“Specifically for 2026, given asset management businesses tend to have higher expense ratios, the acquisition of PineBridge will add 50 basis points to our direct expense ratio in 2026, with our 2026 target being 12.1%.”

In context

“isclosed, we expect to report an initial ESR within a range of 170% to 190% from March 2026. Now let's discuss our outlook starting with the overview on page 10. Based on the forward currency curve, we expect the US dollar to be stable in 2026 relative to 2025. The forward interest rate curve projects long-term interest rates to be modestly higher and the yield curve expected to steepen—a positive development. And we use an assumption of 5% annual return for the S&P 500. For our near-term targets, we expect to achieve double-digit adjusted EPS growth. We expect adjusted ROE to be in the range of 15% to 17%. 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. Specifically for 2026, given asset management businesses tend to have higher expense ratios, the acquisition of PineBridge will add 50 basis points to our direct expense ratio in 2026, with our 2026 target being 12.1%. However, with the considerable progress we've made in the first year under New Frontier, towards achieving 100 basis point improvement over the five years, we intend to maintain our 2029 target of 11.3%, despite the higher expense ratios associated with accelerating growth in our asset management business. Favorable investment income is expected to be approximately $1.6 billion pretax. Our corporate and other adjusted loss is expected to be between $500 million and $700 million after tax. We are maintaining our expected effective tax rate range of 24% to 26%. And we expect our 2026 share repurchases to be in line with 2025. 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”