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Operator: Good afternoon, ladies and gentlemen, and welcome to the SCOR Q4 2025 Results Conference Call. Today's call is being recorded. There will be an opportunity to ask questions after the presentation. [Operator Instructions] At this time, I would now like to hand the call to Mr. Thomas Fossard. Please go ahead, sir.
Thomas Fossard: Good afternoon, everyone, and welcome to SCOR Q4 2025 results on SCOR . I'm joined on the call today by Thierry Leger, Group CEO; and Francois de Varenne, Deputy CEO and Group CFO, as well as other Comex members. As usual, can I please ask you to consider the disclaimer on Page 2 of the presentation. And now I would like to hand over to Thierry.
Thierry Leger: Thank you, Thomas, and hello, everyone, also from my end. I hope you're doing well, and I thank you for joining SCOR's Q4 earnings call today. SCOR delivered another strong quarter, finishing 2025 on a high note. The group achieved a full year net income of EUR 846 million, the highest level in SCOR's history. The return on equity reached 19.1%, both clearly exceeding group targets. All 3 businesses contributed to these excellent results, P&C, Life & Health and Investments, each one delivering quarter after quarter. Our employees executed in a disciplined way on the Forward '26 strategic plan. We fully leveraged SCOR's Tier 1 franchise, seeking for every profitable business opportunity. We have continued to grow in a strategic and diversified way. The strong results are also supported by operational excellence and the rigorous cost discipline we established in Forward '26. Accordingly, we achieved EUR 170 million of savings already after 2 years, 1 year ahead of target, allowing us to keep management expenses flat compared to 2023. Let me turn to the 2025 dividend. At year-end, our solvency ratio was 215%, an increase of 5 points compared to 2024 and at the higher end of our target range. The economic value grew by 13.7% at constant economics. The outlook is positive for our 3 businesses, thanks to satisfactory 1/1 renewals and our diversified business model. On the basis of these strong results and confident business outlook, the group's Executive Committee has decided to propose a dividend of EUR 1.9 per share to the Board of Directors for the financial year 2025, up 5.6% from EUR 1.8 per share the previous year. You may recall that SCOR introduced a new capital management framework in 2023, which includes a dividend ratchet policy. Accordingly, the proposed EUR 1.9 dividend per share will set the new floor offering an attractive yield. This demonstrates our ability to create sustainable value and to offer a resilient and predictable dividend to our shareholders. As we are entering the final year of Forward 2026, I would like to take a moment to speak about the significant progress we have made in building a future-ready platform. We have evolved on all 4 pillars, and I'm confident that we will reach 100% completion rate by the end of '26. We are already dynamically allocating capital to diversifying and profitable lines of business today, improving value creation and capital generation. In 2026, we will enhance our monitoring and decision-making platform further. We have expanded in risk partnerships, supporting growth, helping manage the group's risks exposures and generating additional fees. Future developments in this space will mainly depend on the P&C cycle and the attractiveness of new business. Our ALM has evolved from static to standardized from fixed asset durations in the past to improved cash flow matching between assets and liabilities today. Improvements in 2026 will introduce a specific ALM data platform, allowing us to move to a dynamic ALM. And finally, in tech and data, we are on a good path to complete our 6 AI flagship projects. Already in 2026, we have begun applying AI to our core processes and our underwriting. This will be a major strategic area for us in the next strategic plan. And finally, as part of operational excellence, we are enhancing processes, data quality and systems across the value chain. We expect significant simplifications and efficiency quality gains from this program. Let's turn to the renewals. In a more competitive environment, SCOR applied a disciplined underwriting approach to the January renewals. Our teams leveraged SCOR's Tier 1 franchise to seek every profitable and diversifying opportunity to be added to our portfolio. As a result, we have been able to grow our business at still attractive prices and terms overall. Growth has been achieved in our target markets and with some core clients where we profited from a flight to quality. We have faced headwinds in some specialty lines, but we remain confident in our ability to grow profitably in these lines of business in the mid and long term. To conclude, for 2026, I'm confident that we will continue to deliver a P&C combined ratio below 87% as per our 3-year strategic plan Forward '26. In addition, we should be able to continue to build buffers opportunistically. Before handing over to Francois, a few words on what is happening in the Middle East. First of all, our thoughts are with the populations in the impacted countries. We hope that the conflict can be resolved soon. For SCOR, the immediate impact in terms of claims is negligible at this point in time. War is, in general, excluded from our contracts and where war is covered, our exposures are clearly limited, monitored and priced for. Francois, over to you.
