Helvetia Baloise Holding Stock

Ladies and gentlemen, welcome to the Helvetia Baloise Half Year Results 2026 conference call and live webcast. I am Valentina, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] At this time, it is my pleasure to hand over to Peter Eliot, Head of Investor Relations. Please go ahead.

Thank you very much. Good morning, everybody, and welcome to Helvetia Baloise’s conference call on our 2026 half-year results. On today's call, we have our Group CEO, Fabian Rupprecht, and our Group CFO, Matthias Henny. Fabian will start by giving you an update on our strategy and progress since the Capital Markets Day, before Matthias will then take you through the numbers of the half-year results in more detail. There will then be an opportunity for Q&A. With that, let me hand over to Fabian.

Thank you, Peter, and good morning, ladies and gentlemen. Thank you for joining us today for our first half-year results presentation as Helvetia Baloise. Five months ago at our Capital Markets Day, we presented our strategy, our financial ambitions, and our priorities for the integration period. Today, I am pleased to report that we have made a very strong start. The half-year results reflect high profitability, excellent margins, and continued strong capitalization. Our integration is progressing rapidly ahead of plan. Benefits are becoming visible, and we remain fully on track to achieve all strategic targets we announced in April.

Let me begin with the key messages from the first half of 2026 on Slide 5. We achieved a high level of profitability, generating underlying earnings of CHF 632 million, which translates into underlying earnings of CHF 6.2 per share.

The annualized underlying return on adjusted equity is 18.7%, which is above the communicated range of 16% to 18%. We can show excellent technical margins across our businesses with a combined ratio of 92% in non-life and a new business margin of 4.1% in life.

This demonstrates our disciplined underwriting approach and focus on technical excellence that we set as one of our strategic priorities. At the same time, our balance sheet remains exceptionally strong, as reflected in our indicative pro forma SST ratio estimate and our strong credit ratings. As you might be aware, there was a severe hailstorm event in Switzerland on 28th of August, causing damages beyond CHF 1 billion for the industry. We expect claims of CHF 120 million to CHF 140 million net of reinsurance.

While this means that we will likely not be able to repeat such a strong result in the second half, nevertheless, technical excellence, fast progress on integration, and financial investment performance allows us to confirm our guidance set in the Capital Market Day in terms of underlying earning growth and cash in the absence of further significant Nat Cat events. These results demonstrate the strength of our business model, and importantly, they were achieved at the same time as executing one of the largest insurance integrations in Europe.

This gives us confidence that the combination of Helvetia and Baloise is delivering as we expected, not only today, but also in the future. Before discussing the integration in more detail, let me briefly remind you on slide 6 of the priorities and targets we set out at the Capital Market Day. Our strategy is built around three priorities: First, delivering the merger synergies. Second, achieving efficiency gains, increasingly supported by AI. Third, continuing to strengthen technical excellence.

Together, these priorities support our financial ambitions of double-digit underlying earnings CAGR, attractive returns on equity, and strong dividend growth. We will pay out more than CHF 2.8 billion in dividends in 2026 to 2028, and the 2029 dividend will be at least 50% higher than it was in 2025. Today, only 5 months after CMD, I am pleased to report that substantial progress has already been achieved.

On slide 7, you can see that since April, we have put the entire organization in place, completed the legal mergers of our Swiss insurance activities and our asset management entities, defined the operating model, harmonized employment contracts in Switzerland, launched our rebranding activities, and successfully started sales under the new organization in Switzerland and in Germany to name just some of the achievements.

This early decision-making is helping us move with speed while maintaining operational stability and keeping the integration fully under control. Customers continue to be served without disruption, employee engagement remains high, and the organization remains focused on execution. You can see in the slides that most of the transversal tasks of the integration have been accomplished. The next phase is about IT implementation and continuous value capturing. Responsibilities here need to be with the line managers. A separate integration office is not required anymore.

Therefore, we will shift the integration responsibilities to the CFO and CTO. The role of the Deputy CEO and Chief Integration Officer will be discontinued and we continue to believe that AI is a great opportunity. However, it requires the right organizational setup to ensure a holistic view, and it requires a strong push for execution. This role, therefore, will be combined with the CTO role, creating a single Chief Technology and Transformation Officer role.

This new role will have end-to-end responsibility for integration delivery, system migration, and transformation initiatives. Sandra Hürlimann, a proven leader who has already been instrumental in the integration and transformation, will take on this role. We believe this is the right setup for the next phase of the integration and that it is the right setup for advancing fast, but in a controlled way on AI.

