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Good morning, and welcome to SCORE Q3 2024 Results Conference Call. My name is Thomas Fossard, Head of Investor Relations, and today I'm joined on the call by Thierry Léger, Group CEO, and François De Varenne, Deputy CEO and Group CFO, as well by other COMEX members. Can I please ask you to consider the disclaimer on page two of the presentation? And now I would like to hand over to Thierry Léger. Thierry, over to you.

Thank you, Thomas. Hello, everyone, and thanks for joining our call on a busy day for you all. Let me start with my four key messages for today. First, the underlying performance of our businesses, P&C, life and health, and investments is solid. In P&C, we achieved a very strong performance over the last three months and year to date. We are executing in a disciplined way on our strategic journey of diversified and profitable growth while continuing to build reserve buffers. In terms of outlook, we expect the P&C reinsurance market to remain attractive in 2025 and we look ahead with confidence. Life & Health has been impacted negatively by the 2024 Life & Health Review leading to an ISR of minus €210 million for the quarter. However, if you take this one-off impact out, the underlying life and health performance shows a positive trend, with an insurance service result of plus €81 million in Q3. Investments had another strong quarter. We achieved consistent and solid returns through a high-quality fixed income portfolio that benefits from ongoing high reinvestment yields. Second key message, our group solvency ratio stands at 203% at the end of Q3, comfortably within our optimal range. This demonstrates the resilience of our balance sheet and the effectiveness of our mentioned actions. Third, despite the very strong P&C and investments performance, we were unable to offset the negative results coming from the life and health review and have to report a net loss and negative ROE for the quarter and year to date. However, also here, without the impact of the one-offs, our return on equity is a strong 14% for the nine months. Fourth and last key message. The life and health assumptions review is now complete with an outcome close to the best estimate view provided at H1 2024. This allows us now to draw a line and to move on. We have made significant progress in the elaboration and implementation of our three-step plan to sustainably restore the life and health profitability, which we will unveil in full at our Investor Day on 12 December in London. Let me repeat and insist, SCORE has a Tier 1 franchise and a three-year strategic plan. Forward 2026 that will create significant value for its shareholders in the years to come. Let me switch to the results more in detail. In P&C, the combined ratio for the first nine months is at 87.4%. This reflects a very solid underlying performance, particularly when factoring in seasonal net cap events and continued accelerated buffer buildings. excluding the impact of the commutation of a large deal in Q1, the combined ratio would be at 86.3%, below, better than our 87 forward 2026 assumption. The reported life and health ISR is minus 467 million euros, negatively impacted by the life and health review. However, the underlying life and health performance is solid. with a 334 million euro ISR for the first nine months. This number is adjusted for one month. Following some difficult quarters, we start to see a more positive performance emerge in life and health. In investments, we continue to deliver excellent results with our high-quality, mainly fixed-income portfolio. The nine-month 2024 regular income yield is at 3.5%, at the higher end of our guided range for full year 24. Our solvency ratio stands at 203% at the end of Q3, despite a negative impact of the 2024 life and health review of 20 percentage points year to date. This demonstrates the resilience of our balance sheet, the quality of our management actions, and our strong operating capital generation notably from our P&C and investment activities. We are confident in our ability to maintain the solvency ratio within the optimal range for the rest of the year and beyond. Scores group economic value stands at 8.4 billion euros as of 30 September 2024. After 1.1 billion euros of pro-tax impact from the life and health review, our economic value per share is at 47 euros, well above the current share price. The annualized return on equity stands at minus 6.6% for the first three quarters of 2024, negatively impacted by the outcome of the Life and Health Assumption Review, excluding the one-offs. The return on equity for the first nine months of 2024 stands at 14%. At Q2, I outlined a three-step remedial strategy for life and health and committed to move fast and take decisive actions. Step one is about completing the 2024 life and health review. Our team worked extremely hard to complete this by Q3. I'm very proud about the quality and quantity of work they have delivered in addition to demonstrate the confidence we have in our life and health reserves, we have decided to mandate an external review performed by Milliman. Its conclusions will be shared at the Investor Day on 12 December. As I said, this important first step allows us now to draw the line under the topic of the life and health review and to move on. Step two is about increasing the profitability and improving the mix of our life and health new business. We have taken significant actions to steer our business toward... We have introduced a minimum margin for all our businesses. We are moving much faster into the structured solution space and we are expanding longevity outside UK at the higher pace. All of these actions have been thoroughly planned and are in execution mode as I speak. Step three focuses on maximizing value from our in-force book. As I said before already, the life and health segment is inherently more volatile under IFRS 17, prompting us to strengthen our in-force management and our end-to-end processes. We are centralizing the steering of our life and health in-force business to protect value. We are developing enhanced KPIs to monitor our business We will strengthen the incentives of our people and we will be leveraging advanced analytics to strengthen our measurement and monitoring framework. All of these actions will over time maximize the value extraction from our life and health in force and minimize volatility under IFRS 17. These three steps will bring us back on track in life and health with a more attractive new business mix and more stable results under IFRS 17. In P&C, we have maintained our underwriting discipline and continue to improve our diversification. As a result, we have achieved excellent combined ratios over the last quarters, and we have continued to build buffers at an accelerated pace. The P&C outlook is very positive in terms of margins and growth. The last quarters have been marked by a continued strong NETSCAT activity and the demand for reinsurances up across most lines of business. Overall, I see demand and offer in a good balance and strong discipline in structures, conditions, and pricing. SCORE will continue to lean into the hard market, exploit its T1 franchise, and dynamically grow its P&C business in a profitable and diversified way. We will present full details of our life and health remedial strategy as well as an updated forward 2026 targets and assumptions for our three businesses at our investor day in London on 12 December. With that, let me hand over to Francois to take you through the life and health assumptions review and our results in more detail. Over to you, Francois.

