Allianz SE (ALV) Earnings Call Transcript

Ladies and gentlemen, welcome to the Allianz Conference Call on the Allianz Group Financial Results for the Third Quarter of 2025. For your information, this conference call is being streamed live on allianz.com and YouTube. A recording will be made available shortly after the call. At this time, I would like to turn the call over to your host today, Claire-Marie Coste-Lepoutre, Chief Financial Officer of Allianz SE. Please go ahead, Claire-Marie.

Thank you very much, Andrew, and good afternoon, everyone. I'm very pleased to report on another very strong quarter for the group, which is building to an excellent contribution to the year and our 3-year plan. Our results are supported by both ongoing top line momentum and an attractive margin development. Across the organization, we are working on our 3 strategic levers of smart growth, productivity and resilience, with first signs of materialization in our numbers. As you can see on Page A4, year-to-date, our business volume growth continues to be very strong at 8.5%. As previously, this growth is diversified from a segment perspective and within the segment across businesses and geographies, which gives us a lot of strength for the future. Our operating profit is now up by more than 13% versus last year. That number FX adjusted, would even be 13%. Here as well, we see positive developments in all segments. Our core net income growth is accelerating compared to the first half of the year. Year-to-date, it grows by 10.5% or 8% adjusted for the disposal of -- for the disposal gains on the Life JV with UniCredit in Italy that we did book in the second quarter and the anticipated tax effect on the disposal of our stakes in Bajaj in the first quarter. Our core EPS adjusted for the same effect is now up 10%, which is very strong and ahead of our 7% to 9% target range. Similarly, our core ROE is above 18% and well ahead of our target level as well. Our solvency ratio emerged at 209%. Our operating capital generations continued to be very strong, which gives us flexibility for current and future capital deployment. Given the excellent performance of the organization at the end of September, I'm very happy to indicate that we have adjusted our outlook upward yesterday night and that we expect to land for the full year at least at EUR 17 billion operating profit. Of course, the year is not over, and we can still see natural catastrophes or market movements. But clearly, we are very confident in the overall outcome. Turning to P&C and having a look at Page A5. Here, we had another excellent quarter, building on previously excellent quarters achieving another record level of operating profit, now up 15% versus last year, as you can see on the right-hand side of this slide. Year-to-date, our total business volume is at plus 8%, which is excellent. This 8% growth is ahead of our assumed medium-term growth rate of 6% to 7%. Approximately half of the growth is volume, rest is price. And compared to the first half of the year, the volume growth has been accelerating from both retail and commercial. Our internal top line growth for the third quarter is in line with what we have seen for the second quarter as is our rate change on renewal for the full book at around 5%. The renewal rate continues to be higher in retail at plus 7% versus commercial, which is at plus 1%. The competitive conditions clearly are differentiated market by market in general, but in general, actually, personal lines continues to see a positive environment, especially in core Continental Europe with retail motor and fleet, as an example, pricing at plus 9%. Commercial lines remains more resilient in mid-corp than large corporate, but no real significant change compared to the second quarter. We are as well making good progress with growth initiatives in the retail P&C business, which nonetheless will take time for full impact as we expect actually. We see good traction in Germany, in France, in Latin America, in Australia, as an example, and we will keep the focus on continuing to roll out our tools to deliver higher retention, new business and cross-sell to grow volume. In commercial, we have good ongoing momentum in some areas like our partners business, in particular on the health side, and we remain disciplined as required where pricing conditions are tight. As you can see as well, we achieved a very good level of combined ratio at the end of the third quarter at 91.6% with both retail and commercial performing. Also, as you can see now our material, this performance is very broadly spread across the portfolio. In particular, I'm very happy with the development of our attritional loss ratio with more than 1 percentage point progress year-to-date. This has been particularly driven by our retail business with the benefit of the underwriting and pricing actions earning through. Also, our constant focus on productivity continues to deliver with our expense ratio down around 30 bps to just below 24%. The third quarter was very mild from a natural catastrophes perspective, but we booked no runoff overall. So we