Kevin Hogan: Sure. Thanks, Ryan. This is a great transaction for Corebridge and for Corebridge shareholders. We identified sort of early on as part of our regular review of opportunities that because it is an MGA, this could be a relatively straightforward transaction. And the way that we execute it, I think, demonstrates that and has unlocked significant value. And our focus continues to be on executing on all the aspects of our strategy to deliver our financial targets and to have the financial flexibility to achieve that 60% to 65% payout ratio in 2024, and I think we’ve demonstrated a lot of discipline. And as Elias mentioned, when we have excess capital beyond our plan, then that is where we take additional action. At every step, we will evaluate the options that make the most sense and how we return capital to shareholders and consultation with our Board and also taking into consideration AIG’s plans.
And so a special dividend is one means of returning capital to shareholders, and this position so far has been taken in consultation with our board.
Operator: The next question comes from Brian Meredith with UBS.
Brian Meredith: A couple of them quick here. First one, I’m just curious, Kevin, what other potential strategic actions other you talked about U.K. Life, you’ve got Laya Health being sold. Is there anything else in that portfolio that you potentially see strategic opportunities here going forward? Or is that kind of it?
Kevin Hogan: Yes. Thanks, Brian. Look, we regularly review our portfolio, and we’re always looking for opportunities to unlock further value for our shareholders. And going back to the creation of Fortitude Re, frankly, I think we’ve demonstrated both our willingness and our capability to execute at large scale. And we’re very pleased with the sale of Laya another example as to where we can unlock value. And our next focus is going to be U.K. Life. It’s another very attractive platform. The management team has done a great job, and I think that there’s a lot of interest already been expressed in the market for it. Our focus is on the large U.S. Life and retirement market. It’s the largest and fastest growing market relative to where our strategy is.
And we have important strategic advantages in the U.S., including scale as well as the support of important macro trends. But we always will look for opportunities to optimize the portfolio. Right now, our focus is on the transactions in hand and unlocking as much value in the sale of U.K. Life as we can.
Brian Meredith: Great. And then second question, I’m just curious, given where new money yields are right now, I’m just curious, what could we see base spreads doing here in individual over the next, call it, 6 to 12 months? How should we think about the expansion there? And then on top of that, is there a limit to how much you think base spreads can actually go to?
Kevin Hogan: So the – where the spreads are going to be is obviously going to be dependent on where interest rates and credit spreads are, and we’ve proven that we can deliver an improvement in spreads. I mean our Individual Retirement business is up 10 basis points sequentially and 81 basis points year-over-year. And Group is up 3 sequentially and 23 year-over-year. Will spreads continue to widen? We believe they will, but maybe not at the pace at which they have widened so far. And it really does depend on what the future environment is. I mean if rates stay about where they are, then those would flatten out. If rates continue to increase or credit spreads widen, we can see further improvement. But I believe the most important thing is that where the spreads are right now.
They are very economically attractive. This new business that we’re writing at these spreads are extremely attractive, and we’re comfortable at this level. And even if rates were to go the other direction, we have the opportunity to respond. We’ve locked in the yields on the business we’ve written so far. And historically, we’ve proven the ability to be successful in almost any macro environment.
Operator: The next question comes from John Barnidge with Piper Sandler.
John Barnidge: You talked about being in the U.S. markets, principally. As it relates to the Institutional Markets business, would pension risk transfer be limited to the U.S. markets? Or could that be global in nature?
Kevin Hogan: Yes. Thanks, John. I mean we consider the pension risk transfer business global in nature but leveraging our U.S. balance sheet, which gives us the opportunity for not only strength but further diversification. And our focus since 2016 has been on full plan terminations. And the market in the U.K. is a comparable size to the U.S. In many ways, it’s a little bit more mature. And so we’ve established a position for ourselves as a reinsurer of U.K. transactions as well as the U.S. Those are the 2 biggest markets in the world. But to the extent we were able to identify additional opportunities that make sense for us to participate in, then we would explore those. I have to say the pipeline in the U.S. and the U.K. remain very strong.
And from the outset, we believe that there is upside for us in the pension risk transfer part of the Institutional business alongside GICs. We’ve also said from the beginning that we have the opportunity to be a more regular issue of GICs as a separate and independent company. So we feel great about our position with the Institutional Markets business.
John Barnidge: My follow-up question, if I may. Can you talk about your visibility into recovery of variable investment income?
