WNS (Holdings) Ltd

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Ladies and gentlemen, welcome to the Half Year Results 2021 Conference Call and Live Webcast. I am Sandra, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mr. Philipp Gmür, Group CEO. Please go ahead, sir.

Thank you, madam. Ladies and gentlemen, welcome to our half year conference of Helvetia Group. I would like to welcome you all on the phone. If I say I, then I mean, of course, we, I'm joined by Annelis Lüscher, our Group Financial Officer; and Susanne Tengler, our Head of Investor Relations; and of course, by Jonas Grossniklaus, our Head of Media Relations for Switzerland.I would like to start with the highlights on Slide #3. As you see on this slide, we were successful in profitably growing our business. We have a business volume which grew by 21%, driven, of course, by the Caser acquisition. However, there is more than 5% in original currency of organic growth, which means that we were successfully growing all our business segments, Switzerland, Europe and specialty markets. Annelis will come back to that later on.We could also grow our fee and commission income by more than 125% in original currency driven, of course, by the fee income of Caser in Spain, but also due to a favorable development in Switzerland. The net income after tax is at CHF 262 million, which we think is a very good number for the first 6 months of this year. The Caser acquisition is paying off pretty well. We have a business volume, which we can report out of Caser of CHF 920 million. Caser is, for the first time, of course, consolidated in our half year statement of 2021. Caser's IFRS net income contribution lies at CHF 32 million. That means Caser is delivering according to plan, and its development is and remains very pleasing.We successfully started into our new strategy period helvetia 20.25, which means that we have, for instance, an ongoing strong growth of more than 12% in our online insurer, Smile in Switzerland, which means that we could successfully expand our online bank distribution in Italy, and which means, for instance, that we could expand our health and care ecosystem in Spain by integrating a new small hospital. Fulfilling our purpose is one of the main issues and topics we are talking about with our employees and, of course, our clients.When we were setting for this purpose last year, we did not think about all those NatCats we would have to cope with within the last few months. Life is full of risks and opportunities, and we are there when it matters. And we are happy to say that a record amount of around 50,000 claim notifications could be handled within the last few months. It means fulfilling our purpose is at stake, and we are happy to report that Helvetia is able to really fulfill this purpose to be there when it really matters to help our clients also in different times.With that, I would like to hand over to Annelis, our CFO, which is explaining the financial figures. I will then come back for a couple of comments regarding our strategy 20.25, and we are rounding up this conference with a Q&A session. Annelis, please go ahead.