further increased our reserve confidence during the quarter. Overall, our P&C business is doing excellently. We see volume growth, which reflects a mix of strong ongoing developments, especially in retail and targeted growth in commercial as we are also working together with the cycle management, our profitability is not just a reflection of more benign nat cat, but also very strong attritional improvements, relentless focus on productivity and significant prudence when it comes to the recognition of runoff. Let's turn to our Life results on Page A6, where you can see here that we are fully on track to meet our targets. The numbers are more impacted compared to P&C by FX. And as a reminder, we also have the disposal of the UniCredit JV in the third quarter that is impacting our numbers. Our value of new business is up 4% FX adjusted with our PVNBP up 5% at a very stable new business margin, which is well above our 5% ambition level. We see good developments across businesses. Life new business can always be a bit lumpy. And last year, our third quarter was extremely strong benefiting from various promotions. You may remember that our U.S. life business was up 60% last year in the third quarter, and we had some large ticket transactions, in particular at Allianz Leben. So if you want to get a good illustration of our fundamental growth in new business value, you can take the growth over the last 2 years between 9/9/2025 and 9/9/2023, which is 20%, which gives an estimated annual growth rate of around 10% FX adjusted. We also continue to have a strong year-to-date increase in net flows, even with slower new business growth in the third quarter versus the first half. And if you look in more details at the profile of our business development, you will see as an example, that we continue to grow at 93% in our preferred lines that our health business in Germany continues to show exceptional momentum once again with year-to-date new business profit up 56%. Italy as well is really worthwhile to mention, because we see a very good growth of 13% if you exclude the UniCredit business with the vast majority of that growth coming in unit-linked. Moving to the contractual service margin. As you know, the net CSM development is the indicator which matters most for us as it reflects on the stock of profit to be earned by us in the future. So net CSM year-on-year is up 5% or 8% FX adjusted. This is well on track for our targets as is the normalized growth of the CSM just under 4% at the end of the third quarter. In the gross CSM work, there is some variances this quarter from the annual assumption update and the tax adjustments. This is mainly coming from the lapse patterns we see in the AZ Life business, which is then offset in the net view given the reinsurance that is in place. The trajectory of our net CSM is a better indicator for the business. Net of reinsurance, the noneconomic variances and the assumption changes are actually negligible year-to-date. Our Life operating profit emerged at EUR 4.2 billion, growing 6% adjusted for FX. This puts us well on track against our targets. And this emergence of operating profit is driven by both the CSM release and improved variances in the underlying. Overall, our Life business momentum is good. Our new business profitability is at attractive level, and our IFRS profitability is emerging as expected from a diversified portfolio. Moving to Asset Management on Page A7. Here, you can see how structurally our business is doing well at navigating the market environment, delivering outstanding net flows, performance and profitability. We had our best third quarter ever in terms of net inflows at EUR 51 billion, which brings the annualized year-to-date growth rate to around 7%. Net flows in the third quarter are positive, both at PIMCO and AGI across various strategies, platforms and geographies. Our Asset Management franchise continues to be supported by the performance we deliver to our clients with 92% of our third-party asset under management outperforming the benchmarks on a trailing 3-year basis as of the end of the third quarter. If you look further in our material, you will see that our third quarter revenues are up 9%, FX adjusted. They are supported by the higher average assets under management, continued resilience in fee margins at both our asset managers together with performance fees in solid territory. Overall, this leads us to revenues at EUR 6.2 billion at 9M, which translates into EUR 2.4 billion of operating profit for the segment. This is supported by the continuous focus of both asset managers and productivity, which is fueled by cost discipline, operating leverage as we grow our revenues, overall resulting in a cost income ratio improving 60 bps year-to-date to now below 61%. So overall, on Asset Management, we see an attractive diversified franchise with growth momentum and profitability. On Page A8, you can see the development of our solvency ratio, which is characterized by a continued very strong operating capital generation, fueled by the excellent performance of our P&C business, in particular. This capital