Welcome to the Reinsurance Group of America Fourth Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's prepared remarks, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Also, please limit yourself to one question and one follow-up. Please note, this event is being recorded. I would now like to turn the conference over to Todd Larson, Senior Executive Vice President and Chief Financial Officer. Please. Thank you. Welcome to RGA's fourth quarter 2023 conference call. I'm joined on the call this morning with Tony Cheng, RGA's President and Chief Executive Officer, Leslie Barbi, Chief Investment Officer, and Jonathan Porter, Chief Risk Officer. A quick reminder before we get started regarding forward-looking information and non-GAAP financial measures. Some of our comments or answers to your questions may contain forward-looking statements. Actual results could differ materially from expected results. Please refer to the earnings release we issued yesterday for a list of important factors that could cause actual results to differ materially from expected results. Additionally, during the course of this call, the information we provide may include non-GAAP financial measures. Please see our earnings release, earnings presentation, and quarterly financial supplement, all of which are posted on our website, for a discussion of these terms and reconciliations to GAAP measures. Throughout the call, we will be referencing slides from the earnings presentation, which again, is posted on our website. Now I'll turn the call over to Tony for his comments. Good morning, everyone, and thank you for joining our call. Last night, we reported adjusted operating earnings for the fourth quarter of $4.73 per share, and for the full year of $19.88 per share. Our adjusted operating ROE, excluding notable items, was 14.4% for the year. The quarter included favorable investment and very strong GFS results, along with strong organic new business and in-force transaction volumes. Our underlying underwriting experience was in line with expectations across the enterprise. This capped off a very strong year. We are excited with the great momentum in our business, with our global platform positioning us for continued growth and success. We entered 2023 with the priorities of delivering on earnings and ROE targets, as well as accelerating our new business growth, all while taking an active and balanced approach to capital management. We have delivered on all these three priorities. Firstly, we produced record EPS and strong ROE results. Second, as measured by our internal metrics, we produced a record level of new business value, which was up significantly from 2022. You will also see on slide 17 in the earnings presentation, that the value of business subject to LDTI increased by more than $3 billion in 2023, primarily attributable to new business won during the year. In addition to the volume, I am also very pleased with the breadth and quality of the new business we delivered. We had strong results across many of our businesses and geographies, with a significant percentage of our new business under exclusive arrangements. These types of arrangements create greater strategic value, which gets shared between our clients and RGA. The third priority we delivered on was our active and balanced capital management. During the quarter, we deployed $346 million of capital into in-force transactions, bringing the year-to-date total to a record $933 million. We were active across the globe with the U.S., Asia, and EMEA, all contributing to our in-force transaction success. In addition to supporting our clients through deploying capital into our business, we also returned $419 million to shareholders via dividends and buybacks during the year. Finally, we launched Ruby Re, further diversifying our sources of capital to fund our exciting future growth. Our optimism for the future is fueled by our continued success in our four areas of notable growth that we have previously communicated. Starting with our longevity and PRT business. In the U.S. PRT market, we closed our third transaction. In a very short period of time, we have established ourselves as an active and key player in this market, and we are optimistic about our prospects going forward. In the U.K. longevity space, where RGA is a clear market leader, the team has had an outstanding year, innovating in various segments of the longevity market. Based upon the current environment for global longevity business, we expect 2024 to be another very active and productive year. In our Asia Traditional segment, we continued to see positive results, bringing product development and underwriting solutions to our clients to help fuel their growth and share in their success. In China, in the fourth quarter, we launched a simplified issue medical product with a major insurer to complement the successful critical illness product we spoke about during Investor Day. In Hong Kong, we launched a product with a market leader to provide a more inclusive form of critical illness to individuals that could not previously gain coverage. This supports our purpose of making financial protection accessible to all, whilst furthering our business strategy. In our third area of notable growth, the asset-intensive business in Asia, we