SCRYY (SCRYY) Q2 2026 Earnings Report, Transcript and Summary

Good afternoon, ladies and gentlemen, and welcome to the SCOR Second Quarter 2026 Results Conference Call. Today's call is being recorded. [Operator Instructions] At this time, I would now like to hand the call to Mr. Thomas Fossard. Please go ahead, sir.

Good afternoon, everyone, and welcome to SCOR Q2 2026 Results Conference Call. I'm joined on the call today by Thierry Leger, Group CEO; and Philipp Ruede, Group CFO, as well by the other Comex members. 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.

Thank you, Thomas. Hello, everyone, and thanks for joining us today. We are pleased to report a strong and clean set of results in the second quarter and for the first 6 months of the year. Group net income reached EUR 409 million in the first half, corresponding to an annualized return on equity of 19%. Our balance sheet resilience has grown with a solvency ratio of 220%, up 5 points compared to the year-end 2025. The underlying capital generation is in line with our 2026 guidance, reflecting the solid performance of all our activities. We also had some additional positives during the first half, including the benign cat activity and further ALM refinements. These allowed us to add resilience to the balance sheet and lower our debt leverage. Turning to our 3 businesses. P&C continued its strong performance, delivering a combined ratio of below 80% in the first half. This is supported by a relatively benign cat activity and an excellent attritional loss ratio, demonstrating the quality of our well-diversified P&C portfolio. Our strategy to grow in diversifying lines of business is paying off. At the midyear renewals, SCOR applied disciplined underwriting in a competitive environment, allowing us to preserve our technical margin with a limited 2 percentage points underwriting ratio increase. whilst still finding attractive opportunities to grow our P&C treaty portfolio by 3.2% year-to-date. As in previous renewals, growth was mainly driven by our preferred and diversifying lines of business, whilst we remained very cautious in U.S. casualty. In addition, premiums in alternative solutions grew by more than 70%, 7-0, demonstrating the strength of our teams and franchise in that segment. Before moving on to Life & Health, I would like to say a few words regarding the net cat events that are ongoing at this moment. Europe and Canada are experiencing devastating wildfires. Japan just had a magnitude 6.8 earthquake on Tuesday night. First of all, our thoughts are with the people, the businesses and the intervention teams impacted. As these events are still developing, it remains too early to assess the ultimate loss impact. However, at this point in time, we think that the impact on SCOR will be relatively modest. Turning to Life & Health. The insurance service result stands at EUR 157 million over the first 6 months. This includes the negative EUR 64 million one-off arbitration impact. Since the Life & Health reset in 2024, we have now performed 6 quarters in a row, in line with our expectations, further building our confidence in the quality of our Life & Health portfolio and assumptions. We are satisfied with the new business production in Life & Health at EUR 216 million of CSM. This was mainly driven by protection, but our Finsol financial solutions and longevity pipeline is growing, positioning us well for the second half of the year. Our teams remain highly active, building a solid flow of opportunities across traditional and structured solutions, leveraging SCOR's franchise and expertise in Life & Health across the globe. Lastly, investments continue to provide a stable and positive contribution to group earnings. Based on this strong set of results for the first half year, I see SCOR well positioned to achieve our targets for the last year of our 3-year strategic plan Forward 2026. Philipp, over to you.

