Ageas SA/ NV (AGESY) Q1 2021 Earnings Call Transcript

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Ageas SA/ NV (AGESY 0.13%)
Q1 2021 Earnings Call
May 12, 2021, 6:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, welcome to the Ageas Conference Call. I am pleased to present Mr. Hans De Cuyper, Chief Executive Officer, and Mr. Christophe Boizard, Chief Financial Officer. [Operator Instructions]

I would like to hand the call over to Mr. Hans De Cuyper, Chief Executive Officer, and Mr. Christophe Boizard, Chief Financial Officer. Gentlemen, please go ahead.

Hans De Cuyper -- Chief Executive Officer

Good morning, ladies and gentlemen. Thank you all for dialing into this conference call and for being with us for the presentation of the results of Ageas for the First Quarter of 2021. As usual, I'm joined in the room by my colleagues of the Executive Committee, Christophe Boizard, CFO; Emmanuel Van Grimbergen, CRO;Antonio Cano, Managing Director, Europe, and Filip Coremans, Managing Director, Asia.

We are aware that today is a busy day for you with several insurers reporting their results. So we will do our best to keep this call short. Starting with limiting our usual introductory remarks to the key elements. Anyway, the strong performance recorded this quarter does not require extended explanations, and we will come back to you in 3 weeks time for an update on the strategy.

The impact of the ongoing COVID pandemic is decreasing quarter-after-quarter. It continues to influence our results with lower real estate revenues in Life, compensated by lower claims frequency in Non-Life, but to a lesser extent than what we experienced in 2020. In Life, despite the lower contribution from real estate revenues, we recorded a solid operating performance, in both Guaranteed and Unit-Linked operating margins within our target range, thanks to a sound underwriting performance. Additionally, the realization of capital gains in Asia further supported the Group Life net results, which amounted to a high EUR227 million.

In Non-Life the continued lower claims frequency in Motor resulted in an excellent combined ratio of 91.7% and a strong Non-Life net results of EUR91 million. We also delivered a solid commercial performance this quarter, recording growth both in Life and Non-life. In Life, inflows were driven by the successful New Year opening campaign in China, while Non-Life inflows benefited from a strong performance in Belgium, and the inclusion of Taiping Reinsurance.

This strong start to the year gives us confidence to strengthen our full year guidance. We now expect to achieve a Group net profit, excluding the impact of RPN(I) between EUR900 million and EUR950 million, which corresponds to the upper range of our initial guidance.

Lastly, a quick word on our cash and solvency position before handing over to Christophe. Our cash level amounts to EUR1.2 billion, of which only EUR13 million remains ring fenced for the Fortis settlement, which provide us with great financial flexibility. We have received this quarter EUR73 million dividends, mainly from Portugal and Turkey, but additionally AG Insurance and China Taiping has approved the upstream of a dividend of respectively EUR411 million and around EUR140 million. For the full year, we expect a total dividend upstream above EUR700 million, which represents a significant increase compared to the years before.

As for our solvency, it amounts to a strong 195% comfortably above our target of 175%. As you may have seen, we have finalized the acquisition of a 40% stake in AvivaSA, the fifth largest life insurance company in Turkey, which will provide us with a balanced Life and Non-Life presence in the fast growing Turkish market alongside our long-term partner, Sabanci. Additionally, the sale of our stake in Tesco Underwriting in the UK is now complete. Overall, as these transactions are for similar amount, the impact will be limited on cash and neutral on solvency.

Ladies and gentlemen, I will now hand over to Christophe for a short comment on the segments.

Christophe Boizard -- Chief Financial Officer & Executive Director

Thank you, Hans, and good morning, ladies and gentlemen.

In Belgium, on Slide 5, we achieved a strong performance in both Life and Non-Life. In Life, despite the continued lower investment income from real estate, the Guaranteed margin amounted to 85 bps, thanks to a sound underwriting performance and the realization of capital gain, see the detail of the capital gain on Slide 18. In Non-Life, the combined ratio still benefited from lower claim frequency in Motor and better than last year weather conditions. On the commercial front. the decrease in Life inflows was compensated by the strong growth recorded in Non-Life in all business lines. We are gaining market shares here.

