Jackson Financial Inc. Q2 FY2023 Earnings Call

Good morning, everyone. And welcome to today's conference call, titled Jackson Financial, Inc. Q2 '23 Earnings Call. My name is Ellen, and I will be coordinating the call for today. At the end of today's presentation, there will be an opportunity to ask a question. I would now like to turn the call over to Liz Werner, Head of Investor Relations to begin. Liz, please go ahead whenever you are ready.

Good morning, everyone. And welcome to Jackson's second quarter earnings call. Today's remarks may contain forward-looking statements, which are subject to risks and uncertainties. These statements are not guarantees of future performance or events and are based upon management's current expectations. Jackson's filings with the SEC provide details on important factors that may cause actual results or events to differ materially. Except as required by law, Jackson is under no obligation to update any forward-looking statements, if circumstances or management's estimates or opinions should change. Today's remarks also refer to certain non-GAAP financial measures. The reconciliation of those measures to the most comparable US GAAP figures is included in our earnings release, financial supplement and earnings presentation, all of which are available on the Investor Relations website at investors.jackson.com. Joining us today are our CEO, Laura Prieskorn; our CFO, Marcia Wadsten; our Head of Asset Liability Management and Chief Actuary, Steve Binioris; our President of Jackson National Life Distributors, Scott Romine; and our President and Chief Investment Officer of PPM, Craig Smith. At this time, I'll turn the call over to our CEO, Laura Prieskorn.

Thank you, Liz. Good morning, everyone. And welcome to our second quarter 2023 earnings call. During today's call, we will provide an update on our quarterly results and outlook on achieving our financial targets, including our capital return goals. September of this year will mark Jackson's second anniversary as an independent company. Over these last two years, we have consistently returned capital to shareholders every quarter. In the second quarter, we continued to build upon our proven track record by returning $100 million through dividends and share repurchases. In addition to our earnings release, we announced the Board approval for a third quarter common dividend of $0.62 per share. By the time we reach our upcoming anniversary in mid-September, we expect to exceed $1 billion in capital returned to shareholders representing nearly 40% of our initial market capitalization. Looking ahead, we remain committed to delivering on our 2023 capital return target of $450 million to $550 million as we continue to focus on capital generation and long-term financial strength. Based on our progress through the first six months of the year, we are reiterating our 2023 key financial targets. We ended the second quarter with an RBC ratio up from the prior quarter and within our target range of 425% to 500%. We took actions during the quarter to optimize required capital at the operating company, selling certain limited partnership assets from Jackson National Life Insurance Company to Jackson Financial Inc., and Marcia will provide more detail on this transaction later in the call. We maintained a strong holding company position with nearly $1.5 billion in assets. This includes cash and highly liquid assets of nearly $1 billion with additional liquidity expected over time from the sale of limited partnership assets along with future operating company dividends. We are pleased with our current holding company position, which allows us to meet our November debt maturity and our current year capital return target and provides a strong asset base as we head into 2024. As discussed in the first quarter, statutory reserving and capital requirements are subject to flooring at the cash surrender value or CSV and the economics of our business are not recognized through our capital position. We are actively engaged with our Michigan regulator and are optimistic we will develop a long-term reserves