Operator: Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Generali Group Full Year 2024 Results Presentation. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions.

[Operator Instructions] At this time, I would like to turn the conference over to Mr. Fabio Cleva, Head of Investor and Rating Agencies Relations. Please go ahead, sir.

Fabio Cleva: Hello, everyone, and thank you for joining our full year 2024 results call. Here with us today, we have our Group CEO, Philippe Donnet; the General Manager, Marco Sesana; the CEO of Insurance, Giulio Terzariol; and the Group CFO, Cristiano Borean.

Before opening for Q&A, let me hand it over to Philippe for some opening remarks.

Philippe Donnet: Thank you, Fabio. Good morning, and thank you for attending our full year 2024 results call for which I'm joined by Cristiano, Giulio and Marco. Before we open the Q&A, let me share a few key remarks with you. These results mark the conclusion of our Lifetime

Partner 24: Driving Growth plan and we are proud to have over-delivered against all financial targets.

It is the third consecutive strategic plan we have successfully completed and our 2024 results further confirm our group is the strongest it has ever been. The operating result at €7.3 billion and the adjusted net result at €3.8 billion for the full year our new record highs, and they have been achieved, thanks to the very positive contribution from all business segments. When we presented our full year 2023 results, I stressed that the return to positive net collection would be one of our priorities. In Life, net flows at year-end 2024 were close to €10 billion. This great achievement, which is unparalleled in the industry, was made possible by our powerful distribution force.

Therefore, let me thank our agents and advisers for their excellent work. These net inflows were entirely driven by protection and unit-linked lines. Our continued focus on underwriting discipline and in-force management has resulted in a further increase in the share of Life reserves related to capital-light products, reaching 71% at year-end. In Property & Casualty, the 7.7% increase in gross written premiums was driven by the positive performance of both motor and non-motor lines which grew in all the main markets where we operate. Our tariff strengthening measures also continued to be effective throughout the year.

This is also reflected in our improved undiscounted combined ratio below 96%, in line with our guidance, even when considering the €1.2 billion effect of natural catastrophes. The underlying trend showcases the ability of the team to successfully deliver. Our undiscounted loss ratio, excluding nat cat in prior years, shows at 1.4 percentage point improvement. This is by far the best in the industry and it would be close to 2 points with the same perimeter as 2023, excluding Liberty Seguros. As Giulio told you at our Investor Day, we are strongly focused on continued improvement in technical excellence.

And this performance shows we are starting the new plan with a very positive momentum also on this front. Looking ahead, we are convinced that the key trends we shared on that occasion will create significant profitable growth opportunities for Generali. In line with the increasing demand from customers, premiums related to protection, Health & Accident continued to accelerate and now account for around 22% of the group's overall gross written premiums. This segment is highly profitable, and it is central to our plan to increase the number of multi-holding customers. We have three key strengths that will ensure we achieve this.

First, the best relationship Net Promoter Score among our main peers; second, a modular product offering to respond to customer needs, and third, a highly effective distribution platform boosted by enhanced usage of data and artificial intelligence. Proprietary distribution is an important cornerstone of our offering. We distribute over half of the policies through agents almost double the average in the industry. When interest rates decline, our agents enable us to transform our Life book when lapses increase enabled us to perform better than the market. As Marco highlighted in his presentation in Venice, our agents are fundamental in capturing growth across our preferred lines of business.

Moving to Asset & Wealth Management. The group's total assets under management reached €863 billion, growing by 32% and thanks to the positive net inflows and the consolidation of Conning Holdings Limited. The operating result of this segment grew by almost 23% to €1.2 billion. At the Investor Day, Woody explained the importance of having an integrated offering between a large life insurance book and our strengthened asset management platform. Fully leveraging this relationship is key for us.

When this management team took over the helm of the group, remittances from subsidiaries were around €2.4 billion. In 2024, they reached €4.5 billion, contributing to the highest net holding cash flow we have ever reported at €3.8 billion. The relentless focus on cash and capital optimization has been one of Cristiano's priorities in the past six years as group CFO. And it will continue to be an essential part of our focus on growing shareholder remuneration. Thanks to this healthy cash flow generation, a solid capital position with 220% Solvency II ratio and the underlying growth of the business, we will propose at the next Annual General Meeting a dividend per share of €1.43, but by almost 12% year-on-year as well as a €500 million share buyback to be launched this year, subject to regulatory approval.