Turning now to Slide 9. I am very pleased to report that the progress on synergies and efficiencies is ahead of plan, and that we have greater visibility and stronger evidence of these benefits. We previously reported that 21% of the targeted run rate benefits of CHF 650 million had already been secured by the end of 2025. By June 30th, that figure stood at 49%. Almost half of the total synergies and efficiency program had already been locked in. This is ahead of our original expectation, and we now expect to have locked in approximately 60% by the end of 2026, up from our previous estimate of 50%.

We now also expect the 2026 P&L to benefit by an additional CHF 20 million, bringing the cumulative underlying earnings benefit from synergies and efficiency gains to CHF 170 million. This, of course, will help us deliver attractive dividends. You should not expect, though, it to affect the 2026 dividend, where we will still be financing the integration costs. But it will be helpful when it comes to determining a potential first merger related dividend uplift for 2027. This progress is broad based and reflects execution across all business units and group functions.

However, especially fast progress in Switzerland is the biggest contributor. Our overall ambition remains unchanged. We continue to target CHF 650 million of gross run rate benefits and CHF 350 million net contribution to underlying earnings. Execution discipline is not limited to synergy delivery. We are also carefully managing integration costs as we show on Slide 10. We confirm that total integration costs are developing as expected and are currently projected to remain in the lower half of the previously announced range. To date, most of these are due to social plan provisions.

Integration costs in 2026 are weighted more towards the second half of the year. Even those which we incurred in the first half have been partly offset by a curtailment of pension plans. That is a non-cash item that results from FTE reductions. Our second strategic priority relates to efficiencies. These are supported by artificial intelligence, and we provide an update on some of our initiatives on Slide 11. As a reminder, we do not invest in isolated pilots. Instead, we are building reusable, scalable capabilities.

Let me give you a practical example of how AI is already creating tangible value for both our customers and shareholders. Clara, our AI-powered voice and chatbot, handles more than 250,000 customer interactions each year and achieves a self-service automation rate of 95%. Its scalability was put to the test during the severe hailstorms that hit Switzerland in August. Within just 3 days, more than 4,000 claims were reported, with Clara processing up to 3 messages per second at the peak. This enabled us to support customers quickly and reliably during a period of exceptionally high demand.

We estimate that claims handled through Clara are processed around 9 times faster than through traditional manual processes. And claims can be submitted and processed around the clock, including weekends, eliminating unnecessary waiting times. Even during this extreme event, around 80% of claims were registered correctly without human intervention. Importantly, this rate remained stable despite the surge in claims volumes, demonstrating the robustness and scalability of our AI capabilities. This is a great example of technology helping us improve efficiency, manage peak volumes, and deliver an improved customer experience.

On Slide 12, we turn to our third strategic priority of technical excellence. The first half-year results clearly demonstrate our underwriting discipline and successful cycle management. Across all business areas, profitability remains excellent. The development of business volumes reflects our targeted and selective approach. In non-life, we have been cautious, in particular in Germany and Belgium, and continued our efforts on portfolio optimization. In specialty markets, we continue to manage the insurance cycle with discipline and clear focus on returns.

In active reinsurance in particular, part of the volume trend can be explained by us not accepting declined prices. More broadly, we are very happy that the merger has not resulted in any noticeable pick-up in churn. As a larger group, we also look forward to further leveraging our scale, data, and expertise to strengthen underwriting discipline, pricing capabilities, and portfolio steering. Technical excellence will therefore remain a key driver of shareholder value creation for us.

Let me now conclude on Slide 13. Five months after our Capital Market Day, we can report that Helvetia Baloise has made a very strong start as a combined company as demonstrated by our first half-year results. Our integration is progressing faster than planned. We have already secured almost half of the targeted run rate synergies and efficiencies and have increased our expectations for 2026 accordingly. The synergies and efficiencies are fully in our hands and continue to support our ambitious financial objectives. Helvetia Baloise is thus fully operational, and we remain fully on track to achieve all our strategic and financial targets.

Our employees are the reason why we have been able to move so quickly while continuing to serve our customers and partners successfully. I would like to thank them for their dedication, their professionalism, and their commitment. Many thanks for your interest. I will now hand over to Matthias Henny, who will walk you through the financial results in more detail.