generation continues to support our attractive payout, both dividends and share buyback, together with some of our recent capital deployment like the investment into Viridium or the partnership with RAA in South Australia. As part of our Capital Market Day commitment, we are focusing on the implementation of our capital management framework, and we are confident to achieve our full year objective of more than 20% in terms of operating capital generation. Our sensitivities are almost unchanged at a low level and continue to offer confidence on the resilience of our profile. So overall, we are in a very good position, both in absolute level, sensitivities and ability to generate solvency through our business portfolio. While we benefit from some positive one-offs in our operating capital generation this year, there are fundamentally a lot of positive elements to be appreciated here. On Page A9, we are actually focusing on special events we had this year. As you can see, we are celebrating the 25-year partnership with PIMCO and Allianz following the completion of our first investment into PIMCO back in 2000. We thought it's very worthwhile to do a zoom on this. Clearly, it has been an exceptional partnership. We are very proud of it. and it has generated considerable value. If we move to next page, we will see evidence on multiple metrics. PIMCO has, for instance, grown its assets under management sevenfold, its operating profit ninefold. The latter now making up nearly 20% of Allianz Group operating profit. PIMCO is as well adding value through its strong management of almost 50% of the group's assets. PIMCO's franchise as a leading active fixed income manager has been underpinned by a consistently strong investment performance at the end of the third quarter, as an example, 97% of assets under management were outperforming on a 3-year basis. As I have already mentioned, PIMCO has seen outstanding flows this year and continues to capture a high market share on the flow seen by the industry into active fixed income strategies together with the support from some recent initiatives. As an example, the activity of product I have already mentioned in the second quarter. We continue to look for ways to further increase the synergies between PIMCO and the wider Allianz Group as we leverage the benefits of an integrated asset management and insurance group. The relationship is very symbiotic alongside PIMCO being a manager of our general account assets, Allianz insurance businesses can seed new strategies for PIMCO and help expand distribution. PIMCO as well is supporting and benefiting from our third-party capital optimization vehicles, such as Sconset for Allianz Life in the U.S. Beyond all of these and what may be less identified in the case of PIMCO is how innovative this business is. The success of PIMCO plays as well in its ability to constantly look across the business at new and better ways of acting or investing. You have multiple examples of that in the Capital Market Day presentation performed by Christian Stracke, as an example. Looking ahead and as we outlined at the Capital Market Day last year, we are very positive about PIMCO's future as a leading active manager with skill in both the public fixed income markets and across a broad range of alternative strategies, which are a fast-growing part of its business. So focus is mainly on asset-based finance strategies, that support the real economy as an example, by investing in data centers. So overall, after 25 years of success, we look forward to many more years of working together, seizing growth opportunities and delivering excellent performance to our clients. Let me wrap up on Page A11. Clearly, we have an excellent year, so far, where our delivery momentum continues across all our segments. Together, we are working on executing the Capital Market Day levers, including the focus on higher capital generation and the strengthening of the resilience. As part of that, both the fundamentals and the diversity of our business continue to give us confidence even if the environment can be volatile or uncertain. With all of this in mind, and given the performance achieved at the end of the third quarter, we have confirmed yesterday in our ad hoc, a EUR 17 billion to EUR 17.5 billion range for the outlook. This is subject to the traditional caveats, but clearly, we are very confident. What is important for me to highlight is the fact that we would want to land the year at a level which gives us confidence in our ability to sustainably grow from and to deliver on our planned trajectory. This may mean that even if we are already today very comfortable with the quality of our balance sheet and underwriting, we are prepared to do as we did in the third quarter last year when it comes to our current accident year or previous accident year bookings. This may lead us to a higher combined ratio for the first quarter versus what we have experienced year-to-date, bringing our combined ratio for the year up versus 9 months. With this, I would be very happy to take your questions, and I hand over back to you, Andrew.

