John Barnidge

John Barnidge asked for more details on the trend of higher claim frequency in San Francisco compared to the rest of California, its emergence, magnitude, and correlation with autonomous vehicles. He also asked why concerns about the SaaS model are misplaced for CCC and how it provides leverage.

Answer

CEO Githesh Ramamurthy clarified that the observation of slightly elevated claim frequency in San Francisco was based on data from the last several quarters, but did not draw strong conclusions. He explained that CCC's unique value comes from its $2 trillion of historical, hyperlocal data, a deep network connecting 35,000+ companies, and embedded workflows that feed complex decision engines in a highly regulated industry, making its SaaS model distinct and valuable.

John Barnidge asked about the trend of higher claim frequency in San Francisco compared to the rest of California, its emergence, magnitude, and correlation with autonomous vehicles. He also asked why concerns about the SaaS business model are misplaced for CCC, given its unique leverage.

Answer

Githesh Ramamurthy, CCC's Chairman and CEO, noted that claim frequency in San Francisco has been slightly more elevated over the last several quarters, but cautioned against drawing strong conclusions. He explained that CCC's unique position stems from its $2 trillion of historical, hyperlocal data, its deep network connecting 35,000+ companies, and its embedded workflows that feed complex decision engines in a highly regulated industry requiring accuracy and compliance.

John Barnidge asked about F&G's diversified reinsurance panel, the outlook for continued participation from existing partners, and general market demand.

Answer

President and CFO Conor Murphy confirmed no indication of changes from existing partners like Somerset/Aquarian. He emphasized F&G's robust suite of partners, including the sidecar with Blackstone and the new Anchin partnership, noting strong demand from many potential reinsurance partners.

John Barnidge with Piper Sandler asked about F&G'G's diversified panel of reinsurance partners, the outlook for continued participation from existing partners, and general market demand.

Answer

President and CFO Conor Murphy confirmed no indication of changes from existing partners like Somerset Re and Aquarian. He expressed satisfaction with the suite of partners, including the sidecar with Blackstone and the new partnership with Anchin, noting strong demand from potential reinsurance partners.

John Barnidge of Piper Sandler Companies inquired about the capacity of the new $1 billion reinsurance sidecar and its expected fill rate. He also asked about the implications of the company's capital-light strategy for owned distribution consolidation and future dividends.

Answer

CEO Chris Blunt explained that the sidecar provides 'multiple billions' of AUM capacity, depending on the product mix, and is a key part of F&G's strategy to become a more capital-light, higher-earning business. He noted that while this model will increase free cash flow, the current focus for capital allocation remains on high-return opportunities like owned distribution and flow reinsurance, rather than substantial dividend increases. President & CFO Conor Murphy added that the sidecar enhances their toolkit, likely increasing the focus on FIA sales.

John Barnidge of Piper Sandler & Co. asked about the growth outlook for the RILA product in its second year, both from a sales and distribution perspective. He also inquired about the breakdown of impacts on the owned distribution business and the company's RBC sensitivity to equity market volatility.

Answer

CEO Christopher Blunt explained that while it has taken time to get the RILA product onto platforms, they are consistently adding broker-dealers and believe it can become a billion-dollar business. He noted that the owned distribution slowdown was roughly half due to a strategic investment by a partner and half from a temporary industry-wide slowdown, both of which have since rebounded. CFO Conor Murphy added that there is no change to the company's RBC expectations or its target of remaining above 400%.

John Barnidge of Piper Sandler & Co. inquired about the rationale behind F&G's evolving organizational structure and its growth implications, particularly regarding the Bermuda operations. He also asked for the company's outlook on the Pension Risk Transfer (PRT) market amid ongoing industry litigation.

Answer

CEO Christopher Blunt explained that the organizational changes are a 'divide and conquer' strategy to manage the company's rapid growth and increasing complexity, especially in offshore reinsurance. Regarding PRT, Blunt stated that F&G has not seen a meaningful impact from lawsuits, attributing this to their straightforward U.S.-regulated structure and focus on the $100 million to $1 billion deal size. He affirmed the PRT pipeline remains healthy but noted F&G has other avenues like the FABN market to deploy capital if needed.

John Barnidge inquired about the growth potential for flow reinsurance, particularly with new products like RILA, and asked if the company's stock could be used as currency for larger acquisitions in its owned distribution strategy.

Answer

CEO Chris Blunt explained that flow reinsurance decisions are opportunistic, based on capacity, partner quality, and accretiveness, rather than a specific target, and he remains optimistic about its availability. Regarding owned distribution, Blunt stated that while they are bullish on the opportunity, the focus is on strategic partnerships, not just scaling for size. He acknowledged the asset is performing well and could potentially become a standalone entity in the future.

John Barnidge asked about Lemonade's path to Adjusted EBITDA profitability in 2027, specifically inquiring about the target for premiums to surplus at that time and the company's ability to operate with greater leverage given its operational scale.

Answer

CFO Tim Bixby reiterated the expectation for positive Adjusted EBITDA in Q4 2026 and for the full year 2027, maintaining a goal of 30%+ accelerating growth. He explained that Lemonade operates with a capital-light structure, utilizing a captive and reinsurance, requiring approximately $250 million in regulatory surplus. Tim affirmed that the company has ample surplus to support ambitious growth rates through 2027 and beyond, noting that the forecasted break-even points have remained consistent for nearly four years.

John Barnidge from Piper Sandler asked about Lemonade's target for premiums to surplus by 2027, when the company expects to be Adjusted EBITDA profitable, and whether they anticipate operating with greater leverage due to operational scale.

Answer

CFO Tim Bixby reiterated the expectation for Q4 2026 to be EBITDA positive and full-year 2027 to be the first full year of EBITDA positivity, maintaining a 30%+ growth rate goal. He stated that Lemonade's capital-light structure, utilizing a captive and reinsurance, keeps surplus requirements minimal (around $250 million currently), providing ample capital for ambitious growth rates through 2027 and beyond.

John Barnidge with Piper Sandler inquired about Trupanion's successful brand spend initiatives, asking for specific examples of reaching pet parents in new ways and how these efforts will be accelerated moving forward. He also asked about any favorable reserve development impacting the reported loss ratio or vet service cost ratio.

Answer

CEO and President Margi Tooth explained that brand spend focuses on increasing Trupanion's visibility to pet parents, both within and outside the veterinary profession. She noted encouraging results in moving pet parents through the sales funnel, leading to quicker conversions and contributing to the 8% gross pet adds and 50% net pet growth in Q4. CFO Fawwad Qureshi clarified that there was a slight adverse development of approximately 30 basis points or $900,000 in Q4, but expressed satisfaction with the overall loss ratio trend.

John Barnidge with Piper Sandler inquired about Trupanion's brand spend strategy, seeking details on successful approaches to reach pet parents and how these efforts will be accelerated going forward. He also asked about any favorable reserve development impacting the reported loss ratio or vet service cost ratio.

Answer

CEO and President Margi Tooth explained that brand spend focuses on increasing Trupanion's visibility to pet parents both within and outside the veterinary profession, noting encouraging results in lead conversion and pet acquisition. CFO Fawwad Qureshi clarified that there was a slight adverse development of 30 basis points ($0.9 million) in Q4, but expressed satisfaction with the overall loss ratio trend.

John Barnidge of Piper Sandler Companies inquired about the deceleration in veterinary cost inflation, asking if the loss ratio could improve beyond the 71% target given seasonal patterns. He also requested more details on the food initiative benefit mentioned in the prepared remarks.

Answer

CEO Margi Tooth acknowledged that while seasonality typically lifts costs in the first half, a mild deceleration was observed this quarter. CFO Fawwad Qureshi added that guidance for the second half assumes a continued 1% abatement in inflation and noted a 60 basis point favorable prior period development in Q2. Regarding the food initiative, Mr. Qureshi explained the gain was from exchanging preferred stock in a partner, Baystride, for intellectual property, which is a critical foundational element for the nascent food business.

John Barnidge inquired about the subscription loss ratio, asking about the impact of any reserve development and seasonality, and also asked for the amount of capital held in excess of regulatory minimums.

Answer

CFO Fawwad Qureshi clarified there was an adverse reserve development of $1.7 million (70 bps) in Q1. He also stated that the company is now over 3x overcapitalized versus the required amount and is focused on monetizing this surplus. CEO Margi Tooth added that pricing and cost of care trends are in line with expectations.

John Barnidge requested more detail on the 'normalization of price increases,' asking if earned rate increases would stay above 15% in 2025. He also asked about the specifics of the goodwill write-down related to the European businesses.

Answer

CEO Margi Tooth confirmed that rate increases are expected to remain above 15% but will be lower than in the past two years, which is what 'normalization' refers to. CFO Fawwad Qureshi explained the goodwill impairment was due to a delayed product launch in Europe and a strategic pause on expansion in Poland. He clarified that the write-down reduced the goodwill for the Smart Paws acquisition to zero, and most remaining goodwill relates to the Aquarium acquisition.

