Aviva PLC reported significant growth in its general insurance premiums and wealth business in the fourth quarter of 2025. The company saw a 9% increase in general insurance premiums and secured £2.3 billion in net flows within its wealth business. The stock price experienced a modest increase of 0.12% to $7.72, with InvestingPro analysis suggesting the stock is currently undervalued. The company’s impressive YTD return of 28.11% and six-month return of 23.86% reflect strong investor confidence in Aviva’s strategic direction and market position.
Key Takeaways
- General insurance premiums rose by 9%.
- Wealth business net flows increased by 5% of opening assets under management.
- Aviva maintains a strong solvency ratio of 201%.
- The company is on track with the acquisition of Direct Line Group.
Company Performance
Aviva demonstrated robust performance across its key markets, including the UK, Ireland, and Canada. The company’s disciplined pricing approach in general insurance and successful integration of Probitas have contributed to its strong market position. Aviva remains the top player in the workplace pensions market and holds the second-largest market share in Canada.
Financial Highlights
- General insurance premiums: Increased by 9%.
- Wealth business net flows: £2.3 billion, representing a 5% increase.
- Solvency ratio: 201%.
- Central liquidity: £1.8 billion as of April.
Outlook & Guidance
Aviva remains confident in achieving its 2026 group targets, with a focus on generating £280 million in operating profit from its wealth business by 2027. The company anticipates normalized annuity growth following a strong first quarter and expects bulk purchase annuity volumes of 5-7 billion over the next three years. With an EBITDA of $2.47 billion and robust revenue growth of 5.36%, InvestingPro analysis reveals multiple growth drivers that could support these targets. Subscribers can access detailed financial forecasts and 12+ additional ProTips about Aviva’s growth potential.
Executive Commentary
"We continue to trade strongly, serving our customers well, growing profitably across the group," stated Amanda Blong, Group CEO. Charlotte, CFO, added, "We are well prepared for the integration and looking forward to unlocking the full potential of the combined group."
Risks and Challenges
- Softening rate momentum in the UK insurance market.
- Significant weather events affecting the Canadian market.
- Inflation pressures in motor and property sectors, estimated at 5-6%.
- Ongoing integration challenges with the Probitas acquisition.
- Potential impacts from the acquisition of Direct Line Group.
Aviva’s continued focus on innovation and disciplined market strategies positions it well to navigate the challenges ahead and capitalize on growth opportunities in its core markets. The company’s strong financial position is evidenced by its healthy current ratio of 1.58 and Altman Z-Score of 3.64, indicating solid financial stability. For comprehensive analysis and detailed valuation metrics, investors can access Aviva’s full Pro Research Report, available exclusively on InvestingPro.
Full transcript - Aviva PLC (AV) Q1 2025:
Conference Operator: And thank you for standing by. Welcome to Aviva’s q one twenty twenty five trading update analyst call. If you wish to ask a question, please please press star one on your telephone keypad. You will hear a tone to confirm that you are in the queue. If you wish to withdraw your question, you may do so by pressing star two to cancel.
I must advise you that this conference is being recorded. I would now like to hand over the conference to Aviva’s group CEO, Amanda Blong.
Amanda Blong, Group CEO, Aviva: Morning, everyone, and welcome to Aviva’s first quarter update. As usual, I’ll give a brief overview and then hand over to Charlotte to give you the details before we move to questions. So it’s been another great start to the year for Aviva. We continue to trade strongly, serving our customers well, growing profitably across the group, and demonstrating the resilience of our diversified business. We are well positioned to continue delivering through this current period of market volatility.
What today’s numbers tell you is that we are continuing to build momentum by executing on our consistent strategy at pace and focusing on capital light growth. Let me just share a few highlights. General insurance premiums increased by 9% with strong performances in both personal and commercial lines. We continue to see high levels of interest in health insurance, and we grew sales by 19% with strong demand from consumers and employers. In our wealth business, we secured 2,300,000,000 of net flows, which is an encouraging 5% of opening AUM, and we increased net flows by 52% in our platform business.
Putting customers first remains central to our strategy, and we’ve continued to deliver for them in quarter one. We helped customers with claims following snow, ice storms, and flooding in Canada. And after storm AO in in Ireland, we had teams on the ground helping our customers, arranging repairs to damaged properties, and providing alternative accommodation. We also made good strategic progress accelerating our integration of Probitas as we launched another two new lines of business in the first quarter. And our proposed acquisition of Direct Line Group is firmly on track.
The DLG shareholder vote was overwhelmingly supportive, and we’re really excited about the next phase for the group as we accelerate our capital light growth and bring the best of Aviva to millions more people. In summary, we continue to be very positive about the outlook for 2025, a transformative year for Aviva. Our balance sheet is strong, and our market leading businesses are growing profitably and sustainably. All of this gives me renewed confidence in our ability to deliver our existing group ambitions and targets. With that, I’ll hand over to Charlotte to take you through the number.
Charlotte, CFO, Aviva: Thanks, Amanda, and good morning, everyone. It’s good to speak to you today about the continued growth across our business and another quarter of strong delivery. I’ll first cover the highlights from the businesses, starting with general insurance. We achieved premium growth of 9% across The UK, Ireland, and Canada. I’m pleased with the progression of the underlying cause across all markets, a result of our discipline in pricing, strong rate adequacy, and cost focus.
That said, we experienced elevated weather events in both Ireland and Canada compared to long term averages. And overall, this led to an undiscounted core of 96.6%, which was point eight points higher than q one twenty twenty four. I’ll now unpack this a little more for you, noting a very pleasing milestone that across our UK and Ireland GI businesses, we wrote more than £2,000,000,000 of premium this quarter. In UK general insurance, we saw strong growth. This was the result of a good balance of new business, volume, and rate.
And as you would expect, we remain focused on profitability. Personal lines premiums were up 6% to £945,000,000. Growth was delivered by our intermediated business, both from existing and new partnerships. Premiums in retail were consistent with the strong q one twenty twenty four levels. We saw good volume growth offset by lower average premiums.
This is as expected in the relatively softer market conditions when compared with the hard markets of q one twenty four. Across all channels, we continue to take a disciplined approach. We price for inflation with new business demonstrating good rate adequacy and strong written cause. Commercial lines premiums grew to £828,000,000, and with the addition of Probitas to 905,000,000, up 17%. In GCS, growth predominantly came from new business.
