Aegon Ltd. (AEG) Q3 FY2025 Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to Aegon's Third Quarter 2025 Trading Update Conference Call. [Operator Instructions] Please note that today's conference is being recorded. I would now like to hand the conference over to your speaker, Yves Cormier, Head of Investor Relations. Please go ahead.

Thank you, operator, and good morning, everyone. I would like to welcome you to this call on Aegon's Third Quarter 2025 Trading Update. My name is Yves Cormier, Head of Investor Relations. Joining me today to take you through our progress are Aegon's CEO, Lard Friese; and CFO, Duncan Russell. Before we start, we would like to ask you to review our disclaimer on forward-looking statements, which you can find at the end of the presentation. With that, I would like to give the floor to Lard.

Thank you, Yves, and good morning, everyone. I will start today's presentation by running you through the strategic progress we're making and the commercial performance in the quarter. Then I will hand over to Duncan, who will address our capital results in more detail. So let me begin on Slide #2 with the key messages for the quarter. During the third quarter of 2025, we continue to make good progress in transforming our businesses, and we generated EUR 340 million of operating capital generation. World Financial Group expanded its distribution network, adding more licensed agents and increasing their productivity. The commercial momentum in our U.S. strategic assets resulted in higher life and annuity sales. In Retirement Plans, account balances increased as did the balance of our ancillary products and written sales remained strong. In the United Kingdom, we recorded some outflows due to the departure of 2 large low-margin workplace schemes, while both our asset management and international businesses continue to grow. Turning to our capital position. Our units remain well capitalized. Furthermore, the cash capital at holding remains very healthy at EUR 1.9 billion despite returning just over EUR 800 million to shareholders in the period. At the end of September, we had executed just over half of our ongoing EUR 400 million share buyback program. We expect to complete the remainder by December 15. Looking towards the end of the year, we continue to expect to achieve all our financial targets for 2025, despite the weakening of the U.S. dollar during the year. We look forward to providing you with an update on our strategy at our Capital Markets Day on December 10. On the day, we also aim to share the outcome of a review regarding a potential relocation of our legal domicile and head office to the United States. Let's now move to Slide 3 to discuss the recent commercial performance of the Americas. Our aim is to build Transamerica into America's leading middle market life insurance and retirement company. In the third quarter, we continue to make good progress with this transformation. At World Financial Group, the number of licensed agents continues to increase steadily, thanks to the successful recruitment of new agents and improved retention of existing agents. The number of multi-ticket agents remained stable compared with the past 2 quarters, albeit below the level of the third quarter of last year. We have recently focused our actions on improving the productivity of existing agents. This led to a 15% increase in total life sales at WFG and a 9% increase in annuity sales backed by solid consumer demand. Transamerica's market share in WFG was 65% in the reporting period. Around half of the 39% increase in new life sales in our Protection Solutions segment came from higher index Universal Life sales at WFG and our own agency channel. The remainder of the growth was driven by higher sales of the final expense product we offer through a fully digital underwriting platform that was launched in the autumn of 2024. In the Savings and Investment segment, net deposits in our Retirement Plan business were negative, largely due to outflows in large market plans and slightly negative net deposits in midsized plans. However, business growth and favorable markets over the last year drove a 10% increase in the total account balances. Written sales in both large market and midsized plans remain strong, which implies solid levels of takeover deposits for future periods. We generated further growth in both the general account stable value product as well as in individual retirement accounts, as we work to increase profitability and diversify revenue streams of the retirement plans business. I now move to Slide #4 to update you on our other businesses. At Aegon U.K., net deposits in the Workplace platform were negative for the first time in the last 2 years. This was due to the departure of 2 large low-margin schemes. In the adviser platform, we continue to see the adverse impact of ongoing consolidation in the nontarget adviser segments. We are working hard to improve the platform experience for our customers and the enhancements we have delivered to date have been well received, leading to higher Net Promoter Scores. Together with several other initiatives, we aim to return the adviser platform to growth by 2028. In our International segment, we continue to grow our book. Sales in Brazil continued to grow, particularly in credit and group life products, but was largely offset by currency movements. New life sales decreased at our joint venture in China, which offset growth in the other markets. The new life sales contributed to the growth of gross written premiums across the book. In Asset Management, positive third-party net deposits in our Global Platforms business were mostly driven by inflows in fixed income and alternative fixed income products. In Strategic Partnerships, net deposits were driven by Aegon's French Asset Management joint venture with La Banque Postale. With that, I turn to Duncan to discuss our financial performance in more detail. Duncan?