and capital solution that will better reflect the economics of our business and facilitate more efficient risk management. Turning to our second quarter results, net income was $1.2 billion, reflecting the benefit of a rising equity market and higher interest rates. Adjusted operating earnings were $3.34 per share, an increase from the prior quarter due to the rising equity market and a 4% increase in average annuity account values. We remain confident in credit quality across our investment portfolio and have updated the enhanced disclosures provided last quarter with particular emphasis on commercial real estate. We updated the internal valuation of our entire loan portfolio for current property fundamentals and cap rates. The loan-to-value of the portfolio has increased but remains below 55%. You will see commercial office exposure below 2% of our overall investment portfolio, consisting entirely of first mortgage loans rated at the two highest rating levels. Our conservative underwriting and high-quality investment portfolio remain a core strength of our business. Retail annuity sales totaled $3.1 billion for the quarter and have been stable the last few quarters. Variable annuity sales were flat from the first quarter while RILA sales gained momentum. Fixed annuity sales remain relatively modest as our pricing reflects our prudent investment approach. We remain focused on offering products and solutions that meet the long-term retirement needs of financial professionals and their clients. Our most recent enhancement to the Jackson Market Link Pro RILA suite reflects product innovations that have been embraced by the market. RILA sales reached $540 million in the quarter, up from the first quarter and still climbing. We set a record for RILA sales in the month of July and continue to benefit from our distribution strength as we grow in this space. Our increasing success in the RILA market has made a positive contribution to our distribution expansion and diversification strategy. We have added over 3,200 relationships with new or reengaged advisors since introducing this suite of products in October of 2021. This includes nearly 1,200 relationships in the second quarter alone, following the launch of our enhanced RILA suite in early June. We also benefit from a broader consumer demographic as the average age of a RILA policyholder is five years younger than our traditional variable annuity buyer. Overall, the awareness of annuities as a retirement solution continues to grow, and we saw increased evidence of this trend in the recently released Committee of Annuity Insurer Survey conducted by Gallup organization and Matthew Greenwald & Associates. 87% of individual annuity owners agree annuities are an effective way to save for retirement. These surveys not only heighten awareness of the value of annuities, they serve as a tool for key stakeholders in Washington when developing retirement-related legislation and regulatory policies. In July, our leadership was once again highlighted in Barron’s Annual 100 Best Annuities Guide. Jackson had four products featured across three categories this year, including our Elite Access Advisory II and Perspective II variable annuity products and our Jackson Market Link Pro RILA suite, which was highlighted three times as a leading product providing valuable market protections for policyholders. Overall, I remain pleased with our momentum towards our strategic and operational goals during the second quarter. We continue to maintain a strong balance sheet and remain committed to achieving our 2023 key financial targets. Our focus on product innovation led to the successful rollout of an enhanced RILA suite and an expanding distribution network. As a leader in the annuity industry, we will continue to serve financial professionals and their clients' needs for reliable retirement savings and protected income solutions, and remain steadfast in our commitment to sustainable growth and long-term value creation for all of our stakeholders. I'll now turn it over to Marcia to review our numbers for the quarter in greater detail.

