Vienna Insurance Grp Ord

Ladies and gentlemen, welcome to the today's VIG conference call and live webcast. I am Matilde, the chorus call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mr. Hartwig Müller. Please go ahead.

Yes, very warm welcome from Ringtoon in Vienna and thanks for joining our call with information to the main topics we have prepared for you. So we already last week announced the outstanding performance of our group for Q1 to Q3. So today we have the chance to deepen the information about this very successful first three quarters of this year and which was also announced that we already raised the outlook for our profit before taxes for this year 2025 to 1.1 to 1.15 billion and Liane Hirner, our CFO, will then give more details to the topic of the results of the first three quarters. The second big topic, and we know that there is big expectation also from your side, that we today are ready to give you first information about our interest in Nürnberger and we also released information that the public purchase offer which ended on the 21st of November this year had an acceptance rate of 98.38% so out of that Gerhard Lanner he is responsible board member of VIG for this project he also will give some information in detail about this topic. Myself, I will then follow with information about the new strategic program in the name of Evolve28, which will be the new strategy for 26 to 28, and which will not only further strengthen our group, but mainly will focus also on the long-term profitable growth Today I will offer you the structure, the main topics, and I have to excuse that the targets to this strategic program will be approved by the supervisory board next week, so we will come to the detailed targets back to you as soon as possible after the approval of next week. We also are happy and glad that Peter Höfinger, Deputy CEO of Vienna Insurance Group, is also attending this meeting and is also ready for questions from your side after our presentation. Saying this, I hand over now for the first topic about the performance to our CFRO, Liane Hirner. Please go on.

Thank you, Hartwig. Let's start on slide four with the key figures over the first three quarters this year, which highlight the ongoing strong performance of VIG. Insurance service revenue of $9.7 billion is up by 8.6%. Here, both P&C and Life & Health show top-line growth of more than 8% each, And I will go into more details on that on slide six in terms of the individual market developments. Profit before taxes is pre-announced last week and despite the goodwill impairment taken already at half-year for Hungary increased by 31% to 872.8 million. Main driver for this outstanding profit before taxes growth in the third quarter was an excellent technical result in P&C, supported by low net combined ratio. The biggest contributor to this more than 200 million additional pre-tax profit in absolute terms was Czech Republic, followed by Austria in the special market segment. VIG's P&C net combined ratio improved to 92.1%, driven by favorable weather conditions. Our strong capitalization is reflected in a solvency ratio of 286%. Compared to the solvency ratio at heart, we are 278%. The SBR of roughly 4.1 billion remains fairly stable, mainly due to the slightly higher capital requirements for non-life, life, and health insurance, reflecting the increased business volumes. The own funds of VHG of about 11.7 billion increased by almost 4% or more than 400 million euros in the third quarter. This is driven by operating earnings and the positive development also on the capital markets, resulting in higher market values of our investments. The 4-in-0 ratio, excluding transitional measures, stands at equally very strong 267% and increased also compared to the half year. It is clearly above our warranty target range of 150 to 200%, which does not consider transitional measures, and this also underpins the capital strength and the resilience of our group. Now, on the next slide, we show the gross written premium development by segments. Premiums overall increased by 8.6% to 12.5 billion euros. Double-digit growth rates were recorded in Poland, plus 13.5%, and the special market segment, plus 18.4%. The strongest contribution in absolute terms is coming from the extended CE segment, plus 314 million euros. where especially Romania, Hungary, Slovakia, and the Baltics made up for close to three-quarters of the additional premiums. Special markets, mainly driven by Turkey, as well as Austria, Poland, and the Czech Republic, all increased their premium volumes by more than 130 million each. In IFRS terms, this relates or translates into a very solid insurance service revenue development, which is shown on slide six. Here, in line with gross recent premiums, insurance service revenue also increased by 8.6% to 9.7 billion euros. I would like to draw your attention to the extended CE segment. Insurance service revenues of overall 2.87 billion euros already exceeds the level of Austria. Again, it's the market in the extended CE segment, for example, Baltics, Slovakia, Romania, and Bulgaria, performing extremely well. In the special market segment, it's the dynamic business in Turkey. Despite hyperinflation, which accounts for the significant increase. This segment also includes Germany, Georgia, and Liechtenstein, with Germany and our live and non-live companies in the risk there, contributing 140 million in insurance service revenue. Last but not least, Austria, Czech Republic, and Poland, all three with solid growth rates and strong performance also in the first three quarters this year. The dynamic top-line development of our group, supported by Benin weather-related claims, translated in the third quarter into an exceptionally strong increase of our profit before taxes. On slide 7, you will find a short summary of the results development and the figure for the next weather-related claims recorded in the first three quarters. Compared to the about 338 million in last year, in the first nine months last year, which were related to storm Boris, we recorded only 160 million of weather-related claims so far this year, thanks really to the absence of the severe lab cut events. As already mentioned by Hasek, the strong performance of our group so far this year provides us with the confidence to raise the target range for the group profit before taxes between €1.1 billion to €1.15 billion for the whole year 2025. Finally, I would also like to highlight the rating upgrade by Standard & Poor's, confirming VIG's excellent A-plus rating and raising the outlook to positive. This was driven by our progress in broader diversification and followed the announcement of our intention to acquire a controlling stake in Nuremberg, which was very positively received by Standard & Pulse. With this, I hand over to Gerhard, who will now share his insights to Nuremberg with you. Gerhard, please go ahead.

