Aflac Incorporated (AFL) Earnings Call Transcript & Summary

Good morning, everybody. Welcome to the Goldman Sachs' Financial Services Conference. I'm very happy to have with me today Aflac's President and CEO, Fred Crawford; and CFO, Max Brodén. Before we kick off, I do need to read a quick disclaimer disclosure. So please reference the disclosures posted below, which are required in public appearances, about Goldman Sachs' relationships with companies that we discuss. With that out of the way, one other housekeeping item. If you have any questions, there's a button at the bottom of your screen, where you can submit any questions, which we will try to get to. With that, Fred, Max, thanks for joining us this morning.

Thank you.

So Aflac hosted its financial and analyst briefing a few weeks ago. There was a lot of material there. Maybe we could start with one aspect that I think you started off with, Fred, which was the growth initiatives in the U.S. I think what you had said was that there is a considerable growth opportunity in the U.S. But then you can't approach the market in the same way you have in the past, while expecting different results. Maybe we can start with that and hear a little more about the different initiatives you're taking today versus in the past.

Sure. First of all, thank you, Yaron and Goldman Sachs, for inviting us this morning. Max and I appreciate it, and we enjoy attending the conference each year. So to your question, first of all, stepping back on the entirety of Aflac. While we have a number of initiatives going on in Japan to support their -- and defend their level of penetration and market share, clearly, Japan is in a more maturity cycle given the sheer penetration rates and our market share and dynamics around their economy. As a result, Japan is throwing off a significant amount of free cash flow, as you would expect a mature insurance company to do. And we have been pivoting that cash flow back into the U.S. for, also, distribution, of course, dividend and repurchase, but also with an intent to invest more aggressively in the U.S. platform because we really do believe, with a far less penetrated market, our brand recognition, our distribution reach, that there's some real opportunities to capitalize on. And so a couple of the shifts that we've made in the U.S., and this is what I referred to by we can't expect the same result by doing the same thing, is we've really moved, first, more forcefully into a direct-to-consumer model playing off of our brand. We have been somewhat, by accident, in the direct-to-consumer marketplace because people see our brand over the years. They'll phone up Aflac directly, and we have been moving them off into a third-party call center to process those leads and sell business. And that worked, but it wasn't really focused on. It wasn't concentrated on. And we decided a couple of years ago to start the process of really building out a comprehensive state-of-the-art shopping experience for a full digital end-to-end. There was another reason for that pivot, and that is the growth of the gig economy. And so as we see more and more employees, I think we're upwards of 25 million workers in the U.S., are in a gig-type economic condition, where they don't have that traditional employer-employee relationship. We wanted to capitalize on that growth rate, and the best way to do that, of course, is through the phone or digital experience with those types of workers. So there was a couple of reasons why we did a more pronounced pivot, committing about $125 million over 3 years to build out D2C and be much more serious about it. And we think, with our brand, we will attract natural traffic to that site and sell business. The other pivot and different approach was moving into the employer or paid marketplace and on what we would call the first page of the benefit experience. Both those comments are important. Moving to the first page of benefits, meaning those benefits that are more important and more critical to employees than supplemental-type products or voluntary products, is very important. But the other shift to understand for Aflac is it's moving into employer paid versus purely voluntary. And so we've already -- we're already, of course, the leader in small business, voluntary and group voluntary business, but we had yet to go into network dental and vision and true group life and disability. And so we made a decision that building it from scratch would not make sense because we don't have the expertise and experience and base operations to handle a network dental and vision PPO-style product, nor do we have the true group life and disability, and particularly the advanced claims platforms that are required in that business. So we also had a decision to make on whether to outright acquire some of the larger players as they were coming to market. There's been a lot of transactions. And ultimately, we felt as if that was, first, a sellers' market. These are very richly priced properties. And for us, there's going to be a level of build required no matter what because our strength -- we get stronger, particularly as we come down middle market and down market, and most of those properties are focused on upmarket. So we decided to take a buy-to-build strategy, where we would buy the expertise, the platform, the administration, the technology and very much the expertise of the individuals that have industry expertise in those areas, many years of industry expertise. We would buy that, bring that in and fuel it through Aflac distribution and brand. And so that led to the Argus transaction, which is really a TPA that supports PPO-style dental and vision for Medicare and Medicaid. We like that property because there's very high tolerances required to be successful in that industry, from an operating perspective, because you have to adhere to the very strict standards and quality standards of Medicare, in particular. And so we thought by buying that property, it gives us an immediate jump-start on operations, administration and network management that we did not have as a company, and now we could fuel it by filing dental and vision product. So we have been piloting dental and vision in about 10 states in 2020. And now in '21, we'll roll it out to all the states. And we've made great progress through the regulatory community, and we're ready to go in 2021. The Zurich deal made a ton of sense, not just because of true group life and disability, which is something that we don't do. But it made a lot of sense because we're finding more and more bundling taking place, where consultants and their customers are bundling true group and voluntary product. And interestingly, one of the most common bundling approaches is true group life and disability and network dental and vision. And so if you plan to grow dynamically in network dental and vision, you really need to have a good, mature, state-of-the-art, true group life, disability and absence management platform. And fortunately, Zurich had spent about 4 years developing from scratch a state-of-the-art platform, with all of the advancements that the market was asking for. And it allowed us to jump in midstream in their building plan to take over effectively the reigns, bringing it into Aflac, not really make any dramatic shifts to the strategy because Zurich's strategy is very similar to our strategy, and now just breathe life into it through Aflac's ability to bring voluntary into the picture as well. So that direct-to-consumer shift, that employer-paid first page of benefit shift, those are the 2 major moves that I was referring to when I said, "Look, we can't do -- set things the same way and expect a different result."