Finally, I would like to mention the further significant progress we made as a responsible investor, insurer, employer and corporate citizen. This will continue with Lifetime

Partner 27: Driving Excellence, which has sustainability as one of its three key foundations. In conclusion, our 2024 financial performance is the result of our hard work across the last three strategic cycles, and we are now already focusing on the delivery of our new plan. We have committed once more to very ambitious targets. And we have everything it takes to succeed and to keep creating sustainable value for all stakeholders while driving excellence in everything we do.

Before we open our Q&A, let me just remind you that we will be hosting our Annual General Meeting on April 24 in Trieste. I look forward to seeing you there, and I thank you very much for your attention. Operator, we are now ready to take questions on our 2024 results.

Operator: [Operator Instructions] The first question is from David Barma, Bank of America.

David Barma: The first one is on the very good performance in P&C in Q4.

So you've improved your undiscounted current year loss ratio by around 1.6% in Q4 compared to the nine months, which was the starting point of the new cycle? And actually, we're even closer to the 2.5% if we account for the fact that manmade losses were higher in Q4. So that's better than your target for the next three years. I realize it's only one quarter, but I would expect the underlying profitability to further improve given the good trajectory of pricing for -- at least for 2025. So can you talk a little bit about this and the Q4 performance versus the improvement expected over the next three years? That's my first question. And then secondly, staying on P&C and Motor line specifically, but would you say most of the pruning is now behind, especially in Italy, and we can now start seeing a bit more volume growth in 2025? And then lastly, on cash, the CMD, I think you suggested you'd get around €400 million of remittances from management actions in 2025, but I would have thought the Liberty Seguros, excess capital and the measures you've taken with Allianz and Genertel would give you more than that already.

So can you please come back on the management actions that are expected to come through in 2025, please?

Fabio Cleva: Thank you very much, David. The first two questions are for Giulio. While the third one is for Cristiano.

Giulio Terzariol: Thank you, David, for the questions. I -- on the fourth quarter development, I will never read too much into slides, beside the fact that this gives you clearly the idea or the confidence that we have as we go also into 2025.

What I'm saying shouldn't read too much into the slides on the quarter because at the end of the year, you have always validation of all the assumption that you have. And so in that sense you get a little bit of a catch-up effect from an accounting point of view in the quarter. But clearly, when you see a strong ending, this means that we have a lot of quality in our numbers. And if you look at where we are standing right now in motor, the undiscounted combined ratio is 98%. So that's a very strong basis.

And as we think about also 2025, we still expect to see rate increases on top of the inflation. So from that point of view, there is room to do even better. To your specific question about pruning, I would say we have a limited situation, we really need to pruning and a situation like that might be Genertel in Italy. In some geography, motor and pruning, we still need to get some additional pricing. I'm thinking about Spain and Portugal.

But fundamentally, we have a strong performance already now, and we expect also to see some further improvement from a very good level in 2025 and beyond. Also non-motor, we are running at a good combined ratio, especially if we adjust for the net-cat impact, we normalize for that. Clearly, on non-motor, we need to be always a little bit cautious because assuming that the nat cat budget is going to be lower, it's an assumption. But I think we are well positioned also if we're going to see more elevated net-cat compared to our assumption.

Cristiano Borean: Hi, David.

So going to the 2025 expectation, I think that what is important to keep in mind is what I was telling you at the Investor Day, where basically the 2024 has been a special year with the €400 million coming from Italy and €200 million coming from Austria. In the 2025, you should more expect something like a capital management action of the order of the, I would say, the €400 million to €450 million, including all the actions, which will entail again Italy as we were highlighting.

Operator: The next question is from Andrew Baker, Goldman Sachs.

Andrew Baker: The first one is on just the CSM operating variances. Are you able to give just a little bit more color on the model refinements that you did in France, Germany and Asia.

