Unipol Grupo Spa

Good afternoon, ladies and gentlemen. Okay, they told me you couldn't hear me so far. Okay, no problem. So I will be even shorter than I was before. Again, good afternoon. Now, this introduction is a very short one just to say good afternoon because, of course, as you know, we are here today to take your questions. Thank you. Question number one is from Elena Perini from Intesa, Sao Paulo. Good afternoon, everyone. Good afternoon, Mr. Chambry. My question is on your premium mix. Reading your press releases and presentation, there's been a strong contribution from Bank Assurance. Can you please, well, just give us some color on your strategy concerning, I mean, this part of the business, I mean, on the live business, but also on the non-live business, let's say for the next months or year, if at all possible. Then, also wanted to ask you, well, I know that the combined ratio is 92.8. So at the end of the lockdown, there was recovery, so an increase of claims. And I believe that we also had other effects in the last quarters. Now, What do you think can happen within the end of the year? So do you confirm your 93% target? It was written in your plan. Can you tell us something about the trends that you see in the fourth queue?

Thank you. Good afternoon to you, Elena.

And again, thank you for your questions. Okay, let me answer the questions. And then I will also let Matteo give you information. So you're right, the banking channel, if you will, during the long lockdowns has suffered the most, in my opinion, in terms of production capacity.

Let's say this is due to our organizational choices. And, of course, less contact with customers, if you will.

So it goes without saying that in the past months, thanks to the vaccination campaigns, reopenings, I think we can say that we are back on, let's say, full capacity, including the network of our agencies. Of course, the collection has increased. So, as you know, and as you can see from the market, there's plenty of demand because, you know, the lockdown means that people haven't, you know, spent their money. Savings went up, and today we have more investments, safe investments with quite a good profitability rate. So this is why the life path went up.

Anyway, Matteo will tell you more about this. Now, as for the banking channel, it is right at the center of our strategy.

So you know about my positions and our choices in terms of the capitals of banks. So the only value that this has is an industrial value. So again, it's a channel we would like to develop, and we will do this very strongly in the future. So this is why we have ideas and projects that fit I mean, for our strategy. I have to say, this is going to be one of the key parts, if you will, or drivers of our next business plan.

We'll be able to talk thoroughly about this in the near future.

Now, as for the CR or combined ratio, well, as I said before, in terms of bank assurance, so we're going back, let's say, to a full operation and even full mobility of people. So it's a normal situation, if you will, that we have been missing for almost two years. This means that there's more traffic, and then based on our, you know, metrics in the past weeks, we can say that basically traffic is back to the, well, to one year ago, so same period, 2019. Of course, you can also count on the, you know, the data from black boxes. Now, as for the claims, now claims frequency is not back to the previous, let's say, pre-COVID level. There's a difference, which is positive for us. But, you know, we want to be very cautious and prudent.

So we think we may go back to the same levels.

You know, this is the reason why if you consider, I mean, next year's, and of course I'm going back to your question, I have to say that in the past two, in the last two, well, there will be some specific assessments, if you will, on how to close our balance sheets. Now, when I say assessment, I mean we will be very cautious or prudential assessments. As I said yesterday, you know that, well, we are very close to the end of the plan, so it will be closed in two months. We will close these three years by... by doing much better than all of the targets we set before in terms of general, you know, result. Remuneration of shareholders, for example, reconfirming, you know, and also the remuneration for the entire group.

Now, as you know, we... are sticking to a specific engagement or commitment that I keep repeating.