Great. Thank you, Claire-Marie. [Operator Instructions] Okay. Great. So it looks like the first question is from Andrew Sinclair of Bank of America.

Andrew Sinclair. First for me was just on P&C. And you've confirmed you're building more prudence in those reserves, maybe even some more prudence to come in Q4. Can you help us put some numbers around that? It's always tough to quantify and put context on the reserving strength. Anything that you can do to give us some color on the reserving strength -- strengthening, shall I say, that's taken place over the past year or so? And then just second question is on PIMCO. You talked about the opportunity for PIMCO in private markets, that's a space which has also fully attracted a bit more scrutiny recently. Just what's your outlook on private fixed income risks for that market? And what Allianz has done to really mitigate those risks across the group?

Thanks a lot, Andrew, for your question. So I think you were first asking because on our side, we need to work on that further. The line is not very good. So it was a bit difficult to fully understand. So I think you were asking to provide more color on the P&C reserves, right? And basically, what was the level of confidence we have increased. So I think please understand that in general, we don't provide detailed information when it comes to our overall level of reserves. But as I have mentioned already, we are very comfortable with the quality of our balance sheet. We have increased the level of confidence in our results in the second quarter and in the third quarter as well. And when I look forward, we are now in the process -- in the yearly process to do this fundamental revisiting of our reserve level and globally at group level, we are also in a very comfortable situation. So what I think is important is we are obviously benefiting this year from a lower level of natural catastrophes and as much as possible to leverage that environment to further provide flexibility for the future is an important aspect, I believe, for us overall. And then I think on PIMCO, you were more asking questions on the private fixed income environment overall or that was more related to our own portfolio in general?

So probably both of those, to be honest, just kind of outlook for private credit at the moment. And I think it's an area that's got a lot of scrutiny recently. What you've done across the group to manage those risks?

Yes. So thanks a lot for the question. Obviously, we are very well aware of the current discussions which are happening today around private credit or private debt in general. We are very confident with the quality of our own assets. As you know, we have been invested here for a very long period of time, and we have also a very long experience when it comes to the management of private debt in general. There are different ways to look at the numbers. But clearly, we have disclosed -- we have provided -- or I have provided a full detailed disclosure at the Capital Market Day on those numbers. And we have also updated those numbers at the end of last year. And if I look at the portfolio provide at the end of the third quarter, actually, the numbers have not changed much compared to the disclosure we have provided at the end of the fourth quarter last year. So you can definitely refer to the appendix to get the full details on the portfolio. In general, clearly, I mean in this portfolio, there is nothing very exotic at all, right, given the fact -- I mean, given what I have already mentioned. And if we do a bit of a zoom high level, right, into that portfolio, approximately, I mean, over 50% of that portfolio is real estate related, approximately 20% of that portfolio is connected to infrastructure. And both the middle market lending portfolio and the private credit portfolio are of very high quality, highly diversified with very good loss experience. As an example, in the middle market lending portfolio, we have an average loan size that is lower than EUR 10 million. So that's just to give you a sense on how that looks like. So finally, I think when you think about credit -- about private credit, we have a lot of insights within the group, right? So we have PIMCO on one hand, but we also have Allianz Trade. So this is a very natural place for us to be, and this is why we are extra comfortable, I will say, with our own balance sheet from that perspective too.

Thanks, Andrew. Next question is from Andrew Baker from Goldman Sachs.

So the first one is just on the P&C attritional loss ratio. It looks like there's some noise coming through in the fourth quarter from AGCS accounting change, and I guess, presumably some continued underlying earn-through. So just are you able to give us a sense of how you think the attrition will develop, I guess, in 4Q and then into 2026? And then secondly, on the asset management cost income ratio. Clearly, third quarter was very strong. Top line has helped there. I think the press release mentioned some management actions. Are you able to just give a bit more detail on what those management actions were? And then sort of is Q3 a good level that we should be thinking about going forward? Or is there any one-offs in there?

Thanks a lot. So just to start with, indeed, is good you are highlighting this point. Indeed, we have -- it's related to IFRS 17. We have -- I mean, we have the so-called nondistinct investment component, and we need to do small adjustments in the AGCS portfolio to address for that effect as part of the IFRS fine-tuning of the transition, if you want. So it's just a story of geography. So the overall combined ratio is the same, but we have an effect between the runoff and the attritional loss ratio, which is coming. So for the discrete fourth quarter slides, we would expect to have our undiscounted attritional loss ratio to have a negative effect of 1 percentage point and the runoff ratio to be better by 1 percentage point as well because we have a catch-up effect which is materializing in the fourth quarter. So you should not extrapolate the fourth quarter effect to 2026 because the run rate will be lower from that one. So if you want more details on the exact IFRS 17 effect, you can reach out to IR team, they will explain with pleasure, but I will spare everyone the details of that one. Then on the cost-income ratio of the asset managers. Actually, I would not say that there is anything specific that is coming into the cost income ratio at this point in time for both asset managers. I think, it's really the focus that they are having on general cost discipline and then the earning through of some of the growth that is coming through, but we have obviously also dedicated projects, which are aiming at harvesting some of the benefits in particular of the technological improvements that are being pushed through by both asset managers into their operating model.