And then also related to that, what should we think or how should we think about the 2025 operating variance coming through on the lap side from your methodology change? Any guidance there would be helpful. And then secondly, your fourth quarter Life new business margin was sequentially higher than Q3, which is more positive than you guided at the time. So just curious what drove the sequential development versus what you had expected? And then also, are you able to give the new business value for 2024, what it would have been under your new definition going forward?

Fabio Cleva: Thank you very much, Andrew. The first and the third question are for Cristiano, while the second one on the new business margin in the fourth quarter is for Marco.

Cristiano Borean: Yes, for sure, Andrew.

So on top of what are the lapses effect, which accounts for the €1.1 billion over the total €1.4 billion, the €0.3 billion effect of the last quarter, which are not related to the lapses on refinement are mainly model changes in France related to the way it is treated the movement between unit-linked payment and multi-hybrid product, while some change in an assumption of expense review on Germany. And a more negative development of morbidity assumption in China. These are the main three drivers, which all of them -- the three of them summed up to around €0.3 billion.

Fabio Cleva: Marco, on the new business margins?

Marco Sesana: Yes. So I think the development that we are seeing on the new business margin overall is in line with what we pointed it out as a guidance into the beginning of the year.

So we said we were seeing an improvement of the new business margin across different quarters. So we are coming to the level where we expect it to be, in particular. You know that we have always said that we would have done trade-off versus on volume versus margins and scaling back gradually over the next months, the commercial incentive that we had to improve our collection and that's what we did. So we are at the level where we expect it to be. And again, going maybe I think it's useful also to look forward.

So what do we expect for the next few months, we do expect this level of new business margin going forward. Clearly, we will need to be also tactical and gradually understanding the macro situation on the interest rate to understand when to cut back more on the commercial action and having a good creation of value because I just want to remind that everything is done to create more value overall. So new business margin, new business volumes are in that line. Cristiano?

Cristiano Borean: Yes. Andrew, just to complete on the 2025 guidance, which on the CSM, I did mention before, after having made all these changes lapses hypothesis, we expect a much more stable development of operating variances next year, which will be materially decreasing down to very minor effect, just to clarify.

On the third question on what would be the new business value, new business margin under the new definition, which we discussed also during the Investor Day. You should read the new business value as a €3 billion, so basically €0.7 billion more, with the new definition and the new business margin would increase by 80 bps to 5.4%, hinting into an improvement of 15 to 20 basis points as a margin moving into 2025.

Operator: The next question is from Michael Huttner, Berenberg.

Michael Huttner: Just congratulations, three cycles in a row is amazing. I had three really light questions.

The first is a bit continuation of one of the previous questions on cash outlook. I noticed that in 2024, you had quite a big number from -- or quite a big increase from others. So I just wondered what is that and how much more we could get? And also, I think you had a question that there was a Liberty, there's €300 million left there, whether that's included in the management actions you cited. And then the second is also on cash, Switzerland. I remember you said, mama takes back, and I wondered, is this already starting in 2025? And then the third question is something I think that you said, Philippe, in an interview that you're buying -- you're going to be buying more Italy government bonds.

And I just wondered if you can maybe explain your thinking there.

Fabio Cleva: Thank you very much, Michael. The first question and second one on cash are for Cristiano. Well, of course, the BTP one is for Philippe.

Cristiano Borean: Michael, so the increase in the other remittance of 2024 should be considered also with some effect example of one-off contribution from M&A initiatives like some dividends we received from Malaysia, if I take the example in 2024 on the other.

Don't forget that also, we had in 2023, some high dividend coming from the asset management because of the preparation for the Conning deal. Going to Liberty. Is it included in the management action of the CFO? Yes. We are -- they are there. We are already starting to get the cash back in the first quarter 2025 from Liberty as a first piece and the second one is throughout the year.

On Switzerland, is it already starting in 2025, the remittance? The answer is we are not, we are completing a final step because the very healthy situation of the Life company. Be aware that we are slightly above 250% of Swiss Solvency Test ratio for the year-end 2024. So everything is set in line to prepare, but we agreed to have a 2025 yearly of stabilization and understanding on the full sensitivities with all the numbers to get starting from 2026. As you mentioned, what mama gives, mama will start to ask.