Thank you very much, Thierry, and good morning, everyone. Let me first cover the update of the 2024 Life and Health Assumption Review before moving specifically to the presentation of our Q3 results. As mentioned by Thierry, we are pleased this morning to announce that the 2024 Life and Health Assumption Review is now completed and its outcome is within the guidance communicated at Q2. The Q3 impact is negligible on the solvency ratio. There are only a few non-material open items remaining that can only be processed with our normal annual clause. This was an immense piece of work for which we benefited from the advice of external actuarial firms to benchmark our actuarial assumptions and to support with the documentation. This support also allowed a faster progress of the annual review with the completion for Q3. We have launched an external review being performed by Milliman. The outcome of this review will be communicated at the Investor Day in December, but we remain fully confident in the outcome of this external validation. Please note as well that we ask Willis Tower Watson to review our PNC reserve for the second consecutive year, and also the outcome of this review will be communicated at the Investor Day in December. In Q3, the completion of our life and health assumption reviewed had a minimal impact on both economic value and the solvency ratio. The outcome remains within the best estimate range of minus 500 million plus 500 million announced in Q2 for the second half of the year. Regarding economic value, the impact is slightly negative at 0.1 billion, including pre-tax impact of 0.2 on ISR, plus 0.2 on CSM and a minus 0.2 billion negative impact on OCI. Overall, the nine-month impact of the Life and Health Assumption Review reaches minus 1.1 billion post-tax on economic value and 20 points on the solvency ratio. Now, with regards to the impact by geography, we had already announced the main assumptions and geographies reviewed at Q2. The main geography has not changed, but the numbers have been updated and we are now at best estimate. U.S. impact on the CSM has improved by 0.1 billion, reflecting the completion of the analysis we had started earlier this year. Israel has deteriorated by 0.1 billion as we are taking a more prudent view for the future. We have also prudently pre-allocated the technical provision from profitable to onerous contract to anticipate the end-year financial adjustment and any potential P&L impact in Q4. This results in an improvement of the CSM by 0.1 billion and, of course, the deterioration of the loss component by 0.1 billion. Moving on to the presentation of the Q3 results, As usual, I will focus on figures excluding the mark-to-market impact of the option on scores on shares. Let me share a comprehensive overview of these Q3 results. As mentioned by Thierry, we are particularly pleased with the very strong performance of our P&C and investment activities. The very strong underlying performance in PNC allowed us to continue to build up a significant buffer in our reserves while absorbing a number of mid-size to large CAT events this quarter. We continue to deliver excellent investment results as demonstrated by a high regular income yield of 3.5%, supported by a reinvestment rate of 4.1%. In life and health, we see a positive trend in the underlying performance. This performance has been offset by two elements this quarter. I already presented the effect of the life and health assumption review in the ISR, mostly composited in the CSM. In parallel with the life and health assumption review, we decided with Thierry to conduct a review of our major ongoing arbitration, leading to a one-off true-up adjustment on this position and this quarter only, both under IFRS and Solvency II. Overall, we record a net income of minus 117 million, translating into an adjusted return on equity of minus 10.3% over the second quarter. Adjusted for the two one-offs, namely the impact of the life and health assumption review and the true-up adjustment on arbitration position, the group net income would be strong at 150 million euros with a return on equity of 12.8%. In terms of group economic value, it is down by 7% at Constant Economics to $8.4 billion, primarily driven by the Life Analysis Assumption Review impact booked over Q2 and Q3. Let's now focus on P&C. P&C delivered very strong results again this quarter. The new business CSM reaches $175 million, supported by the July 24 renewals, partially offset by higher retrocession protection purchased at the end of the summer. Note that historically Q3 is low in terms of new business CSM as on the reinsurance side it is only impacted by July renewals. The PNC insurance revenue is down 2.5% at constant FX versus Q3 last year. The two main factors for this decrease are the fact that last year included the effect of a large contract that has been committed earlier this year And also we see the impact of some actions taken by SBS to dynamically manage the cycle. Let's now move on the underlying performance of our PNC book, which has been highly satisfying. Our PNC combined ratio stands at 88.3%, slightly above the forward 2026 assumption of 87, driven by the CAT activity