Thank you, Laura. I will begin with our second quarter results summary on Slide 6. Our adjusted operating earnings of $283 million are up from this year's first quarter as the benefits of higher equity markets are coming through fee income, but earnings are down from the prior year's second quarter as described on the slide. Similarly, our second quarter adjusted book value attributable to common shareholders was up from the first quarter due to non-operating net hedging gains and healthy adjusted operating earnings. We have once again included additional general account investment portfolio details in the appendix of our earnings presentation that provide breakdowns on both US GAAP and statutory basis, excluding the assets reinsured to third parties or funds withheld assets. The information in the appendix provides helpful insight into our highly rated and diversified commercial mortgage loan office portfolio. As you can see, Jackson remains conservatively positioned with only 1% exposure to below investment grade securities on a statutory basis, excluding funds withheld assets. Slide 7 outlines the notable items included in adjusted operating earnings for the second quarter. Results from limited partnership investments, which report on a one-quarter lag, were $23 million lower in the current quarter than they would have been had returns matched our long-term expectations. Similarly, in the second quarter of 2022, limited partnership income was also modestly below the long-term expectation, creating a comparative pretax negative impact of $12 million. The current quarter also included a $25 million pretax allowance for reinsurance losses with no similar item in the prior year second quarter, bringing the total year-over-year comparative pretax impact to negative $37 million. In addition to the notable items, the second quarter of 2023 benefited from a lower effective tax rate compared to the prior year's quarter. Second quarter 2022 pretax operating earnings were higher than the current year quarter, meaning that in the case of tax benefits that were similar on a dollar basis in these two periods, the current period had a larger reduction to the effective tax rate. Adjusted for both the notable items and the tax rate difference, earnings per share were $3.54 for the current quarter compared to $4.52 in the prior year's second quarter. This reflects the previously flagged increase in VA fixed option crediting rates due to the regulatory minimum requirement, as well as the change in income from operating derivatives resulting from higher short-term interest rates. Once again, we saw positive sequential trends as the earnings per share, excluding notables in the first quarter of this year, was $3.18. Slide 8 illustrates the reconciliation of our first quarter pretax adjusted operating earnings of $305 million to pretax income attributable to Jackson Financial of $1.5 billion. Net income includes some changes in liability values under GAAP accounting that will not align with our hedging assets. We focus our hedging on the economics of the business as well as the statutory capital position and choose to accept the resulting GAAP non-operating volatility. For example, the market risk benefit or MRB calculations reflect the impact of interest rates from both the changes in the discounting of future cash flows, which we consider in our hedging, as well as the impact of rates on assumed future equity market returns, which we do not explicitly hedge. Because of this dynamic, movements in interest rates will have a larger MRB impact than the associated hedging assets. This means that when interest rates rise, you would expect the net hedge result to be a positive, and when interest rates decline you would expect it to be negative, all else being equal. As shown in the table, the total guaranteed benefits and hedging results or net hedge result was a gain of $1.1 billion in the second quarter. Starting from the left side of the waterfall chart, you see a robust guaranteed benefit fee stream of $781 million in the quarter, providing significant resources to support the hedging of our guarantees. These fees are calculated based on the benefit base rather than the account value, which provides stability to the guarantee fee stream, protecting our hedge budget when markets decline. Consistent with our practice, all guarantee fees are presented in non-operating income to align with the hedging and liability movements. There was a $1.9 billion loss on freestanding derivatives, primarily the result of losses on equity and interest rate hedges in the quarter where the S&P had total returns of nearly 9% and interest rates were up across the yield curve. Movements in net MRB liability provided a $2.6 billion gain that more than offset the freestanding derivative movements due in large part to these same equity market and interest rate increases. Unlike the statutory framework, the GAAP reserves for variable annuity benefits do not have a minimum requirement and can become negative, switching from a liability to an asset position. This happened during the second quarter as the strong economic profile of our in-force book led to a market risk benefit net asset of approximately $1.5 billion. Non-operating results also include $118 million of gains from business reinsured to third parties. This was primarily due to a loss on a funds withheld reinsurance treaty that includes an embedded derivative, as well as the related net investment income. These non-operating items, which can be volatile from period-to-period, are offset by changes in accumulated other comprehensive income or AOCI in the funds withheld account related to reinsurance, resulting in a minimal net impact on Jackson's adjusted book value. Furthermore, these items do not impact our statutory capital or free cash flow. Our segment results start on Slide 9 with Retail Annuities. Variable annuity sales are down industry wide compared to a year ago, but for Jackson, VA sales have stabilized over the past three quarters, and we remain an industry leader in that market. Our total annuity sales are supported by RILA, fixed and fixed index annuity sales, which are up meaningfully from the second quarter of 2022. Overall, sales without lifetime benefits as a percentage of our total retail sales increased to 43% in the second quarter of this year, up from 38% in the second quarter of last year. We expect this percentage to vary somewhat over time based on market conditions and consumer demand. When viewed through a net flow lens, the gross sales