ageas SA/NV (AGS) Earnings Call Transcript

All right. Good afternoon, ladies and gentlemen, and also warm welcome to investors and analysts who follow us off-line on the screen. Welcome to this Investor Day 2024, where we will share with you the launch of our new strategic cycle called Elevate27. I'm joined here in the room today by Wim Guilliams, our CFO, already well known to most of you; but also by Karolien Gielen, maybe Karolien, if you stand up a second. You know Karolien joined the group in June coming from BCG Partner for Europe and Benelux section, U.K., Benelux at BCG and she is a member of our Executive Committee, leading the Business Development division and in the Business Development division, we also have Strategy. So I think Karolien has been instrumental in bringing this story today to life, of course, together with hundreds of collaborators all over the group. What will I talk about this afternoon? Well, first of all, a little bit our profile, our identity, how are -- who are we actually and how are we, I would say, even more and more being recognized by the market, by analysts and investors. What kind of actor are we in the insurance business? Let me show you the transition, how do we come from Impact24 to Elevate27. Well, Impact24, for me, it was the first strategic cycle to announce was a little bit starting from a white sheet of paper. Today, you will see that's not what we do. We can continue, I think, on what we have already set into moving in Impact24 to go to Elevate27. I will now zoom in then on the drivers of the plan. And then, of course, we have definitely of high interest to you, a delivery, a promise, a commitment towards the new targets and the financials and the targets will be explained to you in a lot more detail by Wim Guilliams in the second half. And then at the end, of course, we close with Q&A. Well, Ageas, of course, well known to you. We are unique and I think unique in the sense how we operate, but also, I think, related to our business mix, we are well diversified, and you will hear the word diversification quite a few times in the presentation this afternoon, Insurance group is clear in Europe and Asia. And that I can already tell you for the next strategic cycle, our focus will remain on Europe and Asia. We're not launching another continent. Of course, a small caveat here. With the Reinsurance business, the third-party Reinsurance business, we operate all over the world. And actually, I would say, almost a little bit more outside of Europe and Asia, except for that reason of diversification via the Reinsurance segment. So you know our map; Europe and Asia, these strong home markets, which leading positions in most of the country. Then I would say Asia, I would almost color in 2 different colors there. You have China and the rest of Asia because China has become an important part of our Asia story. And then something that is hard to squeeze on a worldwide map is Reinsurance, because Reinsurance actually is a little bit everywhere. But after all, it is a well-balanced portfolio, well-balanced geographically. And remember that over the last 2 cycles, geography has played an important role in the diversification and keeping our performance, I would say, at the mark because economic trends, COVID trends, inflation trends, interest rate trends more and more vary around the world, and it is actually the fact that we are well diversified geographically, and also between Life and Non-Life business around the world that is, in my view, a very strong element in our identity and our strength as a group. Of course, we have more than geography as a key strength, and this is the strength, I would say this is the foundation on which we can build the next strategic cycle, Elevate27. And the first one is it was a party year. We have been celebrating 200 years of existing, 200 years of history started in Belgium, serving individuals, serving families, local enterprises on their Life insurance risks and savings, and also on their Non-Life insurance solutions. You know that in Belgium, we are a market leader, and you see that leadership and growth priorities is another element here in our strengths. If we are in a market, we always believe there is a benefit, there is a margin to be made to be able to go into market-leading positions, and we feel that very much in Belgium in the first place. And we are happy to tick another box in leadership because we were already quite a longtime Life insurance leader in the Belgian market. From this year, we are also #1 in Non-Life. And we used to be #2 in Non-Life in Belgium, but now I can officially confirm that we are also #1 on the Non-Life side. It's a group in Belgium with 200 years foundation is, I would say, one of the drivers of this, which is recognized for strong technical insurance expertise. We are technically-driven and a lot of decision-making is based on technical fundamentals and I talk about pricing, underwriting, risk management, asset liability management, I might use that a few more times later in the strategy. I'm still convinced that how we went to 20 years of low interest rate environment in Belgium with a solid asset liability management, not selling back books, no need to sell back books is a key strength in our identity and a strength by the way, that we are exporting now to China, because China, you could say in that respect, is a little bit in the situation where we were 20 years ago. So a very stable, technically-driven profitable engine for the group. We have the diversified footprint regionally. I told you already, and we have a plan here that keeps that profit mix, let's say, roughly 50-50. It will vary, of course, but roughly 50-50. And 50-50, I mean Asia and the rest. And the rest is then Belgium, Europe and Reinsurance. Then we will be a group with a footprint in that respect that is fairly stable for the next strategic cycle. Life, Non-Life, but maybe also a little bit atypical here. We are 2/3 a Life group, 1/3 Non-Life. It has shifted a little bit because of this very solid Non-Life growth that we have seen under Impact24, but roughly spoken, the mix is still 2/3, 1/3. Diversified in distribution. As you know, we had under Impact24, 3 main blocks of distribution, banca, agency and broker. Now I think other, including the direct business, has become sizable enough to get its own color in the pie chart. So we are working also on future proofing and diversifying our distribution model. We have now 47 million customers, and they are served by 50,000 skilled and committed employees. And then let's not forget the partnerships. We celebrated 200 years for ourselves in Belgium. Next week, we will celebrate 20 years partnership in Thailand. By the end of the year, we have 20 years partnership with Banco Comercial Portugu s in Portugal. Our partnerships are built to last. We are not short-term partners. We are there for the long term, and that seems in a way to work. So these brands that you see there under that block are very stable. And I think if you look at previous presentations we have given, you always see the same names coming up. And that's part of our identity, and we are actually quite proud of the quality of partnerships that we have around the world. Another characteristic in the identity of our group is delivering. We are very conscious on setting targets, and Wim will spend all his session exactly on that, how do we set the targets and what is the plan to achieve those targets, but we also have a track record that we can deliver. And we are perfectly on track under Impact24 by the end of the year to deliver on all the targets that you see here on the screen. I don't need to repeat them. These were the targets. If I take the scores of the half year results, then you know a combined ratio of 93%, just above 93%, a guaranteed margin of 124 basis points, but you always know there is a seasonal effect here towards the end of the year, and 39 basis points on the Unit-Linked side, a solvency level, which is well above 200% and then an outlook on shareholder remuneration and how it comes together, meaning going from EPS over holding free cash flow towards the dividend, which will be perfectly in range with the commitments that we have given before. And then we have, for the first time under Impact24 also put non-financial KPIs as a commitment. And also here, I think we will tick or almost tick all the boxes on the investment side, on the product side, our own footprint. And then, of course, we had also strong commitments on the diversity side and then mainly in the area of the gender diversity, we will be able to tick most of these boxes, if not all, by the end of this year. So let me take a few of the nonfinancial ones. First of all, sustainability. Remember that in Impact24, we said we put sustainability at the heart of everything we do and that is key to stay relevant. For a company which is so important in the Belgian economy who has been able to show 200 years of relevancy, we have to think ahead and to see how do we stay relevant. And we said sustainability is a key element here. And we were not first in this. We were average 5 years ago. We have said, okay, we want to reach top quartile by the rating agencies, which by back then, as you know, is a moving target because rating agencies are also still developing their methodologies. Well, we are well within sight to reach top quartile for 3 out of the 6. We never said for all 6. Actually, I haven't found one financial institution with top quartile on all of them. That is, I think, close to impossible. But the 3 that are most relevant to us, we are well on track to reach top quartile. And you have seen a gradual progress over the Impact24 cycle. We have joined the BEL 20 ESG Index at the beginning of this year. So we are one of those companies with the ESG label in the BEL 20 Index. But the more important one for me is the one there at the bottom with EcoVadis. EcoVadis is a label on sustainability also for your suppliers, which for the first time, I feel can also drive business growth, because in Belgium, international conglomerates who decide to put their pension plan with AG, they ask about your EcoVadis Sustainability Rating. So we are now Platinum. That means we belong to the top 1% of companies who have sustainability in their methodology, and that helps us to really win bits in significant material pension plans that international conglomerates operating in Belgium offer to their employees. Investments. Investments, we had said EUR 10 billion will be investments going into direct impact investments. That's what we said, an investment that people immediately recognize as an ESG investment because we all know that ESG investments, it's not yes or no. There is a grading there, and it's all about transition. But we said directly recognizable, we want EUR 10 billion. End of '23, we already reached EUR 13.5 billion. Be aware that it is not only planet, this is not only environment; this is also social. In this portfolio, for instance, there is a significant portfolio of social housing in France or there is also building schools, which is a little bit of the E&S and the social role of schools, but also E because the new buildings are a lot more energy efficient than the old buildings. Let's not forget sustainability for me is also the role you play in society in general, while being one of the largest institutional investors with EUR 27 billion invested in the Belgium economy next, of course, to all the product solutions that we offer to our customers. Here, we also said that 100% of all new investments made would go through an ESG filter because there is not black and white. We have put a threshold there on ESG scoring, and we apply that now already on 100% of our investments. So all companies have to show their ESG plans even if they are, I would say, outside of the scoring. If they have a very solid plan, which we will track, they might be able to get our investment. Again, if they have no plans, then we will probably walk away from them for new investments. We will -- I can already give you this one. We are not putting a formal target on these investments for '27. We believe we have a plan to go to EUR 15 billion. And why not a target? Well, there are 2 reasons. First of all, quite some of these investments start to come at maturity and need to be replenished, which we will do if we have the opportunity. But secondly, there is also something like asset allocation, right? We have fixed income, we have equities, we have real estate, we have infrastructure. And so, I mean, this asset class because some people might think you have EUR 100 billion balance sheet, so these direct impact investments can become EUR 100 billion. No, because we need fixed income, we need liquidity, we need equities. So that's why we don't give a new commitment. But rest assured, we keep on working on this. We believe that we might evolve to EUR 15 billion in line with the evolution of the portfolio, but it also has to fit in our strategic asset allocation. And then we had the topic of the products. We were one of the first ones because until now, 3 years later, there is no such definition of what is a sustainable insurance product or what is an ESG insurance product. We have said that if we can incentivize our customers to make a contribution to a better world or a better society, the same as we do on the investment side with companies, then we would call it a sustainable product. And I think there is a -- massive innovation has happened over the last 3 years by launching new products or adding features to existing products, so that people have an incentive to make that contribution. One example, which is quite common, you have sustainable Unit-Linked funds, right, the ESG funds or you have other funds. So we are driving the development of ESG funds. We have Waldon is a whole platform where we used to call it the health care platform, but it's now become sizable. It serves its own brand. So Waldon is in Belgium, this solution for well-being of employees, working on the reintegration of burnout of employees. We have a few initiatives under M dis, M dis Active, live a healthy lifestyle. We have some initiatives you see here on the claims repair, like here in the U.K. where we use green parts as a solution for claims repair. And then Asia, of course, where sustainability is coming forward strongly, it's a lot more about inclusion. In Asia, you see still large population groups who have no access to insurance. And where you see there, for instance, a Bimaplan micro-insurance solutions to offer. You have micro-insurance. You have something like Microtakaful to drive inclusion in the Asian region. 