In the UK, Slide 6, the excellent combined ratio reflected the ongoing low claims frequency in Motor. Inflows remained stable scope-on-scope with the growth in household compensating from the lower demand in Motor due to the COVID-19 restrictions. A quick reminder, scope-on-scope means without a scope.

In Continental Europe, on Slide 7, the performance was solid in both Life and Non-Life. In Life, the Guaranteed operating margin amounted to 131 bps, thanks to a sound underwriting performance. In Non-Life, the combined ratio stood at 86.1%, thanks to lower claim frequency in Motor partly offset by higher claims in accident and health. The contribution from Turkey was impacted by some large claims and an adverse FX evolution.

When comparing to last year results, please keep in mind that the first quarter of 2020 included a one-off reserve release of EUR20 million in Life. Still in Continental Europe, inflows remained solid this quarter. In Non-Life, the increase in Unit-Linked fully compensated the decline in Guaranteed products in line with our strategy, while Non-Life inflows increased by 15% at constant exchange rate with growth in all product lines.

In Asia, Slide 8, the high net result was driven by a continued solid operating performance in Life further supported by the realization of capital gains, thanks to Taiping Asset Management's smart decision to benefit from stock market highs in January. This more than compensated for the adverse evolution of the discount rate curve in China, negative impact of around EUR40 million this quarter, compared to negative impact of EUR28 million last year. Inflows were firmly up driven by high new business volumes recorded in China during the successful opening campaign and the contribution from Taiping Re. The contribution from Taiping Re to the inflow at 100% amounted this quarter to EUR154 million in Life and EUR335 million in Non-Life. The Reinsurance segment on Slide 9 reflected the lower claim frequency recorded at the level of the ceding entities.

Moving now to the capital position. As mentioned by Hans, our Group Solvency II ratio, see Slide 11, stand at a strong 195%. It was up by 2% this quarter following the favorable market movements mainly the increase in interest rates.

Our operational free capital generation, Slide 12 amounted to EUR114 million, including EUR40 million dividends from our non-controlled participation. This is below our usual run rate of roughly EUR130 million as our own fund generation was mitigated by an SCR increase driven by asset management actions. We have indeed pursued the rerisking of our portfolio in response to the continued low interest rate environment. This should bring additional own fund generation in the future.

Having said that, we are at the start of the year, and I propose to come back with a more detailed analysis of the free capital generation at the next closing. In the meantime, we confirm our usual guidance for the full year of EUR500 million to EUR540 million. This is the end of that shorter than usual presentation, but apart from the COVID impact plus EUR38 million in Non-Life and minus EUR19 million in Life and the capital gain mentioned in Asia, it is fair to say that we had a quiet quarter.

Thank you.

Questions and Answers:

Operator

Thank you. [Operator Instructions] We have a first question from Michael Huttner from Berenberg. Please go ahead.

Michael Huttner -- Berenberg -- Analyst

I had two questions. One is basically your buyback, and the other one is the increased guidance, why not more? Anyway, on the buyback, a very wonderful IR team explained the ins and outs and all the options, et cetera. But really I would like to get a feel for how strongly you feel about it. Talking about the mechanics, it's not so interesting, if maybe we get another surprise like we did last year with Taiping Re. So I just wondered if you can talk about your appetite for buyback that you feel at the moment. And the second one is on the increased guidance. So Asia, China, whatever beats by whatever consensus EUR47 million I think in the quarter, and you raised your guidance by EUR50, one kind of thinking was higher, some of the stuff you did now, it feeds through to higher earnings also in subsequent quarters. I mean, you got 11% more assets in Asia that create more fees, et cetera. So I just wondered what is the offset, what do you kind of -- what are you doing to offset about? Thank you.

Hans De Cuyper -- Chief Executive Officer

Yeah. Thank you for your questions. And let me take the two questions. First of all, on buyback, I can only repeat what we said previous quarter, that means this year we are still guided by the Connect21 commitments and that is an assessment that we will make after the second quarter results. So we are talking here, more along the month of August. So I cannot tell you more now about a potential share buyback, except the fact that we respect the commitments that we have made on the Connect21.