Thank you, Fabian, and good morning, everybody, from me. As Fabian mentioned, we are extremely pleased with the progress we have made. We are reporting a very strong result for the first combined half year as a new company, as we show on Slide 15. You will be aware that true prior year P&L numbers for the combined group do not exist. This makes it difficult for us to provide you with comparative figures. We have tried to be as helpful as possible in this presentation, and we will add further disclosure as soon as we are able to do so. Thus, we provide some illustrative half year '25 numbers in this presentation where we think these may be helpful. However, these should be treated with appropriate caution.

We have calculated them by taking the Helvetia half year '25 results and adding half of the full year '25 illustrative results for Baloise. This means that no seasonality is reflected for Baloise. I also remind you that the full year '25 illustrative results were calculated at a high level of materiality. In addition, 2025 represented a very good year, which we warned you should not expect to repeat. Nevertheless, the result for the first half of 2026 has again been very good. We have benefited from strong progress on technical excellence and from very speedy efficiency and synergy realization. However, we do not consider the results fully sustainable.

Without some small positive one-off elements and some timing effects, underlying earnings would likely have been close to CHF 600 million, maybe a touch under. We expect the second half of the year to be below this normalized half year run rate, we should see more benefit from synergies and efficiencies, but the recent hailstorm that Fabian mentioned will cost us between CHF 120 million and CHF 140 million pre-tax net of reinsurance, and we also expect to incur the delayed project costs.

Thus, when we look at the full year, assuming no further heavy Nat Cat losses, we expect to be within our UEPS growth target range in the first year of the plan. This is despite the very high full year '25 starting point. On an underlying earnings per share basis, we have reported CHF 6.2 for the half year. Here, I would like to point out that we have adjusted the definition slightly. At the Capital Markets Day, we opted for a simple definition of this metric, which did not exclude the impact of minorities and interest on preferred securities.

We have now taken on board feedback and adapted this slightly to more accurately reflect the earnings attributable to shareholders. This results in the 10.4 in respect of full year 2025 becoming 10.2. There is no change in our ambition to grow this at 10% to 12% over the plan. We remain confident of achieving this target. Looking at the individual business areas and segments, these have all performed well. Each reports underlying earnings above the illustrative figures of the previous half year.

IFRS profit after tax is of course impacted by the significant amortization of intangibles this year. This amortization amounted to CHF 672 million, which is fully in line with the schedule we previously gave you. It is, of course, a non-cash item. Turning to Slide 17, we look at business volume. Fabian has already described our selective approach and our focus on underwriting discipline and cycle management, so I will not spend long on this slide.

Overall, we report 0.4% higher volumes in non-life, adjusted for scope changes and FX. Despite the headwinds you are aware of in the reinsurance markets in particular. In active reinsurance, we also do not fully adjust for the currency exposure. In life insurance, the Swiss background trends are unchanged. This is the ongoing shift of demand for full insurance solutions towards semi-autonomous solutions. We also saw lower demand for index-linked products. We continue to remain disciplined, focusing on capital-light products.

The earnings detail of non-life on Slide 19 shows a strong operating insurance service result driven by the combined ratio, which we will look at on the next slide. It is not significantly impacted by CSM movements this period. It does benefit from a release of the non-life CSM, as you will have expected. However, this effect is broadly offset by some profit buffering in the CSM, without which the operating insurance service result would have been higher. The finance result benefits from strong current investment income, however, the combination of the finance result and the operating other result is a single-digit million CHF amount higher than we consider a sustainable run rate. This positive one-off stems from many small items.

So let's look in more detail at the combined ratio on Slide 21. Here we strip out all merger-related accounting impacts. In particular, this means adjusting for the non-life CSM movements, including the CSM release. This is a good example of where we would like to be more helpful in terms of comparative numbers, but where we think the prior year illustrative numbers add little value. Nevertheless, we can say that we can see underlying improvements in the first 6 months of the year, and we aim to continue improving over the coming years.

The expense ratio benefits from the synergy and efficiency gains we have recorded. These translate into a 0.4 percentage point benefit compared to the prior year. The improvement in the overall combined ratio comes despite us being careful in reserving this year, as you can see from the lower PYD number. Turning now to life on Slide 23. The CSM release ratio was 7.8% annualized, being a mixture of the ex-Helvetia business and ex-Baloise. The ex-Baloise release ratio is higher than it was following the accounting alignments, but still below the ex Helvetia business. Overall, life underlying earnings were a bit more positive than we expect on a recurring basis due to several smaller one-off effects across different line items.