Rate was broadly flat as some lines showed rate improvement, but were offset by some softening in other lines. Meanwhile, in UK SME, commercial lines growth came primarily from strong rate and indexation. The UK general insurance undiscounted core was 95.3%, an improvement of two points as the benefits of strong trading and rate increases in the past year continue to earn through. Importantly, q one written cores support a continued trend of positive underlying performance development. In Ireland, premiums of a hundred and £51,000,000 were 21% up, with personal lines up strongly.
The underlying core remained consistent with the prior year, but as mentioned, weather losses were higher than long term averages. Storm A Owen led to elevated claims across the market, and we saw losses broadly in line with our market share. This was the largest windstorm to hit the island in over forty years, leading to significant damage as well as outages that were sustained for days. As a result, the undiscounted core was a 17.8%. In Canada, premiums of £904,000,000 were up 5% at constant currency.
Personal lines premiums grew 10% driven by continued rate actions across both auto and personal property. In commercial lines, premiums were 2% lower as pricing increases taken were more than offset by lower volumes, where we took actions to improve profitability on some accounts. On an underlying basis, core improved, benefiting from rate actions earning through. Lower claims frequency and improving theft trends offset inflation impacts, including an adjustment made for inflation estimates of US tariffs. Canadian undiscounted court was 96.2%, reflecting a number of weather events in the period above long term averages for q one.
These included floods in Ontario and snow and ice storms towards the end of the quarter. And all losses for these events were broadly in line with our market share. Moving to IWR. In the insurance business, protection and health sales were up 19%, with protection volumes benefiting from the acquisition of AIG. Individual protection benefited from strong sales through estate agents in advance of stamp duty increases in April.
And the health business continues to show excellent momentum with in force premiums up 11%. Wealth flows of £2,300,000,000 represented 5% of opening AUM, another strong performance. Platform continues to perform really well, up 52% to £1,300,000,000. We saw record flows ahead of the tax year end with strong inflows in both adviser platform and direct wealth. In q one, workplace net flows were an impressive £1,200,000,000.
Now whilst this was lower than q one twenty twenty four, this simply reflected the exit of one large scheme to another provider. Workplace flows can be uneven from quarter to quarter. Sizable scheme wins have transitioned to Aviva in April, meaning that net flows for wealth overall, as at the April, were £4,000,000,000, which is up 16% on the same time the previous year. The overall resilience of workplace flows and the strength of our adviser platform business position us well as we look forward in this key growth area. And we remain confident in our ambition that wealth will deliver £280,000,000 of operating profit by 2027.
Retirement volumes grew 4% to 1,800,000,000.0, with VNB up 28%, reflecting improved margins as we wrote more smaller BPA schemes. Total BPA volumes were 1,300,000,000.0 across 25 deals in the quarter. We continue to invest in our proposition and are now able to provide indicative quotes to schemes through Aviva Clarity within forty eight hours, which is a competitive edge. The BPA pipeline remains reasonably strong, though as mentioned in February at our year end presentation, we are not likely to see a repeat of the volumes achieved in 2024. In individual annuities, it has been positive to see the benefits of the investment we’ve been making in our operations with volumes up 32%.
That concludes my review of the businesses, and I’ll now move to the balance sheet metrics, all of which demonstrate our focus on balance sheet resilience. Solvency of 201% remains strong. To walk you through the main drivers in the period, total capital generation in the quarter created about five points, including the usual operating capital generation as well as a small positive from market movements, primarily interest rates. And the full year dividend used about eight points. I’m really pleased with the debt actions we’ve taken this year, which contributed a small positive to the ratio in q one and resolved the last of the legacy capital instrument map.
Importantly, we received shareholder approval to cancel the group’s preference shares with the process receiving overwhelming support. And subject to one remaining court approval, this concludes a long standing legacy matter ahead of this year end when the instruments would cease to qualify as regulatory capital. And just before the end of q one, we issued our second restricted tier one debt instrument of £500,000,000, which was keenly priced and heavily oversubscribed. Now the market turbulence following q one had no substantial impact on the asset portfolio and solvency ratio, a further demonstration of our balance sheet strength. Sensitivity show we have relatively low exposure to market stress, especially in equities where we are well hedged.
As an indication, the impact of the significant market volatility since the end of q one on our solvency ratio was about a point adverse as at the April. Moving to other balance sheet metrics. Our credit portfolio continued to perform well in q one with limited net downgrades to a lower letter, about 1% of the portfolio. There were no downgrades below investment grade. Our portfolio has shown its resilience through various periods of stress over recent years.
And remember, insurance companies like Aviva hold these instruments through the cycle, and so short term mark to market movements have little impact. Leverage on a consistent basis to the solvency ratio, which makes an allowance for the shareholder approval to cancel the preference shares, was 30.1%. And center liquidity was £1,800,000,000 at the April. This is separate to the £1,800,000,000 of funds which have been remitted to the group for the cash component of the DLG acquisition. These funds are held in escrow in preparation for the transaction closing.
So to summarize, Aviva continues to grow. Our balance sheet is strong, and we have a firm and disciplined grip on performance management. This is a transformative year for Aviva, and there is a huge amount of work underway as we progress towards the completion of the DLG transaction and plan for the integration. We remain on track to complete the transaction around the middle of the year, and we are well prepared for the integration and looking forward to unlocking the full potential of the combined group. More broadly, we continue to deliver for our shareholders, our customers.
And, specifically, I’m confident in our 2026 group targets and business ambitions. While market conditions are uncertain, my view and confidence on the outlook for the group remain very positive, and I’m excited about what the future holds. And with that, I’ll hand over to the operator to start the q and a.
Conference Operator: Thank you. As a reminder, to ask a question, please press star one on your telephone keypad. You’ll hear a tone to confirm that you are in the queue. If you wish to withdraw your question, you may do so by pressing 2 to cancel. There’ll now be a short pause while questions are being registered.
Thank you. Our first caller is Andrew Sinclair from Bank of America. Your line is now unmuted. Please go ahead.
Andrew Sinclair, Analyst, Bank of America: Good morning, everyone. Thank you very much. 3 for me, please. First, just on tariffs. I guess, in particular, in Canada, you mentioned that precautionary inflation adjustment for US tariffs.
Just can you give us any more details on that? And and likewise, if you made any adjustments in in The UK for for tariff impacts. The second, just anything you can tell us more on on UK personal lines pricing. I get that you’re you’re pricing to maintain strong rate adequacy, but where we are in pricing today, what what’s the desire to to grow at the current pricing levels? What’s your view on pricing in the market today and where we go from here?