Thank you, Liane. Let me provide you with some background and also my personal take on the Nuremberg transaction to explain you the strategic rationale and why we are highly confident that this is an excellent fit and will increase shareholders' value over the mid and long term. The following slides in this presentation will substantiate my top-down view and provide you with further details on German market and Nuremberger. Let me draw your attention to the disclaimer on page number eight and specify that we are still in the non-disclosure phase of the due diligence. And let me stress out that any figures published by Nuremberger are to be seen as national gap German accounting principles which are not comparable to IFRS 17.9. Well, earlier this year, VIG was approached by Nuremberg management whether we would be interested to start talks about potential strategic partnership. Given the attractiveness of the German insurance market for VIG as a special market, with a high insurance density and penetration, While being one of Europe's largest and most mature markets, well governed by Baffin, we entered into these discussions with a clear aim to increase our exposure in Germany in combination with our local company, just recently mentioned by Eliane, Interisk Life and Non-Life. So it should be clearly stated that this is not a market entry, but this is an expansion on an existing market that is, with the VIG portfolio for 35 years plus. After first talks, both sides quickly realized that joining forces and simplifying the shareholder structure would be the most efficient way to return Nürnberger back to a profitable and stable company. With a state-of-the-art IT landscape to best leverage on the strong brand, and the sales footprint in and across Germany. From our perspective, it became clear right away that Nürnberger Management has a clear strategic vision for the company to become a profitable player in the German market, with a clear focus on prevention, occupational disability, and a restructured non-life portfolio. Well, against this backdrop of the strong commitment of Nuremberg's management, the cost efficiency program started by them back to black for the non-life part, but also the further diversification potential through the partially complementary life insurance portfolio and the experience in turnaround and IT transformation that VIG would bring to the table, we intensified our discussion we strongly prepared for the non-binding offer phase, and we were finally granted exclusivity for detailed due diligence. And in this due diligence, we clearly found ourselves confirmed in our basic assumption, which was further supported by the publication of Nuremberger's half-year's result that the manager meant is well on track to deliver. Right from the beginning, it became clear that the solid solvency position of Nürnberger is, of course, combined with the attractive brand, the country-wide operating sales force, and the strong determination of the local team to get back to the historic level of profitability, a very attractive asset. The unrestricted Tier 1 of 1.9 billion euro will strengthen VIG's resilient foundation for further expansion in CEE which clearly remains the strategic focus of our group. Through this transaction, right after closing the deal, all Tier 1, Tier 2, and 3 limits will increase as Nürnberger has become part of VHC Group and therefore provides the potential for further growth in CEE without diluting existing shareholders. At the same time, The risk profile of the SCR of Nuremberg will provide a buffer when it comes to VIG's sensitivity of shifting interest rates downward out of the Austrian live spec book. Most importantly, the investment can be financed from VIG's own liquid funds, providing us with the flexibility to optimize our funding structure in a more opportunistic way and taking benefit of deleveraging the last periods. In addition to VIG's own funds, there is also a 500 mil revolving credit facility in place. Given the spirit of local entrepreneurship at Nuremberg, the multi-channel distribution system across Germany and the conservative reinsurance policy We are very confident that the multi-brand approach with a strong Nürnberger brand combined with the additional scope for further diversification is going to support our operations in Germany in a profitable way, providing a resilient internal financing structure source when it comes to the future expansion in CME region. As we are convinced that biometric risk in connection with occupational disability is a core competence that will be increasingly relevant to support our business in different Central and Eastern European countries, the addition with Nuremberger team and their know-how in this field is just a perfect fit for VIG. In terms of cultural fit, with Nuremberger being an independent insurance group for the last 140 years, The entrepreneurial management style as well as the historical proximity for Germany and Austria will provide a good foundation for Nürnberger to become a strong member of VIG. In summary, we had a chance to look into the books of Nürnberger and are confident that the company's turnaround will be successful and through the acquisition from VIG truly supported by our involvement. So given, first, VIG's experience in turnaround non-lag portfolios in challenging market environments. Second, VIG's experience in IT transformation, especially in Austria, where the digital landscape is very similar to the ones at Nürnberger and was successfully completed in 2023. A strong Nürnberger management with a clear vision how to generate consistent cash streams for VIG's further growth in Central and Eastern Europe, and VIG to leverage on the know-how of Nuremberg in biometrics and occupational disability, VIG will benefit from the Nuremberg's strong solvency position from day one, enhancing its internal financing capacities over the mid-term. Please note that after the announcement, intention to acquire Nuremberg Standard & Poor's, as mentioned by Liane, upgraded our rating A-plus with a positive outlook, with a particular focus on our financial strength and diversification potential for further growth in Central and Eastern Europe. If you allow me now, I would like to go to hand over to Hartwig Löger, CEO, for the presentation about the strategy.