Got it. That's helpful. And if we stick to the direct-to-consumer shift for a second, I think one of the reasons that Aflac historically have gone through the worksite was you got a very different risk profile through the worksite. How do you maintain that risk profile when you do move into direct-to-consumer?

Yes. It's a very good question. And actually, we're often asked either what took you so long or, frankly, before the pandemic, why wouldn't you take advantage of your brand and be in the direct-to-consumer? And I mentioned earlier, one of the big motivations was watching the emergence of the gig economy, but the other dynamic was absolutely being careful about adverse selection. When you're in the supplemental health business, it stands to reason that if you think about people that are waking up in the morning and thinking about supplemental health insurance, it stands to reason that there is a reason that they're waking up in the morning and thinking about the need for supplemental health insurance. Meaning, there might very well be pre-existing conditions or other dynamics that have created more of an awareness or higher risk in the eyes of the consumer. So as a result, quite frankly, you have to be realistic about your ability to, in fact, manage that and price that in. And so it will still be the case that, generally speaking, it is more economic to buy-in the worksite because, like many group-oriented products, you benefit from the spread of that risk and control of that risk in the pricing of the product. So you have to price the product in a way to recognize the fact that there is a level of adverse selection on the path to having more and more policyholders under that umbrella. The other thing that you do is you are very, very sophisticated in data management and using that data to not only track the risk and understand the risk, but also target the types of consumers that provide you a better spread of the risk. So there's no problem with taking in adverse selection as long as, over time, there's a balanced pool of risk. Even in the worksite, when people click on our products, there is that risk of within the worksite cocoon adverse selection. But what we found is that there's a broader population of individual that click on the Yes tab, if you will, to buy our products, and it creates a nice spread of risk. We can create that same atmosphere in direct-to-consumer as long as we're wise about mining the data and mining the targeting of clients with our ads and with gathering traffic into our site. So data management is very critical. The last thing we do is you file your products. Part of what's taken time direct to consumers, we had to refile our cancer, hospital and accident, which are the 3 main products we're offering direct. We had to refile them in the states. Why would we have to do that? Well, because we styled them to be digitally sold. Meaning, we bracket a lot of the features in the products so that we can go in and make adjustments based on the data feedback loop to pricing and other characteristics of the product if we see that data telling us something different about the trends in underwriting results. This is not uncommon. This is not a unique Aflac dynamic. You see a number of companies that will do the same thing, even on life insurance. And so it allows us to react more quickly to the data feedback loop to manage that risk. So long-winded way of answering a very simple question, which is, you realize that you will have adverse selection when you structure the product and price it.

Got it. And then -- so as you think about that and the realization that you need data to price more accurately and learn from it, would the strategic goal then be to grow as quickly as possible in order to collect as much data as possible, and thereby improve quickly? Or would it be to take a very slow and prudent approach to learn as you go before you really hit the bell?