executed transactions that combined our strength of product development with coinsurance, and continued to innovate across the region to support a very active transaction pipeline. Finally, in U.S. Traditional, we closed some nice in-force blocks in Q4, and also partnered with our clients and distribution entities to drive profitable new business growth. As announced, we also made an investment to further our capabilities to support clients in digital underwriting and fulfill their purpose of closing the protection gap in the middle market. I would be remiss not to also mention the collective group of all our other businesses, where we have incredibly talented teams and market-leading positions. For example, we were able to finalize an attractive asset-intensive transaction in the U.S. due to our long-term client relationship and reputation for execution certainty. In addition, we announced yesterday an asset transaction in Belgium, and we are hopeful of seeing other transactions across Europe, similar to what we have seen in Asia and North America. As proud as I am about all these accomplishments, I am even more excited about the future, building on our strong foundation, created by the talent, expertise, and integrity of all our people around the world. Reflecting this positive outlook, we have updated our financial targets as shown on slide 18. We have provided new earnings run rates and reiterated our intermediate EPS growth targets on this higher base. In addition, we increased our expected ROE range to 12%-14%. I am clearly confident in our ability to continue to deliver growth at attractive returns to our shareholders for many years to come. Our growth prospects are built on our core principles of strong risk management, combined with our entrepreneurial spirit, to create new innovative solutions and share with our partners in their success. Thank you for your interest in RGA. I will now turn it over to Todd to discuss the financial results. Thank you, Tony. Moving to the quarterly results, RGA reported pre-tax adjusted operating income of $386 million for the quarter, and adjusted operating earnings per share of $4.73. For the full year, we reported record-adjusted operating earnings per share of $19.88. For the year, adjusted operating return on equity, excluding notable items, was 14.4%. We are very pleased with the strong results, as well as very strong new business volumes and capital deployment. Investment results for the quarter remained favorable. Reported premiums were up 19.2% for the quarter. For the year, premiums totaled $15.1 billion, representing an increase of 16.3% on a constant currency basis. The increase includes $500 million in premium from a U.S. PRT transaction in the fourth quarter. PRT premiums for the full year totaled $1.5 billion. As Tony mentioned, we have strong momentum in new business activity and expect to continue to see attractive premium growth over time. The effective tax rate for the quarter was 18.2% on pre-tax adjusted operating income, below the expected range, primarily due to the distribution of earnings across the globe and generation of certain tax credits. The effective tax rate for the full year was 21.5% on pre-tax adjusted operating income. Turning to the quarterly segment results, starting on slide seven in our earnings presentation. The U.S. and Latin America Traditional segment results reflected favorable group and individual health experience, and slightly unfavorable claims experience and client reporting adjustments in individual life, which had a larger financial impact due to the mix of experience between Capped and Uncapped cohorts. As we've previously discussed, under LDTI, experience on Capped cohorts is reported in the current period. For Uncapped cohorts, a portion of the underlying mortality experience is reported in the current period earnings, and the remaining experience is spread into the future periods. On a year-to-date basis, the underlying experience in the individual life business was favorable.... The U.S. Asset-Intensive business results were strong, reflecting higher investment spreads, including those on floating-rate securities. And our Capital Solutions business continues to perform in line with our expectations. The Canada Traditional results reflected unfavorable group claims experience and impact from a one-time item of approximately $8 million. The Financial Solutions business reflected favorable longevity experience. In the Europe, Middle East, and Africa segment, the traditional business results reflected unfavorable mortality experience, most of which was recognized in the current quarter. This was partially offset by a positive impact from new business in continental Europe. The EMEA Financial Solutions business results reflected favorable longevity and other experience, including improvements in reporting. Turning to our Asia Pacific Traditional business, results reflected favorable underlying claims experience, a small portion of which was recognized in the current period. Asia Pacific Financial Solutions business reflected favorable investment spreads and strong new business. The corporate and other segment reported a pre-tax adjusted operating loss of $23 million, less than the expected quarterly range, primarily due to higher investment