29%, we have already achieved target of 25%. And we have taken 1.5 year to make our own definition, right? And we have taken, I would say, the more stringent view of our definition. So I'm quite confident that this 29% is solid products that help developing sustainability. So this is a little bit our foundation. So Impact24, as you remember, was announced at a long-term sustainable growth strategy. The growth has been there. And I think if you look at the end of '23 results and the half year '24 results, 23% growth in Non-Life, 10% growth in Life, over the 6 months of this year, the growth -- organic growth has delivered on its promises. Sustainability, as I've just shown you, has taken center stage. And we are still long-term thinking, and I will show in the next section how the long-term thinking comes in, in our new plan. So our conclusion was, if I take all these strengths, there is no need -- absolutely no need to start with a white sheet of paper. We can start with the footprint, with the strength, with the delivery, and with the performance that we have. But how are we going to put a layer on top of that? That was the driver to develop Elevate27, and that's why we call it elevate. And elevate in the sense, driving further the growth and driving margin improvement. And in that sense, of course, all the consequences of margin improvement, earnings per shares, holding free cash flow and so on, that's why Elevate27. Okay. Let me zoom in on a few key themes under Elevate27. First of all, we will focus on 3 strategic drivers. We do away with the 10 or even more strategic choices we had in the past. Many of them are still there or have become part of our identity, what I've just shared with you. Here, it's more forward-looking, where we will further build upon. That is, first of all, working and driving profitable growth; second, further building on something we are already recognized for, technical insurance capabilities and more and more operational excellence; and thirdly, distribution excellence and driving customer experience. And I will zoom in each and every one of them a little bit more in a minute. And we see 3, what I would call our enablers; what will facilitate that. Our people are our main enablers for 200 years already. And we have a very dedicated, qualified team that really respects commitments and delivery. Sustainability, I have moved from, I would say, a growth engine, something to be fully developed to an enabler. And I just gave you the example of EcoVadis, our focus on sustainability will continue, yes and we will keep on putting it at the heart of everything we do, but it will start enabling us to do more. And the third one the most important one and you hear it everywhere, is tech, data and AI. We had tech, and I think we are well positioned in tech. We had data and I think if you talk to all my colleagues, everybody will say, getting the data organized took more time than we expected when data management became a possibility. In my view, AI is now the missing piece of the jigsaw. By adding AI on the first 2, we will really be able to deploy all the capabilities, all the management information, all the insights in everything we do. In underwriting, in claims, in fraud management, in customer journey, but also in HR, in recruitment and you name it, we will be able to start deploying it once your tech and your data foundations are installed, and I will show you where we are today. AI for me was the missing tool to really turn it into business, and that is now coming in at rapid speed. We have categorized the drivers in 2 categories. Remember, under Impact24, we said the core, yes. The core is strong and the core will approximately deliver 80% of our story, and of our ambition, but it's more or less the same. We call it here, continue. What will we continue? That means we do it well, we are recognized for that. We will continue trying to do that even better. We can build on our past experience. We have learnings from Impact24 and of course, we will have to adapt that to local market circumstances. And then we have a second block where we say elevate, and elevate, we have been thinking if we take all the strengths together, where do we have the right to win, where do we have the right to outperform what the industry or the society at large will do, yes? Why? Because we have the building blocks to do it better, to do it earlier, to do it faster or to do it bigger. That's what we call elevate. That means elevate things that can bring that new extra layer of value for all our stakeholders, of course, still build on the strengths we have as a group. Let me start with the first one, driving profitable growth. And I'll take a quick sip of my tea, because my voice, I have to keep it up. Well, we are quite happy with the position in Retail P&C to take an example. Combined ratio, 93%. Business growth, 23% in the first half of the year. Please do not extrapolate that too much because there is an element of inflation here and inflation is fading away. Reinsurance, I'll talk about in a second, Health & Protection. Where do we feel we can truly elevate? There are 2 segments. First of all, the SME market. We are very strong in the Retail. We are actually already very strong in SME as well. You would be -- don't underestimate it, but we believe that the SME market is a market that will outperform the rest of the Non-Life market. And second is aging society. I always say if there is any peer of us who want to go in this, we can do better, because we are 2/3 a Life company already. We have shown to have the products. We have the full product range. We have shown how we manage asset liability management, how we cover liabilities that we accept, so we should take a leading role in aging society, and I have not even spoken about our footprint to do so. I'll zoom in into that in a second. So these are elements, SMEs, aging society, where we aspire to outperform and to bring a new layer of value for all our stakeholders. The first 3, where I will continue. A CAGR of 12% in Retail P&C business growth, 10%, above 10%, I mean, double digit. That's good, yes. I don't think that anybody at the start of Impact24 would have thought that the Non-Life markets also in Europe would grow so much, yes? And that is because inflation, but also because of customer journey, distribution intimacy. So we have a very healthy mix here between business growth and well as inflation. And another element that played in our favor here was the transformation that the U.K. has been going through over the last 2 to 3 years. In Re, I would say the timing was right. We went in third-party Reinsurance quite well. Remember, we have allocated [ EUR 215 million ] capital to be invested in this business segment by '27. Here, I can say no change, yes? We are well on track on this plan. We are slightly ahead of business volumes and capital allocation. But for now, the team has said with the EUR 250 million, we can gradually build our expertise and build the portfolio. At this moment, we do not ask for more capital. Let's gradually build this up. So we have committed to continue that plan, of course, subject to trends in the cycle because Reinsurance is a market where you go in, but you also must be brave to go out when the cycle turns. And the good news here is when I got a debrief last week from the Reinsurance team that was in Monte Carlo, is that, first of all, a lot more attention now in the specialized Reinsurance press for Ageas. So that's good. We are recognized in that respect. But also, and that's the first time I hear that, by investors and investment community who is more focused on that segment who start getting some interest, I'm not even saying yet appetite, but interest to get to know what Ageas is doing in this segment. So I hope that this is also, I think, a driver for growth in our investor base. And then Health & Protection, remember, we saw that as main growth engines. The world changes rapidly. When Impact24 launched, Health & Protection was the most profitable segment of Non-Life and Life risk, yes? That has turned, yes? A few Non-Life businesses have had pressure under COVID or after COVID due to inflation. Health, there the issues has lingered on a lot longer because you have an inflation of claims frequency together with an inflation of claims cost, yes? And that's staying and I think we have done significant adjustments in the premiums, but we have also learned dealing with such a situation, developing health and servicing is something very local. So we say the group role is actually limited. So we keep with the model in Health & Protection, OpCo in the lead in Portugal, where we have the best developed health care model with M dis. We will keep on continuing doing this, but we do not see this today as the major elevating segment. It will grow. We will see where it goes. It might come back when I talk about the other topic in a minute, but profitability is key. Profitability for me, combined with insurability because premiums in this segment need to stay affordable for citizens and clients as well. So aging, aging is the first one to elevate. And I don't need to explain you why. Age dependency in Europe, which is now between 35% and 40%, age dependency defined as 65-plus generation compared to the active working population where, in this example, it is taken 20 to 65. Age dependency in Europe will go from 35%, 40% various country by country to 60%, 70% in the future. Age dependency in Asia, Asia has a longer -- a younger generation still. So age dependency in Asia today is between 20% and 25%. It will go to 75% to 80%. Age dependency is a huge issue for all economies in our footprint, both in Europe as well as in Asia. And we talk a lot about how can we further industrialize Europe again and get industry again, that would be great, but we will need immigration for that. Building an aging economy, I think, is another topic that will come more and more on our agenda. And here, we have the right to win. With the presence that we have, with the strengths we have in-house, we have the right to win. To put one example here, why we can play, the cost of aging in Belgium alone for the government will go up with approximately 50%, yes. Well, you all know that there are not many European government budgets who can deal with that easily. So I would say we have a tailwind for the coming years, and I'm talking here about years, in the Pension & Savings segment, and we are convinced that, that will outgrow the traditional Life market. We have already EUR 86 billion Life liabilities on the book today. We kept them all. We were never forced in the low interest rate environment to do back-book transactions. We didn't have to divest Life liabilities because the pressure of low interest rates became too heavy for us to carry. Solvency has been strong. We have stayed active in the whole range of products in this segment, from Guaranteed over Unit-Linked over Funds. We have not closed business lines in this segment. So I think we have the right to win also in the future in this segment. And we have market-leading positions. In Belgium, we are by far #1. We are doing more than 30% of the pension business in Belgium. We have, and I will zoom into that, in Portugal, a top 3 position in Portugal. I don't have to talk about Taiping Life too much in this respect. You know the position of Taiping Life in China. They are #5 in this segment, and soon to be, we will immediately be #4 in the Pension business once we conclude the investment in Taiping Pension that we have announced. We are top players with the second-largest bank because relationship