Thank you, Lard. Let me start with Slide 6. Operating capital generation before holding, funding and operating expenses increased by 1% year-on-year to EUR 340 million. Free cash flow amounted to EUR 76 million in the period and mainly reflected our share of ASR's 2025 interim dividend. Cash capital at holding remained strong at EUR 1.9 billion, largely from the proceeds of the sale of part of our stake in ASR in September. Gross financial leverage amounted to EUR 4.9 billion, which is consistent with our target level. I now move to Slide 7 to address operating capital generation or OCG. Total OCG increased by 1% compared to 3Q 2024. OCG from the Americas increased by 6% or 12% on a constant currency basis. This was driven by a higher contribution from the strategic assets and a broadly stable contribution from the financial assets. The increase of OCG from strategic assets reflected more favorable claims experience compared with the prior year period as well as a higher release of required capital. This was partially offset by a higher new business strain, largely associated with growth in Individual Life compared with the third quarter last year. The total new business strain in this quarter remained $10 million below the guidance of around $200 million per quarter. Adjusting for this and $20 million favorable claims experience, the OCG fell within the guidance of $200 million to $240 million per quarter for the Americas. In the U.K., operating capital generation decreased compared with last year where several favorable nonrecurring items were recorded as well as from higher new business strain from a changing product mix. In British pounds, OCG amounted to GBP 38 million within the current run rate of around GBP 35 million to GBP 40 million per quarter. In the International segment, OCG decreased versus last year, mainly due to lower OCG in China, reflecting the reporting change we implemented at full year 2024. Nevertheless, it was still above the level of around EUR 25 million per quarter, which we see as the run rate, thanks to several favorable nonrecurring items this quarter. Asset Management OCG increased mostly due to around EUR 6 million of nonrecurring items. Stepping back, therefore, we remain on track to achieve our full year OCG target of around EUR 1.2 billion for 2025. On Slide 8, we show the capital positions of our main units, which remained robust and above their respective operating levels. The U.S. RBC ratio increased by 5 percentage points compared with the end of June to 425%. OCG contributed 13 percentage points to the RBC ratio, and this was partially offset by the payment of a dividend from an operating company to our U.S. intermediate holding. This was to prefinance the planned remittance to the group in the fourth quarter, which had a 4 percentage points negative impact on the ratio. Market movements had a 3 percentage points negative impact on the ratio, driven mainly by the interaction of favorable equity markets and flooring on the variable annuity book. Onetime items, including management actions had a 2 percentage points negative impact on the ratio, largely from restructuring provisions. In the U.K., the solvency ratio of Scottish Equitable increased by 3 percentage points to 188%, mostly from OCG, while market movements only had a marginal impact on the ratio. I'm now turning to Slide 9. Cash capital at holding decreased slightly over the period to EUR 1.9 billion. Free cash flow added EUR 76 million, while the divestiture of 12.5 million shares in ASR in September generated gross proceeds of around EUR 700 million. We continue to expect to deliver free cash flow of around EUR 800 million for the full year, despite the impact of the lower U.S. dollar on remittances from the U.S., with remittances expected from all business units in the fourth quarter. We returned just over EUR 800 million of capital to shareholders in the third quarter. Around EUR 600 million of this was related to the payment of dividends. The remaining amount was returned in the form of a share buyback as part of our ongoing EUR 400 million share buyback program, which we expect to complete by year-end. Finally, capital injections to expand investment management capabilities in our international businesses as well as some other items, largely related to capital market transaction costs and the ongoing relocation review reduced the balance by EUR 99 million in total. As mentioned previously, our objective remains to reach the midpoint of the operating range for cash capital at holding or around EUR 1 billion by the end of 2026. Wrapping up on Slide 10, we remain well on track to achieve all our financial targets for 2025. We look forward to our Capital Markets Day on December 10, where we will provide an update on our strategy and financial targets and announce the outcome of our ongoing review regarding a potential relocation to the United States. We invite you to register and join us at the event in London. With that, I would now like to open the call for your questions. Please limit yourself to 2 questions per person. Operator, please open the Q&A session.

[Operator Instructions] And your first question today comes from the line of David Barma from Bank of America.