You know, we want to pay dividends as soon as the, let's say, lockdown time is over, due to what authorities told us to do. This is what we have done in October. Of course, I'm talking about the 2019 dividend period. Our results are almost consolidated for the end of the year, and I have to say that we confirm the fact that we will be able to pay out dividend. So as you have highlighted, we also have the combined ratio target, 93%. Again, we have already reached this target. Now, from now on, the, let's say, financial year closes, And there will be, again, cautious, prudential assessments because, of course, we want to, let's say, save some money and allocate resources for the next three years. So, once again, I'm saying this, I mean, to help our friends to make some forecasts on our closings. Okay, let's say that if you consider figures today, okay, don't consider, let's say that every single quarter is worth one. Okay, so the end of the year won't be a total of four. Okay, Mattel, any other topics? Yes, just a couple of points, Elena, if I may, on the premium mix, because as Carlos said before, the car market, well, of course, the car insurance market is still a very competitive one, where the average premium, well, in the past two months, it got a little bit stable, so it's stabilized a little bit, but because of the end of the campaign that we had, so the name was Un mese per day, so one three-month for you. So those who didn't use the vouchers can use the voucher now. Again, average premium is becoming more and more stable. Anyway, it went down by 6% since the beginning of the year, and it's very competitive. So the premium evolution has still a dynamic development, I'm on the non-car business and independent from the distribution channel because in that case also the agency channel is growing. So this is the consequence of the Italian economy which is now going very, very well. As we all know, it's a cyclical business. So it follows, if you will, the request for insurance coverage that follow, if you will, the improvements of the economy. As for the health business, this is one of the fastest growing business. And the same happens for small to medium enterprises, SMEs, where the dynamic is very unfavorable. So within this framework, you know, the bank insurance level of premium is much lower. So the growth, if you will, promises are much better. also mid-long term, as Mr. Chimbrey said before, of course. We will be talking about this thoroughly during the presentation of the next business plan. As for the NADCAT, 2021 was quite a heavy year for natural catastrophes. And especially, I have to say, during summer, Hail, hail storms were the problem versus 2020 because, you know, 2019 was much, let's say, harder. Now, the difference is that the reassurance coverage versus 19 and 20, this year, this coverage presents, you know, maximum levels which are much more protective for the reassuring companies. So we will recover less than what we were able previously. to recover throughout 2020. So if you break down the impact of NatCat, which is what you see on page 7 of the presentation, if I'm not mistaken, you can see we have been 2021, so 4.5%. This is the so-called natural catastrophes versus 4.1% in 2020. So this has increased a little bit. We have less severe claims, less than 2% versus 2.5% in the previous nine months. And the remaining part to reach 7.3% has to do with active reassurance business. Also in this case, there was an impact generated by natural catastrophes. Of course, it's impossible to make forecasts on Q4. And also from the seasonal point of view, Q4 is characterized by a high level of, unfortunately, of this type of claims that made natural catastrophes. But, of course, it's really too early to have a forecast on Q4. As for the live business, as Carlos said before, these are investment products. So in this channel, we only sell the so-called multi-rano products. So it's a mix between, say, the first type and third type, so multi-type products. You know, in our strategy, we want to limit, if you will, the so-called GS, separated management, because what we want is the right financial balance. I mean, there's a slide in the presentation where you can see the margin we withhold versus the margin we give to the insured, which is around 90 basis points, 9-0. I think this is a key milestone that we want to comply with. And again, we would like to keep this kind of, this level of profitability on a multi-year basis. Thank you so much for your answers.

Next question is from the conference in English from David Bamber.

Yes, hello. Thank you for taking my questions. The first one is on P&C and on the non-technical results. Can you help us understand what the drivers are in the quarter, please, on the investment margin in P&C and on the other items. And then secondly, on capital, can you break down the movements of the solvency position in Q3, please?

Thank you. First of all, thank you so much for your question.

Now, as for question number one, so the question on investments, well, I have to say that in Q3, no, we haven't experienced major changes in terms of the investment policy of the group. And by this, I mean that the investment policy we have is aimed towards maintaining an asset allocation characterized by an exposure to Italian governments around 40%. During Q3, in some cases, we also went under 40%. We would like to have quite a very good liquidity level so that we can do investments on real assets. Now, the real assets item is the item that really gives a strong contribution to the increase and the strengthening of the profitability of the portfolio. Now, this being said, no, once again, we haven't had any special action, also in terms of what may have characterized the quarter. And I have to say that what happened in the quarter was, was, if you will, an increase of the interest rates. And objectively, well, the value is really very, very low. I mean, absolute values are really very low. So the percent of reinvestments of cash flows in the PSE area are very small. I mean, they are around 50 basis points, only, once again, very extremely low values. It goes without saying that as soon as we reach maturities of securities, they are reinvested with yields which are much lower than the previous years. Fortunately, the duration of the portfolio is 3.5 years, the financial duration, I mean. So the gap, if you will, is there, but it takes place very gradually.

of all of the operations and investments we made during the quarter.