Looking at the stock of CSM on Slide 24, the starting value has been restated due to some liabilities being shifted from IFRS 17 to IFRS 9 as part of accounting alignments. The normalized growth is close to stable. We aim to grow the new business contribution in future so that together with expected in-force return, we aim to offset the CSM release. However, we continue to see value creation opportunity outside the CSM, particularly in fee-generating businesses. As one example of this, you can see the strong growth in our semi-autonomous business of +16% on slide 34 in the appendix.

Overall, the CSM has slightly increased thanks to small positive economic variances driven by higher than expected investment returns from direct income, equity funds, and real estate. Our life new business value on Slide 25 has been broadly maintained with higher margin offsetting lower volumes. This was supported by improvements in Spain, Belgium, LIAM, and specialty markets. Volume growth was lower than expected, but we are working on this. You will be aware of the successful joint sales start in Switzerland and Germany a couple of months ago, and we expect new product launches to result in stronger growth in future.

On Slide 26, we cover the non-insurance business. This includes the asset manager, bank, and various other fee-based revenues, as well as external finance costs and corporate costs. Our external financing costs are now also included in underlying earnings here. The asset manager and bank, as well as the overall segment, have performed very well even if this is not immediately obvious due to the change in scope, accounting, and earnings definition.

For example, the strong asset management result does not yet include the insurance-related activities currently managed within Helvetia Insurance, which will only be transferred to Baloise Asset Management in late 2026. The bank reports higher net fee and commission income at the same time as roughly one percentage point reduction in the cost-income ratio. However, we have a mid-single-digit headwind from acquisition accounting effects. The bridge from underlying earnings to IFRS net income on Slide 27 is unsurprisingly dominated by the accelerated amortization of merger-related intangibles. This accounting-only headwind will be much smaller after 2026, when we expect an amortization of about CHF 200 million per year post-tax in the years to 2030, otherwise, the main points to note on this slide are supportive capital markets, leading to some positive market fluctuations.

The positive impact of some pension plan amendments, which are included in the other one-offs, and an impairment in relation to our office spaces. Integration costs were relatively low this period, as Fabian explained. The last Slide, 29, covers the balance sheet, and this remains very strong. The pro forma SST ratio is estimated to be broadly in line with or slightly above our previous full year 2025 estimate. S&P has confirmed our rating of A+ with a stable outlook. The small increase in reported leverage you see is mainly a timing effect. In the first half of the year, we pre-financed CHF 275 million, which matures later in the year. Adjusted for this, the leverage would be 27%, similar to the year-end 2025 level.

We restated this year-end figure due to the CSM restatement I mentioned earlier, and because we observed merger-related tax rate distortions in the full year 2025 net CSM calculation. We have now corrected this using undistorted tax rates. Finally, we note that the combined company enjoys a regular profile of maturing debt over the coming years.

In conclusion, we are pleased to have reported a strong first set of results as a combined company. While it is early days, we are fully on track to achieve our ambitious targets, and we remain committed to these. The results are supported by strong performance from all areas of the business, but they are anchored on excellent technical profitability. Our balance sheet also remains rock solid. With that, we are happy to take your questions.

[Operator Instructions] The first question comes from Farooq Hanif from JPMorgan.

Hi, thank you so much, and congratulations on your first set of consolidated proper results. Firstly, on -- just understanding what you were saying about the combined ratio. So my understanding from what you said is that the CSM release and movement is not in the combined ratio, but some of the negative variances that offset that release are. So I am just wondering if you could quantify the benefit you would get if those variances disappeared going forward and the benefit from the CSM release that would therefore come through.

My second question, also on the combined ratio is, I have noted that you have had slightly higher Nat Cat in the first half than maybe guidance, but PYD and reserve releases are lower. I am wondering to what extent you will use PYD as a tool going forward to manage volatility, for example, with the hailstorm that you have experienced in August.

My last question actually is around your intentions on debt leverage. If you could just clarify again what you said towards the end of your speech on upcoming maturities. Are you saying that you will use your very strong solvency position to maybe control leverage going forward? Thank you.

Thanks very much, Farooq. I think those are probably all for Matthias. The first 2 were basically on the combined ratio. So first of all, to what extent is it affected by CSM movements and how should we think about the combined ratio going forward? And the second one was that Nat Cats look high, PYD a bit lower. Do we use PYD to manage that ratio, especially in regard to the hailstorm recently? Matthias, do you want to take those first?

