Anil Wadhwani: Thanks for those questions. And it’s good to hear from you on the margin expansion. You’re absolutely right. We still believe we have runway to improve our health and protection mix. If you look at 2023, our health and protection contributed to roughly about 40% of the new business profit and grew year-on-year new business profit by 34%. And as we look at some of the demand drivers, not only in China and Hong Kong, but pretty much across the region, we believe that we can do more there. And it kind of comes down to products. It comes down to how we craft the value propositions, how we train both our agency as well as our bank assurance partners. And you simply have to look at the pivot that we made in China and the margins on an ex-economics basis due to the product mix and the protection again was a part of it, did increase by 8% on an ex-economic basis.
On the Hong Kong part, I will turn to Lilian. Suffice to say, obviously, health and protection related products is a key focus area for us. And we did launch a few products that Lilian can provide you greater color on to be able to deepen and broaden our relationship with customers in Hong Kong. Lilian?
Lilian Ng: Okay, just on the pan up demand. So if I look at 2023, in terms of the MCVK size, it was hovering about over US$20,000. But in the second half, it actually normalized to US$18,000. So I believe that the first half, the pan up demand is now normalized at the US$18,000. And we are seeing that trend continue into 2024 to two months. So I think that’s the pan up demand. And we’re now seeing a normalized case size in 2024 as well. In terms of driving customer proposition, we continue to innovate our product proposition. Firstly, on critical illness, we actually innovated our critical illness products to actually deliver for the family life stages. And with that, we see an increase in our health and protection growth in APE. And we continue to do so as we move forward for 2024.
Anil Wadhwani: Just to be clear, US$18,000. So we did see a spike in MCV in March and April of last year. And then it normalized to roughly about US$18,000. And that’s what Lilian was alluding to that it continued in quarter three, quarter four, and into the first two months. And to your point on pent up demand, our customers are largely emerging affluent and affluent. And if you then look at the savings rate in China, China has one of the highest savings rate in the world. And you simply have to look at the deposit velocity growth in China last year. So we believe that’s going to be the source of we being able to kind of provide a different value proposition to address those customer needs.
Larissa Van Deventer: Thank you so much for the analysis.
Patrick Bowes: Thanks, and I’ll just try another one on the line. We’ve got a bit of an extension of time, which is a unilateral decision, but got a few of you. Sebastian, you want to bring the next caller in, please?
Operator: The next question is from Andrew Crean from Autonomous. Please go ahead.
Andrew Crean: Good morning, all. Two questions, please. Firstly, your point $7 billion in investment in new businesses, I think at 100% of economic capital, at 150%, which is I assume where you’d be really targeting, the remittance ratio goes from 80% to 100%, which means that everything is being paid up. Is that a fair thought? And therefore, is there any ability to increase the remittance ratio above that? And secondly, your group surplus is $8.5 billion, your group cash $3.5 billion. Could you tell us how much of that is actually excess to your requirements? And also, could you talk more explicitly about when you’re comparing buybacks to acquisitions, what are you holding as the key comparative? Because it’s all very well, you can always do a banker deal, which on a 10-year view, will be more value accreting than a buyback, but that’s hardly holding your feet to the flames?
Anil Wadhwani: Thanks for those questions, Andrew. I’m going to ask Ben to speak to the economic capital and the group surplus, and then I’ll be happy to kind of address your question on buybacks.
Ben Bulmer: Okay, so hi, Andrew, thanks for the questions. I mean, I’ll try and be brief. You are correct on the 150 point, we brought up some stock from the Hong Kong business. And that’s one reason why I don’t think we’ll be repeating the 80% I referenced earlier. And in fact, you should expect a number like 70%. In terms of the surplus, the $8.5 billion free surplus you referenced, in practice, I think, as we talked about at the half year, roughly half of that is accessible, if you like, and ultimately deployable for use organically, inorganically, and in terms of investment and capabilities. In addition to that, Andrew, as I’m sure you will have seen, we’re operating at the lower end of our leverage ratio. So we have some flexibility there as well.
Anil Wadhwani: Thanks, Ben. Specifically, Andrew, on your question on returning back to the shareholders, as I said, right at the outset, that’s an option that’s always in front of the board. Just to remind you that we are only in the second quarter of the execution of our strategy that we announced in August of last year. And we believe that there are opportunities across not only distribution expansion or expanding our reach to bank distribution, but we spoke about technology. We are creating technology, both that will help enhance customer experience, but also enhance distributor experience. And you know how important that is, both to drive retention and higher stickiness with our customers, but also ensuring that becomes a huge retention tool for our high-performing and active agents.