income. Moving on to investments on slides 10 through 13, the non-spread portfolio yield for the quarter was 4.86%, reflecting higher yields. For the non-spread business, our new money rate rose to 6.65%, reflecting a higher allocation to private assets in the quarter. Credit impairments were minimal, and we believe the portfolio is well-positioned as we move through ongoing economic uncertainties. Related to capital management, as shown on slides 14 and 15, our capital and liquidity positions remain strong. We ended the quarter with excess capital of approximately $1 billion. In the quarter, we deployed $346 million of capital into in-force transactions, bringing the year-to-date total to a record $933 million. In the quarter, we also returned a total of $106 million of capital to shareholders through $50 million of share repurchases and $56 million in dividends. We expect to remain active in deploying capital into attractive growth opportunities in our organic flow and in-force block transactions, and returning excess capital to shareholders through dividends and share repurchases. As Tony previously mentioned, during the quarter, we successfully launched Ruby Re, a Missouri-domiciled third-party reinsurance company. Alternative capital has been part of RGA's capital management strategy for a long time, and Ruby Re is another source of capital to support our growth. As part of the launch, RGA executed an initial retrocession of $2.5 billion of existing liabilities. During the year, we continued our long track record of increasing book value per share. As shown on slide 16, our book value per share, excluding AOCI, increased to $144, which represents a compounded annual growth rate of 10.4% since the beginning of 2021. A metric I want to highlight is the value of business subject to LDTI, as presented on slide 17. This represents expected unrealized underwriting margins, which demonstrates the long-term value of this business. We introduced this metric back in June at our Investor Day. The unrealized underwriting margin is calculated as the expected present value of our future premiums, less present value of claimed benefits and treaty allowances for the part of our business with reserves subject to LDTI financial reporting. These values are derived from the cash flows used to determine reserves, which are based on current expectations and are reviewed as part of the annual audit. During 2023, this value increased to approximately $27 billion, up $3 billion or 15% from the end of 2022. The primary driver was the strong new business written during the year. To summarize, based on our current expectations, over $27 billion of pre-tax, unrealized underwriting margin exists for the business that is already on our books. While these margins don't consider investment income or general expenses, they are expected to significantly contribute to future earnings. I want to emphasize again, the current measure only contains business subject to LDTI, but it and excludes certain asset-intensive and short-duration business. As we've discussed, 2023 was very strong for RGA, and results were ahead of the intermediate-term financial targets and run rates provided at our Investor Day. The primary drivers of the outperformance were favorable impacts of higher interest rates, strong new business and favorable experience. Considering these dynamics and the continued strength of our underlying business, we have updated our current run rates and reiterated our intermediate growth targets, as shown on slide 18. We have also increased our intermediate return on equity target range to 12%-14%. These updated run rates now represent the base from which we expect to achieve our intermediate growth targets... We believe these updates appropriately reflect our strong momentum and earnings power as we look to the future. We continue to see good opportunities across our geographies and business lines, and we are well positioned to execute on these opportunities and our strategic plan. We are very excited about the future and expect to deliver attractive returns to our shareholders. This concludes our prepared remarks, and we would now like to open it up for questions. We will now begin the question-and-answer session. Please limit yourself to one question and a single follow-up. If you have any additional questions, you can rejoin the queue. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Jimmy Bhullar with JP Morgan. Please go ahead. Good morning. So I had a couple of questions. First, on just the, the difference between net and operating income. I think you had a decent amount of derivative losses and losses on sales of investments. So if you could just give us some color on what really drove each of those items. Yeah, Jimmy, it's Todd. One item is, I think what we refer to as B36 or the embedded derivatives. That's on the funds withheld type reinsurance treaties that we've had over the years. So that had part of the impact. And then some of the derivatives that we use in some of our currency investment strategies had a negative impact, and then we had some capital losses as well. Okay, and the capital, the losses on sales, are those related to repositioning of the portfolio on deals and stuff, or is it just normal sales because of credit deterioration? Hi, it's