Ladies and gentlemen, welcome to VIG Key Figures and Updates First Quarter 2025 Conference Call and Live Webcast. I am Youssef, the Chorus Call operator. I would like to remind you that all participants will be in listen-only mode and that this conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or for broadcast. At this time, it's my pleasure to hand over to Peter Höfinger, Deputy CEO of VIG. Please go ahead.

Thank you very much, and very warm welcome this afternoon. I'm happy to present together with my colleague, Liane Hirner, our first quarter results. We can present quite solid results in the first quarter with growth in insurance service revenue by more than 8% and profit growth before taxes of 7.5%. We also have been able to place successfully, a Tier 2 Sustainability Bond and repurchasing part of our subordinated debt. Additionally, we have -- additions to Albania to our two non-life insurance company, a life insurance company, where we will realize with synergies and also exploring the life market in Albania, which is still at a very early stage. On top, we bought a stake in Phinance. Phinance is the largest financial broker in Poland, which will support our growth of our Polish companies. And we are currently in a bid for taking over Moldasig, which is one of Moldova's leading non-life insurance company. And the government has invited us to participate in this bid to then further develop the Moldavian insurance market. On the next slide, you see our diversification, which we have reached until today, and we believe this diversification is important and supports our resilience. And you see on gross written premiums, also in insurance service revenues, there is a very nice percentages divided by our countries and region. And the same is true for the results before taxes, with having Austria with 35%, Extended CEE with 26% and Czech Republic with 23%. On the next slide, you see the economic forecast for other regions. We feel to be currently in the right area of Europe, having projected GDP growth is between 3% for the next year in Poland to 2.5% in Czech Republic. Comparing this with the Euro area in the year 2025 with 0.7%, we are quite in a very active environment and benefiting from the internal growth and consumption of Central Eastern Europe. On the next slide, as I have mentioned, we have been able to issue a Tier 2 bond with a principal amount of EUR300 million, an amount equivalent to the net proceeding is used for a combination of eligible green and social assets in line with VIG updated Sustainability Bond Framework 2025. A very strong order book of above EUR1 billion at peak was finally 3 times oversubscribed and led to the lower spread over of any subordinated notes of VIG with 195 basis points. At the same time, VIG repurchased a total volume of around EUR126 million of subordinated notes issued in 2015 and 2017. With this introduction, I'm happy to handover to Liane Hirner. Liane, please.

Thank you, Peter. As Peter already mentioned at the beginning of his presentation, we are very pleased with the solid business performance we achieved in the first three months of 2025. To summarize, the insurance service revenue increased by 8.1% to EUR3.1 billion. Profit before tax rose by 7.5% to EUR261.1 million, which is driven primarily by double-digit growth rates in Poland and the Extended CEE segment, with Romania and Bulgaria contributing significantly to the profit growth. The net P&C combined ratio improved from 92.7% to 92.3%. This reflects a lower claims ratio, thanks to fewer weather related claims and positive development in the motor business in the Czech Republic and Poland. Our solvency ratio as of end of March this year stood at robust 271%, up from 262% in Q1 last year. This was supported by increased own funds of about EUR10.8 billion, driven by the positive operating performance and by positive interest rate developments. The SCR remained relatively stable at close to EUR4 billion. Please note that the dividend payment for the business year got fully considered in the first quarter, in-line with our dividend policy. Excluding the transitionals, the solvency ratio stood at 252%. Now let's move to Slide 9. And let's have a closer look at the top line development in the first 3 months, 2025, starting on Page 9 with the gross written premiums of the group. Premiums were up 8.3% to overall EUR4.7 billion. Here Austria and the Czech Republic both did well in the Q1 with premium growth rates of above 6%. In Poland, the Extended CEE and the Special Market segments, we saw a double-digit growth rate. Apart from Poland with plus EUR54 million additional premium volume in the first quarter, the markets, Türkiye, Romania, and the Baltic states significantly contributed to the premium growth in absolute terms. This very favorable development gets also reflected in the insurance service revenue figures, which we show on the next slide. Overall insurance service revenue increased by 8.1% to EUR3.1 billion. Austria's growth of 6% was mainly driven by the non-motor and health. Czech Republic posted 7.3% growth, and Poland was up 8.2%, both benefiting from sound motor and other property business as well as growth in life. In Extended CEE, nearly 3/4 of the segment's EUR90 million growth came from Romania, Slovakia, and the Baltics. In Special Markets, it was again the dynamic development in Türkiye pushing the insurance service revenue in this segment to roughly EUR290 million, up by 38% or EUR80 million. These strong developments underscore the broad-based momentum across all our markets. To summarize, we have a look at Page 11. We had a strong start in 2025 with robust business performance in all key metrics. At our AGM last Friday, shareholders approved a dividend of EUR1.55 per share, which will be paid out tomorrow, May 28. Given our sound Q1 performance with gross written premium and insurance service revenue both up 8% and the profit before taxes increase of 7.5%, we remain confident in reaching our targeted profit before taxes range of EUR950 million to EUR1 billion for the full year 2025. Our capitalization remained strong with a solvency ratio of 271%. The SFCR reports for the full year 2024 are available on our website. And we have added two overview slides including the sensitivities on the Slide 13 and 14 in this presentation. I have come to the end of my presentation, and we are now welcome your questions.