But on the other side, they also depend, if you will, on an increase of the interest rate risk. You know, in the past months, the curve, if you will, so the 30-year rate was frozen and the 10-year rate went up. So because of this special movement, What is being created is a bigger absorption of capital generated by or depending on the market risk.

So this is to justify the variations we went through.

Next question is from the original conference from Michele Ballatore, KPW. Good afternoon. I have a couple of questions. Now, first and foremost, can I have the data on the provisions that you have released or used for the nine months? Second question is on the pressure made by inflation. I mean, do you have evidence of this pressure? Is this something you see? And if so, what worries you for the mortal business, but also for the non-mortal business. And so, again, if you see this, how will you manage it?

Okay, good afternoon. Thank you for your questions.

Now, as for the use or release of provisions, okay, just give me one second. I can get the exact figure. Now, so 147 million euros motor business. Of course, I'm talking about the entire, I mean, total product liability and the entire car business, if you will.

Which is very similar.

to the same season, 2020, where we had 116 million euros. Also, you know, in this case, it's basically the so-called recoveries.

I mean... So this is not actually the direct provisions.

As for the non-motor business... I'm talking about 170 million euros. So the total is, let me check, 320 million euros, basically. So 170 million euros. And again, this is almost exactly the same figure we had back in 2020, where we had 160 million euros instead of 170. So once again, we're just looking for one of my personal notes.

So once again, still working on the so-called RCG.

We keep, you know, paying by saving around 40%, basically. So the part that you will see in the statement is a part of the 450 million euros, which is what we've got. For example, on the, once again... TPL, this is what we have saved when we paid the claims. So all the rest, that net of the $127 million that you can see now in the statement, and basically the so-called recoveries or some new openings, but again, all the rest has been used to reassess, again, the provisions. Now, the same happens if you consider the two biggest areas. In this case, we have the so-called RCG. In this case, we paid by saving 68% versus the figure, I mean, we have in the provision. So in this case, the saving was 390 million versus provisions. So in terms of RCG, only 78% were put in the statement while the rest didn't. of this money or of this amount has been used in order to reassess provisions. Now, as for the inflation pressure, which is what you asked in your question, well, I have to say, yes, definitely, this is an issue we have to take into account. And to do so, we need to look at the future because You know, the economy is absolutely back on the right track. Of course, I'm talking about the global economy, which is what you can see in many, many different industries. And the consequence of this is that we may have some bottlenecks in terms of supply chain because what you can see now is, you know, this kind of, you know, slowdown of deliveries or bottlenecks because of the lack of components. You know, the manufacturing industry recovery, It's not the same for every single country around the world. So in Italy today, we are enjoying a very good situation. But, of course, we also heavily depend on components and spare parts coming from the four corners of the world. And in some areas of the world, you know what's happening. So organizations are closed or maybe they have a reduced production capacity. Now, this means there's inflation on spare parts and raw materials. In our opinion, this situation is here to stay. So raw material costs are increasing, just like consumption costs. So this is a major trend today. So we have to consider it will be one of the key issues also for the next financial years. I think we have to consider two different points of view. So on the one side, And in terms of investments, well, definitely it's a benefit. It's an advantage that may also become a big one. On the other side, we need even more rigor or discipline in terms of paying damages or claims. We have quite a high quality in terms of the payment of damages and cost control. It depends on many choices we made in the past. For example, we provision directly with our repair shops in terms of the materials we have to use, but also the business model. So they pay directly. They have, let's say, a cost control, which is upstream, not downstream. Anyway, you're right. there's definitely pressure on the control, the so-called discipline, as we say here. We need to strengthen, you know, the discipline on cost control. What we expect is basically two consequences. On the one side, it's a pressure on costs. And I'm sure we can manage this with the, you know, execution capacity of that we have on every single project. We will also take advantage of our synergies with all the companies that you can find now into the claim settlement value chain.