François de Varenne: Thank you. Thank you very much, Thierry. Hello, everyone. I will now walk you through our Q4 results. I'm pleased to report that 2025 was an excellent year, supported by a strong performance under both IFRS and Solvency II and delivery 1 year ahead of our cash flow targets. In Q4, SCOR reported a net income of EUR 214 million, implying an annualized return on equity of 21.1%, supported by contribution of our 3 business activities. Now I will go on with more details regarding our Q4 results. Let's look first at P&C. In Q4, P&C new business CSM is positive, though modest versus the full year level, reflecting seasonality. First, Q4 new business CSM is impacted by the low number of renewal and then by the early recognition of retrocession contract, a large part of our proportional retrocession cover renewed at 1/1/2026. This shows a pattern consistent with last year. Maybe more relevant is to have a look at the full year 2025 new business growing by 9%, benefiting from growth in our preferred lines, dynamic retrocession buying with some offset by a more competitive P&C pricing environment and some margin pressure in certain inward segments. The P&C insurance revenue is down by minus 1.6% for the quarter at constant FX, mainly driven by a single-digit decline recorded by SBS. On a full year basis and adjusted for large commutation, the full year 2025 insurance revenue growth is flat, consistent with prior guidance provided in previous calls with reinsurance up 2% and SBS down by 4%. Moving on to the underlying performance of our P&C book. P&C performance is excellent again in Q4 as in Q1 and Q2 with a reported combined ratio well ahead of our Forward 2026 assumption of below 87%. Nat Cat ratio stands at 7.6% in Q4 and 6.8% year-to-date, well within the annual budget of 10%. The attritional loss ratio amounts to 74.7% in Q4 and as a reminder, also includes the additional buffer that we put aside during this last quarter of the year. Year-to-date, the attritional loss ratio stands at 76.4%, showing a slight improvement from 2024 at 77%, a very strong achievement given the additional prudence built during the year. As Thierry mentioned it, overall, this supports our confidence in delivering on our Forward 2026 assumption with a P&C combined ratio below 87%. The completion of the annual P&C year-end review confirms all lines are at best estimates and our reserve resilience has even increased. Now let's have a look at Life & Health. Life & Health generated a new business CSM of EUR 170 million in Q4. This is mainly driven by protection and longevity. This is higher than in the previous quarter of the year, but related to quarterly volatility. The full year Life & Health new business CSM stands at EUR 464 million, well above our EUR 0.4 billion new business CSM annual assumption. Life & Health delivered an insurance service result of EUR 115 million in Q4 and EUR 450 million for the full year, comfortably ahead of our guidance of around EUR 0.4 billion per annum. This performance highlights the resilience of the underlying business. On experience variance, we mentioned it in the past, it typically takes at least 2 years before trends can be properly assessed. With 4 quarters of data under IFRS, it remains premature to claim for any victory after the 2024 actuarial review, but the observed positive experience variance is very encouraging. The loss component that you see this quarter relates to a limited number of existing underperforming contracts. After a slight deterioration observed over the first 9 months of 2025, we have taken on this stock of contract prudent action, including strengthening reserves when appropriate. We remain comfortable with reserve levels at best estimate today. As such, this development is fully understood and not a concern for us. The Life & Health CSM is slightly down on a reporting basis at EUR 4.9 billion, but up 6% at constant FX. Before moving to investments, let's have a look to our group reserve resilience. Throughout 2025, we increased P&C reserve prudence as part of our opportunistic buffer strategy, reaching a level above what we initially targeted by the end of 2026 when we presented Forward 2026 in September 2023. This was enabled, of course, by strong underlying P&C performance. Combined with Life & Health, this increased IFRS this increased group IFRS resilience translates into an increase in the group risk adjustment confidence level to 75.5% to 82.5%. As the chart shows, this is another area where SCOR has made significant progress since 2023. Going forward, in 2026, we intend to maintain our opportunistic buffer strategy, mostly on P&C. On investments, performance remains strong. Return on invested assets is at 3.6% in the quarter, generating income of EUR 209 million. This reflects a regular income yield of 3.8%, supported by dividend received from our private equity and infrastructure fund bucket. The credit portfolio remains very high quality and expected credit losses are broadly unchanged during the quarter. Turning to economic value. Economic value increased 13.7% at constant economics over the full year, reflecting the strong business performance across P&C and Life & Health and above the Forward 2026 target of 9% per annum over the plan. Economic value per share stands at EUR 48, broadly stable versus last year. Financial leverage increased to 25.3% from 24.5% at the end of 2025, following the successful issuance of a new Tier 2 debt tranche in September. As a reminder, we are proactively anticipating the refinancing of corporate debt, and we aim to provide credit investors with larger and more liquid tranches. Looking ahead to 2026, I would highlight the potential repayment of EUR 283 million related to the remaining EUR 600 million Tier 2 note, which has its first call date on the 8th of June 2026. Finally, on solvency. The group solvency ratio stands at 215%, up 5 percentage points versus 2024 and Q3 2025, reflecting satisfactory net operating capital generation during 2025. At the same time, during the year, we made further progress in terms of ALM, as mentioned by Thierry, which resulted in an improvement in the solvency ratio sensitivity. I'm personally proud of what we have accomplished over the past 2 years on this topic that is dear to me. Overall, based on the quality of our results over the full year, we remain confident about achieving our Forward 2026 objectives in the final year of execution of this plan. With this, I will hand over to Thomas, and we will start the Q&A session.