John Barnidge asked for details on the capital relief from recent NAIC changes to risk-based capital requirements and the expected future impact. He also requested an update on the previously disclosed material weaknesses and the associated remediation costs.

Answer

CFO Fawwad Qureshi explained that the company's excess capital nearly doubled to $139.9 million, driven by NAIC factor changes (risk lines 4 and 8) and retained profits. Regarding the material weaknesses, he confirmed the company is in the final 'operate' phase of remediation, with increased fixed expenses reflecting these investments, and expects an audit opinion in February with the 10-K filing.

John Barnidge asked if January 2026 growth rates for Investment and Savings Products (ISP) and term life exceeded the 2026 guidance, given encouraging performance and easing cost of living pressures. He also inquired if Primerica would opportunistically consider increasing its free cash flow conversion given strong earnings and stock dislocation.

Answer

Glenn Williams (CEO) stated it's too early to provide specific January growth rates, confirming they will be detailed in the Q1 report, but noted it was an encouraging January with continued strong momentum in ISP. Tracy Tan (CFO) highlighted Primerica's consistent cash conversion (around 80%) and stated that decisions are made looking multiple years out with board involvement, emphasizing confidence in providing superior conversion and return compared to peers.

John Barnidge asked if the growth rate in January, given improving cost of living pressures and encouraging performance, exceeded the 2026 guidance assumptions for both ISP and term life. He also inquired whether Primerica opportunistically considers increasing its free cash flow conversion during periods of strong earnings and stock dislocation.

Answer

CEO Glenn Williams stated that Primerica was not ready to release specific January growth rates until the Q1 report, though he noted it was an encouraging month with strong ISP momentum. CFO Tracy Tan affirmed Primerica's consistent cash conversion performance, historically around 80%, and emphasized that capital deployment decisions are made with long-term views and board involvement. She expressed confidence in Primerica's superior conversion and return compared to peers, focusing on continued strong, consistent performance.

John Barnidge of Piper Sandler Companies inquired about the drivers for the decline in term life insurance sales and the revised guidance, questioning if cost-of-living pressures were the primary factor. He also asked if these same economic pressures create an opportunity for recruiting new agents.

Answer

CEO Glenn Williams confirmed that a combination of cost-of-living pressures and general economic uncertainty has led to a "wait and see" attitude among middle-income families, impacting term life sales. He affirmed that these financial pressures do create a tailwind for recruiting, as people seek supplemental income opportunities.

John Barnidge asked for an assessment of the Canadian economy, whether sales moderation in April differed from the U.S., and how the macro environment impacts the company's stock repurchase strategy.

Answer

CEO Glenn Williams commented that the U.S. and Canadian economies and business dynamics are very similar, and he expects results to be similar in direction, noting that Canada's distribution and term business has been exceptionally strong. Executive Nicole Russell stated that the stock repurchase program is designed for consistency and predictability, not for timing the market, and affirmed the company's confidence in its announced $450 million program for 2025.

John Barnidge asked for the expected duration of the cost-of-living pressures on consumers and questioned the opportunity to improve operational leverage through automation and faster application speeds.

Answer

CEO Glenn Williams stated that predicting the duration of consumer financial pressure is difficult but could take a year or more to ease after inflation normalizes. He confirmed that increasing operational leverage through technology is a top priority, with significant investments planned in 2025 to simplify processes for clients and representatives, thereby improving efficiency and completion rates.

John Barnidge from Piper Sandler asked about the potential scale of the new Canada Life distribution agreement and how Primerica's mortgage business serves to free up client cash flow amid cost-of-living pressures.

Answer

CEO Glenn Williams explained the Canada Life partnership will replace a runoff segregated fund product, re-establishing Primerica in an important market segment. He described the mortgage business as a unique tool for debt consolidation, which frees up client cash flow and serves as a 'door opener' for broader financial planning conversations, making it valuable even in a challenging interest rate environment.

John Barnidge asked if the 140 combined ratio for the home warranty business is a new long-term level or if a reversion lower is expected beyond 2026. He also sought clarification on the per-share impact of the $113 million favorable prior-year reserve development on the $22.81 adjusted EPS in 2025, given the 2026 outlook excludes such development. Finally, he inquired about Assurant's use of AI to drive both margin improvement and top-line growth.

Answer

CFO Keith Meier stated that the 140 combined ratio is specific to 2026, and it is expected to evolve as the business scales, noting a long-term agreement and view for the market. Regarding the 2026 outlook, CFO Keith Meier explained that Assurant expects to generate over $130 million in EBITDA growth to overcome the $113 million of 2025 prior-year development and incremental home warranty investments, aiming for consistency with 2025 levels. CEO Keith Demmings detailed AI's role in driving customer experience, improving operational efficiency, and enabling personalized service and products. CFO Keith Meier added that AI is used to enhance products like premium technical support, assist auto dealers in sales, and optimize device care centers with robotics for mobile phone processing.

John Barnidge with Piper Sandler asked if the $140 million corporate line figure for 2026 should be considered a new combined ratio level for the home warranty business, or if a reversion to lower combined loss is expected beyond the initial investment period. He also requested clarification on the per-share impact of favorable reserve development on 2025 earnings, specifically how the $22.81 adjusted EPS would look excluding the $113 million favorable reserve development. Lastly, he inquired about Assurant's use of AI to drive both greater margin and top-line growth, particularly given its B2B2C distribution model.

Answer

CFO Keith Meier clarified that the $140 million corporate line reflects 2026 investments for home warranty, with the combined ratio evolving as the business scales. He explained that the company expects to overcome the $113 million of 2025 prior-year development and the incremental home warranty investments (totaling $130 million) to achieve consistent earnings with 2025. President and CEO Keith Demmings detailed AI's role in improving customer experience, operational efficiency, personalizing products, and customizing service delivery. Keith Meier added that AI enhances premium technical support, helps auto dealers sell better, and is infused in device care centers for mobile device processing.

John Barnidge questioned the range of impact from tariffs now assumed in the 2025 guidance and asked about the effect of Q1 catastrophe events on the Global Housing expense ratio.

Answer

President and CEO Keith Demmings explained that while there is uncertainty, the guidance pragmatically assumes tariffs remain for all of 2025 and that the impact is manageable. CFO Keith Meier detailed mitigation strategies, including the 'inflation guard' feature in Housing and significant risk-sharing in Auto. Regarding the expense ratio, Mr. Demmings clarified that after normalizing for reinsurance and cat-related costs, the underlying ratio was relatively flat year-over-year.

John Barnidge questioned whether lessons from improving profitability in Global Housing could be applied to Global Auto and if favorable reserve development could be expected. He also asked about the potential for cross-selling mobile or other coverages to clients from the Global Housing or card benefits businesses.

Answer

President and CEO Keith Demmings confirmed that lessons from Housing, such as driving operational efficiency, are being applied to Auto but did not anticipate major reserve releases. CFO Keith Meier added that Auto's improvement will come from earning in rate increases. Regarding cross-selling, Demmings acknowledged it as an opportunity, citing examples of working with banks in the U.K. for mobile protection. Meier noted that strong performance in one area, like with Chase, creates positive internal references that facilitate expanding relationships.

John Barnidge asked about Principal Financial Group's exposure to software within its investment portfolio and the potential impacts of AI on pricing dynamics within the benefits and protection segment. He also inquired about focus areas within the international pension business where there isn't a natural synergy for investment management under the Principal Asset Management umbrella, following its unification.

Answer

Joel Pitz, CFO of Principal Financial Group, stated that software exposure in the investment portfolio is underweight (<1% of GA), with deals underwritten on a cash flow basis, and credit risk remains manageable. Amy Friedrich, President of Benefits and Protection, noted that SMBs view AI as a growth driver, not impacting job growth in their block, and expect wages to rise, benefiting both B&P and retirement. Deanna Strable, CEO of Principal Financial Group, explained that separating IAM and International Pension allows IAM to focus on global growth, while remaining international pension entities are strategic and can contribute to IAM growth by leveraging customer relationships. Kamal Bhatia, President of Principal Asset Management, cited Mexico pension's consistent positive net cash flow and cross-selling IAM business in Chile as examples.

John Barnidge asked about Principal Financial Group's investment portfolio exposure to software and the potential AI impacts on the pricing dynamic within Benefits and Protection. He also inquired if businesses within the International Pension segment lacking natural synergy with Investment Management would be a focus area for divestiture, following the unification of Principal Asset Management.

Answer

Joel Pitz, CFO of Principal Financial Group, stated that the investment portfolio is well-positioned and high quality, with software exposure underweight at less than 1% of the general account. Amy Friedrich, President of Benefits and Protection, noted that SMBs view AI as a growth driver, and the company is not seeing impacts on job growth in its block, with expectations for wages to increase. Deanna Strable, CEO, explained that recalibrating the asset management business allows the Investment Management arm to focus on growth, and while recent International Pension divestitures were focused on synergy, the remaining entities are strategic and contribute to value and growth, sometimes leveraging the customer base for IAM growth.

