We're gonna forecast the P&C profits for Generali. Now, to do this, we're gonna make a few simplifications for the fact that this is a P&C business which sits within a life insurance business. If this was a standalone P&C business and the company provided good disclosure on claims and premiums earned, then we could model the P&C profits in little bit more detail. However, to keep things simple, we're gonna model the P&C profits using these assumptions. And first of all, the net premium earned, that's gonna be a percentage of the gross written premium. Now, in terms of the drivers for this, some of it will clearly be the level of reinsurance activity but equally, some of this will be the lag between when premiums are written and when they're earned. Next we have the loss ratio, so that's the amount of claims relative to the premiums earned. So we're gonna need that to forecast our claims expense. Next, we have the expense ratio, so that's the expenses of the business relative to the premiums earned. Next, we have the investment margin and that's being forecast in the exact same way as it was for the life business which is as a percentage of the average investments and that's the investments for the P&C business. Finally, we have some other operating expenses and those are being forecast as a percentage of the net premium earned. So now we've had a look at the assumptions. Let's go down to the income statement and start to build our forecasts.

So starting off with our net premium earned we need our assumption and that's 95% of the gross written premium. Now, our gross written premium we forecasted in our calculation section. So we need to go right to the top of our model for that.

So that's our net premium earned. And now the claims expense, we're gonna need our assumption there.

And our loss ratio of 65% is applied to our net premium earned.

That gives us our claims expense. Next, we have our acquisition and administration costs, so we're gonna need our expense ratio for that. So back up to our assumptions.

So that's 28.5%, and that's applied to our net premium earned. So that gives us our expenses for the P&C business. And next we need our investment margin. So again, going back up to our assumptions.

So our investment margin of 2.6%, we're gonna apply that to the average P&C investments balance. So we need to go to our balance sheet now to grab those. And that's for the current year and the prior year.

Another prior number.

So now we've got our investment returns and finally our other operating expenses.

Go back up to our assumptions, and that's applied to the net premium earned.

So now we've calculated our premiums, our claims, all of our expenses, and our investment returns for the P&C segment. That gives us our operating profit for that business. Now we can just roll forward those calculations to the end of our forecast period. And there we have forecast P&C profits for (indistinct).