we are generating in RILA and other spread products translated to nearly $600 million of non-VA net flow in the second quarter of 2023. In addition to partially offsetting net outflows in variable annuities, these net flows provide valuable economic diversification and capital efficiency benefits. Importantly, our overall sales mix remains efficient from the standpoint of new business streams. Looking at pretax adjusted operating earnings for our retail annuity segment on Slide 10. Although we are down from the prior year's second quarter, we show positive underlying trends as demonstrated by the AUM growth in all of our annuity product categories. Higher equity markets are benefiting our variable annuity account value and strong net flows are driving growth in RILA, fixed and fixed index annuity account values. Furthermore, the positive momentum Laura mentioned for our enhanced RILA suite positions us well for the future as we enter the third quarter. Our other operating segments are shown on Slide 11. For our Institutional segment, sales for the first quarter totaled $304 million and account values were $8.9 billion. Sales outpaced surrenders in the current quarter, and pretax adjusted operating earnings were essentially flat from the prior year. Lastly, our Closed Life and Annuity Blocks segment was also relatively stable compared to the prior year. Under LDTI, we will now have some additional volatility in this segment due to the quarterly experience update for future policy benefits. While this figure can be positive or negative in any given quarter, we would expect it to net to a small number over time. You can see this in our financial supplement where the last five quarters ranged from a loss of $16 million to a gain of $36 million, and on a cumulative basis totaled to a gain of only $15 million. Slide 12 summarizes our second quarter capital position. As Laura mentioned, we returned $100 million to our shareholders in the second quarter and remain committed to reaching our full year capital return target of $450 million to $550 million. We were active in share buybacks during the second quarter, which totaled 1.4 million shares or $47 million. As of the end of the second quarter, we had $439 million remaining on our share repurchase authorization. Our variable annuity book continues to be in a very favorable position as measured by the projected cash flows of the blocks, which was further improved by the equity market and rate movements in the second quarter. As we've discussed in the past, this has led to a flooring out of statutory reserves at the cash surrender value minimum reserve, which can create an asymmetry between these reserves and hedging assets. We experienced flooring during the second quarter as equity markets and interest rates rose, which drove losses on hedges with minimal offset by reserves released. The strong future cash flows embedded in the books still remain, however, statutory rules limit the ability to reflect the full economic value in our current results due to the conservatism in the CSV floor. This flooring impact contrasts with the large reductions in our MRB liability in the quarter, which as discussed earlier flipped into an asset position as there is no minimum floor concept in GAAP accounting. In the quarter, we saw a further negative impact to TAC of approximately $400 million due to an increase in non-admitted deferred tax assets, which now total $2 billion. The RBC ratio benefited from a reduction in required capital or CAL that resulted from higher equity markets, higher interest rates and the sale of limited partnership assets from Jackson National Life Insurance Company to JFI. Earlier in the year, we decided to take actions to manage our limited partnership exposure down to a level more in line with our investment mix prior to our funds withheld reinsurance agreement. We have taken this approach multiple times in the past to manage our limited partnership exposure given the strong underlying returns and have been successful with the execution. We expect to sell these investments in the coming quarters. But given the excess liquidity at the holding company level, we utilized our financial flexibility by moving these investments out of JNLIC, allowing for more efficient investing at the operating company. Unlike previous quarters where the CSV floor effect was most impactful to reserves, as 2023 progressed, we began to materially experience flooring within our required capital level as well. As of the end of June, almost all of the 10,000 scenarios used in VM-21 were floored at the cash surrender value, which is further into the tail than we have ever experienced. This impacted statutory results because we increasingly had very little reserves or required capital to release. However, this also means that we were building latent capital, not just within TAC but in the RBC ratio as well. As of the end of the second quarter, we had a cushion for potential declines in equity markets and interest rates that limits the corresponding increases in reserves and required capital. This cushion, along with the significant downside protection from our hedge portfolio, positions us well for stress scenarios. As we discussed last quarter, when dealing with the CSV floor, we can protect the upside exposure in the book through call options. As markets continued to rise during the second quarter, these positions became increasingly more in the money, providing substantial payoffs to help protect our TAC and RBC ratio. This moneyness in the call option portfolio at the end of the second quarter gives us an improved RBC profile for further upside moves in equity markets during the second half of the year should they occur. During the second quarter, our hedge spend was within the guarantee fees collected. This continues to be a tailwind going into the third quarter due to higher levels of interest rates as well as lower levels of volatility compared to much of the first half of 2023. This has allowed us to purchase options at more favorable prices and with longer durations. Our holding company asset position at the end of the first quarter was nearly $1.5 billion, including nearly $1 billion of cash and highly liquid assets, which continues to be well in excess of our minimum buffer. This was supported by our preferred issuance during the first quarter that helped to effectively pre-fund our $600 million senior debt maturity coming in November, which we intend to retire at that time. Following that retirement, we have no debt maturities until 2027.