Ladies and gentlemen, a warm welcome also from my side. Within the next 15 minutes, I will give you more detailed information on our financial half in the first half of 2021. We will use a simplified presentation for this conference. The full slide deck, with additional information, is available for download on our website.I would like to start with Slide 5, where we have summarized the key figures of Helvetia's performance in the first half year of 2021. Helvetia can look back on a successful business development in the first half of 2021. A quick look on the key performance indicators shows that Helvetia's core business is in a good shape, and that Helvetia was able to generate profitable growth. The group's business volume increased by 21% in original currency to around CHF 7 billion.Around 3/4 of the growth was due to the acquisition of the Spanish insurance company, Caser, in the previous year. This transaction, as you may remember, was completed at the end of June 2020. The business of Caser is, therefore, now included in the income statement of Helvetia Group and was not included in half year 2020.Also organically, Helvetia posted a growth of 5.2% in original currency. Overall, the group's non-life business was a pleasingly strong growth driver, with an increase of 31.5% in original currency. In addition to the positive impact of the acquisition of Caser, which accounted for around 2/3 of the growth in non-life, Helvetia also recorded a successful organic increase of 9.9% in original currency. In line with its strategy, Helvetia expanded the non-life business in all the country markets and in the area of specialty markets. In the life business, Helvetia increased its business volume by 8.7% in original currency. In addition to Caser, which made a significant contribution to this growth, the main drivers were investment-linked solutions that increased significantly in both Switzerland and Europe.Helvetia generated an IFRS net profit after tax of CHF 262 million in the first half of 2021. A good business development with solid technical results in the non-life and life business was supported by substantially higher investment results following the favorable development of capital markets. Caser also made a substantial profit contribution in the amount of CHF 32 million.With 94.5%, the net combined ratio improved compared to the prior year despite higher claims from natural catastrophes, mainly because of nonrecurring COVID-19 claims in the prior year and the positive one-off effect in Switzerland. I will give you more details in a moment. Worth mentioning is also the very solid capitalization. As of 30th of June 2021, Helvetia estimates its SST ratio to be above 220%.On the next slide, I would like to provide you with additional information on the net income after tax. Slide 6 gives you an overview of the IFRS result after tax of the individual segments and business areas. The IFRS result after tax increased to CHF 262 million in the first half of 2021. The Switzerland, Europe and Specialty Market segments and both the life and non-life business divisions were able to increase their results.In Switzerland, a significantly better result of CHF 177 million was recorded compared to the previous year. After the first half of 2020 had been affected by the effects of the pandemic, in both the life and non-life business areas, the investment results were stronger. Thanks to the participation in the good performance of the equity markets.In non-life, the technical result increased mainly due to nonrecurring COVID-19 losses in the prior year and the positive one-off effect attributable to an adjustment of reserves. These 2 effects compensated for an increase in claims from natural catastrophes and higher costs primarily related to the growing B2B2C business and projects.In the life business, the higher gains on investments were only partially offset by higher expenses for reserve strengthening and policyholder participation. The absence of positive special effects in the previous year in connection with the introduction of a new tariff in group life was also compensated for by the investment gains.In the Europe segment, the IFRS result after taxes increased to CHF 100 million in the first half of 2021. The development was positively influenced in both the Life and non-life business areas by Caser. Caser contributed a profit of CHF 32 million to the segment result.In addition, the non-life and life businesses also benefited from stronger investment results. In the first half of 2021, both businesses also reported solid technical results. Overall, all country markets increased their result, with Italy's results staying close to the previous year's level.The IFRS result after taxes for the specialty segment amounted to CHF 37 million, a significant increase compared to the first half of 2020. The growth was driven in particular by strong capital market development, which led to the pleasing investment results. The segment's technical result also increased compared to the same period of the previous year. Thanks to a better technical performance within usual fluctuations.In the Corporate segment, the IFRS result after tax of minus CHF 51 million was slightly below the IFRS result after tax of minus CHF 40 million in the first half of 2020. The decrease was primarily due to higher financing costs resulting from the issuance of a hybrid bond in June 2020 to partly finance the Caser acquisition. Partially compensating effects resulted from an improvement in the technical result of group reinsurance, which was impacted by COVID-19 claims in the previous year, and nonrecurring costs related to the Caser acquisition of last year.Let's turn to Slide 7 with the growth in business volume. In the first half of 2021, Helvetia Group achieved a business volume of roughly CHF 7 billion. This equates to a currency-adjusted increase of 21% over the previous year. Around 3/4 of the growth came from Caser, most of which in the non-life business.Regardless of Caser, Helvetia was also able to grow organically by 5.2% in original currency. Overall, the group's non-life business was a pleasingly strong growth driver. In addition to the positive influence of the acquisition, which accounted for around 2/3 of the growth in non-life, Helvetia also recorded a successful organic development here.In Switzerland, Helvetia grew its