Thank you, Thierry. Good afternoon, everyone, and thank you for joining us for SCOR's Q2 2026 results presentation. I will briefly take you through a few key highlights of the quarter before we move to Q&A. The key message is clear. SCOR delivers another strong quarter. All 3 business activities contribute positively, reflecting the strength of our franchise, the quality of our diversified model and our disciplined execution across underwriting, investments and capital management. Group net income reaches EUR 188 million in the quarter on an adjusted basis. On the same adjusted basis, this translates into an ROE of 18% for the quarter and 19% for the first half of the year, well above our forward 2026 target of 12%. SCOR's economic value stands at EUR 9 billion at the end of June, up 10.5% at constant economics over the first half of the year. Our solvency position remains strong with an estimated solvency ratio at 220%, up 5 points versus year-end 2025 and stable compared with Q1 2026 despite the deleveraging actions taken during the quarter. Turning now to P&C. The quarter is particularly strong. The combined ratio is at 79.5%, supported by an excellent underwriting profitability, a benign net cat environment and our ability to build buffers while still delivering a strong reported performance. P&C new business CSM increases year-on-year, reaching EUR 255 million in Q2 and EUR 978 million in the first half. Year-to-date, we have maintained a disciplined approach to portfolio management, delivering growth while containing net underwriting margin pressure and benefiting from lower retrocession costs. In Life & Health, performance remains stable and in line with expectations. The insurance service result stands at EUR 49 million. But excluding the one-off arbitration impact, it would have been EUR 113 million with a positive experience variance of EUR 4 million. This confirms the benefits of the portfolio actions taken over the last 6 quarters. In investments, we continue to benefit from the higher rate environment. The regular income yield reached 3.6%. Return on invested assets is at 3.7% and the reinvestment rate remains attractive at 4.3% as of June 30. On ALM, we made further progress by refining our hedging strategies. Consequently, we have increased the duration of the invested asset portfolio to 4.4 years compared with 4.1 years in Q1 2026, taking advantage of the higher interest rates. By strengthening balance sheet protection against interest rates and foreign exchange shocks, we support greater solvency stability over time. Let's now look at the June, July renewals. Market conditions remain competitive, particularly in property cat, but we found attractive opportunities in other areas. EGPI from traditional reinsurance increased by 1.3% over the period, supported by strong momentum in specialty lines, which were up 19.8%. On the other hand, alternative solution EGPI increased by 133% Year-to-date, as Thierry said, the increase in the net underwriting ratio has been very limited. This demonstrates our ability to navigate a more competitive market with discipline while continuing to grow profitably and selectively. Overall, Q2 confirms the core message of our plan, strong earnings, disciplined underwriting, attractive investment income, robust capital and continued progress on balance sheet resilience. We enter the second half of the year from a position of strength with confidence in our ability to deliver forward 2026. Thank you very much. I will now hand over to Thomas for the Q&A question.

Thank you very much, Philipp. On Page 22, you will find the forthcoming scheduled events. With that, we can now move to the Q&A session. Operator, let's move to the Q&A session.

[Operator Instructions] The first question is from Shanti Kang, Bank of America.

So I just had one on P&C to start with. So if I try and work out the underlying attritional, it looks like the second quarter of this year underlying was super strong compared to last year. Is that surprising to you? I was just wondering if you could help us characterize the underlying, especially given the IBNR loading taken today? And then the second one was just a sort of hypothetical question. If ultimately 2026 proves to be another relatively benign cat year, is your preference to allow earnings to flow through? Or is it to keep building prudence or to keep building excess solvency, for example? So in other words, where does the next euro of favorable experience go into the second year?

Thank you, Shanti. I'll take the first question on the attritional. So yes, the second quarter delivered another strong underlying performance before any additional prudence. The underlying attritional loss ratio remains broadly in line with the very favorable trend observed in '25 and '26. As always, this volatility quarter-to-quarter, whether favorable or unfavorable. And so for that reason, we believe the most relevant indicator is the full year rolling 12-month views, which provide a more representative picture of the underlying profitability, and this has been broadly stable, I would say. The strength of the underlying performance is based on the underwriting years '25, '26, mainly, which from a price adequacy are very strong. And so we think this strong attritional underlying should continue for a number of quarters to come.

On your second question, directionally, we would not let the good cat go through P&L, but rather continue in our current approach, which is to use it as an opportunity to build buffers in IFRS and in spirit, normalize to an 87% cat ratio. Combined ratio.

The next question is from Andrew Baker, Goldman Sachs.