And and third is just on central liquidity. I I thought that was a really strong print given it excludes the funding for GLG. Just how should we think about that, and is there anything that we should be aware of in terms of timing of remittances or anything like that this year? Thank you
Speaker 4: very much.
Amanda Blong, Group CEO, Aviva: Okay. Thanks, Andy. So maybe I’ll pick up the first two, and Charlotte can pick up the central liquidity point. So, so on tariffs sort of more broadly, we we don’t we have limited sort of direct exposure to to to those tariffs. And particularly, you know, if you think about The UK business, which is a significant portion of the group, you know, there, we’re really impacted to the extent of any geopolitical or macroeconomic, impacts that there may be.
And Charlotte has talked through some of the impacts that that we’ve seen, which are very limited. So in Canada, you’re right. We do have some exposure through, through auto. But just to to break that down and and and and, I mean, first of all, I think it’s fair to say that that auto, tariff has now been postponed for two years on auto parts. So, you know, at the minute, there is there is no impact, you know, direct impact from what what we see.
But if you think about a motor claim in, auto in Canada, Two thirds of that claim is injury, and one third of that claim is damage. And of that damage, our estimate is around 50% of that. The parts would be impacted by tariffs. So once you break all of that down, actually, it’s a pretty limited impact on Aviva, you know, the the site with the size of the Aviva group. On saying that, we were cautious in adjusting, for that.
But and and we’ve done that in two ways. You know, we we’ve looked at what what those are potential inflationary increase on on the, on the reserves because of tariffs, and maybe Charlotte, will come back on that if there’s anything more you have to ask on that. And and secondly, just in the ratings. So, obviously, you know that in Canada, the rating environment is such that you have to submit your rates to the regulator. So we’ve got all of that prepared, and, obviously, we’re off the back of some strong rating action that we’ve already taken in personal lines in in Canada, you know, over the last number of years.
So we feel pretty well equipped. I think in terms of adjustments in The UK, no. We haven’t we haven’t made any. But, you know, obviously, in The UK, you’ve got an incredibly dynamic rating environment and an incredibly dynamic, feed of data that is going on between claims and underwriting in any, you know, in any one hour. You know, Owen and the team are constantly looking at the pricing and any any changes that they’re seeing from that.
In terms of, of pricing for personal lines in The UK, so, look, what we have seen here is that, so inflation is around, mid mid single digits, and we think that’s sort of across the across the board. And in q one, it’s we let’s talk motor first. We lowered new business rates broadly in line with the market. So there’s been some Pearsonham data, I think, which has come out recently, which is down around 4%. But what we are seeing and what I think the external data validates is that pace of reduction has been decelerating through the quarter, and we have seen that continue that deceleration continue into April.
So, you know, we feel that that is a a pretty good position to be in. So that is new business rates. On renewal pricing, rates are about 1% lower in in q one. I think, you know, I would always remind you, and I know I’m speaking to experts and I know you understand this, but we come off the back of significant price adequacy. You know, if we look at the the the rates that were being put through at the back end of, 2020, ’3, so, you know, the the cumulative year to date increase q four on motor for 2023 is 47%.
So what you’re seeing is some some is some, you know, more normalizing of rates. If we talk about home so, on home, the the situation is that we have not lowered our rates. So so this is Aviva. Whilst the market has softened its rating in q one, we have not lowered our rates. And I think that, you know, if I bring then Home and Motor together, what you will expect to see from us is that we will, you know, we will we’ll obviously maintain rate adequacy.
You’ve seen the performance of The UK core that Charlotte talked about there. We will obviously you know, we are gonna maintain our discipline as the market does what the market does, but we definitely feel that, you know, that we’re in really good shape on both motor and home.
Charlotte, CFO, Aviva: Okay. Just just going back to the the Canadian tariff reserve effect, so it’d be to be a bit more specific to build on on on Amanda’s point. So so what we’ve done there is reflected in the Canadian core is for the open within the context of of what Amanda’s explained, where we’re talking about the the the the the motor claim open claims. We’ve kind of adjusted our inflation assumptions on what those claims cost are gonna make, and that’s that’s led to the the slight reserve adjustment. And, obviously, we will see over the coming months as those claims actually work through whether that reserving is more or less than actually what what it costs to to to fulfill the claim.
So it’s it’s relatively modest, but it it was precautionary in the face of that inflation driver. And coming then to central liquidity. So at the end of the year, I think we published an January position of 1 point 7 billion. And today, we’re publishing the April position of 1.8. So it’s a hundred million increase, but that, you know, there’s a lot more going on there than that.
But I think what you can see and what I’ll try and unpick for you now is real power of the cash generation of of the group. So let me illustrate with a couple of points. Firstly, and separate to the central liquidity number of 1,800,000,000.0, we remitted cash to the center to be ready for the closing of the DLG transaction. And we combined what we remitted centrally with with with roughly 400,000,000 from the central liquidity to give us another 1,800,000,000.0. It’s not helpful that they’re all 1.8 billions.
But this other 1,000,000,000 of funds that is ring fenced centrally out of outside of of central liquidity ready for, closing the the DLG transaction. And having done that, we’ve then canceled the finance facility that was set up at the time that we announced the deal. So then if you go back to central liquidity, the increase through to the April has partly come from the 500,000,000 r t 1 debt issuance, which was done right at the end of q one, offset by the amount that we’ve we’ve moved across to to the ring fenced fund that I just mentioned. And remembering that ordinary, remittances, q one is not a big period for ordinary remittances. So so that’s kind of driven the increase to the 1.8 that you can see there at the end of the April.
So whilst that’s high, then it’s important to remember that there’s some calls on that cash. So we’ve got the cancellation of the pref shares, which is the paramount four fifty, then you add the premium, is a is about total of about $6.65. And then, obviously, later in q two, there’s the final dividend payment. So that’s using up quite a bit, but, obviously, the second quarter when a lot of that central liquidity naturally gets replenished by the remittances, from the business operations across the group, which is all very much scheduled on track for delivery in q two, primarily relates to IWR and and The UK GI business, and is in very much in line with the progression and towards the the target for cash remittances of greater than 5,800,000,000.0 over the periods, what, ’24 to ’26. So, hopefully, that unpacks it for you, Andy.
Amanda Blong, Group CEO, Aviva: Thanks, Andy.