Leslie. Yeah, on the unrealized, on the realized losses, it was things like extension trades, normal trading, cash management, small to value. There was a few specific credit exposures we managed, but it's predominantly just normal course decisions and portfolio repositioning. Thank you. As you know, the portfolio market values are still somewhat below book values for people generally, just because interest rates had risen so much in 2022 and into 2023. Okay. And then just on the portfolio as well, if I look at your new money yield, it was already pretty good. It went up even more in 3Q, and I think you're almost 300 basis points above where a 10-year treasury yield is. So you mentioned private, that you're doing a lot more private, but the yield seems very high. So just talk about what it is that you're investing in and your comfort with the credit quality, and what's really driving the increase in new money yields. Sure. No, that. Thanks for the question. So, in the quarter, not every quarter is exactly our target asset allocations over time, but there were some great opportunities in private, so disproportionately, we had more this quarter. That explained really the full change quarter-over-quarter. But if you look at underlying, still investment grade corporates were the largest allocation, and we had covered a bit in Investor Day. I know we normally don't spend a lot of time talking about investments, but we have a very broad platform, so we do have an excellent mix of opportunities across both public and private. And so, there's a lot of premium we can add over, you know, over just straight public when we're investing. And on top of that, so, you know, there's some areas like, CMLs, where there's still very good opportunities, 'cause there's probably more interested borrowers than lenders, given, banks backing out of there. And, we had, you know, really good opportunities there on rate locks, so that's some of it. Thank you. The next question comes from John Barnidge with Piper Sandler. Please go ahead. Good morning. Thank you for the opportunity. As we think about new business generation, and I'm just trying to think about how much of that is now coming from more boutique one-to-one solutions than just winning on price, maybe leveraging the data and solutions you have to really grow that volume in the flywheel. Thank you. Let me take that, John, and morning, and thank you for the question. Really, I just want to firstly just reiterate our strategy, which hasn't changed, which is, you know, we, as I mentioned in my comments, we've got this incredible risk management and pricing capability. And when you combine it with the entrepreneurial spirit, the collaboration between our great people, this leads to innovation, leads to, you know, growing market share. And as I said during Investor Day, it's very important for our growth to continue to grow reinsurance markets and grow underlying insurance markets. So to answer your question, you know, I'm really delighted with the proportion of our new business that came from, you know, what we call Creation Re. Broadly, you know, it's really pursuing exclusive transactions, where we're able to provide the idea, provide the innovative solution... Hopefully give the, you know, the partner that we partner with an edge to create greater value for that company, and we share in that value. So, you know, what I'd say, I'm not going to give you a specific number. We set a target. We well exceeded that target during the year. We'll obviously up our targets internally for 2024, but really delighted with how that's going. And it really shows the strength of our strategy, the strength of our people, and you know, really the excitement within the organization. It's very helpful. Thank you. My follow-up question: Variable Investment Income has been rather relatively strong. Can you maybe talk about your near-term outlook for transaction volume within that? Thank you. Hi. Yeah, thanks. This is Leslie. Yeah, so we had a very good quarter there on Variable Investment Income. It was modestly above what we expected. I think if you think about the composition of our portfolio that drives that, which we have been strategically building over the last 10 years, it's, you know, we get sort of balanced sourcing from private equity and real estate. I would say that generally in the market, obviously, with 2023, not an amazing year for M&A and things, that tends to drive less activity of realizations in the private equity portfolio. And on the real estate front, you know, we have an in-house team, and we-- we're the ones picking those investments. We're the ones that are thinking about when is the best time to sell them. So I'd say part of 2023, certainly there was probably in the marketplace in general still a separation between buyers and sellers. I think there's some more activity picking up there, but for us, it's really about the specific holdings that we have and what makes the best sense about when to sell those. So I think, you know, we'll continue to have a probably similar year in 2024 in terms of a total VII, possibly a touch lighter. But, you know, we had a couple of years of really, really robust. This environment's a little less robust, but we're still moving around that long-term average return that