First one, just on the P&C reinsurance revenue. Are you able to give us a sense of what the constant FX growth would have been without the EGPI revisions on the existing business? And I guess, can you talk a little bit about your process for these revisions? I guess if I look at, you've obviously done this through 2Q, whereas all of your peers, we saw a similar impact on Q1. Just curious if there's a reason why you think the might have been a timing difference here? And then secondly, can you just help me think about the mix effects on the combined ratio? I guess on a year-to-date basis, it looks like at least from an exposure perspective, you've grown cat quite a lot and which presumably is favorable from a mix perspective. But then you've also grown on the alternative side a lot as well, which presumably is maybe a higher combined ratio business. So leaving pricing to one side, how should I think about the mix impact going forward from the business written already this year?

Yes. So I will hand it over to Jean-Paul for the future of EGPI. But in terms of the impact on reported, the revision would have 2% impact. and the FX around 2% as well. So on a constant FX, it will be flat and the GPI would be 2%.

Then to your question about the process, this is something that we do every quarter and I have always done where the underwriters assess the EBA estimates of the cedents to -- with the latest information. Here, what we've seen some revisions also in Q1, but to, I'd say, a lesser extent. And Q2 is just when we had more information. I think what we're seeing is insurance companies are having a tough time meeting their premium estimates for underwriting year 2025 mainly. And as a result, we've started to take a more conservative approach in our estimates for 2026 based on the information we have at hand. So we think we added some more conservatism, but it really depends on how well the companies achieve their objectives in 2026. On your second question about the mix, if you don't mind repeating your question was about the mix on the combined ratio?

Yes, exactly. Just the fact that you've grown, obviously, in cat business from an exposure perspective a lot this year, which is presumably beneficial from a mix perspective. But then you've also grown alternative a lot as well, which presumably might be a headwind. So just do you expect the mix to be a positive or negative on the combined ratio going forward based on the business written already this year?

Yes. So I think the business mix is definitely a positive. And this is how you can see in the limited net underwriting ratio that we expect from the renewals. If I decompose a little bit your question on the alternative solutions, you have to remember in IFRS 17, the combined ratio is actually quite low because you take into account only the premiums at risk versus the expected losses, which are limited. So the actual IFRS 17 combined ratio for IS is actually quite slightly better than, let's say, the 87% or below 87% target. On the other hand, the amount of revenue that AIS generates is small because you only take into account the premium at risk, not the entire EGPI. In terms of the business mix, where our actions of underwriting actions have done is growing cat where we still see good price adequacy, growing specialty in the areas in specialty where not only is there good price adequacy, but also where the combined ratio tends to be a little bit better and decreasing where we see price adequacy slipping and then the net combined ratio as a consequence is higher. And then also reducing U.S. casualty, which has a high net combined ratio. So the combination of all these actions has a positive effect on the overall net combined ratio.

The next question is from Will Hardcastle, UBS.

I guess just thinking about the solvency level, how are you thinking about it being at the upper end of the current optimal range? And should we be thinking about a higher target range as a possibility? Or does the 185% to 220% still hold? And should we be using this metric as maybe our core proxy on capital levels? Or is that not the binding constraint here? Secondly, one of those specialty lines that you've grown -- you call out for growth is credit and surety. I guess I'm just interested in what's making this much more attractive year-to-date. We're hearing it from a few competitors as well. And just wondering if this is -- there's a huge uptick in demand for the product or it's just you're achieving this business off someone else?

Yes. So -- on the Solvency II, right, you're right to note that we are at the upper end of the current range. But like quite consistently, we've been saying that the priority is balance sheet resilience. And in that sense, we will talk, of course, at Investor Day on how we see that in the next strategic plan. And I can't really comment more at the moment. But directionally, we want to operate higher.