That's right. I think, by definition, to be quite candid with you, it will be a slow and pragmatic approach. I say that because irrespective of how aggressive you choose to be, it is going to be a slower ramp-up of this business. But the other thing I would tell you is, remember, when I said that we have been doing this by accident for several years. And we'll do in the range of $20 million, sometimes as much as $25 million, in sales direct-to-consumer by just being a brand with a 1-800 number. And so we actually have been able to do quite a bit of backtesting on the data and characteristics of the products that have been sold direct-to-consumer in the old-fashioned way, people just calling on their own. And it's told us that we've actually done a very good job naturally based on that national brand recognition of having a broader way of risk. We actually haven't seen a deterioration in underwriting results on those small pools of policies. So we've actually been able to gather a fairly good amount of data already on the performance of the products direct-to-consumer. But the slow gradual build is precisely to be careful as we build this. And so that is the plan, Yaron.

Okay. And then just -- so we have these new initiatives. I think at the investor meeting, you talked about -- you'll get about $1 billion of revenues coming in from that by 2025, 2027. What about the existing products in distribution? Where do you see premiums in those lines over that period?

Yes. So let me make a comment on a different kind of question in the path to answering your question, and that is one thing with the traditional business that we have on our books, so this would be -- this would go for Japan and the U.S., too, but particularly in the U.S., is we are watching very carefully, near term, navigating the pandemic. And so one thing we talked about at our analyst briefing, Horizon 1, 2 and 3 initiatives. And I do want to make sure that investors and listeners understand that there is a very real Horizon 1 that we're watching carefully, and that's, of course, the pandemic. Given the face-to-face nature of our business in the U.S., the small business nature of our business in the U.S. and even in Japan, it being much more of a face-to-face sales dynamic, in fact, digital sale of insurance in Japan really has never really gotten off the ground in any material way in Japan. It is a face-to-face sales environment across a number of industries. Because of that, we have to watch the pandemic very carefully. We are now clearly into a -- whether you call it a second wave or third a wave, it is a significant wave in the U.S. You're seeing a much more modest version of that in Japan. So I would say, in Japan, that navigation is easier to understand. There may be some implications to the virus picking up steam. But as long as Japan doesn't enact a state of emergency or a prefecture-by-prefecture state of emergency, we would expect to see a level of improvement over time and are continuing on that path. When you turn to the U.S., we have to be very careful right now because we have California going back into a lockdown approach. You have New York talking about it. Obviously, cases are significant. And while we're not seeing anything come through the claims dynamics of any great concern, we're being very cautious on that front. We're also being very cautious on sales and sales expectations over the next couple of quarters. We do think the vaccine will make a difference. We do think that, both in Japan and the U.S., for a number of reasons, the back half of the year is particularly more promising than the first half of the year. I think that's a natural inclination. But we are being cautious on our results as we watch things unfold with the virus. Now when it comes to the base business in the U.S., we would expect, before we entered into the pandemic, we had kind of a steady 2-ish percent increase in earned premium from our base voluntary small business platforms sold through agents. And then we had a higher growth rate on group business. But together, around a 2% in change-type earned premium growth rate. Remembering it's from a very large base, these are very inexpensive policies, and we do $6 billion of it a year in the U.S. Also remember that you're talking about a 21% to 22% lapse rate in these products, particularly around the small business sale environment. And with those types of lapse rates, you're well into the year in terms of sales before you actually are incrementally adding to policies under administration and incremental premium growth. And so as a result, we would expect, post pandemic, and as we bring back some steam into the agent atmosphere, that we will gain back to the level of sales that we enjoyed pre pandemic. But it will take a little bit of time to recovery after the pandemic. There'll probably be more of a pronounced increase, followed by a slow trend of increase over time. That's essentially what we've put into our projections. Coupled with that, we're focused on retention. Retention is a big issue in the U.S., unlike Japan, and we'd like to bring our attention back, as we said at FAB, to the 80% retention rates, which would be about 100 to 200 basis point improvement in retention. Every 1 percentage point improvement in retention is around $60 million of revenue to the company. So on a compounded basis, over time, that could make a big difference. So we would expect recovery of the core business back to pre-pandemic levels over time and added on to that a renewed focus on retention.

Okay. And with the new initiatives and the focus on both inorganic growth and investment in platform for organic growth, how does that impact the traditional capital deployment of the company? Where I think investors have grown used -- accustomed to seeing the dividend increase year-over-year, very strong buyback initiative, do those get somewhat impacted by investment and underwritings?

