Assicurazioni Generli Adr

Good afternoon, this is the Coral School conference operator. Welcome and thank you for joining the Generli Group half-year 2026 results presentation. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Fabio Cleva, Head of Investor and Rating Agencies Relations. Please go ahead, sir.

Hello, everyone, and thank you for joining our first half 2026 results call. Here with us today, we have the Group CEO, Philippe Donnet, the Deputy Group CEO, Giulio Terzariol, the Group General Manager, Marco Cesana, and the Group CFO, Cristiano Borean. Before opening for Q&A, let me hand over to Philippe for some opening remarks.

Thank you Fabio and thanks to all of you for joining this call. Generli's excellent financial results for the first half of 2026 demonstrate the strength, profitability and very solid capital position of our group once again. We have now reached the halfway mark in the execution of Lifetime Partner 27 Driving Excellence and these results reinforce our confidence in our ability to successfully deliver our fourth strategic plan in a row. I am going to focus on five key messages. First, we recorded a strong performance across all key metrics thanks to the robust contribution of every business segment. Gross return premium reached 53.4 billion euro up 5.8% from half year 2025 driven by both life and property casualty. The operating result achieved excellent growth to 4.5 billion euro up 11.2% again thanks to all business segments. This led to a 13.7% progress in the adjusted net result to 2.5 billion euro leading to an adjusted earnings per share growth of 14.3%. And thanks to our sound capital generation, we closed the second quarter with a very solid solvent C2 ratio at 216%, notwithstanding the impact of the 500 million euro buyback and the end of the subordinated bond grandfathering regime. Second, our live business maintained a very positive growth trajectory with the operating result increase to 2.2 billion euros up 8.8%. Net inflows were very strong, exceeding 8.3 billion euros. This is a record first half figure achieved thanks to the positive contribution from all business lines. New business value grew significantly by 21.1%, reaching €1.9 billion, benefiting from both higher volumes and improved overall profitability. Our new business margin expanded materially to 5.86%, mainly thanks to the positive impact of a more favorable new business mix and enhanced product features. Third, the property and casualty operating result rose by 4.7% to over 2.1 billion euros. This was achieved despite an additional 425 million euros in both natural catastrophe and man-made claims compared with the first half of 2025. The combined ratio stood at 91.5%. from 91% at half-year 2025 with a 3.6 percentage point impact from NatCat. The natural catastrophes we witnessed this year, including the recent severe wildfires in Spain and France, further highlight the importance of closing protection gaps and improving climate change preparedness across the world. In July 2026 alone, our preliminary assessment is that Natcat impacted our business for around 300 million euros, with around 60 additional million euros related to man-made events. Beyond large loss events, the current inflationary trend is another factor that we will reflect in our pricing, in particular in non-motor. Fourth, the operating result of asset and wealth management recorded healthy growth of 31.3% year-on-year. This was driven by the robust underlying performance of both asset management and Banca Generale. The segment generated around 16% of the group operating result underscoring the benefit of a diversified and integrated business model. Moving to my fifth and final point, as the execution and delivery of our plan remain our top priorities, we also continue to expand our capabilities in key strategy growth areas. In this context, I would like to say a few words about Radion, the new brand for our global care platform. Radion brings together leading capabilities across employee benefits, assistance, health and mobility, Serving multinational companies, financial institutions and millions of customers around the world. It generates annual business volumes of over 5.8 billion euros with more than 12,000 employees and operations in over 190 countries. Radion is one of the very few truly global players in this field being the leading employee benefits network and the second largest player in travel insurance and assistance. Our mission is to further leverage these leadership positions and become the world's premier care partner. Radion stands out for both its skill and technology. It's a data and AI driven insurtech platform that combines Generli's reach and strength with the agility and innovation of leading digital players. Building on this, we are now scaling embedded insurance, a new B2B2C growth engine that distributes seamless protection within our partners' digital journeys from travel and e-commerce to financial services. This allows us to turn our global distribution relationships into a new and increasingly valuable source of profitable growth. Our business model benefits from long-term structural growth drivers, a rising demand for travel insurance and assistance, employee benefits and embedded and integrated service ecosystems. This is why we are truly confident and excited about the opportunities for Radion and we will of course provide regular updates on its progress. In conclusion, the quality of our performance in the first six months of this year reflects the disciplined execution across our three key strategic priorities. Excellence in our customer relationships, in our core capabilities, and in our group operating model. Furthermore, the insurance sector trends on which we build our plan are proving increasingly relevant, with some of them even accelerating. This is particularly true when it comes to new needs deriving from major long-term social and environmental trends, including an aging population and insufficient public health care, the protection gap related to the increase in extreme weather events due to climate change, as well as changing customer expectations driven by market and technological shifts. It is a constantly evolving environment that requires us to be agile, innovative and forward-thinking, to lead and to deliver lasting value to our customers as their lifetime partners and to all our stakeholders as a standalone group. The three foundations that underpin the plan are key to this. Our talented people and the structured implementation The Financial Times recently recognized us as one of Europe's climate leaders, while Time and Newsweek included us in their rankings of the world's most sustainable and greenest companies. We are proud of these important recognitions which make us even more determined to keep driving profitable growth while supporting a green and just transition and strengthening societal resilience. Finally, before we open our Q&A, I am pleased to inform you that we will be holding an investor day on November 18th in London. This will give us the chance to further update you on the execution of our plan as well as to showcase in detail some of our strategic initiatives. You will receive all the details in the upcoming weeks and we look forward to welcoming you there. I thank you very much again for your continued interest in Generli and with all my colleagues we are now happy to take your questions.