with bancassurance, of course, in this segment is very close, right? Aging and savings. In Thailand with the KASIKORNBANK. So we have market-leading position. And don't forget AgeSA. AgeSA is on a boost at the moment. The growth in AgeSA is very, very significant but also promising because we also see bottom line growth coming in, in AgeSA. Another topic, where will we then elevate? Well, first of all, by tapping and developing the segment because we think the segment will outgrow the rest of the Life insurance. So that means stay where you are with your market position and you should outgrow if you focus on this one. Another element here is post-retirement. If you look at this age dependency ratio, a bigger group of your clients and your customer base will go from the accumulation phase to the decumulation phase. In the decumulation phase, we have solutions already in Belgium, for instance. We have [ Silver ] in Portugal, where we service our customers after retirement. And then, of course, we talk more about annuity type of business, for instance, succession planning type of business, a big business in some of our countries, helping our customers with succession planning. So we will also focus more and more how we will develop that post-retirement pension solutions. And then we have China. I just spoke about the aging issue in China. China is on a road to convert its economy from an infrastructure and export economy into a consumer consumption economy. And they know to do that, that they need to develop the social security system because savings are fully growing to servicing your family, meaning after the 1-child policy, 2 20s who marry, service 4 parents, service 8 grandparents. And if you have studied a little bit what Confucius says, that this is one of the highest values that you have in China, taking care of the previous generations. Life & Pension liabilities have grown approximately 3% over the Impact24. We believe with a dedicated focus, we should be able to bring that number above 4%. And if we can bring that number above 4%, that would be, on top of the normal evolution, another EUR 2 billion extra Life & Pension liabilities coming in over the Elevate27 period. Here, you have the Portugal case. I'm not going to zoom in too much. We are #1 for the Pension fund business. In Portugal, we have 22% market share on the Life side, and of course, on the health care side because health care is also the topic, of course, with aging population. We are a market leader in the U.K. with an integrated health care model, servicing as well as insuring. And so where we will focus on, where we will elevate is stay the relevant player with a full set of value propositions so that we can accompany our customers in accumulation, in decumulation in health care throughout their life cycle. And then, of course, a lot focusing here on servicing delivery. And the digital and data is also a very important element in health care. I think the only way out to keep adequate qualitative health care for all is developing more also the digital health care solutions that are becoming more and more available in the market. We have new initiatives there, M dis Vintage, for instance critical illness of seniors in this aging group; or M dis Light, for instance, where we take a relatively basic cover, which is not so much age-dependent, which we can do without a medical questionnaire to be able to service these segments in society as well. So that's about aging. Let me go to SMEs. Yes. SMEs is a segment we are servicing already and with very strong market positions. We are #1 in Belgium in the SME market. I will zoom into that in a minute. We have a top 3 position in Portugal, top 2 with AKSigorta in T rkiye and mainly done here by the agency force. And we also service SMEs with Etiqa in Malaysia. So we have already very strong positions. That means we also have the expertise. Yes. It's an attractive market. We expect the SME Non-Life market to grow faster than the Retail SME market with approximately 2 percentage points higher growth in the overall P&C. And let's not forget, we have the distribution. Because while maybe on the retail market, we might think that direct and digital might gradually take over a lot of the business in the direct market -- in the retail market, sorry, I do not see that happening easily in the SME market because an SME manager, he doesn't want to have the burden of finding out his insurance solutions for all the risks he has. The risk is more complex. It's less standardized. I'm sure that an SME manager will look for professional advice. And that's where brokers or the branches of a bank focusing on SME and medium-sized enterprises will focus on. So this will further future proof also our relationship with our distribution channel in case distribution would shift. So where will we elevate? First of all, further elevating underwriting capabilities. And here, when it will come a few more times, data and AI is transforming underwriting capabilities also for SMEs, yes? How can I ask less to the SME and still know more so that I can properly underwrite a small and medium enterprise? That is the name of the game. Make the burden for the customers as small as possible, make sure you have the maximum information available to make sure to underwrite that SME correctly. Also, this is segment driven, right? You have industries. And every industry has a little bit different type of risks. Here also, data and AI can help. Second area is the product range is quite wide for SME, right? It depends on what type of industry are you working in, what type of risks do you run. We still have room to widen our product capabilities and product solutions. Sometimes you also have very good and profitable niche products in these segments for SMEs. Developing this and helping that through the database we have and the distribution we have will allow us to further elevate our position in this segment. And we will further diversify distribution channels and not at least, also digitizing the relationship with our distribution partner to the end customer because also here, digital can make the customer journey more interesting. So in the 4 SME markets that we have seen here, you do not see U.K. If you would ask yourself, are you going to go back in SME market in the U.K., that is not on the agenda today. We have a focused strategy with Ageas UK on the retail market. And we are quite happy with the transformation that is ongoing, yes? So you do not see U.K. on this board. But in the 4 key SME markets, we believe we can outgrow the growth of the P&C market. If I take Belgium, for instance, as an example, again, there we are already #1. We are approaching in the Non-Life side, EUR 1 billion premium written by SMEs in Belgium. We are just above EUR 900 million to date. And we have a very nice packaging solution for the manager, which is called Modulis, a bit the same like we have on the Retail side with [ families ], which is a packaged approach to our customers. We started that more than 20 years ago. We have started digitizing the customer journey in Modulis in 2017. We started acceleration now. Why? Because adding AI to the digital process and the data we have, we can go to a next level of hyper personalization of the service to our end client in a digital way. The bank as well, it was very much a broker-driven business in Belgium. BNP approached us 3 years ago to take their stake in the market of servicing SME on the insurance side. The plans have been designed, all rolled out, and we see that we have outperformance relative to the market because BNP is coming into that market with our risk solutions. So that is a little bit our ambition. Also, we see last year credibility to specialized brokers. You also see some MGAs in this segment. So we will see how we can build -- bring our expertise, our insights to all related parties here. This was the first block of profitable growth, continue what we do well, adding aging and SME as elevator of our growth and margin. Second block, technical insurance and operational excellence. Of course, a lot of this is happening locally. Each and every market, each and every company we operate in is very strong on their technical expertise. And of course, we have our sharing platforms, which we have more officialized under Impact24 with this creation of the CDSL function. We have now the Managing Director, Business Development, who puts that even at the Executive Committee level. Where will we elevate? Well, we will further step up our leadership here, again, by leveraging and adding data and AI to the story. So we have, I think, a very strong foundation on core insurance expertise, and I gave already the example of Life in Belgium, asset liability management, risk management, pricing, covering guarantees. It's also becoming more and more from the beginning, but still relevant, our export product. We went to Asia because these were emerging markets, and they wanted to build that insurance expertise. We went to Taiping Life because it was a dormant license since 1929, which could be reactivated under the condition that they would seek a partner that brings the expertise. That's exactly what we do. It's our export recipe next to bancassurance, by the way, which is also an export product that has brought us into Asia. What's our ambition here? Wim told me that he's going to generate EUR 75 million to EUR 100 million more insurance result by focusing on this technicality of the business, and that's a mix of 3 things: operational efficiency; customer experience; leveraging the data and AI here. The second one, is technical excellence can be 2, I hear technical excellence is related to cost, but it's also related to claims. So it's not cost savings as such. It can be 2. Sometimes we have that debate: if I make a little bit more cost, but I can create 1% lower combined ratio, what is the best? Cutting the cost of controlling and managing the claims. So that's why we take it in 1 basket, technical excellence. And then, of course, digitalization, simplification here again because the data are organized. The processes are more and more digitized and AI will help us to personalize all this. So a little bit about that data and AI story in this segment because I see a lot of insurance group throwing very big numbers, how much they are going to invest. I cannot give you a euro number that we are going to invest because it can happen at the desk of one person deploying an AI tool. I'm not going to bother how much we have invested to use that AI tool in one entity who has decided to explore something. That's, I think, not relevant. What we have insisted is each and every division has the duty to come up with their ideas. So we do a lot in training and learning development, what AI can do. We give examples. We bring our new strategy Wednesday to the management. And we will show a lot of examples of what it can already do for those who might not know yet. And so we have now lined up already more than 300 initiatives, small and big. In different entities around the world where we say here, data and AI in my job, in my responsibility, in my division is going to make a difference. 8 to 10, and we will also bring them to group to a big extent, we see them as really transformational. They are really already today changing our business model. And let me just take 4 examples, so that you can a little bit understand what we talk about. First is in Belgium, the Car Repair+ cost model. If I take it in 1 sentence, 5 to 6 years ago, when a claim came in, you asked a quote to the car repair shop, you negotiate a little bit on the quote, and you say, you know you go ahead, repair the car. Now it's the opposite. We tell the car shop, that's how much it can cost. If you know the model, if you know the post-quote, if we see the pictures of the car, we said, look, we know what this is going to cost? Because historically, in all our database, these type of accidents, on top of it, we can tell you, there is a margin to be made. And AG Insurance keeps on inventing how can I better control my car repair network to have the best service at the correct price, the correct repair cost for everybody. U.K. Claims Handler AI Assistant, that's more operational excellence. So this is an example where we help the life of our employees and improving the customer journey. So there are 2 things, Life already today, quite promising. The first one is am I covered? So a customer does not have to call anymore. Well, you still have to call, but in the call center, AI can immediately say, "Am I covered" and it takes the general conditions of the contract and can immediately say to the customer, yes, this is covered or not covered. And very soon, I think the customer can do that by himself. He would not even have to call to see whether he is covered or not. And the second one, which is also Life already in the U.K., is speech to text summary. So if now somebody calls into the claims, the whole call can be recorded. You can get the full script of the call and you automatically get a summary. The employee who was losing time on logging the call for the follow-up of the claims