business volume by 0.6% in original currency. The non-life business volume increased by 13.5% in original currency. This was driven in particular by significant growth in the B2B2C business and at online insurer Smile, and supported by pleasing growth rates also in the traditional non-life business.The life business grew by 9.2% in the individual life business, driven by a strong performance of investment-linked solutions. In the group life business, the business volume declined as expected, following the strategic decision at the beginning of 2020 to strengthen future profitability. However, the business volume declined to a significantly lesser extent than in the same period of the previous year.Business volume of the Europe segment grew by 65.1% in original currency driven by Caser. In the non-life business of the Europe segment, Helvetia was able to grow not only thanks to the acquisition of Caser, but also organically in all country markets. Growth was above market level in most countries. In life insurance, a significant part of the growth also came from Caser, but organic growth with the insurance-linked solutions should also be emphasized.The business volume of the Specialty Markets segment also developed positively, which is primarily due to the development of new business lines, in line with the strategy and, to a lesser extent, due to favorable price effects. The fee business also developed positively. Group fee and commission income rose by 127.1% in original currency to CHF 166 million. The strong growth is because Caser contributed a fee volume of CHF 100 million in the first half of 2021.Let's move on Slide 8 to the net combined ratio. With 94.5%, the net combined ratio improved by 1.4 percentage points compared to the previous year. In comparison with the first half of 2020, the claims ratio improved by 2.1 percentage points, primarily as a result of nonrecurring COVID-19 losses in the previous year and the positive one-off effect in Switzerland related to a periodic review of the level of reserves.These positive effects were partly offset by a substantial increase in the NatCat ratio because of an exceptional amount of claims from storms in June 2021, of which about 2/3 affected Switzerland. Furthermore, Helvetia recognized a normalization of claims frequencies in individual lines of business after a reduction in the prior year during the lockdown period.The cost ratio increased by 0.7 percentage points. The main reasons are, firstly, higher costs in Switzerland, mainly due to the growing B2B2C business, which, by its nature, has a higher acquisition cost ratio; and secondly, an increase in the acquisition cost ratio related to Caser due to its strong bank distribution channel.On Slide 9, we will now have a close look at the life business. The IFRS result of the Life business division increased significantly to CHF 122 million compared to the same period of last year. After the capital market fluctuations in the wake of the COVID-19 pandemic affected the gains and losses on investment in the first half of 2020, the life business benefited from a good performance of the capital markets in the reporting period.The acquisition of Caser also contributed to the increase in results. The acquisition had a particularly positive effect on the technical development. Thus, the margin of the cost remained stable despite the absence of positive special effects in the risk result in the previous year.The significant increase in gains and losses from investments due to the good stock market development was partially offset by higher expenses for reserve strengthening and for policyholder participation. New business also developed favorably. The new business margin, excluding Caser, rose to 3%.Let's now have a look on Slide 10, and the development of the interest margin. On a group level, the interest margin, excluding Caser, increased compared to the first half of 2020, thanks to a higher margin in Switzerland. The increase of the interest margin in Switzerland was attributable to the following reasons.First, the yield slightly increased compared to the prior year period because of an extraordinary impact resulting from the decrease of the group life portfolio following the introduction of a new tariff in the prior year. And second, at the same time, the average technical rate further declined due to additional reserve strengthening and the continued replacement of maturing insurance contracts with high guaranteed rates by modern capital-light products.In Europe, excluding Caser, the interest margin slightly decreased. This was due to a stronger decline of the yield compared to the average technical rate. The reduction of the yield is related to the low interest rate environment. Simultaneously, Helvetia was able to further decrease the average technical rate in Europe by strengthening reserves and replacing old contracts with higher guarantees by new contracts with lower guarantees. Overall, our ongoing focus on modern capital-light products supported by reserve strengthening is benefiting the group's interest margin.On the next slide, I will share some details on our investment results. At CHF 461 million, the current income was pretty much stable at prior year's level, thanks to the additional income from the portfolio of the acquired company, Caser. The direct yield, however, slightly decreased to a nonannualized 0.8%, as the acquired portfolio of Caser has a lower yield due to acquisition accounting effects.Realized and book gains and losses amounted to CHF 411 million, a substantial increase compared to the first half of 2020, predominantly due to the participation of the strong performance of equity markets in the first half of 2021, whereas the prior year had been impacted by the equity market crash following the pandemic. Unrealized gains and losses recorded in equity decreased by CHF 725 million due to a decline in the value of bonds following increasing interest rates. Group investment performance was at 0.3%.With regard to new and reinvestment of maturing funds, the direct yield slightly decreased. The reason for this was a higher share of bonds on new and reinvestments compared to the prior year period. Relative to other asset classes, yields on bonds are lower. Nevertheless, they account for the largest share of investments.On that note, I will now hand over to Philipp Gmür, again.