Thanks, Andrew. Next question is from Michael, Michael Huttner of Berenberg.

And you must be really happy, Claire-Marie, to be most profitable insurer in the world, I think. Anyway, 2 questions. The first 1 is on PIMCO and actually it's 3 because I'm not so -- so on PIMCO 2 or asset management more generally, is there any exposure to the 2 names First Brands and Tricolor. And then more generally on PIMCO, given the enthusiasm that you put more slides in there about PIMCO, are you close to buying in the minorities? And how much could that cost? And what would be the benefit? Is there some numbers there? And then you alluded to further progress in retail P&C from the message you're taking, which I think are mainly to reduce churn, but there may be others. I just wonder if you can talk to a little bit about -- more about that, the potential benefit to come. I can't see where it would come because you're already sky high. Your revenue is up 8%, your pricing is up, your combined ratio is down. I just wondered where -- if you were to get a benefit from reduced churn or from increased retention, where would it be? And how much would it be worth?

Thanks a lot. So thank you very much for your kind words. Obviously, as an organization, we are very proud of what we are delivering. Thank you. And also, I mean, I did not mention it, but obviously, it's the outcome of a lot of hard work by many people. So it's nice to hear as well from your side. So maybe just start on the PIMCO minority. So today, we own 91% of PIMCO. We are very happy with the current arrangement. We also like the alignment that we have between us and the PIMCO partnership. So there is nothing additional to report at this point in time when it comes to that setup. Then I think to the specific names you were mentioning in terms of credit. So you know we never report anything on a name-by-name basis. That's very important for us, not to do so, also given the engagements we have with our various parties. But I mean, it's maybe an opportunity just to highlight the very strong performance of Allianz Trade in particular. So you have seen the results as well. So Allianz Trade continues to operate at an excellent level of profitability, and we are extremely confident in the ability of Allianz Trade to manage in the current environment we are experiencing in particular. So the names are mainly related to the automotive industry, right? And that's a sector that is definitely under the radar screen of trade, given, I mean, the tariff and also the supply chain issues in particular. So those are the typical names where we have an ability to see things coming and to react as appropriate to basically secure our trajectory. Now coming to retail P&C and where we are standing today in terms of growth experience, I would say. So what we see in the underlying of the numbers, and this may be interesting to have a look at is that our overall -- where we see -- I think overall, we are in the context of the Capital Market Day -- of the execution of the Capital Market Day strategy, right? And the execution of the Capital Market Day strategy, you remember on P&C was in particular going against 2 angles, one which was a platform play. And the second one was more the retail and the growth triathlon where we want to generate that uplift of 3% to 4% volume growth, right? So on the platform play, we see good progress at this point in time. So as an example, Allianz Direct has achieved a very strong level of internal growth of 14%, out of which 7% is actually volume, and we also see a good trajectory when it comes to partners. And on the retail side, we had a 3.5% volume growth at the third quarter and -- which is promising, clearly, and we are happy with the development we are seeing, which is related, as I mentioned, to some -- to the pickup out of the toolbox of some of the -- some progress in some geographies. In a way, at the end of the -- year-to-date, we are slightly above 2% in terms of volume growth. So we are on the right path, if you want, but we are not yet at the path we wouldn't want to be of this 3% to 4% growth. So that's important, we continue to execute, and we are happy with what we see, but we still need to continue to work hard actually to deliver fully against our target. And why is it that I am saying that? Because we also expect that the pricing momentum is going to reduce itself over the next few years. And so we need that volume effect to offset some of the pricing momentum. So that's the way to think about it, and that's the way we have constructed actually our plan.

And just a little add on, any idea of timing? Are you ahead of plan or just behind plan on this 3% to 4%?

It's a bit difficult to answer this one. I think we are happy with the pickup at this point in time. And I also think we need to continue working quite hard.

Michael, that was 4 questions. So on lack of time, you got a yellow card.

Four questions, I beg your pardon, I'll shut up. Sorry. Sorry. [ You have to give a ] red card next time so...