Thank you.

Let me add to the fact that, well, you know about the current level of inflation. and it has then transformed into salaries and wages inflation. But I think there may be a structural component of today's inflation, so it may have an impact on salaries and wages. So the average cost of TPL, well, basically you have the cost of labor and the cost of spare parts. We do this with our company, Autopresto e Bene, but, you know, The main target for us is to have quite a large gap between, you know, the market labor cost on our site and the labor cost of our, you know, repair shops because, of course, we give them plenty of business, and this is why they have a lower cost. If the absolute cost goes up, of course, it will increase less than proportionally for us. But, of course, it will be, once again, one of the key items of the market dynamics. If you consider the evolution of car making technologies, this means that when you have to repair the damage, the number of spare parts involved increases progressively, stepwise. So the price or the value of the spare part is more and more

important, I mean, as time goes by.

I'd like to go back to your question, Michele, because, you know, Matteo told you about the effects and the consequences of inflation and the forecasts we have for the future. especially in terms of the cost of labor in the near future. This is what I said before on the stronger, if you will, discipline we want to implement if you really want to have a clear vision for the future.

I mean, after all the measures implemented by the government,

which is, of course, what we stick to here in our company. Well, as a group, we would like to go back to, let's say, business as usual as quickly as possible because this has an impact on our capacity and also the possibility to offer services and managing costs. All of this heavily depends on the fact of going back to normal life and the normal business. So, as I said before, just, I mean, if you check the traffic, so the number of cars, you know, on the road, so we are back to the same, I mean, to the pre-COVID level.

So, lockdowns were an exception.

They have been quite a long exception because if you think of the future, the inflation and then the cost of raw materials, so In our opinion, I mean, companies and organizations, I mean, what they need is to go back to full operation, full capacity.

So, under this point of view, we have, you know, speeded up the come back to office.

Of course, there are new technologies and and then all of the tests made during the work-from-home period. Of course, this is one of the new thoughts, one of the new ways or modes of organizing the way we work. If you want to be serious about this, you need to have a general 360-degree vision. Because, you know, if you do something different today, well... This is a steady increase of the labor cost. It would freeze productivity. And in my opinion, companies cannot afford to do this now.

Do you think that inflation...

can be a driver for the tariffs, especially in the motor business. So may this translate into stability for the entire industry, I mean, or an increase of tariffs? So even if you don't, you know, consider inflation, I mean, inflation just adds to what I said before. So the trend, as I said before, takes place even without considering inflation. If you consider, for example, the reduction of prices in the past five, six years, I mean, more than 20% price decrease when it comes to TPL, and the same happens on the market, actually. Now, this is forcing the entire industry, if you will, to look for a new technical balance. So if claims that go back to the ordinary frequency, but also considering the inflation pressure that you have mentioned, well, I have to say that this is something that cannot happen today. So this is what we think. Tariffs, or I mean prices, gradually... will become higher because, of course, we have to make sure the entire industry goes back to a technical balance.

Next question is from the conference in English.

Peter Elliott for Kepler Chevrolet, please.

