“We expect the average asset balances for private equities to decline in 2026 and over the near term as we continue to strategically reposition the portfolio to higher-yielding fixed income securities, consistent with the higher interest rate environment.”

In context

“n 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 the near term. Page 11 provides our outlook for VII. We expect the average asset balances for private equities to decline in 2026 and over the near term as we continue to strategically reposition the portfolio to higher-yielding fixed income securities, consistent with the higher interest rate environment. We are assuming annual returns for private equity to be 9%, real estate and other funds to be 7% over the near term. Finally, as a reminder, we include prepayment fees on fixed maturities and mortgage loans in VII. Moving to our business segments on page 12. Starting with group benefits. We are maintaining our adjusted PFO growth target of 4% to 7% over the near term as we continue to strengthen our market leadership. We are reducing our group life mortality ratio target range by one point to 83% to 88% as we expect favorable mortality trends will continue in 2026. For group nonmedical health, we are increasing our interest adjusted benefit ratio target range by one point, to 70% to 75%. We are seeing the benefits of our leave and absence capability in technology take hold in the market,”