John Barnidge inquired about the Bering Strategic Partnership's impact on fee rates and potential for similar opportunities, and discussed the implications of baby boomer retirements on 401(k) flows and industry consolidation.

Answer

CEO Deanna Strable, President Kamal Bhatia, and CFO Joel Pitz explained the Bering partnership as an expansion of private market expertise, assisting the general account with unique origination strength. President Chris Littlefield addressed 401(k) consolidation, noting benefits from winning plans from lower-scale players and a focus on organic revenue growth over volume, despite secular headwinds to flows.

John Barnidge inquired about the 401k business, considering the secular headwind from baby boomer retirements impacting flows, and how this affects thoughts on industry consolidation and Principal Financial Group's strategy for winning new business.

Answer

Chris Littlefield (President, Retirement, and Income Solutions) acknowledged industry consolidation, particularly a shakeout of lower-scale players, from which Principal expects to benefit as a top-three player. He emphasized focusing on organic growth rather than large M&A. CEO Deanna Strable reiterated the team's focus on driving profitable revenue growth, acknowledging that flows alone might not fully reflect business dynamics.

John Barnidge of Piper Sandler Companies asked about the competitive environment for Pension Risk Transfer (PRT) and whether fewer partners were coming to market. He also inquired about the variable investment income (VII) experience by segment and the outlook for Q3.

Answer

President of Retirement & Income Solutions, Christopher Littlefield, acknowledged more competitors in PRT but noted the pipeline for the second half remains to be seen, with an expectation to land within the historical $2.5B to $3B range. EVP & CFO Joel Pitz explained that Q2 VII was improved but below the run-rate due to low real estate transaction activity, which is expected to pick up in the second half of the year.

John Barnidge from Piper Sandler inquired about the potential for further portfolio derisking in international markets or the life insurance business. He also asked about the company's exposure to the government and nonprofit sectors within its retirement and benefits businesses.

Answer

CEO Deanna Strable stated that while the company continuously assesses its portfolio, it has the right portfolio to deliver on its strategic objectives and does not require further major changes. On sector exposure, President of Retirement and Income Solutions Christopher Littlefield noted PFG is not a large player in the governmental market. President of U.S. Insurance Solutions Amy Friedrich was more definitive, stating the Specialty Benefits business is "simply not a player" in the government marketplace as it does not align with their business model.

John Barnidge of Piper Sandler asked if the slight uptick in the withdrawal rate among older cohorts would become more meaningful as more baby boomers retire. He also inquired about the potential for additional severance charges following the $0.03 per share impact in the quarter.

Answer

Executive Christopher Littlefield responded that while the withdrawal rate was up year-over-year, it was down sequentially, and he does not expect significant changes, though small rate shifts can have a large dollar impact. CEO Dan Houston stated that he does not foresee any large, additional severance adjustments on the horizon, although the company continuously seeks efficiencies.

John Barnidge inquired about Corebridge Financial's Pension Risk Transfer (PRT) volume, the outlook for the year, and the global operating strategy, in addition to the company's investment portfolio exposure to software and real estate (specifically data centers).

Answer

Mark Costantini (President and CEO) noted that the Institutional Markets business grew over 24% in 2025, driven by PRT and GICs, with capital judiciously allocated to high-return businesses primarily in the U.S. and U.K. Elias Habayeb (CFO) added that pension plans remain overfunded, presenting significant opportunities. Regarding investments, Mark Costantini stated no concerns about software exposure due to diversification. Elias Habayeb specified $1 billion in public credit and $350 million in direct lending for software, and selective debt investments in data centers backed by hyperscalers.

John Barnidge inquired about Corebridge Financial's Pension Risk Transfer (PRT) volume outlook for the year and its global operating strategy, as well as the company's exposure to software and real estate (data centers) within its investment portfolio.

Answer

Marc Costantini, President and Chief Executive Officer, highlighted the 24% growth in the institutional management business in 2025, driven by PRT and GICs, noting the lumpy nature of PRT but expressing optimism for the future in the U.S. and U.K. Elias Habayeb, Chief Financial Officer, added that pension plans remain overfunded, presenting continued de-risking opportunities. Regarding software exposure, Marc Costantini stated no significant concerns due to diversification. Elias Habayeb specified $1 billion in public credit (Microsoft, Oracle) and $350 million in direct lending, and for real estate, selective debt investments in data centers associated with hyperscalers, with debt maturing before leases.

John Barnidge from Piper Sandler inquired about the impact of industry litigation on the pension risk transfer (PRT) market and whether the ASR capital regime change in Japan presents an opportunity for Corebridge.

Answer

CEO Kevin Hogan stated that the company has seen no impact from litigation on the PRT pipeline, which remains strong. He confirmed that the capital regime change in Japan is a significant development that could create opportunities for Corebridge's Institutional Markets business to act as a reinsurer, an area the company is actively exploring.

John Barnidge of Piper Sandler & Co. questioned if the increasing use of the Bermuda entity could lead to an increase in the company's free cash flow conversion targets. He also asked for more detail on other capital efficiency levers mentioned by management.

Answer

CFO Elias Habayeb stated that while the Bermuda strategy enhances financial flexibility and will grow distributable cash flows over time, the focus for 2024 remains on the 60-65% payout ratio, with U.K. sale proceeds being additional. President and CEO Kevin Hogan elaborated on other levers, mentioning the continuous exploration of accretive transactions, both internal and external. Habayeb added that organic growth, expense management, and asset optimization remain key value-creation levers alongside capital management.

John Barnidge asked about Apollo's strategy for being 'on the offense' in software, inquiring whether this applies to private equity, credit, or both, and which specific areas of software Apollo finds appealing.

Answer

President Jim Zelter explained that Apollo tends to be defensive when capital is overallocated and offensive when it withdraws. He noted that while software valuations are lower, they are still high, and many companies face challenges in organic growth or equity origination. He anticipates a dispersion of returns, creating opportunities across equity, hybrid, and credit. He emphasized that Apollo is busy screening opportunities, particularly where business models will thrive despite the changed capital availability.

John Barnidge asked about Apollo's strategy for being on offense in the software sector, inquiring whether this focus is in private equity, credit, or both, and what specific areas of software Apollo finds appealing.

Answer

President Jim Zelter explained Apollo's historical approach of being defensive during capital overallocation and offensive during withdrawal. He noted that while software valuations are lower, they are not yet cheap, but the repricing creates opportunities. Zelter anticipates increased activity in equity, hybrid, and credit as dispersion of returns grows among software companies, positioning Apollo as a key capital partner.

John Barnidge asked if the trend of opening capital markets and companies transitioning from private to public (like OpenAI's potential IPO) would lead to a natural inflow of public market dollars back into private assets from traditional asset managers.

Answer

President Jim Zelter explained that the capital needs are vast and global, requiring funding from all markets (public IG, private IG, syndicated facilities). He emphasized that it's an 'open architecture' environment where companies utilize various financing solutions, rather than a black-and-white winner-take-all scenario, and unique financing needs often cannot be met by public markets alone.

John Barnidge from Piper Sandler Companies asked about the outlook for realizations, which have been muted, and whether an inflection point is expected later this year or in 2026.

Answer

President Jim Zelter acknowledged that realizations are below expectations but noted Apollo's DPI is ahead of the industry. He believes monetizations will increase with market appetite but suggested new products, not just IPOs, are needed to solve the PE overhang. CEO Marc Rowan added that Apollo's 'purchase price matters' discipline provides more exit flexibility, contributing to their outperformance on DPI.

John Barnidge of Piper Sandler asked if the alternative asset industry is heading toward a consolidation phase where the largest firms capture the majority of assets, similar to what occurred in the 401(k) space.

Answer

CEO Marc Rowan agreed that larger firms have a distinct advantage. He stated that serving the large distribution channels for individual investors, traditional asset managers, and retirement services requires a scale that smaller firms cannot match. He believes the largest firms will garner the majority of assets, provided they maintain high origination quality, and positioned Apollo as one of those firms.

John Barnidge asked about CNO's exposure to software within its investment portfolio, broadly defined. He also inquired about the demographics of people turning 65 (11,000 per day), the timing of the peak for this demographic, and CNO's product positioning within their life cycle.

Answer

CIO Eric Johnson detailed CNO's software exposure, which is roughly $250 million (60-70 basis points), primarily in enterprise, mission-critical software, with limited exposure in private credit and PE holdings. He emphasized a strong position to capitalize on opportunities. CEO Gary Bhojwani stated that the peak for people turning 65 is expected around 2030 or 2035, after which it will gradually reduce, still representing a significant, long-term opportunity for CNO's products.

John Barnidge asked about CNO Financial Group's exposure to software within its investment portfolio. He also inquired about the dynamics of the 11,000 people turning 65 daily, specifically when this number might peak and decline, and CNO's product positioning within the life cycle of these individuals.