Philippe Donnet: Hello, Michael.

As you know, our BTP portfolio is linked to our insurance liabilities in Italy, and it will always be the case. As of December 31, 2024, the group exposure to government bonds was €35.6 billion compared to €38.5 billion by the end of 2023 and almost entirely in support to our Italian life business. This also includes a €5.6 billion held by Banca Generali. As an Italian group with a significant and profitable life insurance business in Italy. BTP naturally are an important part of our investment allocation.

And as a result of the developments in the markets and positive -- the very positive net inflows for 2024. We are looking into increasing our purchases of BTPs, obviously, in line with our investment policy and with our risk tolerance.

Operator: The next question is from Farooq Hanif at JPMorgan.

Farooq Hanif: Could you please talk about the jump in the Life investment margin? Kind of any one-offs that were in 2024 that we need to take out? And also, you had a very good investment income, too in P&C. So just comment, I guess, around the sustainability of that given current macro.

Second question on margins. I mean when you adjust for your new approach, you're already quite close to your 6% new business margin target in Life. So I was wondering what the path to get there looks like? I mean, is it quite an easy jump from now, for example, in 2025 or 2026 to get there more quickly. And in that context, I noticed there is a big jump in the margin in CEE, you commented on it in your slides, but if you could give us more details about what's going on there, that would be really helpful.

Fabio Cleva: Thank you very much, Farooq.

The first question is for Cristiano, while the second one is for Giulio.

Cristiano Borean: Hello, Farooq. So I think you are referring to the Life investment result when you call the margin. So the effect, actually, if I just check versus the 2023 number in the last quarter, there has been a low reduction versus the 2023, as you've seen, because we had lower rates. And there is an effect which is related to the fact that we are locally adopting in China IFRS 17 locally, which entails to have a single rate to be applied, which has slightly higher interest rates, which are unwinded then in the EFI, which has some more negative impact going forward with a clearly counterbalanced element of the value on the other side.

There has been also an effect, which is a shift from the excess capital from the Life shareholder equity to P&C share on their equity in Argentina, and that shift weights €30 million. So all in all, let me tell you that the investment result for 2024 should be read for our guidance of 2025 of around €900 million, including this effect of what I was mentioning you, higher EFI stemming from this changing curve also in China. So this is what I would mention on that. On the P&C side, I think that we should consider as the shift, I was mentioning from Life to P&C will be recurring for the P&C extra return from Argentina. But I mentioned before that already at the Investor Day, that we should not take into account this volatility stemming around from the Argentina side.

So in a word, which last year was quite positive, the contribution. So I think that our run rate to be projected for 2025, around the €950 million is a good conservative estimation you should plug in with this level of also lower interest rates also in the cash return.

Giulio Terzariol: We can go into the Life side. Maybe first, I answer your question about the jump in the new business margin in Eastern Europe. That's -- but first of all, keep in mind that in Eastern Europe, about 3/4 of our premium are protection.

So that's a very profitable business. And when rates are going down, the new business margin protection goes up. Then we had also some change in operating assumption, that's a positive. And also, we have less inflation on the expense side and that's also contributed to a better new business margin. So we are very pleased with the level, we are pleased with the improvement and also is very important.

We think we can keep this level moving forward. And clearly, we're going to push especially on the potential element in Eastern Europe. Now on your question, a broader scope, I would say that going from the 5.4% that Cristiano was referring before to the 6% that we put into our strategic plan. It's not super easy. So we need to work on that.

You need to keep in mind that our new business margin is already at a high level. So we are starting generally from a high level point of view. It's one of the best business margin you can see clearly in the industry. So from that point of view, there is some work that we need to do in order to go from the 5.4% to the 6%. One element is going to be the mix because over the plan horizon, we expect to see more protection compare, for example, to savings and automatically this should push the new business margin up.

So fundamentally, we have a plan how to get there. But if you ask me, it's a given, I would say it's not a given, so we need clearly to work over the next three years on that. A good part of the story. We have a strong distribution. So from that point of view, we can really control our destiny, but there is some work to do on this one.