Thank you. This is the Coruscant Conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one under touchtone telephone. To remove yourself from the question queue, please press star and two. We kindly ask to use handsets when asking questions. Anyone who has a question may press star and one at this time. The first question is from Michael Hotner, Berenberg.

Fantastic, thank you so much. I have two questions, one a little bit cheeky. So I think on the last call, Giulio said that he uses the Metro quite often to go and visit Unicredit to discuss business, you know, sales and stuff. And of course today Allianz also reports, Allianz, sadly for them, they lost the Unicredit franchise. Is that the one that you're going to pick up or are there plans here? Anything you could say would be quite interesting. Thanks. Thank you very much, Michael. The first question is for Philippe, the second is for Giulio and Marco.

Wait, sorry, Philippe. I didn't say I go to Unicredit often. I said there are five train stops between Unicredit and Allianz and Generali. That's a different story, okay?

We are already doing significant business with Unicredit, including bank assurance distribution in Central and Eastern Europe, including some asset management business as well. and definitely we would be happy to expand the business we are doing with them as we would be happy to investigate any other kind of business opportunities in Italy and out of Italy. Thank you.

Okay, so on the pricing environment, I can tell you what we saw in the first six months. On the Motor side, we see basically pricing holding up pretty nicely against the risk premium, so we have a little bit of a positive spread. And when we look at the lost strength part, we see basically that the inflation is more or less in line with what we saw last year, so we are speaking of inflation between 4% and 5%, but we see also frequency decreasing. I don't know if you remember in the first quarter we told you that Frequency was going up a bit, but it was also related to the difference in the weather-related events between the first quarter of 2026 and the first quarter of 2025. And now with the six months, we see this sort of normalization. So I would say inflation-wise, very stable compared to what we saw last year. From a frequency point of view, I would say also still a decrease in frequency. On the normal side, I would say in general, same story. Just a country where we see a little bit of a pickup of inflation in non-moto, which is Germany. We spoke about that also, if you remember, in end of June. And we are taking rate increases. But just to remind you, the combined ratio in non-moto in Germany is way below 90. So we are speaking anyway of a very strong performance. But as always, we try to keep the marginality as much as we can.

So maybe adding a few words. So we have a close monitoring about all the drivers that can cause inflation. We are monitoring all the spare parts across Europe, across brands, across Asia. So we look at the different drivers, we look at the medical rates, if they're going up. So at the moment, as Giulio was saying, we broadly See the market that is constant in the way we see inflation. So around that 4% that Giulio was mentioning. There might be inflation. We are monitoring. We don't see it yet. We are preparing. So we know that as soon as we see inflation, we know how to act. By the way, I just want to remind you also that in non-motor, a large part of the portfolio is indexed to inflation. So there is also... Thank you very much. Thank you, Michael. Next question, please. The next question is from Fahad Changazi, Kepler Chevreux.

