Unipol Grupo Spa

Really would like to thank you for connecting with us today. I'm sure you stay safe and healthy, and I hope that you are being connected from home or from your safe office. Okay, before moving to the ordinary, let's say, financial session and the Q&A session, I'd like to draw your attention on the fact that we are now going through an extraordinary moment in our lives. So this is absolutely unprecedented. It just never happened before. So in the recent months, the entire business community, including our company, strove to find new ways of working, giving support to the network, including giving support to to local communities, which is what you can briefly see in the very short press release. Now, as for the figures that I'm going to walk you through, because of the lockdown concerning the entire business and because of the extraordinary consequences that this has generated of course, you know, that when we do assessments or when we close some business lines or numbers, well, of course, there are always some adjustments or let's say, you know, we suppose that many things may happen. Now, this is even more true today. So, even the underwriting time windows are different. In some cases, yes, we do have some, let's say, indirect lockdown measures that So once again, it is really, really very hard and difficult to say, to do some estimates and assessments. So it's quite difficult and uncertain, I mean, to make calculations. It's really, really difficult to know what will happen. We know that, of course, the bans will be lifted step by step, gradually. And, of course, it's difficult to imagine, I mean, the behavioral patterns for consumers. users and customers, because this high-risk situation may continue. This, of course, depends on the coronavirus, and the risk may be totally canceled only thanks to the discovery of a vaccine. Now, the scientific community is telling us that this is going to happen, but we are a long way away from the vaccine. So there's a long way to go. I also would like to highlight that the quarterly closures are a little bit less analytical or specific. I mean, what is much more, let's say, reliable is what happens after six months and then at the closing of the year. So, once again, please pay attention and be cautious when you read and interpret data and figures and numbers. Of course, we are supplying and providing information. the financial community with, you know, these figures and numbers. But, of course, all of this is now a little bit less specific and accurate. So please interpret, you know, figures in an aggregate manner. I'm here with the General Director, Dr. La Terza. So I'm available for questions. If you want to ask a question, please dial star followed by one on your telephone. If you want to get out of the booking list, please dial star followed by two. please use the receiver of your telephone. So, once again, if you want to ask a question, please dial star followed by one now. Question number one from the original conference from Elena Perini representing Banca IMI. Good afternoon, everyone. Basically, I have three questions. The first question has to do with what you have written on the press releases this morning, I mean, based on the information that is available today and also based on the trends going on as far as your company is concerned, you say that you know how to continue pursuing the objectives included in your plan. So you have all the ingredients required. Can you give me some color about this? So what about your targets? I mean, Can you reconfirm your targets, I mean the ones that you set some time ago, and where do you think risks may come from? Question number two concerns the Uniball dividend. So are you sure, are you confident that in the final part of the year, you may want to convene a general meeting in order to get to an agreement on the possible dividend distribution. And then the third question, last but not least, I'd like to have some color on the cash position of the holding company, maybe some fresh data versus what I can see on the general price.

Thank you.