On your question, Will, on credit and surety. So what we put in the credit surety, there's credit and most of the trade credit renewals are really at January 1. But then there's surety and other credit products -- and what we've done is build a very diversified portfolio across the credit and surety segment. There's a lot of opportunities in surety over the last, let's say, 24 months. We see, for example, surety in Brazil as a market that's grown very substantially over the last 2 years and very profitably. There's also surety in India, which has been a developing market where we've been one of the leaders in developing that market. And then the U.S., of course, remains a very large market. In that segment, in the U.S., there's been a number of losses going through and the U.S. market is mainly excessive loss market. And as a result, the prices on the excess of loss have increased. And then we've been able to push for sort of compensating business on a more proportional basis on some of those programs. So at June, July, it's still a relatively small renewal overall. And the growth was driven by a few transactions, growth coming out of Latin America, the U.S. and then one large transaction in Europe. And going forward, it's a line of business that we think where price adequacy remains good. Competition is still a lot of competition. But I think given our franchise and I think our very significant presence in this line of business, we remain one of the go-to markets in that field, and I think we remain well positioned for future growth in that segment in '27.

The next question is from Michael Huttner of Berenberg. Fantastic.

I've got the -- ideally, I'd like to ask what your targets are for the 3rd of December, but I guess you can't tell us quite yet. But -- so state of play on Core, I think there's still an outstanding lawsuit. What could be the financial impact of that? And then the other question is, what's the buffer level? So you very helpfully said EUR 300 million you added to buffers in Q1. I think looking back at the end of 2024, you had over EUR 300 million. And I don't know what the figure is for '25. Any help here would be very welcome.

I'll take your first one on Korea. So obviously, this is all confidential. So there's not much we can say. But maybe just so much. First of all, on the second arbitration, we are very confident. Personally, it ranks pretty low on my list of worries. But of course, we -- it is there. And as with other arbitrations, it's something we will be focused on. We, however, expect the process to be a bit less heavy on this one. Allow me to say this as a nonlegal expert, but we expect it to be a bit less heavy compared to the first one. As we said already, typically, arbitrations take 2, 3 years. But again, I'm very confident in the outcome of the second one. The key one was the first one. That's now behind us, and we are pleased to look ahead now.

On the buffers, just to recall, so in Q1, what we did besides adding to the balance is that we transferred CHF 300 million from IFRS into the best estimate liabilities. So the impact on the overall prudence was 0 of that, but it meant that it had a negative impact on the Solvency II. So that's what happened in Q1. Since you mentioned those EUR 300 million, I mean, otherwise, we don't comment on the overall stock, but you will note that we have added in Q1 and that we have added in Q2, again, actually more than in Q1. And so we continue on that journey.

The next question is from Kamran Hossain from JP Morgan.

Two questions from me. The first one is just on the Solvency II ratio. Clearly, the last 2 quarters, you've taken actions to improve the quality of the ratio, kind of best estimate P&C liabilities Q1 deleveraging this quarter. Is it safe to assume that deleveraging is still the focus here on improving the quality there? Or is that something we have to wait until the 3rd of December to hear a bit more about? The second question is on Covey, the first arbitration, so the one that's actually kind of done in the past now, hopefully. Does this mean that cash flow going forward in Life & Health will improve? Just totaling up the kind of cash flows for the last 3.5 years from Life & Health, the operating ones, it doesn't seem like it's especially positive. So just interested in whether with the first arbitration being behind you, that means cash flow will improve in Life & Health.

Yes. So on your first question, I mean, the focus on balance sheet resilience includes the 2 things that you mentioned and the third thing being the absolute level of solvency ratio. So yes, our mind is on putting buffers in the best estimate liabilities, deleveraging. And in terms of the deleverage, we will continue to deleverage. The question is at which speed. On the cash flow, so I would just caution you a little bit that -- I mean, that the period that has passed, right, which is the number that you probably have in mind, included significant COVID-related claims. And therefore, it's not a good basis for the extrapolation into the future. And I think in the overall cash flow, this will not have a significant impact given all the other aspects and the volatility of this number on a quarterly basis.

Okay. Just to maybe just come back just to be clear, so the minus EUR 42 million, for example, in Q2, some of that relates to COVID from 2020, 2021.

No, no, no. Sorry, that is purely on your question about the retrocession and not what happened in Q2. But I think the figure that you see in Q2, the typical fluctuations we have it from quarter-to-quarter.