Thanks, Michael. Great. Next question is from William, William Hawkins from KBW.

Given how well 2025 is going, when you think back to the 7% to 9% EPS CAGR you presented a year ago and you're raising the bar slide, what key line items are most front of your mind that needs revising? That's question one, please. And then question 2. Sorry, maybe to focus on a negative when everything is really so good. But can you just come back and explain in simple terms the impact of the lapse assumption review in AZ Life and what this means for future earnings? Because on my side, I see an assumption change for higher lapse is a bad thing and sharing with reinsurance to make a gross negative into a net positive, again, sort of a mixed message. I think you've got a more constructive view on what's going on. So I just wonder if you could help me get a bit more comfortable with what we've seen in AZ Life, please?

Yes. Thank you. So I think while we are very happy with the development of our results year-to-date, right? I think the way to read it is clearly we are -- I mean this is very strong contribution to the 3-year plan. This is putting us -- ourselves also in a very strong position to deliver against the plan. But we still have like quite some time to go. The environment is a complex environment, and we also need to manage the overall pricing environment quite carefully. So clearly, I continue to see the 7% to 9% CAGR on the EPS being both a very good base and as well also challenging for the organization to deliver. So clearly, we have no intention to revisit that at that point in time. On the lapse assumption review for the life -- for AZ Life. So you are right. So we did revisit our lapse assumption, which is clearly an industry situation because with the increase of the overall yield, there was an increased level of lapses, which is also translating itself on the positive side into a higher level of new business of -- in the industry in general. So there is a sort of recycling in the overall logic. But we have reflected in the third quarter, the lapse level that we see in the AZ Life business at the current industry experience level, if you want. So that's coming as a negative into the gross CSM. And as you know, this book is -- I mean, it's partially reinsurance. And so we get also a partial benefit from the reinsurance we have in place because reinsurer have to take a share of that negative effect. What we see as well is that we have reflected also some of those effects into the investment results, which is also contributing as a positive into the quarter. So that's the way to look at it. The tax effect is a different topic. The tax effect is related to the German health business, where we are sharing the benefit -- where we are sharing the tax effect with our policyholder. So this is coming as a negative effect in the gross CSM because we are sharing with the policyholder, the future profits, benefits out of that one. But on the net CSM, it's actually coming as a benefit to us because we are also benefiting from the change -- from the future change in the tax effect on the health portfolio side. So that's the way to look at those 2 effects.

The next question is from Vinit, Vinit Malhotra from Mediobanca.

Yes. My question is one on PIMCO, please, and one on P&C. On PIMCO, it's quite remarkable, the 97% number that you obviously flagged on Slide A10. And I'm just curious that -- has that been driven by some recent push to alternatives or how would you say this happened? And how -- and has this been in your view really instrumental in this very record-breaking 3Q that we have seen? So I'm just curious to hear your views on the importance and relevance of this number. Second question is just on the retail P&C strategy or story. The motor is an important part of that, I think, and motor has been, I thought, benefiting. But when I see 2Q and 3Q combined ratios, I think that the disclosure is they were unchanged at 94%. So I'm just curious, is that something that we should have expected to be getting better? Is that something you -- is that in line with your expectation? And then if not motor, then where is the retail improvement coming from? Because I think that is driving some of the underlying improvements too.

Okay. So let me start with the PIMCO question. So I think like the performance of PIMCO is simply related to the way they are basically managing the environment and assessing the environment. So it's a structural performance of the asset management as an organization. So nothing particular, I believe, to reflect there. And the flows from our perspective are the outcome of obviously, the performance and the relationships that PIMCO has been having over many, many years and has been developing over many, many years with multiple counterparties, but it's also linked to the environment when it comes to active fixed income strategies and the fact that the absolute level of rate is a good one, also the fact that the slope of the curve is also a good one and that there is also an overall positive environment, which is leading to inflows in the active fixed income strategy. So that's one angle to it. And the second angle to it is that there is also a good success and pick up on some of the recent initiative that PIMCO has been sponsoring or fueling like the active ETF product, which is also contributing to that positive development. And then when it comes to motor, so we have been seeing a strong improvement actually in terms of -- in our combined ratio in motor. So if you look at the year-on-year comparison of the combined ratio in motor, it's now at 94%, as you rightfully mentioned. But a year ago, it was at 97%. So we have a very strong improvement coming there, which is in line with what we were expecting to see also given the underwriting actions we have been pushing through in the portfolio. So we are very happy with the development, and that's definitely one of the driver as well of the improvement in the attritional loss ratio.

