Sampo Oyj

Good afternoon, everyone, and welcome to the Sample Group third quarter 2023 conference call. My name is Sami Taipoulos and I'm head of investor relations at Sample Group. I'm joined on the call by Group CEO Torbjörn Magnusson, Group CFO Knut-Dana Al-Saker, and CEO of IF, Morten Torsrud. The call will feature a short presentation from Torbjörn followed by Q&A. A recording of the call will later be available on sample.com. With that, I hand over to Torbjörn. Please go ahead.

Thanks, Sami, and welcome, everyone. Our third quarter was very much a continuation of the previous ones. The headline numbers are dominated by very strong momentum in our operations and our strong development in our focus areas on the one hand, but also of a second consecutive quarter with natural perilous events in the Nordics. I'll comment on both, of course. I'd like to comment upfront also that the so important underlying margin trends are unchanged in the Nordics. We continue to be able to price slightly ahead of claims inflation and are able to keep an extremely high retention level. Claims inflation is stable or even receding slightly. And in total, the development of our portfolio is a very positive one. Beginning with our momentum in the Nordic operations, we are at the moment growing in business lines that we really like, and I am particularly pleased to see growth picking up in private lines. Car sales are still low, but we are basically keeping market share despite this and growing in personal risks and home. Our digital channel is performing well and online sales grew by 9%. I think the growth in Nordic home insurance is a very positive one. The overall insurance was impressive since the number of people changing homes at the moment is low for natural reasons. Not forgetting profitability for business area private, I should mention that the combined ratio is .7% despite the elevated weather claims. Zooming out to the total P&C picture, the Nordic market has remained disciplined and our claims inflation fell marginally to the lower end of the 4 to 5% range. We had some 90 million euros in weather effects in Q3 and operationally our focus was on supporting our customers. The weather claims were mainly related to one very large Norwegian storm, Hans, and also to a smaller cloud burst in Oslo. It's part of the fundamental idea of insurance to be diversified and see these events for what they are. They will happen once in a while and need to be priced for and reinsured. From a financial perspective, one has to remember though that in P&C's 23 year history, we have had these kind of extreme weather events three, four, five times with a number of event free years in between. So trying to draw conclusions from so few events is difficult. Nevertheless, we are monitoring the layer of smaller events carefully and adjusting pricing accordingly and locally, of course, where exposures are the highest. It's important to remember that we write 12 month policies in our industry and reprice annually. The diversification we have works in several dimensions. We write business in a number of geographies, certainly, but also in multiple lines. And we tend to reserve conservatively. This quarter, we have some runoff gains from an inflation reserve we set up last year, as well as some ordinary positive settlements from large industrial claims. As we have had so often in the past, and I suspect often will have in the future. In the UK, the uniquely high monthly rate increases continued and the market is catching up with claims inflation. Monthly price increases were in the mid single digits, while claims inflation remained high but stable. Hastings is, as always, prioritizing profitability, but has still managed to grow customer account, even in motor slightly. With an operating ratio of 90.5 percent for the first nine months, we expect a full year combined operating ratio in the outlook range for 2023, while carrying very strong operational momentum into 2024. I have a separate slide on Nordic claims inflation today, which almost feels superfluous. In property, the claims inflation has now fallen a bit, especially for materials, and the corresponding development for motor is stable. Claims frequency is in line with our expectations and pricing and does not drive any big part of the rate increases. We compare, of course, mainly to the years before the pandemic. And so we continue to implement rate increases ahead of total claims cost development. This means that the trend in underlying margins remains strong, as if P&C improved its nine month adjusted risk ratio by half a percentage point year on year again, and its cost ratio again marginally. Turning to a more detailed view of the UK, we are doing relatively well in the challenging environment, remembering that our business achieves the same ROE as the Nordic one at a slightly higher combined ratios, and that we have growth opportunities of a different kind there. Premium growth was north of 30 percent, policy count in motor is up, and in home we're still growing based on structural changes in the market. We look forward to 2024 with confidence, even though there is still uncertainty around the development of the claims inflation. A few simple words on investments and strategy to finish the summary. Sampo delivered a net investment income of nearly 500 million euros in the first nine months. The short duration, again, of our fixed income portfolio has allowed us to invest rapidly, pushing the running yield of if P&C to over four percent from one point five at the end of 2021. We acknowledge the uncertainty in relying on this for future underwriting, but continue to make the most of it. Then on the second of October this year, we completed the spin off of a mandatum by listing it on Nasdaq in Helsinki. And I am pleased to see that the listing has been well received by the market. And I am excited to take sample forward from here now as a pure P&C insurance group. And with that sample, I think that we open up for questions.

