Robin Raju: We do expect in the short-term some continued pull forward that’s reflected in our $200 million to $300 million guidance for the full-year that we’ve given. And in Q1, that’s seasonally a high flu season, also COVID lingers as well. So you could see some continued experience there. So far, we haven’t seen anything, though, but that is generally a high peak season for mortality.
Jimmy Bhullar: Okay, thank you
Operator: Your next question comes from the line of Wilma Burdis with Raymond James. Your line is open
Wilma Burdis: Ye, good morning. Your ’24 guide seems to imply EPS of around $6.16. Does that include or assume that interest rates go down? And if so, by how much?
Robin Raju: All of our — when we guide for projections, we take the forward curve as of year-end, the Fed fund rate and interest rates. So I’d point you to the forward curve, if you want to look at guidance as it related to what’s embedded in our numbers. And then we also assume an equity return of with a 2% dividend yield as well. And then the sensitivities we provided in the appendix, the equities, interest rates and short-term cash sweeps.
Wilma Burdis: Thank you. And then a quick one, when Equitable is novating policies to Arizona, does the policyholders have to consent to the move? Or can they approve by negative consent? I guess my question is, is there any risk that certain policies won’t novate? And if so, what would that look like?
Robin Raju: Yes. We — just overall novation, we expect the novation process to take over two years. It’s gone through state approvals now, which can vary by state. Some states do provide allows negative consent. Some states provide consent is needed. We’re also undergoing the process of novating policies that were reinsured to Venerable. This has already been approved by the Iowa and New York regulators. So that’s in good state. And we think it helps our broader strategy and aligns us to our peers and provides us financial flexibility going forward. So but we’re quite comfortable with the process that we have, but it is a cumbersome process, state-by-state, and there are different rules state-by-state.
Wilma Burdis: Just a quick one. I mean, what happens if the policyholders sold improves if they have to?
Robin Raju: Then some policyholders would stay in New York and to operate like they are today on their internal reinsurance. But we expect the majority of the policyholders should novate over.
Wilma Burdis: Thank you.
Operator: Your next question comes from the line of Mark Hughes with Truist Securities. Your line is open.
Mark Hughes: Yes, thank you. On the SCS product, it seems like you’re if I’m looking at the numbers correctly, the RILA market was up about 30%, and you seem to double that. Is that a function of wider distribution, just more productivity. You’re already the market leader. So I’m sort of curious whether you can sustain the kind of market share gains you’ve seen?
Nick Lane: Sure. This is Nick. Look, as we articulated on Investor Day, we think we’re well positioned to capture a disproportionate share of the value in that space. the reasons that you articulated. We were the pioneer in this market. Over 15 years, we’ve got a track record our privilege distribution, that’s both third-party as well as Equitable advisers that understands how to integrate this into a portfolio. as well as our continuous innovation and thinking through new segments. I would highlight one of the advantages we have is in our innovation is given our Equitable advisers. We get feedback on what new client needs are, what advisers are looking for this drives our innovation on the product to continue to leverage this as part of more portfolios.
Mark Hughes: Then the Group Retirement, you described a net outflows in non-core channels offset by the inflows in the tax exempt market, does that dynamic continue? Or is there some inflection point where the inflows become more prominent?
Nick Lane: Yes, Mike, as you highlight, our Group Retirement is comprised of what I would say is 3 channels, our tax exempt channel or corporate channel institutional. Within our core tax exempt business, we had positive flows for the year, $365 million, and for the quarter, $115 million, driven by new client enrollments and renewal contributions as the #1 provider of supplemental retirement than plans to kindergarten to 12th grade teachers. We benefit from the scale of our 1,000 advisers serving over 9,000 payroll slots. And we’re proud that educators that work with advisers contribute 70% more and are better prepared for retirement. As a result, in that, we continue to see consistent flows, organic growth and strong ROAs. In the corporate market, we would expect — we had good inflows.
As you highlighted, we saw outflows in the noncore sort of older 401(k) blocks. I would highlight as a reminder, given our distinct model with Equitable advisers, about 25% of these outflows from this worksite model translate into individual solutions as consumers look to meet their holistic needs. Where we see the step function changes in the institutional channel, which is reported in Group Retirement and as we highlighted in the prepared remarks and some of the questions we’ve got confidence that we’ll start to see flows here in ’24. Those will be large, but lumpy.
Mark Hughes: Okay, thank you.
Operator: And your final question comes from the line of Mike Ward with Citi. Your line is open.
Mike Ward: Thanks guys. Good morning. I was just wondering what you’ve been seeing in terms of the demand levels between the different annuity products and individual? I guess, maybe December, January kind of post Fed announcements, just trying to think through how we should think about that going forward?
Nick Lane: Yes. Look, we see the demand for buffered annuities continue to grow, both of those structural reasons and the fact that people are looking for protected equity stories they move through their retirement journeys. So overall, we see continued growing demand there, driven by those structural dynamics. Traditional between — was that also a question?
Mike Ward: Yes. Well, yes.
Nick Lane: Yes. And then, look, it’s part of the broader portfolio we provide. We provide protected equity solutions, income solutions and tax allocation strategies. It’s apparent to everyone that people are living longer and having secure income is a critical part of ensuring a secure retirement for the future. So we see structural demand continuing to grow. We continue to focus on value in parts of the market where we bring an edge and can create that sustainable value.
Mike Ward: Got it. Thank you. And then maybe for protection, just thinking about the mix between life and non-mortality kind of group benefits. You’ve been posting pretty good growth. Just wondering how you how you’re working on growing that non-mortality side and if you’d ever consider like a bolt-on type add there?
Robin Raju: Yes. We love the employee benefits market because it’s shorter duration, and lower tail risk as we talked about earlier in our product portfolio. We’ve grown that to over 800,000 lives covered. So we’ve seen good growth come through. It’s still a small part, a few years away from breakeven. As I mentioned, the capital at the holdco provides us flexibility to be offensive its situation to rise. But again, it’s had a high threshold because we need to have accretion to shareholders. So primary focus on capital allocation of the holdco, it was M&A, then it was accretive to shareholder would probably be in Wealth and Asset Management first is those are probably properties that we see more of come through. And — but again, a high threshold given the accretion levels that we need.
Mike Ward: Got it. Thanks, guys.
Operator: Thank you. This will conclude today’s conference call. We thank you for joining, you may now disconnect your lines.