Firstly, I wanted to ask about your long-term care book. Some of your peers have had to adjust reserves recently to reflect higher incidence levels. So I was hoping you could remind us what your assumptions are for incidents versus before COVID and also the mortality and morbidity assumptions you have within that portfolio? And then I'll ask my second question straightaway on cash. So your cash conversion of earnings in the U.S. looks like it will still be around 70% for this year. Do you see this level as adequate? And what's holding you back from increasing it already?

Duncan -- thank you, David. Duncan, over to you.

Okay. So on the long-term care, we continue to track quite well actually versus our assumptions in the third quarter. You saw that our actual -- you can see that our actual to expected claims ratio was 97%. Our PDR, which is a target of ours from the Capital Markets Day remains at a good level. And we continue to make progress on implementing our rate increases with a further $115 million implemented in this quarter. So we're making good progress. In terms of our assumptions, we remain happy with our assumptions. We did an assumption review earlier this year, as you recall, where we strengthened our morbidity incidence assumption. We also assume some higher mortality, and that was reflected in our 2Q assumption review overall. In terms of mortality improvement, we think we have a fairly conservative approach, in that we assume mortality improvement. We include mortality improvements for off-claim lives, but excluded for on-claim lives, and we think that's pretty conservative. And then finally, on morbidity improvements. If you recall, we removed an assumption around morbidity improvement back in the second quarter of 2023, which we think is in line with industry best practice. So overall, we're very happy with our assumptions, and we're seeing continued good progress on our long-term care book. Your second question was cash conversions. Cash conversions, I assume what you're referring to there is the ratio of remittances coming out of the U.S. to either our IFRS operating earnings or OCG. And just to remind you, we target a stable progression of remittances out of our business units. Back at the Capital Markets Day in 2023 in the U.S., we were targeting a mid-single-digit growth out of our U.S. business in terms of remittances, and that remains our go-forward assumption. In terms of the overall level of cash conversions, remember, we have OCG, but we're also making investments in the businesses below the line and which impacts total capital generation.

We will now go to the next question, and your next question comes from the line of Iain Pearce from BNP Paribas.

My first question was just on the strategic assets in the U.S. So when I look at the year-on-year sort of Q3 versus Q3 last year, the eligible own funds generation seems to be down across all 3 of the units. So just wondering if you could elaborate on what's driving that lower own funds generation when we just look at that line rather than the sort of OCG as a whole? And then the second one was just on the reduction in capital employed in the financial assets. Obviously, that's come down quite nicely in Q3. Just wondering if you could talk about what the driver of that reduction is, and if that sort of run rate is a good run rate or if there's something special in Q3 that drives that figure.

Thank you very much, Iain. Duncan, can you take questions for generation from strategic assets and the reduction of capital employed in financial assets and the underlying drivers for that?

So maybe on the capital employed in financial assets, which I think is fairly easy. Indeed, we're seeing good progress on reduction in the capital employed in financial assets, which has continued to fall over the last couple of years and indeed also in the third quarter. If you recall, we implemented our base fee hedge in the third quarter, which helped to reduce required capital for the variable annuity book. And in addition, we favorable equity markets and the interaction between that and flooring also contributed to a reduction in required capital. So basically, our required capital for variable annuities has continued to drop in the third quarter, and that basically explains the reduction in financial assets overall. Your second question, I'm not entirely sure what it was actually, but I think is it referring to earnings on in-force?

Yes. So if I look at the first slide of the appendix, so Slide 13, year-on-year, if you look at the earnings on in-force for the Distribution Savings and Investment and Protection Solutions business, that all -- those lines are all down Q3 '25 versus Q3 '24. So I'm just wondering what's driving that because OCG is up, but it seems to be predominantly by release of capital and lower new business strain movements as opposed to…

Yes. Okay. No, I understand now. Sorry for that. So on distribution, as I mentioned in my speaker notes, we saw -- we've had some margin pressure on the distribution business, and that's because we are making some investments into our franchise there in order to ensure that the medium- to long-term prospects remain buoyant. So there is a bit of margin pressure on the distribution side. On the other products, savings and investments and -- just fairly lumpy. So in any one quarter, we can get puts and takes and nothing material driving that. And then on protection, earnings on in-force is down because of just movements in mortality compared to the prior year.

Your next question today comes from the line of Nasib Ahmed from UBS.

The first one, I guess, for Duncan. Stranded costs in the financial assets, can you give us kind of some sense of what kind of costs you're allocating to the financial assets? And the reason I ask is because I think back in the day when you were looking at the variable annuity book, that was one of the points that you needed to take into account in terms of offloading that business? And then second one, I guess, a follow-up to David's initial question on payout ratio. I think in the 2020 CMD pack, you had a 75% payout ratio for the group. I know you had the Netherlands in there. And then the medium-term target to improve that from 75% to a higher level. Is that kind of still what we should be expecting in terms of payout to OCG?

