With the premium deficiency reserve, it really just protects us from downside scenarios. As you know, our new money rate assumption works off of a trailing three-year treasury rate experience. And so we’re able to really take those hedges and get more certainty around what our new money rate assumption is for those portions of the cash flows coming off of that block. So I would view that as downside protection. One of the things that we want to do as part of Investor Day is really quantify that a little bit more for the market to really show what the impact of that is under different scenarios, different interest rate paths. And I think that will give you a better idea of really what the benefit is. But again, fundamentally we’re doing this for risk management purposes.
Erik Bass: Perfect. Thank you. If I can just squeeze one more; and is there a target for how much you want the hedge program to build to. So I think you said you’ve done about 25% of cash flows for the next, I think, five years or so. Is there a level that you can see that building to?
Steve Zabel: Yes. I would say that’s something that we’re just planning on expanding over time. I’m not trying to set a bright line target. We can talk a little bit more about how we’re thinking about that later in February, but really don’t want to get locked down to specific number. We’re just happy with where we are today, and we do think we can continue to expand.
Erik Bass: Got it. Thank you.
Steve Zabel: Thanks Erik.
Rick McKenney: Thanks Erik.
Operator: Thank you. The next question today comes from the line of Jimmy Bhullar from J.P. Morgan. Please go ahead. Your line is now open.
Jimmy Bhullar: Hey. Good morning. So first on a question just on competition in the disability market. So your results obviously have been very good and so have most of your peers. Did you see any of that reflected in renewals for one-one? Did you see any indication of prices going down a little bit just given the strong margin? And what did you do with your prices in your own book?
Mike Simonds: Hey Jimmy, it’s Mike. I’ll take that one. And we talked a little bit about it last quarter because we sort of have a good line of sight on those January 1 renewals. But it was a successful program year, both in terms of placing the desired increases that we need to put through as you’re just kind of actively managing that block and having persistency rates that were at or above where our expectations. So we see sort of aggregate pricing levels in the market as being pretty rational and in line with sort of how we would have an outlook on the major costs that make up the prices that we set. In terms of the outlook for the coming year, we €“ looking at our pipeline of new business, I feel like we’re in a pretty good position to continue to sort of build on the momentum that we established here in 2022 from a new sales standpoint.
We try not to make dramatic changes to our pricing stance. We think our clients really value consistency in their budgeting processes year-to-year. So any changes that we make will be more so at the margin versus wholesale.