observed this quarter. The NAT-CAT ratio is at 13.2%, driven by a number of mid- to large-size events, namely Storm Boris, Hurricanes Debbie, Ellen and Beryl, and the Calgary Ales. While Hurricane Milton is not included in our Q3 number, we also provide our expectations. Based on our latest estimation, we see this event having a mid to high double-digit euro-million impact in Q4 2024, of course, pre-tax and net of retrocession. Our attritional loss ratio, including commission of 76.5%, is very strong, as it includes a significant level of prudence built into our P&C reserve this quarter. On the discount effect, at minus 7.7%, it is in line with our expectation between minus 7.5% and minus 8.5% for 2024. Overall, a very strong quarter for PNC, allowing for an accelerated build-up of additional prudence, despite an active quarter in terms of NatCal. Let's now focus on Life & Health. The Life & Health business generated a new business ESM of plus $116 million in 27 million higher than last year, supported by growth in both financial solution and protection. The insurance service result comes at minus 210 million euro this quarter, primarily due to the impact of the assumption review and the true-up adjustment on identified arbitration position. Adjusted for those two one-offs, we are starting to see a positive underlying trend for the life and health performance with an ISR of 81 million. This is driven by the CSM amortization of 78 million, resulting into a 6.6 amortization rate in Q3 and impacted by the 2024 Life and Health Assumption Review. The risk adjustment release of 29 million is in line with our expectation, and the experience variance of minus 27 million this quarter is back to an acceptable range of volatility. Now, let's have a look at the significant one-offs during this quarter. Firstly, The completion of the 24 Life and Health Assumption Review accounts for minus 163 million. This impact mostly includes movement on the loss component. As I mentioned, a more prudent approach taken with regard to the Israel business and also a prudent pre-allocation of a negative provision taken at Tehran initially booked in CSM. This reallocation is, of course, neutral on economic values. Secondly, we booked a minus 128 million euro impact for true-up adjustment on identified arbitration position. This reflects our most updated view of the evolution of risks in terms of expected outcome, and we are today at best estimate on those major arbitration, both under IFRS and Solvency II. Now moving to investments. We benefit from an excellent performance on the investment side, with a regular income yield reaching 3.5% this quarter, supported by an elevated reinvestment rate at 4.1%. As mentioned in Q2, we have taken a tactical approach to selectively reinvest at a longer duration, benefiting from the attractive level of interest. This again adds an impact in Q3, with an average duration of our fixed income portfolio slightly increasing to 3.5 years this quarter from three years at the end of 2023. The return on invested assets is at 4% this quarter, benefiting from positive mark-to-market movements on asset classes at fair value through P&L and from impairment recoveries on the real estate portfolio as well. With 9.6 billion of cash flow expected in the next 24 months and a still elevated level of reinvestment rate, who are confident in the continued strong performance from investment. Our economic value per share stands at 47 euros per share, compared with 51 euros at the end of 2023. As announced during H1, the group economic value group target of 9% per annum at Constant Economics is unlikely to be met for full year 2024. We will provide more details during our investor day in December. Our economic financial leverage increases to 22.7% from 21.2% at the end of 2023. We are highly satisfied to report a solvency ratio of 203% compared to 201% last quarter, with again a negligible impact from the completion of the 2024 Life and Health Assumption Review. The main driver for the improvement is the implementation of an efficient third-party capital solution, providing us with eight points of solvency relief this quarter, covering P&C and life risk, and starting from 1st January 2025. We are proud to have implemented such a retro structure in short time, with a cost which is very efficient per additional points of solvency. From interaction with investors and analysts over the last few weeks and months, we know that there have been concerns about our ability to maintain our solvency position within the optimal range since the announcement of the impact of the 2024 Life and Health Assumption Review earlier this year. We have listened and believe this structure should provide comfort in our capital position. Another element impacting the solvency ratio this quarter is the true-up adjustment on identified arbitration positions for minus 4 points, which has been mentioned earlier. Again, we are today at best estimate on this position under both IFRS and Solvency 2. On the usual quarterly movement, the market variance and dividend accruals each add an impact of minus 2 points. On that, I will hand over to Thierry for the conclusion and we can switch then to Q&A.