Thank you for taking my question. Could I just follow up on PNC and inflation? I mean, again, on Q1, you also said that you would look at, make a decision on volume growth in PNC in H2. It looks like it's Germany's sort of the odd one out. But in terms of other countries, where are you standing in terms of PNC volume growth? And my second question is on capital. Thank you very much, Fahad. The first question is for Giulio, while the second one is for Cristiano.

Speaking about the volume growth, I can tell you, first of all, speaking for the motor and non-motor in aggregate, I would say that 20% of our growth in motor is coming from volume, so a little bit less than 20%. When we look at non-motor, including also accident health and disability, we are speaking of almost one-third of growth coming from volume. When I look at the geography, I can tell you that we see, actually I'm speaking about motor right now, A good development of volume across the board, there are just, I would say, three exceptions. One is Switzerland, because we do a lot of pruning, and you can see the improvement in the combined ratio is remarkable. Another one is Spain, where we're also doing pruning, we're getting to a different, better level of combination. Then in Italy, if you compare this year, this quarter, this six months to last year, six months, you see a decrease, but in reality the situation is stabilizing, and here we go back that we are managing clearly Thank you very much. Thank you. which is stronger compared to what we had a couple of years ago.

Yeah, regarding capital, I think that you are seeing the push for business growth, as we were saying already. Clearly, depending on the mix of also this growth, when you have like we had in net inflow, especially this half year, even distribution between all the lines, where traditional usually have a slightly higher capital absorption, this also explains some part of the capital put at work. for the new business, which is coherent with the positive environment and the future deployment for growth that we are having, foreseeing already the Solvency II review. I reconfirm that in end of January 2027 that Solvency II review will enter into practice. We will have 15 percentage points uplift for sure on the final year 26 result we will show a comparative starting point which is a common practice I think among the whole industry we discuss all together I think as well in the forum and regarding the level of the risk appetite framework we confirm the level we had as we discussed in the Generally exploring event of March. Our top ceiling element at 230 still is confirmed. Our idea is to put this capital at work in four forms. I repeat it. We are already consuming a little bit of capital from SAA optimization, something in the order of two points per quarter. This quarter we did slightly less because of the positive rates environment which was not necessarily leaving to obtain the desired target or investment result to push for further risky assets but in general we are hinting for two points per quarter of SAE optimization. There was also a small event of Belgium downgrade which accounted for 0.5 percentage point negative effect Overall, we will continue to deploy these extra points on four drivers. The first one is business growth, as we are already starting. Second one is the investment. SAA, as you said, will continue to invest in the business, in the infrastructure in Europe. and overall and the third one for sure will be also in allowing us to have a better mix between the subordinate debt and the senior debt which is not necessary now as required as capital as in the past and fourth is for sure capital deployment be it through growth for M&A or for sure returning capital to shareholders.

Thank you very much. Thank you Fahad. Next question please.

The next question is from William Hawkins, KBW.

Hello, everyone. Thank you for taking my question. Just one topic with a few questions, please. Could you just talk a bit more about your view of the outlook for the new business value? You've printed this very strong, in my view, 1.89 billion. So just very short term, can we annualize it or could there be some variance in the second half? And then what are you kind of thinking about the longer term drivers? I always think a big company like you should be growing that number 5 to 10%. But I don't know if I'm kind of off base to the upside or downside. And if you could talk a bit about the drivers, because I noticed in the detail Asia seems to have had a huge step up, which is great. Germany is a bit weaker, and Italy and France are in the middle. So yeah, just help me on the outlook for new business value, please.

Thank you very much, William. The first question is for Giulio. The second is for both Giulio and Marco.