I'll ask Max to comment.

Yes. Thank you, Fred. So we have -- the starting point is that we have very strong capital ratios in all of our operating subsidiaries. And at FAB, we announced that we would expect an increased level of dividends coming to the holding company from our operating subsidiaries over the next 3-year period. That also translates into increased capital deployment, and we guided towards $8 billion to $9 billion for the 3-year period, 2020 to 2022. This increased deployment is -- it's a function of the improved free cash flow generation. And that it's very important that we take a balanced approach in terms of how much is being deployed into dividends, how much is deployed into share repurchase, how much is being deployed into inorganic growth. And we take a very simple approach to it. We will deploy capital to where we see the best long-term IRRs that we can deploy that capital at. And that is really what's guiding us in terms of where we deploy the capital. Now I would like to stress that all of this capital deployment and all of the subsidiary dividends is after investments into our platforms that Fred primarily talked about earlier in order to drive organic growth for the company. So needless to say, we have increased our dividend for 38 years in a row. We intend to continue to increase the dividend. That is something that's very important to the company. I would say that we almost view that as a fixed expense, more or less. This is not something that's variable. So we would expect that to continue. But over time, we would expect to see a continued increase in total capital deployment. And obviously, with that, we will then allocate capital to where we see the best IRRs.

Okay. And then if we switch gears a second to Japan because we focused mostly on U.S. initiatives until now. So I think at FAB, you were talking about JPY 80 billion to JPY 90 billion of sales target by 2025. I think, from my perspective and from an outsider view, it's difficult to measure that number not knowing how much of an impact Japan Post has in there. Are we talking about 2020 levels? Are we talking about 2019 levels? If we're talking about 2020 Japan Post sales, then that JPY 80 billion to JPY 90 billion target seems aggressive. If we're talking about 2019 or maybe a bit earlier levels, we could come to a different conclusions. So can you offer any additional color on that?

Yes, absolutely, I can, and you're right to point it out. We tried to answer that question during FAB, but it may have been certainly not as clear as maybe we could have made it. But realize that when it comes to projections on Japan Post, that our window into the preciseness of the recovery and the distribution game plan of Japan Post is still rather limited. We have met as executive teams, myself, personally; Dan; with the CEO and executive team of Japan Post; together with Charles Lake, who's a member of the Japan Post Board and our Chairman; and Koide-san, our President of Aflac Japan. We have a great deal of confidence in the new management team. We have a great deal of confidence in their ability to recover from this event that took place pre pandemic. Right now, they're on what's often referred to as an apology tour. They're actually out making apologies and reengaging the relationship with over 9 million policyholders, which takes time. It's literally a personal phone call connection and discussion to both apologize and set the relationship straight and really also set up for future product sales and future account relationships. So they're in that process. Our expectation is that process will take at least through this fiscal year in Japan, which ends March 31, may continue after that, we're not certain. But our sense is that Japan Post is eager to get back out there with business as usual, operating as normal, certainly as part of their fiscal year 2021, which begins April 1. So reading through the public statements and press conferences that Japan Post has had, and our conferences with our internal executive dialogue with Japan Post, we have loosely suggested, if you will, that recovery in the Japan Post system is a second half of 2021 issue in our view. And we'll have to monitor conditions and monitor what Japan Post says and outlines along the way. But that's what we've assumed in terms of our sales projections. So there would be somewhat of a step function, if you will, increase in the amount of sales, realizing right now there's very little sold through Japan Post, even though we are not technically shut down. Because we were not part of the issues that were exposed, they have all, for all practical purposes, pointed all their distribution towards working with existing policyholders, to right the wrongs, if you will. And that's been their focus, and we want them focused on that. So we're going from a base of near 0, there would be a step function and then a linear path to recovery. What we've assumed over the 5-year period of time is that, that recovery does not recover to the levels of pre pandemic. So it recovers in a linear fashion, but not quite to the levels of 2018, '19, for example, and realize, in those years, you also had a new fresh cancer product that really spikes sales for a period of time. So we are coming more below that, okay, really in an attempt to be conservative. We think, over a 5-year period of time, that's very conservative, particularly because both companies are obviously committed and incentivized. Remember, Japan Post obviously owns 7% of Aflac. And for the same reason you're asking the question is the same reasons investors are very focused on Japan Post recovery and what that means for our valuation. So we are all motivated to drive this back to pre-pandemic levels. But from a projection standpoint, we remain conservative, while seeing improvement below the levels of that pre-pandemic time period just to be conservative.

