“FX rates based on the forward curve indicate the U.S. dollar is expected to remain strong, which will be a headwind for our businesses outside the U.S.”

In context

“slides, but we felt it was worth including again for the sake of completeness. Consistent with our Next Horizon strategy, this chart demonstrates that we continue to have a relentless focus on deploying capital and resources to the highest value opportunities. Also Pages 17 through 20 provide interest rate assumptions and key outlook sensitivities by line of business. Turning back to Page 11, we expect COVID-19 to remain with us in 2022. But given the uncertainty of the environment, we are not going to speculate on the magnitude or timing. Therefore, our near-term targets do not reflect COVID impacts. Based on 12/31 forward curve, interest rates are expected to rise. However, we would expect favorable impacts to be offset in part by higher LIBOR rates, resulting in a flatter yield curve. FX rates based on the forward curve indicate the U.S. dollar is expected to remain strong, which will be a headwind for our businesses outside the U.S. As a result, we would expect adjusted earnings in 2022 versus 2021, will be reduced by roughly $50 million in Asia, roughly $25 million for both Latin America and EMEA. Finally, we assume a 5% annual return for the S&P 500 and a 12% annual return for private equity. This is consistent with our historical returns for PE. Moving to near-term targets, we are maintaining our adjusted ROE range of 12% to 14%. We also expect to maintain our 2-year average free cash flow ratio of 65% to 75% of adjusted earnings. Given the strong adjusted earnings in 2021, we would expect to be closer to the bottom end of the range in 2021 and 2022 before moving higher in 2022 through 2024. This is just a function of math, given the outsized earnings in 2021 as well as the lagging nature of statutory dividend pay”