“We expect this favorable trend to continue assuming interest rates remain near current levels.”

In context

“Page seven, the chart on the left of the Page shows the split of our net investment income between recurring and VII for the past three years in Q2 of ‘22 versus Q2 of ‘23. While VII has had the lower than trend returns over the last few quarters, recurring income, which accounts for approximately 96% of net investment income, was up $700 million year-over-year, reflecting higher interest rates and growth in asset balances. Shifting your attention to the chart on the right of the Page, which shows our new money yield versus roll off yield over the past three years, new money yields continue to outpace roll off yields in the recent quarters. In this quarter, our global new money yield reached its highest level in more than a decade of 6.06%, 157 basis points higher than the roll off yield. We expect this favorable trend to continue assuming interest rates remain near current levels. Turning to Page eight, I'll provide a few updates on our commercial mortgage loans, which you can find further details in our quarterly financial supplement. As of June 30, our commercial mortgage loan, or CML portfolio, carrying value of approximately $53 billion is well diversified by geography and property type. The CML portfolio is concentrated in high quality properties and in larger primary markets. These loans are typically to the larger and stronger institutional sponsors who are better positioned to effectively manage assets through periods of stress. Given the focus on the office sector, our real estate team updated all U.S. office valuation through June 30, assuming a 25% peak to trough valuation decline. We believe it was prudent to focus our efforts here in the quarter given”