does not have to do anything anymore. The system automatically captures the summary and when the customer calls back, the claims analysis, "Oh yes, I know you called that day, that's the status of your file" and can immediately service the customer. Other in T rkiye. Here, I think for me, the numbers are mind boggling, and I also heard the numbers only a few weeks ago when I visited T rkiye. T rkiye, I can easily say, to some extent, it's our digital lab. Don't underestimate the speed of digital development that is happening in the Turkish market. And they came with ADA already a few years ago and ADA is a chatbot asking customers to give information and giving immediately a quote, an underwriting and a quote to the customer purely by a chatbot. This year, ADA will approximately do 7.2 million transactions for us in the Turkish market. We started with EUR 2 million in 2023. And again, this is an evolving thing because now we can put a Gen AI on top of the tool to make it even better, to make it even accurate. And they are converting now ADA in what I will call our digital insurance expert. And then we have a Digital Coach. Digital Coach is an asset we have built at group level, and this is all about training our agents, but it doesn't have to be limited to agents in the future, but agents in Asia. You can -- an agent -- well, if you have -- I always say, if you have 270,000 agents in China, you don't bring them in a classroom, yes? So that means now on a mobile, he can do a training course as an agent at any moment in time, when he likes. Every training course is a different one because what Digital Coach does is it could create a potential client, right? And you have the training with that potential client. The tool, immediately after you end the interaction, gives immediately your feedback. Where you did well, where you could do better, why the call was made a bit long or what they would have hoped to get from you. We do that at a group level. This is a typical example of why being part of Ageas as a joint venture, because we build it once, it takes a few weeks to learn another language. You need to add a little bit the product expertise and you're going. So from one country, we can immediately roll it out over all Asian countries. And at this moment, we have already quite some pilots going on. And then -- sorry the last block here on the right side I forgot, it's all about people. People in 2 aspects, everybody, because how do we keep everybody in board with all these AI capabilities. I'm very much convinced that AI will not replace people. AI will be a copilot of our people, and we can actually upgrade also the contribution of people by adding AI to their story, but we also need, of course, the experts themselves to build all this. And here, we invest in 580 and most of them are already available around the world, 580 data and AI experts to build all this for our entities. Last one, distribution excellence & customer experience, I would say, very much a continuing. Diversification, as a group we are very well diversified in distribution. And I would say from what we called, I don't know, 9 years ago, multi-distribution, we then called it omnichannel. I think I call it now more optichannel. Make sure that for every type of transaction you have with the customer, you offer him the most optimal way to get that service done and that means that banca also needs to digitize, a broker is also using data and AI. So this is a mix of customer journeys with all the tools we have in-house and a broker and banca brands is also one of those tools to service a customer. Where will we elevate? Well, we do future-ready partnership capabilities. We want to stay relevant to our partners, and we are still driven by NPS. Elevation comes from traditional partnership, keep on building, digitizing them, helping them in their transformation into a new tech world, but also diversify distribution. Might sound strange but we are very well diversified at group level; we are not always optimally diversified in each and every country. So for instance, there are countries in Asia where we are very strong on banca but less present on agency. So there, I think we will focus. Can we also develop the agency side so that we can elevate our business model and that we can service more customers with their channel of choice? And we will invest also more on what we call the next-gen partnerships, for instance, in the digital platform world. In India, we have started a digital platform for quite simple Life Protection covers and we've seen more and more new type of partners in their service who said, "I would like to add my protection, your protection solution with API to my value proposition to the customers." That's what we call new type of next-gen partnership. That's also what you see here in the block other being developed. Focus here on the operational side is to, first of all, self-service. With data and tech, it was, I would say, a bit difficult to really go into self-servicing. I'm sure with the personalization of AI, that becomes possible. And so that's something where we will focus on. And the other one is very similar, automated customer assistance, which also can become more and more personalized. So these were the 3 main drivers. Let me then go with you through some of the elements where group will take a leading role because our identity is more and more, and I must say the Asian joint venture, recognized stronger and stronger where the added value is of being part of Ageas. Well, first of all, we have sustainability. We keep on putting it at the heart of everything we do. We continue. That would have been, I think, definitely an elevator 3 years ago. I think we have taken the elevator and now we can say this is a continuum. And also group capital management and capital productivity where we will strengthen no surprise, technology, data and AI. And we have 3 roles at group level and that is organized by Karolien in the Business Development. I start with the bottom one. We do the longest already. Sharing of expertise with OpCo in the lead. Belgium is very strong in banca, so Belgium makes sure that the banca expertise goes around the world. We are not going -- setting that up at group level. U.K. is very strong now in agile pricing in customer journey management, CX transformation. They take that role for the group. Portugal is very strong in health care with M dis. They take that role for the group. That's how we operate OpCo in the lead, but with platforms, that information flows around the world. The first one is also evident. We expect local outperformance for everybody in their respective market. The OpCo is also in the lead of their decision-making. We at group, we are not going to say what they have to do first and second. They should know themselves. They are closest to the market. They know what needs to happen to deliver. What we tell them is what they have to deliver. That's what we tell them. Because otherwise, we cannot add it all up to the target story that you will hear in a minute. But we also have areas now where we say the role of the group can be bigger, because there is efficiency to be won. There is gains to be made. We do that now already 3 years in technology, for instance, the cloud, the replatforming and the cloud. We have 1 cloud solution for the group. The security operations center and cyber, we said, let's not invent all this everywhere. We create 1 for the group. And I see more and more for data and AI. If I take the example of the U.K., I take speech of a phone call, I convert it into text and a summary for my claims database. The only difference between the U.K. and Belgium is language. But that the AI tool can learn quite rapidly. And interfacing, interfacing to your call center technology and interfacing to your claims system. The module itself can be deployed rapidly. Look also at Digital Coach another of those examples. You have it in 1 country. So more and more, we are building targeted group assets that we say if we have them at group, we can deploy them rapidly. But we are not going to go to a big centralized IT engine servicing all the world. It will be very targeted, very business focused. So where are we on the readiness, the tech readiness because I hear many groups saying a lot of promises, but it is all about your readiness. And let's be honest, we all learned that the readiness of the data has taken more time than we expected when these things became available. But first of all, 3 of our core entities have already completed the replatforming so that the infrastructure and the data are organized to deploy these new technologies. Eight of our entities have already achieved the ISO27k certification. So that confidently, I would say we have the protection around the prairie. We have the fence around the prairie, in which they can operate and develop their solutions. In the applied tech, we have, as you said already, quite a lot of project life and coming live. And there is a commitment that the margin improvement I show you for 1/3 would come about this applied tech. Interesting is what we monitor very closely is the IT run cost. In a recent study of all players by an IT firm has shown that we outperform on IT run cost. What we do is we do not leave legacy behind. If we do a merger or we integrate portfolios, we really make sure that we fully get rid of the solutions that we decided to abandon. So in that sense, our environment remains clean. And it seems that on the areas that did the first one, the replatforming, our IT run cost is approximately 30% lower compared to peers. And that's 30% that we can move from run to build, yes. And that's, I think, important. And lastly, procurement. Also in procurement, we play more and more of a role as a group. We do it already a few years, but there is still room for further elevation. I'm going to a close. These are the nonfinancial commitments we take for Elevate27. We keep with our top-quartile ambition for all stakeholders. Competitive NPS for the customers, employee NPS for the employees, which, by the way, from the end of '23, we have achieved. So our worldwide employee NPS study has confirmed that on international standards, we have top-quartile employee satisfaction. For gender diversity, we have said that 40% of our senior and middle management will be of the different sex, so in this case, for us still female, and senior and middle management, we defined the top 800. Ambition by 2030 is to bring that to top 300. So but now we say top 800 by 2027. ESG ratings, we spoke about. Top quartile is the ambition to achieve by Impact24 and to stay thereafter. And the 25% premiums what we would call products with an active incentive should further grow to 35%. And then with -- and that one you definitely know already since this morning. We have come with new type of financial KPIs under Impact24 because with the accounting change in IFRS 17, we wanted something that was consistent in this changing accounting rule. So that's why we have moved to free cash flow, holding free cash flow, dividend commitment, earnings per share. You know all this. These are the new numbers. I'm not going to zoom in because that is part of Wim's story in a minute. And then we have inorganic M&A. I'm sure you might have questions there as well. Well, actually, not so much change. We have shifted a little bit from the beginning of Impact24 halfway because we said from investing in growth, we see that the story in rising interest rates is more about cash generation and cash distribution. So we have aligned ourselves with that reflection by investors. So we will look, if we do M&A, at consolidated, controlled cash-generative entities. Of course, where we leverage our good strengths, meaning we can also bring potentially synergies to the table. Our partnership DNA, I think, is a very strong element here. And we are always open to look how can we move into market-leading positions everywhere we operate. So if I look at the regions, for Belgium and Europe, that could be add-ons on the business models that we have in different countries. That could lead eventually to in-market consolidation. We do not exclude the new market, but remember that in Impact24, we said we are looking for a new market, but we don't need it to deliver on Impact24. I'm going to say the same. We will keep on looking on adding another business, but it's not that we need it. So we will remain financially disciplined if we look at these opportunities. For Asia, same story. We're probably not going to add a new market. That's not our priority, but in the same context of consolidation, if we can optimize our position with our partners in a specific market, we are open to look at that. And optimization could be consolidation with a partner, could be more than distribution diversification, I spoke about a minute ago, or it could also be product marketing or market optimization, adding -- widening the product range and the presence in the market on the product side. This is what Elevate27 is all about. Before I'll give it to Wim, let's maybe look at a very quick summary on what Elevate27 is all about. [Presentation]

