Frank Svoboda: So I would say, well, both of those, with respect to the stress testing, no real material change to our thoughts around that. We’ve – we have updated that. We always do kind of a bottom-up approach with respect to what we think potential downgrades would be. Overall, we feel really good about where the portfolio is. We’ve had seven straight quarters of net upgrades in the portfolio, and we’ve positioned it pretty well to where, of course, we have potentials for downgrades and would expect if in fact, there’s some economic downturns, some downgrades and at least the potential for some defaults. But right now in our base case for 2024, we don’t anticipate any defaults with respect to that. Now, if we have any anticipate that there could be some overall net downgrades, but those would be in our expectations around capital and capital requirements and feel comfortable with our ability to manage that.
It doesn’t really have an impact, if you will on the earnings guidance for 2024.
Suneet Kamath: Got it. Okay. And then just you may have mentioned this, and I may have missed it. What are you assuming for just interest rates for next year? Obviously, you have a investment income assumption built into your guidance, but are you assuming kind of current forward curve or what sort of if you could just unpack that a little bit?
Frank Svoboda: Yes. For 2024, we basically take a look at the Bloomberg survey of economists and where they are projecting both bench and overall index rates for, we tend to look at that BBB, BBB+, kind of space, if you will, and around looking at 30-year figure that our overall maturities are probably in that 25 to 30-year range. We do see that. They generally are predicting it to decrease over the course of 2024. Most of that, in the second half of the year and on average, we are anticipating our expectation on average about 5.7% for the year.
Suneet Kamath: That’s your new money rate?
Frank Svoboda: Yes.
Suneet Kamath: Yes. Got it. And then just one last one if I could. Just given the strong recruiting that you guys have done, do you have a rule of thumb around what percentage of life sales and then health sales come from new recruits? I think you may have said that in the past, but I just wanted to ask.
Matt Darden: Yes. It’s a significant portion. It depends on there’s fluctuations in this, so you’re right. It’s kind of a rule of thumb, but it can generally be 30% or 40% or more of our new sales come from those agents that have been recruited in the first year. And if you remember, our business model is recruit agents, and then they start moving into those middle management ranks, and then their time is split between sales and recruiting, training, and onboarding new agents. And so that’s why a lot of our sales are driven from those first year agents because the middle management count or that middle management growth is driving more of activity around recruiting, training, and development of those new agents.
Suneet Kamath: Got it. Okay. Thank you.
Operator: There are no further questions. So I’ll hand you back to Stephen Mota to conclude today’s conference.
Stephen Mota: All right. Thank you for joining us this morning. Those are our comments, and we will talk to you again next quarter.
Operator: Thank you for joining today’s call. You may now disconnect your lines. Hosts, please stay connected and await further instructions.