Thomas Fossard: Thank you very much, Francois. On Page 23, you will find the forthcoming scheduled events. With that, we can now move to the Q&A session. Can I remind you to please limit yourself to 2 questions each. Operator, we can take the first question.
Operator: [Operator Instructions] We do have our first question from the line of Michael Huttner with Berenberg.
Michael Huttner: It's lovely results. So growth and the legal case. So growth, can you say a little bit more because when I speak to Thomas, he always says Thierry thinks that SCOR is underrepresented in the market in terms of share of wallet or whatever. So any feel for how you picture the potential growth of the franchise would be hugely helpful because it's nice to have margins, but growth is nice, too. And then on the legal case, I think the -- there's one with the -- I can't remember the name, the arbitration. And I just wondered what the status is, whether we could expect anything and anything -- I know you can't talk too much, but maybe you've got something new.
Thierry Leger: Michael, thank you. I will take your first question. Francois will take your second one. You're absolutely right. I think that the Tier 1 franchise of SCOR, together with the relatively smaller market share we have globally provides SCOR with an opportunity. And so the way we are looking at it is twofold. First of all, it allows us more than other companies to find opportunities that fit our targets business and target business for us must be the business that is profitable and diversifying. So that's critical for us. So we have more opportunity to grow into this or find opportunities in this segment. And as we have our teams out there every day, always using -- leveraging this franchise, we think, therefore, it should not just be margins. It should also come with some growth. Now clearly, the market is turning softer. And I just want to be clear with everyone, whilst I think we do have that competitive advantage and whilst I'm determined to leave no opportunity, no stone unturned, we will give quality or underwriting priority, and therefore, growth will be an outcome and not a target. I do believe, however, in the current environment, as we have demonstrated in January, we've been able to grow. And it shows exactly the point I'm trying to make that we should have a bit more chances than others.
François de Varenne: On your second question, Michael, I'm a little bit like you. I don't remember the name of the case. But I would say that the arbitration process now is closed. So we are waiting now the decision of the panel, which is expected to be due now, I would say, mid-2026 or by the summer. I just remind you on this topic that our provision on all major litigation and arbitration are our best estimate at the end of the year, both in our IFRS accounts and in the solvency ratio.
Thomas Fossard: Thank you, Michael. Can we take the next question, please?
Operator: The next question comes from the line of Andrew Baker with Goldman Sachs.
Andrew Baker: First one on Solvency II. I guess if I look at the underlying capital generation, less the operating capital deployment and the proposed dividend, it was sort of 8 points positive for 2025, which was quite a bit ahead of what you were guiding for. So I guess as we think about 2026, specifically, how would you expect the underlying OCG and the operating capital deployment to play out? And then can you just remind me how we should be thinking about this between quarters, so seasonality between quarters, if possible? And then secondly, can you just help me understand, I think at the January renewals call, you talked about a stable nat cat budget guidance of about 10 percentage points for the year. If I look at your -- you grew premium in cat in a softening market. So presumably, your exposure growth was significantly higher than even the sort of double-digit premium growth you were showing. So how are you able to maintain that flat cat budget in percentage terms?
François de Varenne: Thank you, Andrew. I will take the first question, and Jean-Paul will take the second one. So on your first question on net operating capital generation, of course, we are pleased with the profitability of our business. It reflects, as we mentioned already by Thierry and I a few minutes ago, it reflects both the strong underlying performance of our P&C portfolio and further supported by, I would say, better-than-expected Nat Cat claims during the year and also a solid contribution from the invested assets portfolio. The good news this quarter and for 2025 is coming from capital deployment, as you saw it on the slide. As I explained during many road shows, the operating capital deployment has 2 components. One is the capital needs on the in-force portfolio, and then there is also the capital deployment on new business. So it's a complex mixture of the 2 effects. Capital needs usually on our in-force portfolio depends mainly on, I would say, reserve development and how the business that we have written last year come on the balance sheet. And capital deployment, that's the other leg on new business depends, of course, on volume, but also on capital intensity and diversification per line of business. What we see in 2025 is the effect of our diversified growth strategy in both business units, by the way, leading to a lower capital deployment than last year. On the Life side, what we see mostly in 2025, that's the effect of the announcement of the new strategy that we updated in December 2024, with higher profitability on protection and diversifying in longevity. And on the P&C side, that's the other leg of the component, I would say, of the capital deployment that we see mostly this year. So on the P&C side, we see a bit of reduction in our capital -- on our reserve capital and overall also a better diversification. So now I mean, to answer more precisely to your question, what should we expect for 2026. We will revise today a little bit upward our expectation. But let's be precise on what we mean by net capital generation. So for 2026, our expectation is that what I call the double net, the net-net operating capital generation, so which means net of capital deployment and net of the dividend accrual, which mentioned by Thierry now as Rachet at EUR 1.9. So this net-net operating capital generation is expected to be in a range of 3 to 5 points of solvency ratio.