Thank you very much. A few questions for me, please. First of all, I just wanted to come back on the motor pricing because I think, I think you said last quarter that prices were down 4.6% year on year. And now you seem to be saying minus 6% since the start of the year, which seems like an acceleration to me. But then you also said that you'd seen some stability the last couple of months. So I'm just a bit confused. I was just wondering if you could clarify what seems like a contradiction there. Second question comes, I appreciate you can't give Q4 guidance, but I'm just wondering if you can give us any estimate of the cost of the recent bad weather in the south of the country. And then third question is on Unipol rec. It looked like the recovery rate has been much lower this quarter, about 21%, I guess. I was just wondering if you could give us a sort of outlook there and whether we can still see the same level of profitability that we've had seen or whether the lowest, the best part of it is now done. And maybe if I can just add a little comment as well, or a quick follow up on David's question on the runoff gains. I got quite confused by all of the different numbers you said on the runoff gains. I was just wondering if you could give us a percentage, what the impact on the combined ratio was. And to be honest, it would be very useful to have that in the press release or the presentation. But if you could give us that number, that'd be very helpful.

Thank you. Okay, let me answer right away on the claims.

Or the, okay, natural catastrophes. Well, now as for natural catastrophes, I have to say that it's, you know, it's difficult to make a forecast, you know, at the end of the year. But if you consider the trend we have, four or less, we should have the same cost that we had because of natural catastrophes in 2020. So in 2020, we had 390 million euros of costs due to, let's say, consequences of natural catastrophes. So what we have recorded at the end of September, we have 270 million euros. So our prudential estimate is to reach a total cost which will be very similar to the one we had in 2020, around 390 million euros. Okay, of course, we will see what actually happens. As for the recovery rate, Unipol record, you're right, there are minor changes, minor variations. 25% on average, if I'm not mistaken, of recovery on the gross assets versus the 29% that we had in 2020. Also, in this case, you know, it depends on which kind of files have been processed at that time because, as you know, we have, you know, a multi-layered, you know, portfolio. We have different types of credits with guarantee, with no guarantee. And, you know, for example, one of the components is that in this part of the year, so in the second half, I have to say that We basically focused on the portfolio, customer portfolios, I mean, acquired by BPER. It was almost 1.2 billion euros gross, which is what we have paid, 8 cents. So if you consider, I mean, the money paid, the recovery, if you will, percent rate is even higher. Then the previous portfolio, it was exclusively the Unipol Banker portfolio that we paid 20 cents. Now, these percent rates are, I understand, much higher than what we paid for, but also than what we may have recovered by selling them as a whole block on the market. So we continue, let's say, driving along the pathway because it has given us the possibility to completely remove, to start at a zero Unipol net financial position. They have already reimbursed all the loans that they had received from Unipol and also a small part from Unipol's side. So the total amount at the beginning was 300 million euros. So now, as far as Unipol REC is concerned, we have a gross portfolio, which is now worth 2.8 billion euros. We also have some net amounts in the balance sheet, totaling 370 million euros. So total coverage is 87%. let's say the value we need to recover in order to neutralize the effect of the loans, well, the minimum level is 13%. Now we have more than double, so we will once again keep implementing this strategy because we think we will quickly recover the capital invested and maybe we can also do even better than this in the future. Now, as for the impact of the runoff concerning the provisions on the combined ratio, let me check. It's basically five points on the car business and 5.9 points. By the way, when I say, okay, I mean the motor business and the CVT, And then we have 5.9. The average is 5.4%. Okay, back to Matteo for the motor pricing. Now, as for the average premium, let me be even more accurate and precise. I'm now talking about the entire portfolio, okay, so the so-called individual but also the group level. There's a comparison within September the 30th. Reduction is between 5.5% and 6%. You mentioned 4.5%, but it depends on the season you use to make a comparison, because from the 31st of December 2020, the reduction is 3.3% on September 30, 2021. On the third quarter, so from the end of June, we see a stability of the average. And this is due to what I said before. So if you have already used the voucher, well, the renewal price does no longer take the voucher into account. So let's say that in this case, there's an upfront, let's say, increase. Of course, you also have to consider discounts administered or managed by agents. But in general, that part of customers, I mean, they have a monthly, let's say, payment. There's a tariff increase versus what has been paid the previous year that does no longer take the voucher into account. There's a small number of customers. I mean, it's smaller and smaller. They can use the voucher. And these are the customers who didn't use it, let's say, with the first opportunity. Now they have a second chance until the end of the year. So they use a voucher, once again, that has an economic value which represents 8% of the premium paid. So that part, I mean, that component determines the reduction of the average price rate. But there's a renewal without voucher and renewal with voucher. The one without voucher will be even more important. So this justifies the stability of the average premium from June to today.