Thank you, William. So on the new business value, I wouldn't say you can take the number two times two, because actually, Especially in China, we have a much stronger production in the first part of the year. Part of it is always happening because it's linked to the Chinese New Year, so there is a lot of production basically happening in the first quarter. And then also in this situation, there was some fire sale effect because of a change in the illustration rate in the second quarter. So from that point of view, you need to normalize production. China from a growth point of view. Otherwise, the rest of the portfolio is evolving actually pretty normally. There is also one other element to consider. It's true this is not the highest new business margin business that we have, but also the protection business of France, which is delivering new business value, is particularly skewed to the first part of the year. So from that point of view, I wouldn't take the number and two times two but I can assure to you that we are going to have a much stronger growth in VMB than last year and definitely we're going to meet this year your objective of five to ten percent value new business growth is going to be most likely much more for this year moving forward I would say clearly one drive of growth in our value new business is going to be Asia by the way Asia is not only China we also grow in our franchise in India I don't know if you remember, but basically last year we found a new joint venture partner. This joint venture partner is a bank. So even if in India there is not exclusive bank assurance, clearly we get access to the branches of this bank. And I can tell you that in India we had also a nice increase in present value of business profit and also in value of new business. The marginality in India is about 7% right now. and we are doing like for the six months about 250 million present value in the business premium. So that's also something to consider because the expect is to grow moving forward. And then we go back to Europe. Definitely we see a good dynamic in France. I cannot tell you this is going to go forever, but I would expect to see strong results coming from France also in the coming years. The coming months or next year, Italy is doing very nicely from a V&B point of view. If you look at Italy, even if the present value of business premium is down, the value of business growth is 5%, which is definitely a good starting point. And then eventually, clearly, the situation in Germany is going to normalize. So from that point of view, I would say Asia clearly leading in terms of growth, but also in Europe, I think we have a strong franchise and we're going to

A couple of points that I think it's worth mentioning. So the first is clearly we see the development of Asia, but also coming back to Europe, the dynamics of the demographic invention and the need of people in this segment are going to be an important driver for us in the future. Both, I would say, Germany, Italy, but also the CE is going to be important. The second point that I want to mention is that the type of articulation of product that we have developed over the years, you know, we always mention our hybrid products, so multi-line products, and the ability and sustained growth of protection inside these products This product is going to be a driver of sustaining of the new business margin and therefore of new business value. As Giulio already pointed out, we always have done choices and when we have a trade-off, we have done choices on value. For example, you see how good was the development of value in Italy notwithstanding the decrease of volume. There is always this choice that we make. To recap, demographic, pension, and also the type of product we put on the market will be core driver of sustained growth of value for the future.

Interesting. Thank you, gentlemen.

Thank you, William. Next question, please.

The next question is from Andrew Baker, Goldman Sachs.

Hi, thank you for taking my questions. First one, I guess just given the strong investment performance in the second quarter, is there any change to either your operating investment guidance on the life side or the investment result guidance that you've previously given on the P&C side? And then secondly, I guess just taking a step back, adjusted EPS grew 16% last year, it's up 14% in the first half this year. There's obviously no change to your targets at this point, but is it fair to assume that you'll come in materially above the top end of the target range for both 26 and I guess the three-year target as well, just based on where we're sat today? Thank you.

Thank you, Andrew. Both questions are for Cristiano. Yeah, hi Andrew.

So, I would say, speaking about first the PNC effect in the second quarter, you have observed a very positive recurring growth of the investment result, where there was a reduction of dividend from our private equity side, but we confirm the guidance given of 1.1 billion euros. So far, but this is a proof point of the very good reinvestment activity done there together with the growth of the business. At the live side, I think especially in the second quarter in isolation, there were 25 million more while in the... P&C there were 24 million less, here there are 25 million more on Lion River dividends and kind of 20 million more of dividends from the funds in China which are more a kind of timing shift. That's why we still stick to the 900 million operating investment results for life as well. Going back, going to the second question related to adjusted EPS, we are not changing target but we are hinting that we are confident that given this momentum we will overachieve our target and I think that this is the most important thing out of it and it is not the first time we are saying it.

All right, thank you.

Thank you, Andrew. Next question, please.