Thank you, Gerhard. I will now give you the first insight about the structure of the new strategic program for 26 to 28. As you all know, we are still in the end spurt of the group-wide strategic program VIG25 ending this year, and I think with the expected performance we raised as we already set to 1.1 to 1.15, we see also the success of the activities of our running strategic program. With Evolve 28, as you can see also on the slide number 16, we used also a name which gives the first intention what we are looking for. It is not the big revolution. but a dynamic evolution which is built up on the success of the last years and also the current performance we can show as VIG. The frame which is shown here is in our understanding of the, I would say, USB model we are living as VIG. Our understanding is not being a big tanker in a centralized form, but being a dynamic fleet with responsible ships and this framing which is shown here in these four parts will secure that this fleet has a common direction and a strategic performance also in the upcoming years. To start, maybe also in the description, You see on the bottom values and principles. I will go deeper afterwards, but we already were sure that it is the need maybe also to evaluate and also to a little bit, yes, renew the values and principles for the upcoming years and the challenges we are seeing in France. On the left side, with country portfolio and company strategies, this is more or less the backbone of this strategic part for the next years. What is meant, and I will also show afterwards, there are 50 individual company strategies. So over the last year, we developed under a common structure and on the basis of deep analysis of each market, a common strategic implication for each market of our group and then the CEOs of the companies in the markets developed their company strategies for the next three years and they were following a common structure of five strategic fields. This means that this framework for the next three years already has a detailed definition for each company of our group in targeting and action plans for their activities to improve the performance also for the next years. You see the group programs. We defined also five group-wide programs. These programs are not initiatives as we have defined it in VIG25. Because initiatives have been the offer to the companies in our group, if they will also join these initiatives, the five group programs now we are focusing are really for group-wide activities seen, and they are coordinated by the holding or also competence centers out of our group. On the right side you see also the fourth part which is ongoing in CO3. Here we define our activities in communication collaboration which is needed to really bring added value out of the best practice and the innovation and creative projects in between the group and cooperation which is focusing also to find the synergies in between the companies working on one market. On the next slide, you get the overview. I will not now present in detail, but we clearly defined the five values for our group. Plurality, which is the basis for our fleet. We have not only 50 companies in 30 countries, We also have a very high diversification in between also the different markets, the different brands, also the different sales channels. We are active all over our brands and companies. We have the basis of our 33 billion customers already, which will be improved and increased also by incoming Nürnberger customers in Germany soon. And this is the plurality basis which is also our understanding that this plurality in the activity of a fleet is the added value of our model. Entrepreneurship, following this plurality idea, means that especially the local entrepreneurship, the self-responsibility in between the management of the ships in our fleet, and the companies it is to strengthen the motivation and identification of all our managers and leaders. Responsibility on one side of course to the society but also as we know out of the challenges of climate change there is a broad basis in our understanding that we want to make sure that our economic value today is not in any form destroying the future of our society. Excellence, which is clear in the focus of our company activities on the customer basis to make sure that in all our services, products, processes, we are focusing also to deliver excellent services and products and that's the base of our performance. And passion, it is needed also to create and find out the right form that we are clear for our 33 customers the, yes, I would say best partner in all our solutions. The principles on the next side we also evaluated to make sure that the description in the way how we work together in this group and I'm open to say that the interest also in the partnership which was developed now also in the purchase of Nürnberger, that Nürnberger is, it was also said by Gerhard Lanner, it will be a perfect strategic fit also in the understanding of a group-wide common activity also in the future. Now a little bit deeper in the content on slide number 19. You see here the five strategic fields. This is the common structure of each individual strategy of each company of our group. The one field the most important and the first one is the expand of the customer base and also the enrichment in the activities that there we will focus in all the companies in also cross-selling and up-selling potential areas. out of this base we already have and this base we also want to increase in the number of customers. The second topic in line is to enhance the distribution footprint. As you know we have a very strong diversified sales channel activity and including also bank and direct sales it will be the basis to improve on a better way and also to use also the challenges and advantages which will come up in the development, also on digital basis, and also we will come further on to that in artificial intelligence solutions in services which are provided in this form. Next part is products. We enlarge also the product offerings. It was mentioned that here we use the collaboration in between the group really to improve also the broad plurality of offerings we have. And also