Next question is from Iain, Iain Pearce of Exane.

The first one is just on business volumes in P&C. So if I take out AGCS ex-fronting reinsurance and look at the business volume growth, it looks like it's roughly 3% versus 7% at H1. So I'm just trying to square that with the 8.1% retail internal growth number that you've given. And also just trying to understand why the reinsurance number was so strong in Q3? And then the second one was just on PIMCO and a really, really strong flow number that was delivered. I'm just trying to understand if anything is sort of viewed as one-off in that number. I mean, clearly, you mentioned data centers in your commentary, there was clearly a very big data center deal announcement in the quarter. Is that included in the net flow number? And is that sort of an expectation of a strong pipeline for that sort of deal that could lead to these sorts of flows being benefiting in the coming quarters?

So just on PIMCO, very briefly, the short answer is no. There is nothing of that. So it's very natural inflows that we have observed during the third quarter, and by the way, actually, like at this point in time, we are seeing also inflows in our overall asset management portfolio at the similar pace as what we have seen as well in the third quarter. Then now on the P&C, I think on your question on the overall -- is on the overall growth or maybe I can focus on the volume growth, which I think will give you a good sense overall on where we are standing. So what we have in terms of overall internal growth for commercial, we are at 11%, right? And we have in that number, I mean, I think the commercial business, you always need to think through that it can always be a bit lumpy and we always have also nonrecurring items that may happen from one quarter to the next. So I think that's also the way to look at this quarter. And I will not take that as being the forward-looking level of growth, you should anticipate in the commercial portfolio. Indeed for AGCS, it's -- we have a growth effect, which is linked to the fact that last year, we had a lower level of ART business. And this year, it's higher. So it's contributing very positively to that growth effect. But then for the rest of our portfolios, we see good development in our mid-corp business, which is growing nicely in the mid-single-digit level. We also see a good growth level, as I've been mentioning on the Allianz Partner side that's coming from the health business, which is also developing very nicely this quarter, but also with a bit of lumpiness there for sure. And both at trade, we see good growth development and as well on the reinsurance side, in particular, where we have captured good opportunities in the structured business -- structured reinsurance business side, together with some of the Allianz X strategy as an example. And then I think, as I mentioned, volume growth overall for retail is at 3.5%, which keeps -- which still gives us room for further development. And overall, I will always go back to the 6% to 7% overall growth range we have given as being the right reference to consider for our business at this point in time.

Next question is from Kamran Hossain from JPMorgan.

First one, just on P&C. I think it's clear in a few markets there have been frequency benefits, particularly in motor. Can you just talk about to what extent you're seeing kind of that come through? And is this fully visible in the attritional performance in P&C? The second question is on Solvency II. I guess, recent changes going on with Solvency II. Can you just outline any kind of high-level assumptions on how much this might benefit Allianz?

Yes. So I think, indeed, on the frequency benefits on P&C motor. We actually have indeed, identified a bit of that. I would say, in an anecdotical manner in some of our countries or operating entities. We also see in some operating entities, actually, the opposite. So we have not -- I mean we have not reacted yet at those frequency benefits neither in our reserving nor -- I mean, nor in our pricing conditions at this point in time because it's too anecdotical, I will say. And it may very well be that some of the frequency positive effect are simply related to the fact that we had known natural catastrophes, as an example. And then you were simply driving under better conditions, which is also supportive in terms of frequency experience at this point in time. And then I think on the Solvency II reform, indeed, so that's going to come up into place on the 1st of January 2027. At this point in time, I have no refined update to share with you in terms of number effects. So we had previously mentioned to you that we were estimating 5 to 10 percentage point positive effect into our Solvency II ratio. We are, as we speak, actually recomputing the effect. So I will definitely come back to you with more insights towards year-end numbers.

Next question is from James, James Shuck of Citi.