Thanks, Marcia. As noted, we have been highly engaged with our Michigan-based insurance regulator regarding statutory reserve and capital requirements related to the cash surrender value floor. We are seeking a long-term solution that will provide greater visibility into the profitability and strong cash flows of our variable annuity business. We look forward to continued progress and expect to provide you future updates. I continue to be proud of the Jackson team, the performance of our business and our balanced approach to capital management. Our recent recognition in Barron's and the positive reception to our recent RILA suite enhancements reflect this team's industry leading distribution, exceptional service and ongoing product innovation. These core capabilities allow us to meet the needs of our distribution partners and their clients and deliver value to all stakeholders. To our associates, thank you for your efforts and thank you for your unwavering dedication to helping people achieve financial freedom so they can live the lives they want in retirement. I'll now open it up for questions.

Our first question comes from Tom Gallagher from Evercore ISI. Tom, your line is now open, please proceed.

Good morning. First question just to follow-up on the go forward, if equity markets continue to strengthen, the mention that the call options being further in the money. Would you expect if we had a repeat of 2Q and 3Q stronger equity markets, et cetera, with the floored out reserves, that there wouldn't be much RBC decline, or would you still have some moderate level of RBC decline? Just considering what you are projecting.

I think we have gotten ourselves floored out so far into the tail that we kind of know there's less responsiveness in the reserves and required capital. So that has meant that the call options and that protection has been very helpful to us as we completed the second quarter and position ourselves for the third quarter. So I think that that's correct that if the equity market continues to climb we do have that call protection in place to help protect our RBC position as we go forward.

I have a follow-up question regarding your discussions with the Michigan regulator. Can you share what your goals are? I understand this might involve some negotiation. I see the positive GAAP reserves indicating a net asset of several billion, and you mentioned a non-admitted asset in a deferred tax asset valued at around 2 billion. Is your goal to have all that added back to TAC? If that happens, I would expect your RBC could potentially double. What do you consider a realistic outcome, and what are you trying to achieve? Are you looking to fully align the economics to make reserve movements resemble GAAP more closely, or do you anticipate something less than that?

Tom, our aim is to find a solution that enhances the alignment between the fluctuations in our liabilities and assets. The primary reason for this is to achieve two key benefits moving forward. First, it will enable us to focus our hedging more on economic risks, reducing the need for non-economic hedging related to the statutory framework, specifically the cash surrender value floor. This improvement presents an opportunity for more efficient hedging, allowing us to use fewer resources for that purpose. The second benefit is that we want to ensure the economics of our business are more accurately recognized and reflected in our financial results. This clarity will help external stakeholders better understand the reasons behind our performance and its changes. Our goal is to eliminate the artificial floor in reserves that complicates our results and necessitates non-economic hedging expenditures.

And one more if I could slip it in. When would you expect to have this resolved one way or the other? Do you think it would be by the end of this year, by the time you file your staff filings for 2023?

At this point, we are particularly focused on long-term solutions. Even though we are engaged with the regulator, there is a process we need to navigate. Therefore, we don’t have anything definitive to share at this time. We are continuing to work toward that long-term solution and look forward to providing future updates and additional disclosures.

Our next question comes from Ryan Krueger from Stifel. Ryan, your line is now open, please proceed.

My first question is, can you quantify the impact if there was no requirement for the variable annuity reserve to be set at the cash surrender value? Specifically, how much higher would your capital be or how much lower would your reserves be without that requirement?

It's a bit complex because the impact on the cash value floor affects both the reserves and the required capital. Without any floor, there would certainly be a significantly lower reserve requirement, but this would also lead to a higher increase in required capital. Currently, the floor affects both the numerator and denominator. To provide some context, our reserve for benefits under GAAP, specifically the MRB liability, is currently in an asset position of about $1.7 billion. This gives an idea of the reserves related to benefits on a more economically responsive accounting basis. Additionally, the cash value floor for SAT is based on full policy calculations and riders, making it not a direct apples-to-apples comparison with the guaranteed benefit reserve under GAAP. However, it does give a general sense of the magnitude that would be significant.

And then on the alternative asset sale to the holding company. Do you have any expectation on the timing of now selling those assets to third parties, and I guess, has already been a process that's underway to do so?

The process has begun and our expectation is that we would have that sale before the end of the year.

Our next question comes from Suneet Kamath from Jefferies. Suneet, your line is now open, please go ahead.

Could you help us with the quarter-over-quarter decline in required capital? I'm just curious, like, how much of it was driven by the equity markets being higher versus how much of it was driven by the lower capital requirements on the LP sale? And maybe relatedly, if you hadn't done the LP sale, would you have still been in that sort of 425% to 500% RBC?

So maybe start with the second one first. Without the LP sale, we would estimate our RBC would have been approximately at the lower end of the range. But when we look at the movement in the CAL over the order, the majority of it, significant majority of it, was due to market conditions, the strong equity performance and move up in interest rates. And a much smaller piece would have been the component related to the LP sale.

And then, I guess on the Michigan thing. Can you give us a sense for how long you've been talking to them about this issue? Is this something that you've started this year, or has it been sort of an ongoing conversation? Just any color there would be helpful.

We've been looking at the issue itself and considering options for quite a while. So that was something that began in the latter part of last year for our own internal analysis. The discussions with our regulator have been this year. We did some of our own work first to kind of bring forward just the results of that so we could begin the conversation with some context for them. But the conversations with the regulators have been more this year and are ongoing.

And then maybe just a bigger picture question. When we talk about RBC, you have this really wide range, which is I think wider than most companies, even VA companies use. And we're always trying to estimate kind of where you land within that range. And in some ways it feels like there's some reluctance on your part to be more specific or provide more specificity on the components of RBC, even though we get a lot of that information from your peers. And so I just maybe wanted to understand why you take the approach that you've taken? Clearly, it has an impact on the stock, it's very important. I think some additional specificity would be helpful. I wanted to just get your logic behind that.