Thank you, Torbjörn. Operator, we're now ready for the Q&A.

Thank you. Ladies and gentlemen, if you would like to ask the question, please press star one on your telephone keypad. Thank you. We'll now take our first question from Jakob Brink at Nordia. Your line is open. Please go ahead.

Thank you and good afternoon. Can I start where you started, Torbjörn, on the premium growth? Could you potentially split up the very high underlying growth in what comes from price hikes and what comes from from new clients or new products to existing clients in P&C,

please?

Martin, do you want to talk?

Yes, I can take that one. Hi, Jakob. I think it's easiest then to look at the six point nine percent figures that we have for the first nine months. I think that's mostly representative. And then you've been saying that we've been pricing up about five to six percent for inflation. So that sort of would sort of be the larger part of that. And then we have a small growth also in number of customers in basically all business areas, but predominantly the growth is coming from from price actions. Then sort of on the customer side, we are supported still by what is still a historically high retention level. But but again, sort of the main growth drivers is price increases.

Which means, Martin, that when we look at public statistics, it seems as if we're growing market shares slightly.

Slightly growth in market share on the Nordic level. That's right.

OK, very clear. On my second question, looking at there's a lot of talk these days around weather and large losses, and especially after two pretty soft quarters also for you in the Nordics, to what extent should we worry about this relatively high level of weather and large losses when it comes to to the outlook for the reinsurance renewal first of January? Is this anything that could potentially cause retained risk levels to go up again? Now pricing given the again, maybe somewhat soft profits in in or lots of quite high large losses over the past few years, actually.

First of all, I think you need to take sort of a longer term perspective when it comes to sort of the development in the nut cut market. As Torben alluded to, we've seen some few events over the last 20 years, but we really need to go back. I mean, 2005 we had Gudrun, 2011 we had Dagmar, now 2023 we have Hans. So it's it's it's something that will be here occasionally. Then, of course, we have sort of the more normal sort of cloud burst that is typically not hitting our reinsurance cover. When it comes to reinsurance, it is a market that has been hardening, of course, for a while. The cat market is very much a commodity market. It's been a profitable market sort of so far. It's more even of a global market. So I think sort of even though the market is hardening, it will probably not have a big effect. And then on the property per risk side, there's been some few large claims in the Nordic region over the last couple of years. But then again, I mean, one need to take a longer perspective. And I think in that perspective, the Nordic region look quite, quite fine. Of course, we have sort of assumptions of this when doing pricing. So, of course, we are sort of passing this on sort of in our pricing.

And the total reinsurance cost for our core programs is like 80 million euros. So that's not a big issue. And we also have the luxury that we have chosen the present net retention of, say, some 30 million euros from a more tactical perspective. We could easily live with a higher net retention or bring it down further lower if that was a good tactical decision against or together with the reinsurance market. So this is this is business as usually in every way for us.

Thank you. My third question, please, on capital, I recognize there's a relatively small buffer from from your current performance solvents ratio of one hundred ninety five down to the current upper end of the range of one hundred ninety. But also, I know you have a CMB later in the year and that model approval early next year. And if we start to play around with the numbers of getting the reduction and potentially taking down the solvents ratio, it could become a sort of a meaningful special payout. Is that how we should look at it, that you're willing to potentially use these capital drivers to pay out or is it more to basically have more more reported solvency going forward?

Good afternoon, Jakob Knuttonne here. You're right. Currently, with the current solvency target range we have, the excess capital is there, but small or small. And as you know, we'll update our capital management framework later. In terms of the discipline that we have shown in capital management, I would expect us to continue to be disciplined. And the capital management framework talks about excess capital either being used for buybacks, special dividends, both we have done a lot of over the last few years, bought on acquisitions, which we also do from time to time. And I expect those three uses of excess capital to remain also going forward.

Okay, thank you. And my last question, a small one. You write that you bought a few top Denmark shares in the quarter. Could you tell us what price you bought it at?

It was bought in the market. It was a tiny amount and nothing new to say about that. Okay,

fair enough. Thank you.

Thank you. And we'll move on to our next question from Yudish Jitore at Autonomous Research. Your line is open. Please go ahead.