The next question is from Andrea Lisi, Equita.

Thank you. Good morning. Thank you for taking my questions. The first one is on the rumors. We have read in newspapers about a possible merger between the Generali Italian Network and Alleanza. If you can provide any thoughts on this. and if you think that this can accelerate the synergies and development of the business as well as potentially extend the perimeter of collaboration with Banca Generale. The second question is on new business margin. We have seen a really nice development and if you think that we can go ahead of the guidance you have provided so far. and the other is if there is any possibility if you can provide us an indication over your expectation on net operating expenses that have declined quite materially so any thoughts on this can be appreciated. Thank you.

Thank you very much Andrea. On your first question as always we never comment on article, rumors or speculations. The second question on the new business margin will be taken by Giulio, while the third one on the non-operating items is going to be taken by Cristiano.

Sorry, guys. Yes, on the new business margin, clearly it's a nice development. By the way, I want to point out it's driven also by a nice increase on new business margin in Italy and also the new business margin development in Asia is really favorable. For this year, I would say definitely we're going to be at the guidance that we gave you, but we said also many times in the last course that we are not really focused necessarily on the 6% new business margin. For us, it's more important, also coming back to what William was saying before, to look at the value of new business growth. So if we need to, in some cases, have a little bit of less new business margin to add growth and new business value growth, we are going to do that. I want to give you an example. If you have a target of 6% on business margin, everything which is below 6% on business margin can be diluted from that point of view. So in theory, we should be in a situation where we have to forgive maybe business at 4% or 5% on business margin just to keep this 6%. So from that point of view, this is not necessarily the best course of action. So yes, we are basically at the 6% level. We might maintain it, but if we see there are

POSSIBILITIES TO GROW THE VALUE IN THE BUSINESS STRONGER THAN WE ARE GOING TO BE HAPPY ALSO TO DRIFT AWAY A BIT FROM THE 6% LEVEL YES ANDREA REGARDING THE NET OTHER NON-OPERATING EXPENSES AS PROBABLY YOU MAY RECALL WE HAD THE EXPLORING GENERAL EVENT ON FINANCE IN MARCH WE WERE GIVING SOME LET'S SAY RANGE GUIDANCE OF 200 TO 300 MILLION EURO ON THE SPECIFIC OTHER NON-OPERATING NET EXPENSES CLEARLY Be please mindful that this kind of item is pretty erratic in nature, usually also with a seasonality skewed towards the fourth quarter. As well as, don't forget that we are also working, and that is the reason why you are seeing this reducing for allocation. We did already in the past move from that item more than 80 million euros We are continuing this journey of extreme rigor around that to really keep a higher, let's say, much lower capability to use that item in order to concentrate all the operating result impact of all the loading and charges apart from very, very specific topic. There are also other parts which are parallel to them like the amortization of intangibles and you know that the more you do activity of growing the business like we did last year purchasing asset management company MGG, we have amortization of intangibles for the client value part which is part also of the non-operating overall results.

Thank you.

Thanks to you, Andrea. Next question, please.

The next question is from Gianluca Ferrari, Mediobanca.

Yes, hi, good afternoon, everyone. Sorry to go back to Andrea's question on the net other non-operating expenses. If I recall properly, fourth quarter last year, you had a lot of early retirement plans that affected this line. Are you expecting another kind of round of early retirement in Q4 this year? The second is on cut losses. If you can give a bit more detail on the 300 million you mentioned and if you can have some kind of guidance for the cut budget for full year 2026. Thank you.

Thank you Gianluca. The first question is for Cristiano while the second one is for Marco.

Yes, so Gianluca, first of all, I recall what I was mentioning before was the subcategory other net non-operating expenses adjusted to 200 to 300 million. In the same event of Generli, we were hinting between 100 to 150 million of restructuring charges throughout the year. So far, we are I think we will have more detail eventually in the nine-month result if we can accelerate further. I mean, for example, the pension reform in Germany is allowing us to work on further accelerating Efficiencies and we are seeing whether this is something that can happen in 26 or in 27. In any case there is an opportunity that this reform is bringing to streamline further and so we will be more precise by nine months.