Duncan?

Yes. So on the second one, again, just to reiterate, so how we're managing the cash flows into the holding is we're trying to make sure that the units, a, pay remittances in line with the growth in their cash flow. And so for the U.S., for example, we've guided towards a mid-single-digit growth in the remittances coming out; b, that we don't want that number to jump up and down year-on-year much because we like predictability in the cash flow coming into the holding. It allows us to plan and to manage the use of cash. And then, c, and I think that's what you're referring to at the Capital Markets Day that over time, as our -- as the quality of our businesses improve, given that we have been a bit of a restructuring story and therefore, the quality of our earnings improve, then over time, there should be potential to increase the payout ratio over time. On the -- your other question was stranded costs. I can't give you a precise number right now. I'll come back to that maybe at the Capital Markets Day. But indeed, when we consider actions around our financial assets, we have a range of considerations around that. But one of the inputs indeed is stranded costs because they do represent a sizable portion of our balance sheet, as you know. And therefore, they do cover an element of fixed costs. But let's come back to you potentially at the Capital Markets Day with a bit more guidance on how we think on that. So far, by the way, our actual to expected performance on costs on the financial assets has been good.

[Operator Instructions] We will now take the next question, and the next question is a follow-up from David Barma from Bank of America.

On variable annuities, Duncan, you previously mentioned the possibility of fixing the flooring via internal reinsurance through a captive, I think. Is this still on the table? Or are you okay keeping that noneconomic sensitivity in the VA block? And then secondly, on the net flows into the U.S. mid-market retirement plans, they've been very, very volatile in the last years, but only slightly positive on average. Lard, would you be able to give us some color on the competitive dynamics there and what the more elevated withdrawal rates might be driven by? And then lastly, coming back to mortality and morbidity and widening the question from just the LTC block to the whole U.S. business. So if I got this right, I think 8 of the last 10 quarters were more favorable than expected. So could you talk about the dynamics there? And at what point you'd recognize this as a structural trend versus where your reserving and expectations are?

Yes. So David, on the retirement plans in the U.S. frankly, as I mentioned in my speaker notes, the business in total is developing actually quite well and has reached now $251 billion of AUA, of which the AUA for midsized plans has increased to $62 billion. And the written sales, which is -- as a good indicator for future takeover deposits are actually strong, and they remain strong. If you look at the net deposits cumulatively over the last 4 to 8 quarters, we have booked net deposits of $1.4 billion in the last 4 quarters and $2.2 billion in the last 8 quarters, respectively, in dollars. So also, you see really that the underlying business is really strengthening quite a bit. So actually a pretty -- in our view, we're progressing quite well in the business. The -- as I said, the written sales remain strong for both large and mid-markets. Pipeline is strong. So we believe that we're actually pretty well positioned here. Duncan?

On the sensitivity, so we provided again the RBC sensitivities in our presentation. And what you see from those is that our sensitivity to equity markets on a statutory basis for plus or minus 10% is pretty manageable. A 25% drop has a roughly 24 percentage points hit to the RBC. So I think we're in quite a good position there. But indeed, we have this peculiarity whereby if equity markets go up 25%, which is obviously a very good thing for our business and our long-term earnings power. Our RBC would fall by, as of the third quarter, roughly 52 points. And that's entirely due to the flooring, which, as you pointed out, is noneconomic. At this point in time, we haven't taken any action on the flooring. It's something which we'll continue to monitor. And if we feel that, that becomes a constraint or an issue for us. We will indeed explore potential options to mitigate that. But so far, we felt that that's not something we needed to do. We did implement a base hedge, as you recall, last quarter to dampen our underlying economic sensitivities to equity markets, and that remains in place as of today. Second question was life mortality. I don't know if it's precisely right in terms of your statistic on the number of quarters. But indeed, the thing we do monitor every quarter in detail the amount of mortality actual to expected. And since we made the assumption update a period ago on mortality, we've had, I would say, fairly neutral overall outcomes, mortality coming in more or less with what we would have expected, which is a good thing. In any one quarter, that can be a positive or minus. This quarter, it was a positive. But overall, it's giving us comfort that our mortality assumptions are in the right sort of area.