[Operator Instructions] The first question comes from Youdish Chicooree from Autonomous Research. Please go ahead.

Good afternoon, everyone. Can you hear me?

Yes, we can hear you.

All right. Thank you. So I'll kick start with two questions first. Firstly, just on your guidance. Judging from your pretax profits, it seems quite a solid start to the year, but you have maintained your full year guidance unchanged. So I was just wondering, is that just because it's too early in the year? Or is that a reflection of some increased uncertainty or maybe some slowdown that we should be aware of further down the line? That's my first question. My second question is on solvency, actually. Just looking at your most recent sensitivities, it seems that your sensitivity to increase of 50 basis points in your corporate bond spreads is now minus 6%. And -- but last year, I think it was closer to 15%. So I was just wondering what has driven this change, please?

So I'm happy to answer your question. The first one regarding the guidance. The guidance remains unchanged. Usually, our first quarter -- or we start with a good first quarter and also, we did that in the last year. There is no increase of uncertainties. But for the moment, it's too early, and we stay with our outlook as presented. Yes, the second question was regarding solvency. The spreads of corporate bonds, 50 basis points compared to last year. This year, you would have to add spread corporate bonds and spread government bonds. This was shown in one figure last year, 14.9% minus. And this year, we split it. So you can see 5.55% downward sensitivity for corporate bonds and 8.96% downward sensitivity for corporate bonds. We would have --.

Okay. That makes sense.

Somehow unchanged.

Okay, thank you very much.

[Operator Instructions] The next question comes from August Marcan, UBS. Please go ahead.

Congrats on a solid set of results. My first question is on P&C. How are you seeing pricing versus inflation trends in your major geographies? And how do you see it developing in near, medium-term? Any color there would be helpful. Then my second question is on your strategic plan -- your current strategic plan sense in this year. Are there any updates, any plans on an update for the market or anything there? And then my final question is on excess capital. Again, you're still trending well above your target range. Now you have a bit more debt than you do it before as well. So that also helps. Any thoughts about how do you see your capital? Do you see potential for an inorganic growth distribution? Anything you can tell me here would be helpful. Thank you.

Thank you for your questions. I will take the first two questions. The first question is rate increases versus inflation. You have to separate between Austria and Central Eastern Europe. In Central Eastern Europe, we have annual contracts. Therefore, we are adopting our contracts also to the claim costs and needs. And therefore, we are reflecting quite pretty, the inflation and are able to increase with inflation. In Austria, specifically in the retail book, we have long-term contracts with indexes. Indexes which are not CPI. But for example, in the household property, it is a construction price index or in CASCO business. It's a repair cost index, which is generally higher than the CPI. We are having here the effect that the indexation is always at the inception -- at the original inception state of the policy. Therefore, quite a large part of our book gets inflated with the inflation rate from last year, increased this year, whereas the inflation in Austria is quite stable, even maybe a bit lower than last year. If I come to your second question which is more about the topic about our strategy. You know that we are currently still having our strategy VIG 25. We are in the middle of the process, making our new strategy for the next three years. As soon as there is something to deliver and to inform, we are happy to do so. I would expect this to be in the second half of the year. I hand over to Liane.

Thank you. Your last question related to capital position of VIG. We have a very solid solvency ratio, I already mentioned, which has been positively influenced by the interest rate development. So our capital is well above the target range that we published, between 100% and 200%. As Peter already started in his presentation, our M&A activities are ongoing. So we have explained some other M&A activities in Albania, in Poland and in Moldova. So the active capital or the capital is used for inorganic growth and also for organic growth. So the growth rates in the gross written premium and insurance service revenue, both amounted to 8% in the first quarter 2025, also need capital. This would be my answer.