Second, related on the guidance. Indeed, what we have done is we have actually raised our guidance in the Asian part to EUR400 million and that gives us more confidence in the range EUR900 million to EUR950 million. Your question, why not more, is that the remainder of the year still has some, I think, important uncertainties. First of all is, which other COVID impact we will see, and as you know, we have always two COVID impacts. The first one is the claims. We could see in Motor, but we see the effects becoming less and less month after month, and we are definitely not anymore at the levels that we have seen last year, as well as in January.

But on the other hand, we have the real estate revenue and that is to a big extent the parking revenue from interparking and there actually we assume that the current drop in revenue, which you could see between 40% and 50% month after month, but that will probably last a bit longer, and we expect it more, I think, to normalize after summer instead of before summer. Let's not forget that some of our parkings are situated at airports. And I think it's clear that air travel is not yet fully recovering.

And then the third important element is the interest rate evolution in China. That we have -- with the will we have an automatic adjustment there from interest rates with the smoothening mechanism into the reserves. Previous quarter, we had said that we expected an impact around two-thirds of last year. Last year was EUR160 million. With the evolution of interest rates, we expect it now to be more in line with what we have seen last year. And so with those uncertainties to stay for the rest of the year, it is too early to raise our guidance more than EUR900 million to EUR950 million.

Michael Huttner -- Berenberg -- Analyst

Can I just ask a quick follow-up. How much was the quarter number, the Q1 numbers, the interest rate?

Hans De Cuyper -- Chief Executive Officer

EUR40 million for this.

Michael Huttner -- Berenberg -- Analyst

40? 4, 0?

Hans De Cuyper -- Chief Executive Officer

40. Yes.

Michael Huttner -- Berenberg -- Analyst

40. Yeah. Okay. Thank you so much. Thank you.

Hans De Cuyper -- Chief Executive Officer

And by the way, on the buyback, are we still hungry for more? Very well, that's all. Thank you.

Operator

Thank you. Going to the next question. Yes. Okay. Next question from Ashik Musaddi from JP Morgan. Please go ahead.

Ashik Musaddi -- JPMorgan Chase & Co. -- Analyst

Thank you, and good morning, Hans. Good morning, Chris. Just a couple of questions I have. Okay. First of all, you gave a guidance of north of EUR700 million of cash remittance this year. Now the way I think about this is, your last year dividend cost was EUR485 million I guess, and then holding company costs, let's say, EUR100 million. So is it fair to say that if you do a buyback of EUR150 million that would entirely be covered by this cash flows, because in partial, buyback was only partly covered by cash flows, and partly by excess capital, but it looks like the way cash is going up it is fully covered? And just related to that, I mean, is it fair to say that this increase year-on-year is more or less recurring in nature, like it's just a normal business trend rather than you are getting a one-off cash from somewhere? So that's one. Secondly, any guidance on what sort of real estate gains and equity gains we might still get for the second --- I mean, for next three quarters? I mean, do you think that we have more or less exhausted on the capital gains on equity side, or do you think that there could be more as well? I'll stop here. Thank you.

Hans De Cuyper -- Chief Executive Officer

Okay. Thank you, Ashik, and good morning. For your two questions, well, they are more global, so I will take that. But first of all, indeed as we expect an upstreaming above EUR700 million from our different operations around the world, we expect if, and please, if we do a share buyback, and that's in line again with the Connect21 guidance, we expect that it would be covered by the cash upstream, and that we do would not eat in our capital or cash position to do this, but of course, this also is linked to the amount that if we do a share buyback, it also depends on the amount that we will do. Let's not forget, we are still under the guidance of National Bank and EIOPA on the distribution for this year.

Secondly on cap gains. We don't give forward-looking guidance on cap gains, because it's always highly uncertain with the financial markets. The only thing I can tell you is that in the first quarter results there are almost no capital gains from real estate, they are mainly coming from the equity portfolio, and we still have the real estate capital gains scheduled and are ongoing for the rest of the year, but we expect the results to come in, mostly in the second half of the year.

Ashik Musaddi -- JPMorgan Chase & Co. -- Analyst

Okay.