Speaker 4: Thank you very much.
Andrew Sinclair, Analyst, Bank of America: Yeah. That’s good. Thank you.
Conference Operator: Thank you. Our next caller is Rhea Shah from Deutsche Bank. Your line is now unmuted. Please go ahead.
Rhea Shah, Analyst, Deutsche Bank: Great. Thank you very much. And hi, Amanda Charlotte. Three questions from me too. The first one, in terms of the margin in in annuities, this is strong and clearly, you’ve already said that this is because of a smaller scheme.
Do you expect this to continue into the second quarter or the rest of the year? The second question is going back to UKGI, and personal lines. Maybe taking it from a different point, but what are you seeing for in terms of claims inflation, frequency trends, in motor and home? And then finally, in terms of commercial, both in The UK but also Canada, what are you seeing in terms of pricing for yourself but also in terms of the market as well? How how do you position yourself versus the market?
Thank you.
Amanda Blong, Group CEO, Aviva: Okay. Thanks, Rose. Shar, do wanna pick up one? I’ll pick up two and three. Yeah.
Charlotte, CFO, Aviva: So so look, I think in in margins, as we said, it’s it’s it’s predominantly driven by strength in the BPA margins. We’ve written 1,300,000,000 of volumes in in in the quarter, which is which which is similar to to last year. It’s across 25 deals, though. So, you know, you can see that’s typically the smaller schemes. And with that mix sort of weighting more towards the sets the smaller schemes, we see that coming through in in the higher margin.
I think as we progress through the year, we would expect this to normalize as as the mix of of schemes, you know, becomes more normalized to to a mix of of larger and smaller schemes. So I would I would kind of guide you back to similar margin levels to to what we saw last year, as we progress through the year for for retirement overall.
Amanda Blong, Group CEO, Aviva: Okay. So, there’s there’s a number of things. Maybe we can start with, with commercial lines pricing. So thinking here UK First. So, I mean, good good rate adequacy in the book.
Again, I think it is the same story as we’ve talked about for retail in that we come off the back of hard markets and, you know, and and good performance. So what what we’re seeing here, if we break it down, is, a slowing in rate momentum in the commercial lines market overall, but but particularly for the larger accounts. So this is where we will remain disciplined to make sure that we get the price adequacy right. So we’re still targeting rating increases, particularly on those challenged accounts. So I think in these in this sort of market, you will be selective about, you know, more individual account underwriting rather than group account underwriting.
And the retention is remains very strong at around 90% in the commercial lines business in The UK. So if we if we think about the GCS business, we’re still seeing rating increases in motor, specialty lines, in in liability and property investors. But in some areas like that in financial lines, we are seeing that the soft market conditions of last year have continued into 2025. If we talk about the market, the mid market business, we’re seeing still seeing good price increase across all those key lines of business. And in the SME business, we are still seeing good pricing increases.
So I think, you know, as always, it’s the larger cases that are coming under more scrutiny and a more and and more, more competitive. On the, you asked, I think, about inflation. I thought I did answer that in in the first question, but just in case, just just what I said was on UK inflation, it’s around mid single digits, and that’s really across all the all the lines. So I I won’t I I sort of won’t break that, down for you. And our sort of outlook on that is that we think that that will continue to plateau.
I mean, obviously, with all the caveats around macro and everything else. On frequency, so we have seen, you know, continued improvement on frequency in The UK, which I think was the question that we answered back in in March sorry, February. So it’s q one twenty twenty five frequency has followed similar trend to 2024. Here, I’m really talking, motor. So and that’s in common, I think, with other areas across the market.
We’ve got fewer accidents, than the previous year. But but, obviously, January weather does affect motor as well. Affects other lines of business. So we have we saw some small increase in frequency in January, but the claims, the claims frequency trends are coming down, and that’s there’s contributory factors from that, you know, whether that is, you know, favorable winter weather in the latter part of the quarter, positive impacts from improvement in people. And, also, you know, the 20 mile an hour, limits obviously, my my home country of Wales has put in place and in many other other parts of of UK.
So you’re you’re sort of seeing that that coming through. In terms of home frequency, I don’t I don’t have any sort of specific data on that. But, obviously, you know, if there are weather events, you would you would you would that frequency increase for weather. On Canada, let me just try and find that here. I’ve got so many pieces of data.
It’s all very exciting. I know. Hold on. Hold on. What what we’re seeing in Canada is that inflation is around five to 6% in motor and in property, so very, very similar to the to The UK.
And in terms of rating in in both, auto and property, we’ve put in around 11%. So you can see that’s more than adequately covering for inflation. In commercial lines, inflation is around five to 6%, so so the same. Renewal rate increases is, is just slightly less than that, but, again, coming off strong, strong rating. Premium retention is about 86%.
What I would say on Canada is and and Charlotte referenced it in her speech. We have exited an unprofitable scheme. So, you know, that that that is impacting the overall retention. But I think, overall, we’re in good shape in these. We’re monitoring it all very closely and reacting, obviously, pretty quickly.
Hopefully, that’s covered all of the questions there.
Rhea Shah, Analyst, Deutsche Bank: Very helpful. Thank you.
Conference Operator: Thank you. Our next caller is Larissa Van Deventer from Barclays. Your line is now unmuted. Please go ahead.
Rhea Shah, Analyst, Deutsche Bank: Thank you very much, and good morning. Thank you for the detail on The UK, which I was going to ask. On Canada, though, one of your peers reported, a combined ratio that was quite a bit lower than what you reported. How should we think about your geographical exposure and about the evolution in the market going forward, please?
Amanda Blong, Group CEO, Aviva: Is that is that just one question, Larissa?
Charlotte, CFO, Aviva: Yep. Just one. Yeah. Okay.
Amanda Blong, Group CEO, Aviva: So maybe I’ll ask Charlotte to just comment on, the the relative because I think there are differences. But just in terms of sort of geographic exposure more more broadly, obviously, we benefit from the diversification the geographic diversification in terms of the amount of capital that we have to hold and a very strong position in Canada as the number two player. You you know, it’s something that we, you know, we are looking to continue to maximize. So we’ve got very strong positions in where whether it’s commercial lines or personal lines and strong partnerships with, with RBC and and the a recent other big partners partner that we’ve signed in q one. So we feel very, very comfortable about that.
But, Charlotte, maybe you can just unpack a little bit the differences.