Okay. And before I jump to the next question, just a reminder to the audience, if you have any questions, there is a box at the bottom of the screen where you can submit the questions. One other dynamic that we're seeing in Japan is some pressure on net premiums earned from the limited pay -products. We think it had hit the limit. Can you maybe remind investors why that is, that we're seeing kind of that pressure point today, how much longer we expect that to continue and what the economic impact is? Because if I understand correctly, it's actually, call it, pretty good for the company to see the limited pay product in maturity.

Yes. Yes, well, thank you for asking the question first. The reduction in premium that you see, remember, that is on a GAAP reported basis. And so paid-up policies on a GAAP basis, once that policy is paid up, you're no longer recording premium through your GAAP financial statements. However, that is not impacting profitability as dramatically because we have booked a deferred profit liability that allows the profitability of the product over the life of the product to continue to be recognized on a GAAP basis. That's why you may see revenue coming down more pronounced. You may see it impact some of our ratios, for example, an expense ratio, which has bounced up against revenue. But when you get to the bottom line or the pretax profit margin, you'll notice, in Japan, we still call for very healthy pretax profit margins and, in fact, very stable pretax profit margins despite the drop in revenue. That's because, yes, we are managing expenses more aggressively in Japan. We plan to take about JPY 15 billion out of expenses over the 5-year time frame. But it's also because we have that deferred profit liability that supports the profit margins despite revenue moving down more aggressively. So that will continue because it's largely a first sector dynamic, and we have shut down the sale of first sector. When you shut down the sale of new limited pay product and just let it run off, the paid up will be more pronounced. So you're seeing upwards of a 10% reduction in first sector savings premium, for example, on a GAAP basis, and that leads to a 2% to 3% decline in overall revenue. When you go to the third sector, which is really much more economic, that's really where the economic value is created. First sector savings has decent economic value. It covers our cost of capital, but it's not nearly as rich and productive as the third sector business we have, which is cancer and medical. And so our mission in Japan for now, since 2016, in the Bank of Japan's negative interest rate decision, has been to work down first sector savings because with interest rates now and into the future, that's not a profitable or economic area to concentrate on, and to build up third sector where we have a leading market share and much better economic value. That, together with first sector protection, which is traditional life insurance, that also has a good return. So that's been our strategy. As a result, we would expect to get third sector back to that 1% to 2% or so earned premium growth rate, recognizing this is off a very large base of premium, and recover that as Japan Post recovers, as we introduce new product, which starts next year, and we build that back. So as you move through the next 5 years, you will start to see that first sector savings will start to plateau a bit in terms of its reduction on a GAAP basis. And third sector earned premium will start to grow, and you will level out a little bit of the revenue stress. But for a period of time, the paid-up policies is actually the majority of the reduction in premium. For example, first sector policies in-force are only leaving at around 1%. In other words, they're lapsing at about a 1% rate, yet premium is coming down at a 10% rate. So the policies remain on our books. The economics remain on our books, but the GAAP revenue recognition is more accelerated down. And we have to talk about that because it plays into some of our ratios.

Got it. Max, this next one is probably for you. If I look at the RBC ratio, about 550% today, I think, versus a near-term target of 500%, longer-term target of maybe 400%. Can you walk us through, one, what long-term means or what over time means? How long will it take to get to the 400% target, one? And two, if you have a target that's significantly lower than the 500%, which you're at today -- the target you're at today, why do you need an extra buffer on top of that to get to 550% in this environment, when it seems like there's still a huge buffer there between 500% and 400%?