we've communicated in Investor Day of 10%-12%. Thank you. Appreciate it. The next question comes from Joel Hurwitz with Dowling Partners. Please go ahead. Hey, good morning. So I appreciate the updated disclosure on the unrealized under margins. Can you just take me through the moving pieces of the $3 billion growth? I think you mentioned $2 billion is new business. I guess, what is the other billion? Is there net favorable experience that flows through that? This is Todd. I'll start, and others can chime in. But yeah, so a big portion of that $3 billion, as you refer to, the about $2 billion, is due to the value added from the strong new business growth throughout 2023. Then, the additional $1 billion is really a combination of, you know, sort of experience assumption adjustments and how they impact the future margins, a little offset a little bit by just runoff, natural runoff of the in-force business. Okay, helpful. Then just in terms of current quarter experience and U.S. individual mortality, can you just give a breakout of what you saw and the impact between Capped and Uncapped cohorts? Yeah, so I'll start out. This is Todd again. For the individual life portion of U.S. Trad, we saw adverse claims of about $20 million, I would say, mainly related to elevated large, large claims. And as we mentioned, a lot of the unfavorable experience was in the Capped cohorts. There was some offsetting favorable claims experience in some of the Uncapped cohorts. So the net financial reporting statement impact, or the income statement impact, was about $40 million negative for the individual life in the quarter. Okay, helpful. Thank you. Yeah. Hi, and sorry, this is Jonathan, too. Just to add in, you know, if you take a step back and look at the year-to-date results for U.S. individual life, our overall, our underlying claims experience was favorable for the year, as we mentioned in the prepared remarks. About $40 million favorable for individual life on its own. And again, we had some cohort distribution impacts, which resulted in that being, you know, a headwind over the course of the year, but our underlying experience was favorable. Sorry, Joel, and let me just add a few more comments on your first question. You know, thank you for asking the question around long-term value from LDTI. I'll state the obvious. You know, that is only the business that's under LDTI. There is a significant proportion of our business that is not covered under LDTI at the moment. Got it. Thanks. The next question comes from Tom Gallagher with Evercore ISI. Please go ahead. Good morning. Just a first question on the updated run rate earnings guidance. Should we view that as normalized 2023 run rates or exit rate? And so when we think about 2024, should we be growing that by your high single-digit rate, or should we think about that more as a run rate for 2024? ... So, hi, Tom. Thanks. Yeah, so, it is, you know, we did look at, you know, 2023 on a, sort of, on a more normalized basis as we built up our projections going forward and, you know, developing our financial plan, that type of thing for 2024. So you could look at the updated run rates, more of our expectation of the run rates for 2024. Gotcha. So there's some embedded growth expectation in, in those, in those ranges. Is that fair, Todd? That's fair, yeah. Okay. Okay, great. My follow-up, Tony, I was interested in your comment about a greater percentage of your business coming from exclusive arrangements. Can you, you know, not that I'm looking for a history lesson, but just can you provide some perspective on how that's trended over time? Like, historically, has most of your reinsurance you've written been done with pools of other reinsurers? What does that look like now? Is it different between U.S. and Asia? Yeah, look, thanks for the question. I mean, I'd say, you know, we haven't kept track of those numbers necessarily. I mean, it's always been part of our culture, really, from day one. You know, I would say it, it has, you know, broadly directionally increased over time. And, and as you allude to, it may differ, in, in different geographies around the world and business units. Now, what, what really delighted me is, is, you know, as, as the messaging within the organization under Anna and, and now myself got stronger, just, you know, the belief in the teams that perhaps were not, you know, pursuing that as vigorously. You know, we obviously asked them to... Look, that's the direction, give it a try, and there's nothing more fulfilling for any leader to see, you know, teams succeed in that, raise their own self-belief that, "Hey, this- we can do this." And, and therefore, you know, that's why we're so excited about our prospects and, and seeing some of the flywheel or the virtuous cycle really kicking off. Tony, just one follow-up. Is the punchline there that the margins are, I presume the margins are a lot better when you do exclusive deals instead of like, you know, we'll call it the pool deals. Is that, you think that's fair? Yeah. No, I mean, definitely the margins are better, but obviously, it's you know, it's a win-win with us and our clients, right? I mean, we're truly able to give them something that they're willing to commit an exclusive to, so it must be of great value. It's usually first