Charlotte, CFO, Aviva: Yeah. And and I’ll just sort of unpack what what’s happened in court because, like, you know, obviously, drawing comparisons to to to is is is always challenging. But our q one in Canada was impacted by, as I said earlier, three main weather events. So, you know and these were, you know, the most destructive destructive winter for weather events in in Canada since about 02/2017. They they largely affected Ontario where we have, you know, higher market share than the market average.
So our losses were in line with our share, but we have a greater share in Ontario. So this impacts, you know, us more than those that are less exposed to to that region. So, you know, that’s what I would I would say. None of the events were sufficient to be, you know, hitting, the retentions of of of the reinsurance, but they were sizable in the context of q one and long term averages that we normally expect to see. When I then look at underlying core, it has improved versus q one twenty four.
So that reflects rate continuing to earn through, continued market discipline. We’ve seen continued improvement in in theft trends and that sort of stuff. So I think, you know, we feel confident about that. We can also we’ve got, you know, good line of sight on on future rate filings that we’ve planned, you know, allowing us to navigate inflation and loss trends and and and continue to to move forward with our ambition. So, you know, I think it’s a it’s a good result, but, you know, drawing comparisons is is is always challenging, particularly just based on one quarter of data.
Amanda Blong, Group CEO, Aviva: Thanks, Larissa.
Rhea Shah, Analyst, Deutsche Bank: Just a quick follow-up. There were issues with auto saved. Are those now largely done, or do you still see that trend continuing?
Charlotte, CFO, Aviva: Yeah. Much improved. So, you know, I think we we continue to see that that that improve.
Amanda Blong, Group CEO, Aviva: I
Charlotte, CFO, Aviva: mean, it it’s slightly above longer term average, but it’s significantly below ’23 and and the first half of twenty four. You know, we, as well as many of our competitors, have taken steps to address that. You know, we’ve got the tagging that we talked about before, you know, offering free discounted installations for high left vehicles on comprehensive coverages. You know? So there’s a whole range of different things.
A lot of it was about awareness, but, you know, I think I think I think we’re in a good place on that now. It’s much, much, much reduced.
Rhea Shah, Analyst, Deutsche Bank: Thank you so much.
Amanda Blong, Group CEO, Aviva: Thanks, Theresa.
Conference Operator: Thank you. Our next caller is Steven Hayward from HSBC. Your line is now unmuted. Please go ahead.
Steven Hayward, Analyst, HSBC: Good morning. Thank you very much. Two questions, from me. Firstly, on Ireland, I know it’s a small business, but it’s obviously quite important this quarter after a big storm came through. I see that your reinsurance retention is around €30,000,000 here, and I think that the the market, of the storm, around about 10% of that.
So it’s not quite getting into your reinsurance cover. Is that correct? And, you know, this is the one in 40 storm event. Is a one in 40, reinsurance cover adequate, going forwards? And then secondly, on your, BPA, I I hear that you’re saying that it’s gonna be sales this year versus last year.
But could you give an indication of your expected yearly amount of BPA sales for this year potentially? Thanks.
Charlotte, CFO, Aviva: Okay. Shall I take one of Yeah. Look. I think, as you say, it was a big storm. Biggest hit one in in forty years.
It you know, market estimates are around €300, 3 hundred million euros, and and, you know, that that’s that’s that is significant. As you say, our market share is is around 10%, and and so you can sort of, you know, roughly size size what we’re talking about. I mean I mean, I think we are at the the retention, level for Ireland now, which is 30,000,000,000, euros. So, you know, what we’ve reflected even though there are still some claims coming through, we would we’re we’re we’re kind of hit our retention level. We wouldn’t expect further losses from that.
If anything, we might we might see recoveries, coming through. So I think I think we have got the right specific cover, for for Ireland there. And then in terms of of BPA volumes, I think we guided at the full year, that, you know, the sort of 15 to 20 over a three year period, you know, as we’ve seen in the previous three year was was the right way to think about it, but not being in the sevens that we saw in that particularly elevated period, of ’24. So, you know, I think, you know, more in that, you know, a third of 15 to 20, but but also recognizing that some years, some of the biggest schemes get delayed or they come forward. And so, you know, actually, you know, the the the market is lumpy and and it can it can vary.
And we will, as always, be incredibly disciplined because we have many other, places to, use our capital. So our objective is always to hit the hurdle rates for an IRR’s and, you know, good IRR’s and the capital strain that we use. And and and and optimize particularly the Aviva investors’ ability to to access good assets to back them. So, you know, that’s what you’ll see us do. We’ll be disciplined.
So some some some months, some periods will be greater than others. Okay. Steven. Thank very much.
Conference Operator: Thank you. Our next caller is Andrew Creen from Autonomous. Your line is now unmuted. Please go ahead.
Amanda Blong, Group CEO, Aviva: Morning, Andrew. Hi, Andrew. We can’t hear you. I don’t know if you’re on mute.
Conference Operator: Hi there, Andrew. We cannot hear you, so we will move to the next caller, which is Naseeb Ahmed from UBS. Your line is now muted. Please go ahead.
Naseeb Ahmed, Analyst, UBS: Thanks. Good morning. So a couple of questions on Workplace and one on liquidity. On Workplace, you lost the the scheme in 2023. Is there any feedback that you’ve got?
And just generally, what what are the pension schemes mostly looking at when they’re when they’re choosing a provider? Then the second question is around margins in Workplace. It is a competitive market. You gave a margin, a net margin of around 10 nine to 10 basis points at the Infocus Day. Has that margin compressed?
And that’s the admin margin. And what are you earning in the Viva Investors given 70% of the of the AUM is going into into Viva Investors? And then the second question on liquidity. Charlotte, you said there’s 1,800,000,000.0 ring transfer dark line, 400,000,000 from the center. Is the other 1.4
Charlotte, CFO, Aviva: Okay. Let’s see if we can’t
Amanda Blong, Group CEO, Aviva: hear you. I think we
Charlotte, CFO, Aviva: probably got most of it.
Amanda Blong, Group CEO, Aviva: Yeah. I think we got most of it. Shall I do the workplace one, and Charlotte, you can do, the liquidity one? So I think so so just on workplace, maybe give a bit of sort of, background. So the scheme in question was lost in 2023.
Charlotte gave you the numbers, you know, to the April, and we did that obviously deliberately so that you see that this was effectively, a one off in the numbers. So what’s what are scheme a sponsor’s looking for? Well, obviously, they’re looking for a trusted brand. They’re looking for a seamless process. They’re looking for excellent service.
