Unipol Grupo Spa

Good afternoon. This is the Corosco Conference Operator. Welcome and thank you for joining the Unipol Consolidated Results at June 30th, 2026 conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to send the conference over to Mr. Matteo Laterza, CEO of Unipol. Please go ahead, sir.

Good morning and thank you very much for attending this conference. Before opening the floor to the question, as usual, let me make some remarks on the first half numbers that you saw this morning. They were numbers that confirms the strength, resilience and consistency of our business model. We were able to deliver excellent results across all key metrics with the net profit reaching more than 900 million up almost 50% year on year. More importantly, these results reflect not only a very strong earnings growth but also a significant improvement in the quality of our earnings. Our performance is based and supported by all the core drivers of value creation, technical profitability in non-life, Profitable growth in life and resilient recurring investment income and strong capital generation. What I would particularly like to emphasize in our ability to combine business growth and improving profitability is in non-life premium increased by almost 4%, while the combined ratio improved to less than 92%, allowing us to reach ahead of schedule the target originally envisaged for the end of the strategic plan. This is a particularly important achievement because It demonstrates that growth has not come at the expense of underwriting discipline. On the contrary the quality of our portfolio continues to improve. The result is even more remarkable considering The operating environment compared to the first half of this year we had a larger impact coming from NATCAT that were offset by lower impact coming from large losses. The combined effect of the two is pretty in line with the numbers of 2025 and is way in line with the expectation and the assumption of our budget and industrial plan. Life business is also performing very well. We delivered strong premium growth, positive net inflows at almost 800 million, and a significant improvement in profitability. This recovery in earnings is being driven both by the technical component of the business and the investment income, while improving portfolio economics continue to support future profitability. Finally, investment performance was very strong independently on the effect of the SpaceX IPO, that is a non-recurring component of the investment income, but Even not considering the impact of SpaceX, the investment yield of the portfolio is close to 6%. That is very robust, significant and persistent in terms of contribution coming from dividend and coupon. Finally, capital position remains a key competitive advantage for us. We closed the first half with a solvency to a ratio of 259%, that is the official number. But as usual, I underline and remark the importance of the 290% that is the solvency position of the insurance group. That is a very strong number and paved the way to be very consistent with our policy. Metrics and target in dividend distribution policy that, as I said last time that we met, is based on the 930 million for the dividend expectation for 2026. and pave the way to the dividend capability for the rest of the industrial plan and in general for the next future. Having said that, I am here as usual with Enrico Sanpietro to answer to your question. Thank you very much.

This is the Coruscant Conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-note telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question comes from Tomas Onyedu with Kepler-Chevreux. Please go ahead.

Hello and thank you a lot for taking my questions. The first one would be on net financial results. The underlying yield, especially, I'm not talking about the SpaceX MTN. In the underlying yield, both in life and non-life, the return has been incredibly strong. My question would be, I just want to understand what's the kind of run rate we should expect in H2? And the second question is on the health business. clearly there the profitability remains outstanding. But it seems to be that growth has been decelerating through the first two quarters compared with last year. So should we expect a reacceleration in the next quarter? Or please, if you can provide any color on why that shouldn't be the case. Thank you.

Okay, concerning the first question, without considering SpaceX mark-to-market, that as I said before is an exceptional component, very volatile. and it comes from an investment that we did in the past that was very worth to do considering the evolution in terms of market to market evaluation of SpaceX stock. It is not a strategic stake and we will see the opportunity to divest the investment as soon as there will be the market condition to do it. And without considering SpaceX, as I said before, overall the investment yield of PNC and LIFE Not related to the segregated portfolio, gestioni separate, is 6%. The running rate, that is the component related to coupon and dividend, is 5%, because 1% is the component related to mark-to-market valuation of assets that are mark-to-market to P&L. And so, if you want to consider and to extrapolate the investment income for the second half, if you want to be prudent, you should consider only the 5% that I said before. Consider that to this 5%, a very important contribution comes from dividend. Grupo Spa Grupo Spa The dividend component from the run rate you should arrive to a number close to 4% if you want to have an idea of the contribution coming from the investment to the second half of the year. Of course you have also the mark to market of the assets that are booked to PNL that will give a contribution depending on the performance of financial market in the second half of the year. The second question regards the health business. There is a point considering the trend of premium that were in a sort of sense subdued in the first half of the year because the The performance of Bank Assurance and Agent was very strong, but in terms of contribution to total premium, these two components are still not the majority of the premium of the company. The most important component is the corporate, the big contract that we have with big institutions. that in the first half of the year grew mid-single digit. We expect an acceleration in the second half of the year as a consequence of the possible acquisition of new contracts. In terms of profitability, the profitability was very strong and we expect to maintain this trend also over the span of the industrial plan, that means the second half of 2026 and 2027. Okay, thank you.