[Operator Instructions] The next question comes from Thomas Unger, Erste Group.

Yes. Good afternoon, thank you for taking my question. I'd be interested in your expectations for the combined ratio was at 92.3% in Q1. Do you expect -- I mean, presumably, you would expect weather-related claims to go up in the coming quarter or in the coming quarters? Do you expect any positive developments on the cost ratio? It increased a bit year-over-year, while the claims ratio was quite a bit better than last year in Q1. And staying with the combined ratio, if you could just maybe talk a little bit about the individual segments and their development in Q1? I know you touched very briefly on Czech Republic and Poland, maybe you can go into some more detail on other regions? Thank you.

Okay. Thank you for your question. Combined ratio, 92%. You know it's the first quarter. You know that the principal in the first quarter, there is low weather-related claims activity. The same is true for this first quarter. If there would be something like a NatCat season in our region, then it lies ahead of us. I’d expect that we will stay in the region of our combined ratio where we are today. There will be a certain smoothing out of the cost ratio over the year. And let's see how the NatCat and weather-related claims will develop. But if it would be not something very unexpected, one can expect that we will be in this range of the combined ratio. To go more into details of the region, we see and you see our figures that we are able from the beginning of the year to have again, an attractive growth dynamic in Poland. We had the mergers and the reduction of complexity last year in the merging companies. The growth ratio which we are showing here is clearly a time that we are again, very much focused on the market development. Market development is very much supported by other property, as the GDP growth in Poland is like outperforming and there is a large economic activity there where we are benefiting. I mentioned, I think, Czech Republic, where we also do have a decent growth, property as well as in motor business. We are growing quite significantly in Romania. In Romania, on one hand side, we are growing in motor business, CASCO and motor TPL, but also in property. Also in Romania, we see a favorable economic environment currently there. Those are also driven by a certain number of repatriation of the Romanian citizens back to Romania, the last years, and a certain increase of ForEx direct investment. Maybe to have a word about Bulgaria. In Bulgaria, we are growing with 9.9% over here, it is mainly driven by property business. Also, Bulgaria does have a nice GDP growth, which is supporting our premium growth there. Again, generally, we are able to reflect in our rates, the inflation of our claims costs. So there is a certain automatic driver of the premium growth by inflation adaptation. But on the other hand side, the markets which I mentioned, we also have an increase of number of risks. I hope this gave you a bit more details.

Great. Thank you very much.

[Operator Instructions] The next question comes from Thomas Chesser, [indiscernible].

Good afternoon to everyone. I would have a question related to the interest rate environment. So it's quite a recent topic on the bond markets globally that loan rates are going up. And I would be curious on your opinion, how is it affecting VIG currently? And whether, of course, it's more happening maybe in the U.S. and Japan, but might have an effect also on the European rates and Germany rates are also higher due to the fiscal situation? So generally, can you mention a little bit how is it affecting? Is it benefiting VIG or not? What is the kind of a sweet spot of loan rates for your business in your mind? And whether the current market rates we are seeing, it will continue to support the financial profits of the company or not? Thank you.

I'm happy to take your question regarding interest rate developments. For VIG, interest rate developments of our countries are relevant. So euro, Czech crown, Turkish lira, [indiscernible] in the main yield costs. And in the first quarter we saw an increase. So this had a positive effect on our results, also on the solvency ratio. In the fourth -- in April, we in the meantime, see a decrease again. The interest rate environment outside our markets are not -- do not have a huge impact on our business. Does this answer your question?

Yes, maybe that part I would ask again is whether -- what do you think what's an optimal level of your interest rates for your business?

In optimal? I didn't catch your question, optimal level?

Optimal level of long euro rates for your business? Or is this current environment is kind of optimal for VIG or higher, it would be more beneficial or not?

For us, a low interest rate environment, as for every insurance group, I think is not the best situation. But as it is currently and smoothly increasing interest rate curve is positive and is something that we would be happy. But on the other hand, as we saw in the past years, we could manage very well, all the interest sensitivities that we saw in the last years in various crisis times. So idea could be quite well matched and very well diversified. So this makes our group very resilient also in this respect.

[Operator Instructions] That was the last question. I would now like to turn the conference back over to Nina for closing remarks.

Thank you. Thanks to everyone listening in and for your questions and interest. We will publish the half year results of Vienna Insurance Group on the 27th of August. If you have any questions in the meantime, please do not hesitate to contact the Investor Relations team. We are happy to help. Thank you, and goodbye.

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