Answer

Eric Johnson, Chief Investment Officer, detailed CNO's software exposure, noting approximately $250 million (60-70 basis points) with a strong preference for enterprise, mission-critical software, systems of record, proprietary data, and cybersecurity. He also provided details on software exposure within private credit (less than 10% of $1.4 billion, mostly structured) and private equity (15% of $400+ million), concluding that CNO is well-positioned for opportunities. Gary Bhojwani, Chief Executive Officer, stated that the number of people turning 65 daily is expected to peak around 2030 or 2035 before gradually reducing. He emphasized that this demographic trend will continue to represent a significant opportunity for CNO for quite some time, as these individuals will always consider relevant products.

John Barnidge from Piper Sandler Companies asked for details on the expense experience that led to the improved guidance and inquired about current utilization and claim patterns in the long-term care (LTC) block.

Answer

CFO Paul McDonough explained that the expense ratio improved primarily due to better operating leverage as the business grows, with the denominator of the ratio increasing. On long-term care, he noted a continuation of the favorable claims experience seen in prior periods, though he cautioned that over the long term, claims are expected to trend back toward pre-COVID levels.

John Barnidge of Piper Sandler Companies asked for details on the expense experience that led to a favorable adjustment in guidance and inquired about current utilization patterns for long-term care claims.

Answer

CFO Paul McDonough explained that while dollar-based expenses were in line with expectations, the expense ratio improved due to better operating leverage from business growth. On long-term care, he noted a continuation of the favorable claims experience seen in recent periods, though he anticipates an eventual reversion to pre-COVID trends over the long term.

John Barnidge asked for details on the expense experience that led to the improved guidance and inquired about the current claim patterns and utilization trends in the long-term care (LTC) business.

Answer

CFO Paul McDonough clarified that expenses on a dollar basis were in line with expectations, and the improved expense ratio guidance is primarily due to better operating leverage from business growth. Regarding long-term care, he noted a continuation of the favorable claims experience seen in recent periods, though he anticipates a gradual trend back toward pre-COVID levels over the long term.

John Barnidge from Piper Sandler Companies inquired about the drivers of the favorable expense experience and the updated guidance, and also asked about current utilization patterns in the long-term care (LTC) block.

Answer

CFO Paul McDonough clarified that the improved expense ratio was primarily due to better operating leverage from strong business growth, not lower dollar-based spending. On long-term care, he noted a continuation of the favorable claims experience seen in recent periods, though he expects trends to normalize closer to pre-COVID levels over the long term.

John Barnidge from Piper Sandler followed up on Medicare Advantage fee income, asking if the expected reversal would be intra-year or multi-year, and inquired about the market opportunity for the new Optavise Clear product.

Answer

CFO Paul McDonough acknowledged the reversal could occur within 2025 but might extend beyond, reaffirming that full-year earnings guidance remains unchanged. CEO Gary Bhojwani expressed bullishness on Optavise Clear, a new Worksite product that consolidates services and adds new capabilities like Medicare advocacy, noting positive early feedback from brokers and clients.

John Barnidge of Piper Sandler & Co. inquired about the assumptions for share buybacks within the 2025 guidance and the extent of the remaining opportunity for geographic expansion.

Answer

CFO Paul McDonough explained that share repurchase capacity for 2025 can be estimated by considering the free cash flow guidance alongside the year-end excess cash position. CEO Gary Bhojwani added that a significant geographic expansion opportunity remains, particularly for the Worksite division, which has a much smaller agent footprint than the Consumer division, noting that growth is being balanced with expense discipline.

John Barnidge asked about the termination of the long-term care (LTC) reinsurance agreement, the potential for further use of the Bermuda platform, and how recent organizational restructuring would impact the direct expense ratio.

Answer

CEO Gary Bhojwani stated that the decision to retain 100% of new LTC business reflects strong confidence in the product's performance. CFO Paul McDonough added that this will improve earnings and ROE over time. Regarding Bermuda, McDonough confirmed they are exploring ceding other liabilities to the platform, pending regulatory approval. He also noted that while the recent restructuring will improve run-rate expenses, specific guidance on the expense ratio for 2025 will be provided in February.

John Barnidge inquired about RGA's investment portfolio exposure to software-related companies and how the company is assessing potential disruption from AI. He also asked about the evolution of RGA's long-standing relationships with external partners, particularly in light of recent cross-ownership transactions among alternative asset managers.

Answer

EVP and Chief Investment Officer Leslie Barbi noted RGA's modest software lending exposure (less than 30 basis points of total portfolio) and confirmed active monitoring of AI's potential impact across the portfolio. She explained RGA's flexible approach to partnerships, utilizing internal teams or external managers based on capabilities and seeking strong alignment for long-term value.

John Barnidge inquired about RGA's investment portfolio exposure to software-related companies and how the company is considering disruption from AI within the portfolio. He also asked about the evolution of RGA's decades-long relationships with external partners, particularly in light of recent cross-ownership transactions involving alternative asset managers.

Answer

Leslie Barbi, EVP and Chief Investment Officer, noted that software lending exposure is modest, less than 30 basis points of the total investment portfolio, and RGA is comfortable with its position. She added that AI, like other market trends, is actively monitored across the portfolio, with decisions and actions taken as information evolves. Regarding partnerships, she explained that RGA uses external managers for additive or scaled expertise, engaging in partnerships where there is strong alignment and a win-win scenario, considering a wholesome approach to value.

John Barnidge of Piper Sandler Companies inquired about the specifics of the additional value of in-force (VIF) credit RGA received, asking what changes were made and if assumptions about GLP-1 drugs were included. He also asked if such assumptions would be part of the Q3 actuarial review.

Answer

EVP & CFO Axel André clarified that the VIF credit captures the embedded value of the existing business using current assumptions and does not reflect any changes related to GLP-1 drugs. He stated that it was too early to comment on the upcoming Q3 actuarial assumption review.

John Barnidge asked about the trend in new money investment rates during the second quarter and whether the sourcing of private assets has remained favorable.

Answer

Chief Investment Officer Leslie Barbi stated that new money rates in the current quarter are similar to Q1, as lower base rates have been offset by wider credit spreads. She also confirmed that RGA's private asset platform continues to find attractive opportunities and maintains a good pipeline, leveraging its 20-year history in the space.

John Barnidge inquired about new money rates for portfolio investing and the favorability of increased private asset sourcing.

Answer

CIO Leslie Barbee stated current rates are similar to Q1, with spreads widening. She noted attractive private asset opportunities matching stable liabilities, with a broad platform built over 20 years.

John Barnidge asked for an explanation of the 'value of in-force' metric and how it translates into durable earnings power. He also inquired about the capacity of PACT Capital and its role in RGA's ability to reposition assets from transactions.

Answer

Chief Financial Officer Axel Philippe Andre and CEO Tony Cheng explained that the value of in-force represents the present value of future profits and is also viewed as a form of capital recognized by rating agencies. Chief Investment Officer Leslie Barbi clarified that PACT is one of many strategic partnerships within a broad asset platform that provides a competitive edge and helps scale RGA's asset management capabilities.

John Barnidge asked about RGA's redefinition of excess capital, its potential use for non-organic growth like acquiring stakes in asset managers, and how the company's successful product strategies in Asia could be exported to other global markets.

Answer

President and CEO Tony Cheng confirmed that while the primary use of capital is for business growth, opportunities on the asset side, including acquiring stakes for private asset origination, are considered. He also explained that RGA already exports successful strategies globally, citing an example of a final expense product concept moving between South Africa and the U.S., emphasizing the strength of local teams in adapting products to local consumer needs.

John Barnidge inquired about the unfavorable claims resolutions and higher incidence observed in Unum International's Group Long-Term Disability product line.

Answer

Rick McKenney, President and CEO, directed to Mark Till, Head of International Business, who described a buoyant U.K. market but noted claims incidence volatility. Steve Zabel, CFO, elaborated on Q4, citing a higher number of new disability claims without specific concentration, and unfavorable volatility in the size of terminated claims, though recovery counts were good. He expects the International Benefit Ratio to return to the low 70s.

John Barnidge inquired about Unum's investment portfolio's exposure to software, particularly after the reclassification of the closed block. He also asked for details on the unfavorable claims resolutions and higher incidents observed in the UK group long-term disability product line, seeking clarification on frequency and severity drivers.

Answer

CFO Steve Zabel stated that software exposure is less than 1% in the investment-grade bond portfolio, primarily in integrated software providers, and around 0.5% in the alternative asset portfolio, with no leverage loan structures. Mark Till, CEO of Unum International, noted a buoyant UK market but acknowledged claims volatility. Steve Zabel elaborated that the challenging quarter for international was due to a higher number of new disability claims without specific concentration, and unfavorable volatility in the size of terminated claims, though recovery counts were satisfactory. He expects the UK to contribute to an international benefit ratio in the low 70s.

Inquired about the implications of the recent long-term care (LTC) experience on the upcoming annual actuarial assumption review and questioned the rationale for the current level of share buybacks given the company's excess capital position and free cash flow.

Answer

The company stated it is too early in the process to comment on the outcome of the annual LTC assumption review but highlighted the $2.6 billion protection buffer on the balance sheet. Regarding buybacks, management emphasized a sustainable, long-term approach, noting the increase to the top end of the $500M-$1B range is appropriate for now, though they will remain dynamic.

