Linea Directa Aseguradora, S.A.

Good morning to all of you, and thank you for joining the call today. Welcome to Linear Director's Third Quarter Results Conference Call. My name is Beatriz Izar, and I'm Head of Investor Relations. Presenting today is Carlos Rodríguez Ugarte, our CFO. And as usual, after the presentation, we'll open up the call to Q&A. And with these words, over to you, Carlos.

Thanks a lot, Beatriz, and good morning to all of you. I will start, as always, on the first slide by commenting on the financial highlights for the quarter. We are reporting premiums of 844 million euros, which is an exceptional growth of 11.4%. By line of business, motor grew by 11.8%, home 7.3%, and health 13.9%. The portfolio of customers recorded an outstanding growth of 8.1%, reaching 3.65 million clients as of September 2025. Despite a few high severity claims experienced in the quarter, combined ratio was a solid 93.4%. Our highly efficient capital model translated into return of equity of 22.3% and solvency stood at 189%, which is supportive, of course, of future capital distributions. Moving to page number six, here the message I would like to convey is consistent with what we said in previous quarters. further acceleration in the top line and sound retention levels by increasing the loyalty of our customers and attracting new ones to our brand. We accelerated commercial digital initiatives, aiming at improving top line development and efficiency in the coming years. It is always important to remember that growth can easily be achieved in our industry, but discipline, growth, is a different story, and we only seek the latter. We posted a worse underwriting result in the third quarter from a few high-severity claims, and still, combined ratio was a sound 93.4% for the first nine months of the year. Expense ratio posted a further improvement. Financial result was up 18.9% with higher income from the bond and equity portfolio and the revaluation of investment funds. and all of this led us to a profit after tax of 60 million euros, up 46% over the nine months of 2024. As with regard to business volumes and clients, all line of businesses reported significant growth, particularly the motor line of business, with more than 53,000 new clients in the quarter. We are very pleased with this progress. In health, we resume growth, even considering the extraordinary dental campaigns of 2024. Excluding this effect, clients will have grown by 9.8%. Moving to page number 8, the evolution on the combined ratio was solid, despite a seasonable adverse quarter with a handful of high severity claims. We continue to invest in data and tech capabilities that will improve efficiency and customer experience. We consider the expense ratio to be a key competitive advantage and remain very focused on this. Now I would like to move to a more detailed explanation by line of business. In motor, we further accelerate growth with premiums up 11.8% year-on-year and 13.3% in the quarter standalone. we were able to see the market growth by more than three percentage points. The combined ratio stood at a solid 93.4% for the nine months. For the quarter standalone, a handful of high severity claims in the summer months added 2.3 percentage points. Excluding this effect, the underlying combined ratio stands at 94%. For its part, the home line of business posted significant growth, with premiums up 7.3%. Profitability for the year continues to be remarkable with combined ratios below 90s. The quarter standalone stood at 87%. Moving to page number 11, health posted growth of 13.9%. The figures are benefiting from more comprehensive products. Specialists and complete products now account for more than 65% of the portfolio. Very importantly, we will also resume customer growth. On the technical side, combined ratio posted a further improvement. Moving to the financial results, we posted higher income on bonds and equity instruments. The mark-to-market of investment funds was very positive in the year. particularly in the first half and less in the third quarter. The investment property result declined due to the temporary loss of rental income from a building under renovation at the city center. Completion is expected by the end of 2026, after which an updated rental income will resume. As we regard the investment portfolio, its composition remained pretty much stable in the third quarter. with the portfolio excluding cash increasing by 1.2 billion euros on the back of business growth. The underlying return stood at 313 basis points. Average reinvestment yield for the fixed income portfolio was 249 basis points. Its duration is currently four years. On our solvency position, solvency margin stood at 189%. As we anticipated last quarter, a more consistent calculation has been performed in parallel with the development of our internal model for premium risk. Given the quarterly volatility, while we calibrate the tool, it is more appropriate to look at it on a yearly basis. Moving to the next page, SCR is mainly driven by underwriting risk. increasing as a result of business growth, and market risk on the back of interest and spread risk, and a significant increase in the year of the symmetric adjustment. The second dividend, if the Board decides to do so, is expected to be announced before year-end. To conclude, September results posted exceptional growth, and the writing remains very prudent. Combined ratio was also solid in the quarter, despite headwinds from a few severe accidents. We continue developing the necessary basis for our future ambitions and remain very focused on efficiency. I will now hand the call over to Beatriz to begin the Q&A questions.

Thank you, Carlos. We'll begin with the questions received from the conference call.