The next question is from Iain Pearce, BNP Paribas.

The first one is just on the capital generation number. So Q1, you guided 3% to 5% net of the dividend accrual and we're at 5% in Q1. It sounds like there has been positive net capital generation in Q2 again, quite a strong number. Just wondering why you're not bumping up the capital generation guidance for the year? And if there's anything we should be thinking about into H2 around new business strain expectations or anything as to why that number has not been increased. And then the second one is just on the Alternative Solutions growth. Obviously, it's been very strong. We have peers sort of flag demand headwinds in alternative solutions. So just if you can give us some color on what you're seeing in the market, what's supporting that level of growth? And also with that growth now leading to alternative solutions in 20% of EGPI, do you see a maximum level for that? Or are you happy to continue to grow this book ahead of the wider traditional business?

So on your first question, we would maintain the guidance of 3% to 5% because the drivers were the good luck in net cat, and we don't want to extrapolate that necessarily into the future. And on the ALM, what we did is improvements. I mean you can actually see that we lengthened the duration from 4.1 to 4.4 years on the asset side, and that led to a lower requirement in the SCR. And so these are improvements, but more one-off in nature. And therefore, our guidance is really for the capital generation of the core business.

And your second question on AS. So year-to-date, the growth of AS has been really spread geographically across Europe, U.S., Latin America and Asia. At the June, July renewals, the growth has been specifically concentrated in the U.S. just because of the renewal dates in that region. what we see is the clients where we've grown has been 2 parts. One is growing shares on existing business. And this is -- I think as CRE becomes a bigger challenger in this field, clients are more comfortable allocating larger shares to us. The second one was new business. And here, a number of clients are just using AS as one of their capital management tools regardless of cycle. There are some clients that actually use AS when the market is hard and soften the impact of the price increases. And there, we do see demand going down. There's been also a number of clients that have been using AS when their surplus was depleted. And then as the real surplus, that demand goes down as well. Those are not clients where we have large concentrations. The business -- the new business we're getting on right now is more clients that use it as a capital management tool. And we see further growth opportunity because our shares relative to market leaders remains still small. So I think there's still room for us to grow. And on your question of the relative size to P&C, I think right now, we feel pretty comfortable that if there's room to grow in the segments that we're targeting, we're happy to continue the growth. So we're not chasing the growth. It has to fit our risk appetite.

The next question is from Vinit Malhotra from Mediobanca.

So my question is more -- so if you look at the new business CSM in P&C, 13% growth, and you're talking about retrocession benefits and other drivers. I'm just curious, I mean, if we are getting such good numbers, I mean even though retrocession economics, Gerry, you said in 1Q was favorable economics. But even though that might lead to some lower net top line, surely, the combined ratio should be getting better. Is that a fair assessment of how this new business CSM -- and I know I'm not trying to preempt the guidance here, but just a trend of thought, is that what you would agree with that the better retrocession dynamics, the combined ratio should get better. Second question is just on strong attritional loss ratio mentioned. The presentation also noted man-made. Could you just help me understand if manmade was a big driver in the improvement? Was it a big factor last year and was less low factor this year or something? Any comment to that?

So on the new business CSM, I won't split it, but there's really 3 drivers. One is we have growth in volume. So that's a positive. Then as everyone else, we have a reduction in the margin, and that's more substantial than the volume growth. And then the third one is the reduction in the ceded new business CSM on the retro side. And these 3 factors are roughly offsetting in the big scheme of things. And then on the combined ratio, I'm not sure I understand the question properly, but I will try. I mean, ultimately, if you look at it, the net combined ratio deterioration that we see is 2, and we would say the gross one would have been 3 points. So it is helping us in dampening the deterioration of the combined ratio. Is that clear?

Yes, sure. I was just trying to say that when you see such strong new business CSM in the face of these kind of markets, the temptation would be to think that the positive effects are a little better. So I get the 3% and 2%, but maybe the dynamic is that it will help more than we thought or more than you thought earlier.