Yudish, it's very difficult to hear you. If you're wearing some headphones or something like that, could you try to change the arrangement? Should we take the next question in between and then let Yudish come back in the queue?

We'll now move on to our next question from President Lekhani at HSBC. Your line is open. Please go ahead.

Hi, thank you very much for taking my questions. The first is on the cost ratio. I can see the trend on a nine-month basis, but on a Q3 it was a considerably better result year and year. Is that simply due to sort of timing of expenses or can we take that and assume that that was a genuine improvement this quarter?

Because Morton Torsdorf completely ignores managing the costs over quarters and sometimes pay more and sometimes pay less, for instance, of IT investments. The annual number is what you should look at.

And we still have a target of 10 to 20 basis points on a full year. That could be

higher. It could be up quarter in Q4 year and year, I guess, on that basis. The second question is more of an I for 17 question. Can you just tell us how the IFI is meant to develop over the course of the next year, directionally and sort of on an absolute basis? That would be useful. And the final one is on the prior year releases. It sounds like most of it is one off, but it's been two quarters where you've had quite strong reserve releases. Is there anything we can assume that was more structural and that beyond the sort of general guidance?

There is half of the reserve releases were from the inflate course reserve that we set up for inflation last year. And then the large the settlement of large losses in the industrial that made up part of the rest. That's now and then. But we we seldom have a negative item of that.

Is there any more inflation reserves left?

We are always sort of prudent reserve. I think that's that's what we typically say about that. But what told me most talk about was a special reserve that we put up in second and third quarter. But of course, we have still reserves to handle inflation, of course.

If I understood your question on I for 17, it was about insurance financing, common expense. Is that was that correct? Yes, that's correct. There's a few few elements there without going into to sort of significant detail. But but unwinding of of discounting effects is basically going to be sort of unwinding of of last year's. Discounting in the combined ratio fairly stable quarter over quarter, as you've seen seen also this year. So no sort of need to give any specific comments that that will materially change going forward. Same with with the indexation of of annuities, also a fairly stable element. And then you have the effect of of from changes in discount rates, which obviously will be stable if there is no change in discount rates. But you saw we have sensitivities from that in our in our I for 17 intro material, and I think also some in in the investor presentation from today. What happened during the third quarter was that long euro rates where we have the highest sensitivities increased slightly. So long euro rates, if they go up, it will mean a more meaningful positive impact on the on this particular part of of the insurance financing common expense and obviously the other way around. If it if it if it drops the second highest currency sensitivity or rate sensitivity here is Swedish long rates and we will sort of come back with a little bit more granularity on the on the sensitivities that we so far have published where it's basically a basis point up and down on the interest rate curve on average to give you a bit more granularity on how that sensitivity plays out, particularly in the euro and Swedish curve.

That's very useful. Thank you.

We'll now take our next question from Vinit Malhotra. The line is open. Please go ahead.

Yes, thank you. I hope you can hear me clearly. The main question I have is on inflation and thank you, Torbjorn, for a slide number 10 today on your comments. I'm just curious about the wage inflation topic given, you know, even in properties, as you highlight in your slide, labor is sort of the bigger chunk. And you said here a statement that visibility on salary and cost inflation gradually improved. I'm just curious to hear some more thoughts on wage inflation generally, because that seems to be a topic that can have longer term implications. And obviously you have to reduce some of your inflation reserves while still saying that you're confident. I'm just curious to hear your thoughts on the topic of wage inflation and how this plays out when you see gradually improved visibility. Thank you.

It's Morten here. I can comment on that. I think what we have this year that is a bit special is that we already know the wage inflation sort of through the Central Union negotiations in Sweden and Finland also for next year. So that is giving us quite a bit of visibility in terms of development of wage inflation next year. Then, of course, we also have sort of the usual sort of negotiations with suppliers that always gives us good visibility on future inflation when it comes to repair costs and so forth. So I think that's something that is positive and a little bit sort of different than what it would be in the normal year that you have sort of two-year agreements with unions in the Nordics. And then as I've seen, inflation for us is easing a little bit, so it's now more in the lower range of four to five percent. Motor stabilizing property going a bit down.

And even Norway and Denmark, similar approach? Not similar

arrangements in Norway and Denmark, but I think we still have good forecasts also there sort of for where wage inflation will move. And of course for us, it's more important than the negotiations that we do with the body shops where we sort of constantly are sort of setting prices for also next year. So that gives us already a lot of visibility on pricing into next year.

