“Also, given our continued focus on expense discipline, we target reducing our expense ratio down 100 basis points to 11.3% by 2029.”

In context

“en, which creates a headwind to adjusted earnings growth of approximately $150 to $175 million in 2025. This impact is embedded in the non-US segment outlooks I will discuss in a moment. The forward interest rate curve projects long-term interest rates to be stable, and the yield curve to steepen, a positive development. We use an assumption of a 5% annual return for the S&P 500. For our near-term targets, these are consistent with our New Frontier commitments that we announced at investor day. We expect to achieve double-digit adjusted EPS growth. We expect adjusted ROE to be in the range of 15% to 17%. We expect to maintain our two-year average free cash flow ratio of 65% to 75% of adjusted earnings, which supports our five-year commitment to generate $25 billion plus of free cash flow. Also, given our continued focus on expense discipline, we target reducing our expense ratio down 100 basis points to 11.3% by 2029. Therefore, for 2025, we are lowering our direct expense ratio guidance to 12.1%, down from 12.3% in 2024. Specifically, for 2025, variable investment income is expected to be approximately $1.7 billion pretax. Our corporate and other adjusted loss is expected to be between $850 to $950 million after tax. We are maintaining our expected effective tax rate range of 24% to 26%. At the bottom of the page, you'll see certain interest rate sensitivities relative to our base case, reflecting a relatively modest impact on adjusted earnings over the near term. Further sensitivities are in the appendix to these slides. On page twelve, the chart reflects our expectation of VII average asset balances to be stable in 2025. We are increasing our near-term expected annual returns for private equity to b”