Thank you, François. Let me say it again. We have done what needed to be done. These are difficult months for SCORE and its employees, but now we are moving on. The underlying performance of our businesses in Q3 2024 was strong or at least trending positively. With a solvency ratio of 203%, our balance sheet is in good shape. We have a tier one franchise and see lots of opportunities to grow in a profitable and strategic way with our clients. Particularly, P&C offers attractive opportunities for SCORE to grow profitably at a fast pace. We look forward to present the updated Forward 2026 strategic plan on 12 December in London. Thomas, over to you.

Thank you, Thierry. On page 25, you will find the forthcoming scheduled events. With that, we can now move to the Q&A session. Can I remind you please to limit yourself to two questions each? Thank you, operator. Over to you.

Thank you. This is the conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Faizan Lakhani, HSBC. Please go ahead.

Hi there. Thank you for taking my questions. My first question is on the life and health reserves that you've carried out. How much of the total life and health reserves have you reviewed this year? some of your peers have pointed to pressure within the Chinese critical illness market and some competitive pressure in UK longevity. Are you happy with the level of reserves there? And the second question is on the reinsurance structure. Is there any knock-on impact in terms of your PMLs or how to think about market shares in terms of capital losses? And do you see this third-party capital solution as a temporary solution or do you see this as a permanent element of your capital structure? Thank you.

Thank you, Fezzan. I will take the two questions. As I mentioned, we mentioned the four deep dives at the end of July, namely US, Canada, South Korea, and Israel. Since we did the normal review of the entire portfolio, so the completion of the review, we have done 100% of the portfolio. We asked to Milliman in the external review of this reserve to review 100% of SCORE life and health portfolio at the end of the year. And we have asked to Milliman to provide an opinion on PVFCF, risk adjustment, and CSN. So we'll have three opinions on each of those three items, again, covering 100% of the portfolio. So we think with this, it should give you the final comfort you need on the strength of our life and health reserves and the translation of this under IFRS 17. On the retrocession structure, so let me come back on this. So that's a three-year stop loss. So we will see in three years if we need still this structure. But that's done and that's implemented for three years. The cover will start 1st of January 2025. It's a retrocession agreement with Tier 1 Bank. It's a capital market solution which provides covers for both PNC and life risk with an attachment point around 1 in 100 years. So that's a very high attachment point. So don't expect to see the impact of traditional retrocession through this structure on a quarterly basis. Again, we cover here tail risk. And that's an efficient tool in our internal model and solvency ratio. So, again, the structure will be active as soon as 1st of January 2024 and will provide us with a total solvency ratio on a full year basis of 10 points. We are counted already. three quarters of the effect in Q3, of the effect of 2025, since the solvency ratio is 12 months forward looking. So we accounted eight points in Q3, meaning we will still take the benefit of the remaining two points in the Q4 solvency ratio. Now, the cost, I mean, we don't provide exactly the cost. Just to say it's a low-digit number in euro, and we think it's really efficient, again, if we look at the impact per additional solvency points.

Just on two elements. On PML, it does not have an impact on our PML. And on the temporary one, I just wanted to reemphasize what François just said. It's a very efficient tool for us in terms of providing capital. So we could imagine to continue to use this as part of our toolbox of efficient capital management going forward. At the moment, it's a three-year structure. Very clear. Thank you very much.

Thank you, Philippe. Operatio, next question, please.

The next question is from Derald Go, RBC. Please go ahead.

Hey, morning, everyone. My first question is on your SPS cycle management. Could you maybe elaborate which lines did this involve and how much more is there to do? And I guess linked to that, what kind of growth are you expecting in 2025 as well, just given all these actions? The second question, so I've noticed that your life and health risk adjustment, it increased by about half a billion from H1, so that's quite a big number. Can you say how much of that is from the additional prudence that you're putting aside in the back of the review, please? Thank you.

So, Thierry, for the question on the SBS cycle management.

Okay, so on SBS, We see two elements. The first is our decision to not write U.S. casualty business anymore from outside the U.S. You remember, that's an action we took already a while ago. And the action consisted of two things. First, not increase our U.S. underwriting overall and write U.S. casualty business only out of the U.S. So this closure of our offices or teams in London and Paris led automatically to a negative impact on the premium, but that was foreseeable and it's entirely what you want to do. And then there is a bit of cycle management in it. We have seen in a few lines decreasing um profitability and we have taken action action there too but but let me just re-emphasize we are leaning into this hard market we are growing very attractively uh overall in in pnc um we are also leaning into the hard market that still persists in sbs but even more so in So we have some technicalities, I call it, on the IFRS 17. But I can assure you all that we are really dynamically, profitably growing in a diversified way as we have already communicated multiple times this year.