Next question from the regional conference is from Andrea Lisi from Equita, please.

Good afternoon. I have one question on the contributions you expect for the fourth quarter.

In the first part of the year, I mean, things went very well. So considering the plans,

but also considering, you know, the past data. In the fourth quarter, can we see further write-offs in terms of real estate? And then back to the net financial position that I can see in the slide. Does it include the payment of the dividend in October? And can you also talk about the discount concerning Unipol security? Okay, let me answer on the life business. Now, the life business had an ordinary development. I mean, the abnormal behavior concerned the 2020. There was a strong variation of asset allocation. So on the life business, I mean, on the assets, there were, you know, capital losses around 100 million euros. So the life margin was taken down to a very low level. This year, this didn't happen. So live business went up to ordinary profitability levels, so in line with our expectations. Now, the variability of this component basically has to do to the operations on financial assets. So Unless you have strong peaks of volatility in the financial markets, we do not expect any change in terms of the ordinary profitability level of the life business.

Now, as for your question on the real estate, I have to say no.

We don't have any evidence on possible adjustments to be carried out. There was, by the way, an adjustment done in the previous quarter. But it was a functional one. I mean, it concerned a deal we are working on now in order to transfer to sell our building. So it's a very specific deal. and hopefully it will be a successful strategy. For the time being, we don't have any other evidence of adjustments on real estate.

There was also a question on the net financial position and FPE.

So as of the 30th of September, It should be included, by the way, in the presentation, but anyway, this is the situation at the end of September. Maybe we forgot a point, because here in the list of liquid assets, we also have 150 million euros of loans to companies belonging to the group. So this is one of the ways we use to allocate some of our liquid assets. So it has to be considered a financial asset because this can be replaced by direct funds or the Unipol-Sci bank system, I mean, overnight. For example, a loan for the business of Unipol Rental. So again, at the end of September, the position is 1.1 billion euros. Of course, I'm talking about the net financial positions. Sorry, because this is a missing point in the presentation. This is what happens before the dividend. If I'm not mistaken, the dividend was 200 million euros. So we go back to 1.3 plus the accumulation of the benefits and profits above. On a pro forma basis, end of September, 1.3 billion euros.

You also asked about the discount.

Well, you know what I think, because I keep sharing this personal of mine. I think this assessment is very irrational from the market. It is not rational at all because, in this case, the note, I mean, the security is still, you know, traded with a 40% discount. I've been doing this for 30 years, and believe me, there's no technical reason behind this because the NAV of the holding company is the following. Okay, so let's, it takes one minute. Now, Unipol holds 85% of Unipol Sai. Based on the current price, I mean, the total capital is 7.1 billion euros. So 85% Unipol portfolio market price. Okay, no other considerations. Well, the value is 6 billion euros. The same happens for BPE. Unipol holds 9.35%. The value is 260 million euros on the market. Unipol also has liquid assets, which is what we've seen previously. When we talked about cash flow and the value here is 1.7 billion euros, debt is 2.8 billion euros. Net financial position is, again, 1.1 billion euros. Now, the deferred taxes amount to 300 million euros, and there's a residual equity value. All the part of debt, as I said before, has already been reimbursed at the Unipol REC, 377 million euros. So if you put all of these components together, Well, the value is 5.8, maybe 5.9 billion euros. If you also want to think of the holding company costs in the next 30 years, the cost is 30 million euros a year. Net of taxes multiplied by 10 years, it will be around 210 million euros. So once again, same final value, 5.8. 6 billion euros. Price share is 7.9. Now, I don't know why people exchange or sell them for 4.6 instead of 7.9. So once again, as I said before, this is a technical lack of rationality. So this is the best comments I can find on the, well, holding discount. So once again, I simply think it is a non-rational, let's say, behavior. Don't forget that Unipol Group, I mean, all the assets are here. I have just described them. We don't have any direct risk to undermine our position. Maybe the only one is the investments in stakes that we did in the past. But, you know, the only item which is not listed, Unipol REC, you may take it down to zero. So from now on, you can say, okay, I won't recover any euro from Unipol REC. Well, anyway, we have 5.3 billion euros, while the capitalization is 3.4 billion. So the difference is 2 billion euros, and I don't know how this can happen. So again, I think it's an opportunity for those who make investments, because the profitability of OnlyPol Group, well, it's something you are very much familiar with. it may change in the next business plan, but of course it won't be lower than the level we had in the previous industrial plan. This is it. Thank you. Next question is from the conference in English, Sudham Sabuta from Societe Agenera.