The next question comes from Michael Hotner with Berenberg. Please go ahead.

Thank you very much. I hope you can hear me. I'll just switch off my ventilator. Congratulations on fantastic results. I had two questions and they come a little bit from listening to your contest a little bit earlier. The one is on cats. Can you talk about what you've seen in July maybe? and the second is on the underlying trends in non-life and the balance between inflation if there is any and pricing and what you intend to do in pricing going forward. Thank you.

Hi Michael, I'm Enrico. So the first question is about the NatCat events. So as you have seen in the first half, the overall amount of NatCat losses was not concerning, so around 150 million. then in July as it happened to Italy France Germany Switzerland between 15 and 20 July there were several convective storms in our estimation this could have an impact that is of course Quite significant, but still not concerning compared to what we put in our budget, in our plan. So, in the plan, the overall amount that we are expecting for net cut events both on motor-rider damages and property is around 550 million euros. And... We think that we are on track to stay in this amount or lower. The second question is about the underlying trends in non-live generally. Of course, when it comes to motor tripartite availability, the price momentum is going down on the market, and this is something that is true also for us. The price increase is lower than the previous year. in the region of 2% and as you have seen in the first alpha the motor combine ratio is slightly worsened but the motor tripartite liability is exactly the same level of combine ratio and the worsening is related to nut cut events on motor rudder damages so this is for the motor business Non-motor has become quite profitable for the market. This means of course the price momentum is changing and in some cases, for instance in generator party liability, the whole market is decreasing the amount of premium return. that is of course due to the fact that after years in which general tripartite liability was quite a problematic light of business nowadays has become really profitable and so the market has become softer the prices are decreasing and of course also the overall amount of premium written and this is true also for us as you can see our business now that was not increasing is general tripartite liability Thank you Thank you

The next question comes from Antonio Gianfrancesco with Intermonte. Please go ahead.

Yes, good morning and thank you for taking my questions. I have three. The first one is on the agreement with Inter San Paolo for the acquisition of the Banca Montepaschica vault. Because I was wondering if you could help us to understand How fixed is the agreement with Intesa at this stage? If Intesa were to revise the terms of its offer on Montepaschic, should we assume that the terms of the agreement between Intesa and Unipol on Montepaschic are fully locked? Or could there be any risk on changes in price, perimeter or other conditions that could be less favorable for Unipol? The second one is on the dividend policy. because I was wondering if you could give us a bit more color on dividend policy after the very strong capital generation you delivered in the first half. You already generated 300 million of excess capital in this first half on top of the half billion in full year 25. So given the approval of capital increase and the consequent higher number of shares, should we think that your ambition is to Manage stable or growing DPS year after year including 26 on 25 and 27 on 26 and this also even before the first material synergies from the Permonte-Parsi combination start to be visible and the third and last one is on corporate structure because I was wondering if you could give us a qualitative sense on how you think about the medium-long term corporate structure because in theory once Piper and Montepaschi-Carvalho are combined a bank-linked holding inversion could be a way to improve capital efficiency in that case obviously considering the current shareholder situation this let's say action could be dilutive for current main shareholders of Unipol, also making the financial conglomerate exposed to takeover risks. So, do you think that the more realistic path is first to increase progressively the stake in the combined bank over several years before any structure change could be considered? Thank you.