Thank you, Annelis. Now let me give some comments on our strategy, helvetia 20.25. You might remember that back in March, we announced a couple of key figures we want to pursue within the next 5 years. In June, we were giving you some more insights when we had our Capital Markets Day in Zurich. I would like to give some comments now on where we stand with our strategy, helvetia 20.25.We were thinking -- please, I'm referring to Slide #13. We were thinking a lot about our reason why about our purpose in our management team last year. Life is full of risks and opportunities, and we are there when it matters. And we then were setting forth a new vision for our company. We want to be the best partner for financial security and set standards in customer convenience and accessibility.And in order to do so, we were setting forth 4 different strategic priorities, such as customer convenience, which means we want to be present whenever business, i.e., insurance needs might arise. We want to have the right offering for our clients, which means that we have to think from the client's side more outside in than inside out. We want, of course, to keep our backbone, our insurance business, in profitable shape by profitably growing our core business, and we want to make use of new opportunities.Now where are we standing as of the end of June 2021. Referring to Slide #14, I would like to make a couple of comments. First, talking about customer convenience. Smile, our leading online insurance platform in Switzerland is still growing very strongly. We have a growth rate of around 12%. And, in the meantime, we have more than 160,000 customers.A second point I would like to mention is our recent acquisition of faircheck in Austria, which is a very small, but fine company, which helps us in processing our claims and which helps to have more convenience in our claims processing. Faircheck is not only offering its services for Helvetia, the new owner now, but also for other competitors. We want really to make sure that we are investing a reasonable amount of our new projects and project costs in customer convenience.That's key in order to keep our not only purpose and what we are promising to our clients, but also to make sure that we are keeping our backbone, our non-life and life insurance business, in best shape. Second, the right offering. We came to the conclusion that it's not enough going forward only to offer, let's say, the core product premiums against claims selling, so to say, but we have to offer a whole variety of additional services around our core products.That's why we were launching new ecosystem, Atlanto, back in June 2021, providing new comprehensive services for our SME climates, helping them to lower their work with the whole administration, for instance, they have to cope with. We have a cooperation with a new institute for young entrepreneurs, and together with them, we want to launch this Atlanto ecosystem within the next 1 or 2 years. In Germany, we were launching a new motor product around Elektro Mobiles. In the meantime, we have some 300 contracts and we really successfully launched this new kind of motor insurance policy.The third point, the profitable growth. We were successful in expanding our banking corporations in Italy with new means, which means digital channels. Together with CiviBank and the platform, YOLO, we now can serve our clients not only on a personal basis, but more and more also on a digital basis. And of course, our growth initiatives in the active reinsurance portfolio are well underway. We launched 5 different growth initiatives some 3 years ago and all of them are coming forward at a very pleasing level.We also want to make use of new opportunities. Let me give you 2 or 3 examples. We were successfully expanding our health and care ecosystem in Spain with the acquisition of a new clinic by our Grupo Hospitales Parque. We, second, successfully grew our B2B2C business in Switzerland. We have recently announced a cooperation with Polestar. If you are on the Polestar website and if you want to make the configuration of your new car with Polestar then, by default, you come to the Helvetia insurance coverage, i.e., we make really use of new means also in the motor business and of new opportunities.And then, of course, our Helvetia Venture Fund. Maybe you remember that we were reserving like EUR 50 million for our Helvetia Venture Fund. In the meantime, we were investing between CHF 35 million and CHF 40 million into this fund. And the recent acquisitions the fund made is, for instance, FAAREN, which is like the car evolution solution, so to say, in Switzerland, a motor -- a system, which helps you rank your cars. And Coinscrap Finance, which is a micro finance tool in Spain.Let me summarize, ladies and gentlemen. Helvetia was really successful within the first 6 months of this year in successfully growing the core business, in expanding the fee business, in a good investment performance, and we are very happy to report that we have a very successful and dynamic start into our new strategy period 20.25. And with that, I would now like to hand over to Susanne for the questions. Annelis and I, we are ready to answer your questions. Please go ahead.

