Fred Crawford: Why don’t I just make a couple of comments on that, and then Koide-san can comment. But what we are focused on in Japan from an efficiency perspective is digitizing the platform. That’s the major thrust of what we’re looking at, which is a long-term plan of investment followed by returns. And that is a plan to digitize or increase the usage of digital applications away from paper applications, the use of digital self-service where policyholders go online and serve themselves through technology as opposed to inundating our call center and then claims payments or digital claims. We’ve been making steady progress on both the digital application front and on the customer self-service, but we are engaged currently in updating those tools.
Think of it as no different than your iPhone 1 to iPhone 11. We are updating those tools to modernize them and improve the customer experience. We have been in a proof of concept over the last year and, in fact, have moved those digital adoption rates up. And so with that will come natural efficiencies over time but it will take time. So it’s a long-term progress of moving customer and agent experience to digital and away from paper, but that will yield benefits. The claims side of it is more stubborn. And the reason for that has nothing to do with Aflac. It’s because the Japanese healthcare system is a paper-based healthcare system that requires the exchange of paper forms when one goes to the doctor. That’s really requiring a modernization of the healthcare system in Japan.
And interestingly, they actually do have an effort underway to attempt to modernize or digitize the healthcare system. But until that takes place, our ability to process claims digitally will be somewhat contained. But over time, we expect to improve. So what you should expect as investors is that over the long time, we will be increasing that digital adoption. It will yield a lower per-policy expense outcome from an administrative standpoint, but it will be over multiple years of slow and steady progress because this is about adoption, it’s not about installing software, okay?
John Barnidge: Very helpful. Thank you very much. And then on the investment portfolio, those properties you took keys, can you maybe talk about the occupancy rates in those versus the ones that remain on the watch list? Thanks a lot.
Brad Dyslin: Sure, thank you. The two properties that we took back, the current occupancy levels are in the low to mid-50s, which has been pretty stable since we first got involved and did the loan. The occupancy across the portfolio, it does range a fair amount. We’ve got a few that are below 50%, given the nature of the asset class, the nature of transitional real estate. But for the most part, our averages are right around the 55% to 65%.
John Barnidge: Thank you very much.
Operator: Our next question will come from Wilma Burdis with Raymond James. You may now go ahead. Pardon me, Wilma, your line is open for question.
Wilma Burdis: Thank you. Good morning. Is it fair to think that Aflac can rewrite its hospital indemnity policies to comply with the potential DOL-HHS rule without compromising the attractiveness of the product? And has Aflac started to work on this? If so, does the burden appear manageable?
Virgil Miller: This is Virgil from the US. We absolutely are taking precautions to make sure that we prepare just in case the proposal does go through, and we are confident that we can do that. We’ve been continuing to enhance our benefits while current policies are out there. I think Dan stated earlier, we were clear that we’ve sold before in an environment without some of the pretax benefits that currently exist, and we’re confident we’ll be able to do that again. We have a random process here that we are always looking to innovate and reinvent our products and enhance our benefits. We demonstrated that this past year with our cancer enhancements we did that really had no additional cost to our policyholders. So you can expect more of the same related to that.
