“We also expect to maintain our 2-year average free cash flow ratio of 65% to 75% of adjusted earnings.”

In context

“r 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 payments to the holding company. In addition, we remain committed to maintaining a full year direct expense ratio below 12.3%. We are raising our VII guidance in 2022 to $1.8 billion to $2 billion. After applying our historical average returns on higher asset balances, I’ll provide more detail on VII in a moment. Our Corporate & Other adjusted loss is expected to remain at $650 million to $750 million after tax but we are increasing our expected effective tax rate by 1 point to 21% to 23% to reflect our expec”