Good afternoon, and thank you for the questions now. Let me go back to what I said at the very beginning of my presentation. I mean, you know, this very moment in time is very complex, so it is not difficult, I mean, to make reports or to draft, you know, reports, including, you know, what you talked about. I mean, the final result at the end of the first three months of the year. you know, it's very difficult now to anticipate, I mean, to forecast, I mean, to see what may happen to the economy of our country because of the coronavirus. Once again, as I said before, this is going to be quite difficult for the entire planet, I mean, for the entire world, not just the financial business. And so this is the reason why we have decided, I mean, to implement a specific It's a way of behaving. So we want to be very, very cautious in terms of reporting, drafting reporters, but also making forecasts. So once again, in other words, and in simple words, because there are so many uncertainties around us, I think that an extra caution is absolutely necessary. Well, this is the best answer because we are just sitting and waiting. So we are right in the middle of thick fog today. in terms of the Italian and the global economy. So we are waiting for the fog to disappear. Now, this being said, I think that everyone here, so the operators, I mean, in this business, know very well that if you consider the, well, industrial, let's say, management of our business, well, this year, so 2020, and, well, maybe not today, but I'm just thinking of the possible results at the end of the year. So once again, 2020 will give us, well, let's say consistent margins, I mean, versus the objectives and the targets that you can see in our business plan, because you can see that the, I mean, the lockdown here, the business lockdown has generated a contraction and it will also you know, trigger a reduction of the inflows, okay? So it depends, I mean, on the different sectors. So we have the, you know, life and long life. So the two main, if you will, deficits will deliver different results. But, you know, in general, you know, this has generated a contraction of claims. And so I'm trying to project, I mean, our current assessments, you know, to the end of the year. So I'm trying to do this kind of forecast effort to So from the industrial point of view, I mean, in terms of business plan, well, yes, I do confirm that we will, you know, well, once again, get the results that we had set some time ago. Now, what is absolutely different is the other sector. I'm talking about the financial business, because in this case, it is much more difficult to forecast, for example, the volatility, which is now very high. So right now we are going through the post-shock phase. I mean, the shock was the, well, the, you know, the blasting, if you will, of the epidemic. And then it turned into a pandemic. So everything, I mean, has been impacted, you know, negatively. So everything went down. I mean, the rates, credit loans, I mean, shares, stocks, bonds, I mean, everything went down. the same time so now markets are you know sort of rebounding and of course they do what we are doing here once again the fog is being uh you know lifted as i said before so this means that we will have you know a clear overview or clearer forecasts on what will happen to the italian and global economy so in terms of the financial business i'm pretty sure there will be an increase of volatility Now, this being said, in terms of the income or income level generated by our portfolio, which is what you must have seen in our presentation, that's unchanged. In terms of pricing, pricing may change, and this is one of the consequences of the portfolio assessments and evaluations. We will have a positive global reaction. Now, this means that we will be able to remove at least one part of of the financial shock, which is what happened between February and March. Once again, it is difficult today to measure, to do a proper assessment. Once again, we are very cautious. Anyway, if you combine both businesses, the so-called industrial management on one side and the financial business on the other, and if you consider the current situation, and again, if you also consider the answers and the reactions, which are many different types of reactions. I'm thinking of the monetary policy and then the fact of keeping the Italian spread down, and then the stimulus, the encouragement and the bonuses and the incentives to the global economy. So if you consider all of these factors, I don't think we will have any special criticality or difficulty also in terms of financial management. If you combine both business lines, I am confident that we will reach the targets that we have set some time ago.

So it depends on us, of course.

Now, there is something which is sort of special, which is what we are doing now. So what's happening now in this quarter, but also for the next quarters, we have to have a perspective on the future. We do have to take into account the current trends, but at the same time, we have to forecast, I mean, the future perspectives, I mean, economy in 2021 and 2022 as well. So, once again, in terms of quantity, well, I do confirm what we have already written in the press release, which is exactly what you asked before. So, based on current figures or current data, well... we won't have any difficulty this year to reach the target, I confirm, once again. So once again, if there's no further, let's say, deterioration or extraordinary worsening of the economy, I mean, the same may be happening in 2021. Anyway, we just have to wait, you know, the second half of the year, so age two. in order to really, really understand what will happen to the economy. I know that the lockdown has been quite long, so there may be an impact on different business lines and the different sectors of the economy. Now, it goes without saying that an insurance company doesn't have the same kind of correlation that the banking business has in terms of being linked to the evolution of the economy. So... This is not a correlation. This is a de-correlation, or let's say smaller correlation. So we take advantage of this. And this means that our leverage is more powerful also when it comes to manage, let's say, difficult or more difficult economic cycles versus what we imagined when we drafted the business plan. There's one point I'd like to highlight, and once again, this is what I briefly said at the beginning of this presentation. Of course, we have to responsibly adopt, right now, extra caution before making choices or decisions of any type. And again, what I said before, is also answering your second question. I mean, you have a question on the Unipol dividend. Now, this is one of the choices we made. So, we have decided, I mean, to be, let's say, in compliance with the requests and demands, which are typical of that time. So, this is what the regulator has done. And I'm talking about both the Italian but also the European regulators. So we want to be in compliance with what they said. Of course, you could find these results in the 2019 financial statements and balance sheet. And the same will happen in the balance sheet in 2020. So in terms of cash, and I won't forget to answer your third question on cash. Yes, we did have cash because, among other things, Unipol's dividend, financially speaking, is not linked to the distribution of the Unipol SAI dividend distribution. So we already had enough cash, so we already had enough provisions. So even if you don't consider the Unipol SAI dividend, we do have cash. In terms of solvency, even if there's been quite a high volatility on the market, this is, once again, in compliance or, you know, just fit and proper, if you will. This means that, yes, we can distribute or pay the dividend. You know, this is worth basically four or maybe five times of solvency, okay? So 200 million euros dividend, this is what comes from Unipol. Once again, we have the same philosophy, the same willingness. As of today, we still have all the financial conditions in order to be able to do this. For the same reasons I have mentioned before, I'm not really talking about the results of 2020. I'm rather talking about the near future. We have to take into account the macroeconomic scenario. We also have to consider the industry scenario in the second half. of the year. So we will make decisions there at that time. Anyway, there's plenty of willingness. What we want is unchanged. I mean, we want to hit the targets we set. There was a question on cash. So at the end of March, of course, we have the properly liquid investments, but also general investments, €700 million in terms of liabilities. we have 2.4 billion euros. So the net financial position is 1.7 billion euros. So once again, it's 700 million euros cash plus 400 million that we have to add, and we're going to receive this thanks to the Unipolsai dividend. So on a pro forma basis, on our liquidity situation, I can say that, well, it's basically, yes, the general cash positions is 1.1 billion euros, and the net financial position will go up to 1.3 billion euros.