to market or innovative, and then it's a greater value created for us and our partner, and obviously, we're able to share some of that value. Okay, thanks. The next question comes from Suneet Kamath with Jefferies. Please go ahead. Thanks. Just wanted to follow up on Tom's question, just so I understand the run rate guidance and all that stuff. So if I look at slide eight, I think it shows that on a normalized basis, you did call it $1.7 billion of pre-tax earnings in 2023. And if I take the midpoint of the range in terms of the run rate, that's also around 1.7, and I think what you said, Todd, is that's probably a good indication of 2024. So is that right? I mean, basically what you're saying is 2024's pre-tax earnings should be in line with 2023 normalized? Yeah, normalized, and we've in 2023, we would, as we've talked about, very strong year, very solid underlying earnings. But when we came up with the 2024 run rates, we did look at what we would view some, you know, sort of not unusual items, but some one-off type items that we don't expect to repeat and add to the ongoing run rate. That could be some of the impact of the in-force action or some client reporting adjustments, sometimes some related to, you know, experience, that kind of thing. Okay. Got it. And then I guess on, on capital, just maybe if I could just parse it into two pieces. The $933 million deployed in 2023, like, how quickly should that kind of earn in? Is that... You know, will that take kind of- will that earn in over the course of 2024, or just-- because it seems like a lot of that was back-end loaded in terms of the third and fourth quarter. So just curious about that, and then somewhat relatedly, in terms of your excess capital, right? Like, if I think about what you're earning on that, it would- I would guess that the drag on ROE is probably like 100-150 basis points, something out like that. So when you say excess of $1 billion, is your view that that is fully deployable and that you will take that down over time, or is a portion of that sort of walled off for, you know, just risk management? Thanks. Yeah, so I'll take the latter part of your, your second question first. No, we're comfortable taking that excess, you know, capital level down. What we've talked about in the past, you know, down to the $600 million-$700 million range, we're comfortable with. We do want to keep, you know, some level of cushion. But all that being said, you know, we've done quite a bit of work over the years, developing, you know, alternative forms of capital that we can access, you know, fairly, you know, quickly, for example, the Ruby Re transaction that Tony and I mentioned. So if for the right transaction, the, you know, the right underlying return profile, strategic profile, that kind of thing, we would be willing to dip down into that excess capital level when we're confident that we can replenish it fairly quickly. And then on the, you know, as we deployed the $933 million of capital, you know, throughout the year, yeah, that's the profits on that and returns tend to ramp up... ... over time, depending on the type of underlying business. So there will be some contribution in 2024, but it'll be increasing over time. Okay, thanks. Next question comes from Ryan Krueger with KBW. Please go ahead. Hey, good morning. My first question was on individual life mortality in the U.S. Heard your comments that 2023, in total, was a bit favorable. I guess in the overall population, it seems like it's been consistently running unfavorable still to pre-pandemic levels. So I was interested in your thoughts on why you think you're seeing that type of divergence between insured experience versus population experience at this point? Yeah. Hi, Ryan, it's Jonathan. I mean, as you mentioned, there, you know, there is a difference in the populations that we're talking about, so that could be some of why we're seeing different experience. And it's also relative to the expectations that you set as well. So, you know, if you recall, over the last couple of years, we have been including excess mortality expectations in our reserving assumptions, in particular under LDTI, when we moved to best estimate. So our expectations include our best estimate of what we think that excess mortality will be, and as you said, the results are coming in a little bit favorable relative to those expectations. Okay, thanks. Makes sense. And then can you give any, rough sensitivity on your exposure to floating rate assets, either just the amount of floating rate assets that you have or the potential impact to earnings from, let's say, you know, a 25 basis point change in short-term rates? Sure. Thanks. This is Leslie. So, you know, floating rate overall, I will first say that obviously, some decline in rates has been expected for quite a while, and so we already have assumptions in the run rate guidance that are similar to where the market is currently. So, you're starting from a fine point there. And then, you know, we have taken actions over 2023 as we thought we were near those peak short-term rates to do some floating to fixed swaps on some of the floaters. And then, you know, net in the portfolio, you know, it's less than 4% of the total exposure. So you're talking on the order of under $10 million over the course