Good afternoon, ladies and gentlemen. I also would like to thank you for joining us today on our Elevate27 Investor Day. And Hans has already provided you with a look back on our Impact24 performance. With only a few months remaining, we are very confident we will deliver on our financial and operational targets. And the least we can say is that Impact24 has proven to be a quite unpredictable journey. If you look at the interest rate environment, we started with a low, even negative interest rate environment in Europe, and we moved to a significantly higher and inverted yield curve. And in China, we moved to a lower interest rate environment. In Europe, we were also confronted with a much higher inflation and our Non-Life operations had to translate that in tariffs going forward to protect our profitability to deliver in line with the Impact24 targets. Impact24 was a period of many new challenges, but it also allowed us to grab many new opportunities. And thanks to our diversified and resilient business model, to which Hans already referred, and the strength and proactiveness of our group, we are delivering on the different Impact24 ambitions we have put forward. Elevate27 is a plan of sustainable profitable growth going forward in which we will accelerate progress in key areas of strength. And on the graph, you can see that we have delivered already over a long period, over the last 9 years, a steady progress in our shareholder remuneration. And under Elevate27, we also will promise an attractive shareholder remuneration going forward. Hans already explained Elevate27 and he showed 1 graph with the different financial targets, the 3 financial targets until 2027. I will take some time in my presentation to guide you through the underlying numbers, the numbers behind these targets. And with this reasonability assessment, we aim to give you comfort on our ability to deliver on these targets put forward. Now, as under Impact24, the one thing we'll know is that market will change. So we will adjust where and when needed to deliver on these 3 financial targets and the numbers that I'm providing is a bit of guidance based on the assumption of today, how we look to prevailing these targets. Now at the start of Elevate27, we decided that it would be good to simplify and create focus on a limited number of financial targets. And you can see them here on the slide. So we commit to an average annual EPS growth over the period '24 to '27, so year '25, '26, '27 in the range of 6% to 8%. We commit to a holding free cash flow contribution based on a cash view of an amount of more than EUR 2.2 billion, which is a growth on a comparable basis with Impact24 of 25% to 30%. And we commit to a shareholder remuneration of more than EUR 1.9 billion over the same period, which is approximately a growth of 20% on a comparable base compared to Impact24. We also reconfirm a progressive dividend and we reconfirm that we will continue an interim dividend of EUR 1.5 per share going forward. We have decided to focus on these 3 financial targets where we consider that to be in line with what shareholders are using to evaluate the performance of a company. The first one shows our ability to grow and to grow that, translate that growth into profit. The second one shows the ability to convert that profit into cash. And the third one indicates what part of that cash we will distribute to shareholders. Holding free cash flow is defined as the difference between the dividend upstream that we will get from our operating companies and the holding costs. Shareholder remuneration, more than EUR 1.9 billion, is the dividends that we will pay over the next 3 years to our shareholders. It's important to highlight, and it's mentioned there, that this is under a cash view where under Impact24, where we had what we called an accounting view. What's the difference between both? In an accounting view, we take the dividends that we receive in the year that the net results are accounted; whereas under cash view, we account the dividends that we received and pay in the year that we're reporting, '25, '26, '27. On a comparable base, this is a difference of EUR 100 million to EUR 120 million; where under the accounting view, the numbers are higher. They're now on a comparable base, which is a cash view. So allow me now to go to the EPS growth and explain the underlying reasoning behind our EPS growth ambition. But before, let's have a look at the long-term evolution of our EPS over the last 6 years. So you see that over the last 6 years, we have delivered a very nice growth in our EPS of between 6% to 8%. And before we were in the IFRS 17, you remember that we had much more volatile results. And now under IFRS 17, we're able to realize more stable, growing net operating results. The numbers you will see here, pre-IFRS 17, is the so-called underlying result. And you remember that at that moment, we had a net result, which we corrected, adjusted for the RPN(i) movement, and we also adjusted for the volatility on the asset side in China and for the revaluation of our nonparticipating business through the P&L. We've always disclosed that underlying result separately, and this is the numbers that we are using in this graph. Going forward, under Elevate27, we commit to continue to deliver a growth of 6% to 8% per year. So let me allow me now to go a bit in the underlying assumptions behind that 6% to 8% EPS commitment. And in a simplified format, EPS growth can be driven by 3 elements. You have, of course, the business growth that's contributed, business growth at unchanged margins; you have the improvement of the margin, think here about a Life margin, think about the combined ratio improvement, think about the investment result improvement in Non-Life; and you have, of course, the contribution of the capital redeployment. Now that last element of capital redeployment refers on the one hand to share buybacks. And on the other hand, on the decision to reallocate, to redeploy capital from lower-yielding activities to higher-yielding activities. A good example has been our divestment in France, our Life business in France, where we reallocated the capital to funding the profitable growth of our Reinsurance business. On the share buybacks, the recently announced share buybacks. By the way, we just also published a press release in which you can follow the share buyback as it's being implemented in the market. That recently announced share buyback with the half year result, the part that we will be executing in 2025 will, of course, also contribute to this capital redeployment you see there and to give you an idea, if we would do 1/2 in 2025, that would translate in 0.5 percentage point. Like Hans mentioned Elevate27 is based on 3 strategic drivers: driving profitable growth; leading in technical insurance and operational excellence; and future-proofing our distribution and enriching the customer experience. Let's now look in more detail at that business growth component. If we look at Impact24, most of the growth of the EPS, primarily the growth of the EPS was coming from business growth, so we have realized, we will be realizing the upper range of that 4% to 6% that you would see here. That can be explained by a continued growth in our Life liabilities of approximately 3% and an exceptional growth in Non-Life of plus 11% to 12% over that period. And we mentioned at the half year results, we said that, of course, part of that growth in Non-Life is coming from the rate effect for inflation, 1/2, and 1/2 is coming from customer acquisition and portfolio growth. Looking forward toward under Elevate27, we continue to see a sizable contribution from profitable growth, but at the same time, in line with the strategy that we have communicated, an increased focus on increasing our margins going forward. And that's in line with the second driver of our strategy, to lead in technical insurance expertise and operational excellence. If you look at that business growth, and that you see here on the graph, we foresee a contribution of 4% to 6% coming from business growth. In our strategy, our strategic drivers, you have driving the profitable growth, you have, of course, the focus on distribution excellence and enriching the customer experience. That should contribute positively to our volumes growth going forward. We have, of course, the continued profitable growth in our Reinsurance business in line with the business plan that was announced in 2022, contributing to the business growth. We have our operating entities striving to grow in line, even outperform the market growth of their separate markets. And finally, Hans mentioned SME and solutions for an aging population as 2 accelerators on which we can create additional growth. In SME, we have the ambition to outgrow the SME market and in Life, aging solutions. Hans has mentioned that in Life and Pension liabilities, we foresee with the initiatives that are planned to have an additional EUR 2 billion, at least EUR 2 billion Life and Pension liabilities in '27 compared to the normal road without these initiatives. In summary, 4% to 6% business growth where you can expect Non-Life based on today's assumptions to be more in the upper end of that range and Life to be more in the lower end of that range. We also confirm that we foresee that even in the economic situation in Asia today, that the Asia segment will continue to outgrow the consolidated entities there. Economic situation of today, we foresee that Asia will continue to grow at twice the level business growth as we see in the consolidated entities. Let's now move to the margin expansion part. As Ageas, we have a strong track record in everything which is technical insurance, operational and distribution excellence. And we use that to better serve the clients but also support the margins that we are realizing. First, look at the Life margin and what we expect going forward. There's many initiatives that are planned to contribute positively to the margin and that contribute positively to the bottom line. But most of that improvement we foresee to utilize to make our product offering more attractive in the market and so indirectly support the business growth. If we look at the Asian markets, we also see a lot of improvement initiatives, but they, we foresee, to be offset by the lower interest rate environment that we have in China today. So combined, our outlook for the Life margin is more a stable outlook. There's a lot of questions on Life margins and what we'll be showing. We will continue disclosing Life margins. But you have seen with the move to IFRS 17 line, with the move to group-wide Life margins, that especially for operating entities and segments which are more dependent on contribution of protection results and which have fast-growing Life liabilities, that these Life margins are more volatile and less telling. But if you look at the Belgium markets, there, the Life guaranteed margin stays very relevant. So we guide also to have around 90 basis points on average as a Life guaranteed margin in the Belgium market. Let's now look at the Non-Life margin. We said that in total here, we foresee a margin expansion of 2% to 3%, Life margins more stable. That means that this contribution will come from the Non-Life segment, based on the assumptions that we have today looking forward. Hans already shown that we foresee a positive contribution to our insurance result of EUR 75 million to EUR 100 million. EUR 75 million to EUR 100 million is comparing 2027 expected results with 2024 expected results. This is an improvement in the combined ratio of approximately 1% to 1.25%. So if you translate that, that will mean that we assume, we guide toward a discounted combined ratio of approximately 92% in '27 on a discounted basis and assuming today's interest rate environment. Hans already has shown how we're going to do this. What will drive this improvement in the margin expansion? 