I will take the second question. So on the significant impact of the risk adjustment this quarter of 0.5 billion, So just to remind you how the risk adjustments work. So the flows in risk adjustments work in the same way as the flow in the CSM. So the risk adjustment is increased with the new business and then released into the P&L every quarter. To answer now to your question, this quarter we see three effects in the risk adjustments. The first one that's linked to the Life and Health Assumption Review, since we have modified the pattern of the cash flow, there is an impact on the risk adjustment, a positive one. There is also a strong impact this quarter of economics and mostly change of interest rates. And the third point, I mentioned it a little bit in the speech, but we added some prudence as well in Q3 in connection with the life and health review to prepare and to manage the remaining small uncertainty before we close the reserve at Yerhan. I would say over the 500 million impact of risk adjustment this quarter, The two main effects this quarter are mostly the interest rate effect and the impact of the life and health review. And that's almost 50-50, the same importance for the two effects. So the rest, but that's smaller. That's the added credence in the reserves in Q3.

Yeah. Can I just quickly clarify? So I think at H1, you said you've got about 300 million. Has that been partly released already on the back of the 3Q update?

No. No. No, it's not. It has been slightly reinforced. Got it. Thank you very much.

Thank you, Dérald. Operator, next question, please.

The next question is from Ivan Bokmat, Barclays. Please go ahead.

Hi. Thank you very much. Congratulations on completing the review. My first question will be on the life and health. You mentioned that the CSL amortization for third quarter was about 6.6%. I'm just wondering if following the review you think this is a level that we should be thinking about going forward, or perhaps in December you will expect to give us something different. And then maybe the second one, just could you give us a little bit more color on the arbitration pro-op? What is the expected timeline on this process do you think? And I think you've highlighted that there is no risk of further charges. Maybe a little bit more color in that would be helpful. Thank you.

Thank you, Evan, for the two questions. On the first point, the 6.5% amortization rate of the CSM, that's in line with what I mentioned at the end of July at the Q2 call. That's in line with our expectations for 2024. Given all the works we are doing on the LIFE-NL strategy, we will take the opportunity during the IRD to give you an update and our assumptions for 2025 and 2026. But I would say for 2024, that's fully in line with our expectations. On the arbitration position, I just want to be clear on what I can say and what I can't say, and I think you will understand. Again, we did a comprehensive review of all major ongoing arbitration. It's not one, it's not two, it's more than this. So that's many cases, a few cases that we reviewed. Again, we took the opportunity in parallel to the life and health assumption review to review the position of those major ongoing positions. So they are at best estimate today under IFRS and Solvency II. You know that for any arbitration, and of course for the major ones, we are under strict confidentiality requirements, so we cannot comment on any name or any change in the process, but we remain confident. It's just a change of the best estimate on the major cases. Nothing else, nothing more. Thanks, Ivan.

Next question, please.

The next question is from Cameron Hossen, JP Morgan. Please go ahead.

Hi, morning. One question for me. Just interested in, I think you've set out that the retro strategy is in place for the, I guess, for three years. Benefit to capital, kind of small cost involved with that. How should we think about that versus the dividend policy? And, you know, I'm very aware that, you know, good news today on the solvency and capital and probably, you know, likely that dividend gets paid. I'm just interested in, like, how those two things interplay for the next three years. That's my question. Echoing other thoughts, congrats on getting the review done. I think it's a very positive move.

Thanks. I will take the first question. The link between this retro structure for three years, the dividend policy and our capacity to pay the dividend. We said and we were clear in Q2 that The current dividend policy, which means including the floor compared to last year, kicks in with a solvency ratio at 185%. So we are well above. So we think we should give to you the level of confidence on the dividend to be paid in 2025 for the year 2024 and for the following years. You know that in our capital management framework, We look to take a decision on the dividend. It's not a liquidity issue. It's not a payout ratio linked on the net income. We are still in a lost position for the year. So that's really linked first to the solvency ratio and then also for the growth of the dividend that's linked to the growth of the economic value. Again, we think with a solvency ratio at 203%, you should have now the level of confidence on the dividend. It's not a guarantee what I say, but we provide the level of confidence that we think is strong. The second question?

No. It's just more of a comment than a question. It's just kind of a thing. Congratulations on getting that done.

Thanks, Cameron. Operator, next question, please.