John Barnidge inquired about the macroeconomic conditions and opportunity set in international markets, comparing Poland and the U.K., and asked if employment expansion is still being seen in renewals.

Answer

Mark Till, CEO of Unum International, described Poland as a strong, growing economy and noted that while the U.K. has a more difficult backdrop, it remains a positive opportunity. EVP Chris Pyne confirmed that Unum continues to see natural growth from wages and employee additions at historical levels during renewals.

John Barnidge asked about Unum's proprietary moat in leave management capabilities and inquired about the market dynamics between core and large case markets.

Answer

CEO Rick McKenney and Chris Pyne, head of Group Benefits, detailed that Unum's competitive moat in leave management stems from decades of experience, deep expertise in the associated disability claims, and significant investment in integrating with client HR ecosystems. CFO Steven Zabel added that these investments are funded within existing operations. Regarding market dynamics, management noted that while large case sales were exceptionally strong, the core market also saw double-digit growth, driven by platform integrations and bundled solutions.

John Barnidge asked about Unum's proprietary moats in leave management capabilities amid growing competition. He also inquired about the sales growth dynamics between the core and large case markets over the last year.

Answer

CEO Rick McKenney identified Unum's moat as its decades of experience in both leave and disability management, combined with deep integration into key employer HR platforms. CFO Steve Zabel added that these investments are funded by ongoing operations. Regarding market dynamics, management noted that while large case (National Client Group) sales were exceptionally strong, the core market also saw double-digit growth in the quarter, demonstrating a healthy balance.

John Barnidge of Piper Sandler asked about the potential runoff duration for the long-term care (LTC) block if a risk transfer deal is not pursued. He also inquired about how tech connectivity is helping win business in the large case market.

Answer

CFO Steven Zabel described the LTC block as having a multi-decade runoff but emphasized the company feels confident in its ability to manage the book effectively. Chris Pyne, head of Group Benefits, explained that Unum's multiyear investments in platforms like HR Connect and Total Leave create a robust, integrated offering that solves major problems for large employers, leading to a higher sales close ratio.

John Barnidge asked about Globe Life's investment portfolio's exposure to software companies, the potential impact of artificial intelligence (AI), and any de-risking activities undertaken.

Answer

Frank Svoboda, Co-CEO, stated that the company has very limited exposure to software companies, estimating less than $15 million in the alternative portfolio and less than 2% of the fixed maturity portfolio in technology. He explained that Globe Life is generally underweight in tech, focusing on long-term stable companies like IBM, Amazon, and Microsoft, and that AI disruption is a considered risk in their investment matrix.

John Barnidge inquired about Globe Life's investment portfolio exposure to software companies and how the portfolio is being impacted by the rise of Artificial Intelligence (AI), along with any de-risking activities undertaken.

Answer

Frank Svoboda, Co-CEO, stated that software exposure in the alternative portfolio is minimal (less than $15 million), with private credit representing about 1% of total invested assets. In the fixed maturity portfolio, technology exposure is under 2%, mainly in hardware and data service providers. He noted a small portion (less than $50 million) with potential AI displacement risk but protected by proprietary data. AI disruption is a long-standing risk consideration, with investments focused on long-term stable companies like IBM, Amazon, and Microsoft.

John Barnidge asked about the health sales distribution environment, specifically if the aging baby boomer generation is creating a secular, extended need for Globe Life's products beyond recent trends. He also sought an update on the EEOC investigation following the conclusion of the DOJ and SEC investigations, inquiring about its ongoing status and visibility into its resolution.

Answer

Matthew Darden, Co-CEO, discussed the Medicare Supplement market, noting that while Medicare Advantage has grown due to low premiums, there's a consistent segment of customers willing to pay for choice and provider freedom, which will always be an opportunity for Globe Life. He acknowledged short-term market disruptions but expressed long-term confidence. Tom Kalmbach, EVP and CFO, added that the growing number of retirees is a favorable demographic dynamic. Regarding the EEOC investigation, Darden reiterated that EEOC findings are not binding, no litigation is pending, and it remains status quo. Frank Svoboda, Co-CEO, reminded that courts have consistently found American Income Life agents appropriately classified as independent contractors and the company would vigorously defend any lawsuits.

John Barnidge asked about health sales performance, the distribution environment, and whether an aging baby boomer generation creates a secular demand for Globe Life's products. He also sought an update on the status and visibility of the EEOC investigation.

Answer

Co-CEO Matthew Darden discussed the Medicare Supplement market, noting that while Medicare Advantage has grown due to low premiums, increasing rates in MA are creating opportunities for MS, where customers value choice. He acknowledged short-term market disruptions but expressed long-term optimism. CFO Tom Kalmbach added that the demographic trend of a growing retired population is a favorable dynamic for product sales. Regarding the EEOC investigation, Darden stated that findings are not binding, no litigation is pending, and it's status quo. Co-CEO Frank Svoboda reiterated that courts have historically found American Income Life agents appropriately classified as independent contractors, and any lawsuits would be vigorously defended.

John Barnidge of Piper Sandler followed up on the Bermuda strategy, asking if the plan to move 25% of in-force reserves would involve a series of transactions. He also questioned if the resulting efficiencies could enable an acceleration in agent growth or opportunistic M&A.

Answer

Executive VP & CFO Thomas Kalmbach confirmed the plan would likely involve a series of transactions over time, including ceding new business. Co-Chairman & Co-CEO J. Matthew Darden clarified that while the increased cash flow provides flexibility and could support future M&A, it would not change their current disciplined approach to investing in new sales and agent growth.

John Barnidge of Piper Sandler Companies inquired about the strategy for the Bermuda reinsurance entity, asking if the plan to cede 25% of in-force reserves would involve a series of transactions or one large one. He also asked if the resulting free cash flow and operational efficiencies could accelerate agent growth or enable opportunistic M&A.

Answer

Executive VP & CFO Thomas Kalmbach stated the plan is to use a series of transactions over time, ceding both in-force blocks and a portion of new business. Co-Chairman & Co-CEO J. Matthew Darden clarified that the 25% target is a long-term view. He also explained that the company is not currently capital-constrained and invests fully in new sales with appropriate returns, so the change wouldn't necessarily accelerate agent growth but would provide more flexibility, potentially for future M&A.

John Barnidge from Piper Sandler Companies asked whether the plan to move 25% of life reserves to Bermuda would involve a series of transactions and if the resulting financial flexibility would accelerate agent growth or M&A activity.

Answer

Executive VP & CFO Thomas Kalmbach stated the plan would likely involve a series of transactions over time. Co-Chairman & Co-CEO J. Matthew Darden explained that the additional flexibility would not necessarily accelerate agent growth, as they are not capital constrained, but it could support opportunistic M&A in the future, though share repurchases remain the primary focus.

John Barnidge asked about the target level for reducing commercial paper balances and whether the increase in health usage was driven more by frequency or severity, referencing a recent article on fraud.

Answer

CFO Thomas Kalmbach stated the goal is to reduce commercial paper from ~$410 million to its historical range of $300-$325 million. On health usage, Kalmbach confirmed utilization is the main driver but noted that higher-cost specialty bandage claims are contributing to severity. Co-CEOs Frank Svoboda and James Darden added that the company is taking action to mitigate fraud and that this is an industry-wide issue.

John Barnidge of Piper Sandler asked about agent count trends in the first quarter so far and requested an update on the company's initiative to establish a Bermuda platform.

Answer

Co-CEO James Darden noted that while there is some seasonality in recruiting around the holidays, the company is starting the year strong and is pleased with the high correlation between agent count and sales growth. CFO Thomas Kalmbach stated that the analysis for the Bermuda subsidiary is on track, and an update will be provided mid-year as previously communicated.

John Barnidge from Piper Sandler questioned whether the company is now factoring the impact of GLP-1 drugs into its mortality assumptions and if the 2025 guidance incorporates any capital benefits from a potential Bermuda reinsurance platform.

Answer

Co-CEO Frank Svoboda stated that Globe Life is not yet factoring in potential mortality improvements from GLP-1 drugs, preferring to wait for observable impacts on their specific insured base before adjusting long-term assumptions. CFO Thomas Kalmbach confirmed that the 2025 guidance does not include any potential benefits from the Bermuda initiative, as the evaluation is ongoing and expected to conclude in 2025.

John Barnidge asked about the potential size of the sports business within the new KKR Solutions vertical's $100 billion AUM target and whether this assumes any changes in domestic league ownership limits.

Answer

CFO Rob Lewin stated that there are no specific targets for the individual components (sports, GP Solutions, secondaries) within the $100 billion AUM goal, as KKR sees significant growth potential across all areas. He highlighted the opportunity for Arctos to originate across KKR's broader ecosystem and for KKR to provide a differentiated toolkit, such as stadium financing. Co-CEO Scott Nuttall clarified that the growth expectations for the sports business are not predicated on any changes to existing league ownership rules.