Operator: The next question is from Iain Pearce, Exane BNP Paribas.

Iain Pearce: Two, just around the motor business. The first one is on the 98% full year combined ratio, which is a bit better than what I thought you spoke about at the Investor Day. Just trying to understand if there's anything sort of one-off or some favorable experience, favorable PYD in there? Or if you think the 98% is a true sort of underlying level and a good starting point for the 2027 plan? And then the second one is just on the motor businesses in France and Italy. So it looks like they're growing below the level of rate increase or average premium increase you would have been achieving in 2024 you flagged some challenges around Genertel in Italy.

I wonder if you could firstly just elaborate on why that's so challenging in the direct segment. And if you expect those businesses to return to above premium increased growth in 2024 -- 2025, sorry, in France and Italy. If you can elaborate on that would great.

Fabio Cleva: Both questions are for Giulio.

Giulio Terzariol: Okay.

So starting from motor, yes, I would say the 98% is a good proxy for the starting point. So from that point of view, there are no special one-offs justifying the 98%. So from that point of view, you can take this as a reference, and next year, considering the rate increases that we have, which are on top of inflation, we should expect a 98% to be even lower. So we feel very good about the work that we have done on the motor side. There are just maybe two questions marks is Spain and Portugal.

And not because we are not taking actions, but because in Spain and Portugal, we have seen inflation to be more persistent compared to other geography. A positive thing that we are seeing on the motor side is, inflation is coming down a bit, but especially, we see lower frequency basically across the board. And from that point of view, we might expect also to see lower frequency continuing into the next year. So fundamentally, it's a strong business right now with a good performance and also with potential for further improvement. On France and Italy, I would say, in Italy, the situation has been especially driven by Genertel but also outside Genertel, we are not necessarily increasing in motor, the number of policy.

This happens more in non-motor, but think about Italy, Genertel is clearly taking down if you want the number of risks and on the non-Genertel side, there is a slight negative, but this is a reflection, clearly, the effort that we are putting to get to the good combined ratio motor that you're seeing. On France, there was more of a pruning in motor, especially at the beginning of the year. Now we are taking some corrective action also because the performance is very good. So I would expect that as we go into 2025, you're going to see a higher growth, if you want less of a pruning effect in motor compared to what you saw in the course of 2024.

Operator: The next question is from William Hawkins, KBW.

William Hawkins: Just coming back on some of your answers you've already given. So forgive me, please. your Life investment results, the outlook, did I hear you say €900 million for 2025 because that feels very low relative to the €943 million for a business that should be growing. So just could you repeat what you said about the outlook for the Life investment result, please? And then secondly, you've already been very kind on the detail of the new business margin, but the specific impact of the commercial initiatives, they dragged 50 basis points last year. What are you expecting the drag is going to be in 2025? And do we keep that sort of par pursue with the new methodology? Or is there some reason why it might change in the new methodology? And then lastly, please, I'm sorry to repeat again because I was trying to type while you were talking.

The higher exposure to BTPs, are you simply saying that your business will be bigger. So of course, you're going to own more BTPs, or is there actually a suggestion that your economic weighting towards BTPs could be rising?

Fabio Cleva: Thank you very much, William. The first question is for Cristiano. The second one is for Marco and the third one is for Giulio. And of course, Marco, if you want to complement.

Cristiano Borean: William. So let me remind you, when we talk about Life investment results, we are talking about the non-VFA business. Non-VFA business is clearly related to some specific business we are having, but there are also running off pieces of our portfolio. I'm thinking about the Czech Republic portfolio, which has a run-off nature out of that on top of what I told you before. So we stick to this number.

I said always when this estimation are given, we try to make a conservative estimation out of that. But I think the €900 million is a good reflection also of -- due to the fact that the shift from the excess capital in Argentina from Life to P&C itself is only €30 million as a weight on a yearly basis. So this is the outlook. And don't forget that what I was mentioning about you, about the non-VFA, other part of the growth with the Asian change in China, which is having higher unwinding of the embedded cost and guarantees out of that.

