In addition, we have repurchased shares holding approximately $250 million in October. For our US companies preliminary third quarter year-to-date 2023 statutory operating earnings were approximately $3.1 billion, while net income was approximately $2.1 billion. Statutory operating earnings increased by approximately $1.6 billion year-over-year, primarily driven by favorable underwriting partially offset by higher expenses. We estimate that our total US statutory adjusted capital was approximately $17.7 billion as of September 30, 2023, up 2% from June 30, 2023. This increase was primarily due to operating earnings partially offset by dividends paid and net investment losses. Total US statutory adjusted capital has absorbed a negative impact of roughly $300 million associated with the investments expected to be transferred to Global Atlantic, which will be recovered upon closing.
Finally we expect the Japan solvency margin ratio to be approximately 600% as of September 30th, which we based on statutory statements that will be filed over the next few weeks. Let me conclude with a few points. First, while VII remains below historical returns, core spreads remain robust and continue to benefit from higher yield environment. Second, the underlying strength of our business fundamentals continues to be displayed with strong top line growth coupled with disciplined underwriting and expense management. Finally, our strong value of new business metrics provide further evidence of our disciplined approach to deploying capital to its highest and best use consistent with our all-weather strategy. To close, MetLife remains in a position of strength given our balance sheet, free cash flow generation and diversification of our market-leading businesses and we are committed to deploying capital to achieve responsible growth and building sustainable value for our customers and our shareholders.
And with that, I will turn the call back to the operator for your questions.
Operator: [Operator Instructions] And we have a question from Ryan Krueger with KBW. Please go ahead.
Ryan Krueger: Hey. Thanks. Good morning. Can you provide some color on how January 1 renewals are shaping up so far in Group Benefits and also both in terms of persistency in the pricing dynamic in the market?
Ramy Tadro: Good morning, Ryan. It’s Ramy here. I would say we’re still in the middle of the season. Recall the middle part of the market is still kind of active right now. But from everything we can see so far, we are doing extremely well here. Persistency in national accounts continues to be exceptionally high. We are seeing a tick up in the jumbo activity into next year as well building on what we’re doing this year. And with respect to our rate actions, we are getting the rates that the book needs in the market and continue to see that both in terms of new business as well as persistency.
Ryan Krueger: Thanks. And then in terms of capabilities within in Group Benefits and M&A, you’ve done a couple of things to round out the portfolio. Is there anything else you’d be interested in at this point? Or do you feel like you have what you need to grow organically?
Michel Khalaf: Yeah. Hi, Ryan, it’s Michel. Yeah. I mean, I think we’re very pleased with the capabilities that we’ve built with the transactions that we’ve done in the last few years in Group Benefits. I think they’ve been highly complementary and we’re very pleased in how they’ve performed. Think about our Pet First acquisition our Versant acquisition. And we’ll continue to invest in this business. We’ve said all along that this is a business where scale matters, and to continue to meet customer expectations, you have to continue to make meaningful investment, something that we’ve done, and I think that’s translating in terms of the momentum we’re seeing whether it’s in variable benefits or in other areas. Whereas, we don’t see any gaps, when it comes to our product set or our capabilities.
We’re always open to opportunities, if we think those make strategic sense, if we think they can help us accelerate revenue growth, whereas we see a path to continue to grow at within the range that we provided organically, if there was something that would help us accelerate that that would make sense strategically. And that would make sense from a valuation perspective as well. We look for the type of transactions that are accretive over time that clear a minimum risk-adjusted hurdle rate. And we’re always going to also compare any transaction to other potential uses of capital. At the end of the day, our focus pillar is about deploying capital to its highest and best use. So hopefully, this helps.
Ryan Krueger: Great. Thanks a lot.
Operator: Next, we go to the line of Tom Gallagher with Evercore ISI. Please go ahead.
Tom Gallagher: Good morning. A couple of questions on capital. The SMR in Japan seems kind of low at 600% now. Is that something to watch? Or should we really be more focused on ESR since we’re going to be pivoting to that new regime pretty soon. So that’s the first question. The second is just the $1 billion increase in debt. Is that part of the permanent capital structure? Or are you pre-funding a maturity there?
John McCallion: Good morning, Tom it’s John. Thanks. So first question on SMR. Yes, I think it’s a balance when you start to look at these metrics. Obviously, we’re looking forward at ESR higher rates are positive to ESR. So I think there’s a transition happening in the market. We don’t have any concerns with being at of roughly 600% right now. Also we have other tools if needed to the extent that rates would rise further we have other internal reinsurance transactions we could do as of now. So no concerns from a capital perspective or dividend capacity perspective. What was your second question?
Tom Gallagher: The $1 billion debt increase.
John McCallion: On debt, yes, so we issued the debt in July. That is not considered permanent capital. That is to pre-fund a maturity in the first quarter of next year.
Tom Gallagher: Okay. Thanks. And then just one other quick one. The slightly improved real estate returns expected for alternatives in 4Q. Is that because you have some property sales resuming and related gains? Or is that just marks being stable?
John McCallion: Yes. I think it’s more of the latter. I think it’s just we’ve in a way it’s trailing a little bit of what’s happened in PE, where we had kind of the markdown and then we’ve built – you’ve kind of gotten to a trough. And as we’ve said before we feel like we bump along the bottom here for a little bit on some of these fund related returns for sometime. So before we see kind of that U-shaped recovery. So it’s more of that.