John Barnidge asked about the projected size of the sports business within the new KKR Solutions vertical's $100 billion AUM goal and whether this assumes any changes in domestic league ownership limits.

Answer

CFO Rob Lewin stated there are no specific targets for the individual components (sports, GP solutions, secondaries) within the $100 billion AUM goal, with significant growth expected across all areas. He highlighted the opportunity to leverage Arctos's market presence to originate across KKR's broader ecosystem, including stadium financing and sports-adjacent real estate. Co-CEO Scott Nuttall clarified that the growth expectation for the sports business is not contingent on any changes to existing league ownership rules.

John Barnidge inquired about the opportunity for KKR to enhance relationships and broaden its reach within the broader life insurance sector through product creation for retirement products, evergreen, or interval funds.

Answer

Co-CEO Scott Nuttall confirmed this is a significant opportunity, noting that life insurers are a meaningful component of KKR's growing third-party insurer relationships, scaling in both life and P&C. He highlighted increased discussions about infrastructure, real estate equity, and specific sizable transactions for partnership. Nuttall emphasized that this is a global opportunity, with KKR's total AUM from insurers (GA plus third parties) now between $290 billion and $300 billion. CFO Rob Lewin added that KKR has formed a dedicated group to deliver the firm's capabilities to insurance clients, including reinsurance opportunities, globally.

John Barnidge asked about the opportunity for KKR to enhance relationships and broaden its reach within the broader life insurance sector through product creation for retirement products, evergreen, or interval funds.

Answer

Scott Nuttall, Co-Chief Executive Officer, confirmed this is a significant opportunity, noting that life insurers are a meaningful and growing component of KKR's third-party insurer client base. He stated that KKR is increasingly discussing infrastructure, real estate equity, and other opportunities with life and P&C insurers, both in the U.S. and globally. Nuttall mentioned that KKR's total AUM from insurers (Global Atlantic plus third parties) is now between $290 billion and $300 billion. Rob Lewin, Chief Financial Officer, added that KKR has a dedicated group focused on delivering the firm's capabilities to insurance clients, including reinsurance opportunities.

John Barnidge from Piper Sandler Companies asked about the potential opportunity for KKR arising from 401(k) retirement reform and how significant this could be for the company.

Answer

Craig Larson, Partner & Head of IR, and Scott Nuttall, Co-CEO, framed it as a very interesting, albeit long-term, opportunity. They emphasized it's about giving individual investors access to higher-performing asset classes, similar to institutional plans. They see target-date funds as the likely first entry point for alternatives. Nuttall noted that while the quantum and timing are unknown, the opportunity is entirely incremental to their current plans and that KKR is well-positioned due to its brand, track record, and partnership with Capital Group, a major target-date fund player.

John Barnidge asked for details on the factors contributing to the lower benefit ratio projected in Aflac Japan's 2026 guidance and the sustainability of this trend. He also questioned the total addressable market for new Japan products like Tsumitasu and Anshin Palette, and whether Moraito and annuity products require repricing.

Answer

Max Brodén (CFO, Aflac Incorporated) identified three key drivers for the lower benefit ratio: a 130 basis point reduction in the net premium ratio from updated actuarial assumptions, increased lapse and reissue activity with new product launches, and the shrinking runoff of the high GAAP benefit ratio WAYS product block. Koichiro Yoshizumi (Head of Marketing and Sales Division, Aflac Life Insurance Japan) explained Tsumitasu targets young and middle-aged individuals for asset formation but also attracts affluent customers, noting its flexible rate adjustment. Daniel Amos (Chairman and CEO, Aflac Incorporated) highlighted Moraito's strong performance and anticipated increased sales from medical products and Tsumitasu.

John Barnidge from Piper Sandler asked about the drivers and endurance of the lower benefit ratio in Aflac Japan's 2026 guidance, particularly concerning new business versus the in-force block and product repricing. He also inquired about the total addressable market for new Japan products like Tsumitasu and Anshin Palette, and if Moraito or annuity products require repricing.

Answer

Max Brodén, CFO of Aflac Incorporated, attributed the lower benefit ratio to a permanent 130 basis point reduction in the net premium ratio from Q3 2025 actuarial assumption updates, increased lapse/reissue activity from new product launches, and the shrinking high-GAAP-benefit-ratio WAYS product block. Koichiro Yoshizumi, Head of Marketing and Sales Division, Aflac Life Insurance Japan, described Tsumitasu's market as young to middle-aged individuals seeking asset formation, also attracting affluent customers, and noted its flexible rate adjustment. Daniel Amos, Chairman and CEO, Aflac Incorporated, highlighted strong Moraito sales and potential growth from medical products and Tsumitasu.

John Barnidge asked whether the new 'Miraito' product was fully rolled out across all distribution channels by the end of Q2. He also inquired about the expected frequency of product refreshes now that Aflac is bundling products and solutions.

Answer

An Aflac Japan representative confirmed that the 'Miraito' product was launched in March and rolled out to the bank channel and Japan Post in April, making it available across all channels. The representative also stated that the typical refresh cycle, subject to FSA approval, is about three years for cancer insurance and two years for medical insurance.

John Barnidge of Piper Sandler Companies asked whether the new MiRyto product in Japan was fully rolled out across all distribution channels by quarter-end and inquired about the expected frequency of future product refreshes.

Answer

An Aflac Japan executive confirmed that the MiRyto product launch was completed in April with its rollout to Japan Post, making it available across all channels. The executive also stated that the typical product refresh cycle is about three years for cancer insurance and two years for medical insurance, subject to regulatory approval.

John Barnidge asked about the persistence of remeasurement gains in both Japan and the U.S., seeking clarity on the expected 'waterfall or decay' of these gains and whether they would be primarily concentrated in the third quarter.

Answer

Max Broden, CFO, confirmed that the most significant remeasurement impacts occur in Q3 when actuarial assumptions are annually unlocked. He noted that gains in other quarters are smaller true-ups but reflect a long-term trend of favorable claims utilization. Alycia Slyck, SVP and Global Chief Actuary, reiterated that the annual unlocking of assumptions in Q3 reflects all experience to date.

John Barnidge asked for clarification on the market impact of the U.S. dental and vision platform's past implementation failure and whether to expect a near-term sales dip in Japan ahead of a new cancer product launch.

Answer

Virgil Miller, President of Aflac U.S., clarified that while the dental product was available, earlier service issues eroded broker trust, leading to a 33% sales decline in Q4. In Japan, Koichiro Yoshizumi detailed the upcoming cancer product launch, and CEO Daniel Amos confirmed a typical pattern of a brief sales dip before a new product launch, followed by strong growth.

John Barnidge sought clarification on whether the 100 basis point benefit ratio improvement already incorporates long-term experience trends. He also asked if this GAAP unlock increases the potential pool of liabilities that could be reinsured to Bermuda.

Answer

EVP and CFO Max Broden and Global Chief Actuary Alycia Slyck confirmed that the unlock incorporates all current experience and future trend expectations, which are reviewed annually. Regarding reinsurance, Max Broden stated the GAAP unlock is unrelated to the Bermuda strategy, as it has no impact on U.S. statutory or Japan FSA reserves, which are the basis for such transactions.

John Barnidge asked about the early retirement offering, specifically the percentage of eligible employees who participated and its impact on workforce planning. He also inquired about Horace Mann's approach to share repurchases as an opportunistic lever and the targeted run rate level of free cash flow conversion of operating earnings.

Answer

Marita Zuraitis, President and CEO, stated that only about 8% of employees were eligible for the early retirement offering, which was designed to accelerate workforce planning and align skills for future growth. She noted a 'pretty nice participation rate' and the dual benefit of reinvestment and expense ratio improvement. Ryan Greenier, Executive Vice President and CFO, confirmed that associated costs would be non-core. He also mentioned exceeding free cash flow targets in 2025 at 80% and targeting north of 75% for 2026, highlighting share buybacks as an attractive lever.

John Barnidge asked about the early retirement offering, specifically the percentage of eligible employees who took the opportunity to align the workforce. He also inquired about the run rate level of free cash flow conversion of operating earnings targeted in the Investor Day goals, considering share repurchases as an opportunistic lever not embedded in guidance.

Answer

CEO Marita Zuraitis stated that only about 8% of employees were eligible for the early retirement offering, which was designed to accelerate workforce planning and acquire future skills. She expressed satisfaction with the participation rate, noting that the savings would be reinvested and contribute to expense ratio improvement. CFO Ryan Greenier confirmed that associated costs are non-core and highlighted that Horace Mann exceeded its 2025 free cash flow targets at approximately 80% conversion, with a target of over 75% for 2026, supported by capital-efficient businesses. He also noted active share buybacks as an attractive lever.

John Barnidge inquired about sales volumes and RFP activity in the Individual Supplemental and Group Benefits segments. He also asked whether recent P&C sales growth was driven by the core educator customer or by new channels discussed at the recent Investor Day.

Answer

EVP & COO Stephen McAnena detailed that Individual Supplemental sales growth of 43% was broad-based, driven by increased seller productivity. For Group Benefits, he noted that despite a quiet Q2, a record July and a strong pipeline give them confidence for the second half. President & CEO Marita Zuraitis added that the growth is still overwhelmingly from the core educator market, as initiatives for new channels are in their early stages.

