“We would expect this positive trend of new money yields outpacing roll-off yields to persist given the current level of interest rates.”

In context

“in Q1 of '24 was up roughly $500 million or 10% year-over-year. While recurring investment income moderated in the quarter due to the roll off of the interest rate caps, we did see a solid recovery in PE returns driving the VII improvement year-over-year. Shifting your attention to the right of the page, which shows our new money yield versus roll-off yields since Q1 of '21. New money yields continue to outpace roll-off yields over the past 8 quarters, consistent with the rising rates. In the first quarter of 2024, our global new money rate achieved a yield of 6.6%, 103 basis points higher than the roll-off rate. Keep in mind, the roll-off rate can fluctuate from period to period, as it did in the first quarter due to a greater volume of higher-yielding floating rate assets paying off. We would expect this positive trend of new money yields outpacing roll-off yields to persist given the current level of interest rates. Now let's switch gears to discuss expenses on Page 8. This chart shows a comparison of our direct expense ratio for the full year 2023 of 12.2% and Q1 of '24 of 11.9%. 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 are off to a good start achieving a full year 2024 direct expense ratio of 12.3% or below, demonstrating our consistent execution and a sustained efficiency mindset. I will now discuss our cash and capital positions on Page 9. Cash and liquid assets at the holding companies were $5.2 billion at March 31, which is above our target cash buffer of $3 billion to $4 bi”