Jean-Paul Conoscente: And Andrew, this is Jean-Paul. I'll answer your second question on the Cat ratio. So you're correct that on a gross basis, we increased our exposures at 1/1. And the way we manage our Cat ratio is through the optimization on the ratio side. So our Cat ratio is on a net basis, we have a plan going into the renewals and able to deliver on this plan. We buy our retrocession in accordance, and that is why we're still confident of staying within the cat ratio budget of 10%. And as I mentioned during the renewals, if you look at individual perils, for example, in the U.S., we expect the females to go up compared to last year. On a number of perils, we expect the PMLs to go down compared to last year. But overall, the cat ratio will stay within the 10% budget.
Thomas Fossard: Thank you. Can we move to the next question, please?
Operator: The next question comes from the line of Shanti Kang with Bank of America.
Shanti Kang: So just on the P&C opportunistic buffer building that you said will carry on in 2026. Do you think you could give us a kind of quantum on how much more buffer building will take place? Do you think maybe year-on-year, that will be higher or lower? And then perhaps linking into that, the direction of that risk adjustment percentile, the increased upper end to 82.5% is a good step. How are you thinking about the direction of that going forward? Should we expect that to increase further, for example?
François de Varenne: Thank you, Shanti, for your 2 questions. So on the P&C buffer, so we mentioned, you remember last year during the annual call that we were significantly above the initial target of EUR 300 million. We mentioned in Q3 a quarter ago that we already put aside more in 2025 than in 2024. So you can imagine that we are above the double of the initial target today. So which means that we are really confident, that's what I mentioned in my speech at the beginning. We are really confident in the fact that we can really still continue subject, of course, to potential claims in the future, but we can really still put aside in 2026, a significant amount of buffer. It's on a full year basis, you can understand it's a few points of the combined ratio. So despite what we said during the 1/1 P&C renewal call with, I would say, an expected impact of 2 points on the loss ratio. We can absorb the impact over the next 2 years of this slight erosion of the margin by slightly reducing the buffer, but still this should remain quite significant. So what can we imagine that's your second question, the impact on the percentile. So you know that we publish only the group percentile. We don't give the split between P&C and Life & Health. I would say it's difficult to predict. It will depend a little bit on the amount of buffer. So it will depend on the cat ratio and the attritional loss ratio. And for me, it's difficult to make a bet really on what will happen. But if we can still put aside some buffer, it should increase a little bit. But again, take into account that at group level, so we could have also mix effect coming from the rest of the group.
Thomas Fossard: Can we move to the next question, please?
Operator: The next question comes from the line of Will Hardcastle with UBS.
William Hardcastle: First of all, on the call option, can you give us an insight perhaps into what would make you use the option? I think you've got up until the summer should you remain trading above the strike? And how can you help us think about this both tactically and strategically? Second of all, just thinking about the onerous contract in Life & Health, you talked about contracts, sorry. What exactly did these relate to, which underperforming contracts? Is there a specific line or a specific region that these were impacting?
Thierry Leger: I will take your first question. So on the call option, as we said already in the past, -- the option is considered in the money when the price reaches or exceeds EUR 28. The call option will expire in June this year. So we still have a bit of time ahead to take a decision. So I just wanted you to be aware, right? But obviously, we are monitoring this. We are monitoring the group situation. Everything necessary will be taken into account, but we have more time for a decision.
François de Varenne: On your second question, Will, so again, I reiterate what I say. So that's really linked to the fact that we observed in Q1, minus EUR 6 million of loss component, minus EUR 10 million in Q2, minus EUR 20 million in Q3. So we decided to take action on this portfolio, which is nonperforming. So the adjustment is really linked to the year-end review. We -- day 1 loss on new business remain really immaterial, nonmaterial in Q4. So the EUR 42 million is driven, I would say, by a combination of both volume updates and assumption refinements. We continue, of course, to monitor this portfolio very, very closely, and we will adjust reserve when appropriate and if needed in the future. Today, we are at best estimate. So we are confident on the fact that this book should be okay in the future. On geography, I would say, I will not surprise you. I would say a significant part of the adjustment has been made on our Israelian portfolio, which is in runoff over many years, and that significantly impacted the book during the 2024 review.