beside this, there will be added services also as basis to strengthen our customer experience. Next is operation. This field, this strategic field in each of the strategies of the companies is focusing on the effectiveness and effectivity of processes in our operations and also with improving the automation in between these processes in best practice forms in between the group. And last but not least, The fifth and very important base is employees to foster the people who are already active and to find also the best experts in our companies which are needed for the innovation transformation we see all over our base. On the next slide, here you see the five already mentioned group programs which were developed also on a broad discussion basis in between the CEOs of our group. Here we build on the relevant trends. We also discussed on broad basis the trends already existing and upcoming for the next years and the challenges and out of that we clearly defined the main programs on one side sustainability which is an ongoing program which has already been started three years ago but there will be again a strong focus in delivering also solutions on the basis of underwriting as our key activity but also in the asset management and operations field and which is important also for VIG to not only focus on the ecological part but also on the social part which includes society our customers, and also our employees. Capital management. In the understanding of the group, it's very important also for the efficiency in between the capital management of our companies in the group, and Gerhard Lanner is leading this capital management program, starting in a pilot last year, and we will work out for the next three years that we have a very professional team also management of the upstream of dividends out of the performance of our companies. Banking cooperation, which is mainly driven by the backbone which we have in the strategic partnership with Erste Group, but we will not only work on the improvement of this strategic partnership with Erste, where we are active already in seven markets, together and we also see the opportunity all over the group in all the other markets to expand with additional partners beside the seven markets of ERSTE. Artificial intelligence I think it's clear for all of us that there has to be a focus in the activities which already is on a broad basis. I sometimes already mentioned that in the activities of our VIG Accelerate program, more than 50% of the projects which are brought in by the companies in this kind of platform of project for digital solutions, we have more than 50% already on the basis of AI. But it is needed, and this is what we will focus the next three years, to optimize also the efficiency in the use of the use cases in between the group and all over the group. And the fifth program, focusing on health, which we see in all the markets in different forms as a high potential for developing not only on product but especially on service basis. And there we also will have a focus in analyzing and then also supporting our companies in a group-wide form on these solutions. The next slide, Evolve28CO3, I already mentioned, I will not go deeper, just repeat. Collaboration, here shown in the symbol of the spider net, this is really supporting the added value created out of the broad innovation and creative basis of all our companies. This is really, I would say, a boost in the way of creating new solutions in all forms in between our business. Cooperation, yes, inside we say ensures independence in the way that there is a clear focus in the optimization of the cooperation in between our companies in one market. For example, in the back office optimization between Wiener Städtische and Donau in Austria, also other companies in Czech, Slovakia, Poland, and there is a big range where we can deepen also the optimization, partly also optimization of common activities. communication already mentioned, we have as information already provided more than 40 communities which are active in between our experts and specialists in between the group, so there is also a very strong interlink between our fleet. Last but not least, on the slide number 22, I offer to you also knowing your expectation. And we already mentioned by myself and also Gerhard Lahner, there is still a little need of patience from your side. Why? We have now the performance of Q1 to Q3 for this year, and we also raised our outlook for the result of 2025. Regarding now the program Evolve 28, which I shortly presented in its structure and content, there will be the next week our supervisory board meeting where we will approve the targets for the next three years, including also the targets coming up from Evolve 28 strategic programs. What we can offer is then next week after the supervisor report meeting, there we will also then comment and declare the targets and the figures for the next three years to you. Peter Hüffinger and me, we will join also in the dance program all bank conferences which are offered in London, in Frankfurt, in Hamburg and also the others where we then hope that we will have the chance also to present to you maybe also in personal talks and not only the program but also the targets and some interesting discussions. The closing of Nuremberg, and I know that there is a big expectation also regarding the details, KPIs and targets from the inclusion from Nuremberg, but we still have the need that the closing, which we expect till the second half, beginning of second half of 26, there will be then the start of the financial integration which cannot be done before. But immediately after this financial integration phase, we will also have the chance then to integrate the targets of Nürnberger also in the strategic targets of this Evolve28 program. And then we really can not only open, but give a deep insight in also the calculations and also the valuation of all this influence of integration of Nürnberger. So I know that there might be a bigger expectation but there are also the legal frameworks we have to declare and out of that we are also open now to answer your question and we are looking forward to the first questions you have. Thank you very much.