Christophe Boizard -- Chief Financial Officer & Executive Director

Ashik, that's great, and we usually try to achieve the global written objective that we have around 5% and we complement the income by capital gain, and you will remember that we gave some guidance about what is necessary and we said it was between EUR80 million and EUR100 million. So, but we will stick to that. The aim is to be at 5% return on real estate.

Ashik Musaddi -- JPMorgan Chase & Co. -- Analyst

Okay. That's very clear. Thank you.

Operator

Thank you. Next question from Fulin Liang from Morgan Stanley. Please go ahead.

Fulin Liang -- Morgan Stanley -- Analyst

Thank you. I just --- a couple of questions. So the first one is, so it's a very good capital gains in Asia, roughly more than EUR100 million in the quarter. And did I understand it correctly, you said, because of like Taiping took the opportunity to realize the gains, and does that actually implying that they reduce the overall exposure in equity. So therefore we would see less volatility in the future or they just recycle the proceeds back into the equity market again? That's the first question.

And then secondly is, could you give us a little bit more kind of --- we understand there is a very good opening sales in China, but what -- could you give just more color on like what's the product mix there, channel mix there, and what's the margin? Is margin better or worse? That's kind of more color would be helpful. And lastly, just very, very quickly, because I missed the first couple of minutes of the presentation. Did you actually upgrade Asia guidance as well, just in line with your Group numbers?

Hans De Cuyper -- Chief Executive Officer

Okay. Good morning Fulin. I will pass the questions to Filip, they are all related to Asia.

Filip Coremans -- Managing Director, Asia

Okay. Thank you so much for your questions. Let me take one by one, maybe first on the capital gains. Our CFO, Christophe mentioned that there were some smart realization of capital gains, certainly in terms of timing, and indeed almost all the capital gains at least in China, they were made by the end of January, but the investment mix has not changed. So these have been redeployed into equity markets. That redeployment has happened gradually over the quarter and just on a very high level, the unrealized capital gain position on the equity position in China, compared to the end of the year, despite realization of these capital gains is hardly changed, in fact. So they realized on high undeployed over the quarter. The asset mix has not changed. It's still an equity, but the unrealized capital gain position is actually in euro terms only EUR18 million down on this realization. So they did a good job in timing, let's say like that.

Secondly, on the commercial development. Yeah, indeed we can be very positive forward-looking, because we will disclose more on this as we usually do on with our half year figures. But you can see in the additional disclosure that the growth across Asia region and certainly in China, in terms of new business has been extremely solid in the first quarter. The APE new business is up 37% for the whole region, of course, mainly driven by China, but we also saw strong development and you can see that in, on slide, what is the number and where do we have the -- 16, where you see that also a strong commercial development in the Philippines and Vietnam and actually in Malaysia, but more in Singapore was there. So it's very broad based.

The quality of the business has also been a significantly better than last year. I can already tell you that we had positive renminbi margins in all channels. So in China both in Banca as well as in the agency channel, but the exact figures will be disclosed in respect of our partner disclosing their first with half year, but already end of last year, the shift to quality renminbi margins was there. It has been continued and the growth in renminbi will be higher than the growth in APE, I can tell you that.

And the third question was the guidance. Yeah, at the end of last year, based on the underlying, we said, yeah, we give a minimum guidance of EUR350 million for Asia region and indeed we have raised that EUR350 million to a EUR354 million run rate range with, we think that the full run rate is achievable. And to make that picture then complete, that includes the comment that Hans gave that is after a slightly raised expected feed impact for this year, almost at the same level as last year, which was EUR160 million last year.

Fulin Liang -- Morgan Stanley -- Analyst

Okay. Thank you.

Operator

Thank you. Next question from Steven Haywood from HSBC. Please go ahead.

Steven Haywood -- HSBC -- Analyst

I just wanted to follow-up on rerisking your asset management actions here. You've done a triple amount in the first quarter. Can you give more detail on what type of assets you're rerisking into and what the potential and yield uplift is? And also, how much more rerisking have you got to do this year? Is that going to be an impact on the cash generation going forward? And then secondly, I just wanted to confirm your cash generation guidance, because I think, my line cut out then, was it EUR500 million to EUR540 million for the year? Thank you.