Many thanks.

Next question is from the conference in English, from Peter Agnes, from France.

Hi. Thank you very much. Three questions, please. First one, I was wondering if you could let us know what reserve releases feature in the non-life result. The second question, as I understand it, premiums were impacted by 120 million from the discounts that you offered to customers. If I add that back, then motor premiums would have been 1.142, which is a growth of 10%, which seems far too high. So I'm just wondering if you can explain the moving parts of the premium income a little bit. And then finally, on the solvency, maybe just focusing on Unipol-Sci for now, would you be able to split out the drivers of the change? So what caused how much of the fall was due to interest rates, equity markets, BTP spread, et cetera.

Thank you very much. Okay, so one second.

think Mr. Chimbrey has switched off the mic inadvertently. Just one second. Okay, here we go. Yeah, Peter, sorry, once again, I realize now that the mic was off. Sorry, let me start again. Okay, as for the reserve or, well, provision policy, this was your first question. So, I was basically answering this question indirectly when talking to the previous speaker, I mean, Elena Let's say that what we have now is a non-ordinary situation, and let's say that this policy is due to the extra caution that I have mentioned before. So based on this, we have released what was not possible to treat in a different way, I mean, from the financial point of view. So I'm talking about some recoveries that we went through during the year. Basically, we haven't released anything on the reserves. So what you can see in terms of book value, so you can see here reserves, but it's just basically a recovery. So the mismatch or the difference that you have with the reserve or provisioning policies last year is basically €70 million less reserves. of reserves released versus what we have done in Q1 2019. So this is the only difference. There was a second question on the discount.

Yes. Well, maybe discount is not the right word. let's say the, well, the policy we have chosen. Okay, so once again, let's say, let's call it the policy that we have chosen some time ago in order, in order to carry out, I mean, the campaign, I mean, to help our customers, okay.

Well, first of all, you have to consider that in Q1, Well, let's say that we have had, let's say, two different phases or two different situations. I mean, January and February were ordinary business, so business as usual, so in terms of premium collection or premium income, including, I mean, the claim, let's say, area. Well, everything was, once again, business as usual. So... I mean, just like the first two months of 2019. Now, the big problem was in March. So we started here with the lockdown in March. And this is, you know, when everything started to change. So once again, we have already, well, registered, if you will, a reduction of claims in the month of March. I should say a significant drop. Let me check. So 20% down of the motor business, and then this trend became even stronger in April, so much so that in April we decided to give back, to give our insured customers back one month of premium worth, because, once again, based on what was happening in April, we can see again that there are less premiums being paid. I know that the premium will come later, but anyway, there were many, many less claims.

Okay, so claim level went down. So once again, we've given back something, and of course, we

We have the possibility to do this. I mean, the gross value of what we have given back is around 250 million euros. This is our own cost. In general, it is 300 million euros of pure benefits, I mean, for our customers. From the accounting point of view, yes, of course, we made some estimates and calculations. So we think that This possibility that we have shared with our customers, the fact of receiving a voucher, this opportunity will be used by around 85% of our customers. This is the share or the percent rate that we are very familiar with. This is the usual renewal rate from our customers. It's around 85%. Once again, we haven't done this to encourage people to underwrite, because anyway, 85% of people would have done this anyway, and this is, once again, demonstrated or based on some history. But in terms of accounting systems, once again, we imagine that 85% of those who renew policies will take advantage of these vouchers or bonuses. Once again, the value is around €180 million. So this quantity, so 120 million, sorry, so 120 million is something that will impact the accounts this year. In terms of the technical management, if you will, of this disbursement, and maybe this is the right answer to your question, maybe you want to know how technically the 120 million euros impact this. on the accounts well this is included into the ongoing risk reserve management okay so they don't have an impact on the premium of this quarter okay because okay let me rephrase this so there's no impact on the premium collection which is in you know impacted rather this will impact The general premiums, so the so-called competence premiums, I'm really just trying to explain how we do this from the accounting point of view. So we will use the risk reserve going on. Once again, we will use 120 million euros. So once again, the direct income or the direct collection is different. This is much, much higher than the one that you can see here in the premium line into the financial statements. Once again, my colleagues are reminding me that there was a third question. Yes, Solvency and Unipol say, well, if I'm not mistaken, the impact was 50 points. I mean, as compared to the level or to the situation we had at the end of 2019 on a consolidated level, I should say, because on an individual level,

more or less, we have the same situation.

