what we want to make sure is that in our offer to those customers, we make sure that we respect their specific needs, which, of course, change over a lifetime. And we consider this group as in our share in the portfolio that will be a growing group because that's just the demographics in Europe. And therefore, we want to make sure that we serve this part of our client base well. That is what the initiative is about, which doesn't mean that we don't continue, of course, being attractive for our younger customers through the different products and sales channels.

Our last question comes from Anne-Chantal Risold with Octavian.

I would have a question -- first on your operating improvement and initiative. And do the -- you set all this initiative in December before the merger. So I wanted to know if like your 4 pillars have been influenced since April by the merger or the expected merger, if you had any slight deviation or revaluation of your initiative, in particular in Switzerland, where the merger will be more affecting your business? And maybe also looking at the full year reporting, can we expect that the combined entity will also report an underlying approach in addition to the IFRS results?

Thank you very much, Anne-Chantal. So the first one, to Fabian on the strategy, has that been impacted by the planned merger at all?

When we announced the merger, Anne-Chantal, we said that one of the reasons why we think that we're a good fit Baloise and Helvetia is that we have a very similar vision on strategic priorities. And for that reason, I don't expect significant changes to the approach which we already have because it is very similar to the one of Baloise. And therefore, of course, we will announce more details at the Capital Market Day. And of course, there's -- beyond the strategy, there's as well opportunities. But that's as a guideline, you can assume that, that will not dramatically change. Now we have -- of course, we are committed to our strategy. So we have started implementing it. And that's why I gave as well an update on where we stand. Now what is clear with the planned merger, we will have probably some priority conflicts on things which we originally planned to implement as part of our strategy and which we might need to prioritize against some activities of the merger because we might not be able to do everything. And any of those impacts, we will as well report on the Capital Market Day.

But with that, I want to still emphasize that we were very clear on what we -- that we expected that the individual plans of both companies will still be fulfilled and then even beaten by the positive effects of the merger. So with that, I'm not at all announcing that we go back from -- or that we draw back from any of our commitments. Just it's natural that those re-prioritizations need to happen once we have a clear planning of the merger and those activities. I hope that was clear.

And then the second question was on the full year '25 disclosure, which Annelis will take.

Yes. So the full year '25 disclosure will already be on Helvetia Baloise, if everything goes as planned, was what we currently expect with the closing towards the end of the year. Regarding the exact way, let's say, the new company will be steered. Of course, this is too early to confirm anything. You can imagine that the new governance then of the new company has to approve all these concepts. For Helvetia now in the past years, it has proven extremely helpful to have a measure for earnings power like this is the underlying earnings. And this measure is like a common language for all our market units because if we would only look at cash generation or at cash, we will be in many different languages with languages, I mean in many different local accounting regimes.

And the beauty of underlying earnings under IFRS is that we have a common language to talk about profitability, which at the end of the day is the driver of value generation for the company. So that's the way how we think about it, but it's very clear that the governance of the new company, of course, has then to approve all the concepts of how the new company will be steered.

Yes. I was just thinking since the closing is in Q4 and depending if it's at the beginning or end of Q4, that leaves you very short time to react effectively for the full year disclosure. And also the date has not been confirmed, but -- so it's -- do we have any target when you expect to report the full year results?

I think Fabian will comment on that last point quickly.

Yes. So we're not yet communicating a date because we wait for the merger approvals and the antitrust approvals. Once this is clear, we can announce a concrete date. Just assume it will be rather towards the end of Q4. We always, I think, said that as well than the beginning. And we're very positive and confident, but we want to wait until we get certain approvals so that we can as well be sure that we communicate the right day, and it's all feasible, yes.

Our next question comes from Michele Ballatore with KBW.

Anything you can say about the SST ratio development in terms of market impact on capital generation?

Yes, certainly. I mean, the SST ratio development, we've obviously said that, that it's been fairly stable overall across the first half of the year, but I'll pass to Annelis in case we can add anything.

So at half year, we only show an estimate, but our estimates proved to be quite accurate in the past. And yes, there was not really a lot happening in the SST ratio. So compared to end of the year, it really stayed stable with different effects. So with the effect being rather small and sort of compensating each other. So market effects and business effects, dividend payments and so on.

Ladies and gentlemen, this was our last question. I would like now to turn the conference back over to the management for any closing remarks.

No, that's great. Thank you all very much for attending on this busy day. I wish you a good afternoon. Thank you.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.