Hans De Cuyper -- Chief Executive Officer

I'll give this to Christophe, who always comments on the figure.

Christophe Boizard -- Chief Financial Officer & Executive Director

Yeah. So indeed. As you know, the guidance is for the full year at EUR500 million to EUR540 million, unchanged. And coming back on the asset management, here the rerisking idea is not something new, but something that is ongoing for several quarters. What we are trying to do, while obviously respecting all the policies, risk appetite and all this, is to go to up more yielding assets, and to give you a sense under this Q1 period, the new money yield amounted to 1.5%. So you may imagine that that cannot be achieved by simply by use of on that. So we achieved 1.5%. What can we do here, and the 1.5 is on fixed income.

So what we do is we do a lot of loans. A lot of loans. It is not new. You are -- you know all the story about the Dutch mortgages, a very fashionable asset class. We were among the first and we keep on doing -- investing in this, but we are not far from reaching some limits, but then we have other asset classes, which very much looks like this one in France, where we invest along with our partners Natixis in socializing. So this is where we invest more in loans.

And then, besides this, there is this trend, slight increase in the equity exposure, having in mind that we will try to take benefit of the long-term equity opportunity and this will go even further when the IFRS 9 will enter into force in 2023 where our intention is to take advantage of this new option sale to OCI, which will allow us to escape from the impairment risk going through P&L. So in a nutshell, more loans. After the Dutch mortgages, we are investing in France, but in same kind of assets. And then slightly increased allocation to equities.

Hans De Cuyper -- Chief Executive Officer

And then what I can add to make it complete is also some exposure in real estate increase and that is mainly coming in the area of logistics and warehousing.

Steven Haywood -- HSBC -- Analyst

Okay. Thank you very much.

Operator

Thank you. [Operator Instructions] We have a new question from Farquhar Murray from Autonomous Research. Please go ahead.

Farquhar Murray -- Autonomous Research -- Analyst

Good morning. Just two brief questions if I may. Firstly, on the pricing strategy in Belgium, Non-Life, could I ask how Motor renewals are running at present, and is there any kind of pass-through or frequency benefits going on in the markets or is actually market looking through that into recovery? And then secondly, how does that experience compare to what you're seeing in the UK, just as a point of reference? Thanks.

Antonio Cano -- Managing Director

Good morning, Antonio here. I'll answer that one. So on the Motor renewals in Belgium, I would say that there is nothing really changed considering they have big increases, but they tend to follow the indexation. So no significant impact on Motor renewal rates in Belgium. On the UK, I guess, you're aware, you've seen the latest numbers of the market. The latest data point coming out was minus 7% quarter-on-quarter for Motor. So that's what we observed in the market. Our rate movements are a bit less aggressive, let's put it that way, so we have not carried out rate decreases at that rate. So there is a clear difference between how the market in the UK behaves and Belgium.

Farquhar Murray -- Autonomous Research -- Analyst

Okay. Thanks so much.

Operator

Thank you. Next question from Michael Huttner from Berenberg once again. Please go ahead.

Michael Huttner -- Berenberg -- Analyst

Thank you so much for the opportunity. I'm really sorry. Just two questions. One is, I have a feeling, but I just wanted to maybe you can say a bit about it that you may be in order to prepare for higher accidents, I think lockdowns, and you might have done reserves more released through your back book reserves. Just wondered if you can say anything about that, I could be wrong. And then the other thing is Asia. Asia seems to be getting on the -- you know, one of those curves which seems to go up through to the sky, I suppose, exponential. Can you say, I mean you've raised guidance this year, and clearly as the interest rate challenge maybe and next year would have higher earnings, we saw higher earnings contribution. Can you say a little bit more about how you think about this mid-term? Should we expect, I think, in the past and then, I know this is probably wrong, with some more production growth about 13% here, but this year, it feels much faster now.? Thank you.

Hans De Cuyper -- Chief Executive Officer

Okay. I'll give the first question to Antonio, because I think it's mainly UK, and Belgium related, and then Filip can respond on Asia.