[Operator Instructions] The first question comes from Thomas Bateman from Berenberg.

Congratulations on your results. Three questions for me, if possible. Can you give any more details or indication of the level of claims you expect to incur for the floods in July. Question number 2 is just on the guidance for the non-life division, as the combined ratio is 2.1% this year, obviously running a little bit higher than that for the first half. I guess can you just give me some color on what your thoughts would be where we would likely end the year?And finally, really lovely growth across all your domains, but does it include specifically Swiss non-life? And how sustainable is that [indiscernible] 13%? And what should we expect going forward? And any color on sort of where that's really coming from would be very helpful.

Thank you, Thomas. Frankly, it was pretty tough to understand you. I don't know whether the line -- the telephone line is in good shape. As I understand it, the first question deals with the July floods?

Yes, that's correct.

I will then ask Annelis to answer this question. The second question deals with the combined ratio?

Yes. That's correct.

The combined ratio guidance for the year. I will ask Annelis to answer this question as well. And the third question, could you [ remember ] it, we couldn't understand you, sorry.

Sorry. Apologies. I hope this is a little bit better. Basically, I'm just asking you about the sustainability of the growth in Switzerland and how much do you expect to grow in Switzerland going forward...

Okay. So Annelis, please go forward with answering the two first questions, and I will then take the third one.

Yes, of course. So the first question about the July floods, maybe to put that in context, the June NatCat events did cost us around CHF 70 million on a net basis. And the July floods, we expect them in the middle 2-digit million era on a net basis. So I hope you could understand me.And on the combined ratio, so we have communicated in the strategy a combined ratio range of 92% to 94% on group level. Of course, this is still our goal. We have to be, let's say, a bit careful in this year '21, as we have seen NatCat events that are very exceptional and exception in the last 10 to 50 years, depending a bit on the country, but we still hold our goal to reach 92% to 94%.

Thank you, Annelis. Then I would like to answer the third question regarding our growth in non-life in Switzerland. Of course, we are very happy with the development within the first 6 months, which stands at the growth rate of more than 13%. Now it is widely spread, it's property, it's motor, it's liability, it's accident health, it's transport and art. And we do not give any guidance with respect to the growth rate we really are looking for. But of course, we want a dynamic growth.What is hard to predict is whether the online channels are growing as dynamically as they used to within the last few years. We hope so, of course. There are -- there is a certain development into the direction of the online growth rates. However, the market in Switzerland is pretty much consolidated. So there are -- there is not so much fantasy in the growth rates.But of course, our ambition is to grow at least above the market, and we want to pursue a dynamic growth also in the future. And we think that given our different sales channels we have, the agents, the brokers, the B2B2C and many access points, we are well prepared to realize pleasing growth rates also in the future. More questions?

[Operator Instructions] There are no more questions. We have now a last minute registration from Mr. René Locher from Stifel.

Yes, I have a couple of questions, if I may. So the first one, again, on this non-life market, I mean we are looking at motor business, like here in Switzerland we saw last year new registration minus 18%, and I've seen you just mentioned 1 of you startup FAAREN or car evolution here in Switzerland. So I'm really struggling to understand how you can still grow your motor business as well as competitive lower registration, it's much more about sharing, and nevertheless, insurance companies are still able to grow, yes, the business volume here.And then let me see, yes, on the investment income on Slide 11, I mean just -- for my understanding, I would have thought that the current income yield of 0.8%. I was expecting a little bit higher yield here because, I thought to myself, you're adding now, with Caser, quite a decent portfolio of BBB-rated bond, which should have a higher yield, but it's not reflected in the current income. So well, I guess it's my fault, but I just -- if you can shed some more light on this development.Then the net income of CHF 262 million, I guess you have quite a few one-offs in there, right? You had a strong investment result, then you had this one-off in non-life business Switzerland. So I was just wondering a little bit what is a sustainable run rate going forward? And then in addition to that, if I split the CHF 262 million in Caser and the old Helvatia. I mean, Caser is performing very well. But the CHF 230 million of the old Helvatia, this is a little bit below my expectations. I stop here and perhaps a few follow-up questions afterwards.

Thank you, René. So to summarize your questions, I hope we properly understood them. The first one deals with the motor business in Switzerland and where the growth comes from? The second is dealing with the comments you would like to have on our current income? And the third one is the question about the sustainability of our net profit, right?

Yes.

So I would -- I just start with answering the first question and then hand over to Annelis. Now where does the growth come from? We have like 1/3 of the growth related to new cars being newly...

Registered.

Registered there in Switzerland and 2/3 is just due to the fact that you had another insurance policy with the competitor, and now they came over to Helvetia. So it's like 1/3 to 2/3. Now talking about the future and about car sharing and other platforms, it's hard to predict what the impact is on our motor business, of course.For Helvetia, it's important to be present where this business might happen in the future. That's why, for instance, we are investing in FAAREN. That's why we are cooperating with Polestar. That's why we are investing in B2B2C platforms. That's why we are making sure that our agents are close to the clients and so on. So it's hard to predict how the future looks like. We want to make sure that we are being part of the future, notwithstanding what it looks like.The second question and the third one, please, Annelis.