John Barnidge asked for details on sales volumes and RFP activity in the Individual Supplemental and Group Benefits segments. He also inquired whether the recent strength in P&C sales stemmed from the core educator customer base or from new channels discussed at the recent Investor Day.

Answer

EVP & COO Stephen McAnena reported that Individual Supplemental sales rose 43%, driven by broad-based productivity, not a single large case. He noted that Group Benefits has a longer, lumpier sales cycle but that July was a record month, indicating strong second-half performance. President & CEO Marita Zuraitis clarified that recent P&C growth is still overwhelmingly from the core educator market, as initiatives to expand into adjacent channels are still in their early stages.

John Barnidge of Piper Sandler Companies asked about sales volumes and RFP activity in the Group Benefits and Individual Supplemental segments. He also inquired whether the recent strength in P&C sales was attributable to the core educator customer base or the new channels discussed at the recent Investor Day.

Answer

COO Stephen McAnena and CEO Marita Zuraitis addressed the questions. McAnena detailed that the 43% sales growth in Individual Supplemental was broad-based, driven by higher agent productivity. For Group Benefits, he noted that while quarterly results can be lumpy, the sales pipeline is strong, with July being a record month. Zuraitis clarified that the recent P&C sales growth is still overwhelmingly from their core educator customer base, as the initiatives to expand into new channels are still in their early stages and not yet meaningfully impacting results.

John Barnidge of Piper Sandler Companies asked for details on the Individual Supplemental and Group Benefits segments, specifically regarding sales volumes and RFP activity. He also questioned whether the recent strength in P&C sales and improved outlook for policies in force stemmed from the core educator customer base or from new channels discussed at the company's Investor Day.

Answer

EVP & COO Stephen McAnena detailed that the 43% sales growth in Individual Supplemental was broad-based from increased seller productivity, not a single large case. For Group Benefits, he noted that while Q2 was quiet, the long sales cycle provides strong visibility into future growth, with July being a record sales month. President & CEO Marita Zuraitis added that the growth is still overwhelmingly from the core educator customer, as initiatives to expand into adjacent markets are still in early stages and will not significantly shift the customer mix in the near term.

John Barnidge of Piper Sandler Companies inquired about sales volumes and RFP activity in the Group and Individual Supplemental Benefits segments, and asked if recent P&C sales growth was driven by the core educator customer or by new channels.

Answer

EVP & COO Stephen McAnena reported that Individual Supplemental sales growth was broad-based and sustainable, while the Group Benefits business, though lumpy, had a strong outlook for the second half of the year, evidenced by a record July. CEO Marita Zuraitis clarified that recent P&C growth is still overwhelmingly from the core educator customer base, as initiatives to expand into adjacent channels are still in their early stages and not yet meaningfully impacting results.

John Barnidge from Piper Sandler asked about the drivers behind the 61% growth in individual supplemental sales and whether the company was increasing reserves for Supplemental and Group Benefits due to potential macroeconomic deterioration.

Answer

Stephen McAnena, EVP & COO, explained the supplemental sales growth was due to strong execution by benefit specialists and a comparison to a light Q1 2024, noting 12-month rolling growth is around 12%. Regarding reserves, Ryan Greenier, EVP & CFO, stated there are no current plans to increase them for macro factors, as utilization trends show no cause for concern and the educator market is historically resilient. Marita Zuraitis, President & CEO, added that an increase in utilization was already contemplated in their plans.

John Barnidge asked whether improving rate adequacy in the personal lines industry presents new strategic options for Horace Mann, particularly in property, and requested an update on the tangible impacts from changes to deductibles and roof schedules.

Answer

President and CEO Marita Zuraitis emphasized that Horace Mann's strategy remains focused on its educator niche and is not based on being the lowest-priced option, highlighting strong retention. Executive Mark Desrochers added that while they offer a bundled product suite, they remain mindful of property volatility. EVP and CFO Ryan Greenier noted the target for the property line is a combined ratio of 90% or lower. Regarding underwriting changes, Mr. Desrochers confirmed they are seeing positive impacts from new deductibles and roof schedules, which contributed to favorable prior year reserve development.

John Barnidge of Piper Sandler inquired about the growth opportunities across Horace Mann's business segments as the company approaches rate adequacy, specifically in both its core educator market and adjacent markets. He also asked for an outlook on commercial mortgage loan income, questioning if annual marks might turn into gains.

Answer

President and CEO Marita Zuraitis and Executive Mark Desrochers highlighted strong auto sales momentum from increased agent productivity and digital investments, projecting policy growth in late 2025. Executive Steve McAnena detailed the worksite segment's strength, noting record individual supplemental sales and stable fundamentals in the group business. CFO Ryan Greenier stated that while commercial mortgage loans show early signs of stabilization, it is too soon to predict if future marks will become gains, though the second-half income forecast is nearly achieved.

John Barnidge inquired if the wider range of outcomes and reserve adjustments in the Stop Loss business indicate increased seasonality going forward, and also asked about the strategic rationale of Stop Loss, particularly its synergies with Investment Management and Retirement growth opportunities.

Answer

Michael Katz, CFO, noted that the current healthcare backdrop is a 'once-in-a-generation' situation, making it uncertain if the wider range of outcomes will be a recurring seasonal event, but affirmed that Voya will continue its rigorous assessment. Heather Lavallee, CEO, explained that Employee Benefits, including Stop Loss, is a critical product in the portfolio, meeting high employer demand for managing volatile medical medical expenses and complementing accumulation-focused businesses like Retirement and Wealth Management, thus serving clients comprehensively at the workplace.

John Barnidge asked if the wider range of Stop Loss outcomes implies more seasonality going forward and inquired about the strategic rationale of the Stop Loss business in terms of synergies with Investment Management and Retirement growth opportunities.

Answer

Mike Katz (CFO, Voya Financial) indicated that while 2024 and 2025 represent a 'once-in-a-generation' healthcare backdrop, it's not necessarily a signal for recurring Q4 seasonality, but rather a commitment to ongoing rigorous analysis and reserving. Heather Lavallee (CEO, Voya Financial) emphasized that Stop Loss is a critical product within Workplace Solutions, meeting high employer demand for controlling volatile medical expenses. She highlighted its complementary nature with supplemental benefits, leave management, and the broader retirement, wealth management, and asset management businesses, all contributing to Voya's vision of helping clients achieve financial security.

John Barnidge of Piper Sandler Companies asked about the strategic partnership with Blue Owl Capital, its potential for the retirement business, and the possibility of co-branded products. He also inquired about the new distribution partnership with Edward Jones and the scope of products to be offered.

Answer

CEO - Workplace Solutions Jay Kaduson explained the Blue Owl partnership will expand access to private investments for retirement clients, initially through CITs in managed accounts and target-date funds. CEO - Voya Investment Management Matt Toms added they will co-develop products focused on strong risk-adjusted returns. Regarding Edward Jones, CEO & Director Heather Lavallee noted it was a key benefit of the OneAmerica deal. Kaduson elaborated that the new selling agreement will drive full-service sales and expand Voya's distribution footprint.

John Barnidge of Piper Sandler asked about the $6 million in severance costs and whether Sconset Re assets contributed significantly to Investment Management's strong net flows.

Answer

CFO Michael Katz explained the severance was part of normal course expense management and was not concentrated in any one area, with no further large charges anticipated. Matthew Toms, CEO of Investment Management, stated that while Sconset Re is a client, its contribution to Q1 flows was not outsized, as the assets are primarily in private strategies that take time to fund. He emphasized the quarter's success was driven by broad-based demand across multiple channels and products.

John Barnidge asked about the Sconset Re partnership, specifically how many of Voya's existing insurance clients currently lack a sidecar structure. He also asked for visibility into first-quarter annual marks on variable investment income.

Answer

CEO of Investment Management Matt Toms estimated that the majority of Voya's 70+ insurance clients, which are often mid-to-small sized, do not have sidecars, representing a growth and advisory opportunity. Regarding variable investment income, he acknowledged it is difficult to predict but suggested that current market conditions could support a return toward the company's 9% long-term average assumption.

John Barnidge asked about the opportunity to cross-sell Voya products into the OneAmerica client base and the potential for investment portfolio repositioning. He also inquired about non-renewal strategies in Stop Loss and cross-sell opportunities with Benefitfocus.

Answer

Executive Michael Katz noted the OneAmerica portfolio is conservatively positioned, offering opportunities for reinvestment over time. Executive Rob Grubka highlighted ESOPs as a key cross-sell capability from OneAmerica to Voya's book and the potential to engage OneAmerica's 800,000 new participants via retail wealth management. He added that the focus with Benefitfocus is currently on a successful open enrollment, with broader cross-sell opportunities to be leveraged in the future.