Remember, claims inflation never exceeded five percent in the Nordics and for almost all lines it was three to six percent at the most. So we never had a period when we hit our clients with extremely high rate increases.

Thank you. Thank you.

Once again, ladies and gentlemen, as a reminder, if you would like to ask a question, please press star one on your telephone keeper. Thank you. We'll pause for just a moment while waiting for them to queue in for questions. Thank you. We'll now take our question from Freya Kong. Your line is open. Please go ahead.

Hi, thanks for taking my question. It sounds like you are getting a little more relaxed on the claims inflation outlook in the Nordics. How long do you need to see this trend normalizing before this moves potentially into lower pricing for your customers?

Of course, never relaxed, but Morten will give you the right answer.

Yeah, I think sort of claims inflation and also sort of claims frequency very much has developed as we have anticipated. I mean, first claims frequencies have come back more or less to pre-COVID levels just as expected. Claims inflation has of course been high in the historical context, but due to the fact that we're sort of having a lot of future looking agreements with partners, we've been able to predict it with a quite high degree of accuracy. Then looking forward, I think sort of it will be at an elevated level also sort of the coming year or two if you just look at sort of the wage increases that that will have in the Nordics. I mean, that will continue to sort of be above a longer term sort of average. But again, as Torben said, I mean, we've never seen sort of really the extreme levels that you see in other parts of Europe. So we've been always sort of talking about the peak of five to six percent infl- yeah, peak of sort of four to five, perhaps a little bit more than five percent inflation. Now it's more towards sort of the low range of four to five. So yeah, I think that's sort of the outlook that we have.

Okay, thank you. My next question was on Hastings. I think the guidance would imply still quite a strong Q4 operating ratio better than what you've done this year to get to the target for the full year. So how should we think about the trajectory of the earn through into Q4 and 2024 of these higher rates? And I guess once you hit this target range of profitability, how are you thinking about what's the competitive landscape like in the UK to push for growth from there?

The important development is the rate increases of three, four, five percent per month now for five or six months consecutively. Claims inflation has stayed at 12 percent in our view. And of course at some stage these lines will cross and we will have earnings from the excess rate increases over a period going forward. So that's the important development and exactly when that happens depends on the claims inflation going forward. Then the beginning of your question was more purely mathematical. Knut, do you want to expand a bit?

I mean the outlook for the full year with a combined ratio or operating ratio between 88.9 obviously means that we will see some of the benefits which Torben just alluded to in Q4. That's needless to say. And also of course continuing into next year.

Okay, thank you. And then sorry, just final question if I may. I think you alluded to it in your introductory remarks, but how are you thinking about the attractive pickup in yields when it comes to underwriting and pricing? Surely this at some stage is coming into the overall ROE considerations which might allow a more aggressive combined ratio?

I think the jury is out on what the interest rates will be at the end of next year and underwriting decisions are annual decisions. They work for the next 12 months so we have to be careful not to be too much influenced by instantaneous changes in the financial markets. At the moment we haven't changed our stance on rates.

Okay, thank you.

Thank you. We'll now take our next question from Jennerig at ABG. Your line is open. Please go ahead.

Thank you for taking my questions as well. I have a couple of ones. The first one is to your position. You have a very strong underwriting profitability. How do you see your annual growth in volumes versus sort of your improved pricing and seeing the claims inflation coming through? So your rate increases. How should you think about them, volume versus prices going forward? How should they be picked up, so to speak? That was the first one. The second one is on the PE portfolio which sort of limited down the road probably and you took some work down on next year. I can see in your disclosure. So how should we think about those PE investments when it comes to your excess capital, not necessarily next year but down the road in 25 or 26? Your industrial gross written premiums should be growing by about 40 percent. Could you just more fast about the price versus volume in that business line? And finally on Hastings, could you update us on how you think about retention or your own sort of retention for premiums next year in that kind of business? Thank you.

Everyone wants to answer your first question. I'll give you the first answer. Now our main purpose in life is of course to grow profits and we do that by growing the underwriting profits mainly and the rest will follow, which means that your question is basically in for the Nordic smart and Turskiris job, isn't it? There will always have to be a balance between increasing rates, improving the combined ratio, reducing costs and on the other hand increasing volumes and that's not a theoretical decision. That's the decision that he takes every day for every segment that he's in charge of. So that's the question. More to add to that.