So again, around 50 points. So individually, solvency is 226%. At the end of March, consolidated is 200. Now, of course, this is entirely due to the use of own funds. So all of the, well, moves that we had to perform

because of the big shock on some markets. Okay, maybe you want to have some more details, so let me check.

We have 40%, I mean, of this, you know, 50 points, I mean, out of this, 40% is due to the spread moves, and around 30% is due to the, well, equity value changes, 15%, well, in general, so the remaining 30%, let's say, is due to the moves of the other spreads. So credit spread, for example, so I'm not talking about the Italian spread, okay? I'm talking about the credit spread and the spread on the other companies, okay? So 40 is the Italian spread, 30 other spread, and 30 equity. Okay.

Could I come back on that very quickly? On the spread widening, that move seems to be rather bigger than the sensitivities that you've given us in the past. So I'm just wondering if you can update us on how you think the solvency ratio, how sensitive the solvency ratio is to the BT spread in the future. And perhaps if I can also quickly come back on my premium question. What I was really trying to understand is what is the underlying growth rate or development on premiums, because on slide six, you show that motor premiums fell by 2%. What I'm trying to understand is what the actual growth rate is if you adjust for the vouchers that you've offered.

Thank you very much. Thank you.

Now, as for the current solvency situation, I have to say that, okay, let me try and remember, okay, what's happening. So, this is the figure we have. Just one second. I'm in Let's say market moves were around 180. Yes, between 180 and 200. So here's the document. So we also have other, let's say, adjustments. And so this is, yes, exactly, 180. So I remember correctly.

So this is only, let's say, 180. Okay, so let me go back to slide six.

Okay, this is our direct business. Okay, so going back to the previous question. Premium income. So this is what you can see here.

So this is impacted.

Okay, so this is, once again, impacted by the change of the risk reserve going on now, 120 million euros less or negative. So the premium collection of the income, as you said, would have been bigger, higher, and growing. So if you just consider what we have collected in the first three months of the year. But then we made a different assessment, let's say an accounting assessment, And so this means that we charged onto this quarter two-thirds of the estimated future cost of vouchers. So, well, this translates into the following. On the one side, so we have apparently reduced a main premium level. It would have been much higher. if we hadn't done this okay so the income would have been positive or it would have been it would have gone up from the accounting perspective we have basically less premium that we would have in the future but we have set them aside but let's say that two-thirds of this part has been let's say they won't be collected in the future rather We decided, I mean, to do a reserve, so a provision this quarter. I know that this is a very flexible, you know, well, presentation of the prudence, I mean, of the caution I was talking about before with Elena. Okay, so from the accounting point of view, this is what we have to do. So we are now presenting here less premiums. So in this case, there's a lowering on the premium. There's a reduction of the turnover.

and there's a reduction, if you will, of the economic result. Next question from the original conference from Alberto Villa from Inter Monte, please.