Hi, thank you for taking my question. My first question is regarding the P&C expense ratio. So can you just provide some color on why the P&C expense ratio improved so sharply in Q3? I mean, if you look at the ratio, it was flat year-on-year in 1H21, and then in 9-month figure, we see a 20 basis points improvement. So what has happened over there? My second question is regarding the reinsurance program. So can you just provide some color or some thoughts on how we should look at the reinsurance retention for next year? I mean, given that the reinsurance rates are rising, should we expect a higher retention going forward? Any thoughts on that would be very helpful. And my last question is just a sort of a query. I mean, I was reading somewhere in the Italian press that the regulator is looking at the Unipol Banker disposal because the PPER has not fulfilled some of the prerequisites. So does that have any implications for you? Thank you.

Thank you so much for your questions.

Now, as for the expense ratio, you know, usually the third quarter is sort of misleading because of some technical reasons. I mean, the expense ratio, net of insurance, is calculated based on the specific premium, while the part concerning commissions is based on how much money was collected. So Q3, usually we have low, I mean, not much money which is paid, but the premium go a different evolution or development versus collections. So if you make a comparison between H1 and then nine months expense ratio, well, almost always you think, I mean, the situation has improved it, The expense ratio seems to have improved because of the technical issues. But if you make a comparison versus the nine months of 2020, there are no major changes to comment. As for the reassurance program for next year, well, right now we are talking about this with the reassurance program. certainly the renewals. So it's a little, a little too early to imagine the renewal conditions. Let me repeat what I said before. As for 2021, the conditions that we have negotiated at the end of last year are, of course, much more protective for reinsurers than they were in 2020. Because, for example, all of the recoveries, all of the collections we managed to have in 2020 and 2021, given to us by Reassurance, well, these amounts of money are very big. So Reassurance, of course, asked us to have more protective conditions for them for the new renewals. As for the last question... concerning, you know, the, well, antitrust behavior on BPER. Well, this is something really not material. Okay.

Okay. And just one more thing.

I mean, BPER... Sorry, yes, please go on.

No, sorry, please complete your answer. I have a follow-up question on something else.

Please complete your answer. Yes, exactly. So I said this is not material because, you know, BPER has a market share. So in Sardinia, something like 56% because of the, you know, Banco di Sardinia, so the local banker. So four or five, you know... Agencies have to be given back, and they're still waiting because there are no purchases available. So, I mean, they're sitting there, I mean, just waiting to be sold. Again, this is not a new procedure. You know, this is not a change of the procedure. Please.

And you had made some comments about dividends. Sorry, the line was very bad, so I missed those comments. But you did make some comments about dividends going forward and under the conditions. So, I mean, is there anything specific to highlight over there? Sorry, I missed what you said because of the bad line.

Yes. Next question is from Gianluca Ferrari from Mediobanca, from the original conference.

Good afternoon, everyone, and thank you for accepting my questions. The first one is, can I have the combined ratio of the current generation of the motor business in the first nine months, and then in the holding and other line, can you tell us about the result of the real estate? Because in the press release... You say that the hotel business is still in trouble. Any strategic updates on the Gruppo Una, so the hotel business, and what you think you can do about this?

