John Barnidge: Yes, correct. Thank you.
Tom Kalmbach: Yes. So, for 2023, for the — we expect a little bit higher COVID deaths in the first quarter than we would for the third — second, third and fourth quarter. So that’s — we do kind of think that will be front-loaded a little bit during the course of ’23.
John Barnidge: Great. Thank you.
Operator: Thank you very much, sir. Next question will come from Mr. Andrew Kligerman calling from Credit Suisse. Please go ahead, sir. Your line is open.
Andrew Kligerman: Good morning. First question is around American Income. And completely understand kind of 2023 being kind of a digestion period of having 10,000 producers. As you go into this new incentive strategy, just different initiatives, do you think in 2024, and I know it’s early for guidance, but is there a reason to believe you’ll kind of get back on track to that kind of mid-single-digit producer growth, maybe mid-upper single-digit sales growth? I mean, is there any reason to believe you can’t get there in ’24 that maybe it will take longer?
Matt Darden: No, that’s a great question as we do believe we can get back there. As a reminder, agent count and average agent count for the quarters is a leading indicator, and it takes time to get these new agents onboarded, trained and producing. And then, obviously, the longer they’ve been here, the more effective they are from a production perspective. And so, that’s why you’ll see in our guidance as we have growth projected on the agent count side, but the sales are lagging that a little bit and more toward flat. We do believe that we can get to middle management growth in 2023 that will drive that longer term growth in — on the sales side in ’24. We also anticipate opening three to five offices in American Income over this next year, and that too will set us up for good growth in 2024.
And I also wanted to just clarify, when we talk about compensation adjustments, there’s two primary components to the compensation for agents. One is just the base commission on sales. And then, we also have incentive-based compensation that’s targeted at specific behavior. And we do that throughout our history. So, when we talk about changing the compensation we’re really not changing the total amount of compensation that is in our overall pricing and profitability targets, but really, we’re targeting two specific activities and behavior that we’re trying to influence. So, I just wanted to clarify that overall, our compensation and acquisition costs are going to be consistent with what we’ve experienced in the past.
Andrew Kligerman: Super helpful. Shifting over to the health lines, particularly United American with sales down 25%, and I think that was due to pressures not only in MedSup, but also like Med Advantage gaining share. We look at a number of companies, the online players, some of them are subs of the other insurers we cover. And many of them seem to be pulling back in that kind of online Medicare Advantage product. And so, as I look at United American down in the agency channel, I’m wondering, a, where is the competition coming from? And — yes, I guess, it’s just where is the competition coming from as I kind of think the players seem to be getting more disciplined?
Matt Darden: Yes. I’ll say what we saw throughout 2022 was just more aggressive pricing by certain competitors. And we’re focused on maintaining our profitability targets and underwriting margins in this area, and we’re really not going to chase the sales, so to speak. But — and we are also seeing and experiencing a movement toward Medicare Advantage plans as well. I’ll say that we’ve been in this business since the program started, and we’ve seen these market dynamics happen over time. And so, we anticipate that some of that will abate as we move forward. But Mike, do you want to add anything to that? You’ve been running this area for quite some time.