They’re looking for, you know, various fund availability, whether that’s ESG or or other allocation. From our perspective, that particular scheme and, obviously, we won’t can’t say too much detail, but the pricing was so competitive that we did not want to administer a scheme where the margins would be that thin. So, so we made a decision, to, that that we wouldn’t compete on that. So to to to to say that, obviously, that takes time then for that scheme to come out. And then in April, we’ve we’ve run we’ve run another large screen some time ago, which came into the numbers.
We remain the number one player in the market. We’ve won around a 35 schemes this quarter alone. Our win rate on schemes is 76%, and our retention rate on schemes is 95%. So I think what, you know, I think what that shows you is that we are making as as in, you know, general insurance, we’re making calls around being disciplined around our pricing, and that’s what you that’s what you’ve seen here. But with it it you know, it isn’t stopping our ability to be able
Rhea Shah, Analyst, Deutsche Bank: to
Amanda Blong, Group CEO, Aviva: win schemes. And you see that, you know, we have now on both platforms, the adviser, and workplace around 200,000,000,000 of of, flows of of AUM, and we’re seeing really, really good momentum there. So, you know, we’re not gonna talk about the margin compression and those sort of things here too much, but what we would we would say, and we’ll recheck and maybe Charlotte will come back, is that we’re on track to achieve the 280,000,000 of our profit, which obviously a big contributor of that is the is Workplace and the adviser platform. And on the AI earnings, you know, again, we’re not gonna break that down.
Charlotte, CFO, Aviva: Charlotte? Yeah. So all I was just gonna say is is you’re correct that back in the Wealth and Focus session back in ’23, we talked about operating margin of around 10 points, revenue about 30. When I look back at the the the ’24 numbers, they’re very much still in line with that. So, yes, yes, you do see some, but, you know, we’re we’re still tracking in in in line with that.
And and as as you say, and as Amanda reiterated, that’s the piece that comes into the IWR business. It’s the most material component of the profit, and it’s the the platform administration fee. But, you know, a significant amount of flows do go into a Viva investor solution, and then we do earn a fund management fee as well. So there is an additional revenue component that comes there. It’s it’s, you know, as you would expect, quite a lot smaller than the the the platform fee.
And I think although I don’t know. Are you back on now, Naseeb, or is your connection completely dropped? Well, I I’ll answer what I think was your question, which was of the 1,800,000,000.0 that we rim we have now segregated to to to complete the the cash component, the DLG transaction. Where did it come from? It it was special remittances coming through from the businesses, primarily those yeah.
It was it was specifically for that purpose and outside of the regular remittances which remain on track. Okay. We still got anyone, or is that all the comments have dropped?
Conference Operator: Thank you. Our next caller is William Hawkins from KBW. Your line is now unmuted. Please go ahead.
William Hawkins, Analyst, KBW: Hi, Amanda. Hello, Charlotte. Thank you very much. Hello. Can I just be clear, please?
What was hi. What was the percentage point weather impact in the 96.6% undiscounted combined ratio? I just wanted to be clear in my mind, I think 4% is your normal annual figure. And so I’m just trying to get clear whether we’re still comfortably on track for that for the rest of the year or if we should already be nervous that the level of losses in the first quarter has put the normal budget at risk? And then secondly, please, could you also just maybe be clear about the percentage point impact of prior year reserve development?
I’m not sure from what you said about the Canadian tariff adjustments, is that implying that that’s a negative PYD in Canada or it might be taken another line? And if it is, does that mean you’ve had a small negative PYD at the group level or is there something offsetting it? And then thirdly, please, the individual annuity growth is is massive. Congratulations. I I’ve got in my mind that, you know, this is a business that over time is growing five to 10%, not not the north of 30% you’ve just printed.
I I just wanted to, you know, get my own expectations kind of framed for the future. You know, what what do you think is sustainable relative to that 30% for for the full year and and looking beyond?
Dom O’Mahoney, Analyst, BNP Paribas Exane: Thank you.
Amanda Blong, Group CEO, Aviva: Okay. Shar, do you wanna
Charlotte, CFO, Aviva: pick up the first one, pick up the third one? Yes. So so look, William, as usual I’ll call. We don’t provide all of that details that in the trading update q one. You’ll see that all at the half year, which is a full analysis of of of full six months of of of data.
That said, looking at the weather overall, it’s definitely an abnormal amount of weather in in the quarters for both Ireland and Canada. When I compare that to q one twenty four, which was relatively benign, So you you’re seeing a you’re quite a swing. Compared to long term averages, so, yes, we talk about four points annually, but we load different quarters differently, you know, because it doesn’t it’s according to where we expect the weather to be. So long term averages in a particular quarter will be will be will be different to the four points per se. And I really think I I would just say, you know, it’s it’s it’s always tough when you start the year and you have them in the in the first quarter.
Even April and and and March have been much better. So I think we still believe that we’re we’re loading and pricing for the right amount of weather. And, you know, across the year, it will be reasonable. But, you know, we we as you would expect, we’re always updating our models to reflect the claims trend trends and experience. And, you know, the the budget itself, while we talk about in point terms, it’s it’s increased with the portfolio growth.
So, you know, I I think we we we feel confident that we’ve got sufficient weather loading and we’re pricing accordingly. You know, we’re quite specific now in Canada on on pricing in in the cat regions in particular. On in the I think the question was India. I I can pick that up.
Amanda Blong, Group CEO, Aviva: Okay. So on on individual annuities, yeah, we obviously, we’ve seen really good growth in this quarter. I think that that comes off, suppressed growth last year because we we were building our operational capability to be able to deal with the volumes that are coming in. So I think what you should expect is that that that does come back somewhat towards the end of the year, albeit that the growth will still
Charlotte, CFO, Aviva: be strong. So we’re not
Amanda Blong, Group CEO, Aviva: gonna we’re not gonna give you, you know, an exact number, but we will still see, see growth strong. So, you know, I I think that we were seeing, you know, we we have seen about a a 50% increase in terms of our ability to be able to deal with applications versus what we were able to deal with at the beginning of 2024. That got better through 2024. And then as you know, so, obviously, you’re comparing a very good quarter in ’5 with with a quarter in 2024 where operational capability was constrained. But I think, you know, it is, you know, it is a product which people are buying, people want to buy.
