Tony Cheng: What’s the hook and opportunity, sorry?
John Barnidge: What’s the hurdle for some of these primary carriers from implementing it today and because we’ve seen a number of them talk about doing more automated underwriting within their portfolio. Thank you.
Tony Cheng: Look, automation of underwriting, obviously, is a theme very big in the US and across the globe. In each of our clients obviously work very closely with us on that. Our focus is a broad range of underwriting capabilities. So we absolutely work very closely with our clients to automate as well as provide the facultative as well as a multitude of services in between. So I’d say the hurdles really depends on client by client, obviously, size and scale, but it’s clearly a strong trend that we’re very much partnering with our clients and the industry to facilitate them further.
Operator: Next question comes from Joel Hurwitz with Dowling & Partners. Please go ahead.
Joel Hurwitz: Hi. Good morning. I want to start on the interest rate tailwinds. Can you provide some color on the level of incremental benefits versus what’s in your guidance if new money yields stay around current levels?
Leslie Barbi: Yes. Thanks. This is Leslie. And I think maybe it’s helpful if I just compare this quarter to last quarter. So if you focus in on our Non-Spread business, the incremental difference from higher yield has been about $5 million on the quarter. That is sustainable if we stay at the deal levels that we had at quarter end and they moved up a bit. And there will actually probably be a little additional tailwind in the fourth quarter because as you now the yields really moved up sharply towards the end of the quarter. So saying these levels, the $5 million and maybe a little bit more in the fourth quarter.
Joel Hurwitz: Okay. Very helpful. And then just shifting to the in-force activities. Obviously, year-to-date capital deployment is very strong there. I guess, do you see this level persisting over the intermediate time? And then can you just talk about where you see the strongest opportunities? I know much of the activity has been in GFS, but are you seeing more opportunities with the traditional business?
Tony Cheng: Yes. Let me take that one. The growth in our deployment, as Anna mentioned, the growth in our deployment of capital into the business, we’ve already surpassed all of last year. And we have obviously very strong momentum, and we have no reason to believe that won’t continue across the globe. Obviously, with regards to our four major areas of notable growth. Asia, the asset-intensive business. We’ve already discussed a bit on the PRT in the US, which is also asset involves asset intensity and other parts of the world. So the prospects are very strong on both the GFS as well as the traditional business. We do time to time see in-force opportunities arising, particularly in the US. And I want to also say, we spoke earlier about in-force management.
Our ability to partner with clients when we have to discuss with them in-force actions. And there how can I put it their experience when they work with us on that sort of differentiates us so that when they have other blocks of business, they’re more prone to work with us on those opportunities.
Operator: The next question comes from Tom Gallagher with Evercore. Please go ahead.
Thomas Gallagher: Good morning. Todd, I just wanted to come back to your response to Ryan’s question. The favorable underwriting this quarter. Overall, I think you said was around $150 million, $60 million of which actually came through in the quarter. Do I have that right?
Todd Larson: Yes. And that’s specific to the claim’s activity. That’s right. And that’s on both traditional and GFS.
Thomas Gallagher: Got you. And so Todd, the right way to think about this, that the $90 million that is deferred is going to come through very slowly in the future that will get amortized in future periods over, I don’t know, 10 years? Is there a way — how should we think about that $90 million?
Todd Larson: Yes, that’s right. It’ll be amortized in over time in the future. And depending on which cohort is in and the underlying product and on the duration of the underlying liability. It probably is 10 years or longer on average.
Operator: The next question comes from Jamminder Bhullar with JPMorgan. Please go ahead.
Jamminder Bhullar: Good morning. First, maybe for Leslie, on the new money yield, obviously, you’re benefiting from the rise in interest rates. I think you highlighted that the yields also benefited from a shift in allocation to private and to structured investments. Did you highlight that you sort of imply that maybe this quarter, the new money yield is trending above what it normally would have trended because you opportunistically increase allocations there? Or — and should we expect it to maybe not be as high? Or was that just — were the allocation still normal versus where you expect them to be going forward?
Leslie Barbi: Thank you. I’m glad you asked that if that wasn’t clear. I think the comment really about the select opportunities was to make it clear, I guess, that we have a broad platform and we’re actively selecting and not everything is driven by just interest rates that show up on our doorstep. But actually, the allocation of private is a little bit less than the second quarter. In the second quarter, I think I had noted we had a bit higher allocation. So that shift in mix was actually a bit of a negative on the quarter. But generally, we’re at very healthy yield levels because of our broad platform.
Jamminder Bhullar: So nothing to suggest that if rates go up more, your yield shouldn’t incrementally improve from even the high levels that it was at in 3Q.
Leslie Barbi: Yes, correct. In fact, as you know, rates went up much more towards the end of the quarter. So if you’re going from the 930 level, that would be supportive going forward.
Operator: The next question comes from Tracy Benguigui with Barclays. Please go ahead.