1/3 will come from the positive contribution from data and AI initiatives that will mostly be contributing to the improvement of our expense ratios. 1/3 will be coming from the improvement in technical and price positioning and claims management. And this especially in product groups, where we're not reaching the minimal profitability targets that we have in mind. One of the example is Household U.K., where we're still re-rating in the market to support the profitability going forward. And 1/3 will be coming from these initiatives to simplify and digitize further our business, which will contribute positively to the margin evolution. So in summary, we commit to an EPS growth of 6% to 8%. And based on the assumptions of today, we foresee that we will be able to deliver on that commitment with the contribution of 4% to 6% from business growth, 2% to 3% from margin expansion and 0% to 1% from capital redeployment. But again, this is an assumption based on what we know today, but we have also shown in the past that if markets change, the environment are different, that we will take the necessary measures to adapt and live up to the commitment that we have put forward. It's also interesting to look at from a different perspective and to take a regional view on that outlook that we have from the growth, the EPS growth that we've put forward. And if you look at it from a regional perspective and we look at Asia on the one hand and we look at the rest of the activities, you will have different contributors to the growth of the net operating result, but the end picture looks quite similar. For both, we expect the growth of 6% to 8% going forward, over the Elevate27 period. For Asia, the growth will come primarily from business growth, and this can be explained by, on the one hand, the portfolio effect, past sales that still have to run through the Life liabilities growth and also, there remains big social security gap in the Asian market, which means that the insurance market, we continue to see outgrowing the economic growth of these markets. As mentioned on the margin side, we see improvements. We see improvements by moving more to profitable product mix. We see improvement by improving pricing agility and we see improvements by focusing on expense management. But these improvements will help to offset the impact of the low interest rate environment in China. If you look at our consolidated entities, we also expect a growth in the net operating result of 6% to 8%, and this to an equal contribution from business volume growth and margin expansion. I already explained the business volume growth, which is the continued growth in our Reinsurance business, which is the growth in our direct insurance, the outgrowth in the local market and the acceleration, the add-on growth in SME and in aging solutions. The margin side, primarily in Non-Life and coming from data and AI, coming from technical pricing claims management and coming from simplification and digitization. Now let's have a look at the holding free cash flow and the shareholder remuneration. Let's take as a starting point 2024. And over '24 on the lefthand side, you see that we have realized a nice increase of 12% in the recurring dividend upstream from mostly -- fully sorry, from our consolidated entities. And remember, we didn't ask for a dividend of U.K. to support the high growth that they were realizing in the U.K. So that translates over '24 as a starting point in the net dividend upstream of slightly more than EUR 800 million. We're expecting holding costs of approximately EUR 175 million, so that translates in a holding free cash flow of EUR 625 million. Now in that dividend upstream, it's good to know that Belgium, Europe and Reinsurance are contributing approximately close to 85% of the total dividend upstream, with the dividend payout ratio from Belgium and Reinsurance being at 100% and Europe being at 55%, in line with the fact that we didn't ask for a dividend of the U.K. Asia has a payout ratio of 23% and is contributing approximately 15% to the total. We foresee the future growth rate in the holding free capital, thanks to a positive growth difference between the growth of the dividend upstream and the growth of the holding costs. The growth of the net operating result, 6% to 8%, that growth in our consolidated entities, I foresee, we foresee to drive still an important part in amount in nominal terms of the growth of the dividend upstream going forward. And again, remember, with U.K. not contributing dividends in '24, that means that there is also a step-up possibility contributing to the growth in the dividend upstream. We remain also confident that also the Asian entities will continue their dividend payments at a growing trend over the longer term. This is supported by a net operating result growth of 6% to 8%. This is supported by the fact that we see alignment with the partners and the partners also focus on optimizing the dividend payouts. But even if there would be volatility in the results going forward, as this is only 15% of the total, we will be able to manage some volatility over the future years. That brings me to the targets, yes? We have a target of the holding free cash flow of more than EUR 2.2 billion, with an increase of 25% to 30% compared to the Impact24 period on a comparable cash view. So adjusted for the movement to the cash view and adjusted with that EUR 100 million to EUR 120 million, explained by dividend upstream growth of 6% to 8% and a holding cost growth below 4%, creating a positive difference between the 2 growth rates. For the total shareholders' remuneration, we target to be above EUR 1.9 billion at a growth of almost 20%. Now this means that the shareholders' remuneration is 85% of the holding free cash flow. And that difference, we plan to use to support profitable growth, to fund profitable growth or to fund M&A opportunities. And of course, if this would not be available, then we can use that difference also for additional shareholders' remuneration. Some concluding remarks on our balance sheet and financial flexibility. We have a strong balance sheet. We have ample financial flexibility. I'm not saying anything new. This is also what we disclosed in the half year results. We reconfirm that under Elevate27, we do not change our risk appetite. And we also keep a neutral solvency level of 175% based on our Pillar 2 ratio unchanged. We only changed the name to neutral. We don't put it on the headlines because as we said in the past, this is a neutral level. This is not a minimum level. So we changed the terminology accordingly. For what do we use that? We use that for performance monitoring internally to calculate the operation of free capital generation and we confirm the same picture that we've shown in Impact24 for what we would call capital management thresholds. A final slide on capital productivity, capital management. Under Impact24, we have given more importance to that topic, and that will also continue under Elevate27. Under Impact24, that started with monitoring up close the operational capital generation, operational free capital generation at OpCo and segment level. So we're now disclosing them also on a group-wide base to you and per segment. But we're also using this internally, both for the consolidated entities and the NCPs. So these numbers are an integral part of the conversation that we have with the partners and the NCPs. Another example is the improved capital fungibility which with Reinsurance for capital management is the most clear visible example how we have increased that capital fungibility going forward. We also have used though under Impact24 to improve our internal cash management. So we have strengthened the central liquid resources. Think about the repayment of the internal debt of AG, the alignment of interim dividends received and interim dividends paid. And we also focus on capital remuneration in how we look at the performance of different entities and as such, we safeguard the long-term value creation. So you look at the value added, but we also look at the return on capital. With return on capital, we've defined as the difference between OCG and the capital consumed, and require operating companies, both consolidated and NCP, to generate a return in excess of the local cost of capital. The excess return that we ask for is, of course, dependent on local market situations; our outlook on future value creation that we can do; and to what extent the entity is adding to group diversification benefits. And this is a simplified format to show you how we are looking at that, and we clustered it. And you will see that only 15%, the 5% and the 10%, is generating net operating result while at the same time, having a return on capital which is below the local cost of capital. The biggest one, the 10% on the right is high-growth company. And it's quite logical that if you're in a high-growth company, that you're not immediately living up to a return on capital targets. But the moment that growth starts tapering off, that you get a better balance between return and between volume growth. You also see that 5% is in what we would call a transformation journey, transformation trajectory in which we have and/or to improve the growth and the return on capital, and they should also contribute towards the future in improving our return position. But what is most interesting to see is that 85% of our net operating result is generated by companies which have a high return on capital, significantly above the local cost of capital threshold, which makes us very confident on the long-term value creation going forward. So I have now reached the end of my presentation. We will take 3 minutes technical break. There will be a clock on the screen, and they will do things on stage, and then we will be back on the stage to answer any questions you might have. [Break]