We will take the next question, and the question comes from the line of Jason Kalamboussis from ING.

The first one is for Lard. If you could -- if you can give us the same comments that you gave on the U.S., that means how you see on the U.K., the developments this year or back end of last year and this year compared to your plans? Are you satisfied with it? And the second question is on the U.S. RBC ratio. In fourth quarter, clearly, it's more likely to be lower. So I would be interested to understand if it is a level you are happy with or if we should be looking at some stage for some injection from the holding into the U.S. And also just mentioning that, I mean, I don't follow the U.S. life insurance industry, but my impression was that a lot of your peers like to be in the 430%, 440% level. So again, if you can comment on that, it would be much appreciated.

Yes. Let me take the first question, Jason, on the U.K., and then Duncan will discuss the RBC topic. So on the U.K., well, as you know, we have announced our plans for the U.K. to turn it into a leading savings and pension player in the U.K. We have also disclosed how we would do that in the coming years. We have set targets that we want to get the adviser platform to net positive by 2028 and the overall platform to grow in total by 5 billion by 2028. And we've also set other targets associated with it and also investments that we would make to the -- especially the adviser platform to make the customer journeys more intuitive. We're doing that against the backdrop of a market in the adviser platform business where we see a lot of vertical consolidation happening, and that is driving part of the reason for the outflows there. And the other piece was that we felt that the platform needed work and needed improvements and a lot of new releases and capabilities. And that's why we're doing quite some investments in it. On the workplace side, you've seen now 2 years of very strong workplace business. And the fact that we now have to this quarter, 2 plans that are going out, which are low margin, by the way, should not detract from the reality, which is that this is a very strong business that has structurally provided either a #2 or #3 position in attracting new plans. So that business is doing well, and 1 quarter doesn't change that. When it comes to the adviser platform, we continue to roll out new releases and improvements. That actually leads to a positive reception. So we've seen that in our Net Promoter Scores. That's number one. You know that we target 500 advisers. The feedback we're getting from them is also positive. So this is a more longer-term trajectory, as we said, because we want to turn it to positive by the end of 2028. So we are on track. It is not an easy turnaround story that we have there. But the workplace business, strong business, adviser platform, doing what we expected it to do. Reception of the improvements that we're making is positive, is good. And as a result, we maintain our targets for 2028 for the business. Duncan, RBC?

On the RBC, so I think you're aware, we have an operating -- what we call an operating level, which is our kind of normal level we would target for the business of around 400%. And we have a minimum dividend payment level of 350%, which is the level at which we will continue to pay remittances up from the U.S. into the holding. And we're currently slightly above that. From my perspective, that's fine. U.S. peers are anywhere between 350% and 450% depending on business mix, how they're structured as an organization, et cetera. So I don't think we're an outlier, to be honest. And from my perspective, the RBC ratio is at a fine level.

Your next question comes from the line of Michele Ballatore from KBW.

Sorry if I missed this, but the reduction of around $200 million in the capital employed in the financial asset versus the second quarter. Is it -- I mean, is there any particular action taken there? So if you can maybe give me some details about this? And also on the target of reaching $2.2 billion, should we expect more details around this particular factors at the next Capital Markets Day?

So it's Duncan here. So I already mentioned that if you recall, in the second quarter, we -- or just after the second quarter, I think August, mid-August, we implemented a base fee hedge on a portion of the base fees, and that obviously reduced required capital because we're reducing our risk exposure. And in addition, what I mentioned to you is that as equity markets moved up, there's an interaction with how the flooring works, which reduced required capital with some offset in reserves. And the combination of those 2 things meant that the amount of required capital and variable annuities fell in the quarter, and that basically explained the whole movement in financial assets in 3Q. I think your second question was in terms of the target for 2027. And we continue to make progress, as you saw. As you've seen, actually, we've made good progress in reducing it since -- we originally came out with the designation of financial assets. We made good progress during this year as well from a combination of management actions, unilateral and bilateral. And we're going to continue to explore all options on the financial assets, actions we can take ourselves, actions we can take with our customers. And if the economics are right, third-party actions with external counterparties.

The next question comes from the line of David Barma from Bank of America.

Sorry, it's me again. And just one last small follow-up on the capital employed again. There's a lot of different moving parts in tracking this capital employed figure between what you're doing, the equity performance, the runoff of the book, et cetera. So Duncan, could you give us a sense of how you're doing compared with the ambition for a $700 million reduction coming from management actions. So the management action part specifically of the reduction in the capital employed, please?