The next question is from Shanti Kang, Bank of America. Please go ahead.

Yeah, hi. Thanks for taking my question. I just wanted to hear a bit of commentary around the pricing you're seeing in P&C for 1-1 renewals. Maybe if you could split sort of by sub-line, just if you're seeing any softening or continued tight pricing. Thank you.

I will give the floor to Jean-Paul, who is on the line.

Yeah, thank you, Francois. So what we're seeing on the, you know, it's still early days. What we see on the CAT is more or less flat with the price increases on programs that have been less affected. You know, for example, and we see in Central Europe, Price increases of double-digit, 15%, 20% increases. Pricing pressure on loss-free programs in Europe and elsewhere. In the U.S., similar trend. It's really early to say whether there will be overall price increases on the U.S., and the impact of Milton is sort of weighing in here. On large international programs, we see more or less risk-adjusted SLAT. On U.S. casualty, there's a lot of discussions, a lot of focus on the post-law remunerations that the sedents are doing, but I think some pressure on commissions, but probably not enough to make it attractive for us. On some of the specialty lines, that have been quite profitable lately. We also see some pricing pressures of flat to minus single digits. So that's where we stand right now. We can probably give you a better update at the investor day early December.

And maybe to add on this one to what Jean-Paul just said, you know that we are rather underweight in net cap. So we have a more diversified portfolio. And as you know, our growth strategy is to continue to grow in this diversified way. And we see just generally a quite disciplined market, as I said in my preliminary remarks. Overall, we think that the markets in P&C for SCORE offers many attractive opportunities.

Thank you. Operator, next question, please.

The next question is from Michael Hartner, Berenberg. Please go ahead.

Thank you so much. And yeah, well done on pretty much everything, I'd say, the dividend in particular. I had three questions that if I list the first two, and if you think you have time, maybe the third one. The first one is I was interested in the pricing, but maybe can you give an idea of the volume you would expect given those conditions going forward? It's difficult to see what the volume growth is. I find it difficult, so that would be very helpful. And obviously, the positive numbers would be very reassuring. The second is on the cash, so slide 20. I was told by your lovely IR this morning that that would probably more come on the 12th of December, but I'll try my luck. So the cash at nine months is well lower, not just in life, which is clearly what I would have expected, but also in P&C. So maybe you could give some kind of indications of how you see that operating cash flow. And then the kind of third optional question, I think you've sort of answered, but I'm not sure. You've talked about building buffers in PNC, and I'd be very curious if you can give an idea of how much. Thank you.

I will give the floor to Jean-Paul for the PNC volumes there.

I think for the volumes, again, we'll provide you a better outlook at December 12th, but based on what we're seeing, You know, we still expect a strong growth at the January 1st renewal. And then for the rest of the year, you know, we'll provide you an update in December.

Thank you. The second question, I'm not sure, I think the question was on the cash, Michael.

Yeah, so I'm looking at the line, the line that cash flow from operations, slide 20, which says one is, yeah.

Yeah, so just to tell you, I mean, we disclose, again, that's the net operating cash flow from the two business units that we disclose on slide 20, and that's the usual slide. So on the PNC side, we have positive cash flows with inflow from premium more than offsetting expected payment from last claim from the previous year. This effect was expected in forward 2026. On the life side, you have to look, you know, that the guidance or the assumption we gave in forward 2026 in September 23 was an operating cash flow. So what we call operating cash flow, that's the operating technical cash flows between 200 and 400 million in 2026. At this stage, we are on track to deliver this. So here you have the net effect, which means it takes into account allocation of costs We will give you a full update on our assumption on life and health cash flow at the Investor Day, especially explaining, if any, the impact of the life and health assumption review on the generation of operating cash flow by 2026. The third question was on the buffer on the PNC side. So as you know, since July 2023 with Thierry, I think each quarter now we put buffers in our PNC reserves. We accelerated this quarter, as mentioned by Thierry and I at the beginning of this call. So if you look at the expanse variance of PNC this quarter of minus 151 million, if you take into account the three points for the cat ratio, I think you will find quickly the amount of buffer that we've got this quarter. So we accelerated. You know that we have the target to have at least 300 million of buffers by the end of the plan. We have to wait the full review of our PNC reserves, including the Willis Tower Watson view on our PNC reserves. to know how much of those buffers translate into real resilience at the end of the year. But we are pretty confident on the fact that we will deliver this minimum objective of 300 million rather shortly than at the end of the plan.

Thanks, Michael. Thank you. Can we move to the next question, please?

The next question is from Vinit Malhotra, Mediobanca. Please go ahead.