Yes. So your question is very valid. And my answer is, really, it's because of the environment that we are in right now. So we are primarily a morbidity company in the middle of the worst pandemic that we've seen since the Spanish flu. In that kind of operating environment, even though we have not seen any significant impacts on our profitability in terms of spike in benefit ratios, et cetera, to date, we still operate in a fairly uncertain environment. And also the potential impacts it could have on the asset side of the balance sheet. So given that backdrop, we also went out and raised a lot of cash and capital in March this year when we raised $1.54 billion through 2 senior debt transactions. What that did was it bolstered all the capital and liquidity at the holding company. That gave us the flexibility and opportunity to be more flexible in terms of how we manage our capital base at the subsidiary level. So right now, we're running high at the subsidiary level. We're also running high at the holding company level. This is the buffer that you referred to. When we expect -- when we get out to a more normal economic environment, and we see that the risks to both the asset and the liability side of the balance sheet are on a more normal level, that's when we really can move our capital ratio in the U.S., so primarily our RBC ratio in the operating subsidiary, Aflac Columbus, closer down to something like 400%. So how long will that take? I put 2025 on the slide at FAB. Hopefully, it's much sooner than that. But I would say that what will really dictate it will be the economic environment and the economic uncertainty around us. At the point when we feel comfortable with the economic outlook and that the risks to the balance sheet is fairly low, then we will start to draw that down towards 400%. In the meantime, also, I would say that, right now, we have significant amounts of capital and liquidity at the holding company. We are using that. You've seen us step up our share repurchase. You've seen us guide towards increased deployment into dividends as well and also total deployment over the next 3 years. Given that we have all this capital at the holding company, we can then be more flexible. So right now, we don't need to force capital up to the holding company in order to pay it out because we already have enough capital there. And in this case, actually, it makes more sense to, for a short period of time, operate with a little bit higher RBC ratio because you can earn a higher net investment income on the capital sitting at the subsidiary level than at the holding company. Because at the holding company, you have different investments that you can make. You go much more short-term liquid, et cetera, so you then have lower NIIs. So in the very near term, it's a tactical decision to actually hold a little bit more capital inside of the operating subsidiary.

And Yaron, I might add just some perspective from a different angle. When we -- this year, and when I took over this new position of President and Chief Operating Officer, I sat down with Dan, and we initiated an enterprise-wide strategic planning process that really focused in on 2 major efforts, which is growth, which we know is a big challenge for a company that has reached maturity in our 2 countries that we operate in. And then also efficiency because we know also, as you move towards maturity as a company, you now need to really be particularly careful about your expense dynamics and efficiency dynamics. Meanwhile, we're all in the industry trying to continue to advance the ball on technology and digital efforts. And so we went into an exhaustive strategic planning process that ended around the August time frame. It then coupled into our financial projection process, which we do each and every year. And we married up those financial projections to that 5-year strategic planning process. The idea was we would then go to the Board of Directors, which we did, and review all of that material and talk about the efforts and investment required and then go to our analyst briefing a few weeks ago and talked publicly about the nature of that strategic plan and financial. And one of the things I want to impress upon you is we know that when we're sitting down with our investors, we are asking for you to trust a number of things. Number one, trust that we're capable of navigating through this pandemic in a way that doesn't damage the franchise over the long run and also secures the financial position of the company, such that we can continue to distribute money back to our shareholders, while at the same time investing in the platform. We also know that we're showing you elevated expense ratios as we pivot and build these new areas of growth for the company, and that includes all the issues that we talked about in the U.S. that were driving new growth efforts in, which are naturally going to be losing money or thin margin until they reach a level of scale. We need to invest in those. And then we also have certain long-term efficiency metrics that require early days' investment for long-term payoffs, such as the paperless project in Japan and other initiatives, particularly the group platform technology and having that ready to be a one group Aflac face-off against the customer, offering true group life and disability, network dental and vision and leading group voluntary products. So all of those investments will, in the short run, elevate your expense ratio. As a result, we purposely went to our analyst briefing to say, "Well, what are we solving for when we get out to 2025?" But realized a few things. We're not done at 2025. In fact, you'll notice a number of the growth areas, dental and vision and group, we are calling for a 5- to 7-year growth rate, and that's because we're not done growing at 2025. But also important, back to capital, was a 17% increase in the dividend. Your Board of Directors would not reflect on that strategic plan and financial plan and approve and feel comfortable with a jump, an inter-period jump, in the dividend increase and continued pledge to increase, if not confident in your ability to turn that corner and produce economics with all of these investments we're making. And so I want to reiterate the dividend was not just a technical dividend payout or yield exercise. It was putting money behind the effort to pivot the company and put it in a better growth position over the long term.

Thank you. That was actually a great summary, I think, with which, I think, we have to end. But this was very, very helpful. Thank you, both, for your time and for your thoughts.

Great. Well, thank you very much for inviting us.

Thank you.

Thank you.

Take care.

Take care.