I also have three questions. So the first one, is on your share in Unipol's side. So you reached 83%. In the past, I thought you had sort of a threshold, 80%. So now you have exceeded 80%. So are you going to continue with this purchase? So is this share going to become bigger? Or because of the reduced liquidity of this security, maybe you have decided not to go over, not to exceed 50%. specific threshold or once again you think it's interesting i mean to buy only pulsai on the market uh because of the uh well favorable prices second question i'm talking about the own major pair test so the voucher offer so one month off you decided i mean to basically spend 120 million euros for this voucher project two-thirds in the month of march as you said before So they have undergone the lockdown impact that then continued totally, basically, all the way to the beginning of May. So are you going to revise this offer or are you going to extend it? Because, I mean, you announced that, you know, some weeks ago, but then, of course, customers haven't used the vehicles for more than one month, so for a longer time. The third and last question is a general consideration on the price of Unipol Group. Of course, this is basically representing, I mean, the, well, investors who are quite worried. So it doesn't seem that it reflects a very good, you know, well, operating evolution of Unipol's size. So maybe shareholders or directors of Unipol's size um want to share with us some some you know considerations of the situation thank you now s4 only poll side now as you said before our share our threshold was 80 percent so this is probably done some time ago uh because um Well, we thought that this was the right threshold considering our strategies. We would have complied with this 80% threshold, but some extraordinary situations came up. And, you know, extraordinary situations may happen on the market, and they also may happen to us. So, for example, if the Unipol side price, you know, drops by, for example, 30%, well, for us, this turns into an opportunity for investment that we won't miss. So if the UnipolSci price hadn't changed, of course, we wouldn't have purchased shares in UnipolSci. So this is what's happening now. It may also happen in the future. So if the market, I mean, doesn't believe in UnipolSci, well, okay, they have their own reasons. I mean, there must be a reason why they don't believe in it. We have an opposite situation. We believe in it, and this is why We have moved up to 83%. It may also be more than this. Of course, as you said before, it depends on the price or the value of only both sides. So if we think that there's a significant temporary under, you know, evaluation or under assessment due to the pandemic or bad economy perspective. Well, we think that the perspective, I mean, the future of OnlyPoSci is positive. So we think they are really able to produce good income and good profits. So this is why we keep purchasing. May I go back to this point? I mean, considering this price, is this the right purchasing time? Well, you know, assessments and decisions are very, let's say, personal. So if you want to have, you know, an advisory service, well, this is a different, you know, agreement. Okay, just joking.

Now, as for the decision that we made, so your second question,

Well, let's say that we made an immediate decision because we thought it was the right thing to do. If I'm not mistaken, it was mid-April, so just before Easter. We thought it was a good decision and we made it. Well, I have to say that in terms of follow-up or good reaction from the market, no, it didn't happen. I mean, recently I've seen other competitors who basically followed exactly what we have done. But I have to say that quite a large part of the market made a different decision. And to go back to your question, no, we don't have any other decisions of this kind in the pipeline. So we're just sitting and waiting. We are kind of observing what's happening on the market before making possibly other decisions about this. We have implemented many other initiatives, and the one that's going on is reconfirmed, and it will continue throughout the year. So our customers will be able to use or to redeem the vouchers until April 2021. Okay, so once again, this is ongoing, and it is confirmed. Now, as for the evolution of Unipol Group at the stock exchange, Well, basically the same conditions apply. I mean, this is what I just said in terms of the investment decisions or investment choices on Unipol's side. And by this, I mean the following. I mean that the market makes assessments or makes decisions, right? Okay, so in my opinion, the market is wrong now that they're making a mistake. I mean, there are no technical reasons why the market is negative on the Unipol's side. Just look at the structure of our group. Just look at the business of OnlyPulse Group and do make a comparison with OnlyPulse side. Some time ago, the situation was different. I mean, let's say the make was much more complicated. Then, I mean, we worked on this. We have streamlined and optimized, I mean, the shareholding structure. So the values of OnlyPulse Group are very easy now to understand. Anyway, if the market has a different perspective on, I don't think this is a management problem. It's a market problem. It's a market issue. So what managers here have to do is sort of arbitration between different situations. Of course, we make an effort. We try and make forecasts. But once again, we are not talking about this now. I mean, we're not talking about this with shareholders or with directors of the companies involved. We are not considering any kind of extraordinary operations So we are not thinking of changing the corporate structure. So the only thing that's different between Unipol Group and Unipol Sai is the fact that we invest in Unipol Sai because we are the holding company. I would invest very much and with pleasure thanks to the current prices because, I mean, the market is not believing in them. We do believe in Unipol Sai. So it's a pleasure for me to invest on this company. But as you know very well, you know, investments that we make on our own securities, well, they have a direct impact on the solvability of our company. So because the market now shows a high volatility level, which is, you know, represented by the big, big shocking moves, you know, that have taken place in the insurance companies in terms of solvency, from December until today, it is not a good idea. So it would be very risky to carry out operations which reduce the own funds because, once again, volatility level is so high. So, once again, I am so sorry, and I really repeat this, I am so sorry I cannot do this because in terms of economy or income, so the securities to be purchased now are exactly the Unipol group securities. And Personally, I am one of the shareholders. From the management point of view, this means that we have to have a balance between different factors, different variables. This is the reason why we are here, to keep the balance. Of course, I cannot... I have to take into account all of the uncertainties. When you consider the general economic forecasts... I cannot reuse the own funds of my group, okay? So in a nutshell, this is what's happening. Very clear. Thank you so much. You're welcome. The next question from the conference in English, from Edward Morris from JP Morgan, please.