Yes, sure. So the CSM that you mentioned, I mean, we excluded the CSM in non-life from the calculations of all the ratios, so there is no impact of CSM in these ratios simply because they are quite unnatural to have these non-life CSM out of the acquisition accountings. On the second question, the Nat Cat loading that we had in the first half is broadly normal for a first half year. I mean, we had some winter storms in Spain. We had some hailstorms in Belgium. So that is broadly in line and regarding to PYD development, I mean, this is a case-by-case assessment and currently, we are at the lower range of the 2%-3% guidance that we gave. Everything handled in the normal way.

Thank you very much. The last question was on debt leverage, and should we expect that to change with upcoming maturities?

No. We are -- our strategy is to remain roughly at the leverage ratio where we currently are. We are happy with our capitalization level as we see it today and also the Group SST ratio of 270% that we report is not really the binding constraint. It is more the SST ratio that we have on an OpCo level.

And Farooq, I appreciate the...

I was wondering if I could follow up on the CSM point.

Yes. Sorry. Do go ahead.

Yes. So, of course, the CSM is not included in the combined ratio, but you mentioned some negative variances that offset the CSM release in the P&L. How much were they, and will that be a benefit to the combined ratio? That was really my question.

Yes. I think, I mean, the non-life CSM movements are quite technical, and we would be obviously always delighted to follow up with investor relations on the detail. I do not know if, Matthias, you want to add a little bit on that?

No. I think we take them offline.

Yes. We'll follow up, Farooq, but I mean, essentially, you can see the CSM release and the buffering that Matthias mentioned was roughly equal in magnitude, but we can talk through the detail offline.

The next question comes from Iain Pearce from BNP Paribas.

The first one is just on the business volume growth in non-life. It sort of looks like ex-price. There has been some declines in volume. I am just thinking what has happened in pricing in Switzerland and in Germany. You sort of said you haven't seen an increase in churn rates. So I'm just wondering, is this part of a re-underwriting strategy, sort of evaluating the different books in a new context, or are you seeing any impact on sort of NPS scores or increased -- sorry decreased customer satisfaction leading to some customer losses?

The second one was just on the normalized CSM growth. Just trying to sort of clarify the guidance really here. Is the expectation that the normalized CSM growth is basically flat and that the life business growth is going to come from fee earnings going forward? Just any further comments you could give around normalized CSM growth expectations would be great. Thank you.

Thanks very much, Iain. The first one was on portfolio pruning and whether that's had any impact on satisfaction or NPS scores, et cetera. Do you want to take that one, Fabian?

No. I can give a straight answer. So, of course, we observe our NPS during the period of a merger because it's, for us, a very critical indicator, and we have the positive news that NPS remains at the same level as we knew it from before the merger, so there is really no impact. You should consider that indeed some of the growth is impacted by a review of some of the portfolios. That's as well part of the exercise we do in a merger. So you have new management looking over the portfolio and making their judgment about where we need to prune or where we need to adjust. That's happening, but you should see that as a temporary effect, and then over time, growth rates should further increase beyond the level where they are today, so that is what I can tell.

Then on churn, I can confirm that we don't see increased churn. I think that question was as well asked in connection with the NPS. So we're very happy, because that was one of our focus point that we don't lose customer in that merger, and there is nothing which goes beyond the normal fluctuation which you have. With that, I think I answered your question, and then the normalized CSM growth trajectory. Matthias, do you want to do it? Happy to do it.

Okay. Thanks for the question. I mean, the CSM growth that you can expect is flat, slightly positive. I think that's a fair assumption going forward. I just have to remind you that some of the business that we write is outside CSM. So whatever goes into semi-autonomous solutions or whatever goes into wealth management of the bank is obviously outside the CSM.

The next question comes from Murray Farquhar from Autonomous Research.

Just 2 questions if I may. Firstly, just coming back a little bit to Farooq's question on the PYD. Could we just get to the bottom of whether there was a particular reason why it was kind of the lower half and perhaps below the long-term average? I am just wondering whether there might be some seasonality there or maybe a particular book movement that was a bit more material than some other parts. And then secondly, on the SST ratio, could you possibly decompose the improvement over the first half? And in particular, how significant was the model harmonization component there? Thanks.