Marco Sesana: Yes.

Hi, William. So just to maybe go back to what we intend to do in 2025. Clearly, as you know, we expect all the external environment to be a little bit volatile. So we are planning to reduce those commercial incentives. But we will look into quarter-by-quarter how much it's possible to do.

We want to make sure that we are strong on the value creation. Therefore, we will see how that can be reduced. So we do expect to reduce it. And by the way, this will stay broadly unchanged with the new methodologies of this number. But we do expect them to reduce it, but we are going to be tactical understanding how much is the environment changing and how much we can do.

Philippe Donnet: Hello, William. On the BTPs, I said that the exposure has been decreasing significantly between the end of 2023 and the end of 2024 from €38.5 billion down to €35.6 million. And then I said that we are looking into increasing our purchases of BTP. I didn't mention anything about the exposure on BTP, which is a matter of strategic asset allocation, Maybe, Marco, you want to say something about this?

Marco Sesana: Yes, exactly. So I think William, you remember in the planned presentation, we define what are the main direction of our strategic asset allocation.

You remember that we said we would retain the allocation of the govies. But generally speaking, we would like to reduce our exposure to govies into the medium term. We would like to slightly increase and tactically increase, but over time, our exposure to private markets, so private equity, private credit in particular. So that direction is unchanged. Clearly, we in -- we have defined a plan horizon direction.

Clearly, this is going to change as long as in line with the external conditions, this might be fine-tuned or tweak a little bit over the different quarters. So we are just -- we just said, exposed the general direction to our medium-term strategic asset allocation.

Operator: The next question is from Gian Luca Ferrari, Mediobanca. Gian

Luca Ferrari: Three for me, please. The first one is credit spread sensitivities.

I noticed they went up quite materially, particularly on the CSM. I was wondering if there is anything related to the average rating of the credit book or if there is any other explanation for that? Second is the CSM of Switzerland. If you can give us a bit of color on the 30% decline in this line. And last, on a direct insurance company up for selling Italy, I think in Venice, you have been very clear in saying that M&A is not top priority of the new plan. I was wondering if you are looking at the file or this file is not of interest for you.

Fabio Cleva: Thank you very much, Luca. The first two questions on the CSM are for Cristiano, while the third one is for Philippe.

Cristiano Borean: Credit spread sensitivities, I think what matters most is no specific topic, honestly, out of that about the rating of the book. I think what is also important to keep in mind is more the government spread sensitivity, which we experienced in the CSM, which I think you have seen brought down a material €0.3 billion to €0.4 billion CSM effect only in the quarter. So I would more highlight that there are really no particular specific topic or issues related to the nongovernment credit distribution.

For what regards the Switzerland CSM, I think there is specific topic again to be mentioned. There is a joint effect of a reduction of base interest rates and opening of the spreads versus the government versus the swap rate, which is the baseline rate used for evaluating liabilities under both IFRS 17 and solvency. This creates a kind of leverage effect onto this movement, which was, by the way, for your info, we were at the highest level of bifurcation between the government and the swap spread rate observed there and had also some effect also on the local gap because it is in the way you are making in the resulting, reminding you that our Swiss business, which is left there, notwithstanding a good ALM, has also a long stand nature. So the nature of the government sensitivity to swap spread is extremely high due to the dependency of the matching, which is a peculiar feature if you allow me both of the IFRS 17 and as well as of the solvency, but we are all experiencing in this period when there is the full decoupling between the government bond movement in the rates versus the swap rate, which is a collateralized baseline rate why we are observing this deviation. I think these are the main explanation also going there.

Philippe Donnet: So on your third question, let me remind you first that in our new plan, we have been very clear on our very strict approach and discipline on M&A as we will benchmark any opportunity against share buybacks. Then we do not comment on specific speculations. And as you can imagine, we are very happy with our footprint and our distribution in Italy.

Operator: The next question is from Hadley Cohen of Morgan Stanley.

Hadley Cohen: Two questions, please.