Oh, hello, everyone. Hope you're all well. Thank you for taking my questions. My first question actually just comes back to this point you've just been talking about around purchasing Unipol side shares and not reducing your own funds either by paying the final dividend last year or otherwise purchasing Unipol group shares. Can you just walk us through the solvency treatment when you buy Unipol side shares? What are the moving parts on your solvency ratio when you do that? And at what point do we need to get to for you to have the confidence to be able to decide again on paying dividends from the group level or otherwise returning capital to shareholders of Unipol Group. So that's the first question is around solvency and the decision between buying Unipol SAI and returning capital to group shareholders. My second question relates to the life business. I noticed there's a quite significant drop in premiums written in the life business, and principally this is coming from Archivita, it seems. Can you just tell us a little bit about what's going on there and what sort of run rate we should expect to continue? What will be the factor that causes that to go back to a more normal run rate? So just a bit more color around what's happening at Archivita and how will lower premiums affect the net result from life?

Thank you. Thank you for your two questions.

I mean, the first one is basically the impact consultancy of the UnipoSci purchase. Okay, just to give you an order of magnitude, I mean, so, for example, as I said before, so if we pay dividends and the worth, I mean, the value is around 5%, the same happens in terms of purchasing shares. So if I buy 200 million euros worth of share, I basically lose around 5% of solvency. If I buy 400, I would lose around, let's say, 10 points, I mean, 10% in terms of solvency. And of course, in that case, I'm talking about only bond group. Okay, so more or less, this is the general value to make the right calculation. And this is what we consider, you know, when we purchase, I mean, own shares. Okay, so let's say the loss is on a one-to-one ratio versus the amount of money you invest. So if you buy 100 on own shares, of course, you lose 100 in terms of own funds. And in percent rate, you know, this is basically, I mean, 200 million is more or less, you know, the kind of 5%. I mean, the points I said before. Now, in terms of the Unipol site purchase, well, this calculation is really, really varied. different. So the impact is so much smaller in this case because. So because we purchase Uniposai, well, basically we have an inflow of the excess of capital in the pockets of Uniposai. So every time I purchase Uniposai, basically I reduce the third party shares in terms of excess of capital And of course, I take it in. So on the one side, I have the amount represented by the investment made. But on the other side, so this is the negative side. On the other side, I have the positive side. And the positive side is the excess, so the so-called over capital that was owned by third parties before. And then it becomes included. It is included then in our own funds.

There was another question on ARCA.

Back to Matteo. Thank you for your question on ARCA. Now, it depends on the distribution strategy that we have adopted this year in 2020. In Q1 2019, so one year ago, ARCA has also distributed traditional products. the so-called level 1 or type 1 products. In terms of strategy, we decided to discontinue those products and to sell the multi, let's say, branch or multi-approach products. So this can be reassessed, re-evaluated, but of course we also have one part of unit-linked. Now, this kind of production has a lower productivity level versus traditional products, so they are easier to sell because the traditional products are totally guaranteed or secured. So the budget was already going down in terms of premium level versus the 2019 production. There is more, I mean, this being, you know, the big shock of the coronavirus, and this has strongly downsized, I mean, the operating activity in every single office in every single agency. So we have, for example, Banca Popolare Miglia Romagna, so BPER, and Banca Sondrio, so the two banks. As a consequence, I mean, the general incomes and the general production has shrunk. Now we are moving up, so we are just resuming our business. Bank agencies or banks are still receiving customers based on appointments, but anyway, We are implementing all the measures required, but we are going slowly back to business. We are now much more active versus some days ago, I mean, versus the real lockdown. So we expect a recovery of production. Don't forget that the rate structure has changed and the financial conditions have changed as well. So the so-called re-evaluable or re-assessable products may be sold out. in banks, but also in the insurance agencies. There was another question. I mean, there's an effect between premium reduction and income reduction. Well, no, there is no link. I mean, there's a reduction of income on live business. Its origin, its cause is totally different. And basically, it has to do with financial income flows in the first quarter of the year. Usually, this part of this share is higher. This is also due to the fact that the financial markets in the first quarter of 2019 was totally different versus what happened in 2020. In terms of technical margins, basically there are no important changes, no major differences. And so once again, I have no other comments on these differences just because there are no differences.

Thank you. Can I just have one follow-up question on the first point around buying unipolsi shares? I understand you've passed this threshold now of 80%, but given that the solvency treatment you seem to be saying is fairly neutral in buying unipolsi shares, or at least not very punitive, then why not keep buying more? And what is the end point that you're aiming to arrive at? Is this just going to be a slow process towards reaching a level where you have to buy all of the shares?