On the PYD, as I mentioned, it is on a case-by-case basis. We do this assessment. There is no structural change to how we do it, and it is just in the lower end of our 2% to 3% bandwidth. So, I would say this is in the normal volatility that you can expect in a half year. On the SST, I mean, there has been a slight improvement from 260% to 270%. These are small effects from financial markets, investment performance, also from model harmonization.

I would just like to remind you that the model that we use, that is not a harmonized joint SST model, it has also not been approved by FINMA yet. So we are still working with two separate models; therefore, the improvement from 260% to 270% is just a smaller deviation, which I wouldn't put too much weight on it.

Okay. Do you have a follow-up? Could we have the next question, operator?

Next question comes from Michael Huttner from Berenberg.

Apologies. I am on holiday. It is a bit noisy. Sorry about that. So I have 3 questions. The first one is on the bank. The second is on the solvency. And the second -- the third is on DPS, because you said something, and I completely missed it and I'm sorry for that. So on the bank, I spoke to Peter, who was really helpful and said, "Well, we haven't made a decision yet." I imagine the market would love it if you sold the bank. I'm sure it's a fantastic asset, et cetera. It's just how markets behave.

I just wondered if you could kind of maybe give us a few hints of your thinking either how the bank is now relative to a hurdle rate or how far it is or how much time it will be -- it will have, et cetera. That's the first question really. But the second on solvency, I wondered, A, if you could give us a rough idea of what the numbers behind the ratio are. I'm assuming the earned funds is CHF 18 billion, but I'm not sure.

And then on solvency, it's a bit of a cheeky question, but you remember Zurich when their solvency was about this level, 270. They decide that they should make a large acquisition, which they have. And I just wondered whether you're already ready to think about an extra acquisition because your growth was kind of weak and maybe bolstering would be nice. And then the third one is on dividend. You said something about 50% higher, and I completely missed it, sorry.

Cool. Thanks very much, Michael. I think those are possibly all for Fabian in terms of what is our view on the -- well, should we start with the first one? What is the view on the bank?

Okay. So look, we are now a few months into the integration, and we understand as well better what the bank can offer us. I must say that the wealth management product, which we get from the bank into our distribution, is an asset and we consider it as an asset because you know that we have a 50 plus strategy. So focus on our customers who have maturing life policies, and the wealth management offer is a perfect way to give them an offer after their life insurance contracts matured.

When we talked about volumes purely in life, wealth management is one of the examples where we build something for our customers, which is not anymore part of the pure life numbers that creates significant value for us. So that is what I can say to the bank, and I think that gives you a direction.

Thanks, Fabian. The second question was on solvency, so in theory for Matthias, but the acquisition was mentioned we already for another one. I do not know if you want to take that at the same time.

Okay. Just start with him.

Okay. Matthias, in that case, the second one for you on the solvency. Can we give any more details on the numerator and denominator? I think given what you said on it being an estimate, et cetera, at this stage, we don't get further information at this stage, but yes, we can discuss that...

I'm sorry, now I get your point on acquisition. So if you want, I can just say. Overall, look, our focus now is on getting the merger done, getting the integration, not the merger, the integration done. We are very disciplined in the way we execute the integration, and we allow ourselves little time for distraction on that one, and that's how you should look at us. This is our focus. Our focus is on our growth with our existing footprint and the execution of the merger. Of course, that will not hold forever, but this is what is now our priority, and you should consider it this way.

Then on the third question regarding the dividend expectations. So I basically repeat what we communicated at the Capital Markets Day. We have said for '29, we expect to have a dividend which is 50% higher than the last dividend and this is a 20% uplift, compared to a normal 6% growth trajectory that we usually had. And given the good progress we are making in the integration and the good development in the business, we are very confident to reach that goal.

The next question comes from Nasib Ahmed from UBS.

Thanks. Firstly, just to follow up to what Iain was asking around the retail, non-specialty business on Slide 12. It feels like pricing in most of these markets is much higher than what you have shown in business growth. I get the pruning in Germany and Belgium, but what about Spain, which is not an integrated -- integration market? The LIAM market as well. What is going on there? Just related to that, is the pruning done? Should we expect growth at least in line with pricing trends from here?

I guess second question is taking on the one point technical excellence benefit on the attritional combined ratio. How much of that have you achieved already in the first half? Then moving to non-life, you talk about new products to improve the new business CSM. Can you talk us a little bit about what are the life insurance products that are going to add to the CSM?

