Unipol Grupo Spa

Gentlemen, good morning. This is the chorus call operator. Welcome to the Q&A question. We will be talking about Unipol and Unipol's data. The CEO, Carlo Cimbrì, will go through a short introduction, and then he will be available to pick up and answer your question. Dr. Cimbrì, your floor is yours. Thank you. Thank you so much, and good morning, everyone. Now, as usual, well, I have basically nothing to add to the contents of what we have published. So the press releases we have released this morning. So this is our habit. I'm here with the general director, Mr. La Terza. So once again, we are available. So do not hesitate to send us or to ask us questions. Thank you. Now, if you want to ask a question, please dial star followed by one on your phone. If you want to get out of the booking list, please dial star followed by two. Please do ask your questions by using the receiver of your telephone to hear you better. Once again, if you want to ask a question, please dial star followed by one now. Question number one is from Elena Perini from Intesa San Paolo from the Italian conference call. Hello, Carlo and Matteo. Good afternoon, everyone. I have three questions, if at all possible. Question number one. On the trend, I can see in the norm life. So in the second quarter, I saw an increase of the CR, so the combined ratio. So I just wanted to have some more light and color on the impact you expect on the second half of the year in terms of the evolution of the motor business frequency or rates, but also the impact of what happened in the past months. Now, as for the live business, this is my second question. I have to say that in the second queue, there's been a very positive contribution in terms of capital gains. So my question is, do you still have some components that you have to go or maybe to give back to the insured? And what can we expect? I mean, which kind of trends can we expect? I mean, a sustainable trend for the second half of the year. And then the third and last question is some color on the net financial position of the holding company at the end of the H1, which, in my opinion, is also, well, a new presentation. I mean, just, you know, some extra, you know, details on the net financial position and, again, the trends that you are expecting. Thank you.

Good afternoon, Elena.

