So we – obviously, in the past, we’ve spent quite a bit of time on XVII. We’re happy to give that number, but we’re really looking at the total spread all in now and as you think about the reemergence of VII.
Jimmy Bhullar: Okay. And then for Ramy, on margins and Group Benefits, I think group life margin, you had assumed that they’d be weak in 1Q because of seasonality. Dental claims picked up as well and do you attribute most of that to seasonality as well? Or are you seeing just higher incidents for some reason?
Ramy Tadros: Hi. Jimmy, it’s basically seasonality story. As you know, with dental claims, the benefits reset at the end of the calendar year. So come January you just get to see more utilization as the claims reset. And therefore, that’s just a seasonally higher ratio. If you look at our overall non-medical health ratio, this first quarter seasonality is baked into our guidance ranges. I remind you, these are annual ranges, and our expectations are at this point, that will be well within our range, 69% to 74% for the full year. And I would also remind you that we did lower that range by 1 point earlier this year. So very much a seasonality story and feel very good about being within that range for the full year.
Jimmy Bhullar: Okay. Thanks.
Operator: And next, we move to Tom Gallagher with Evercore ISI. Please go ahead.
Tom Gallagher: Good morning. Just a few follow-ups to Jimmy’s questions. John, if I followed your math that would suggest about 20 basis points of lower base spreads for RIS versus Q1 level if I look at towards the end of 2024. Is that directionally right?
John McCallion: Yes, 8% to 10%, you took the top end of that range, but sure it’s close, so 16% to 20%.
Tom Gallagher: Okay. 16% to 20%?
John McCallion: Yes.
Tom Gallagher: Okay. And then for – and Ramy, for Group Benefits, I just want to make sure I have the right expectation here. The – if I look at last year, and I look at the last three quarters of the year, I think earnings averaged around $450 million, that’s probably $170 million, $180 million above what you did in Q1 this year. So is it fair to say you still expect to grow above the $450 million earnings level for the next three quarters. In other words, it was just worse seasonality this year? And then is it – and said another way, it sounds like dental utilization was quite high. You fully expect to recover and see a big earnings snapback in dental for the balance of the year? Thanks.
Ramy Tadros: Hey, Tom. I mean, the way you can triangulate to an earnings number is take our top line and our guidance ratio. So from a top line perspective, we’re still very much within the 4% to 6% range. We got a 6% PFO growth this year – this quarter, but think of that ratio being close to the midpoint of the range for the full year. And for sure, think of both non-medical health which includes dental moderating for the full year. So think of that going towards the midpoint of the range, and think of the same thing happening with the life underwriting ratio; so very much a seasonality story for this quarter. Remember, as Michel alluded in his remarks, that seasonality was kind of masked in the last few years with COVID and different behaviors on the dental side and clearly on the mortality side in terms of what we’ve seen.
And that’s just now returning to a more regular pattern, if you will. So I hope that helps you think through the guidance growth, both given the top line number that I’ve articulated as well as the midpoint of these ratios for the full year?
Tom Gallagher: That does, and if I could just sneak in one other follow-up. So dental utilization, you would fully expect that to be far lower in 2Q than 1Q? Or is there going to be some tail on that where you might see some level of higher utilization and lower earnings into 2Q as well, would you say?
Ramy Tadros: I mean Q3 tends to be the lightest. So you’d expect it to come down in the second quarter. Q3 will be a lot lighter. So there’s going to be always – there will be a decrease whether it’s going to happen as a sharp cliff in Q2 and then another one in Q3 or different patent, it’s hard to predict. But again, think of it as a full year range and think of that ratio coming to the midpoint for the full year.
Tom Gallagher: Okay. Thanks.
John McCallion: And Tom, maybe I’ll just add a follow-up again on your first question. I mean, I think also just you only focused on XVII, but as I said, I think what’s really important is that we think of the all-in spread here, and that’s, all of that is very much in line with what we gave in the outlook for the midpoint of the range.
Tom Gallagher: Okay. Thanks.
Operator: Next, we move on to Brian Meredith with UBS. Please go ahead.
Justin Tucker: Hi. This is Justin Tucker on for Brian. Thanks for taking my call. My first question is about RIS, when looking at the structured settlement results could you kind of help us understand how much of the demand is driven by the favorable interest rate environment? And then how much of it is driven by the courts opening and social inflation? And then furthermore, just curious about the sensitivity to those factors, if interest rates do decrease, do you think that has a bigger impact on structured settlement demand versus a dampening of social inflation? Thank you.
Ramy Tadros: Hi. It’s Ramy here. I mean, I would say interest rates is the primary driver of this. You have seen coming out of the pandemic call it, pent-up demand with the courts being closed and some of that clearly kind of caused an increase in volumes earlier on. That’s now stabilized, and it’s very much an interest rate-driven volume increases. And you do have given court settlements have increased. You do have some social inflation component, but I would say interest rates is the primary one. We are a major player in this market. The market has grown substantially over the last few years, and we have maintained a pretty good share in that market. And it’s a very specialized market in terms of the distribution channel, the underwriting, et cetera. And we’re extremely pleased both with the volume, but as importantly with the ROEs and the returns we’re able to achieve in this market.
Justin Tucker: Great. Thank you. And then my follow-up question is just on Latin America. Sales were flat year-over-year. I’m just kind of curious about what you’re seeing in the overall market for demand and what you expect with sales going forward?