And finally, if I can ask a quick one as well, it feels like the second half underlying earnings guidance is about CHF 500 million. The way I get to that is, Matthias, you were saying CHF 600 million is the underlying for the first half. Take off maybe CHF 120 million for the nat cats and then add CHF 20 million for integration takes you to CHF 500 million. Is my math correct? Thank you.

Okay. Thank you very much. We'll start with the first one, on how do we reconcile basically the pricing developments we have seen with volume growth. Fabian, do you want to comment on that one?

Yes. I think the first one is, so you see in the integrating markets, you see a positive growth. Part of that growth, of course, comes from price increases. That is part of our way to manage the business. So we always ensure that rate increases or effective rate changes outweigh inflation, and that is how we improve technical excellence. And you asked as well, what is our expected growth in the markets where we do pruning or where we have done pruning and by the way, we have as well done some pruning in Spain, just did not mention it because it was not as important as in the other markets.

And what I can tell you is that I am happy to confirm what we said in the Capital Market Day, and that is that in our retail market, over time, we expect to grow at least at the level of the market with our strategy around customer and champion and best broker partner. So this is the outlook going forward. Just accept as well, we are half year into an integration, so it is very early days. You will see some fluctuation. That is part of the biggest merger in Switzerland, that you have some of those fluctuations, and you hear me, and you hear me not at all concerned. Then your question was on the loss ratio target of 1%, to which point I hand that over to Matthias.

Yes. So you refer to this 1% improvement of the loss ratio current year net ex-Nat Cat, ex-discounting. So for the first half year '26, this shows clear improvement in underwriting. However, we are still in a transition phase, so we should not over interpret the direct comparison of full year '25 pro forma with half year '26 actuals. In the pro forma baseline, we have some approximations. We have some simplified Baloise figures, and we have, for instance, cost allocations which still need to be harmonized, and that will affect the split between expense and loss ratio. So therefore, the attritional loss ratio is to be seen as a directional indicator, not an exact number. But it is clear we made a clearer progress in the underwriting in the first half year.

Great. And then third question was on life insurance products?

Yes. I understood this was more like a definition question. So what is not covered in CSM? So It's basically the fee business. It's also the IFRS 9 business. So for instance, in Luxembourg, we got the freedom of service business and then everything around semi-autonomous business, the bank wealth management and asset management activities as such. So typical fee business, which is not covered.

Thank you very much. And then the last question was on the guidance. His math has got him to around about CHF 500 million. Is that the right answer?

Well, we don't give guidance for the full year. But you can assume the 10% to 12% underlying earnings per share growth target that we have and if we're not seeing another severe event like the storm -- the hailstorm that we had in August, then you can assume that we will reach this 10% to 12% growth rate this year, which translates in a bit more than the CHF 500 million in the second half.

Sorry. Just on the -- question on the one point combined ratio, are you able to give the improvement in the first half? And then on the CSM growth, it wasn't a definition question, it was more about what are you doing to improve the new business CSM contribution? I think you said you're launching some new products. So just what is the strategy there?

Perhaps I take the one on the CSM and so what do we do on the new business contribution? That goes in line with our ambition as well on the value of new business, where we said that over time we want to increase it by 8%. There are a few immediate product launches in some of those markets together with the sales start. The most important is the one in Switzerland, but we have as well some product launches as well in the other markets like Germany. So this is where we expect to see improvements over the time.

So value of new business is as well a new way of steering. To be very clear, our teams are as well getting used to that steering, and typically what you measure, you can improve. There will be as well a dynamic that will unfold itself over the months and years to come.

On the question on the attritional loss ratio, we see an improvement, but we are careful with prior year comparison. We do not quantify at this stage, but I would say it's less than 1%, so there's more to come.

The next question comes from Kaya Batikan from Credit Suisse.

Congrats on the strong results. I have 2 questions. First one is related to dividend. In the initial merger assumptions, the first dividend uplift was expected in 2028, but looking at your cumulative dividend target, it seems there needs to be some additional uplift already in 2027 and earlier synergy delivery from today should also support this. Can you give us some indication of how much additional dividend growth we might see in '27 on top of the 6%? And second, as a follow-up on CSM, can we use the H1 CSM release ratio as a reasonable run rate? Thank you.

Thanks a lot, Batikan. I think both of those are probably for Matthias. So the first one, can we be more specific on the 2027 likely dividend uplift?