Yes, good morning. I hope you can hear me. So congratulations on this balance sheet resilience. So I have two questions, please, and one very quick check, if you don't mind. The first one is just on understanding the strategy update, the next step for life free. You know, if I look at the nine-month life ISR and kind of just simply analyze it, It's about $450 million, give or take. And the target used to be $500 to $600. So I think my kind of simple question is that should we expect that you have a plan to get to that $500 to $600 on 12th? Or are we expecting that you will update on the target itself on 12th, December? So that's the first question on life. Second thing is the P&C rate. Accretional is already strong. And when I look at the experience variance and compared to CAT budget, would you agree that there is a reserve prudence, roughly 100 million euros? And then could you also comment on how this reserve prudence has been building up over the year? Because this is also, I think, a very important part of the balance sheet strength. And last quick check, sorry, is that The reinvestment yield, 4.1, compares to 4.8 in Tokyo. It's obviously still above book yield, but this fall of 70 bps seems to be a little higher than peers. Is it because of this increasing duration strategy or any comments there would be helpful too? Thank you.

Thank you, Vinice, for the three questions. So let me take the three questions. So the first one, what you should expect during the investor day on the update of the life and health strategy. There is something that has disappeared forever. So the write-down linked to the life and health review of 2024, so the write-down of this part of the CSM, will never amortize in the P&L. That's now given. You should be prepared for this. Thierry indicated end of July, reiterated this during the introduction. you will have a full update of the updated life and health strategy at the IRD, so including where, which line of business, and the impact on forward 2026. So you have to wait four weeks before you will have this full and detailed update. On the PNC experience variants, I can only say that you are close to the truth. We have 151 million of negative experience variants. You know that since Q2, we moved the buffer to an add-on of the risk adjustment. So all the buffer on the PNC side, but also on the live side now, they moved through the experience variants. If you look at the CAT losses for the quarter compared to the budget, you can imagine that the difference is in the experience variance. So you are close to the real amount in your estimate on the prudence I did this quarter. On the investment side, so I agree with you, the high level of interest rate is still positive for us. We are benefiting a little bit quicker than peers, given the short duration of the portfolio. So we have more cash to reinvest on a short-term basis. So we have an uplift of the regular income yield, which is a little bit quicker compared to peers. That's a duration effect. Of course, this effect is a little bit increased by the fact that over the first nine months, we significantly increased the duration of the fixed income portfolio. Please note that this quarter, as I mentioned it during the introduction, we have a significant effect of... Contribution of asset classes that are fair valued into the P&L, that's mostly our private equity, private equity infrastructure, private debt funds, which are fair value into the P&L. And there is also, even if this is a small amount, but we start to see more positive news on the real estate market, at least in France. And we start... to reverse some impairment, and we have this positive effect as well this quarter.

Okay. Thank you, Francois.

And we need just on your remark regarding the life and health ISR, well explained by Francois. Mechanically, we will be below in terms of amortization. Now, because the investor day is in four weeks, I think it's a relatively short time. But what I wanted to leave with you already now is we will, of course, look at our different businesses, while some might be down, like Life & Health, others, like P&C, could be up. So I leave that with you until then.

Okay. Thank you. Thanks, Vinit. And we can move to the next question. Thank you.

The next question is from Ismael Dabour, Morgan Stanley. Please go ahead.

Hi, congrats on the Life and Health Reserve Review. It's really good. Two quick questions. One on the CAT losses. They continue to come in fairly high. And I was just wondering if you're, one, comfortable with the level that they continue to come in at, especially thinking about the strategic plan going forward and how we should think about the CAT loss ratio assumptions in your business, and also just wondering what the skew of the losses were. Are they more European-focused? Or obviously we had the large hurricanes, but just trying to figure out how to think about your exposures globally in the PNC book. Second question is just on the reserve buffer build. This year you've clearly accelerated the buffer build, but just wondering if you do reach that $300 million before the plan is over, would you then continue to add to your preserve buffers? Thank you.

I think, Thierry, maybe the cat.

So on the cat losses, we see that in an active year of cats, we are now over nine months at budget. I think that's a very, very good outcome and actually supports and underlines how solid our pricing is and our risk management in the CAT area. So that's one point. And so it just shows our confidence. In terms of SKU, So what we have observed is, in line with our market shares, you know that we are relatively stronger in Europe. And in Europe, we had a very active net catalyst, particularly in flood, hail, and this kind of losses. And because we are rather a bit overweight with regard To our book in Europe. We were more impacted by these claims. So no surprises there And everything we have seen in in a relatively active us cat Hurricane market has been in line with our expectations and and market share. So everything we have seen this year and last year does actually help us in our confidence in our NETCAT underwriting.