Yes. So I agree with you, by the way, there are a lot of moving parts. And when I look at the financial assets in general, to be honest, the overriding principle is how we're managing the risk profile. And capital employed is one way of expressing that. But as you can see and as you know, there are many moving parts and drivers of that. So I also look at the sensitivities, particularly under an IFRS basis where you don't have the impacts of flooring, et cetera. So I think your point is fair. In terms of management actions, I think, we've made reasonable progress so -- and by management actions, I mean, including things like optimizing the hedging strategy, right? So the implementation of the base fee hedge. So I think we've made reasonable progress. Some of the management actions we anticipated years ago, we would implement, didn't work out, and that's because markets behaved differently than we thought and this book is quite sensitive to markets. But we identified other actions we could take, including the base fee hedge, which offset that. So we've made reasonable progress. I think as we look forward to delivering the target, it's likely we're going to have further management actions. The natural runoff of the book is not going to be sufficient. And we'll continue to look for actions we can take in our own control and as I keep pointing out, potential third-party transactions, if they make sense economically. Overall, though, David, I think we're doing okay versus our target in aggregate. Things move around. We block and tackle. We adjust our own plans depending on what's happening with markets and where our levels are. But overall, I think we are in a pretty good place of managing the financial assets down.

Your next question comes from the line of Michael Huttner from Berenberg.

I mean -- sorry, I joined the call late, so probably be answered, but just in case. I have 2. The one is on the cash and the other one is on mortality. On cash, can you give us a feel for the walk forward from the EUR 1.8 billion and change in 9 months and the EUR 1 billion target you've kind of set for 2026. What could be the potential moving parts? And then the other one is on mortality exposure. So from memory, I think you reduced maybe 30%, even 40% the institutionally owned life, and that's gone now. So can you give us a feel for what the current mortality exposure is at the group level and how you think of it as developing? I noticed mortality was EUR 12 million better in Q3, which to me feels like a low number. I would have expected around EUR 30 million, but maybe there's some moving parts I'm not aware of.

Thank you, Michael. Yes, it's a busy day today for disclosures so Duncan over to you.

So on the cash, Michael, you're basically asking us to give you a movement from here to the target of EUR 1 billion by end of 2026, which we're not going to do, at least not today. As you know, the cash capital at holding, we're going to bring down to EUR 1 billion by the end of 2026. We have 3 broad buckets which we can deliver that. The first is to deleverage further with our current portfolio, that's not required in any meaningful way. The second is to fund either organic or inorganic initiatives, which our businesses may source or the group may source. And then the final one is if neither of those emerge, we'll return the capital to shareholders, as we have been doing over the prior quarters. And we aim to do all this by the end of 2026, so just over a year from now, so not too much longer to wait. In terms of mortality, I think, you're right, firstly, in our strategy in mitigating mortality risk. So we had a program to purchase institutionally owned policies, which we successfully executed upon. And also, we've done, I think, 2 reinsurance transactions on our legacy life books in the U.S. in the past. And we updated our assumptions, obviously, which, as I pointed out in a prior question, we're trending more or less as we would expect since that assumption update. So things look okay. In our statistical supplement, we give you the -- under the financial assets KPIs, we give you the net face amount for Universal Life, which I think is a reasonable number to track in terms of our total exposure on this book. Hopefully, that's answering what you were asking.

And how much was the institutional purchase so far? And is it all now gone clear through the capital because I think there's an element where you have to cancel the stuff before and you have to wait for the reinsurers to agree.

That's right. So not all of it has been canceled. So I think -- because as you're aware, the process is we purchase the policies from the institutional owner. All of these policies have reinsurance on them and we negotiate with the reinsurers for them to take their share of the exposure. And if we were to cancel fully our remaining exposure as of today, there would be a negative impact on the RBC ratio of around 11 points, including the release of the equity, which is in that vehicle.

Brilliant. And just the last figure, how much have you bought back on the institutional to date?

As of 3Q, we bought back -- we reached our target. So we were targeting, if you recall, to purchase 40% of the outstanding face value of around USD 7 billion, and we hit that target in 3Q 2024 and our activities since then has been more muted.

We have no further questions. I would like to turn the call back over to Yves Cormier for closing remarks.

Thank you, operator. This concludes our Q&A session. Should you have any remaining questions, please get in touch with the Investor Relations team. On behalf of Lard and Duncan, I would like to thank you for your attention. Thanks again, and have a good day.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.