I think the combined ratio as hinted at the renewal, ultimately, like-for-like, we would expect as it earns through a deterioration of 2%...

And Vinit, on your second question on the attritional. So this quarter, man-made was, I'd say, in line with expectations. As I mentioned before, it's better to look at it rather than on a quarter-by-quarter basis, more on a rolling 12-month basis. And what we see for that is a fairly stable attritional for the past quarters. I think this is also why we've been able to build a significant amount of buffers in '25, '26. And as I said, we -- as the portfolio underwritten in '25, '26 continues to earn through the rest of this year, I think the expectation would be similar trends to be observed in the second half of the year, bearing any unforeseen large man-made losses or large losses overall.

The next question is from James Shark of Citi.

My two questions. Firstly, I just wanted to delve into the P&C Re expense ratio. So we're kind of 8.2%, up 40 basis points year-on-year. And there's a comment in the presentation it's pretty stable versus Q1, but actually have it up also up about 40 basis points versus Q1. Obviously, some of that is coming from the top line pressure, but there's quite a big move offsetting some of that underlying attritional loss ratio improvement. So my question is really kind of do you view the expense base as being the right one for the shape of the business going forward? And do you expect, therefore, to be able to grow it back down to historical levels? That's the first question. And secondly, I just wanted to ask a bit more about your use of retro because if I look at your gross ISR versus the net ISR, and historically, you're giving away about 50% of your gross ISR to retro, which seems a massive number. I understand the balance sheet is in a much better place and you're introducing various amounts of kind of buffers, et cetera. Is that the right business model to rely on that amount of retro going forward? I mean, obviously, you've got the Capital Markets Day, I want to preempt anything from that, but it just seems a very high level for you given the strength of the balance sheet now.

Yes. So on the cost/income ratio, I mean, this can fluctuate quite a bit quarter-to-quarter. And it's also the divider is actually the net insurance revenue. So even the retro has an impact on the divider. So I would say, broadly, as a firm, we manage that at the group level, and we're committed to our EUR 1.2 billion of expenses, and we're on track to delivering that. Then on the second part, I take the compliment on the strength of our balance sheet. But to your question, I mean, I think it is a very legitimate question on the retrocession. And indeed, this is part of our reflections that as we grow the strength of our balance sheet, but we would also -- it's not just the solvency ratio. It's also the prudence that we were able to build up that this is certainly going to be part of the reflection in the next strategic plan, whether that level of retrocession can or should be reduced.

The next question is from Ben Cohen from RBC.

I had two questions, please. The first was if you could just say a bit more about the improvement in the gross price year-to-date in the second quarter versus the first quarter. I guess that was a bit of a surprise to me given trends at least in terms of U.S. net cat markets. And the second question was in terms of revenue growth on the Life & Health side going forward. I guess in terms of the gross revenue growth, it was down in the first half. Could you maybe say more about why you have the confidence? It sounded like you're confident that, that is going to grow in the second half, but maybe you could say more about that and specifically where it's coming from.

So on your first question regarding the price, it's really driven by portfolio mix. So what happens at the June, July renewals, we have a higher proportion of nonproportional than at the prior renewals. That's one effect. And then the second effect within the nonproportional, we have a higher percentage of property cat and property cat is where we've seen the largest price decreases relative to other lines of business. So this is why the price -- the gross price decrease for the June, July renewals is higher than what we saw in April and July. But again, it's -- the trend that we've seen has been very similar for -- from the April and January renewals. I'd say on the property cat, we saw price decreases in the U.S. around minus 20%. Outside the U.S., we saw price increases on cat between 10% and 20% and other lines of business, I'd say, very similar to what we saw in other renewals. So for us, June, July is a continuity of the prior renewals. And the overall net impact to -- on our net combined ratio remains limited. June, July is a relatively small renewal compared to the overall book and the impact of this on the overall book is very limited.

