Sabra Purtill: Yes, happy to do that. And I would just note, we added a new footnote on Page 47 of the financial supplement that gives you the walk of the yield on fixed maturity securities and loans. So you can see the quarter-to-quarter improvement in the portfolio yield on that portfolio, which basically begin to bend the curve in the second quarter for a step-up in yields. And we also, there, give you the impact of the other yield enhancements, which year-over-year was about a $400 million headwind for AIG consolidated NII. But to go back to your question about the path forward, and I’ll put alternatives to the side. I mean, those are obviously volatile quarter-to-quarter. But like I said, that was 340 basis points of headwind year-over-year.
2021 was an exceptional year for alternative returns, whereas full year 2022 was about a 5.6% yield. So more in line with our average assumption. But to go back, so in the quarter, as I said the new portfolio yield or the new money rates were just above 6% and about 173 basis points over the assets going forward. And if you look at in the quarter, fourth quarter 2022 grew about $160 million just due to the rate resets and about 14 basis points from the pickup in yield on the portfolio. Now in 2023, the impact is going to really depend on the path and timing of market rates, fed rate hikes, changes in credit spreads as well as the movement in the yield curve. As the GI has got a shorter duration than L&R, and right now we’ve got an inverted curve.
So depending on where you’re investing, and you’re going to have different impacts on your yield. So what I would just kind of point you to is, for the full year, we are projecting about $8 billion of reinvestment on the GI portfolio, $20 billion in Corebridge. And for the first quarter, we’re projecting about 10 basis points to 15 basis points of yield uplift just based on where we are for rates. Since the market is expecting additional rate increases, I would €“ from the Fed, I would expect to see more pickup from the floating rate note resets during the course of the year. And then like I said, really what we pick up in the second or third quarter is going to be a function of how the shape of the yield curve changes. But the point I would just make in total is that we are definitely having a tailwind from higher rates and higher spreads in the market.
In addition, during the last several months, because of the €“ basically the changes in the spreads and where some of the opportunities were, we were able to move up in quality on the bond portfolio investments while still getting a pickup in the yield because of the market environment. So at this point in time, I think it’s premature to give any sort of actual projection on a dollar basis. But from a yield pickup trend we’re very confident that we’ll continue to see that during 2023.
Peter Zaffino: Thanks Sabra.
Erik Bass: Thank you. That’s helpful. And then secondly, I just was hoping you could help us think about the trajectory for the other operations loss spoke before and after the Corebridge separation. So it sounds like GOE there should go up in 2023 because of some of the Corebridge expenses, maybe that’s offset a little bit by interest savings. But then you’ll get a big step down when you deconsolidate Corebridge when the $300 million comes out. Is that the right way to think about it?