So firstly, thank you for giving the extra color around the average coupon on redemptions for 2024, I think it was 1.3%. You said versus the 3.6% reinvestment rate. Is it possible to give us a flavor of how you're thinking or how we should think about the average coupon on redemptions for 2025, please? Presumably, we should still be expecting investment income to be pushing higher from here? And then second question, slightly linked to Will's question earlier, I think, but useful to see the €2 billion of net flows in the fourth quarter in Italy. I think, roughly split between unit-linked and savings business. Is it possible to give us an update on how you're seeing flows so far in the early parts of this year.

I guess I'm thinking in the context of bond yields pushing higher, not quite as high as they were in '22, '23, but how we should think about the risk of an uptick in lapses again?

Fabio Cleva: Thank you very much, Hadley. Maybe we start with the second question with Giulio on the first quarter development in Life, while the first question clearly is for Cristiano.

Giulio Terzariol: So from a flow situation in general, we see clearly a positive flows into the beginning of the year. When we are focusing on Italy, we are basically breakeven, but we are much better compared to the beginning of last year. So from that point of view, it's normal that after a strong finish into 2024, you're going to have less of a momentum.

But at this moment, in Italy, but we are very confident that we're going to pick up also during the course of the year. So we expect 2025 to have a number of flow in Italy, assuming the situation stays like it is, which is consistent with the 2024 level. So we have a good start to the year because we see clearly that the headwinds that we had at the beginning of 2024 are basically behind us.

Cristiano Borean: Yes. Hadley, so regarding redemption for Life, we are expecting something around 3.2% in 2025, while as an average, sorry, for the group, which is split between 3.5% in Life and 2.2% in P&C.

So these are the two main drivers you should more focused on more than the average per se.

Operator: The next question is from Fahad Changazi, Kepler Cheuvreux.

Fahad Changazi: Two questions, please. It sounds promising on the underlying loss ratio. But could you comment on the expense ratio for 2025.

I think given the change in mix in non-motor versus motor, there was going to be an impact on acquisition costs. But is this still the case for 2025, given we expect some growth in motor premiums. And second question on Solvency II Life in-force returns. Could you give some indication on how that will develop in 2025 given the lower swap rates.

Fabio Cleva: Thank you very much, Fahad.

Both questions are for Cristiano.

Cristiano Borean: Yes. So first of all, when we look at the expense ratio development in the year, don't forget that this year was specifically affected by the so-called Liberty effect. You know that there is this purchase price starting point where there is this mix between what is loss ratio and what is expense ratio. If I just take out the Liberty effect, the expense ratio of the year would be reducing by 0.1%, so 10 bps versus the 30 we are showing.

So that is a better starting point to project starting from next year, which would keep, in any case, a double effect, which we were highlighting already on the Investor Day. Don't forget that in the '25, '27 plan, we are driving through higher amount of non-motor component growth in high-growth countries like Asian countries like India where there is a higher acquisition cost together with higher acquisition cost of non-motor per se, which in the mix is not bringing a material change to what you should expect in 2025 versus what we had in 2024 adjusted for the Liberty. So if I can see the question -- or the second question on the Life in-force in light of the movement of the rates, we should have lower unwinding, which would mean something in the order of €0.2 billion less effect out of this unwinding. Clearly, the growth of the business, the improvement of the profitability out of that will be a counterbalancing element.

Operator: The next question is from Rhea Shah, Deutsche Bank.

Rhea Shah: Two questions for me. The first one, just going back to P&C and the loss ratio improvement that you saw in '24. You said that this was split between tariff strengthening and other technical measures. If you could just give the split between those two numbers and then how we should be thinking about that into 2025? And then the second question is in Holding and Other, what's a good normalized guide for other businesses, it was €250 million in 2023, €157 million in 2024. How should we be thinking about that going forward?

Fabio Cleva: Thank you very much, Rhea.

The first question is for Giulio, while the second question is for Cristiano.

Giulio Terzariol: So the first question, it's always challenging to give you an exact split. I would say anyway, the majority of the improvement is coming from clearly the tariff increases that we're pushing through. But for example, when we speak about frequency, which is reducing and this might be a consequence of the general trend, but also the underwriting actions that we are taking. So doing the split is always a little bit of complex exercise.