It is part of their decumulation, and it’s an important part of that decumulation. Therefore, it’s really great for us that we actually were able to bring our operational capability, up to up to the levels that that we that we wanted to. So, yeah, that’s good investment in the business, in system and people.
Charlotte, CFO, Aviva: And sorry, William. You also asked about Canadian PYD. Again, I’m not gonna break it out, but there was usual in it.
Dom O’Mahoney, Analyst, BNP Paribas Exane: It’s all possible.
Amanda Blong, Group CEO, Aviva: Thank you.
Andrew Sinclair, Analyst, Bank of America: Thank you, both. Thank you.
Conference Operator: Thank you. Our next caller is Andrew Cream from Autonomous. Your line is now unmuted. Please go ahead.
Speaker 4: Hello. Can you hear me now?
Amanda Blong, Group CEO, Aviva: Ah, yes. Hooray.
Rhea Shah, Analyst, Deutsche Bank: You got me?
Amanda Blong, Group CEO, Aviva: Hi, Andrew.
Speaker 4: Good. Great. Sorry. I wasn’t done. I I I wasn’t muted the last time.
I’m doing it one wrong. Three questions if I can. Firstly, Nat Cat in Canada. Can you just tell us what the industry loss was and what your market share is? Then secondly, I wanted to ask you about targets.
You said you’re going to refresh your targets. Should we expect that in, August? And as part of that, I noticed that when you did the Direct Line deal, you said that the Direct Line deal would improve your earnings per share, I think, by 10%. One of the things I noticed is that Direct Line has its amortization of intangibles at a hundred million, within its operating line, whereas you take amortization below the line. What so the question is, was when you set the 10% EPS growth target from the deal, does that include or does that exclude the movement of the amortization charge to below the line?
Sorry. It’s a slightly complicated question. And then third question, I just want to go back to, the annuity book and asset optimization because from another couple of companies, we got a very different view as to what the annual, impact of Phoenix talk about 500,000,000, Legal’s talk about 200,000,000. Could you give us a sense as to what do you expect asset optimization to do each year on your annuity block?
Amanda Blong, Group CEO, Aviva: Okay. Thanks. So, Charles, do you wanna pick up, one and three?
Charlotte, CFO, Aviva: I’ll pick up the the bit of the the first bit of
Amanda Blong, Group CEO, Aviva: the targets, and then you can answer the second bit. Yeah. So let’s start. Should we start maybe we should start with target. Amortization.
Oh, I’d love to do the amortization bit, but, you know, I I wouldn’t wanna embarrass you, Charlotte.
Charlotte, CFO, Aviva: Turn the corner. On the NatCats in Canada, I actually don’t have the industry estimates to hand. As I said, they were quite concentrated in Ontario where our market share is is, you know, is is is concentrated. But, you know, it is it is in line with our market share of it. So, yeah, I don’t I don’t have that to hand.
Sorry. Then do you wanna talk more generally about
Amanda Blong, Group CEO, Aviva: Yes. So so on on targets more generally so, obviously, just to to sort of remind everyone, we set the new three year group targets at the full year results presentation back in March. And we’ve we are obviously confident that the stand alone business is on track to achieve those targets, so that’s that’s all good. Once the DLG acquisition closes, we will come back to you with how the acquisition will impact those existing targets. Clearly, DLG will accelerate our pivot towards capital light, so it’s gonna contribute operating profit, OFG, and cash incremental to those existing targets, and we’re very focused obviously on on on that.
As we get closer, to achieving that, Andrew, we’ll we will look to set new targets for the group given the the change of the shape of the group. We will look at those target metrics being more closely aligned to our composite peers. So it’s difficult to say when we’ll have that conversation with you. I think it’s unlikely to be August because, you know, we’re complete midyear. But as soon after that as we can, we will we will come back to you with that because we recognize that that is that’s a really important thing to do.
And, actually, we we are quite excited about doing that sort of, you know, if you like breaking into these new target metrics, are more closely aligned to the type of group that we are. On the amortization point, Charlotte, knock yourself out.
Charlotte, CFO, Aviva: Yeah. So so look. The the the 10% EPS accretion that we gave or guided to on on the December 23 was very much based on standalone DLG business and the synergies that we expect. So, you know, the QFBS number of one twenty five. We didn’t, at that stage, make any alignment, you know, any assumptions on the alignment of accounting policies, and and there isn’t really any updates to give you, on that today.
When we complete and, you know, can can look at the the records directly, we will, of course, be looking at accounting policies and, you know, we can see what’s in the the public domain and and and and some of our thoughts are already obviously developing. So that when we strike the acquisition balance sheet, you know, it’d be fair to assume that we will be looking to align policies there and and make the whole thing more straightforward as we as we go forward. And there will be, you know, valuation differences and all sorts of other things that will come through as we strike that acquisition balance sheet, which will be really important. On the amortization point specifically, and I’m just thinking about how that interplays with with your 10%. When we when you when you acquire something, you you you you create some intangibles.
Intangibles. You know, often customer and and and client assets will be intangibles that you need to bring onto the balance sheet. And they are things that amortize, so because they’re separate from the goodwill. Those you would expect to go below the line, so outside of operating profit as they amortize. Intangibles that are already on the balance sheet, so software, that type of thing, we will reevaluate at at at the point of the acquisition balance sheet, and then it will, you know, start a new amortization profile based on on on that carrying value.
There, we would expect that that would go through still go through operating profit. So there will still be an amortization. Now how that will compare with what you see in DLG will, as you say, depend on as we how we align periods and and and and on what we amortize and what we don’t. And it will also depend on that initial carrying value in the acquisition balance sheet. So there’s quite a lot of variables to get through there.
And and and, you know, those decisions are the only things that we’ll finalize once we’ve completed the transaction. But taking up detail and stepping back from it, I think there are likely to be some offsetting items. But I would I would, you know, there could be some upside there as well. So we’ll we’ll update you once we’ve actually completed and and and are in a position to understand exactly how to align policies.
Amanda Blong, Group CEO, Aviva: So the third question was around the annuity book and, optimization. And Andrew, you did break up just a little bit. Do wanna just can you just repeat that question so we make sure we answer it correctly?
Speaker 4: Yes. Other companies have got very different targets for asset optimization of their annuity books for years. So Phoenix talks about 500,000,000, I think. Legals talks about 200,000,000 off a much bigger book. I just wanted to get a sense to what your expectation of for asset optimization actions, each year are.