Thank you. Thank you for the question.

Now, as for Unipol Sai, the strategists of the group are the ones I explained before. I mean, Our share, which in our opinion is the so-called structural share, is 80%. You are right. Today we have more than this. The market has basically dropped or reduced the Unipol's high price. So for us, it became a good opportunity for a good investment. But there are no other strategies behind this. So we are not considering doing any other move at all. It is just an allocation opportunity that we couldn't miss. We have plenty of cash in the group, and we decided to spend the part of this cash in a high-income way, so in a very, let's say, profitable way. Of course, we perceive the risk in a different way. So the market thinks that the risk is higher. This is a company we control. Of course, we know the solidity, the strength of the company, the assets, even the income flows generated by that company. So this is why we believe in it. And, of course, we have possibly much more confidence in only POSAI than the market today.

Next question from the original conference from Andrea Livi from Epita, please.

Good afternoon, and thank you so much for the call. I have two questions. If I understand correctly what you said before, Unipol size solvency, based on your recent measure, is around 180, 200 points. Can you give us some color on the solvency on a group level, please? I also have a question on the difference that I can see here between the pre-tax result of only per holding and only per size. This is due to the financial business carried out by the group, I guess, but I'd like to have more color about this. I mean, the losses I can see here, what is this? Is this, you know, realized gains or losses? Is this the expectations of the market or any other reason behind this? Thank you. Thank you for the three questions. I said before that as compared to the latest, I mean, observations of solvency that we have collected concern Unipol site. So if you make a comparison to the moves and the ups and downs on the market, I mean, after the 31st of March, I do confirm 180 to 200. So at the end of December, sorry, at the end of March, okay, this is what we had between 180 and 200.

S4 Unipol group solvency level. So end of March, 31st of March, we had 155.

And the latest observations, okay, just give me one second. Yes, we have 140 up to 145. As for the pre-tax result, Unipol, so back to your second question, the mismatch that you can see versus the Unipol-Sci consolidated figures is due to the following. We have a portfolio in Unipol Group, I mean a small portfolio, so some investments. Last year, it has generated between 60 and 70 million euros extra income versus the typical, I mean, let's say income of the holding company. So basically the dividends that this company receives from the subsidiaries. So if you consider the rest of the market, I mean, there have been... capital losses. So we have closed some positions and what we have had is around the 30 million euros capital losses. So this is the difference between Unipol SAI and Unipol holding.

Next question. Associate engineer, please.

Hello. Hi there. I have a few questions. The first one relates to Unipol REC. Now, your collections in the first quarter were quite good at 36 million. I just wanted some color on what are the more recent trends and how do you expect the collections going forward, the 30% target that you have, is that still achievable? The second question is on the cash position of the group now. I mean, you have the cash coming in from Unipol Sai as dividends, but you will not be paying out dividends from Unipol Group. So your cash position is quite strong now. Do you have any plans how you plan to use this cash going forward? I mean, over the near term or something? And the third question is more of a number question. Could you just provide the weather-related impact in the combined ratio for Q1-19 and Q1-20? Thank you.

Thank you for the question. So now, Unipol REC keeps recovering. And by the way, this is what it has done for last year. with an average percent rate of 30% versus the gross value of our loans. So again, this is what we have done in the first quarter of this year. Some operations and transactions have been carried out. So this is already included into the pipeline, also for the second quarter. So we are going to reconfirm the assessments that we made. So as of today, versus the portfolio that we have, we keep seeing this trend in terms of recovery. So the percent is around 30%. So this is what we are catching up.

And the level of collections, do you expect it to be at the same level as last year or do you think because of the lower economic activity this level could calm down?