Yes. So the second one on our investment income of 0.8%. Just 1 remark here, this is not annualized. This is on the half yearly basis. What is important to notice here is the acquisition effect we are now being affected by because Caser is included in these numbers. And when acquiring a company assets as well as liabilities are accounted for at the market rates at the time of acquisition.What does this mean? This means that the June 2020 rates of, let's say, Spanish government bonds, which are dominating the Caser portfolio, were of great importance to the effect we then have on the investment income. And, as you probably know, the Spanish government bond rates were around 0.4% in June 2020. So this is -- yes, the height of the investment income is strongly influenced by acquisition accounting effects.Now on your...

Can I quickly because I remember when you did Helvetia acquisition, it took about 2 to 3 years until this acquisition effect banished. Would this also be the case with the Caser acquisition? Is it just 1 year and then you're done?

No, no. It's -- as you would buy -- it is as we have bought a complete portfolio of assets to the rates which were market rates in June 2020. So then you have the normal runoff of this portfolio until the bonds are at maturity and then reinvest it and so on. So it's really as if the whole portfolio was valued at mark-to-market -- the whole portfolio of Caser was valued at mark-to-market in June 2020.

Okay.

And regarding your third question on the sustainability of the result. So yes, CHF 32 million were -- are the effect from the Caser contribution. And the focus, of course, on the whole portfolio of Helvetia is on profitability now and also in the future, of course, and, as you know, also on cost efficiency regarding the cost base, mainly in Switzerland, but also in our European countries.Regarding the results, we make no further guidance than that.

That's fine. That's fine. Just a follow-up question, if I may, quickly. In previous years, you have always provided a slide with the other activities, which amounted to minus CHF 55 million. Just here, is this kind of a normal run rate? Or is it too high, too low? So that would be one question. And then the last one, was interested in the dividend. And if you go to Slide 36, I was surprised to see that the remittance ratio in 2020 is at 113%. So I mean just for -- I'm struggling a little bit to understand how can the remittance ratio be at 113%?

Okay. René, I'm not sure whether I properly understood your questions because you are referring to slides and numbers, I -- which might not be the same as I have in front of me. So one is dealing with the -- our net dividend capacity, right?

Yes. That is on Slide 36. So that's in the large desk you have provided, there you can see the remittance ratio is at 113% in 2020, where I'm struggling a bit to understand how can it be above 100%. So that's the first one. And the second one is a run rate for other activities. I am more than happy to discuss that afterwards with the IR Department. Leave it up to you.

Okay. Let me start with some words to the corporate result of the minus CHF 51 million. There -- a lot of different effects are in there. So these are financing cost of our hybrid instruments. So they are pretty stable, let's say. They were not stable compared to last year because we issued the new hybrid bonds, which partly financed the acquisition of Caser. They were in there in the prior year, not in there now. Group reinsurance flows in there and also quite a lot of volatility out of FX effects, which we have on group level, but which are partly offset then in the segment results. So it's difficult to say how it will develop as it's a collection of different effects, but it depends strongly on the FX development, and of course, on the claims we have on group reinsurance. Other aspects of this composition are more stable.

The second question, Annelis, is on Slide #36, i.e. 42.

Yes.

René would have -- would like to have some comments on our cash production and the remittance ratio, i.e. if I understand you correctly, the impact on our dividend capacity?

Yes. So let's -- if we imagine what full year 2020 has been, it has been an exceptional year also for Helvetia in the sense that the first half of 2020 was negative in net profit, slightly negative. And then, for the rest of 2020, we could catch up. Nevertheless, we left the dividend payment stable according to our strategy, which, of course, then can lead to remittance ratio of higher than 100% for this exceptional year.

Now to sum this up, René, as you well know, we have a strong balance sheet. We have a very strong core business, which, of course, as you commented, had to cope with the NatCats during the first half of the year, which we could pretty well cope with. And our dividend capacity is still intact. We promised a increase of the dividend payouts within the -- for the next strategy period, and we still stick, of course, to this promise.

The next question comes from Jimmy Fan from UBS.