Thank you. So on the NatCat I think the 300 million that you refer to are the one in July, that we have recorded in July. So those are mainly two types of events. One is severe convective storm, I think in the first part of July, that is more around 25, 30 million. And the other one is the hailstorm in Europe in the second part of July in Italy, France, and Germany. Clearly, this is going to be on top of what you see in the half year. Overall, what I can tell you regarding the budget is that we are very close to the budget, so more likely we are going to end up there or slightly more, but it's always difficult to forecast any nut cuts. Now, if I can add, also I want to remind you how we are covered on the NACA because I think there is a good work that we have done on the reinsurance treaty this year. So there is not only the prevent treaty, which is about the 300 million, but also the NACA aggregate that is working in excess of 1.2 billion for 550 million of capacity. and also this year it's the structure is very interesting because we have a 10 million franchise so it's a very favorable setup and so what you see here and what we have you have reported you need always to remind that the net is going to be different because of this so overall yes we're going to be close to the budget but on the other side we will be covered also by the cart aggregate thank you very much thank you Gianluca next question please

The next question is from Ian Pearce, BNP Paribas.

Sorry, it was just a follow-up on the NatCat question, actually. The convective storm and hail losses, I mean, the industry reports I've seen on those seem to be sat around a billion, slightly above a billion industry loss. So the market share seems very high, and we haven't really heard your peers talk about this as yet. So just wondering if there's anything specific about that loss, why you might be picking up a slightly higher market share. And then just to follow up on the savings new business margin, which improved a lot half on half, could you just give us a bit more color around what's driving that improvement, please?

Of course, Ian, the first question is for Marco, while the second one is for Giulio.

Yes, so we have on the loss that you mentioned, we have probably estimated higher compared to what you mentioned. So we are almost between 4 and 6 billion. So I would say our losses are in line with our market share. So at the moment we don't see any different pick-up of losses compared to our market share. This is going to be very much in line with the business. And the source that we are getting, these are market sources from broker reports, so I would say we are in line with our market share.

On the same as new business margin, there are basically two drivers. One is Asia, because we see an increase in new business margin both in China and also India. In the case of India, it's because of volume. In the case of China, it's also volume, because clearly when you grow faster, your expense overrun and underrun gets better. And also the quality of the production in China is better than last year. We are basically selling... Thank you very much. The value of new business is going up. This is driven by the marginality, and I can tell you that we have increased by the marginality in traditional savings by about 100 basis points. So from that point, this is coming from product mix. Also last year, we still had some products which were on commercial discount, and this year we are just running without any kind of commercial discount. So from that point of view, there is a quality production also on the savings part.

Thank you. Thank you, Ian. Next question, please.

The next question is from James Shock City.

Thank you. Good afternoon. I just had a question on the strategic asset allocation investment. So can you just remind me what the expected yield pickup is, please? I know you're investing two points per quarter of SCR. So what's the expected yield pickup? I guess I'm most interested in what What the marginal return on that FCR is generating for you. And then secondly, a bit more of a big picture question, but we've seen State Farm take a completely different approach to paying its agents, essentially focusing much more on new business at the expense of kind of harvesting the back book. Are there any plans? Can you update a little bit on how the tied agents that you have in your networks are remunerated and whether you have any plans to change that? Thank you.

Apologies, James. The line was not very good on your second question. Could you please repeat it for us?

Certainly. Hopefully you can hear me now. Is it better?

It is a bit better, yes. Thank you.

Okay, yeah. No, it's just a question, given what State Farm is doing in the U.S., I'm just intrigued about potentially paying our agents in a different way. So, you know, are there any plans to focus more on the business generation rather than just harvesting the back book? Thank you.

Thank you very much James. So the first question is for Marco and the second question is for Giulio.

I can give you an highlight and then also Cristiano can add on the topic. So as we said, we were working on our SAA, in particular on the PNC side because we wanted to re-risk the SAA. and so the uplift that you see on our operating income is coming both from the increase in asset under management and also from an increase rate that we have developed thanks to the re-risking of the SAA. So what you are seeing now in terms of operating income, especially on the PNC, is something that you should expect going forward, probably even slightly higher, if I can give you this guideline.