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and 2. Questioners on the phone are requested to disable the loudspeaker mode and eventually turn off the volume from the webcast while asking a question. Anyone who has a question may press star and 1 at this time. The first question comes from the line of August Markan from UBS. Please go ahead.

Hi, thanks for taking my questions. I have too many, but let's start with three. First one on the combined ratio. This year, the nine-month combined ratio benefited a lot from benign weather, and last year we had worries. So in the last two years, we kind of had the opposite extremes. So I was wondering if you could tell us what you see as a normalized combined ratio level for the group going forward. Then the second question, rather simple one, apologies for that, on your strategic plan. I'm not sure I fully understood the timeline. You said that next week you're going to have the approval from the board. Are you then immediately going to have an event or publish this or what exactly is the timeline? And If, again, on the CMD, you said that the financial targets are going to be published there. Could you just tell us now what the KPIs are, not the numbers, but what the metrics are that we're going to be looking at? Because I think your last strategic plan didn't have a lot of financial KPIs, so I'm not sure what this one will include. Thank you.

Thank you for the question, for the combined ratio. Yes, you are quite right that the comparison of last year to this year is quite difficult, as having Boris, which was a gross claim of 620. But you know, and we have presented this, that we do have a quite conservative reinsurance policy. We are still able... over the last years in the re-insurance market keeping low self-retention. So the last year for the first nine months we had a combined ratio of 94.3. This year it is considerably better with 92.1. But you also see that the difference if you compare the amount of the nut-cut events is not so significant as we have as a mitigation element reinsurance, which we are willing to buy in quite a bigger amount. What was beneficial this year to our result, and this is outstanding, is the phenomenon of having less frequency of small to medium-sized events. So this has had quite an impact on our improvement of our loss ratio, the mild climate and the absence of this frequency of small to medium events. We are not impacted in a year by the big events due to our reinsurance. So therefore I think you see the limited volatility of our combined ratio from last year to this year, having a very big event and having this year an outstanding event. So I think between 92 and 94 is what is our combined ratio to be expected going forward.

Okay. Thank you, August, for your question. I will take question two and three from my side. First, yes, there will be also an information immediately next week when we have the approval from the supervisory board to the targets 26 to 28 next week. And what you can expect, there will be a very transparent basis also in the information about these targets. It will be a target about the growth, a target about profits. It will also include combined ratio, which you asked before to Peter Höfinger. And there will be also a target clear on the return on equity as an operative return on equity. And there will be also targeting the solvency ratio. So these are the targets which will be discussed in the supervisor report. and then we will clearly make it transparent to the capital market about the targets we have for the next three years out of our program.

Next question comes from the line of . Please go ahead.

Hi, good afternoon, and thank you for the presentation. Yeah, I would have just one question and it's, forgive me if I'm being a bit impatient, usually you disclose these things with half year and full year results, but I would still like to hear your view on future investment income expectations. So the question is, do you expect future investment income to be roughly at the same level as this year? or do you expect this line of your P&L to improve in the future, or maybe given the changing interest rate environment to even decrease? I'm just wondering what your thought is on developments in the future. Yeah, thank you.