On the Life and Health insurance revenue, I mean, this is totally in line with our expectations because it is a consequence of us prioritizing profitable growth and focusing on higher-margin opportunity. And as a result, we've seen lower insurance revenues in certain protection portfolios that we discontinued. Having said so, I mean, if you actually look at the constant FX in the first half of 2026, it would only be down 2.9%, and that's probably a fair representation of the reduction in volume.

Okay. And sorry, the -- I mean, are you confident that, that changes? Or is there more of that effect to come through in the second half of the year?

We are confident protection we keep being very selective, and we are seeing the opportunities. Probably you've seen new business CSM, which is okay. And then we have a good pipeline for financial solutions and longevity. Typically, the first half of the year is more quiet on these sizable transactions. But yes, we are seeing the market dynamics, and we are working for executing as soon as clients are ready.

Then when we presented the updated strategy in Life & Health, we are very clear, right, that there would be some sort of a U-shape -- so as what Philipp mentioned before, is coming through slowly and what added with what Peter just said on the future growth opportunities. And if you combine the 2, you can now see this U-shape coming in. We don't exactly know when the bottom will be reached. At some point, we will reconnect this growth.

The next question is from Benoit Valleaux, ODDO BHF.

Two questions. The first one is more a follow-up on Solvency II margin. In Q2, you have this positive ALM. You just mentioned that you increased your asset duration. And you say it's a one-off. But my question is, should we expect maybe more to come and you believe that you might increase further your asset duration or not in the next quarters? And linked to this, you mentioned that you could to deleverage the balance sheet. But do you believe that it could make sense also for you maybe to build some additional buffer within your best estimate liability under Solvency II as you did in Q1 in a specific situation? And my second question is related to tax rate. Tax rate in Q2 was very low. I just to check if it's just your mix effect. If there is anything else to be mentioned? And also linked to this, you have redomiciated some earnings to France this year. Can you give you a view on what could be a normalized tax rate in 2027? Or is it a bit too early?

So on the asset duration, we're very happy with the progress that we made on the ALM, and we're moving more into a business as usual phase going forward. So you should not expect any adjustment of that size in terms of the duration. We were just -- we had a need to lengthen. And given that when the conflict started, interest rates went up, we felt the timing was right -- but in that sense, on the duration side, you should not expect big movements going forward rather that this is kind of the closure of multiple years of efforts in matching interest rates and currency better. Then I mean, for me, the two are, to a certain extent, a bit interchangeable, right, whether we do deleverage or whether we add resilience to our best estimate liability. It is a form of balance sheet resilience. And so we will look at it as the opportunities arise. I would say maybe not exactly your question, but of course, and I've been saying it for months that the solvency ratio is a very high priority for me, and we will continue to see what actions can be taken left, right and center. And then you asked about the effective tax rate. So I would say it's just important to remember that on a quarterly basis, the effective tax rate can be quite volatile, right? Having said so, and you made reference to the French tax parameter and all the efforts that management has made to address this issue. And we did actually, in the second quarter, for the first time, recognize the benefit linked to the re-recognition of tax losses carryforward linked to the French tax parameter. Then in terms of outlook for '27, that's way too early, and you said it yourself. So I'll just confirm that. But in terms of '26, we would probably expect to be below the 30% that we had indicated.

The next question is a follow-up from Michael Huttner.

I had two. So the one is on a broader question on the market terms and conditions. I think we heard yesterday from one of your smaller peers that they're softening. And I just wondered how do you see that and whether it's -- I'm sure it's already in your combined ratio, but just a feel for it. And then the second kind of related on Slide 21, you show the premium mix at the renewals. So property and property cat are down. But the -- on another slide, you showed that the PMLs are up. I'm sure it's a really easy explanation, but I'm just curious why this kind of divergence. And then last one, last one, and I shouldn't. But the Covea EUR 64 million, is that a pretax or net of tax figure? And what would be the net of tax?

So quickly, 64% is ISR pretax, post tax it's 49%.