Yes. We communicated at the Capital Markets Day that the fact that we are progressing faster in the integration, and today's result confirmed this, together with some capital synergies from Spain, that this would open the door for dividend uplift already '27. I think that door got more open today for an earlier dividend uplift already in '27. But I think it is too early to say something very concretely because we will discuss dividends once the full year '26 is complete. And then I take your second question, CSM release ratio. Currently, we have 7.8%, and this can be considered as a run rate for the future, yes.

The next question comes from Anne Risold from Octavian.

Good morning, everyone. Thank you for taking my question. I have some question more on Switzerland. One, yes, you mentioned there is coming a heavy nat cat stage to this hailstorm. So do you expect to be able to recover, partly recover this next -- at the next motor renewal? One on the group life business in Switzerland. So you mentioned you had lower demand for the full year insurance in Switzerland, while we recently have a large competitor who actually reported strong demand in this space. So could you help us understand what was the difference -- where you see the key difference between your 2 experience? And maybe a last one on the integration in Switzerland, integration in the front office. Can you tell us how this is proceeding?

So thank you very much, Anne-Chantal. I'm not sure we quite got the first question on the nat cat being recovered.

I think through premium increases.

Well, not recovered. But do you expect premium? Do you have already some flavor?

I want to put the nat cat event into the right context. So, we overall give you a guidance of nat cat budget, which is around 4% of our overall premium volume in the group. And so when you refer that nat cat event to that larger budget, you see that it is part of that budget. By itself, these are events for which we have the budget. So let's not overestimate as well the impact of that nat cat event. This is as well the reason why Matthias said that we stick to our guidance to year-end, unless many other nat cats now happen in a severe way.

And the way we do our premiums is not that there's one nat cat event and then we increase the premiums. We rather look at nat cat events over time, and we make sure that the premiums reflect that average, and the rest is the volatility we as an insurer have and want to have in our P&L because it's part of our business. So there's not a direct connection.

Having said that, in Switzerland, and I really -- that is why we're very happy to be so strong in the Swiss market. In Switzerland, there is still a hard market, and we know that if we need to increase premiums because of increased nat cats or because of inflation, the market allows us to do it. So we are very bullish and very comfortable around the level of premiums in Switzerland. And I think with that, I have answered really your question from different angles. I think -- so, what I -- I'm sure. So the question on the integration update for the front office. So I'm not sure what you mean here with front office. If you mean how did the sales start go?

More agents, you know you. Yes, you also have one in Switzerland. It's a lot of redundancy.

Yes, that went really smooth. So we are -- we prepared as well for different scenarios, of course. But overall, there is no hiccup. There's always a risk. Sales have started well. And we have done the trainings of the agents. So there's really nothing extraordinary to say. It's really a little bit of a normal course of business that is happening here, and that's good. That's the best news you can have for an integration and the joint stage start. By the way, not only for Switzerland, as well for Germany. So we have in Germany the exact same situation and then I think there was a question on individual life in Switzerland?

No, group life. I think it was more the group life.

It was more on group life.

Because, so -- you mentioned here you have mostly, I mean, the traditional move to semi-autonomous, low demand for or decreasing demand for full life. We just had some other experience from the large competitors. Maybe if you could just comment a bit on how is your group life business.

For us, it's important. We are one of the very few providers of a full product range in the pension and in the group life business in Switzerland. So you can really choose with us between full insurance, semi-autonomous, and other solutions and we allow our customers to decide what is the right solution for them and our business is a consequence of that. So we're not now pushing full insurance, or we are pushing semi-autonomous. It's really following our customers.

I think you should always consider that the reason why semi-autonomous is attractive is because the capital return of semi-autonomous is much higher than the one on full insurance. So that is the reason why that shift overall we consider as capital efficient. So I think there's not more to say. There's of course always fluctuations. So take the half year, but as well respect that those things can move up and down a little bit in particular when you come together as a new company, because there have been different growth rates from the previous companies and they are now merged.

So depending on which aspect you see, there might be more growth compared to one of the previous companies or less growth compared to the previous companies. But overall, when we look at the trend, and that is what we did, the trend, taking both together, is very stable. So this is how we look as well at the volumes.

Thank you very much, Fabian. Looking at the time, we are unfortunately hitting the time limit. I am aware there are a few more questions in the queue. I think they are all follow-up questions at least, but we will be very happy to take those offline with IR afterwards or in meetings over the coming days. So I think we probably need to wrap up the call there. But thank you very much, everybody, for your interest and questions. As I say, the IR team is always available. Thanks a lot.

Thank you very 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.

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.

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