Charlotte, CFO, Aviva: Yeah. So so look, I think they’re very again, without talking about other people’s policies, you know, you you you have definitions of of of managing actions that that differ across different companies. And and, you know, their their questions you know, their definition, if you look and you compare it to us, is is more extensive. And so, you know, that they they sort of actually target that and and go after it. So, you know, that that’s a little bit different from us where and if you look read our annual report, we basically say, you know, the director’s view, they should be excluded in understand in order to understand the underlying performance.
That doesn’t make them any less valuable. It’s just how how we how we look at it. So we are we do go after those types of management actions. You know, you’ve heard us talk about the guidance of of, you know, 200,000,000 a year, and and and that will be assumptions under the management actions that that drive capital generation from the balance sheet. And we absolutely see as part of that how we manage, you know, the the the assets that are allocated to the to the annuity book.
So it is something that we’re actively doing. I think it’s just a little bit how how different companies sort of put prominence to to those things really. But the you know, ultimately, does drive for us as well capital generation. Yeah. You should look
Amanda Blong, Group CEO, Aviva: at the definitions though. Think, that that’s where we point you to, Andrew. Thank you.
Naseeb Ahmed, Analyst, UBS: K. Thanks.
Conference Operator: You. The final caller we have time for today is Dom O’Mahoney from BNP Paribas Exane. Your line is now unmuted. Please go ahead.
Dom O’Mahoney, Analyst, BNP Paribas Exane: Thanks. Thanks for taking questions, folks. So
William Hawkins, Analyst, KBW: just to go back to The UK, if
Dom O’Mahoney, Analyst, BNP Paribas Exane: that if that’s alright, and I thought that the top line here was was very impressive, and that just prompted two questions for me. The the first is on just on the personal side. It looks like partnerships delivered most of the growth, if I’ve understood correctly. I think that implies extremely strong growth within the partnership portfolio. Could could you help us unpack that a bit?
I I know that nationwide Travel is is in there now. I wonder if you could explain what else is is in there. What’s what’s driving that? And also Nationwide Home, as I understand it, came online early this year. How could how big could that be for the full year?
How much of that contributed, if any, in 1Q? Just on the commercial side, I think as as you explained it, pricing and other large stuff is is slightly tougher than than on the little and and the small stuff. Your your growth, sir, I think, was the other way around, but you you were doing volume in GCS ex privatized and and price in SME, if if I’ve understood correctly. Where was that volume in GCS coming from in terms of products? Then, I I guess, a related question on that.
I’ve we’ve seen some of your other peers do do more gross but reinsure more. Is the bridge to gross to net sort of normal for
Steven Hayward, Analyst, HSBC: you this period, or or is
Dom O’Mahoney, Analyst, BNP Paribas Exane: there more utilization? And if I can ask just one more question, and and, again, apologies. It’s still The UK. I just want to understand the message on on the on the combined ratio development. Charlotte, I think you said that the q one written core supported underlying positive positive development, which is very welcome.
If I just compare the one q combined ratio of about 95 undiscounted with the core last year, that is a couple of points, I think, higher, give or take, than than the full year. Is that is that just what we should expect? I I understand that the the impact of of pricing and margins normalizing in in in retail. Is that sort of a good read for the year? Thank you.
Amanda Blong, Group CEO, Aviva: Okay. There’s a lot there’s a lot in there. We’re doing our very best. There’s a lot of detail in there.
Dom O’Mahoney, Analyst, BNP Paribas Exane: Yeah. There is. Sorry.
Amanda Blong, Group CEO, Aviva: Dom, so so I’m I’m I’m not sure that we’ll be able to give you all the detail, but we’ll give you as much as we can. Okay? So in terms of personal lines, UK grew by 6%. That was, as Charlotte said in her opening remarks, supported by growth in intermediated, which does include the travel partnership with Nationwide. So that that that has that has been, you know, a good part of that that growth.
In terms of the home partnership, that hasn’t started, coming through in the numbers yet. So there’s no benefit from that being seen in those numbers. And in terms of the retail volume, I think as, again, as Charlotte said, we have grown retail volume, but the average premium has come down and they sort of net off they net off against each other. I think your next question was around, GCS, growth where we are we are seeing growth coming from the the Probitas integration and the, you know, the the fact that that that has come through. And that I think that’s about £77,000,000 of the gross written premiums.
Look. I’m not gonna tell you where we are winning where we’re winning individual deals, but we have won a number of individual deals because of that dual platform. Charlotte, do have a bit more to add on that?
Charlotte, CFO, Aviva: Yeah. Just just in GCS, I mean, I I think we see in in the sort of in the the CS part of g c of of GCS or the the commercial piece, new business wins across property and and motor. I think in specialty, it’s been wins in in construction and renewables. And then, you know, down in the in the sort of more mid market or SME, we’ve been benefiting there from, you know, continued rates with with good growth across, I would say, the the smaller digital end of the market and in mid market. So, you know, we we we’re trading we trade across the whole platform, and we’re always super disciplined and prioritize profits and rate adequacy.
So you’ll kinda see us trading, you know, where we can where we can achieve that objective. So those are some of the areas that that we’ve seen that are outside of the the 77,000,000 from Probitas. And then, you know, I do think there are really nice examples of where because we’ve now got Probitas, we’re being shown business that perhaps neither we nor Probitas saw in the past, And and and that’s, particularly interesting, as well. So lots of little examples, but I think you’ll see that for the developer of the year. And then I think just on combined, I mean, you know, I I I think it’s it’s it’s is a message of we are seeing the the the the pricing coming through and driving underlying improvements.
And as I look through to to the profitability forecast that we’ve got for the first half, you know, I can see that, you know, all of that strong rating and discipline continues to improve the underlying. And and and, you know, ultimately, we are looking and nobody’s asked me today about the the sub 94 core, but it is still the main aiming point, and we still believe in it. But, you know, we’re also just focused on driving economic business and and and and driving forward to optimize operating profit. So but I think, you know, good good good indications on the way the underlying used to develop. So I’m positive about that.
Amanda Blong, Group CEO, Aviva: Okay. So I think that’s the end of the call. It was only a trading update, but you managed to keep us busy for an hour. So thank you for that. There’s a lot of detail in there.
So, you know, obviously, if you need to follow-up with the IR team after the call, then please do. But thank you very much for joining the call, and we’ll see you all soon.
Conference Operator: Thank you. This now concludes our conference call. Thank you all for attending. You may now disconnect your lines.
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