I think this is connected to your initial point. The wider range we've established is meant to accommodate the likely volatility we experience on a quarter-to-quarter basis. We've set this range to absorb that volatility while keeping us comfortable within it. Acknowledging that there is quarterly volatility in the RBC, we're focusing on the long-term outlook for the business, its fundamentals, economic future, and cash flows. Some of the fluctuations we see each quarter are influenced by unique elements in the regulatory framework. We believe that concentrating too much on the detailed movements can overshadow the larger fundamental messages. Therefore, we felt it was appropriate to communicate it in a broader sense externally.

I mean, for what it's worth, I would encourage you to maybe think about providing a little bit more specificity. I think the long-term view makes sense a hundred percent, but my guess is most companies have the same view of the business. But just more color, sensitivities, that kind of thing I think would be very helpful.

Thanks. Appreciate the feedback.

Our next question comes from Alex Scott from Goldman Sachs. Alex, your line is now open, please go ahead.

My first question is regarding the RBC and your comments on CTE-98. It seems that even in the most adverse scenarios, you are still limited to the surrender value, which is surprising since those scenarios are supposed to be the worst 2%. I would expect that such an outcome would give the guarantee some value beyond just the surrender value of the policies. Additionally, I've heard that the NAIC is considering changes to the model that creates these scenarios and that some field testing has been conducted. I’m curious if you have participated in that testing and whether you believe the situation will remain the same under a new model that might introduce more rate volatility. It sounds like you’re indicating that you currently do not have much capital allocated to the VAs, as none of the scenarios seem to push you beyond the surrender floor.

Let's revisit what you mentioned earlier. You are correct about the trends we observed in the second quarter, particularly regarding the ongoing rise in interest rates and equities. This combination reflects a favorable market condition that we haven't experienced in quite the same way since the introduction of VM-21. Last year, when rates increased, equities decreased, which was counterproductive. Given the current environment, it's reasonable to expect that the flooring will extend further into the distribution tail. You are right that most of our full 10,000 scenario sets are now floored, impacting not just reserves but extending significantly into the required capital CTE-98 tail. In contrast, under GAAP, which uses a different methodology, we find ourselves in an asset position. It makes sense that if we extend the flooring under statutory accounting, we would theoretically observe reductions in liability requirements akin to those in GAAP. However, that doesn't align with the cash value floor, and you correctly noted that there's not much required capital tied to it. Conversely, we are maintaining significantly higher reserves, as our reserves are held at cash surrender value, exceeding what would be indicated by a cash value-based framework focused solely on cash flow projections in the context of tail scenarios. Regarding the NAIC's work on the scenario generator, we are actively involved and have participated in all aspects of the NAIC’s VA reform efforts, including field studies and industry group engagements. We are closely monitoring developments, although it's currently uncertain what the final changes will entail. It's clear that there may be a shift towards more lower rate scenarios in response to historical low-rate environments, but this is still evolving, making it premature to assess potential impacts or predict what the final outcomes will look like.

I would like to shift focus from the RBC dynamics and accounting to your economic view on cash projections, which has notably improved due to higher equity and interest rates. This is information we haven't had since your company became a standalone public entity. Could you provide more details on this? Understanding the current situation would help us assess the true economics and ultimately value the company more accurately, despite the complexities related to RBC surrender floors.

The disclosures that we put out initially and in our Form 10, the primary one I think that folks ask about is the five-year projection of distributable cash flows. Of course that is in a statutory framework, so it would reflect any of the limitations or unique aspects of statutory accounting in that. So what we've been looking at is, while we definitely want to provide as much insight and help others get the greatest amount of insight into the business, we do think that the best time to update those will be just after we get our solution in place with respect to the cash value floor. So we have a clearer picture of how we think capital will emerge as we move forward under that solution. I think that'll be a lot more meaningful and it'll be a good opportunity to refresh that information.

Thank you. There are no further questions on the line, so I would now like to hand back to Laura Prieskorn for any closing comments.

Thank you. Your participation and interest are appreciated. We thank you for joining us this morning. Take care.

That concludes today's conference for everybody. Thank you very much for joining. You may now disconnect your lines. Have a lovely rest of the day.