Thomas Fossard: Can we take the next question, please?
Operator: The next question comes from the line of Kamran Hossain with JPMorgan.
Kamran Hossain: Two questions from me. The first one is just on dividend trajectory from here. Clearly, a very welcome increase this year after a number of years of maybe keeping it flat. You pointed to kind of better capital generation than you targeted when you set out the initial guidance. Do you think it's possible for the dividend to step up a little bit further as you get into the end of '26? And the second question is just on the Life book. It sounds like you're very pleased with the results you've seen in Life and fast forward kind of 15 months, things seem to be going pretty well there. At what stage do you think it will be possible to increase the EUR 400 million insurance service result in Life? So those would be my 2. And just a really quick word to say, Francois, thanks for your help over the years.
Thierry Leger: Kamran, I'll take your first question on the dividend. So I just want to remind everyone of a few things. So first of all, we -- as you pointed out, with a good satisfactory solvency ratio in the upper end of our range at 215% plus the growth in our economic value plus the positive outlook, actually, we felt we are in a good position to increase the dividend. If we look ahead, I guess we have to maybe remember ourselves that this has been the first increase after several years of stability in the dividend where we haven't been able to increase it. That's why we think this is an important first step for us. And I really have to defer to the future on the one side regarding '26, but in particular, to the new strategic plan for better indications on where the dividend journey will go. Just so much, we have now for several months, started to talk a lot about capital generation and how important it is to us. It's one of the core elements we are looking at as a team. And therefore, we are really satisfied with what we have seen so far, and we will put a lot of emphasis on capital generation in '26 and in the next strategic plan.
François de Varenne: Thank you, Kamran, for your kind words. On the ISR, if I understand clearly, your question is what could be the guidance? We won't provide a guidance during this call on 2026. I would say if you look at the ISR outcome in 2022 on the Life book, it's the combination of different items. We have a stronger-than-expected amortization of the CSM. We have a positive -- I'm commenting on the full year basis. We have a positive expense variance. We have this impact -- negative impact on onerous contract, mainly coming from year-end review on nonperforming contracts, and we consider today the portfolio is at best estimate. So we prefer to repeat again that only 4 quarters following our Life finance review of 2024 will require at least 4 quarters in addition to what we see today to claim for the victory. Having said this, of course, Thierry and I and Philippe as well, we are very satisfied by the performance of the book, which underscores the resilience and the robustness of underlying business. So we are very satisfied by Q4. It should give you an indication of what we have in mind.
Thomas Fossard: Thank you, Kamran. Can we move to the next question, please?
Operator: The next question comes from the line of James Shuck with Citi.
James Shuck: I just had a couple of questions, please. Just on the capital generation again. I mean, obviously, it was much stronger in 2025, and you've given some helpful guidance for '26 as well. I mean that's looking like kind of 16 points or so -- 11 to 13 points of CapGen over the 2 years, '25 and '26, net of all of the things that you mentioned earlier. I guess the CMD, you were indicating 2 to 4 points. So my question is really kind of what has actually changed? And it's great to see the numbers come through. But is it increased use of retro? Is it slower growth, less capital deployment? Just kind of keen to understand why there's such a big delta to what you're indicating at the CMD versus what we're looking at now. And then secondly, just on the risk of focusing on a negative thing. But I was just interested to understand more about the high level of man-made losses in Q4. This is something that came through in Q3 as well. So I just want to understand if there's any trend there at all.
Jean-Paul Conoscente: Yes. The point on capital generation, I mean, you see here the capital deployment really consists of the components that Francois has elaborated. So first, it's really our development of the in-force together with the new business of last year, how this comes on the balance sheet. And what we have seen, in particular, the situation on the Life side is quite stable. So we didn't use a lot of additional capital for the in-force combined. And on the P&C side, we saw even a slight drop of the capital consumption of the in-force. And together with the new business that we bring on the -- in the solvency ratio in the SCR for this year, which is really showing the diversified business strategy that we have outlined, we saw now a reduction of the capital deployment to EUR 160 million. In this mix, you have a bit of diversification also driven by the longevity that we have written in Q4.
Thierry Leger: I think, James, that our efforts, right, to focus on capital generation, but also on capital deployment, we have always said diversifying lines to actually get a better mix, a better diversified mix of new business on the books that slowly also get on the books actually and create the reserves that we have. I think this is all going in the right direction. And we see now the numbers slowly emerge.
James Shuck: Do you mind if I just quickly follow up on that? Because I can understand how the numbers work to get you to what the numbers are. But my question is really kind of -- it's such a big difference from what you were indicating before. So how was it different to what you were expecting at that time is really my question.