Thank you so much for your questions. Now, let me answer your first question that has to do with the evolution of the combined ratio in the first age, 2021. Now, of course, we also have to take into account, if you will, the entire H1 context, and in particular Q2 versus, you know, H1 2020. That, of course, was deeply characterized by, you know, very restrictive lockdown situations. I mean, much more, let's say, restrictive than the lockdowns we have experienced in H1 2021. Now, all of these happened in a context in which the average premium kept going down. And, you know, this is also due to the one month for you campaign that we have closed some months ago in April. But let's say that it continues until the end of the year because now we offer the possibility to all of those customers who haven't done this yet to use the voucher. And they can do this also in the, let's say, second renewal. So once again, the context, as you know very well, is characterized by rates and frequencies which are higher than H120. This is due to the, if you will, lower intensity of the lockdown measures between the two periods. Average premium is going down, and then the average cost of what we manage decreases. going up. We have to say that the combined ratio and the second queue mirrors the actual situation of the first half of 2021. Now what we do on a daily basis is the monitoring of the motorway traffic but also road traffic in general because we have 4 million black boxes that we have installed on the cars of our customers and what we see today is that traffic is exactly back to the pre-pandemic level. So, well, basically 2019 figures. Now, all of this hasn't yet brought about the, let's say, increase of the frequencies, but in the second half of the year, this may happen because, once again, we are right in the middle of quite a solid, intense economic recovery context, so this may happen. Now, considering all of these factors, well, we need to really think or imagine the possible future dynamics of the pricing of our products because, of course, what we want to do is to sort of not be surprised by the possible increase of frequencies in the second part of the year. Now, as for the non-MV business... Now, in this case, the situation is a little bit less intense than the motor vehicle. But if you consider the health or accidents, well, H1 2020 was an exceptional one. I mean, in positive terms, because... Once again, because of restrictions of mobility of citizens, I mean, there's been a major drop of frequencies. Now, H121 is basically a sort of a come back to normal situation. Well, maybe normal is a little bit too much. We do have some mobility restrictions also in 2021, but that was different. much less intense than before. So in terms of the ratio, I mean, considering the frequency and the premium, let's say that the situation is much closer to the average values in terms of accidents or claims in these two sectors. So in this sector, I don't think there will be major changes in H221. First of all, good afternoon, Elena. Thank you for your questions. Okay, just some more insights to add to what Matteo has just told you. Now, there's a natural trend starting now, and this will be a long-term trend. So what we see today is that, as Matteo said before, traffic is back to the pre-pandemic level, or let's say the same data we had in 2019. But we have far less claims than in 2019. So I have to say that as for the rate or the frequency, It's still very low. Now, we have plenty of unanswered questions. I mean, will frequency go back to the 2019 frequency, or how long will it take? We don't know, but in terms of claims, the situation is still positive. And once again, we are not even close to what happened in 2019. Then, you know, it goes without saying that... If you ask the question, okay, what about the drop of price in the market in the last five years? Well, the drop, if I'm not mistaken, was 35%, so 35% drop of the average premium. So if you consider this... It goes without saying, once again, that the trends that we will have in the future, well, of course, prices have to be adjusted once again. So there's been a unique, extraordinary phase. So prices went down in an extraordinary way. So we also have reduced prices by 7%, 8% last year. But, of course, prices are, you know, meant to be realigned once again. So as to strike, if you will, the right technical balance in those cases where frequency should go up. Now, in phases or times like these, and basically this is what we did last year as well, we have to be very cautious in terms of provisioning. So as you can see here, we are not using reserves or provisions in H121, maybe just some having to do with what we have recovered. But as you can see, once again, we have not touched the provisions, which is exactly what we did last year. So the combined ratio is good. just changing in a very small part just to have some so-called recovery percent that we get from last year. We also would like to be as cautious also for the future because, you know, we want to have strong, robust margins. If at all necessary, we would like to use this to keep the benefits or the profits of the group on a high level. And, of course, we will be talking about this during the presentation of the next business plan that will take place spring 2022. Thank you. Let me pick another question. There was a point on natural events. Now, in the first H21, we have had an impact that was a little bit smaller, lower than H1 2020, so a little bit less than 70 million euros instead of 80 million euros, which is what we got in H120. After the closing of the First age we had some peaks due to hail, hail storms. Now it's a little bit too early to make a total assessment of the impact of hail storms. So we are right at the beginning of the natural events season. So considering these events and based on our, you know, forecast, we have basically the same impact in terms of natural events that we had in 2020. No major changes. But once again, as I said before, we are here in Italy right at the very beginning of the, let's say, well, strong or extreme event season. So it would be too early to talk about this now. As for the live business, we have received a small contribution from capital gain. Maybe you remember that in the previous age, we had a negative contribution because we have realized capital losses. This is due to a deep change of the asset allocation, which is what we had implemented. And we did that in order to improve and enhance the risk profile and even the capital profile of our group. And I have to say that this had definitely a positive impact as a whole on our solvability. Now, in H121, this kind of negative element on the live business hasn't taken place. As a consequence, we went back to an ordinary normal profitability level. So, as we said, well, sometimes in the past, the general live business is between 150 to 200 billion euros a year. I'm now talking about the financial components of the live business, of course, and I have to say that if the total yield of financial assets is 100, well, what we withhold, I mean, for the shareholders is 90 basis points, and the rest is given to insured. Now, this is what happens in a normal situation, which is, you know, the first half, 20 basis If I'm not mistaken, you can see this in one of our slides. This trend is a sustainable one. I mean, if we don't have extraordinary events, if we don't have, let's say, positive or negative realizations from the financial point of view, this is the structure of the live business. And I have to say that so far we are 100% aligned or compliant with this kind of setup. Now, there was another question on the net financial position, NFP, which is what you can see, slide 20 of our presentation. 1.2 billion euros in net financial position. This is the current situation of the group. I have to say, we also have, well, we maintain a very strong financial flexibility, and by this, I mean that we have €2.8 billion of debt, of which €2.5 billion on the market. We also have liquid assets, €1.6 billion. That, of course, represents the financial flexibility leverage that gives us the opportunity to be, let's say, ready and prepared to any strategic option on the market.