So on your first question, Michael, in terms of conditions and renewals. So we did see, especially at the Florida June renewals, clients coming in with attempts to broaden the terms and conditions with drop-down covers, top and drop cascading structures. This has been, I'd say, broadly resisted by traditional reinsurance. There has been a few insurers that were able to place this with the ILS markets, but the traditional reinsurers have resisted broadly. And outside of Florida, we've really seen very little softening of terms. Attachment points are remaining stable. reinstatements are remaining stable. The event definitions, everything else is remaining stable. It's been really renewals focused on price. As we look forward to 2027, of course, terms and conditions would be an area, a topic of discussion at the negotiations. But I think reinsurers have stayed very disciplined so far. Our intent is to continue to do so, and we'll push strongly for remaining disciplined in the upcoming renewals. In terms of your question on premium and PMLs, so just to understand, as rates decrease, if premium is stable on property cat, -- that means we've increased exposures to sort of match the decreasing premium rates. So that could be the explanation you're looking for.

The next question is a follow-up from Will Hardcastle, UBS.

I was expecting the PMLs would have reduced with the added retro, but this hasn't really been the case. I guess is the retro operating more in the belly at the risk as opposed to the tail? And are you able to help us consider whether any further optimization of retro that was perhaps mentioned is more like to focus on capital or earnings volatility? And just on the second one, just coming on to the investment duration. You've increased it from 4.1 to 4.4, as you say. Can you help me to understand how you've achieved this? I'd imagine only a little over 5% of the portfolio probably turns over in any one quarter. So wondering if that's all being invested in closer to 10-year average duration? Or is it through derivatives?

So, I'll take the first question. On the retro, again, focused on cat, the -- we buy both proportional and nonproportional retro. Proportional retro plays across the gamut of earnings and capital protection. The nonproportional depending on the layer, also has different benefits. The lower layers are really earning protections and the higher layers are more capital protection. So the retro program really covers, I'd say, both areas on the balance sheet. And then when Philippe talked about the optimization that we might be looking in 2027, we'll definitely look at both aspects.

Yes. So on the duration, what we did not use any derivatives, it's purely cash instruments, and we saw -- we sold a little bit of corporate short duration and bought government bonds with quite long duration to better match some of our life and health liabilities. and in the process actually picked up a bit of yield.

The next question is a follow-up from Vinit Malhotra, Mediobanca.

I saw the time and I thought I'll ask one more. The split of revenue between SPS and P&CB is quite interesting because the SPS growth, 4.1% is probably one of the higher prints seen in many recent quarters, while P&C, obviously, you've explained ceding revisions and other things. I'm just curious whether -- so the IR team has said that there's some seasonality, but could you just comment a little bit more about SPS if that 4.1% has any more background that you could help us understand.

Okay. Thank you, Vinit. I think we do see going forward SBS playing a stronger role in the overall revenue growth just because of the breadth of the insurance market and the very small footprint we currently hold, there's more opportunities to target pockets of profitable business than there is in reinsurance where we already have a footprint. We do expect some growth in reinsurance, but I think SBS will probably be a stronger driver. Here, what happened in Q2 is really, as mentioned, seasonal. It depends -- the renewals for SBS tend to be concentrated in Q2 -- and so as the premium earns through and SBS earns through relatively quickly because our book is very short tail, that has the effect that we're seeing in Q2. So there's nothing, I'd say, out of the ordinary other than we do have growth plans for SBS in 2026, and those are starting to materialize in the balance sheet.

Ladies and gentlemen, this concludes today's Q&A session. At this time, I would like to hand the call back to our speakers for any additional or closing remarks.

Thank you. Thank you very much all for attending this conference call. We remain available for any follow-up questions you may have. As a reminder, SCOR will release its Q3 ' 26 results on Friday, 30th of October with a call as usual as 2:00 p.m. CET. And with this, I wish you a very good summer break and see you soon. Bye-bye.

This concludes today's call. Thank you for your participation. Ladies and gentlemen, you may now disconnect.