All right. Welcome back. How do we organize this? Veerle, you pass the mic? [ Michael ]?

It was a lovely presentation. I like the fact that you're smiling. And my first question, because Karolien is not on the stage, how much more do you think they could have done than the figures they've given us? That would be my first question. But I can make it more precise, which is the numbers you had on that lovely slide with the EPS, actually adds up to 6% to 10%, not 6% to 8%. So I just wondered if you can explain a little bit on that? And my last question is, you spoke, Hans, a lot about T rkiye. And I just wondered is T rkiye that little 5% lump, which is going to get better and how much? What numbers can I put in my model for T rkiye?

Yes, nicely spotted. On the different components, it has been deliberate. So we added up to the lower boundary where we had 6%, and we kept some flexibility on the upper boundary to see how they would combine because, as you know, there's always a bit of link between how you do your price positioning in the market and the business growth that you can do. So on that side, we wanted to keep some flexibility on adding the upper boundaries of the equation.

On T rkiye, so that Karolien can think about her answer, on T rkiye, well, we did not comment where the different countries are positioned. I can tell you that in that ball, there are very specific market attention points. So that means that we are still confident that we can move them into the right direction. Of course, we will monitor that very closely. On T rkiye itself, independent of that graph, I can tell you the situation, very much the same. The Non-Life company, of course, with the effect of the inflation and the pricing mechanisms in the Turkish market that stays difficult, but improving. As I said during my presentation, the Life side with AgeSA is actually doing very well. And it's growing quite material. Remember that it's also quite common in T rkiye to write U.S. dollar Life liabilities, covered also by U.S. dollar assets. And we see the company is still benefiting from that. I don't know, Karolien, how much more you want us to do.

Yes. So I think on the question on the simplification of the targets we put forward, I think what we reflected a bit internally, in the end, it's all about 3 things. It's about the earnings we generate out of the businesses that we have. It's about the cash that we generate at the level of the group, which is the second one that you see. And then, of course, it's about how much of that cash can we distribute in terms of shareholder remuneration. And of course, those 3 things are underpinned by the margins we make in Life, by the combined ratios that we put forward in Non-Life which you heard also Wim talking about. It's something that as good insurers, we will continue to guide you on. But in the end, it's those 3 things that will drive the value of the group. So it was a deliberate choice to also simplify around these 3 components.

Can we raise the volume a bit because here, we cannot really hear it?

Farooq Hanif from JPMorgan. Thanks for the presentation, by the way. I think it's very clear. Just going to the point you made about getting 2% higher growth from SME, your kind of forecast. Why is that? Why do you naturally think especially in Non-Life you get that higher growth? If you could just back that statement up. Secondly, let's say, you gave -- obviously, you're not giving a combined ratio target, and I think that's very sensible. But you indicated under current yields, the 92% will go down materially. I mean, are you just transferring from insurance service result into net financial results? Or do you feel from a profitability point of view, it's really not going to make a difference by 2027? And then my last question is on the Taiping Pension opportunity. You mentioned that market -- sorry, it's gone again. You mentioned that margin in Asia goes -- is going to be flatter and you're looking for top line growth. So can you talk about Taiping Pension? What numbers can you give us on the growth potential, the market and also the margin on that?

