Linea Directa Aseguradora, S.A.

Hello, everyone. My name is Beatriz Izar, Head of Investor Relations at Linea Directa. We published our first quarter figures earlier on this morning and I have here with me Carlos Rodríguez Ugarte, our CFO. And with these words, over to you, Carlos.

Thanks a lot, Beatriz, and good morning to everybody on the call. We are very pleased to deliver an excellent set of results for the first quarter. I would like to start by talking about the key figures on page number five. Business growth accelerated to an increase of 9.5%, with motor at 9.1%, home at 8%, and health at 14.4%. The portfolio grew more than 184,000 policies to 3.5 million policies. Combined ratio was excellent and stood at 92.3%, down 5 percentage points from last year. Net income doubled that of first quarter 2024. Return on average equity rose to an excellent 21.8%. And finally, solvency increased to 187%. Moving to page number six. Here I would like to highlight once again the acceleration in the top line driven by the motor line of business. We expect this high single-digit growth to continue throughout the year together with sound retention levels. We posted an excellent combined ratio with outstanding improvement in the claims ratio and very contained expenses. The evolution of the financial result was also remarkable, up 10.6% with higher income from the bond portfolio. And all these led us to a profit after taxes of 20.8 million euros, which compared to 10.1 million euros over the same period of last year. That is a two-fold increase. As with regard business volumes and clients, all line of businesses reported significant growth, both in premiums and policyholders. Customer retention improved very significantly. In health, our core products, complete, specialist, and essential, grew by 15.8%. Moving to page number eight, the progression of combined ratio was remarkable, from 97.3% in the first quarter of 2024 to 92.3% as of March 2025, down five percentage points. Loss ratio was the main driver, down 3.8 points, as the actions carried out have been earned into the income statement. Expense ratio is supported by tight cost control. We do run a very efficient business, characterized by a low expense ratio and low distribution costs. And we are continuously working towards automatic processing, streamline the business in general, as well as improve our digital setup. We consider the expense ratio to be a key competitive advantage. I would like to move to a more detailed explanation by line of business. In motor, we further accelerated growth in the first quarter, with premiums up 9.1% on the back of improved sales and retention. The combined ratio stood at an excellent 91.9%, down 4.6% as compared to the first quarter of 2024, and down 1.1% as compared to the fourth quarter of last year. Also, the home business posted significant growth, with premiums up 8% in the first quarter. Despite the March rainfalls, the two first months of the year had an excellent claim behavior, so the home combined ratio was exceptional at 89.9%. Moving to page number 11, health posted growth of 14.4%. These figures have also benefited from more comprehensive products. This growth was not at the expense of risk appetite, where we keep a very cautious stance. Moving to page number 12, the financial result was up 10.6%. driven mainly by higher income from the fixed income portfolio and the mark-to-market of the mutual fund portfolio. As usual, we saw the credited interest in a separate item. Remember that this reflects the financial unwinding of the claimed provision for the prior year. The decrease is explained by the lower financial discounting in 2024 as compared to 2023. As with regard to the investment portfolio, government bonds gained weight in the quarter, taking advantage of a higher yield window of opportunity and also of a higher duration. The return of the portfolio stands at 324 basis points. An average reinvestment yield stood at 295 basis points in the quarter. Moving on to our solvency position, solvency margin rose to 187%. Owned funds were mainly a function of operating earnings in the quarter. SDR increase was driven by market risk due to the increase in the symmetrical adjustment provided by IOPA and interest rate risk. Underwriting risk grew on the back of business growth. To conclude, March results were strong. We delivered a very solid set of numbers. We are really excited by the next few years. We have worked our way through and managed difficult times in the last few years. Starting 2025, we are delivering, we think, great customer outcomes and great growth in premiums and in profits. Having said that, we keep on working for the company's long-term benefit rather than a poorly short-term approach. I will now hand the call over to Beatriz to begin the Q&A sessions.

Thank you for the presentation, Carlos. First, we'll begin with the questions received from the conference call.