So, Liane, I'm happy to take your question regarding the investment income. What I can say is that we have a very positive development in the investment income in the first three quarters. So this year, so no impairment, no one-offs. Also, we have a positive development of the interest rates, especially in CE, also, for example, including Turkey. And due to the increased business volume, also interest income or financial incomes is increasing, so I would expect a positive development also on this side in the upcoming quarters. I hope this answers your question.

Yes, thank you very much.

We now have a question from the line of Yudesh Sikure from Autonomous Research. Please go ahead.

Good afternoon, everyone. Thank you for taking my question. I've got two questions. The first one is on the top-line development. I was wondering whether you could provide a split between life and the main lines in non-life, you know, like multi-TPL, other property, et cetera. And then secondly on Neuenberger, could you tell us, I mean, how long will the turnaround of this business take? And are you able to share – what your view is of the sustainable earnings power of that company, please. Thank you.

Okay, I'm happy to take the question about the developments of the business lines. If you look on our non-life portfolio, so we are growing all over the group in health business. And what is very positive to see, we are growing by 12% in health. What is very positive to see that we have a quite very good dynamic in health business in Central Eastern Europe. We see a growing demand by our clients and by our markets getting health insurance and we are having quite innovative concepts and also offering this market to market depending on the framework of the social security laws there. We do have a growth in property and casualty of around 5.6% all over the group. Also here you will see a stronger growth dynamic in Central Eastern Europe as this is also linked to the overall GDP growth and the economic dynamic and as you know there is a quite positive GDP growth in Central Eastern Europe where we are benefiting with our property business. When we come to the motor business we have to differentiate between motor TPL and motor-owned damage. In motor TPL, it is around 11%, and in motor-owned damage, it's more than 6%. The background here is over the last years, we have seen in Central Eastern Europe quite an overproportional salary inflation differently to maybe Western Europe increased salaries more or less go immediately into consumption and not just on the saving book. Part of this consumption also goes in cars and buying new cars. This is the road driver for motor-owned damage but also in motor TPL. If you look on The life business, I think you also asked, overall the life business is growing by more than 8%. Here it is the classical life business which is growing, but also in unit links we are closer to 6% of the performance. So here we have, I think, a quite attractive dynamic. The same true what I said for the other business lines. The driver of this growth is Central Eastern Europe, where the demand for old age savings is growing, and we also see this as one of our further future potentials of growth in the years to come. I hope I have answered your question.

Thank you. Thank you very much.

Let me take the second one on Nuremberg. I will, in my first part of the answer, I will refer to publicly available information. Nuremberg itself has announced that the turnaround for the non-life park will last until 2027. We have seen quite a strong development this year, supported, of course, also by favorable claims development, as well as a positive market cycle on the German side. insurance market when it comes to non-life profitability. So we trust the management to be well on track with the turnaround of the non-life part. The IT part will take probably a little longer nevertheless, given the status in which we are as of today. I think that we will have the chance to have more deep dive with Nuremberg management on on that issue when the closing has been done. Nevertheless, we are aware of that this will, of course, also long-term decrease the cost base. So I think that from our point of view, I think that the Nuremberg management is well aware of that we are expecting them, when you ask me, to return to historical profitability levels As you know, not only you are impatient, but we as well. I guess this is also well known to the Nuremberg management.

And can I ask a follow-up question, please? Yeah, so you're expecting the closing in the second half of next year. So do we have to wait until then to get, let's say, IFRS? 17 numbers for Nuremberg, basically.

I would like to give you a different answer, but the answer is clearly yes.

Right, okay, thank you.

You're welcome.

As a reminder, if you wish to register for a question, please press star and 1 on your telephone. The next question comes from the line of Thomas Unger from Erste Gruppe. Please go ahead.

Yes, good afternoon. Thank you very much also for taking my question. I'll connect to the last question and answer on Nuremberg. What can VIG do here to advance and accelerate the transformation process for Nuremberg? And you already said that the timeline remains about the same as what Nuremberg But when do you expect the first dividends from Nuremberg to VIG? That will be my first set of questions. And upon closing, do you expect any significant one-offs to be incurred or immediate major investments that you anticipate for the second half of 2026? And then also I'd like to ask you now that you're in the process of this takeover, how does that affect your growth strategy in Central and Eastern Europe? Are you able to take advantage of any M&A opportunities or other growth opportunities that may arise in the next one to two years? I don't know, you haven't said anything or any details, haven't given any details on the capital hit that you'll be taking as you in attractive opportunities in Central East and Europe in the next one or two years. And if you allow me to, I'll also ask you on the dividend, the upcoming dividend from 2025 earnings. Will the Nuremberg acquisition, in any way affect the management board's decision process leading up to the dividend proposal from 2025 earnings?

