“We remain committed to achieving a full year direct expense ratio of 12.6% or below in 2023, demonstrating our consistent execution and focus on an efficiency mindset.”

In context

“main confident in the office portfolio given this high quality, we have been very selective on new office loan production in the current environment. In 2022, office loans represented only 8% of our total U.S. commercial mortgage loan production. And since 2016, we have reduced our overall office exposure from approximately 50% of the CML portfolio down to 39% today. Now let's switch gears to discuss expenses on Page 11. This chart shows a comparison of our direct expense ratio over the prior five quarters, including 12% in Q1 of '23. As we have highlighted previously, we believe our full year direct expense ratio is the best way to measure performance due to fluctuations in quarterly results. Our Q1 direct expense ratio benefited from solid top line growth and ongoing expense discipline. We remain committed to achieving a full year direct expense ratio of 12.6% or below in 2023, demonstrating our consistent execution and focus on an efficiency mindset. I will now discuss our cash and capital positions on Page 12. Cash and liquid assets at the holding companies were approximately $4.2 billion at March 31, which is above our target cash buffer of $3 billion to $4 billion and down from $5.4 billion at December 31. The sequential decline in cash of the holding companies reflects the net effects of subsidiary dividends, payment of our common stock dividend and share repurchases of roughly $800 million in the first quarter, as well as holding company expenses and other cash flows. Our first quarter tends to be lower in subsidiary dividends and higher in holding company expenses. As illustrated in the chart, you can see that the same seasonal pattern occurred from 4Q of '21 into Q1 of '22. Regarding our statutory capital. For our U.S. companie”