Manjit Singh: Nigel, it’s Manjit. Overall, the corporate expenses on a quarter-over-quarter basis are relatively flat. On a year-over-year basis, we have seen an increase, and there’s a couple of factors that are driving that. So the first one is just increase in sort of compensation, both relative to wage inflation, and also higher incentive comps and the two businesses that you mentioned, Canada and Asia, as we’ve talked about earlier, have had very strong results this quarter and for the year-to-date. And then as Kevin mentioned, as Ingrid mentioned, we’re also continuing to invest in these businesses. So that’s also reflected in there. But then as you’ve talked about, you’ve seen higher revenues related to those expenses.
Nigel D’Souza: Okay. That’s helpful. And then the second question was on your actual review this quarter. And wondering if you could provide some color on what experience since — pandemic was incorporated into your assumption versus long-term trends? And maybe a bit more on morbidity because I think you noted a favorable morbidity update in the U.S. and unfavorable morbidity in Canada. But — and the experience this quarter was actually, I think, favorable in Canada and unfavorable in the U.S. So just wondering if you could unpack how much of experience has kind of been an input into those updates and what hasn’t?
Kevin Morrissey: Nigel, it’s Kevin Morrissey. So on the first one, the pandemic experience, I would categorize it as saying we fully reflected all the pandemic experience in our valuation assumptions and our updates, and so that’s really specific to each of the local jurisdictions. So we took a look at the experience, how relevant it is and whether it’s appropriate or not to include it directly in the update. So for example, where we had in some of our Annuity segments, some higher death rates spike up as part of the pandemic, we did not project that to continue going forward. In some of the Life Insurance businesses where it was fairly benign, we did incorporate that in the experience study and just became part of our regular update.
So I would say it’s fully reflected where appropriate. And again, we always take a very conservative bias on that, not wanting to be overly aggressive with regard to that. Your second question around morbidity; one, maybe I’ll start by making a couple of comments. When you update our assumptions, we always include three different perspectives when we’re setting our new assumptions. The first is the longer-term average of the historical performance, the second being the trend and the third, the future outlook. And so you mentioned morbidity specifically in Canada and the U.S., and that has been positive in the quarter. And when we’re looking at the update, as noted, there was strengthening — some strengthening done in Canada. I would describe it as fairly modest in the update this year.
However, that does reflect the longer-term time horizon. So that’s a 5-year historical average. And it won’t necessarily link with a direct line with the experience in the last couple of quarters. So it’s a much longer-term perspective on that. That being said, the experience in Canada over the last two quarters has been positive. I’d say it was a bit elevated probably in this quarter for Canada, a bit higher than we would normally expect. But again, the trend line has been good. The experience update though is much longer term. So if we do have that, that short trend line continues, then we would expect to see favorable results going forward.
Operator: Thank you. And I show our next question comes from the line of Lemar Persaud from Cormark. Please go ahead.
Lemar Persaud: Thanks. I just want to close the loop on this medical or Medicaid redetermination. I guess, given that it was mentioned that over 50% of the redeterminations are in now, some of the new Medicaid sales coming in 2024 and Q3 being a seasonally high quarter for claims, would it be fair to suggest that this quarter was the trough for Dental earnings?
Daniel Fishbein: I think that’s a reasonable comment. Of course, we can never know for sure, but I think that’s the way we look at it, too, that there were some onetime events plus we’re at — in a sense, we’ve had a lot of the redeterminations without the new business yet coming on the books, which is really more of a timing issue. I think in terms of thinking about looking at one quarter versus a longer period of time, year-to-date, our underlying net income is up 33% and sales are up 44%. And that may actually be a better indication of the way to look at things than just the stand-alone quarter, especially with some of these onetime events.
Lemar Persaud: Okay. That’s fair. And then just turning over to SLC, I guess you guys called out an unusually low tax rate. So maybe start on what drove that? What’s the reasonable tax rate moving forward? And then beyond the tax rate, is this quarter’s result an appropriate run rate for earnings moving forward?
Stephen Peacher: It’s Steve Peacher. Thanks for the question. I — off the top of my head, I don’t have — I can’t answer the kind of the good run rate tax rate question for you, but we can get back to you on that. It was around — I would say that it certainly bolstered underlying net income for the quarter by $7 million, $8 million. I would — in terms of run rate earnings, I think if you look at — if you look at the financial supplement where we — where you see the quarterly results, management fees have been growing every quarter because AUM has been growing. And as Kevin mentioned in his comments, or Manjit did, we have a significant portion of our AUM is in commitments that where we’ve gotten commitments from investors, and we haven’t yet invested the money, so we haven’t started joining fees.
That AUM that’s been committed but not invested is around $21 billion. So we definitely think that the trend in earnings in both revenue and earnings is up. And as we — and we think — feel like we’re on target to hit our Investor Day targets. So I would — well, I would say this is a representative quarter, we think the trend in earnings and revenues are just going up.
Operator: Thank you. And I show our next question comes from the line of Tom MacKinnon from BMO Capital. Please go ahead.
Tom MacKinnon: Yeah, thanks. Just on the Medicaid redetermination. What were the total net premiums annualized for that business when you — just prior to that, I guess, that May 11 date kind of where do they sit now as well?
Daniel Fishbein: Yes, I don’t have that off hand. What I can say is that Medicaid does represent more than 80% of the total revenue within the Dental business. And the — you can also see if you look at the premium revenue for the quarter versus the prior quarter, some decline, and that would basically all be from the Medicaid business.
Tom MacKinnon: Okay. Yes. So if I take 80% of your total Dental net premiums annualized, and then I take 13% of that, and then I take that as a percentage of your total net premiums in both Group benefits plus Dental, it’s still less than 5% of your total net premiums.