What can VIG bring to the table? I think that in different markets, and especially in challenging market circumstances, I guess that VIG has shown that we know what it means to turn around, especially non-life portfolios. So I think that what we see is that the Nuremberg management is very well in place and know what they do on the restructuring and turning around the normal life portfolio. Nevertheless, I guess that we can bring some know-how. In addition, I think that I'm not sure if everybody is aware of, but VIG has taken advantage of an IT transformation program recently. executed by Wiener Städtische and Donor Insurance the last years ended in 2023. And what VIG can bring to the table is that given the fact that the IT landscape is very, very comparable between VIG in Austria and Nuremberg IT landscape, we are very confident that we know what needs to be done. First point. Second point is when it comes to talents. We have the team that was successfully doing this transformation in the DACH region still on board. You just should probably know that we decommissioned a lot of old systems in Austria, which finally gives you also going forward quite some flexibility on technology. on the digital journey that, of course, you need sooner or later. Second of all, dividend expected. I think that, in general, our intention is that Nuremberg will keep on paying dividends in general. Nevertheless, of course, we, and this leads to, I guess, your third question, one-off investment. We will need to judge what is the best way to finance the long-term IT transformation program of Nuremberg. Nevertheless, we don't expect this to be a big upfront amount, but probably be spent over several years, and then we would probably judge on what is the most efficient way to deploy capital in Nuremberg or within the entire group. I guess the fourth question is twofold. One is the financial part of the flexibility for taking further advantages of unorganic growth or M&A transactions in Central and Eastern Europe, and the second one is the managerial question. I will take the first part. So definitely, given the deleveraging that VIG has gone through the last periods and the financial flexibility that we have from our balance sheet, I do not see any immediate restriction out of either the transaction nor anything upcoming. The managerial part of the answer, I would ask probably Arti Klöger to give you the answer.

Okay, thank you Gerhard. I will take also the question about our possibility also to invest and go on in the growth of Central Eastern Europe. This is clear the target and we also, including our investment in Nuremberg, we are ready and also in part of the program of Evolve28, we are still interested in possible profitable growth and also investment in the enlargement of our activities in Central Eastern Europe. And as we expect, maybe coming up soon also with some targets we have also already on our radar. I think the most important things also for that question, our investment in Nuremberg will not have any impact to the dividend payment out of the outperformance of 25, which is expected. So we have the clear definition of our policy to dividends. So there is the floor, and we are clear that with the performance on the operative side, there will be also the definition and the increase on the dividend payment for this year. I hope this gives security to you.

Yes. Thank you very much.

We have a follow-up question from the line of August Marcan from UBS. Please go ahead.

Thanks for taking my follow-up. Two quick questions on Nuremberg. One is, with this acquisition, you're getting some businesses that maybe are not core for Vienna, like the banking business. Have you considered what you want to do? Do you want to keep the business, keep Nuremberg as a whole, or are you looking to dispose of the non-insurance assets that Nuremberg has. And then the second question, you're also bringing from Nuremberg a sizable investment portfolio and their asset allocation is quite different from yours. They have much more equities and a bit more real estate than you do and much less bonds. Have you considered what the plan is here? Are you going to move them to your strategic asset allocation or are you going to leave it as is? Thanks.

Thank you very much for those questions. The first one is probably still too early. Definitely the focus of the acquisition for us is the core business, which is the entire insurance business of Nuremberg. So this is the focus. The rest we will see further down the road when we are able to judge immediately after closing. The second one is on the asset allocation. VIG will not move away from the conservative asset principles that we have in place. Of course, there is an interlink between the asset portfolio of Nuremberg, so we will first very thoroughly analyze what are impacts, but definitely we are supposing to continue VIG's conservative investment approach in the long run. Thank you. helping.

Thank you.

You're welcome.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Nina, head of investor relations, for any closing remarks.

Thank you for your participation in today's call and your questions and interests. As mentioned by our CEO, our targets will be announced next week. Investor Relations is available to provide support and assistance with any further questions or requests for meetings. And I hope to be in touch soon. In the meantime, goodbye.

Ladies and gentlemen, the conference is now over. Thank you for choosing Coruscant and thank you for participating in the conference. You may now disconnect your lines.