François de Varenne: Yes. So I think, I mean, the underlying explanation, I mean, you have it. I mean that's the dynamic on the release on the in-force or capital deployment on the in-force and capital deployment on new business. When we said that we revised a little bit the net-net OCG expectation or assumption for 2026 to 3.5. The EUR 160 million that you see on Slide 21, which is the additional capital deployment through the SCR, it's mostly a good guy of 4 points versus 2024 and we just take the mean or the average of 2 points to lift a little bit upward our expectation.
Jean-Paul Conoscente: And James, I'll take your second question. So I think you may have misunderstood. The Q4 environment was heavy man-made losses, but actually man-made losses to score remain in normal. As you mentioned, Q3 was higher, but Q2 was lower. So you have this quarter volatility, which is normal. But if you look across the year, our man-made losses are, I'd say, within the normal expectation, and that's reflected in the quite good attritional loss ratio we produced for the year.
James Shuck: Got it. Okay. And best of luck for the future.
François de Varenne: Thank you very much.
Thomas Fossard: Can we take the next question, please?
Operator: The next question comes from the line of Vinit Malhotra with Mediobanca.
Vinit Malhotra: Congratulations, Francois as well on your next and all the best for next endeavors. From my side, I mean, there's one topic on the P&C and apologies if it's really 2 sub-questions there. But if you think that the renewals last year were about 7% or so growth, you see 4-point something this year. You see the very strong alternative solutions. I know the SBS is a bit weaker. But -- and I know you said growth is an outcome, not a target. But would you say that the original 4% to 6% target, I think it was, would you say that you're going to be a little bit in the middle of that range? Or would you say where -- given the data we have and then what you probably expect, what would you still indicate to us? And just quickly, just following up again, the 74.7%, which is a very strong attritional level, is that -- do you think some exceptional things there happening? Is it because E&Cs are still helping out? Or is that something that we can think of as likely the starting point? Is it some more commentary on that would be very useful.
Jean-Paul Conoscente: Vinit. So regarding your first question, it's still relatively early in the year. And the final outcome of the P&C ISR growth will largely depend on the upcoming renewals also later in 2026. As Thierry mentioned, our focus remains firmly on improving the profitability and quality of the portfolio rather than pursuing volume growth. And accordingly, insurance revenue growth this year will be driven by the availability of attractive and profitable opportunities in the market. So we're not going to provide any indication at this stage as I think it's a bit too early. As you said, the renewals at January 1 on the treaty side were quite positive. We're still earning through the portfolio of 2025 as well in the first and second quarter, especially. And then SBS, the cycle on the insurance side is also quite difficult. So all these factors put together makes it a little bit too early to give you any indication. On your second question on attritional losses, I think, as I mentioned before, there's nothing -- there's no exceptional item in this. It's really the strength of the underlying portfolio that's coming through. You have, as usual, every quarter, some volatility. But I would say the attritional that we're producing for the full year 2025 is pretty much in line with our expectation of the performance of the portfolio.
Thierry Leger: And Vinit, just to remind everyone, of course, this attritional loss ratio is including the buffers. And it's also clear that if the renewals are done at slightly worsening trends, right, this will impact, as Francois said before, the buffers first, right? So that means that we are relatively confident still in being able to get the performance around this attritional loss.
Thomas Fossard: Can we move to the next question, please?
Operator: The next question comes from the line of Ivan Bokhmat with Barclays.
Ivan Bokhmat: I've got 2 relatively small questions, please. The first one, thinking into 2026 and '27, there is a solvency reform ongoing. I was just wondering if you could give your expectations of what impact SCOR would see? And the second question, quite technical. As we look at the cash generation from your Life business, it continued to be negative in the second half of 2025. So I was just wondering if you could maybe give some color, is it related to the business mix, like financial solutions growth? Or is there anything that could help us?
François de Varenne: So we'll take -- Ivan, I will take your first question. So we don't change what we said on the impact of the EPA reform to be implemented in 2027. We're waiting, by the way, the final guidelines for the implementation of the reform. [ FCO ], we mentioned it, it's mostly an impact through the risk margin and the cost of capital. So we maintain what we said. We will provide probably at the end of the year with publication of the strategic plan an update on this. But we maintain that we expect a good guide of 10 to 15 points of solvency ratio, including the fact that we're going to lose the benefit of the contingent capital facility we've got in the balance sheet. On the second question, Philippe?
Philipp Rüede: Yes. On the Life & Health cash flow, I mean, I think better to look at this on a full year basis rather than quarterly. And we remain committed with our goal for forward 2026. And we see improvements underlying it, but still quite some volatility.
Thomas Fossard: Thank you, Ivan. Can we move to the next question, please?