Antonio Cano -- Managing Director

Yes, so on the first question, whether we are adjusting our reserves given -- we don't know, we don't change the reserving approach. What you see is more mechanical effects. So the IBNR patterns and things like that tend to change somewhat because of the need to reporting patterns. But there is no deliberate strategy to set more aside. It's just the normal mechanics that overall you could say that the ratio of reserves toward earned premium would slightly go up, but that's more a mechanical thing. There is no deliberate strategy behind that. It is business as usual.

Filip Coremans -- Managing Director, Asia

And Michael, thanks for your additional question on the longer-term guidance of Asia. Now, I'm going to be a bit evasive when answering that, because I think we will give a longer-term outlook perspective when we talk to you guys in a month or so around our Impact24 strategy, but indeed Asia is starting with a little bit as expected, as indicated at the end of last year, we are aware of the feed impact, OK, it moves obviously with interest rates, and it is now slightly higher that we expect for this year than what we indicated at the end of the year, and that is also because we have very strong growth. If you look at the growth of the balance sheet, it was up 11%, and the results actually of this quarter, because if you take feed and capital gains out, you may have the impression it's rather flattish in comparison to the first quarter last year. But let's not forget that 37% growth in APE and related channel development costs in China, because we are building up agency network, that they have some strain in that result which will moderate out over the year. So we feel that we are exactly on-track to deliver what we promised. For the longer-term outlook on the region, I would like to reserve the answer until we talk about our Strategy24.

Michael Huttner -- Berenberg -- Analyst

And can I ask a very cheeky follow-up question. In CS time, when we have with the next strategic updates be in Hong Kong or Shanghai?

Filip Coremans -- Managing Director, Asia

I'm taking Chinese lessons. Yes.

Michael Huttner -- Berenberg -- Analyst

Thank you so much. Very well said.

Operator

Thank you. Next question from Colm Kelly from UBS. Please go ahead.

Colm Kelly -- UBS Group AG -- Analyst

Yeah, thanks. So following up on the answer to Asia there. I felt like you're indicating, look that there's higher strain due to the impressive growth in the quarter and that's depressing the year-on-year underlying earnings growth, but clearly that's something you want to balance all three and generate significant growth in all three at all times in terms of growing new business at a strong rate, but also growing earnings and cash flow. So it didn't quite exhibit that in 1Q. Clearly, it needs to be exhibited going forward. So can you just help to indicate how the balance of those three are expected to develop from here? That's the first question.

The second question is just around long-term equity. So you indicate that the tailwinds there from a regulatory perspective should help to increase appetite for equity investments. You're currently I think allocated around 5% of assets to equity assets. Do you have any indication of where you would like that allocation to get to based on the guidance that's been provided by the regulatory authorities? And do you have any sensitivity in terms of capital generation as to how much uplift to capital generation you would get from, say a 1% increase in allocation to equity perhaps coming out of something like sovereign bonds. Is there any indication of the potential uplift from that? Thank you.

Filip Coremans -- Managing Director, Asia

Yeah. on the Asian one again. I think we'll provide more guidance on that when we -- during the Impact24. But just three ballpark figures to give you a feel of what is happening there on a very high level. If you look at our disclosures first on operational free capital generation, we only put Asia there in the footnote, why, because obviously it is not Solvency II, but when you look at the figure that we mentioned there last year and this year in terms of our ballpark estimate on the free capital generation -- operational free capital generation in Asia, it went up from EUR369 million last year to EUR413 million in this year report. That's one. Secondly, when you look at the results, we raise it now to a range EUR354 milion run rate, so slightly below that still, meaning the risk constraint.

And thirdly, if you look at the evolution of the dividends that are flowing out of the Asian region, this year in the EUR700 million that Hans indicated, you saw the step-up of China, but roughly EUR170 million is now coming out of Asia. So take these three together and that is the situation, more or less off of the earnings and certainly more than half of the free capital is still being redeployed and invested in growth in the region. But slowly, but certainly, these three figures are moving up in tandem, but there is still a need on capital generation, followed by the profits, which is are always emerging due to strain a bit later. And the dividend flow is also increasing gradually, but slowly. I think all macro indicators there are good on the figures that you can find in our results back end.