of a year for a 50 basis point move. But again, the forwards that already predict, you know, moves down in interest rates this year are already in our guidance. Great. Thanks a lot. Our next question comes from Wilma Burdis with Raymond James. Please go ahead. Hey, good morning. I guess could you talk a little bit about the unfavorable experience in the Capped cohorts, specifically if there were any trends you noticed there? And somewhat related to that, could you talk about any mortality trends you're seeing in this kind of winter flu and COVID season? Thank you. Yeah, thanks, Wilma. This is Jonathan. So for the quarter, when we looked at our experience, we did see some adverse experience in older ages and in larger policy sizes, as Todd mentioned. And again, most large policies can be volatile period over period, just sort of the nature of the business. Our experience overall was favorable or in line with other age groups and sizes though. When we think about the flu, I think so far, based on data that we've seen this year, flu is expected to be, it's a little earlier than what a sort of a typical season would be, but not nearly as significant as what we saw last year. Based on the trending, it looks like it's probably going to be an average flu season this year, maybe a little bit below average or a little bit better than what we'd see in a typical year, based on deaths and hospitalizations observed so far. And that's pretty consistent with what we've seen around the globe as well. Anything to note on COVID? Yeah. I mean, COVID is really, you know, difficult to get an accurate count of COVID on its own, so which is why we look at it more from a total excess mortality perspective. But, you know, based on the data we are able to observe, I think our expectation is there's no sign of a major fall or winter surge. But it's, again, it's difficult to parse out the COVID based on the reporting quality these days. Gotcha. And then just one more. If you guys could talk a little bit about how you're thinking about longevity exposure going forward. I know that's something that you used to kind of give some targets around increasing longevity exposure. Just maybe you could give us an update there. Yeah, this is Jonathan again. I'll go first and others can add on. I think our expectation is the same as what we would've shared before at Investor Day. You know, we do expect to see our proportion of longevity risk as a percentage of our overall biometric risk increase over the next few years. We expect our mortality and our morbidity business to grow, but we just think there's a great opportunity on the longevity side. So we do think it will increase. It won't. It's gonna be, you know, moving from more like 10%-15% of our total biometric risk to 20%-25%, so something of that magnitude. So we'll still be, you know, more weighted towards mortality, but just a little bit more balanced, which is a positive from a diversification perspective, obviously. ... Yeah, perhaps let me just add, and I was just going to key off what Jonathan said on diversification. So obviously, you know, we will be mortality long for quite a period of time, but the longevity adds some diversification. But just to get a bit more finer, yeah, our mortality block tends to be higher socioeconomics and younger age. Our longevity block, obviously, tends to be blue collar and retirees. So, you know, with medical advances that we would expect to continue to see, as we've always seen, in a way, it favors the mortality block more so than the negative on the longevity block. Thank you. The next question comes from Alex Scott with Goldman Sachs. Please go ahead. Hi, good morning. First one I had for you is on the regulatory front. I know in Bermuda, I think, you know, you guys don't use the scenario-based approach and your U.S. taxpayers are a little less applicable to you, but I guess you're just interested in a broad update. Are you seeing it affect the competitive environment at all, for some of the, you know, relationships and transactions you have? I mean, any kind of price sensitivity, change related to it? Thanks, Alex. Thanks for the question. I think we've previously shared, you know, we have anecdotally seen some impact on the competition. You know, there was a previous quotation where, you know, due to an announcement in Bermuda overnight, you know, the number of competitors on a certain individual quotation dropped dramatically. You know, we obviously are very mindful of regulations around the world, Bermuda, the U.S., even Europe and U.K., we're seeing obviously some discussions. You know, we're not overly concerned by that. We, you know, always continue to focus on what we're doing. And, you know, in some sense, that's why we're very delighted with the Belgium transaction that we did. You know, there is a lot of discussion on regulatory issues in the continent, but we were very delighted with that transaction. We believe it can open up further opportunities in Belgium and broader throughout the continent. Got it. Very helpful. You know, I guess for a second question, could you just kind of give us a feel for how cession rates are trending in the U.S. market? Something I don't, you know, track quite as closely, so I'd just be interested if you have an update on sort of