Operator: The next question comes from the line of Iain Pearce with BNP Paribas.
Iain Pearce: Just coming back to this capital generation point. I'm just trying to understand what you're assuming in the 3 to 5 percentage point guidance for next year, particularly around the operating capital deployment. Should we be using this level or the 2025 level of operating capital deployment as a relatively normal level of operating capital deployment? I'm just trying to understand, just clarify that move from the '24 capital deployment to the '25 level. Is it effectively the difference being capital deployment on the in-force was quite high last year and was relatively small this year. And if you're not deploying capital on the in-force going forward, this level is a good level for the 2026 capital deployment.
François de Varenne: Thank you, Iain. So again, I mean, you remember, I mean, we mentioned initially in the plan that we had an ambition of, again, net-net operating capital generation of 1 to 2 points during the plan. So net-net means operating capital generation coming from the 3 business lines, so P&C, Life Finance and Investments, net of capital deployment and net of the accrued dividend in the solvency ratio. So this revised expectation or assumption for 2026 to 3 to 5 points is mostly due to the fact that, again, this is the good guy that we see in Q4 on the operating capital deployment. We think as explained -- I explained a few minutes ago and reiterated by F -- we believe, I mean, the observed impact in 2025 is 4 points of solvency ratio, and we take, I would say, half of the good guy in our assumption for 2026. So it's a little bit a new regime that we start to see here as developed by Thierry. We have been working hard on diversifying the portfolio, growing on diversifying line of business in P&C, and we start to see the benefit of the updated Life strategy of December 2024, especially with longevity transaction. We mentioned in the past that we used to have a strong pipeline on longevity. Now we see the traction.
Thomas Fossard: Any follow-up Iain? No, that's okay. Okay. Good.
François de Varenne: Iain , is already taking...
Thomas Fossard: Okay. Thanks for your question. Can we move to the next one, please.
Operator: The next question comes from the line of Benoit Valleaux with ODDO BHF.
Benoit Valleaux: And first of all, I would like to warmly thank Francois for your strong support to investors, analysts and the financial community in general. And I wish you all the best in your new life. I have 2 questions, maybe the first one related to your rating. You have a better expected solvency margin, strong capitalization, strong underlying profitability, notably in P&C. So I know that rating is not in your hands. But my question is more to know that if your outlook turned positive, for example, this year and maybe with a potential rating upgrade next year, will it have or not for you a positive impact in a soft market in terms of underwriting or no impact really to be expected on that front. And my second question is regarding tax rate, which has been slightly higher maybe than expected in Q4, but still at a good level at 28% for full year '25. Just like to know if you maintain your 30% assumption for '26 -- and I know it's maybe a bit too early, but you made this announcement regarding your business in Ireland beginning of this year. So do you have a view on what will be a potential level of tax rate in '27.
Thierry Leger: Benoit, I will take your first question. So regarding ratings. So it's, I guess, clear to everyone that we are not setting the rating. But we do note a few things still. So first of all, as you know, there is 1 out of 4 major rating companies who put us with a positive outlook, which we see as a positive sign for future developments. When we look at -- and we have been consistently communicating on this. When we look at just the capital side with the different rating agencies, we have always been in a very good spot. So the issue we were facing or the challenges from the rating agencies was much more with regard to consistency of our results. Do we have the franchise? Can we actually turn this into profit and capital generation and so on. So that was the challenge we faced. -- takes a moment to regain that confidence. But again, 1 out of 5 has moved positive. and my personal expectation is that others will follow in the next 12, 18 months. But again, I do not set the agenda for this. Impact on business, when it went down, we were quite clear that this did not have an impact on our business. However, going forward, I do actually expect this to have a positive impact because as we want to utilize our Tier 1 franchise better, gaining market share, clients will see a growing contribution from SCOR. And in that regard, an upgrade would actually really help us to gain additional market share tomorrow again if profitability permits that. So this asymmetrical view, I hope I have been able to explain it to you. Again, when it went down, we didn't really lose business, but now on the way up, we will count on it to grow our market share.