Thank you. Thank you to you. The first question regards the agreement with Intesa San Paolo that we disclosed when we did the conference call in the early of June. The agreement, of course, remains the same. As we said before, we have a cap in the acquisition of the carve-out that is 3.5 billion. once reached this cap we are protected by the cap and so any decision that Intesa San Paolo will take in the offer will follow what is contained in the agreement that means that we will pay half of the multiple that Intesa San Paolo will pay for Intesa for Montepaschi capped at 3.5 billion and this is the point concerning the dividend policy we have a new floor at 930 million that was the 800 million that we disclosed before considering the capital increase that we think to be able to execute within the end of the year and this will be the floor for the future. Having said that We also gave some numbers of the net profit that we could do once we will become hopefully a conglomerate taking the control of Monte dei Paschi and Bitter and put together having the control of Bitter with a total profitability close to 2 billion. and so you can do your math in order to understand which could be the possible dividend policy that we could implement in the future assuming that 930 billion is the floor. Concerning the third question as you correctly said our ambition within The next future is to execute the transaction that we disclosed in the early of June. That means to create a big financial conglomerate that will have an insurance leg and a banking leg of the same size. Grupo Spa Grupo Spa and then depending on our capability in terms of capital generation we look forward over time to increase the stake if we will have the capital to do it and consequently any possibility of inverse merger is not on the table today because as you correctly said it would change quite radically the structure of the shareholding of the company and it is a decision of the shareholders of the company and It is the shareholder meeting that has to take this kind of decision. So it is completely premature to think about this possibility.

Very clear. Thank you.

The next question comes from Andrea Lisi with Equita. Please go ahead.

Good afternoon. Thank you for taking my questions. The first one is related to what you have already stated in the previous answer, so the part that you are willing progressively to increase the stake in deeper, also potentially from the kind of close to 30% at which you will end up following the transaction if successful. In particular, we know that you have derivative position, in particular you have entered into 4.9% derivatives on paper capital at the beginning of June. If you can provide us some update on your expected capital impact if you were to convert these derivatives right now, so the impact on solvency, if you have any indication on that. The second question is on excess cash. We have seen that you are ahead of the plan and the 1 billion target by 2037 is more than visible. You have indicated in the plan that this could use for growth or to be returned to shareholders. Just wondering if the approach used in excess cash has in some way changed with a potential transaction in place regarding Unipol, Bipper and Montepaschi. And the last one is that if you can provide us the most recent market regarding the value of the SpaceX stake. Thank you to you Andrea.

So the position in Bipper today is physically we own a little bit less than 20% of stake and on top of that we have 10% of derivatives. The 20% physical stake is as these two components have a completely different impact on the capital in the sense that today we consolidate at equity Bipper having 20% physical stake on the shares. On the opposite, 10% investment that we have in derivatives are considered as an equity investment in terms of contribution to capital. Of course, if you convert the 4.9% from derivative to physical, the impact would be quite important. As you know, because we say this several times, we don't have the reverse Danish compromise and for this reason and this is a completely unfair position for us compared to what is the treatment for banks having a stake of insurance. having 5% of physical stake in the bank is very hard and means almost 30 points of impact in terms of capital position. So you can understand that for us capital is very important because this capital is put at work at a very high profitability but it is a lot of money compared to what you would invest if you were a bank investing in an insurance company. Considering the excess capital that you mentioned, yes, we are on track to over-deliver the target of the industrial plan, but we have already an idea to put at work this capital that is the acquisition of the carve-out of Monte dei Paschi, of course with the 2.5 billion of capital increase that we hopefully will execute within the end of the year. So we need this organic capital that we create in order to be able and to be in the position to have a very solid capital position to finance the transaction. Finally, SpaceX today at the 30th of June it was 200 million of unrealized gain, today it is almost half of that. But it changes on a daily basis, so It is a very volatile investment and as I said for us it is not strategic and depending on market condition we don't think to take this investment for a very long time.

Thank you very much.

The next question is a follow up from Michael Hartner with Berenberg. Please go ahead.

