“So relative to expectations, earnings were lower due primarily to the variable investment income. But when you look at the outlook, we expect full year underlying earnings to remain strong and in line with guidance.”

In context

“don Oliver: Jimmy, Lyndon here. So thanks for the question. So Yes, you're right. Asia earnings were lower year-over-year, and there were a couple of drivers here. First, as you pointed out, lower variable investment income due to the fact we have lower PE returns, and John pointed out right at the beginning that Asia accounts now for over 40% of the VII assets in the company. Next, when you look at the underwriting margin, it was less favorable compared to the prior year. And this is because we've got a strengthening yen, which is driving lower surrenders right now. So it's creating a short-term headwind for earnings, due to the overall lower surrender income. But it does drive higher sales. It does drive higher AUM, and this will kind of support us as we get higher future earnings here. So relative to expectations, earnings were lower due primarily to the variable investment income. But when you look at the outlook, we expect full year underlying earnings to remain strong and in line with guidance. VII performance will continue to be a factor that will impact our overall reported earnings. Operator: Our next question comes from the line of Wes Carmichael from Autonomous Research. Wesley Collin Carmichael: I actually wanted to follow up on the last question on Japan. Just hoping maybe, Lyndon, can you unpack the surrender activity? How pronounced is that as we've seen a bit yen strengthening? And I guess relatedly, how do we think about higher long JGB yields impacting your savings product offering there? Lyndon Oliver: Yes. All right. So Wes, just first on surrenders. So we've seen surrenders come down relative to the prior year, but persistency is back in line with our expectation right now. So the underwrite -- unfavorable underwriting margin compared to the prior year's really be”