Well, It depends, and we have to see what's going to happen. So the effects and the consequences of the future economic crisis, I mean, it's difficult to foresee which impact they will have on the customer portfolio. I have one point I may share with you. Once again, it goes without saying that the economic crisis will have a negative impact on the loans the portfolio currently manages to buy in. banks. So the unlikely to pay, for example, or let's say the performing loans, of course there would be an impact. Of course there would be some, you know, well, let's say changing situations, which is what I'm seeing these days. I mean, just look at what banks are doing in terms of provisions. Now, the world has changed. This is a new world. Okay, so right now we have plenty of loans that have to be recovered. So we have a I mean, we had the non-performing loans, so we had non-performing exposures. Some positions were already dead, if you will, in terms of, you know, quality of the loan. So what the Unipol REC does is something different. I mean, we have to do with the goods and products or assets which have been secured, okay, so Basically, we look for an agreement for many different positions because, for example, the company pays a credit for the bank, but then some people put some money somewhere else. I mean, we discover that this is what happened, and we have to find an agreement, okay? So we want to have the money back. I mean, we don't really work on the current operating economic world, okay, that will impact us. will be impacted by this crisis. I mean, we're now working on closed, I mean, previous positions, and, of course, we strive to recover or to get, you know, the payment of guarantees. So this business does not really depend on the evolution of today's or future real economy. These are positions that, you know, come from the past. Of course, if we recover, you know, 30%, I mean... Maybe 30%, maybe too much. We are also happy with less than this to recover all the money that we have in Unipol, Iraq. The value of the residual loans is only 15 cents. Basically, we just have to recover 15 cents instead of 1 euro just to recover all of our money. And we can do this for as long as it is necessary. So today we are doing this, and today we are recovering twice as much as the previous so-called loading value. I don't know if we are able to do this for the next five years, but I'm sure that we will recover or collect much more than the so-called loaded value. As for your second question, a question on liquidity or cash, because there's a strong cash position that we enjoy. You're right. I mean, this is a choice that we have to make. You know, when you go through a crisis or, for example, when you have high volatility on the market, well, you know, if you have plenty of liquidity, I mean, if you are very strong in terms of cash position, Well, this is my personal point, but, you know, this is an absolute value. So much so that, I mean, just look at what companies need today. They need liquidity. They need fresh cash. And this is what the Italian government has to do. You know, the government has to send money to companies. Otherwise, you know, they go bankrupt. You know, in Unipol, sorry. So as soon as we knew about, I mean, the crisis, I mean, the pandemic, I mean, we have reacted right away, and we have strengthened the cash position in terms of asset allocation, so only post-sign investments, exactly because we think that cash is a major protection value, and even more so when it comes to the holding company. So there may be some small amounts of money allocated to some risk investments. I mean, sometimes they go positive, sometimes they are negative. But in this case, I'm talking about real small portfolios, I mean, maybe up to 200 million euros. So the rest of investments of the holding company, so it may be either to purchase Unipol side shares, because, I mean, the risk ratio is interesting for us, or because we have low risk positions. I prefer not to have some, let's say, some little points in terms of income, But I have a strong cash position so that I can, you know, fight against the possible new shocks. Okay, so for the holding company, this is an ordinary situation. But, well, even more so when you are going through some stress situation, which is the current situation because of the pandemic. You also had another question. Back to Matteo. Maybe you want to have some color on the combined ratio change between the Q1 2020 and Q1 2019. Now, in terms of, well, expenses, I mean, there's a slight deterioration, which is due to cost. Now, if you, well, if you have to consider less premium that we have received versus Q1 2019, but, I mean, most of this change is This has to do with the ratio between claims and premium. Now, this is what's happening for motor but also non-motor. In our business plan, one of the key elements is to become technically excellent. So we want to have a much higher income. And much of this improvement depends on the actions that we have planned some time ago. So once again, this is what we're doing. in the motor business, but also in the non-motor business. In the motor business, the changes in terms of claim premium ratio, well, this improvement is due to the current operating or financial year. So we have had some retricing on the tariffs concerning the motor business, but also the Many other risks concerning the motor business. Anyway, of course, there have been less claims, especially in the final part of March. As Mr. Chimbrey said before, we haven't released any reserve. So it's basically recoveries. So these recoveries have to do with, you know, a franchise or, once again, there is no release at all of the motor business reserves. The same happened in the non-motor business. Now, in that case, what I can see is an improvement of the current financial year. This is due to the activities and actions that were included in our plan, and especially in terms of the total product liability, but also in many other business lines where we have striven to recover the margin. So, of course, this improvement has been helped by the non-release of previous provisions. So, in general, and as a total, I mean, there's an improvement that you don't see in terms of non-motor business combined ratio. If you also consider the previous financial years, I mean, there's an improvement of the combined ratio, and this improvement is due only to the auto or motor business. Don't forget that in the previous quarter, we had released reserves on the non-motor business totaling 9%. Okay. Thank you very much for that. For the time being, we have no other questions.

Oh, sorry. Sorry. Thank you for the questions. Okay.

Maybe we heard the voice on the conference in English, so I'm asking the operator to confirm that there are no other questions.

Thank you so much for taking part in this conference. Stay healthy, stay safe.

And looking forward to the next conference to comment on the first six months of the year at the beginning of August. Thank you so much. Keep up with the good work. Bye-bye.