I think sort of little to add on that. So I think I'll rather comment on the industrial part. Industrial growth, I think also there, remember we are reporting on sort of gross written premium and that's always a little bit sort of volatile from quarter to quarter and in particular third quarter is a small renewal quarter in industrial. So I think it's more fair to look at the 13.1 sort of being sort of the -to-date figure where all of that growth is coming from either price increases or value increases. On the totally industrial business area, new versus lost customers is actually marginally negative. Then in the third quarter in particular there was also there's a little bit of movement of inception dates. So some technical effects in that respect sort of driving up sort of third quarter growth in industrial which was a similar effect actually sort of in the negative direction on commercial. So again it's better to look at the nine months figures that's more sort of representing the underlying and underlying growth. And again all coming from rate increases or value increases sort of insured value.

Hello, Janne Eriksson, here on the PE. There's really nothing new to say in terms of our plans for those two remaining financial investments in sample PLC. We're not in control of the... There's neither NEXI because we don't own NEXI shares. We own a part of a company set up with a private equity firm that is a special purpose vehicle for basically only NEXI shares. And when that is exited we will get our money back and obviously it will add to the excess capital. So there's nothing new on the timeline of this but you are right that there was a smaller negative effect from this investment in the Q3 and you all can see how NEXI have performed in Q4 just following the share price since it is an SPV we're owning that's directly linked to NEXI but nothing new on the timeline.

And finally your fourth question on Hastings retention. Not sure that I heard all of it but the UK retention in the UK first of all retention is a prioritized number for us. We understand how important it is for costs and actually also on keeping the right customers. Hastings has understood this from the very beginning of its well 12-13 year journey and has very very high retention numbers in the UK context. The UK context is normally such that the retention numbers are significantly lower than in the Nordics. The large companies probably have something like 10 percent lower retention numbers than in the Nordics. Take that as a very round number. But Hastings has made an effort from the very beginning to keep customers to find ways of keeping customers also not to use first year discounts as has now been prohibited by the pricing reform last year in the UK. So we never had any problem with that or had to address an issue arising from that. Hope that's an answer to you.

Perfect. Just one follow-up. The reinsurance share or the quota share you have in the UK is still very high. Do you intend to lower it or is this the level you are as comfortable with?

We're too comfortable. For the long term it's going to be lower. But then it's a tactical decision together with all the other reinsurance programs that we buy. So it doesn't have to happen immediately. But it's not there for the long term.

Okay thank you.

Thank you and we'll now move on to our next question from Triffenhuis at Barenberg. The line is certain. Please go ahead.

Apologies if this has been addressed. I joined the call a little bit late. But it's on the private growth which accelerated. I think you had a slide highlighting that. I guess what was the key driver there, Hastings, about the volume versus price dynamic and how much of that can mix up late into next year. Is that growth sustainable? That was my question. And then on Hastings, clearly you expect the operating ratio to be below maybe 80%. Given that this is what you need to get below back to your target guidance for this year in Q4. So in that level then the right one to expect into 2024. So that means somewhat below the 88% you had originally guided to. Thank you.

Good I'll start with the question on the private growth. So we report .3% growth in the third quarter. And prices as we say is about five to six percent sort of on a sort of total Nordic level. So clearly most of the growth is coming from pricing. Then if you just for the Swedish mobility business where we still see a little bit of a headwind due to still failure of new car sales. The growth in private would be .8% in the third quarter. So we have sort of growth in number of customers. But of course the largest growth driver is still pricing.

When it comes to Hastings just to be clear on the outlook for the year it's 88 to 90. I'm not sure I heard you right. Just to make clear it's not below 88. So it's 88 to 90. In terms of targets and ambitions for the various segments going forward after the three year strategic period will obviously revert to when we have a CMD.

And may I please ask if the new targets will be annual or will be a three year target if I may. We don't have time to answer it. Let's revert

to the new targets when we have a CMD.

We'll wait for that. Thank you.

Thank you. We'll now move on to our next question from Asporn at Danske Bank. Your line is open. Please go ahead.