Yeah, so giving you a few numbers, if we concentrate on the core countries where we develop the strategic asset allocation, which is the core part, of the group we are seeing our investment yield including all the asset classes including private asset of 4.24% which is allowing us to keep a spread of almost 1% more than the redemption component of what is happening which is allowing us to get better commercial offer and then clearly embedded investment I'm referring this about life portfolio. Clearly this number goes to 4.01 if we just look at the PNC portfolio, clearly talking about the core, which means excluding hyperinflationary countries or countries where we have a minor clearly weight versus the core European operations.

To your question about changing the remuneration to the agents, we are not changing the remuneration to the agents. I can tell you anyway that clearly growth is a component which is important in the remuneration of agents. I would also say that generally, because I need to generalize, obviously we have Thank you very much. The portfolio growth, the assets and the management. On the P&C side is a combination clearly of growth or new production. There is also an incentive on retention. Then we add generally also an incentive on quality of the business. So fundamentally, I would say that clearly our incentive system, which is not just a compensation, but also you have other forms on how the agents to push production is definitely geared towards In terms of increasing the productivity of the agents, that's the ultimate goal basically of any remuneration system.

Hey James, to complete, because I think I didn't answer the return on the ACR benefit, we are adding 1.5 percentage point of return on ACR from this investment compared to the previous asset allocation. So it is, as we called it, ROARC accretive, return on risk capital accretive.

Thank you. Thank you, James. Next question, please.

The next question is from Elena Perini, Intesa San Paolo.

Yes. Good afternoon, and thank you for taking my questions. The first one is a follow-up on the most recent nut cuts. Do you have any impacts from the wildfires in France and Spain? Because you didn't mention before. And then the second question is on the pension reform in Germany. What are the steps that are still now ahead for its adoption? Will it come into force on the 1st of January as you were mentioning at the event in June? And when will this start to contribute to your Thank you very much.

Thank you very much, Elena. The first question is for Marco, while the second one is for Giulio.

So, like, correctly, you're pointing out a correct point, so I didn't mention the wildfire that there are at the moment in France, but also Spain, I would say. These are typically booked under the man-made, not the nut-cut, so... These are very recent. We are looking at that. So we are doing our first estimation. We believe they're going to be under the 100 million. So both combining the French side and the Spanish side, we believe they can be less than 100 million, I would say. Considerably less and therefore, but please remember these are books under the man-made.

So on the pension reform in Germany, maybe I also, because I don't know if everybody is familiar with the pension reform in Germany, so I'll just describe how the pension reform is working. It's basically a substitute for the Rista products. The state has decided to introduce a standard product. The standard product is a very low cost product, but this also means a little bit low value in the sense there is not much choice in funds and also there is not an option with a guarantee. So anyway, you need to be offering the standard product in order to offer other solutions where you can put guarantees or you can put a wider, broader fund allocation. Also, a change is that for the products without guarantees, also non-insurance players can offer these products, so technically speaking banks as a manager, a new broker. Another point which is a positive is that the subsidies are larger compared to the subsidies that were given before, and so this clearly is going to increase the number of people that are going to go into this solution also. The immediate effect, because we see an effect, has been that actually production has slowed down. When we look at what is happening right now, people clearly are staying on the sideline because they are waiting for the reform to come. We are positioning ourselves for January 1st. As you know, we are very strong in life in Germany. We have the strongest distribution footprint of Any competitor which is a DVAG and also DVAG is very strong on this kind of solution so from that point of view we think that sure it's going to be a little bit of losing some customers and getting some customers but we are very well positioned. We are also starting soon a marketing campaign in order to be prepared for January 1st. So all in all I would say this could be an opportunity for us if we play this well.

Thank you Elena. Next question please.

The next question is from Farquhar Murray, Autonomous.