Christophe Boizard -- Chief Financial Officer & Executive Director

May be more generic on long-term equities, but first of all the capital efficiency, we assume and over the cycle return of 7%. So that's what we take, whether it's long-term equity or normal equity, that's what we take in SCG, but of course you do have the benefit on the solvency side because capital charges is roughly half, OK, it depend on at the moment, but roughly half. Whereas the last year in the first place is the dividend yield and then is the realized capital gains at the end of the day will run into the IFRS results, but anyhow, that's all going to change, loans add over 17%, it's coming on-board. And then we will have to revisit that.

Colm Kelly -- UBS Group AG -- Analyst

Okay. Thank you.

Operator

Thank you. [Operator Instructions] We have a new question once again from Michael Huttner from Berenberg. Please go ahead.

Michael Huttner -- Berenberg -- Analyst

I'm really sorry, I got in. And can you say a couple of words that the format of the -- of your --- the presentation, and so it's Connect21 and it's so called something 24 in a month's time, please? Thank you.

Hans De Cuyper -- Chief Executive Officer

We will share that with you in a month's time.

Michael Huttner -- Berenberg -- Analyst

Okay. Thank you.

Operator

Thank you. We have another question once again from Ashik Musaddi the from JP Morgan. Please go ahead.

Ashik Musaddi -- JPMorgan Chase & Co. -- Analyst

Thank you. And just -- sorry, again for going back on Asia. I mean, it is an important topic. So that's why coming back on that. I mean, if I think about what you are saying is, you have raised the guidance by about EUR50 million for Asia and at the same time the underlying earnings are impacted EUR40 million by higher interest rates, lowering interest rate impact. So it feels like the increase in the guidance on an underlying basis is about EUR90 million. Is it possible to break that in terms of how much that increase is underlying and how much would that be capital gains driven? So that would be the question. And just as a follow-up, I mean, I think in past, you have guided for about EUR100 million capital gains in Asia, if I remember correctly. Can you just confirm that if possible? Thank you.

Christophe Boizard -- Chief Financial Officer & Executive Director

Yeah, Ashik, obviously this is not a science. This is financial markets, Ashik. So indeed, you think about it, we say we go for range EUR350 million, EUR400 million and we realize now roughly EUR150 million, that mean we have EUR200 million to EUR250 million to go. We also gave guidance that valuation interest rate impact could be at a similar level as last year, meaning that we are at EUR40 million now and at least our estimate of EUR60 million is to come. If we look at the underlying that I mentioned, excluding year-end capital gains, we had a run rate of about EUR90 million for the first quarter, where I said that this will back a little bit strain. So if you put all these in the mix you can see that indeed there is still some requirement of additional capital gains to compensate some of the feed impact to reach our target.

Ashik Musaddi -- JPMorgan Chase & Co. -- Analyst

Okay. That's great. Thank you.

Operator

Thank you. We don't have any more question. Back to you for the conclusion.

Hans De Cuyper -- Chief Executive Officer

Ladies and gentlemen, thank you for your questions. And to end this call, let me summarize the main conclusions.

Our strong net result was driven by a solid performance in both Life and Non-Life. Inflows were up, thanks to a good sales momentum, especially in China and in Belgium Non-Life. This strong start of the year led us to strengthen our full-year guidance to EUR900 million to EUR950 million.

With this I would like to bring this call to an end. Don't hesitate to contact our IR team should you have outstanding questions. Thank you for your time and I would like to wish you a very nice day.

Operator

[Operator Closing Remarks]

Duration: 44 minutes

Call participants:

Hans De Cuyper -- Chief Executive Officer

Christophe Boizard -- Chief Financial Officer & Executive Director

Filip Coremans -- Managing Director, Asia

Antonio Cano -- Managing Director

Michael Huttner -- Berenberg -- Analyst

Ashik Musaddi -- JPMorgan Chase & Co. -- Analyst

Fulin Liang -- Morgan Stanley -- Analyst

Steven Haywood -- HSBC -- Analyst

Farquhar Murray -- Autonomous Research -- Analyst

Colm Kelly -- UBS Group AG -- Analyst

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