Yes, thank you and good afternoon. Thanks for taking my question. If I may ask on your motor insurance and the imported claims inflation, just looking at the Swedish Corona being relatively stable for at least a couple of months after being under significant pressure. I know it's early days but I was just wondering the 45 percent claims inflation you mentioned obviously in the lower end now. How big a driver has imported claims inflation been within motor, within building materials? How would that have looked if the currency was stable? And a second question looking at the Norwegian motor insurance market, at least the statistics that I have available seems to have been around seven percent year over year repricing on motor on your side. Quite a big difference between different players in the market. Obviously I only have average numbers and there might be issues with the official data in any case. But do you see anything in some sort of some competitors being more aggressive on the motor side? I guess lowering their or deterring the underwriting to take market shares. Other players being more rational seems to be so in the statistics.

Thanks. Yeah I'll try to answer your questions here. First of all just to repeat sort of overall inflation 45 percent and then we've been saying that motor inflation more on the higher end of that and property lower than that. Weak Norwegian currency unfortunately is not the new thing. It's something that we worked on sort of for many many many years. So we're quite used to sort of that and of course it has an impact over time in terms of sort of spare part prices. But this is something that we have a very sort of granular view at. It varies from producer to producer sort of but it's it's this is our sort of core business sort of monitoring this on on on the monthly basing and basis and making sure that your price for it. So of course if the weak Norwegian currency continues then of course that will mean that inflation will continue to be at a bit more elevated levels. But again this is this is business as usual for us to sort of work with that and price for that. When it comes to reported claims inflation numbers and and you asked about Norway in specific specifically it's always difficult to comment on what people report in the market because sometimes people confuse claims frequency with inflation. You can have mixed effects which you typically have sort of if you're in the COVID period or not. So so we do not see a significantly different picture in in Norway. Obviously you have the weakening Norwegian kroner that's that that we talked about but but there's nothing special about Norway that makes it very different than than the other Nordic countries. And claims inflation for us when we look at real inflation sort of comparable claim types is comparable sort of now across most of the Nordic region. Then to competitors action I don't think sort of we comment that that much.

But there is a simple answer isn't there Morten? Retention levels have not changed.

We still have sort of a very very good retention level which is still sort of very high in in the historical context Steven.

Okay fair enough. If I may follow up just on the on the FX side. So if I look at the repricing that you've done obviously taking into consideration the the FX happens. If we sort of look at the potential stabilization of the of the Swedish kroner which seems to be the case considering your repricing would there be an increased possibility improvement going forward from that or would that just be peanuts?

Let's see I think sort of I mean we're not following the sort of daily movement on FX sort of again for us be more look at sort of the the actual price increases we with specific OEMs on specific car models so it's sort of for us it's a much more granular approach much more sort of long-term view and of course FX in the long run has an impact but but we don't need to look at sort of the daily FX trading so to speak.

All right thank you.

Thanks. And we'll now move on time expressing from Alex Stevens at City. Your line is open please go ahead.

Hi yeah thanks for taking my questions. Just I think Torbjorn at the start you mentioned something about adjusting prices for smaller events and exposure errors. I just wondered if you could give a little bit more detail on this. Is this an appreciation of a different trend of losses than you've seen historically because commentary from some of the competitors suggest that some of these losses are just stochastic and then just following up on the questions on implied Hastings Q4 operating ratio obviously homes in area that you've grown very strongly in. Are there any specific weather reinsurance programs that you have there and how should we think about you know exposure to some of the storms that we've seen in the UK recently for Thanks.

Every natural perils event flood windstorm gives you new information about which parts of your geography is sensitive to that like areas along rivers or next to mountains and we learn from that and price that's why I used the word locally I think in my introduction. The total natural perils element of pricing in the Nordics is not very big so these are small changes to most policies unless you are unless we learn something completely new just about your specific house that we didn't know before. So this is an ongoing process and we learn from every new event but it's we're not talking about any any large effects. It

was Hastings and Q4 there is a reinsurance program in place for property excess of loss reinsurance program although obviously a number of events would mean a number of of of net retentions which which would impact the profitability and just to be forecast for that we do assume a normal weather pattern and not a number of of weather events in our outlook so they are not included as normal assumptions that then of course the property book is fairly small still but growing in terms of the relative importance of motor claims inflation for example.

Thanks can you is it possible to give the level of retention on that program?

I think the the if I remember correctly it's seven million sterling.

Okay okay thanks a lot.

Thank you we have no further questions in queue currently as a final reminder if you would like to ask a question please press star one on your keypad thank you. There are no further questions coming in so I will hand you back to your host to conclude today's conference thank you.

Okay thank you all for your attention and we look forward to seeing you soon.