But for the time being, I would say the majority of the improvement is currently from the rate environment. I would expect this to be the case also as we go into 2025. And then clearly, as we think about the last part of the improvement we want to get, this is coming most likely now from rate increases or inflation, but more from the pruning, the claims initiatives that were put in place. So as I think about the time line, think about price, strength is right now the major driver of improvement. And when we think about the planning at the back end of the plan, clearly the initiative that we put in place are going to help us to get to our targets.

That's it, yes, on this one.

Cristiano Borean: Rhea, so for the second question. So first of all, holding and other, when we comment within the other business, it is right because in the element, you should always take into account that you should add the consolidation adjustment effect of the infra group dividend, the one which this year created the €60 million more consolidation adjustment because there were €60 million less infra group dividend, which we're tackling down and projecting that the 2024 is a good run rate number more than the 2023, which was positively impacted by some excess capital repatriation on, for example, the asset management component I was mentioning before to prepare for the coming deal. So I would say 2024 is a much more representative number also because we have minor businesses inside, which are interest rate dependence and the 2024 interest rate environment is much more in line with the one observed in 2025 versus the one in 2023, which was much, much higher and was potentially having a small benefit out of that.

Operator: Next question is from -- is a follow-up from Michael Huttner, Berenberg.

Michael Huttner: I'm very lucky. So I'll keep it really brief. Just one question. The capital generation, an amazing number, €4.8 billion, 21% for group growing as fast as you, that's an extraordinary number. You're well ahead of the target for -- to get to €14 billion in the next three-year plan.

Can you explain a little bit what's driving this huge beat?

Cristiano Borean: Yes. Michael, so the -- clearly, as we were already discussing during the Investor Day, we confirm that our view on the capital generation takes also into account some margin of prudence because of the adverse potential scenario we can always face. So by the way, I think the €4.5 billion is a good starting point on to which project, but clearly, the improvement that we can expect if we stabilize the environment also on the interest rate for the collection as well as the expected direction where we are going with the contribution of the P&C. Don't forget that this year, we were, in any case, having a bad natural catastrophe. So -- and we do put in the capital generation only the current year, contrary to -- I know the normal maybe in the market, we are quite more conservative.

I think that the 4.5% is really a lower-end level onto which projecting going forward. And the beat was also given by a good financial segment result where we have different topics, including our financial holding of the asset management, wealth management, but including also a positive development in some business treated under Solvency I, which is our pension business in France.

Operator: The next question is from Steven Haywood, HSBC.

Steven Haywood: Two questions from me. One is just to clarify on your Solvency II position at the start of the year, has there been any major moves since then and the €500 million share buyback is not in that ratio? And then secondly, can you give us an indication on what is going on with the Italian government's review of the Natixis deal? Could there be any implications from this as well?

Fabio Cleva: Thank you very much, Steven.

The first question is for Cristiano, while the second question is for Philippe.

Cristiano Borean: So on the 7th of March, we published in our slide commentary, 214% Solvency II ratio expected. By the way, if I look at the sensitivity between the 7th of March and these recent days, there are no material change because there are ups and downs in various pieces. Here, we are embedding already some regulatory changes like the EIOPA curves and the effect of the Intermonte deal on Banca Generali, we are not embedding the €500 million buyback, which we are going to propose to the general shareholder meeting because there are two steps first to be achieved before accounting or deducting already for it. Number one, general shareholder meeting approving it; number two, regulator approving it.

Only in that moment, we have the authorization to deduct from the own funds as a rule.

Philippe Donnet: Steven. There are no specific updates regarding Natixis actually. We are in the middle of the consultations of the unions, as required by the law, as agreed in our memorandum of understanding. This consultation will probably take another two months and no other update on this.

Operator: [Operator Instructions] Gentlemen, there are no more questions registered at this time. I'd like to turn the conference back to you for any closing remarks.

Fabio Cleva: Thank you, operator. This concludes our full year 2024 results call. Thanks, everyone, for dialing in.

Of course, the Investor Relations team remains at your full disposal for any follow-up. Enjoy the rest of your day. Bye-bye.

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