“We are increasing our expected effective tax rate range by two points to 24% to 26% to reflect our expectation for higher earnings in foreign markets with higher tax rates and lower tax credits in the U.S.”

In context

“-year average free cash flow ratio of 65% to 75% of adjusted earnings. Also, given continued focus on expense discipline, building capacity to reinvest in growth initiatives, and our overall efficiency mindset, we are lowering our direct expense ratio guidance for 2024 from 12.6% to 12.3%. Specifically, for 2024, VII expected to be approximately $1.5 billion. Our corporate and other adjusted loss target is expected to be $750 million to $850 million after tax in 2024. This represents an approximately $100 million increase from our prior adjusted loss guidance of $650 million to $750 million in 2023. The higher range reflects C&O's current run rate given the impact of a higher rate environment on interest expense and pension costs, as well as the impact of lower expected benefits from VII. We are increasing our expected effective tax rate range by two points to 24% to 26% to reflect our expectation for higher earnings in foreign markets with higher tax rates and lower tax credits in the U.S. At the bottom of the page, you will see certain interest rate sensitivities relative to our base case, reflecting a relatively modest impact on adjusted earnings over the near-term. On Page 13, the chart reflects our VII average asset balances from $18 billion in 2022 to $19.7 billion expected in 2024. Private equity investments will continue to represent the vast majority of our VII asset balances. We are reducing our near-term expected annual returns for private equity to be between 7% to 10% and we are also lowering our expected returns for real estate and other funds to be in the range of 5% to 7% over the near-term. We expect PE and real estate returns will remain pressured in the first quarter of 2024 before trending higher. Finally, as a reminder, we include prepayment fees on fixe”