Michel Khalaf: Thanks. I would say from a top line perspective, we’re still seeing significant strength across the portfolio. So we’re very pleased with our PFO growth. And that’s a combination of new customers. It’s a combination of good persistency, rate actions for a portion of our portfolio. We’ve got some tailwinds in terms of wage growth. So we’re still seeing very strong momentum there. As Michelle alluded to, we’re still seeing double digit growth in our voluntary portfolio. And with a lot of white space, both in terms of customers who don’t offer voluntary as well as increasing opportunities to increase penetration within the work site as well. And then I would also just point to the below 5,000 space, which we define as our regional market.
National is above 5,000. That is emerging as a particularly bright spot for us. Our PFO growth there is high single digits. We do a fair bit of internal research where we cut the data by market segment. And when you look at that data below 5,000, we’re a top three player in that segment, and we’re continuing to take share in the fragmented market. So all in all, we’re still seeing really positive tailwinds both from the macro environment as well as how we’re positioned in this business that’s driving PFO growth. That’s kind of well within the 4% to 6% range that we have.
Michael Ward: Thanks, guys.
Operator: And next we go to a question from Alexander Scott with Goldman Sachs. Please go ahead.
Alexander Scott: Hi. First one is a little bit of a housekeeping question. I was just interested in the corporate expense load. It looks a little bit elevated. I know some of that. I know some of that is just part of VII, but even other expenses a bit elevated. So I just wanted to get a feel for if there’s anything nuanced going on there in the investment in the business or something we need to be aware of and just confidence around the 650 to 750 annualized number heading in the back half and into next year.
John McCallion: Good morning, Alex. It’s John. As you point out a couple things. One, obviously, VII being below the kind of historical returns puts pressure on C&O as well. So that’s probably one driver to maybe the elevated loss that you’re referencing. We did have higher expenses in C&O. Obviously, our direct expense ratio came in well. Overall expenses would were very good along with strong top line growth. So our ratio at 12.2 was well below the 12.6. We’re still obviously targeting below the 12.6 for full year and it can fluctuate from quarter to quarter, but a good quarter nonetheless. In terms of the expenses, if you kind of compare to last year, I’d say probably two main things to highlight. One, interest on debt. It was one item year-over-year.
That’s a relatively big piece of that. And then the second one is we did have some higher one-time costs in C&O this quarter due to some corporate initiatives. I’ll call it that, it was part of just kind of our general efficiency mindset. We don’t ever exclude those things. Those are all part of our direct expense ratio, but their investments that we’ve made to kind of improve our run rate go forward. So hopefully that helps with C&O.
Alexander Scott: Yes, that is helpful. The second one I had for you is just on the pitch downgrade of U.S. debt. I think having two out of three below AAA now probably moves the you know, the composite rating and so maybe that would affect risk rates and yes, it seems like it should be reasonably limited, but just wanted to get your thoughts on, we should expect any material impact RBC from that and, if it affects anything else in your business?
John McCallion: Hey Alex, it’s John. Obviously, very recent news. I’m not so sure I saw a ton of reaction yesterday on it and nor do we really think that it has a broad-based impact on, how we run our business or we wouldn’t expect capital impacts, but I guess you never know, but right now, we wouldn’t expect any impact one way or the other in terms of our, how we run our investment portfolio and our outlooks there. It doesn’t change anything.
Alexander Scott: Got it. Thank you.
Operator: And ladies and gentlemen, for final remarks, I’d like to turn the call back to MetLife’s Global Head of Investor Relations, John Hall.
John Hall: Well, thank you everybody for joining us and you know where to find us with any follow-up questions. Thanks very much and have a good day.
Operator: Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T teleconference. You may now disconnect.
