Jimmy Bhullar: And on spread, your spread both an individual and group retirement are at very good levels already. With rates going up even more, should we assume that spread will improve further or – because of competition or whatever, they’ll – I’m assuming they’ll be stable at the very least, but are you assuming further improvement in spreads or is competition taking over to where more of the increase is going to fall to the crediting rate?
Elias Habayeb: Hey, Jimmy, it’s Elias. So on base spread income, we expect our income to continue to grow from here, given what we’re seeing in our outlook. With respect to base spreads, base spreads are already at the very attractive level. There’s still room for them to continue to expand more from where we’re here, but we’re expecting at some stage you’re going to taper off. And as you’ve seen, the trajectory of improvement has slowed down, but it’s still at very attractive levels.
Jimmy Bhullar: Okay. And is competition in the fixed and index annuity markets with rates going up, would you characterize that as being rational or are you seeing a pickup in competition?
Kevin Hogan: For the distribution channels that we work with, the way I would define is the rationality of competition is what we’re seeing as margins on new business and we continue to see very attractive margins on the new business.
Jimmy Bhullar: Thank you.
Kevin Hogan: Just as a reminder folks, one question and one follow-up please.
Operator: Thank you. Our next question comes from Ryan Krueger of KBW. Ryan, your line is open. Please go ahead.
Ryan Krueger: Hey, thanks. Good morning. Many of your competitors in the annuity space as well as an increasing amount in the institutional market space utilize Bermuda for increased capital efficiency. Is that something that you would consider at Corebridge on a go-forward basis?
Kevin Hogan: So we’re very familiar with the Bermuda environment. I point to the creation of Fortitude Re, which we engaged in a number of years ago. That was a transaction really specifically designed to access the best benefit of the environment there and it’s long been an element of our operating strategy as part of AIG. So we do have a Bermuda entity. We are familiar with it. And one of the options that we’re evaluating amongst many others in terms of where are the next opportunities to create value or optimize the portfolio would include potential offshore solutions.
Ryan Krueger: Great. And then I think, Elias, you mentioned some seasonality in the fourth quarter expenses. Can you give any color on the magnitude there?
Elias Habayeb: So there’s a couple of drivers that impact our expenses fourth quarter. We do have some seasonality around some of our IT-related spend. That’s maybe $10 million, $15 million. And then obviously year-end, there’s always the bonus accrual true-ups depending where we end the year.
Ryan Krueger: Thank you.
Kevin Hogan: Thank you.
Operator: Our next question comes from Mike Ward of Citi. Mike, your line is open. Please go ahead.
Michael Ward: Thanks, guys. Good morning. Maybe just expanding on the questions around third-party risk transfer. I think flow reinsurance historically has been focused more on the fixed annuity side for new business at least, rather than variable. So just wondering if there’s like a specific product line that you might be considering more than others.
Kevin Hogan: We’re always looking for opportunities to optimize the whole portfolio. We’re not going to talk about any particular product plan.
Michael Ward: Okay. And then on institutional retirement, pension deal activity was kind of muted. So just curious if you could sort of comment on that slowdown from a sponsor’s perspective and how they’re feeling about the market.
Kevin Hogan: Yes. Thanks, Mike. Look, these are very large complex transactions and it is unpredictable when a particular program is going to land. You think of them as miniature M&A transactions because a great deal of work has to be done on the sponsor’s side of assembling the asset portfolio and understanding the asset portfolio and then working with a consultant understanding the liability portfolio. And I wouldn’t read anything into the relatively modest activity in the third quarter because the pipeline for transactions is – continues to grow and is very strong. And our focus, I’ll remind you, is on full plan terminations. Historically, we have not really participated in the commodity, or retiree, longevity type deals.