On your second question, on the reserve buffer, I guess that was on the PNC side. So you know that we have this objective of at least 300 million by the end of the strategic plan. You understand, I think, today that we are pretty confident on the fact that we will deliver this amount of buffer by the end of the plan. Let's deliver the buffer first and then we will see if we are satisfied with this level of buffer. If we continue to build them, you know that our intention with those buffer is to use them in the next phase of the PNC cycle. So it's a little bit too early to know by the end of 2026 where we will be exactly in the PNC cycle. So let's first build the 300 million, and then we will see, and we will answer clearly to this question. But that's really too early. Great.

Thank you very much. Operator, next question, please.

The next question is from James Shark City. Please go ahead.

Thank you, and good morning just about from my side. I'd just like to ask about the retro cover, and just to clarify the return period. I know it's a whole account program, but is the return period across the three years, i.e., is it a cumulative number, or is it protecting against one in 100 on a 12-month view? And I'm particularly keen to get a view of actually what that attachment point is in absolute euro terms, please. in both P&C and Life and Health. That's my first question. Secondly, I'm going to have a crack at this, but I understand there's confidentiality around it. You added $128 million to the arbitration reserves. I understand you can't comment individually on those reserves, but are you able to tell me the size of those reserves in aggregate? You mentioned there's a few of them. I'm not sure entirely how many, and I'm very keen to get an idea about the tail, i.e., How long will they take to settle? Is it two to three years, three to five? Any indication about a timeline for settlement would be helpful. Thank you.

Thank you, James, for the two questions. So the first one, we are very clear. So this retro structure has an attachment point around one in 100 years. It's a yearly attachment point, so it will be reset in euro terms each year, depending on where we are in the internal model and our view of this point. I cannot disclose the amount, but you can imagine that in Euro terms for 2025, it's a few billion, the attachment points. So that's very high. But again, the reset is annual and it will be reset. The attachment points will be reset with the counterparty annually. And again, it's not linked to on one side PNC and on the other side to life. It's really all PNC. All events affecting score, again, as seen by the internal model today. On arbitration, again, that's the major litigation. So we cannot comment, of course, on the name. There are many cases here. There is an impact under ISR. Usually, for major arbitration in the reinsurance industry, I would say the average period is three or four years. So you understand that if we book them, maybe some of them are at the beginning of the process. Some of them are quite advanced in the process. So we should not expect a term horizon of those major arbitrations above two or three years.

That's very helpful. Thank you for giving me that. Are you able to tell me the size of the aggregate reserves, though, please? Sorry, if I could just repeat quickly. Thanks for that. But are you able to tell me the size of the aggregate reserves that there are for these arbitration cases? No. Yeah, I thought I'd try anyway. Thank you very much. Thank you, James. Thank you, James. Next question, please.

So the last question is from Real Heart Castle, UBS. Please go ahead.

Oh, hi. Two very quick questions just to wrap up if that's okay. I just wanted to clarify on the life and health review that none of that would change the amortization rate assumptions on a go-forward basis, would it? And how should we think about that given targeted mixed shifts? Are they likely to increase or decrease or too small to be impactful on a go-forward basis to be noteworthy? And I guess just real quick clarification, on that 300 mil targeted reserve build, you mentioned it before, I was just going through my notes, I couldn't quite remember or find whether that was from the beginning of 23 or it was from the beginning of 24 that that 300 mil was targeted. Thank you.

Yeah, thank you, Will. The second question is interesting. As I mentioned, it's too early. I wait for the IRD where we give you the assumption of the amortization of the CSM. You could expect, I mean, the life and health review, we change the pattern of the cash flow. And we charge on a long-term basis. There is a link between the review, the CSM stock, and then since we amend the pattern of the cash flows, you see this quarter there is a significant effect in the life and health risk adjustment. So wait. Don't take as a given that the current assumption will be the one for 2025 and 2026. On the buffer strategy, I think we were clear already in the call of July 2023 with Thierry. We initiated the strategy in Q2 2023 and we took again the message of the buffer in Forward 2026. So for them, the strategy was initiated in Q2 2023. So we look at what Thierry and I, we build as buffers of resilience since we are both together, CEO and CFO. That's brilliant.

Thank you.

Ladies and gentlemen, this concludes today's Q&A session. At this time, I would like to hand the call back to our speakers for any additional or closing remarks. Thank you.

Thank you very much for attending this conference call. The IR team remains available for any follow-up questions. As a reminder, SCO will host its investor day on the 12th of December afternoon at the London Stock Exchange. Invitation and reply forms can be found on the website under the investor section. So have a good day and speak to you soon. Thank you.