Maybe I'll take the first one on SME, outperforming growth. Well, first of all, I think the SME market as a whole will continue its growth pattern. Potentially, I think, even more and a bit longer than the retail market where you see that combined ratios are better. So today, in most of the markets, the combined ratio of the Retail segment is better than the SME segment. So I think there is still room to further improve in that area. Secondly, like in Belgium, we have really been upgrading our capabilities over the last few years coming from a lower position into what is now approaching a market-leading position, and I have no reason why we would not be able to continue that momentum. If I see the intimacy with the broker that we have, the presence in distribution and also, let's not forget the bank. The bank in Belgium have clearly taken a commitment to also develop the Non-Life segment for the SMEs and medium-sized enterprises. And I'm sure they have all the right to take a fair stake of that market coming from almost nowhere. So that's why we see that outperformance. I think combined ratio?

Yes. On the combined ratio, you remember that we disclosed the sensitivity of the combined ratio for interest rate movements. So as a reminder, if the interest rates move up 50 basis points or down 50 basis points, we see a movement on the combined ratio of 44 basis points, just to put that in perspective. Now it is important to remember that we are pricing from an actual perspective. That means that we also take into account the interest rate situation. Due to the way we are presenting it, with smaller interest rate movements, you will have a bit of volatility in that combined ratio. But if we would go to a completely different interest rate environment, at that moment, we will also reprice the products to take that into account. So we've said that we are one of the companies that look at the discounted combined ratios also to support the profitability going forward because it's that discounted combined ratio that drives the return on capital. So if you look at return on capital, you have to take that into account. Yes. On Taiping?

Yes, please start.

Yes, on Taiping Pension, when I was referring to the margins, I was mostly looking at what you would call the Life margin. The Taiping Pension business to a big degree is, of course, a pension fund business, which is margin driven, and it will be especially how the cost/income ratio will be evolving over time that will drive the profitability. So it's more a margin business for a big part. There's also short-term and long-term insurance contracts, but they're on a much smaller level than what you see, for example, in Taiping Life. But I don't know, Hans, if you want to add something on the pension market in China.

Yes. And you have the 2 components there. We have the occupational pension and you have what we call typically the second pillar for the corporates. But you also have now, of course, the launch of the third pillar, pension system in China. That means individuals organizing pension savings. And that's a new market to be developed. The first signs that we see in the numbers are quite promising. But honestly, it is very hard to guess where that will end because this is a new market to be developed. But I cannot even imagine what it would mean if I would say, 400 million Chinese, who have become middle class over the last 20 years, would start using this individual third pillar of pension saving. In that sense, I would say, compared with maybe a little bit when we went into Taiping Life 20 years ago, it's like where is this going to bring us? The only thing I see is 2 things, demographics, the way the economy is transforming and also the regulatory initiatives to drive the development of that market makes it very promising. But please don't ask me a number with 10% accuracy where that is going to bring us. Of course, we have run our models there. We have stress test models on the entry ticket that we pay to get into that business. For us, the main driver of us, it would be good for us to stay a complete player in this business segment in China, meaning with the Life insurance side in Taiping Life and then the Pension business, which is a little bit in both. So that was the -- with the partner, of course, we know and we work very well with.

David Barma from Bank of America. Three questions, please. So firstly, on the target to increase by EUR 75 million to 100 EUR million, the Insurance results. Could you give us an indication of how that is split between the U.K. and Portugal? Secondly, on free cash flow. Can you talk a little bit about your assumption for growth in Asian remittances? Is that based on the earnings target that you put out, on the 6% to 8%? Or are you assuming any change in payouts? And then lastly, on Reinsurance. What's your expectation for kind of normalized earnings growth for the Reinsurance unit?

I don't know, [ Louis ], whether we -- we almost don't hear anything here. There is a big echo. So sorry, we need to guess a little bit what the exact question is. I think the first two are for you, I think.

First one I thought to understand that you want to have more granularity on the EUR 75 million to EUR 100 million, what would be from the different segments. I don't have it split per country. But of course, if you look at our half year reporting, you will see already a better combined ratio in Belgium. So there, the improvement is far less. And you see much more improvement potential in Europe and, of course, in our Asian segment. So that's the biggest contributor to come to the improvement of the combined ratio.

Just on that, but -- can you hear me? No? [Technical Difficulty] Okay. Great. Just on that, what I meant was between Portugal and the U.K. So maybe to ask this differently, would you say Portugal is already back to kind of a run rate of profitability? I think where the profitability pattern changed quite a bit from pre-COVID to today in Portugal. Is this back to normal?

So what we mentioned during the half year results is that the combined ratio of Portugal and U.K. are slightly better than what we disclosed to 95%. So they're quite similar. And there, you will see for both the improvement potential still going forward.

If you -- on the health care side, I think we saw significant improvement there. Health care was the major pressure point in the Portuguese market. And there, we have seen significant improvement, mainly due to premium rate increases. And then, David, you had a question on Reinsurance, but I didn't capture that.

Underlying growth.

Simply, what your growth expectation is for earnings in Reinsurance?

Okay. We do not specific -- that specifically.

No.

I don't know, Wim?

But you have, of course, if you look at the Reinsurance result, there's a big part that is coming from Reinsurance for capital management, so that you can look at the growth rate, of course, of the underlying direct business that will evolve in line with that one. And then the other part that will contribute to the growth is the growth of the external Reinsurance where we said that we will follow the business plan, as we put forward in '22. There's approximately already EUR 120 million capital used, and we will go to EUR 250 million in capital. I think there was a question on the free cash flow from China going forward. What we assumed in this outlook, if I may say, based on the assumptions we have today, is a kind of organic capital growth rate going forward. So that's the underlying assumptions. You have a view of what they do today. You probably heard that our partner, CTIH, which is the mother company of Taiping Life, has also announced for this year, stable and then in the longer term, growing dividends. So that's the underlying assumption that we have taken in this outlook. We didn't assume a complete different positioning of solvency ratio. We didn't assume a complete different higher rate environment in that outlook. So that step-up was not included. But of course, we have included for some volatility that can happen over the period for the dividend upstream from China.

Nasib Ahmed from UBS. First question, again, on the 6% to 8%. When you keep on saying that it depends on current market conditions. So what -- particularly your interest rates, what assumptions are you using? Are you using the forward rate over the next few years and that rates are going to move quite a bit based on the forward curve is, what rates are you using until 2027? Second question on Belgium. Hans, you were talking about no backward transactions, but would you be open to doing something on the disposal side? But also on the acquisition side in Belgium, something came to your table? And on the acquisition side, are there any areas where the regulator wouldn't be happy, given you've got a very strong position already in Belgium? And then third question on the U.K. Non-Life. You gave an example, Hans, on how you can actually determine the cost of claim based on pictures in Belgium. You probably don't do that in the U.K. Are you going to expand that and try and do that in the U.K. as well. And claims management in the U.K., I don't think you have your own garages. What makes you think that you can win on the claims management side in the U.K.? I know your pricing is very agile, but on the claims management side, how are you competing with your competitors in the U.K.? Sorry, lots of questions, please.

Yes. But first, on Belgium, yes? On Belgium, on the acquisition side, I assume you have a specific target in mind when you asked that question. Yes, we have a very strong position, but that does not exclude any options. It is not only market share that matters in this respect. And then even then, you have market share by business segment. Actually, you shouldn't -- don't -- no need to look overall. What also plays here is, for instance, distribution, right? So if you have a target in mind that is more in the public sector compared to us, we are almost fully in the private sector. That does not automatically mean that, that would create the competition issues or a target that is distributing directly, which we are not doing at AG in Belgium. So there is more elements than market share at play here when we look at ours. But in that sense, yes, we are open to look at further strengthening our position in Belgium, specifically in areas where it is complementary to what we do. In the U.K. transformation, I didn't get your question fully. Remember, we have 3 elements. The first 2 -- the very first one, I think, is fully live. That was -- and I think for the U.K. market, the most important one, that was pricing and underwriting agility. How fast can we bring a new tariff to the market in a market that is so price sensitive? Remember that November last year, we managed to do that in Motor, and we have seen the benefits of this. In home, it is also live now. We have not seen yet the full effects, also in the market, by the way, we have not seen the full effects of what I would call the right pricing discipline in home, but we are ready. So the tool for that underwriting is ready. Second block is everything that is related to the customer journeys, modernizing, digitizing, data-driven customer journeys. There we're also on a new IT system. That was a plan that should bring us to the end of the year. And we are quite well on track. There might be a minor delay, there might be minor expense over, but nothing material, nothing I would say that would make me worry. And here, again, the first modules have already gone live. So I hope we can see some of the benefits coming in soon. When we designed the plan and the allocation of capital, we left claims management a little bit towards the end. So there, we have not really started at a big scale on the claims management side. That may be for the future. I don't know, Karolien, whether you want to add something here?