where things are moving there. Yeah, maybe I'll take that one. I mean, you know, I think directionally, you know, it's in a positive direction. You know, our jobs is always to—as I mentioned earlier, continue to innovate, find new ways to have a win-win with our partners, so they have a strong, compelling reason to reinsure. I would say cession rates, as they're usually tracked, is on new business. What we have seen increasing interest in, as some of the clients, you know, move towards a more capital-light, de-risking their in-force blocks of business, you know, that's creates greater opportunities for us on an in-force perspective, you know, reinsuring mortality on back books and so on. Got it. Very helpful. Thank you. The next question comes from Mike Ward with Citi. Please go ahead. Thanks, guys. Good morning. So we have the new run rate guidance, and there's the 8%-10% earnings growth, which I think is for dollars of earnings and EPS. So I'm just kind of wondering, is there a component that you in with the 8%-10%, is there a component in there from, you know, just improved new money yields or just NII in general growing? Hey, Mike, it's Todd. I'd just start out by saying, you know, the increase in the overall, you know, run rates, that we provided last night compared to the Investor Day back in June, there's really three components I would say. There's the, you know, higher investment yields, and then there's the, you know, good experience on the in-force, you know, book overall across the diversified, you know, platform. And then there's the added, you know, margin for the strong new business volumes that we've been able to achieve during the year. And, Todd, the only thing I'll add, you know, I know the, the print for new money rate is particularly high this quarter. That isn't what is assumed for the full year. The assumptions about how much money we'll have put to work and where it will go is more consistent with current market conditions than that particular print in the fourth quarter. Okay. Thanks. And then maybe on just on capital return, does the 8%-10% kind of assume, you know, an ongoing, call it, $200 million of annual buybacks going forward? Yeah, I would say, you know, it really considers our continued sort of active and balanced capital management between- ... You know, as we've been very consistent over the years, we really like deploying the capital, you know, into the transactions that make good returns for the risk-return profile, keeping the healthy dividend, and then balancing it out with the, you know, the share repurchases. So, you know, it's really the continued assumption of that active and balanced approach to the capital management. Okay, thank you. Our next question comes from Jimmy Bhullar with JP Morgan. Please go ahead. Hey, I just wanted to see if, just to follow up, to see if you could give us some color on what's going on in the Australia business, and just how the block performed this quarter, and how much of the problematic vintages are already on your books, and just your overall comfort level with the reserves for that book. Yeah, so, you know, for the quarter, we had a modest loss in, in Australia, you know, continuing to, you know, monitor the business, and, you know, overall, you know, market conditions, you know, seem to be, you know, okay. But, you know, continue to, you know, keep a close eye on, on the overall, you know, block. But overall, you know, our reserves for most of that business are under LDTI, so we're required to be, you know, holding best estimate, you know, reserves on the, on the balance sheet. Yeah, Jimmy, as we've probably shared, previously, you know, Australia is somewhere we pay very close attention to. I guess it was my first home. You know, really, we, as you would expect, you know, the regulatory environment and the market has improved over time. But we, as you'd expect from RGA, retain our incredibly strong discipline. You know, like I mentioned, it's really that combination of the risk management along with the entrepreneurial spirit, that absolutely the discipline, and, you know, Australia is part of our Asian business, a relatively minor part of the Asian business. Thank you. This concludes our question and answer session. I would like to turn the conference back over to Tony Cheng for any closing remarks. Thank you everyone, for your questions, and, and sincere thanks for your continued interest in RGA. You know, this was a very-- it was a strong quarter, but really completing a very, very strong year. It, you know, further demonstrates our substantial earning powers in our, in our business. You know, I think you've seen at, all the time, you know, the incredibly diverse platform we have, whether it's, it's experience, whether it's geography, whether it's our business strategy. And that's really fueling, you know, we feel a, a very strong pipeline that we obviously have visibility, on. So, we really remain very well positioned to capitalize on the many growth opportunities ahead. We're absolutely confident in our ability to continue to deliver attractive returns to our shareholders, and, and benefit all our stakeholders. So thank you once again. This concludes our- The conference is now concluded. Thank you for attending today's call. You may now disconnect.