Good morning all. Just two questions, if I may. Firstly, with regards to Radeon, I just wondered if you could walk us through the industrial reasoning for the new setup there and maybe what the key changes will be on the ground and how you expect that to carry through into kind of target deliverables. I suppose it's mainly a revenue discussion built around wallet share, but just want to check whether there's a cost or capital management angle to this too. Can you just explain what's driving the higher yields in the non-life investment portfolio? In particular, is that just like a passive reinvestment outcome into the current curves or a more active consequence of portfolio management? Thanks.

Thank you very much, Farquhar. The first question is for Giulio, while the second one is for Cristiano.

So I would say the Radion business consists of two pillars, and then we're also adding some other capabilities into this business. One pillar is the pillar basically of travel and mobility assistance. This business is overall doing about 4.5 billion of turnover. Just to give you an idea, 60% of this turnover is in travel, 30% is in mobility, and then the rest is in other forms of assistance. and it's a business also that has a lot of travel business in the U.S. It's about 40% of our exposure and then the rest is 50% around of the business is in Europe and 10% of the business is fundamentally in Asia. So that's one part of the business. The other part of the business is the employee benefits and this is a business that right now has 1.5 billion in revenue but with the acquisition of Swiss Life we are going to double basically those revenues. I will look at these two Thank you very much. When we presented the strategic plan in January of last year, we talked about the health service factory. This is also something that Radion is basically putting in place. So from that point of view, it's a global platform. It's also a global platform which is digitally enabled. And so this allows us to be very nimble in pushing lines of business where you want to have basically a direct connection to the consumer. So look at this business somehow also a little bit like a B2C business with a good level of digitalization now the numbers that we saw in the last years have been very positive also if you look at the six months numbers you can see in the region what we call assistance and insurance business a double digit growth both of revenue and also of profit we continue to invest in this business to make sure that we can see Continue growth also in the future.

So, hello, Farkar. Regarding the higher end of the portfolio, just to set the delta, especially, between what is invested at 4.101 in the core portfolio and what is maturing at 2.37, which makes a 1.64% positive spread pulling up, is something driven by Liquid asset classes investment. Maybe you noted that the amount of private debt is basically substituting simply which was there. So there is a higher weight of liquid fixed income in particularly on the credit side. And this is consistent with the statement and explanation we were given before of putting the capital at work because clearly the benefit is purely shareholder driven and we have Thank you very much. Next question, please.

The next question is from Michael Hartner, Barenburg.

Thank you very much for this opportunity. I hope I have something clever. The first one is a really general question. So you're operating capital generation, I think, 2.4 billion net SCR. That's a lovely number. It is, however, just 9% of the... Total Pot, if you like. And some of your peers have higher numbers. Now, they're not hugely higher, but they seem to be consistently higher. And I know you don't obviously want to talk about your peers, but I just wondered, is your accounting more cautious or is there something I'm missing? And then my traditional question, Cristiano, can you talk about cash? I love cash. I'd like to think you're going to bathe in it during your holidays, but any indication would be lovely.

For sure. So I start with the most boring and then I will end with the happy part, jokes aside. So the first topic on the operating capital generation, it is something that we are looking at. And for sure there is a difference if we compare ourselves towards other, let's say, standards of industry because the component, as explained in Exploring Generali, Thank you very much. Thank you. Thank you very much. Regulatory asymmetries without any form of real underlying limitation for the local development of the business. We were, in our opinion, in line. Another difference which I think I've noticed is that we account. For the full deduction of the cash spent for the full amount of any LTI plan used and not for the actual cost that we pay for it. So in some cases we buy more shares than the one which were actually needed. We deduct it from the capital and we don't have a kind of positive recovery out of that. Going to cash. First, I want to have a good news for both you and I, which we do care. In July, we received the first remittance from Switzerland. So I think this is a very positive news, which we were hinting from years, and we were explaining even in the plan, and it is here. I mean, on capital, job finished. Thank you so much. Thank you Michael. Next question please.

There are no more questions registered at this time. I turn the conference back to you for any closing remarks.

Thank you very much for listening to our call. Of course, should you have any follow-up questions, the investor relations team is at your full disposal, and we all look forward to seeing you in London on November 18. Have a great weekend, and goodbye.

Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.