François de Varenne: Benoit, thank you very much for your words, and thank you for the, I would say, the rich discussions we had together over the last few years, not only when I was CFO, but before as well. So on the tax strategy, I just remind you a little bit what we initiated with Thierry in 2023. remember, we had a significant impairment of our stock of activated on the balance sheet in 2022. So the first priority was to protect what is already activated on the balance sheet to protect them against new and additional impairment in 2023 and after. So that's -- we initiated the strategy. The idea is really to relocate profit from the rest of the world in France. It took 2.5 years to do this. It's done. So we had 2 waves in '24 and in '25 of full restructuring of the internal retrocession structure of the group to move from stop loss to quota share, so to create profit assets and cash as well in Paris. You saw it probably in January, we published a press release. So we redomiciliated one of our 2 Irish platforms, retro -- internal retrocession platform from Dublin to Paris. Now this entity is French based in Paris and regulated by the ACPR, so which means that the profit of this entity is now consolidated in the French tax perimeter -- so which means that I think it's protected now. I mean what is activated is really protected against any potential impairment. And I think now the next step is to convince our auditors to activate what is not activated, and that's roughly EUR 250 million. And I'm sure Philippe will convince our auditors to do it as quickly as possible. On your question on the 30%, so we had this, I would say, assumption of 30% during the plan to take into account that we could have some friction during the 3 years, I mean, with this strategy to redomiciate profit in France. You know that we changed something I mentioned in previous call, but we changed a little bit the way we compute the effective tax rate in Q1, Q2 and Q3, which is a little bit more normative compared to the previous year to avoid the volatility in Q1 and Q2 and Q3 -- and we adjust a lot to actuals in Q4. So don't look at the -- the effective tax rate of Q4, but look at the effective tax rate over the full year, that's a good indication, 28%. I think it's a good indication for the future. Of course, everything is linked as well to the profitability of the business. So we have, as you see it and as mentioned many times during this call, we have an excellent performance of the P&C book. So this performance everywhere in the world is, in a way, repatriated in the French tax perimeter today. So it depends as well, of course, on the future profitability of the book.
Thomas Fossard: Can we move to the next question and last question.
Operator: The next question comes from the line of Ben Cohen with RBC.
Benjamin Cohen: I just had 2 smaller things, apologies. I just wanted to ask, is there more to come through on the expense line in terms of savings in the P&C division after you sort of ahead of targets? And the second question was just the run rate of claims discount benefit in the combined ratio. Is that a reasonable outlook for full year '26?
François de Varenne: Thank you, Ben. I will take this last question of my career as CFO. So just to remind you, we manage expenses at group level. Thierry commented in his introduction, the delivery of a significant amount of savings since the beginning of the plan, so EUR 170 million. and you know that we are committed to maintain stable expenses. So that's the way we manage internal expenses. On P&C, it's a one-off. What you see in Q4 is really a one-off that reduced the expenses ratio to 6%. Again, if you look at 2025, the expense ratio stands at 7.4%, which remains slightly below management long-term expectation, and I prefer today to maintain the guidance of 7% to 8%.
Thierry Leger: So usually, this would be the moment where Thomas would thank everyone. But given the exceptional circumstances today around Francois's departure by the end of this week, I thought I just want to add a few words before closing this call. So obviously, as I said it, as everyone knows, this is Francois's last quarterly closing, and I wanted to express my sincere gratitude for his significant contribution over the past 3 years as Group CFO. Francois has been my CFO since my beginning. We have gone through difficult times, good times as well, fortunately. Francois has played a pivotal role from the beginning in setting the Forward '26 strategy, but also in establishing a professional and strategic finance function. So Francois may thanks for all of this. Now we all know in life, everything has an end. And therefore, I'm also very pleased to have in Philippe a successor, a talent who can ensure a seamless handover. So Philippe, also to you, thanks for accepting such a challenging role, and I wish you all the best, and I look forward to working with you. I see that Francois is sitting like on needles. I still not close the call.
François de Varenne: Thank you. There is a little bit of emotion. So thank you, Thierry, for the kind words, which I really appreciate. It has been a real pleasure to work with you over the last 3 years. SCOR is in good hands with you and your comments. Philippe? A lot of success in your role. I'm sure you will deliver. Just a few final words for me. When I accepted your offer, Thierry 3 years ago in June 2023, I had 4 priorities in mind. First one was to strengthen the resilience of our balance sheet and reserves. The second priority for me was to identify your specific concern you as investor and analysts on SCOR, so that we could take decisive action to reduce progressively our implied cost of equity. My third priority was to communicate with you as transparently as possible. And my last priority was to restore your trust in SCOR. I want to tell to Thomas, it's the day to say thank you to everyone. I want to tell Thomas how much I enjoyed working with him. Thomas, you do a fabulous job. It was a pleasure as well to work with you every day. Your consistently positive energy fascinates me, and it was really a source of pleasure even in our situation in 2024. Learning and continuing to learn is one of the major driving forces in my life. Thanks to you, all analysts and all investors, thanks to your questions, thanks to your comments. I've learned a lot during the last 3 years. So thank you very much for the quality of our discussion, our relationship and for your trust.
Thomas Fossard: Thank you very much, everyone. And I think that on this good note, we can close definitively this call today. Thank you, and speak to you soon.
Operator: This does conclude today's call. Thank you for your participation. Ladies and gentlemen, you may now disconnect.