“We expect incremental yield pickup from this repositioning in 2Q '23 and also from higher reinvestment rates throughout 2023 based on the current rate and spread environment.”

In context

“m fixed maturities and loans in both GI and L&R rose sequentially and over the prior year, while returns on alternative investments were down $593 million compared to very strong annualized returns of 28% last year. Income on fixed maturities and loans rose by $573 million over the prior year, with average new money reinvestment rates of 5.35%, about 220 basis points above sales and maturities. The yield rose to 4.29%, up 78 basis points from 1Q '22 and 23 basis points over 4Q '22. Part of the increase in fixed maturity yields resulted from our proactive repositioning over the last 2 quarters in the U.S. GI portfolio. We sold and reinvested about $6 billion in fixed maturities, resulting in a realized loss of $224 million, but added 9 basis points of GI yield improvement for the quarter. We expect incremental yield pickup from this repositioning in 2Q '23 and also from higher reinvestment rates throughout 2023 based on the current rate and spread environment. Turning to the segments. GI adjusted pretax income, or APTI, was $1.2 billion, $37 million higher than 1Q '22, principally due to a $56 million increase in underwriting income from both higher-earned premiums and a 1 point improvement in the calendar year combined ratio, which was 91.9%. Peter covered underwriting results in detail, but I want to add that GI reserves had favorable prior year development, net of reinsurance at prior year premiums of $54 million. Turning to L&R results for the first quarter. APTI was $886 million, down $48 million compared to $934 million in 1Q '22 as restated. Consistent with GI, L&R had a strong increase in base portfolio investment income, but lower alternative investment income. Mortality experience improved, but fee income was down due to lower capit”