Thank you very much for this opportunity. Just one question. You mentioned in your remarks that the life profit growth, which was fabulous, came both from investment margin and the technical side. I just wondered if you could explain a little bit more on the technical side what this means and what it could also mean going forward. Thank you.

Yes, Michael, was both of that. If you go to the presentation, you can see that we worked very hard in order to improve the yield of the segregated portfolios by increasing them quite consistently from 3.35% to 3.43% gross. of this number we debated to the policyholder 2.35% that is a net yield that is very competitive with what you can get from the treasury market of other alternative investments and we keep for us 1.08% by increasing it by two basis points the profitability of the technical profitability of the of the investment products on top of that we increase the profitability also in other kind of product categories like for instance the fan premium that was very important and on top of that Also, the investment income gave a quite significant contribution to the total profitability. So, all the drivers of the business line of life gave a very positive contribution to the profitability of life, and this is the reason why the numbers were very strong in the first half.

Brilliant. Thank you.

The next question is from Elena Perini with Intesa San Paolo. Please go ahead.

Yes. Hello, everyone, and thank you for taking my questions. The first one is just a follow-up on this last question about life. Considering all what you have said, should we expect life to incorporate a better run rate going forward? Because if we look at the CSM release, we are at approximately 140 to 150 million users. every six months. So, on top of that, we have the financial income, and it seems that the running yield is going quite well. Then, the second question is on the trend on your solvency ratio of the insurance perimeter, which was very high, 290%, and the an increase of 11 percentage points compared to the end of 25, but a decline, if I remember well, of 5 percentage points compared to March. I don't know if you can elaborate a bit on the moving parts in this second quarter. Thank you very much.

Thank you to you, Elena, and concerning Life insurance, the answer is you can consider recurring the component related to the operating profitability improvement, of course not for The contribution coming from investment income that was positively affected by a very strong performance of financial market in the first half of the year, in particular in the second quarter of the year. On the other side, the improvement that we had in the technical profitability in the investment product and in the term premium product could be considered as recurring. In terms of solvency, at the moment I can't explain the evolution that you mentioned of the insurance group from the 30th of March to the 30th of July, but I expect this to be related to the increase of the investments that we did in BIPER over time. But then with Alberto Zoya, we will go in deep more in the number, and I will revert to you. The improvement generally of the solvency ratio is due to the capital generation contribution coming from the usual business, of course, on one end. We had also in the second quarter of the year the approval of a component of the partial internal model that Concerning the NatCat exposure that gave a positive contribution of 4 percentage points. and then we deducted the expected dividend that we will pay for the 2026 and we deducted also the investment that we did in BIPER after the execution of the merger with Banca Popolare Isondrio in order to come back to less than 20% that is the number at which we are authorized to bid.

Okay, thank you.

For any further questions, please press star and one on your telephone. The next question is a follow-up from Michael Hartner with Berenberg. Please go ahead.

It's just such a great opportunity. I'm sorry to keep you on the phone. The I was discussing with an investor the difference between you, your market leader in Italy, incredibly focused, that some of your peers are more diversified, and the only difference I could think of was because you probably have to pay more for reinsurance or you're less diversified in a way. I just wondered if you can give us a feel for, it's now a benefit, reinsurance costs are coming down, Are we seeing this in our numbers or should we start seeing it next year?

Hi. So, Michael, the overall issue about the cost of reinsurance is not only about geographical diversification of your exposure, but it's about, of course, the quality of your portfolio, the quality of information you provide, and, of course, your underwriting strategy that allow reinsurance to offer better prices. The resource market is soft, has begun to reduce prices already in the last renewals in 2025 year-end. and the market sentiment is about further decrease in the reinsurance cost, of course, unless some events that can change this kind of momentum. So far I think that this is quite probably happening and I think that you can also see in our reinsurance result something that is improving compared to the previous year because of course we were able to reduce prices. and at the same time also to strengthen the level of our cover.

Good, thank you very much.

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Okay, thank you very much for attending this conference. Have a good vacation for who of you will go on holiday, and we will meet again in November for the September results. Thank you very much.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.