It's Jimmy Fan from UBS. I have 2, please. My first question is about reserve movements in non-life. You mentioned on Slide 8.1. There is a positive, well, reserves impact in Switzerland. Could you give a bit more color on that please? My second question is about catastrophic reinsurance. Given that your reinsurance department has kicked in already for June and also the July, August events. Could you give a bit more details on your position in terms of your aggregate cover? And also do you have to pay more to pay more reinstatement later on if other events happen?

Okay. Thanks. If I understood it properly, the first question deals with the reserves and the reserve releases in Switzerland during the first half of the year. Annelis, if you might comment on that, please?

Yes, sure. So in Switzerland, we had positive one-off effect from reserve releases. They stem from a periodic review we do on the level of reserves and led to this positive one-off effect.

Then the second question is about the recoveries and the effect of the NatCats in the first half of the year. I mean, we are monitoring the cat risks on group level. And if you ask how we do model them, we -- for NatCats, we have used, for quite some time, cat vendor models to access the exposure on a gross basis and to buy then the required insurance and reinsurance capacity.And in addition, larger risk exposures are partly reinsured via facultative reinsurance contracts. And we are targeting a net retention for -- of roughly CHF 35 million per event. You see this information in the financial reports, I think, which we are publishing by the end of the year.

And just a follow-up on my first question about reserves release. Could you give a bit more details in terms of which lines or business is it coming from?

No, I'm sorry, we do not give additional information on the exact lines of business which are affected.

Last year, we reported a reserve strengthening in the country market, Switzerland, related to health and accident because of the interest rate development. And of course, the release we now are reporting is not related to this reserve strengthening we just did last year. It's just -- it's in due course of a regular review of our reserving levels. We are releasing or strengthening in one or the other business lines according to our estimates.

We have a follow-up question from Mr. Thomas Bateman from Berenberg.

I hope you can hear me better this time. I'm just wondering if you could give any more color on the contribution of Caser? But I think -- it's a reasonable result. But I think you mentioned in the past an annual run rate around CHF 70 million or so. So maybe we're a little bit behind that. Is that in line with your expectations of CHF 32 million, or should we expect a bit of a pickup in the second half of 2021?And just the second question is on the new 20.25 strategic plan. When can we expect to get disclosure on the percentage of fee income in relation to IFRS profits and on the expense savings measures?

Yes. The line is -- I don't know, it's -- does not really allow us to properly understand your questions. We think that we could understand the first question. Annelis, I ask you to answer it. And then, please, after Annelis' comments, please come up again with the second question. Annelis?

Yes. So I understood the first question regarding the profit contribution from Caser, where we estimated in the full year disclosure a profit contribution of around CHF 70 million, and now what we show is CHF 32 million. We expect that to be completely in line with the CHF 70 million, whilst that there are some seasonality effects, of course, in the half year results on the first -- firstly.And secondly, also, if you imagine the life in the first half year in Spain, then the first 2 to 3 months were still much affected by lockdown effect. This also means -- or by restrictions, of course, due to the corona restrictions. And this affected the noninsurance business of Caser, which now, from month to month, is taking up speed like it would in a non-restricted world. So we still think that the Caser's contribution is very strong and stable and according to our expectations.Now the second question, as we said, I think we did not understand it. At least I didn't, I am sorry. Could you repeat, please?

It's -- your new strategic plan helvetia 20.25, you have targets for percentage of IFRS profits and fee income and the expense saving measures. And I'm just wondering when can we expect to see disclosure on those particular financial targets.

Yes. So our cost target of reducing our cost by CHF 100 million, we will, for the first time, show a tracking on that in the full year '21 figures. And we will also then show the second aspect of the fee -- so the second aspect of the fee goals, so not only the fee volume, but the profit out of fees we will show in full year '21.

[Operator Instructions] So far, there are no more questions from the phone.

Okay. If there are no more questions, I would like to thank you very much for your attention in Helvetia. And once again, we are very pleased about our results on the first half of the year. We could successfully expand our business, be it the core business, be it the fee business. We have a very good investment performance within the first half of the year.And we are sure that we are well on track in order to fulfill our financial targets we were setting forth for the strategy period 20.25. And thus, we are positive as of today with regard to the second half of the year. If you have any questions, please do not hesitate to contact us by either telephone or mail whatsoever. I wish you a good week and stay healthy. Bye-bye.

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