John Barnidge asked for Ameriprise's perspective on the consolidation opportunities within the asset management industry. John Barnidge followed up on Ameriprise's asset management technology transformation, asking what 'inning' the company is in regarding the initial transformation of its expense base to better position the organization for additional AUM.

Answer

Chairman and CEO Jim Cracchiolo noted ongoing consolidation in asset management but suggested a 'wait and see' approach given strong markets. He highlighted Ameriprise's focus on transforming its platform for efficient asset addition, product introduction, and cost reduction through technology, new products (ETFs, SMAs, alternatives), and offshore resources. He expressed confidence in active management's reassertion and Ameriprise's strong investment performance. Cracchiolo stated that Ameriprise is in the 'later innings' of completing its back-office transformation by later this year, with ongoing efforts on the front end using AI, intelligent automation, and offshore demographics. CFO Walter Berman concurred.

John Barnidge inquired about the consolidation opportunities within the asset management industry, particularly in the current market environment. He also asked about the progress of Ameriprise's asset management technology transformation, specifically what 'inning' the company is in regarding the initial transformation of its expense base to better position for additional assets under management.

Answer

Chairman and CEO Jim Cracchiolo noted that while consolidation has been ongoing, favorable markets might lead to a 'wait and see' approach from some. He highlighted Ameriprise's focus on transforming its platform, introducing new products (ETFs, SMAs, alternatives), and improving efficiency. Regarding the technology transformation, Jim Cracchiolo stated they are in the 'later innings' for the back-office component, expecting completion later in 2026, with ongoing efforts on the front end using AI and leveraging offshore demographics. CFO Walter Berman concurred.

John Barnidge asked if Ameriprise is considering partnerships with other asset managers for new product creation, such as interval or evergreen funds. He also inquired about the deceleration in AWM inflows, specifically whether outflows from departing teams are exceeding inflows from new additions, and how this impact can be dimensioned.

Answer

Chairman and CEO Jim Cracchiolo stated Ameriprise is looking at various arrangements, including launching its own interval fund and working on other alternative space products, some with partners and some organically. He confirmed that in the short term, losing large teams can make outflows exceed inflows, but emphasized a strong pipeline (e.g., a recent $1.7 billion win) and focus on organic growth, advisor productivity, and long-term fundamentals.

John Barnidge asked for details on Asset Management flows, specifically the cause of higher redemptions beyond the known Lionstone outflow. He also inquired how the company balances human capital investment against automation and AI to fund competitive recruiting.

Answer

Chairman & CEO James Cracchiolo cited institutional lumpiness and a retail slowdown in April for the redemption pressure, though he noted a subsequent pickup in gross sales. He explained that the company consistently invests in technology and AI, which drives efficiencies and productivity, allowing them to reinvest savings into strategic areas like recruiting, rather than viewing it as a direct trade-off.

John Barnidge of Piper Sandler Companies asked about the drivers of higher redemptions in Asset Management and how the company weighs investments in human capital versus automation and AI to manage costs.

Answer

James Cracchiolo, Chairman & CEO, explained that institutional outflows were lumpy and retail redemptions rose in April, consistent with industry trends for active managers. He elaborated that the company continuously invests in technology, AI, and automation, which drives productivity and allows for the reallocation of resources to fund growth initiatives like competitive recruiting, viewing it as an ongoing transformation rather than a direct trade-off.

John Barnidge asked for an updated view on Retirement and Protection Solutions (RPS) earnings, which have recently been exceeding the $200 million quarterly guidance. He also inquired about what might be needed for retail investors in Asset Management to re-engage.

Answer

CFO Walter Berman described the RPS earnings as 'solid and predictable,' stating the company feels comfortable with the book's performance due to its investment strategy. Chairman and CEO Jim Cracchiolo addressed retail engagement by highlighting product initiatives, including rolling out more active ETFs, focusing on SMA model delivery, and launching new products like an interval fund. He noted that while gross sales were up, higher redemptions impacted net flows, reflecting a broader industry trend.

John Barnidge of Piper Sandler asked if recent premium rate increases in Long Term Care (LTC) would lead to a higher earnings run-rate and inquired about adviser demand for alternative assets in the Wealth Management channel.

Answer

Executive Walter Berman indicated that the fundamentals for Long Term Care are on a good trajectory for continued profitability, without providing a specific earnings number. Executive Jim Cracchiolo explained that while a digital alternatives platform has been built, adviser adoption is in its early stages but is expected to grow over time.

John Barnidge asked if the long-term care (LTC) risk transfer analysis considered a full sale of the RiverSource life insurance subsidiary or was limited to specific liabilities. He also inquired about the future direction of distribution expenses in AWM.

Answer

CFO Walter Berman and CEO Jim Cracchiolo clarified the analysis was focused on reinsurance transactions for the LTC block, which could have included transferring some life insurance books as part of a deal, but not a full sale of RiverSource. Regarding AWM expenses, Jim Cracchiolo noted that volume-related distribution costs are embedded in G&A, which remains well-managed due to re-engineering and efficiency initiatives.

John Barnidge inquired about the 2025 outlook for net flows and surrender activity, and how Brighthouse Financial might optimize its investment portfolio to enhance competitiveness in the RILA market.

Answer

Head of Product and Underwriting David Rosenbaum stated that he expects 2025 net flows to be at or higher than 2024 levels, driven by fixed rate and Shield annuities coming out of their surrender periods. Chief Investment Officer John Rosenthal commented that the company is continuously working to optimize its investment portfolio to improve returns but did not provide specific details on current initiatives.

John Barnidge asked about the expense associated with outsourcing investment management and the concentration of those outsourced assets with any single manager.

Answer

Chief Investment Officer John Rosenthal stated that the company does not provide a specific breakdown of outsourcing fees but noted that investment management agreement (IMA) fees are the majority of the overall investment expense number found in their financials. He declined to specify the concentration of assets, stating only that they use about a dozen world-class outside managers across various sectors.

John Barnidge of Piper Sandler inquired about the possibility of optimizing the investment portfolio, the potential for enhanced annuitizations or buyouts for the closed block, and the scope of liabilities being considered for transactions.

Answer

CEO Eric Steigerwalt stated that optimizing the investment portfolio is a possibility and not excluded from their strategic review. He noted that the company has generally avoided buyouts due to distributor disruption and historically low take rates, making it an unlikely path. Regarding the scope for deals, Steigerwalt confirmed they are looking at everything but must prioritize based on the 'art of the possible' and degree of difficulty.

John Barnidge asked where inorganic growth fits into the company's strategy and inquired about the opportunity for interval funds at PGIM.

Answer

CEO Andy Sullivan positioned organic growth as the top priority but called inorganic growth an important tool for maintaining market leadership, emphasizing a disciplined approach. He confirmed that PGIM has introduced interval funds combining public and private assets, viewing it as a key opportunity, though it is still in the early stages and will take time to impact results.

John Barnidge inquired if the opportunistic M&A capital allocation would be primarily for Prismic or if it included interest in other areas like emerging markets. He also asked if Prismic could now 'warehouse' liabilities to streamline future transactions.

Answer

Chairman and CEO Charles Lowrey responded that while organic growth is the priority, the company remains open to selective M&A for PGIM, emerging markets, or to add distribution and scale, including through Prismic. Vice Chairman Rob Falzon clarified that there is no specific plan to 'warehouse' liabilities; rather, Prudential's core businesses naturally generate a significant and ongoing pipeline of opportunities for Prismic.

John Barnidge asked for clarification on the new variable investment income (VII) pre-announcement disclosure and inquired about the strategic partnerships being developed in the Workplace Solutions business.

Answer

Yanela Frias, Chief Financial Officer, confirmed that the VII pre-announcement will be included within the existing AUM disclosure, not as a separate release. Caroline Feeney, Head of U.S. Businesses, highlighted partnerships focused on enhancing the customer enrollment and claims experience, such as one with Evolution IQ that uses AI to improve disability claims evaluations, positioning the group business for continued profitable growth.

John Barnidge asked about the growth drivers in the group insurance channel, specifically the contribution from employee and wage growth versus adding new coverage. He also inquired about the international growth strategy, the opportunity set in emerging markets, and the potential for M&A to accelerate expansion.

Answer

Caroline Feeney, Head of U.S. Businesses, explained that growth in the group channel is primarily driven by the execution of their diversification strategy into smaller case sizes and supplemental health products, rather than just employment trends. Andy Sullivan, Head of International Businesses and PGIM, outlined the strategy to focus on select emerging markets in Latin America, Asia, and Africa. He confirmed that while organic growth is the priority, the company is open to programmatic M&A to accelerate its presence in these markets.

John Barnidge asked if the real estate component of variable investment income (VII) could become a larger contributor upon recovery. He also inquired about growth opportunities from regulatory reforms in Asia beyond the known changes in Korea.

Answer

CFO John McCallion indicated that while real estate fund returns are improving, their expected returns are typically lower than private equity, so their relative contribution to VII should remain consistent with their risk profile. He also noted that while the move to an economic framework in Korea is favorable, it doesn't necessarily change the broader business outlook across Asia, but rather aligns the regulatory environment with MetLife's internal management approach.