Thank you. Thank you.

Waiting for Matteo so I can give you the number of the combined ratio of current generation. Now, let me answer the question on Oona. So the hotel business, of course, they suffered because of the pandemic. Of course, they suffered in 2020, much less in 2021, if I'm not mistaken. Una Hotels' nine-month result is negative, minus 12 million euros. It was 24, maybe 25 million negative, I mean, last year. So, that's been said. I have to say that our strategy on Una Hotels doesn't change. So, of course, we would like to go back to full operations on the market. So, as to go back to those positive results of that Una Hotels, already reached, you know, before COVID. Now, this is still a collateral, let's say, asset versus the core activity of the group. I have to say that our strategy in the next plan will consist in looking for the best value possible in terms of the quality of the scope of UNA Hotels, At the same time, we would like to take possible opportunities so they, you know, give us, again, the chance to increase its value. Because it's – this asset, you know, doesn't really integrate with the main core business of the group. But of course, it's an asset whose value we want to enhance at best. So today, the hospitality market is sort of frozen all around the world. We had contacts with some global companies that are more or less all around the world. The situation is unchanged. Now, this is not an issue for us, of course. We would have done without the pandemic. If that was possible, anyway, we will go back to profitability now from the strategic point of view. We will, you know, be very careful and, of course, we will keep an eye on the values, let's say, available on the market. Combined ratio material, please. Now, the loss ratio current business, including other technical items on TPL, 74%. On the CWT component, it's 72.2%. Now, as for TPL, there's also one part belonging to the previous financial years, which accounts for around 6%. And on the CWT, it's basically zero. So this is the level I wanted to share with you. If I add the expenses, we're reaching 100. If you reach the expense on the TPL, the total is 97.

So it's 100 on the CWT. You also had a question on the holdings.

the breakdown of the real estate. It's a little complex that I don't have here, but let's say that in the holding we also have the accounts from BPER and they have specific components, for example, all of the analysis on the balance sheet of BPER and then I mean, Adriano will give you details.

Okay? Thank you. Next question from Alberto Villa, Intermonte, please.

Just one question on the investment policy. Slide 10, I can see the breakdown of investments at nine months. Real assets of private equity went up. positive contribution generated also by private equities. So I see here 2.5. Now, is this going to be dramatically bigger in the next years or so? So is this one of the key points in the plan that will be well presented in 2022? And what about the, well, let's say, contribution of this asset class in the first nine months? We explained some time ago all what we wanted to do on the general asset allocation, so reducing BTPs, investing in core European bond, and mid-high rating buckets, and investing in real assets as well. Now, in terms of contribution to asset allocation, well, BTP is one thing for the market to have. A different thing is the real assets because this is a niche market. We have increased or improved our exposure there, but, well, frankly speaking, this will never be the final destination of all of these markets. these investments that we are doing or will be doing in the fixed income universe. So as of today, we're really working or we're doing some, you know, in-depth analysis, and then we will reveal this during the presentation of the business plan. Real assets do play an important role, but their contribution to the asset allocation from a size point of view will always be small. versus what the fixed income securities may have. Now, in general, the contribution from this asset class leads to a profitability, which is the final one we have today, which is around 3% to 4% as a whole. Now, in the future, of course, there will be an increase of private equity and a decrease of, let's say, infrastructure, which is characterized by much lower rates. Well, this contribution may be growing. But in terms of asset allocation, in terms of incidence, well, this incidence will never be significant again. because it's a market that presents relatively limited opportunities. You have to carry out a careful selection activity, so all in all, the possibilities of investments are reduced.

Thank you. We don't have any more questions. Mr. Chamberlain?

Okay, then. So thank you so much for participating. Thank you for sharing these questions with us. And I don't think there will be other conferences before the end of the year. So we will be talking about the accounts at the end of the year, next February. Thank you so much. Enjoy the rest of the day. Bye-bye.